ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
AUGUST 24, 2021
ADR LAW ACT 9285
Alternative Dispute Resolution System means any process or procedure used to
resolve a dispute or controversy, other than by adjudication of a presiding judge of a
court or an officer of a government agency, as defined in this Act, in which a neutral
third party participates to assist in the resolution of issues, which includes arbitration,
mediation, conciliation, early neutral evaluation, mini-trial, or any combination thereof.
OLD CASES IN THE PHILIPPINE ARBITRATION
1. WAHL V. DONALDSON, SIMS & CO., G.R. No. 1085, [May 16, 1903), 1
PHIL 449-450)
FACTS: Plaintiff filed a case against the defendant for rental. payments for the use of
the ship PETRACH. A judgment of default was rendered in favor of the plaintiff. An
application for a motion for new trial was granted but upon termination of plaintiff
evidence, defendant filed a Demurrer to Evidence claiming the court had no
jurisdiction over the case there being an ARBITRATION CLAUSE in their rental
contract.
COURT JURISDICTION: A clause in a contract providing that all matters in dispute
between the parties shall be referred to arbitrators and to them alone is contrary to
public policy and cannot oust the courts of jurisdiction.
Important: “to them alone” – cannot by mere agreement alone
deprive/oust the court of its jurisdiction
By mere agreement only, the parties cannot violate a rule or law.
2. CORDOBA V. CONDE, G.R. No. 1125, [August 24, 1903), 2 PHIL 445-448
FACTS: Parties entered into a Contract of Mercantile Partnership with an Arbitration
Clause..." it being agreed that all doubts, disputes, or disagreements which may arise
between the partners during the existence of the partnership, as well as during the
period of its dissolution and liquidation, will be decided by friendly adjusters
Allegations: A general clause in contract entered into at a time when the Spanish Law
of Civil Procedure was in force and made with a view to that law, agreeing to refer all
disputes to friendly adjusters (amigables componedores) becomes inoperative by the
repeal of the law, and the parties may resort to the courts without a previous offer to
submit their differences to adjustment by arbitration.
Ruling: The parties, in a suit already pending in court, to submit their evidence and
argue the case before a third person (referees) instead of doing it before the judge
himself. The referee reports the result to the judge, who takes such action as he sees
fit. It is merely a method of determining what the facts are in a pending case.
- the term friendly adjusters/referees or "amigables componedores" is the
precursor of the "amicable compounders" now mentioned in Article 2030 of
the New Civil Code
3. M.E. SICAT CONSTRUCTION, INC. V. BIWATER [MALAYSIA] SDN BHD,
G.R. No. 211448 (Notice). [February 17, 2021])
ISSUE Whether or not the arbitration clause in the Supply Agreements entered by the
parties herein does not apply in the Complaint for Sum of Money filed by respondent
Ruling: This Court is very much aware of the State policy to promote and encourage
arbitration and alternative dispute resolution, as well as its importance in achieving
speedy justice and decongestion of court dockets. This policy essentially favors
arbitration in the interpretation of arbitration clauses.
However, where such interpretation of arbitration clauses will not result in a just,
practical and speedy resolution of the controversy, or cause serious prejudice to the
other party that rightfully sought judicial intervention, as in the instant case, courts
shall refrain from ordering prior referral to arbitration.
ALTERNATIVE DISPUTE RESOLUTION (ADR) ACT OF 2004
State Policy on ADR
 It is hereby declared the policy of the State to actively promote party
autonomy in the resolution of disputes or the freedom of the party to make
their own arrangements to resolve their disputes. Towards this end, the
State shall encourage and actively promote the use of Alternative Dispute
Resolution (ADR) as an important means to achieve speedy and impartial
justice and declog court dockets. As such, the State shall provide means for
the use of ADR as an efficient tool and an alternative procedure for the
resolution of appropriate cases. Likewise, the State shall enlist active private
sector participation in the settlement of disputes through ADR. (Section 3,
ADR Act of 2004)
 Alternative dispute resolution methods or ADRs - like arbitration, mediation,
negotiation and conciliation - are encouraged by this Court. By enabling the
parties to resolve their disputes amicably, they provide solutions that are less
time-consuming, less tedious, less confrontational, and more productive of
goodwill and lasting relationship. Institutionalization of ADR was envisioned
as 'an important means to achieve speedy and impartial justice and declog
court dockets.' The most important feature of arbitration, and indeed, the key
to its success, is the public's confidence and trust in the integrity of the
process. ·xxx." (RCBC Capital Corporation v. Banco de Oro Unibank, Inc.,
G.R. No. 196171, December 10, 2012)
 In a long line of cases, the Supreme Court has referred to alternative dispute
resolution in general, and arbitration in particular, as the "wave of the future
in international relations”.
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 Instead of relying on the courts to decide, parties now take the
matter to their own hands. They have the freedom to settle on their
own.
 NOT all cases can be subject to ADR. NOT all cases can be
settled. ADR settles only issues of facts. Issues of law must be
settled in courts
Alternative Dispute Resolution
 A system, using means and methods allowed by law and approved by the
parties for the purpose of resolving or facilitating the resolution of disputes
and controversies between them, in an expeditious and speedy manner,
without resorting to court adjudication.
o This definition covers all forms and methods of resolving disputes
outside the court trial system.
o Not just arbitration, mediation, conciliation, early neutral evaluation,
mini-trial, or combinations thereof, but also includes similar
processes in quasi-judicial agencies such as the National Labor
Relations Commission (NLRC), Regional Offices of the Department
of Labor and Employment (DOLE), Intellectual Property Office
(IPO), Mines and Geosciences Bureau, Insurance Commission and
other similar government agencies.
 Any process or procedure used to resolve a dispute or controversy, other
than by adjudication of a presiding judge of a court or an officer of a
government agency in which a neutral third party participates to assist in the
resolution of issues. (Section 3, ADR Act of 2004)
o Under this definition, arbitral proceedings conducted by the above-
mentioned administrative agencies exercising quasi-judicial power
are not covered by the ADR Act of 2004.
o However, it does not mean that similar procedures before quasi-
judicial agencies are not considered forms of arbitration, mediation
or conciliation. They are, except that they are not governed by the
ADR Act of 2004 there being specific laws and rules applicable to
them.
 ALTERNATIVE, not appropriate dispute resolution. The former gives parties
options as to how they settle their dispute. The latter refers to the best, most
practicable or most preferable option
RA 9285 Section 2: party autonomy or freedom of the parties
- Effect: avoid trials
- Resolution of the case is in your hands > speedy and impartial justice
and declog court dockets
- Not every case can be settled but there are some cases which allow for
settlement
Party Autonomy is Central to Arbitration
- Central Doctrine in Arbitration
o In arbitration, you can choose your own judge.
- PARTY AUTONOMY refers to the idea that Arbitration is characterized
by the freedom of the parties to control almost every aspect of the
arbitral process
- They can design their own dispute resolution procedure that will meet
their particular needs & preferences
- Routinely invoked to justify interpretations of how arbitration should
operate, and is almost never criticized
- If there is disagreement in the arbitration, the parties can go to court.
- There is party autonomy to resolve disputes when the disputants have
the capacity to make choices among viable dispute resolution systems
to resolve their disputes & can make the choices for the reason with
which they are comfortable with.
- Parties must be allowed to make their own arrangements in resolving
their disputes
- In case of deficiencies in the Arbitration Agreements
o Allow viable choices
o Provide default workable rules
Objectives and Benefits of ADR
1. Speedy and impartial justice
 ADR has been judicially recognized as a tool for the speedy,
inexpensive and amicable settlement of disputes.
 Courts usually take a longer time to resolve a case
2. Declogging of court dockets
 Ultimate objective of ADR.
Features of ADR:
1. Means used to resolve a dispute or controversy
a. Main objective of the ADR forms, methods and processes.
b. ADR should not be resorted to when the motive is to delay or
suspend the proceedings rather than to put an end or facilitate the
conclusion of the controversy.
2. Utilizes means and methods allowed by law
a. Cannot use own rules that is illegal
b. Any means or method aimed at resolving disputes outside the court
trial system may be recognized as an ADR form provided it is not
contrary to law, morals, good customs, public order or public policy
3. Contractual in nature
a. The parties are given the freedom to agree to resolve their dispute
and decide on the procedure.
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3H | CLASS NOTES | J. ALARAS
b. THE CONTRACT IS THE LAW BETWEEN THE PARTIES provided
that the contract is not in violation of any law or jurisprudence, it will
remain as the law. When the parties exercise the right to party
autonomy, choose this person to be the arbitrator or arbitration
tribunal, you have to abide by it because you entered into a
contract.
4. Avoids court trial
a. ADR is conducted outside of the court trial system.
5. Involves the participation of a neutral 3rd party
a. Mediator / JDR Judge
b. Arbitrator
c. It is imperative that the third party participant observe neutrality at
all times
RA 9285 Section 3: “arbitration, mediation, conciliation, early neutral evaluation, mini-
trial or any combination thereof”
Liberal interpretation in favor of ADR.
Policy on Arbitration: Courts shall not refuse to refer parties to arbitration
- Simple arbitration clause in a contract, courts must follow.
- If there is an arbitration clause, the court must inquire on the possibility
of arbitration
Preference for ADR
 Art. 2030 of the Civil Code shows a clear preference for ADR over the court
trial system. Hence, even if a case is already pending in court, either party
may, before or during the pre-trial, file a motion for the court to refer the
parties to alternative dispute resolution.  e. If you file a complaint, you must raise all the causes of action. In
Article 2030. Every civil action or proceeding shall be suspended:
(1) If willingness to discuss a possible compromise is expressed by one
or both parties; or
(2) If it appears that one of the parties, before the commencement of the
action or proceeding, offered to discuss a possible compromise but the
other party refused the offer.
The duration and terms of the suspension of the civil action or
proceeding and similar matters shall be governed by such provisions of
the rules of court as the Supreme Court shall promulgate. Said rules of
court shall likewise provide for the appointment and duties of amicable
compounders.
Misconceptions on arbitration:
1. Referral tends to oust a court of jurisdiction
a. Failed arbitration = refer the case back to court
2. Court in a better position to resolve the dispute subject of arbitration
a. Arbitration resolves issues of fact. Resolution of issues of law
remain to the court.
b. The primary mode of dispute resolution is going to trial. There are
issues that separates the decisions of the court, issues of facts and
issues of law. When it comes to the issues of law, these are
determined by the court. In arbitration, the arbitral tribunal they only
resolve issues of facts. 
c. If you go to arbitration and there is an issue of law, you can submit
it to the court. Arbitral tribunals cannot resolve an issue of law. 
3. Referral might result in multiplicity of suits
a. When you file a complaint, you are required to raise all the causes
of action. If you fail to do so, you are forever barred. If you fail to
answer an issue (admitted or deny), the issue is deemed admitted.
b. Parties can chop the issues – file one issue in Luzon, another in
Visayas, another in Mindanao. Can file different cases in different
courts.
c. When you file a complaint, raise all the issues, must not chop the
issues, certification against non-forum shopping to avoid multiplicity
of suits.
d. Multiplicity of suits – It is a situation wherein the issues of a
complaint are separated and filed in different courts. In order to
combat this problem, there is now a requirement to add a
certification against non-forum shopping. 
answering such a complaint, the defendant must be able to
comment on all the issues raised by the complainant. 
f. There is no multiplicity of suits in ADR because the Arbitral Tribunal
cannot resolve issues of law.
4. Arbitration proceedings has no comments
a. The Arbitral Tribunal receives evidence on disputed issues and they
come up with the decision on the disputed issues. The arbitral
tribunal was created voluntarily by the parties but the arbitral award
was not negotiated by the parties themselves because the parties
surrendered their right to resolve their disputes to the arbitrator. 
b. The assumption is that when the arbitral tribunal grants the arbitral
award then the parties must voluntarily comply with such award
because they voluntarily agreed to the arbitration. 
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c. When the enforcement of an arbitral award under a special
proceeding is brought to court, the court can no longer comment. 
d. Should court not find case meritorious, walang mangyayari. It will
not conduct trial, it will not refer case to proper court. Bc special
proceeding lang. Hence, ARBITRATION PROCEEDINGS HAS NO
COMMENTS
e. If court finds something wrong or lacking in the arbitral award, the
court will not do anything. The court will not hold trial, receive
evidence or substitute its findings because it is a special
proceeding. The court can give it back to arbitration.
5. Place of arbitration is in a foreign country
a. Party autonomy allows parties to conduct arbitration outside the
Philippines even if both parties are Filipino.
b. Under RA 9285, arbitration when conducted in the Philippines, must
follow Philippine laws.
6. One or more issues are legal and one or more of the arbitrators are not
lawyers
a. In arbitration, it is not required that all are lawyers. It is more
appropriate to choose those who are more knowledgeable in the
issues.
b. When it comes to construction issues in the Philippines,
Construction Arbitration Laws says that CEA has original and
exclusive jurisdiction.
c. Having a lawyer – Pros: know how to conduct trial, know how to
proceed with procedure, know how to appreciate evidence; Cons:
not a technical person
7. One or more of the arbitrators are not Philippine lawyers
a. It is not required in arbitration to have Philippine lawyers. But if the
arbitration involves filing of pleadings in Philippine courts, PH
lawyer is needed. Other than that, PH lawyer is not needed.
8. One or more of the arbitrators are alleged not to possess the required
qualification under the arbitration agreement or law
a. Arbitration is dependent on who you choose as arbitrators.
AUGUST 31, 2021
Parties select an arbitrator > forms an arbitral tribunal > Arbitral Award > law
between the parties
Arbitral award may be submitted to the court (Special proceeding for the recognition
of the arbitral award) should one of the parties refuses to comply. Court shall then
acquire jurisdiction over the case, and, if it recognizes the arbitral award, may execute
it. Jurisdiction of court never lost.
- File to court a special proceeding for recognition of arbitral award. If one
of the parties does not comply, the court can issue an execution.
- Jurisdiction is very important. The issue of jurisdiction can be raised
anytime even in appeal and even to the supreme court.
Arbitral tribunal
 Resolves issues of facts, not issues of law
 For issues of the law, it is the court to decide
Arbitration proceeding
 Does not create multiplicity of suit as it does not deal with issues of law
 Arbitrators come in threes: tie breaker
Mediation
 Parties resolve their issues among themselves
Arbitration
 Parties voluntarily surrender their issues to arbitrators to decide
 resolves issues of facts NOT ISSUES OF LAW (remains with the Court)
 Belief arises because question of law and question of fact are split between
arbitration and court respectively
 Since factual issues are involved, parties are better off choosing a person
knowledgeable of the technical circumstances.
 Parties may opt to choose a lawyer as an arbitrator
Special proceeding on the recognition of arbitral award
 Filed with RTC as it is one of incapable of pecuniary estimation
 Court cannot conduct trial based on arbitral award (this is the meaning of
arbitral proceedings has not comments)
Place of arbitration can be in a foreign country
 Filipinos can bring arbitration outside the Philippines
 If arbitration is held in the Philippines it must follow Philippine laws
ADR Provider means institutions of persons accredited as mediator, conciliator,
arbitrator, neutral evaluator, or any person exercising 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 mediator, conciliator, arbitrator
or neutral, evaluator of their dispute. Whenever referred to in this Act, the term “ADR
practitioners” shall refer to individuals acting as mediator, conciliator, arbitrator or
neutral evaluator.
Kinds of ADR [Arbitration] Provider:
1. Institution (one stop shop) - they have their rules and place for arbitration
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 They have a list of arbitrators who specializes in different fields,
they have the laws and the rules that applies to them, the place
where you can conduct arbitration, and the particular time frame. 
 Institutionalized arbitration is conducted through organized bodies
such as courts of arbitration, trade associations, and arbitration
centers and institutes, each prescribing its own different arbitration
procedure
2. Ad hoc (DIY) - can select arbitrator and create rules on their own
a. Select your own arbitrators
b. Create your own laws or adopt the laws of the Philippines
c. Choose the place and time frame of the arbitration.  incorporated in the Republic of Singapore.
 For ad hoc arbitration, Philippine law grants the parties the right to
select an arbitrator or arbitrators and to choose procedures to
govern the proceedings, including rules of arbitration institutions.
3. Special
 Specialized arbitration involves particular industries or kinds of
disputes.  For example, banking disputes on check clearing are
resolved by a specialized system administered under the auspices
of the Bankers' Association of the Philippines. In the construction
industry, the Construction Industry Arbitration Commission (“CIAC”)
The Special ADR rules recognize the principle of competence-competence, which
means that the arbitral tribunal may initially rule on its own jurisdiction, including any
objects with respect to the existence or validity of the arbitration agreement or any
condition precedent to the filing of a request for arbitration.
Principle of Competence-Competence “Kompetenz-Kompetenz”
- The arbitral tribunal may initially rule on its own jurisdiction, including
any objections with respect to the existence or validity of the arbitration
agreement or any condition precedent to the filing of a request for
arbitration.
- Gives arbitrators the power to rule on jurisdictional challenges.
- It gives arbitrators the power to decide their own jurisdiction.
o Complaint > Responsive Pleading. Motion to dismiss is not a
responsive pleading.
o Issue that is raised and can be raised every time: lack of
jurisdiction; court itself will decide if it has jurisdiction over the
case
- Benefits: prevents dilatory tactics by parties who can cause extensive
delays in getting a case to arbitration
- When a court is asked to rule upon issues affecting the competence or
jurisdiction of an arbitral tribunal in a dispute brought before it, either
before or after the arbitral tribunal is constituted, the court must exercise
judicial restraint and defer to the competence or jurisdiction of the
arbitral tribunal by allowing the arbitral tribunal the first opportunity to
rule upon such issues
Mabuhay Holdings Corp. v. Sembcorp Logistics Limited, G.R. No. 212734.
[December 5, 2018])
FACTS: Mabuhay Holdings Corporation and infrastructure Development & Holdings,
Inc. (IDHI) entered into a venture of carrying passengers on a common carriage by
inter-island fast ferry (with arbitration clause). Sembcorp Logistics Limited
(Sembcorp), formerly known as Sembawang Maritime Limited, is a company
Special ADR Rules: Rule 2.4. Policy implementing competence competence principle.
The arbitral tribunal shall be accorded the first opportunity or competence to rule on
the issue of whether or not it has the competence or jurisdiction to decide a dispute
submitted to it for decision, including any objection with respect to the existence or
validity of the arbitration agreement. When a court is asked to rule upon issue/s
affecting the competence or jurisdiction of an arbitral tribunal in a dispute brought
before it, either before or after. the arbitral tribunal is constituted, the court must
exercise judicial restraint and defer to the competence or jurisdiction of the arbitral
tribunal by allowing the arbitral tribunal the first opportunity to rule upon such issues.
- Important in the case: first opportunity
Principle of Separability (Severability Clause)
- The arbitration clause shall be treated as an agreement independent of
the other terms of the contract of which it forms part. A decision that the
contract is null and void shall not entail ipso jure the invalidity of the
arbitration clause.
o Ex. There is a contract for supply of bananas. In the contract,
there is an ADR clause which states that before any dispute is
filed in court the party shall submit the case to ADR. If the
dispute happens to be the validity of the contract and the
contract was declared void, the arbitration clause is treated as
an agreement independent of the main contract and the
decision that the contract is null and void shall not entail ipso
jure invalidity of the arbitration clause.
- The agreement to arbitrate is separate from the main contract
o The issue of separability arises when there is a challenge to
the validity of an arbitration clause because the overall contract
is invalid
o The claim may be that the entire contract is void because of
such defects as fraud in inducement, lack of a meeting of
minds, or lack of mutuality of consideration.
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o Applies to both domestic and international arbitration.
- Model Law, Article 16(1):
o An arbitration clause which forms part of a contract shall be
treated as an agreement independent of the other terms of the
contract
Should the court or the arbitrator resolve them?
- Arbitration clauses are separable from the contracts in which they are
embodied and where no claim is made that fraud was directed to the
arbitration clause itself, a broad clause will be held to encompass
arbitration of the claim that the contract itself was induced by fraud.
- As a matter of substantive federal law, an arbitration provision is
severable from the remainder of a contract, and a challenge to the
validity of the contract as a whole and not specifically to the arbitration
clause within it, should be for the arbitrator, not the court to decide.
Cases:
1. Gonzales vs Climax Mining LTD, GR Nos 161957 & 167994 (Resolution),
[January 22, 2007]
a. Arbitration agreement is independent of the main contract. The
arbitration does not automatically terminate when the contract from
which it is part comes to an end.
2. Del Monte Corp USA vs Court of Appeals, GR No 136154, [February 7,
2001]
3. Cargill Philippines, Inc vs San Fernando Regala Trading Inc, GR No 175404,
[January 31, 2011]
a. Arbitration agreement which forms part of the main contract shall
not be regarded as invalid just because the main contract is invalid
or did not come into existence. The arbitration agreement shall be
treated as independent form the contract
SEPTEMBER 7, 2021
“CONTAINER” CONTRACT v. SEVERABILITY CLAUSE/PRINCIPLE
Gonzales vs. Climax Mining LTD., G.R. Nos. 161957 & 167994 (Resolution),
[ January 22, 2007], 541 PHIL 143-171
 The doctrine of separability as other writers call it, enunciates that: AN
ARBITRATION AGREEMENT IS INDEPENDENT OF THE MAIN
CONTRACT  Rather than the disputing parties agreeing on the result of the
 The arbitration agreement is to be treated as:
o A separate agreement and the arbitration agreement does not
automatically terminate when the contract of which it is part comes
to an  end.
The separability of the arbitration agreement is especially significant to the
determination of whether the invalidity of the main contract also nullified the
arbitration clause. Indeed, the doctrine denoted that the invalidity of the main
contract, also referred to as the “container” contract, does not affect the
validity of the arbitration agreement.  Irrespective of the fact that the main contract
is invalid, the arbitration clause/agreement still remains valid and enforceable.
Compromise agreement is signed by the parties. And the court will see if the
compromise agreement is valid. Judgment on the merits, final and executory. 
 
APOSTILLE (“ah-po-steel”)
 A certificate attached to another document so that it will be accepted when
used overseas
o Provided under the Hague Convention on Private International Law
of 1961
o Only certifies the origin of the public document to which it relates
 Certifies the authenticity of the signature or seal of the person or authority
that signed or sealed public document & the capacity in which it was done
Authenticate means to sign, execute or adopt a symbol, or encrypt a record in whole
or in part, intended to identify the authenticating party and to adopt, accept or
establish the authenticity of a record or term.
- Signature of a person in a contract binds himself to the contract. The
signature of the parties in the mediation is essential. In arbitration, the
arbitrators are the ones who sign the arbitral award and not the parties.
Arbitration
 Voluntary dispute resolution process in which one or more arbitrators,
appointed in accordance with the agreement of the parties, or rules
promulgated pursuant to this Act, resolve a dispute by rendering an award.
“Arbitration is private adjudication. It is a process by which
somebody (the adjudicator) decides the result of the dispute.
dispute, as in negotiation or mediation, adjudication is the
adjudicator telling the parties the result. As Judges & Jurors are
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3H | CLASS NOTES | J. ALARAS
the adjudicators in litigation, which is adjudication in a government (3)  Pleadings, motions, manifestations, witness statements, reports filed or
forum, a court. Arbitration is adjudication in a private (non- submitted in arbitration or for expert evaluation.
governmental) forum.”

CONFIDENTIALITY

Arbitrator  Secrets revealed or communications made in mediation cannot be shared

with others or used in litigation
 Person appointed to render an award, alone or with others, in a dispute that  Disputants won’t feel free to communicate openly with one another if they
is the subject of an arbitration agreement.  believe that what they say or reveal might be used against them
 Quality of mediation might be compromised if disputants believed that the
communications in Mediation would be subject of Discovery or Trial
Award Tactics later on
 Although the degree of confidentiality afforded by the arbitration law of
 Any partial or final decision by an arbitrator in resolving the issue in a different jurisdictions (absent express provisions by the parties) varies,
controversy however ARBITRATION provides GREATER PRIVACY &
CONFIDENTIALITY than litigation
o Parties can provide for the require the required degree of
confidentiality in their Arbitration Agreements (at least until such
Commercial Arbitration time, if ever, that enforcement through the courts becomes
necessary, when confidentiality might be put at risk)
 It is commercial if it covers matters arising from all relationships of a
 
commercial nature, whether contractual or not
Convention Award
PRINCIPLE OF CONFIDENTIALITY  means a foreign arbitral award made in a Convention State

 Second most important concept in ADR

Court
 “Confidential Information” - any information, relative to the subject of
mediation or arbitration, expressly intended by the source not to be  referred to in Article 6 of the Model Law shall mean a Regional Trial Court
disclosed, or obtained under circumstances that would create a
reasonable expectation on behalf of the source that the information shall not
be disclosed. Court-Annexed Mediation
 Assures the parties in an arbitration proceeding that it will be confidential. 
 If unsuccessful, the parties may resort to court, and the court will have no  Any mediation process conducted under the auspices of the court, after such
idea as to what transpired in the arbitration proceeding.  court has acquired jurisdiction of the dispute. 
 Includes:

(1) Communication, oral or written, made in a dispute resolution proceedings,

including any memoranda, notes or work product of the neutral party or non- Court-Referred Mediation
party participants
 Mediation ordered by a court to be conducted in accordance with the
 Courts of the Philippines are court of records (e.g. Agreement of the parties when an action is prematurely commenced in
transcript of stenographic notes) violation of such agreement. 
 In ADR, there is no TSN.
(2)   An oral or written statement made or which occurs during mediation or for
purposes of considering, conducting, participating, initiating, continuing or
reconvening mediation or retaining a mediator; and Early Neutral Evaluation (ENE)
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 An ADR process wherein parties and their lawyers are brought together Mediation Party
early in a pre-trial phase to present summaries of their cases and receive a
non-binding assessment by an experienced, neutral person, with expertise in  A person who participates in a mediation and whose consent is necessary to
the subject in the substance of the dispute resolve the dispute

KINDS OF MEDIATION PROCEEDINGS:

Mediation-Arbitration (Med-Arb)
1.     Facilitative
2.     Evaluative: Early Neutral Evaluation  A two-step dispute resolution process involving both mediation and
3.     Transformative arbitration
 It is possible to go back to mediation again after arbitration. (Singapore
Mediation Center: Med-Arb-Med)
Government Agency  CBA: employee v. employer
 Any government entity, office or officer, other than a court, that is vested with
 Grievance Machinery: employee v. employee
quasi-judicial power or the power to resolve or adjudicate disputes involving
the government, its agencies and instrumentalities or private persons
 Office of Alternative Dispute Resolution (OADR), Department of Justice Mini-trial
 CAM and JDR - Court
 Structured dispute resolution method in which the merits of a case are
 Philippine Mediation Center (PMC)
argued before a panel comprising senior decision makers with or without the
 Philippine Judicial Academy (PHILJA) presence of a neutral third person after which the parties seek a negotiated
settlement

International Party
 Entity whose place of business is outside the Philippines
 Shall not include a domestic subsidiary of such international party or a co-
venturer in a joint venture 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
Philippines
Mediation
 Voluntary process in which a mediator, selected by the disputing parties,
facilitates communication and negotiation, and assists the parties in
reaching a voluntary agreement regarding a dispute.
Mediator
 Person who conducts mediation
Model Law
 Model Law on International Commercial Arbitration adopted by the United
Nations Commission on International Trade Law on 21 June 1985
(UNCITRAL MODEL LAW)
New York Convention 
 means the United Nations Convention on the Recognition and Enforcement
of Foreign Arbitral Award approved in 1958 and ratified by the Philippine
Senate under Senate Resolution No. 71
 Membership in the NYC
 Equity and comity: if not member of the convention
Non-Convention Award
 Forgeign arbitral award made in a State which is not a Convention State
Non-Convention State
 State that is not a member of the New York Convention

Non-Party Participant 
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3H | CLASS NOTES | J. ALARAS
 Person, other than a party or mediator, who participates in a mediation - A structured information exchange attended by Senior representatives
proceeding as a witness, resource person or expert  of the parties authorized to settle the dispute
- “case presentations”
Proceeding  - Consists of informal summary presentations by lawyers & experts
 Judicial, administrative or other adjudicative process, including related pre- representing each party to a dispute of that party’s best case followed
hearing or post-hearing motions, conferences and discovery by a short rebuttal & clarification from the other party
- The case presentation are presided over by jointly selected neutral
Record  adviser who may comment on the arguments & question the witnesses
 An information written on a tangible medium or stored in an electronic or or counsel
other similar medium, retrievable in a perceivable form - Hearing is informal rules of evidence are not typically followed
- Following the presentations, the senior representatives then enter into
settlement negotiations based upon the information and insights gained
SEPTEMBER 21, 2021 - END RESULT: SETTLEMENT
- Essence: VOLUNTARY & INFORMAL
Section 18. Referral of dispute to other ADR Forms – The parties may agree to
refer one or more or all issues in a dispute or during its pendency to other forms of
ADR such as but not limited to:
MODEL LAW VS MODEL ACT
(a) The evaluation of a third person or [EARLY NEUTRAL EVALUATION]
a. Caucus – talk to parties separately MODEL LAW: Governs International Commercial Arbitration. The Model Law on
International Commercial Arbitration adopted by the UN Commission on International
Trade Law “UNCITRAL”
b. The Judge will tell them that based on his experience and reading
of the case including the evidence offered, these are the MODEL ACT: A statute drafter by the National Conference of Commissioners in
advantages and disadvantages. Uniform State Laws for adoption by state legislatures, modifying it to some extent to
c. The Judges/Mediators will talk to the parties in order to persuade meet its own needs.
them to come up with a settlement.
d. WHEN? After pre-trial but before trial
(b) A mini-trial
DEFINITION OF ARBITRATION
a.All parties will have their senior representatives.
- In an arbitration process, disputing parties present their case to one or
b.One by one, parties will present their cases (witnesses, evidence,
more impartial 3rd persons (ARBITRATOR) who are empowered to
etc.) to the panel.
render a decision. (Nolan-Haley, Jacqueline M. ALTERNATIVE
c. At the end, the senior representatives will decide whether or not
DISPUTE RESOLUTION IN A NUTSHELL, 3RD Ed., 1992.)
who will be entitled.
(c) Mediation-arbitration, or a combination thereof.

NOTE: The decision is not a settlement. It is an arbitral award. 

For purposes of this Act, the use of other ADR forms shall be governed by Chapter 2
of this Act except where it is combined with arbitration in which case it shall likewise Because the parties voluntarily entered into arbitration, they surrendered their rights
be governed by Chapter 5 of this Act. and must accept the decision of the arbitrator.

MINI-TRIAL:
NATURE OF ARBITRATION: (Cole, Tony & Ortilani, Pietro. Understanding comity.
- A settlement process which blends together the components of 2020 ed. Pp. 1-9.)
negotiation & mediation 1. Private Dispute Resolution Mechanism
2. Third Party Dispute Resolution Mechanism
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3H | CLASS NOTES | J. ALARAS
3. Arbitrators perform an ADJUDICATORY Function Mechanism
4. Rule-Centered Dispute Resolution Mechanism
CONDITION PRECEDENT:

In INTERNATIONAL SETTING, as a General rule:

A. Private Dispute Resolution Mechanism
• Any party who agrees to arbitrate loses the right to have their disputes heard by the
o Private in nature; some are held in public, even online courts

- Unlike when you file a case in court, it is public in nature. Anyone can • If parties have agreed to arbitrate a dispute, that dispute can only be taken to court if
attend. However, in arbitration, the public is not allowed. And at times, it both parties agree to do so
is not recorded.

o More intimately connected to human relationships

B. Third Party Dispute Resolution Mechanism
o Controlled by the parties to the dispute
- Resolution of a Dispute through recourse to a 3rd party, other than a court
- The parties can decide how long the arbitration will last. Ex. 3 weeks
only In Mediation, parties themselves talk, agree, and settle. Mediator simply
assists them. But mediator will not receive evidence, they will not decide the
o Can occur in almost any form that they wish to use case. At the end, compromise agreement are not made by the mediators but
the parties themselves.
- The parties can decide their own rules. Ex. 4-man arbitration tribunal

o Varies in form, in accordance with variations in the identities of the parties in the In Arbitration, parties surrender their rights. Arbitrators will decide the case.
dispute

C. Arbitrators perform an ADJUDICATORY Function Mechanism:

- Proceedings need not take place in public
- Arbitrators do not act as government officials - They hear the opposing parties' arguments &
o This is because it is created by the parties themselves, not by
- apply agreed rules to decide the disputes
law.
- Parties have the power to decide how they want to arbitrate - binding the parties with their decision.

- rather than merely advising them

O NO RULES, ONLY LIMITS

 As long as the parties stay within those limits, they can resolve their D. Rule-Centered Dispute Resolution Mechanism:
disputes in any way they wish
- Arbitrator will have to make decisions on FACTS (not law) when resolving the case

- EXPERT DETERMINATION:
PARTY AUTONOMY:
o Decision on the facts have legal consequences but the 3rd party has only been
 Parties cannot be forced to Arbitrate, but must agree to do so asked to make a decision on the facts, not on the law
 The rules governing arbitration are ultimately determined by the
contents of the parties' agreement to arbitrate on o Decide "ex aequo et bono"
 Characterized by the freedom of the parties to control almost every
• On the basis of their own perception of rightness & fairness
aspect of the arbitral process, so that they can design their own dispute
resolution procedure that will meet their particular needs & preferences
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3H | CLASS NOTES | J. ALARAS
- However, whether the arbitrator is applying the law or making a judgment of o Winning party can rely upon the assistance of courts in enforcing the award if the
fairness. A dispute resolution procedure can only qualify as arbitration = IF IT losing party refuses to obey it
INVOLVES A DECISION-MAKER APPLYING A GUIDING RULE TO THE FACTS
OF A DISPUTE • FILE:

• Special Proceeding for Recognition of Arbitral Award

ARBITRAL AWARD: FINAL & BINDING •Upon Recognition ergo court decision, court with jurisdiction to rule on legal
issues
- A decision in which arbitrators resolve one or all of the substantive issues submitted
to arbitration. o Caveat: [no SC jurisprudence yet] courts will offer their assistance even if they
believe the award is incorrect
- Arbitration is fundamentally a "one-stop-shop": once an award has been delivered,
there are very few grounds on which it can be challenged FUNDAMENTAL RISK OF ARBITRATION:

- FINALITY: - UNLESS YOU CHOOSE YOUR ARBITRATOR CAREFULLY, YOU

MAY BE BOUND BY AN xxx
o Parties must comply with the awards & if they refuse to do so, it can be enforced
through the courts

o Even if a judge believes that the award was wrong on the facts or ADVANTAGES:
misinterpreted the law, the award should generally remain in place
- Neutrality
o When the arbitrators have made a decision, it is final & should not be - Speed
overturned by the courts - Finality Enforceability
- Expertise
• EXCEPT: - Flexibility
- IN RARE CIRCUMSTANCES USUALLY RELATING TO - Confidentiality
PROCEDURAL FAIRNESS DISADVANTAGES:

- Costs
- By agreeing to arbitrate, parties opted for a dispute resolution system in which they - Limits to Arbitral Jurisdiction
could select their own decision-maker & as a result determine for themselves what - Limits to Arbitral Power
views & expertise should be used to decide the case If they selected poorly & receive - Lack of Appeal
an award that is questionable, or even demonstrably wrong, this was a risk they took
when they opted for Arbitration
ARBITRATION AGREEMENT: (2006 Amendments to the Model Law, Chapter II.
Arbitration Agreement, Option 1 (1))
o So long as the arbitral process was fundamentally procedurally fair, courts will not
assist parties who believe they have received a mistaken arbitral award-even if they 6) An agreement by the parties to submit to Arbitration all or certain disputes which
agree have arisen or which may arise between them in respect of a defined legal
relationship, whether contractual or not.

a) FORM:
- BINDING:
i) AN ARBITRATION CLAUSE IN A CONTRACT
o As soon as they arbitral awards are issued by the arbitrator, the losing party must
comply with the decision ii) A SEPARATE ARBITRATION AGREEMENT
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
Mandatory Reading:

Arbitration in the Philippines Victor P. Lazatin & Patricia Ann T. Prodigalidad 6. SPEED. The same factors that lead to low costs leads to speedy resolution. In
addition, the parties need not wait for a trial date to be assigned to them but can
Https://Pdf4pro.Com/View/Abirtration-Ib-The-Philippines-35d89f.Html proceed to arbitration as soon as they and the arbitrator are ready.
BRIEF HISTORY OF ARBITRATION:

CHUNG FU INDUSTRIES (PHILIPPINES) INC. V. COURT OF APPEALS, G.R. No. FORMS OF ARBITRATION:
96283, [February 25, 1992), 283 PHIL 474-490
1. Domestic Commercial Arbitration
"Allow us to take a leaf from history and briefly trace the evolution of
arbitration as a mode of dispute settlement. a. Dispute between 2 commercial entities relating to transactions between them

2. International Commercial Arbitration

THEORETICAL ADVANTAGES OF ARBITRATION OVER COURT AJUDICATION: a. Cross Border Arbitration

1. EXPERTISE OF THE DECISION MAKER. 3. Investment Arbitration

a. The arbitrator is selected by the parties, not imposed on them by the courts. Hence, 4. Consumer Arbitration
they can choose a decision maker who is expert in the subject matter of their dispute.
5. State to State Arbitration
b. Select an Expert Arbitrator rather than a sympathetic one.
State-State Dispute: International Court of Justice State-State Arbitration:

• Often default of State-State Dispute

2. FINALITY OF DECISION. The courts will nearly always respect a provision that the
arbitrator's decision is final and binding. This serves to discourage appeals to the • Heavily influenced by the public international law nature of the dispute it typically
courts and to make provisions for finality meaningful. aims at resolving

a. Arbitration awards are not self-enforcing; there is typically no sanction for failing to 6. Mixed Arbitration:
comply with an arbitrator's award unless that award has been judicially confirmed, in
Combines features of both public & private international arbitration, involves the
which event, failure to comply constitutes contempt of court.
settlement of disputes between states and juridical/natural persons
i. SPECIAL PROCEEDINGS: "Petition to Confirm Arbitral Award"

KINDS OF ARBITRATION:
3. PRIVACY OF PROCEEDINGS. If the parties wish their proceedings to be shielded
1) International
from public scrutiny, arbitration - a private forum - is preferable to the courts, which
will rarely deny public access. 2) Domestic

4. PROCEDURAL INFORMALITY. Since the parties determine the procedural. rules,
they can opt for simplicity and informality.
5. LOW COST. Simplified procedures tend to reduce the costs of dispute resolutions,
as does the typical absence of discovery. Costs are also reduced by lack of
opportunity to appeal the arbitrator's decision.
CHAPTER 4: INTERNATIONAL COMMERCIAL ARBITRATION
SEC. 19. Adoption of the Model Law on International Commercial Arbitration. -
International commercial arbitration shall be governed by the Model Law on
International Commercial Arbitration (the "Model Law") adopted by the United Nations
Commission on International Trade Law on June 21, 1985 (United Nations Document
A/40/17) and recommended approved on December 11, 1985, copy of which is
hereto attached as Appendix "A."
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
7) 2006 Amendments to the Model Law:
a) Not adopted by RA 9285; law is specific & no applicable in ADR 2004
b) 2006 Amendments to Model Law provides the adopting State with 2 options
(Chapter II. Arbitration Agreement: Option 1 (a) to (5) & Option 2.
Note: WAIVER OF FORUM NON CONVENIENS:
- in adopting the MODEL LAW, the Philippines in effect waives the right of
a Philippine Court to invoke forum non conveniens as a ground if its aid
is sought in support of an arbitration in the Philippines between parties
who may have their place or places of business in the Philippines.
Continental Micronesian Air Inc. v. Joseph Basso
GR Nos. 178382-83. 23 September 2015
FORUM NON CONVENIENS:
 A Philippine Court in a conflict of law case may assume jurisdiction if it
chooses to do so, provided that the following requisites are met:
1. The Philippine Court is one to which the parties may conveniently
refer to
2. The Philippine Court is in position to make an intelligent decision as
to the law & facts
3. The Philippines Court has or is likely to have power to enforce the
decision
Note: The definition of international arbitration was necessary to:
1. Distinguish it from domestic arbitration.
2. Isolate it from laws & rules which are to apply to domestic arbitration.
3. Court intervention is reduced to the barest minimum.
TESTS FOR INTERNATIONALITY: (see section 32)
1. Place of Business
2. Place of Arbitration
3. Place of Performance
4. Subject Matter of the Agreement
SEPTEMBER 28, 2021
TESTS FOR INTERNATIONALITY: (see section 32)
1. Place of Business
2. Place of Arbitration
3. Place of Performance
4. Subject Matter of the Agreement
International Origin
Need for uniformity
SECTION 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 travaux preparatoires and the report of the Secretary
General of the United Nations Commission on International Trade Law dated 25
March 1985 entitled, "International Commercial Arbitration: Analytical Commentary on
Draft Text identified by reference number a/CN. 9/264."
TRAVAUX PREPARATOIRES
- (french) Preparatory works
- Official records of a negotiation
- This term typically refers to a collection of records relating to a
negotiation of a treaty. These records can take the form of:
o treaty drafts:
o transcripts or minutes of oral negotiations between countries;
o substantive reports prepared by international organizations,
and more.
- They can be valuable research material not only for scholars but also for
lawyers and courts interpreting the meaning of treaty provisions.
- If published, Travaux Préparatoires are usually available in a UN
depository library (e.g.. UHM's Hamilton Library). They may also be
found on official UN sites for the treaty, which may require searching in
the general records of the organization involved in drafting and
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
negotiating the treaty. There might even be records published for a
specific treaty.
- Travaux préparatoires is the name used to describe the documentary
evidence of the negotiation, discussions, and drafting of a final treaty
text.
- Travaux préparatoires is the most commonly used name for these types
of documents, but they may sometimes also be referred to as:
o negotiating history
o drafting history
o preparatory documents
- According to the Vienna Convention on the Law of Treaties, these
documents can be used to supplement the interpretation of a treaty
when the meaning is ambiguous or obscure when reading the treaty
alone.
- There are a number of sources you can use when trying to locate
travaux préparatoires:
- Sometimes, the work of locating these documents has been done for
you and the documents have been compiled and published in a book or
on a website.
- The Historical Archives section of the Audiovisual Library of
International Law is an excellent source for finding selected travaux
préparatoires for UN multilateral treaties.
- Ask DAG also has a number of FAQs related to the travaux
préparatoires for specific treaties and conventions.
- Many official documents of Diplomatic Conferences in which treaties are
negotiated can be found on the UN's Diplomatic Conferences website.
- The Analytic Guide of International Law Commission provides you with
the documents related to the study of a particular international law topic
at the International Law Commission.
SECTION 21. Commercial Arbitration. An arbitration is "commercial" if it covers
matters arising from all relationships of a commercial nature, whether contractual or
not. Relationships of a commercial nature Include, but are not limited to, the
following transactions: any trade transaction for the supply or exchange of goods or
services; distribution agreements; construction of works commercial representation or
agency; factoring: leasing; consulting; engineering licensing: Investment; financing:
banking; Insurance; joint venture and other forms of industrial or business
cooperation; carriage of goods or passengers by air, sea, rail or road.
DEFINITION BY INCLUSION:
Non-Contractual relationships of a commercial nature: torts, damages, ship
spillages
Commercial (not limited to this): trade transactions for supply or exchange of
goods or services; Distribution agreements licensing; Construction works;
investments; Commercial representation or agency; financing; Factoring; banking;
Leasing; insurance; Consulting; JVA (joint venture agreements); Engineering;
Industrial/Business corporation; Carriage of goods/passengers by air, ship, rail, road
Parties may agree on arbitration. The arbitration is technically contractual. Parties are
allowed/permitted to enter a commercial arbitration even without arbitration clause.
SECTION 22. Legal Representation in International Arbitration. In international
arbitration conducted in the Philippines, a party may be represented by any
person of his choice: Provided, That such representative, unless admitted to the
practice of law in the Philippines, shall not be authorized to appear as counsel
in any Philippine court, or any other quasi-judicial body whether or not such
appearance is in relation to the arbitration in which he appears.
- Legal Representation in International Arbitration- it does not have to
be the arbitrator
LIMITED LEGAL APPEARANCE
- If NOT member of the Philippine Bar, a legal counsel should only be
allowed to participate in a particular International commercial arbitration
exclusively
o Not allowed to appear ELSEWHERE Le. courts.
How do you start an arbitration if you do not have a court? You should select an
arbitrator to form your court or arbitral tribunal.
Remember that an arbitrator need not be a lawyer. However, a lawyer is needed if the
issues of the case will be presented to the court.
SECTION 23. Confidentiality of Arbitration Proceedings. The arbitration
proceedings, Including the records, evidence and the arbitral award, shall be
considered confidential and shall not be published except (1) with the consent of
the parties, or (2) for the limited purpose of disclosing to the court, of relevant
documents in cases where resort to the court is allowed herein: Provided, however,
That the court in which the action or the appeal is pending may issue a PROTECTIVE
ORDER prevent or prohibit to disclosure of documents or information containing
secret processes, developments, research and other information where it is shown
that the applicant shall be materially prejudiced by an authorized disclosure thereof.
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
General Rule: Confidentiality is strictly enforced;
Exceptions:
1. Consent of parties
2. limited purpose
relevant documents
court case
3. PROTECTIVE ORDER: WHERE THE ACTION OR APPEAL IS PENDING; may
issue a PROTECTIVE ORDER to prevent material prejudice in case of disclosure
- prevent/prohibit
- disclosure of documents/information - containing secret processes, development,
research, information
Compare with Court proceedings:
1. public in nature
2. courts of record: access to public documented
3. disclosure is discretionary and belongs both to the court & parties
Stay of Civil Action:
SECTION 24. Referral to Arbitration. A court before which an action is brought in a
matter which is the subject matter of an arbitration agreement shall,
(1) if at least one party so requests not later than the pre-trial conference, or
(2) upon the request of both parties thereafter,
refer the parties to arbitration unless it finds that the arbitration agreement is null and
void, inoperative or incapable of being performed.
- When issues of facts are a bit technical, the parties may agree that it be
referred in an arbitration
- An arbitration proceeding is not mandatory because it is not subject to
the will of the parties to a controversy. ADR is strictly consensual.
R.A. No. 876: Arbitration Law
Section 7. Stay of civil action. If any suit or proceeding be brought upon an issue
arising out of an agreement providing for the arbitration thereof, the court in which
such suit or proceeding is pending, upon being satisfied that the issue involved in
such suit or proceeding is referable to arbitration, shall stay the action or
proceeding until an arbitration has been had in accordance with the terms of
the agreement: Provided, That the applicant for the stay is not in default in
proceeding with such arbitration.
Rule: AN ARBITRATION PROCEEDING IS NOT MANDATORY BECAUSE IT IS
SUBJECT TO THE WILL OF THE PARTIES TO A CONTROVERSY.
- IT IS STRICTLY CONSENSUAL
Contract with Arbitration Agreements
KOPPEL, INC. V. MAKATI ROTARY CLUB FOUNDATION, INC., G.R. No. 198075,
(September 4, 2013), 717 PHIL 337-365
Attention must be paid, however, to the salient wordings of Rule 4.1. It reads:
"(a) party to a pending action filed in violation of the arbitration
agreement ...may request the court to refer the parties to arbitration in
accordance with such agreement."
In using the word "may" to qualify the act of filing a "request" under Section 24
of R.A. No. 9285, the Special ADR Rules clearly did not intend to limit the
invocation of an arbitration agreement in a pending suit solely via such
"request." After all, non-compliance with an arbitration agreement is a valid
defense to any offending suit and, as such, may even be raised in an answer as
provided in our ordinary rules of procedure.
In this case, it is conceded that petitioner was not able to file a separate "request of
arbitration before the MeTC However, it is equally conceded that the petitioner, as
early as in its Answer with Counterclaim, had already apprised the MeTC of the
existence of the arbitration clause in the 2005 Lease Contract and, more significantly,
of its desire to have the same enforced in this case. This act of petitioner is enough
valid invocation of his right to arbitrate.
It is clear that under the law, the instant unlawful detainer action should have
been stayed; the petitioner and the respondent should have been referred to
arbitration pursuant to the arbitration clause of the 2005 Lease Contract. The
MeTC, however, did not do so in violation of the law-which violation was, in
turn, affirmed by the RTC and Court of Appeals on appeal.
The violation by the MeTC of the clear directives under R.A. Nos. 876 and 9285
renders invalid all proceedings it undertook in the ejectment case after the
filing by petitioner of its Answer with Counterclaim the point when the petitioner
and the respondent should have been referred to arbitration. This cate must,
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
therefore, be remanded to the MeTC and be suspended at said point. Inevitably, the
decisions of the MeTC, RTC and the Court of Appeals must all be vacated and set
aside.
The petitioner and the respondent must then be referred to arbitration pursuant
to the arbitration clause of the 2005 Lease Contract.
This Court is not unaware of the apparent harshness of the Decision that it is about
to make. Nonetheless, this Court must make the same if only to stress the point that,
in our jurisdiction, bona fide arbitration agreements are recognized as valid; and
that laws, rules and regulations 104 do exist protecting and ensuring their
enforcement as a matter of state policy. Gone should be the days when courts treat
otherwise valid arbitration agreements with disdain and hostility, if not outright
“jealousy”, and then get away with it. Courts should instead learn to treat
alternative means of dispute resolution as effective partners. in the
administration of justice and, in the case of arbitration agreements, to afford
them judicial restraint. Today, this Court only performs its part in upholding a once
disregarded state policy.
[Commencement of ARBITRATION AS PER AGREEMENT OF PARTIES:]
SECTION 25. Interpretation of the Act. In Interpreting the Act, the court shall have
due regard to the policy of the law in favor of arbitration. Where
(1) action is commenced by or against multiple parties,
(2) one or more of whom are parties to an arbitration agreement, the
(3) court shall refer to arbitration those parties who are bound by the arbitration
agreement
(4) although the civil action may continue as to those who are not bound by
such arbitration agreement.
INTERPRETATION: In favor of arbitration
In case some of the parties are not part of the arbitration, the civil action may proceed
as amongst them
- NOT INDEFINITE
Q: which case shall be prioritized? The Arbitration case or the Civil/commercial case?
Q: Can a party refuse to enter into arbitration despite an arbitration agreement on the
ground that arbitration is strictly consensual as compliant with arbitration & the
proceedings are not mandatory?
SECTION 26. Meaning of "Appointing Authority".
"Appointing Authority" as used in the Model Law shall mean:
(1) the person or institution named in the arbitration agreement as the appointing
authority; or the
(2) regular arbitration institution under whose rules the arbitration is agreed to be
conducted.
Note: Where the parties have agreed to submit their dispute to institutional arbitration
rules, and unless they have agreed to a different procedure, they shall be deemed to
have agreed to the procedure under such arbitration rules for the selection and
appointment of arbitrators.
AD HOC ARBITRATION: IBP National President
In ad hoc arbitration, the default appointment of an arbitrator shall be made by the
National President of the Integrated Bar of the Philippines (IBP) or his duly authorized
representative.
Who is your ARBITRATOR?
1. Person or Arbitration Body Indicated in the Contract's Arbitration Agreement
a. Pre-selected & Indicated in the Arbitration Agreement
b. Specific Person or from a Specific Group
2. Regular Arbitration Institution under whose rules the arbitration is agreed to be
conducted
Presumption: deemed to have agreed to procedures under such arbitration rules for
the selection & appointment of arbitrators
SECTION 27. What Functions May be Performed by Appointing Authority. The
functions referred to in Articles 11(3), 11(4), 13(3) and 14(1) of the Model Law shall
performed by the Appointing Authority, unless the latter shall fail or refuse to act
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
within thirty (30) days from receipt of the request in which case the applicant may-
renew the application with the Court.
ADISE: CHOOSE YOUR ARBITRATORS WELL!
FUNDAMENTAL RISK OF ARBITRATION: UNLESS YOU CHOOSE YOUR
ARBITRATOR CAREFULLY, YOU MAY BE BOUND BY AN AWARD EVENTHOUGH
IT IS DEMONSTRABLY INCORRECT
UNCITRAL MODEL LAW:
ARTICLE 11. APPOINTMENT OF ARBITRATORS
OPTIONS: 3 arbitrators; Sole arbitrator
Avoid Discrimination:
1)    No person shall be precluded by reason of his nationality from acting
as an arbitrator, unless otherwise agreed by the parties
2)    The parties are free to agree on a procedure of appointing the arbitrator
or arbitrators, subject to the provisions of paragraphs 4 and 5 of this
article.
3)    Failing such agreement,
a)     In an arbitration with three arbitrators
·      Each party shall appoint one arbitration, and
·      The 2 arbitrators thus appointed shall appoint the 3rd arbitrator
[1] if a party fails to appoint the arbitrator within thirty days of
receipt of a request to do so from the other party, or  arbitral tribunal or to the extent that the arbitral tribunal has no power to act or is
[2] if the two arbitrators fail to agree on the third arbitrator
within thirty days of their appointment, the appointment shall
be made, upon request of a party [INTERIM MEASURE OF
PROTECTION] , by the court or other authority specified in
article 6;
 
(b) in arbitration with a sole arbitrator, if the parties are unable to
agree on the arbitrator, he shall be appointed, upon request of a party,
by the court or other authority specified in article 6.
(4) Where, under an appointment procedure agreed upon by the
parties,
(a) a party fails to act as required under such procedure, or
(b) the parties, or two arbitrators, are unable to reach an
agreement expected of them under such procedure, or
(b) a third party, including an institution, fails to perform any
function entrusted to it under such procedure, any party may
request the court or other authority specified in article 6
to take the necessary measure, unless the agreement on INTERIM
MEASURES aim to protect the parties' rights before or during
arbitration proceedings, to regulate the terms of an ongoing
relationship, or to avoid frustration of the final award. 
They are sometimes called CONSERVATORY MEASURES,
provisional relief, or provisional measures, but it is always the
same procedural mechanism which is considered.
NECESSARY MEASURE = IMP: INTERIM MEASURE OF PROTECTION
INTERIM MEASURES aim to protect the parties' rights before or during arbitration
proceedings, to regulate the terms of an ongoing relationship, or to avoid frustration of
the final award.
They are sometimes called CONSERVATORY MEASURES, provisional relief, or
provisional measures, but it is always the same procedural mechanism which is
considered.
SECTION 28. Grant of Interim Measure of Protection.
(a) It is not incompatible with an arbitration agreement for a party to request,
(1) before constitution of the tribunal, from a Court an interim measure of protection
and for the Court to grant such measure.
(2) After constitution of the arbitral tribunal & during arbitral proceedings, a request for
an interim measure of protection, or modification thereof, may be made with the
unable to act effectively, the request may be made with the Court. The arbitral tribunal
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 acceptance has been received by the party making the request.
(b) The following rules on interim or provisional relief shall be observed:
(1) Any party may request that provisional relief be granted against the adverse party.
(2) Such relief may be granted:
(i) to prevent irreparable loss or injury (i.e. TRO)
(ii) to provide security for the performance of any obligation, (i.e. bond, attachment)
(iii) to produce or preserve any evidence (i.e. search warrants: civil search warrants in
intellectual Property Law: 1] antonpiller order 2] saiziecontrefacon both); or
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
(iv) to compel any other appropriate act or omission (i.e. mandamus).
(3) The order granting provisional relief may be conditioned upon the provision of
security or any act or omission specified in the order
- Surety, cash or property BOND
(4) Interim or provisional relief is requested by written application transmitted 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.
(5) 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,
(7) A party who does not comply with the order shall be liable for all damages
resulting from noncompliance, including all expenses, and reasonable attorney's fees,
paid in obtaining the order's judicial enforcement.
Q: MAY THE COURT GRANT AN EX PARTE APPLICATION & GRANT OF IMP?
An EX PARTE INTERIM MEASURE OF PROTECTION Where a party is not notified
of an application & not given a right to defend its case at the 1st stage of the
proceedings.
ANS: in cases of extreme urgency and cases in which the very purpose of the
requested interim measure could be jeopardized by giving an advance notice of the
request to the other party
When is an Arbitral Tribunal deemed constituted?
1. when the sole arbitrator or the third arbitrator, who has been nominated
2. has accepted the nomination and
3. written communication of said nomination and acceptance has been received by
the party making the request.
Nature of Arbitral Tribunal:
FRUEHAUF ELECTRONICS PHILIPPINES CORP. V. TECHNOLOGY
ELECTRONICS ASSEMBLY & MANAGEMENT PACIFIC CORP., G.R. No. 204197,
[November 23, 2016], 800 PHIL 721-768)
AN ARBITRAL TRIBUNAL DOES NOT EXERCISE QUASI JUDICIAL POWERS: IT
IS A CREATURE OF CONTRACT
As a contractual and consensual body, the arbitral tribunal does not have any
inherent powers over the parties.
Quasi-judicial or administrative adjudicatory power is the power:
(1) to hear and determine questions of fact to which legislative policy is to apply, and
(2) to decide in accordance with the standards laid down by the law itself in enforcing
and administering the same law.
Quasi-judicial power is only exercised by administrative agencies - legal organs of the
government.
Quasi-judicial bodies can only exercise such powers and jurisdiction as are expressly
or by necessary implication conferred upon them by their enabling statutes. Like
courts, a quasi-judicial body's jurisdiction over a subject matter is conferred by law
and exists independently from the will of the parties. As government organs
necessary for an effective legal system, a quasi-judicial tribunal's legal existence
continues beyond the resolution of a specific dispute. In other words, quasi-judicial
bodies are creatures of law.
As a contractual and consensual body, the arbitral tribunal does not have any
inherent powers over the parties. It has no power to issue coercive writs or
compulsory processes. Thus, there is a need to resort to the regular i courts for
interim measures of protection and for the recognition or enforcement of the arbitral
award.
The arbitral tribunal acquires jurisdiction over the parties and the subject matter
through stipulation. Upon the rendition of the final award, the tribunal becomes
functus officio and save for a few exceptions-ceases to have any further jurisdiction
over the dispute. The tribunal's powers (or in the case of ad hoc tribunals, their very
existence) stem from the obligatory force of the arbitration agreement and its ancillary
stipulations. Simply put, an arbitral tribunal is a creature of contract.
Philippine Charity Sweepstakes Office v. DFNN, Inc., G.R. No. 206611 (Notice),
[February 20, 2017]
INTERIM MEASURES aim to protect the parties' rights before or during arbitration
proceedings
INTERIM MEASURE OF PROTECTION is defined under the UNCITRAL Model Law
on International Commercial Arbitration as:
Section 1. Interim measures.
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3H | CLASS NOTES | J. ALARAS
Article 17, Power of arbitral tribunal to order interim measures.
(3) An interim measure is any temporary measure, whether in the form of an award or
in another form, by which, at any time prior to the issuance of the award by which the
dispute is finally decided, the
(4) ARBITRAL TRIBUNAL orders a party to:
(a) Maintain or restore the status quo pending determination of the dispute;
(b) Take action that would prevent, or refrain from taking action that is likely to cause,
current or imminent harm or prejudice to the arbitral process itself;
(c) Provide a means of preserving assets out of which a subsequent award may be
satisfied; or
(d) Preserve evidence that may be relevant and material to the resolution of the
dispute
Xxx Resolution Act of 2004, a COURT may grant an INTERIM PROTECTION OR
PROVISIONAL RELIEF:
(i) to prevent irreparable loss or injury:
(ii) to provide security for the performance of any obligation,
() to produce or preserve any evidence, or
(iv) to compel any other appropriate act or omission.
Interim measures of protection serve to protect the status quo during the pendency of
the arbitration proceeding. It is merely ancillary to the main action.
SECTION 29. Further Authority for Arbitrator to Grant Interim Measure of
Protection.- Unless otherwise agreed by the parties, the arbitral tribunal may, at the
request of a party, 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 against a party, appointment of receivers or detention,
preservation, inspection of property that is the subject of the dispute in arbitration.
Either party may apply with the Court for assistance in implementing or enforcing an
interim measure ordered by an arbitral tribunal.
Interim Measures for Protection available: (measures aimed at....)
1. Preserving or restoring the status quo pending the determination of the dispute
2. Preventing the current or imminent harm to the party
3. Facilitate or to ensure the enforcement of a future award
4. Facilitate the conduct of an arbitral proceeding
OCTOBER 5, 2021
1.  Facilitating the conduct of the arbitration proceedings
1. When an issue arises, the arbitral tribunal shall be the first agency
to rule on it because of the competence-competence rule. The
parties may not go to the RTC without raising the issue to the
arbitral tribunal. 
2. Court intervention as much as possible should not interfere with
arbitration because the latter has their own rules and the parties
choose their own arbitrators. 
3. When the decision of the arbitrators is not unanimous, the parties
now have a cause of action to raise and the court takes cognizance
of the case. The cause of action is based on a contract to create an
arbitral tribunal and the violation of thereof.
4. It is an action and not a special proceeding. A special proceeding is
limited only to the recognition of an arbitral award. 
5. Thru procedural orders: generally followed because they are
directed to a party & an arbitral tribunal might draw adverse
conclusion from non-compliance with such orders in addition to the
inherent authority to make an allocation of arbitration costs in the
final award
6.  EX: Appointment of Arbitrators
2. Avoiding loss or damages and measures aimed at preserving the
status quo
a. Procedural court orders requiring a party to continue performing a
contract or refraining from taking certain actions during the arbitral
proceedings until the awards are made
i. EX: TRO, Mandamus, Attachments. Search Warrant.
1. Arbitral Tribunal first based on the competence-
competence rule then if the award is violated or
not complied with, go to Court
2. The arbitral tribunal expects the parties to comply
3. Facilitating the enforcement of the award
a. Purely judicial in nature:
b. When the arbitral tribunal issues an award, the parties are bound
thereto and must follow it. The injured party may file for motion of
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3H | CLASS NOTES | J. ALARAS
execution which is a non-litigious motion., meaning the court may
determine its validity.
c. Procedural court orders for the provision of security or for
injunction or attachment or for the sale of perishable goods
d. Arbitral Tribunal  has no coercive powers to enforce the award.
The parties may voluntarily comply thereto, otherwise the injured
party can go to the courts.
e. In the instance that there is an appeal, the party may ask for a
motion for execution pending appeal. 
f. If a party files an appeal, there is also a need to file a bond. The
bond is not equal to the award, it is only an appeal bond. In the
case that the other party wants to execute pending an appeal, the
said party will have to file a counterbond that will answer to any
liabilities of the party who filed the appeal.
g. Executi on Bond
4. Distinguish Busn (MRT) vs Falcon (Passport) Cases
BUSAN UNIVERSAL RAIL, INC., PETITIONER, VS. DEPARTMENT OF
TRANSPORTATION-METRO RAIL TRANSIT 3, RESPONDENT.G.R. No.
235878, February 26, 2020
Busan: As a negotiated procurement under the RA9184, a respondent
and the joint venture composed of Busan Transportation Corp, Edison,
Tramat, Castan, entered into a contract for the DOTC-MRT3 System
Maintenance Provider, light rail vehicles (LRV) general overhaul and toral
replacement of the signaling system (MRT3 Contract). The JV was
incorporated as a special purpose company known as BURI.
In procurement, there is always bidding whenever the government wants to
purchase something and have activities done. In the case that the bidding
fails, the government then asks for somebody or a company for them to
negotiate performance.  incompatible with an arbitration agreement for a party to request,
Petition is bereft of merit.
Issue: WON the RTC has jurisdiction to issue the protection order and restraining
order sought  by petitioner.
Essentially, the only issue that is proper for resolution is whether or not the RTC
has jurisdiction to issue the protection and restraining order sought by
petitioner against respondent.
Petitioner argues that the RTC has authority to issue interim measures of protection in
cases involving disputes that are proper for arbitration by virtue of RA 9184. The
prohibitory provision under Section 3(d) of RA 8975 is not applicable inasmuch as the
arbitration clause contained in the GCC, which is an integral part of the MRT3
Contract, is anchored on RA 9184.
The MRT3 Contract was entered into as a result of a negotiated procurement
under RA 9184, or the Government Procurement Reform Act. This provides that
all procurement of the government will always have an arbitration clause. Under
Section 59, Rule XVIII of the Revised Implementing Rules and Regulations of RA
9184:
SECTION 59. Arbitration. —
59.1. If any dispute or difference of any kind whatsoever shall arise between
the parties in connection with the implementation of the contract covered by
the Act and this IRR, the parties shall make every effort to resolve amicably
such dispute or difference by mutual consultation.
59.2. Any and all disputes arising from the implementation of a contract
covered by the Act and this IRR shall be submitted to arbitration in the
Philippines according to the provisions of R.A. 876, otherwise known as the
"Arbitration Law" and R.A. 9285, otherwise known as the "Alternative
Dispute Resolution Act of 2004": Provided, however, That disputes that are
within the competence of the Construction Industry Arbitration
Commission to resolve shall be referred thereto. The process of
arbitration shall be incorporated as a provision in the contract that will be
executed pursuant to the provisions of the Act and this IRR: Provided,
further, That by mutual agreement, the parties may agree in writing to resort
to other alternative modes of dispute resolution.
Under Section 28 of RA 9285 or the Alternative Dispute Resolution Act of 2004, as
referred to in the above Section 59, the grant of an interim measure of protection by
the proper court before the constitution of an arbitral tribunal is allowed:
Sec. 28. Grant of Interim Measure of Protection. — (a)It is not
before constitution of the tribunal, from a Court29 an interim measure
of protection and for the Court to grant such 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 or is unable to act effectively, the
request may be made with the Court. The arbitral tribunal 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 acceptance has been received by the party making the
request.
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3H | CLASS NOTES | J. ALARAS
(b) The following rules on interim or provisional relief shall be
observed:
-1 Any party may request that provisional relief be granted
against the adverse party.
-2 Such relief may be granted:
(i) to prevent irreparable loss or injury;
(ii) to provide security for the performance of any
obligation;
(iii) to produce or preserve any evidence; 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
specified in the order.
-4 Interim or provisional relief is requested by written
application transmitted 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.
-5 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.
-7 A party who does not comply with the order shall be
liable for all damages resulting from noncompliance,
including all expenses and reasonable attorney's fees,
paid in obtaining the order's judicial enforcement.
However, RA 8975 prohibits the issuance of temporary restraining orders and
preliminary injunctions against national government projects. Being a
government project, only the Supreme Court may issue a temporary restraining
order. Section 3 thereof reads:
Sec. 3. Prohibition on the Issuance of Temporary Restraining
Orders, Preliminary Injunctions and Preliminary Mandatory Injunctions. —
No court, except the Supreme Court, shall issue any temporary restraining
order, preliminary injunction or preliminary mandatory injunction against the
government, or any of its subdivisions, officials or any person or entity,
whether public or private, acting under the government's direction, to
restrain, prohibit or compel the following acts:
(a) Acquisition, clearance and development of the right-of way
and/or site or location of any national government project;
(b) Bidding or awarding of contract/project of the national
government as defined under Section 2 hereof;
(c) Commencement, prosecution, execution, implementation,
operation of any such contract or project;
(d) Termination or rescission of any such contract/project; and
(e) The undertaking or authorization of any other lawful activity
necessary for such contract/project.
This prohibition shall apply in all cases, disputes or controversies instituted by a
private party, including but not limited to cases filed by bidders or those claiming to
have rights through such bidders involving such contract/project. This prohibition shall
not apply when the matter is of extreme urgency involving a constitutional issue, such
that unless a temporary restraining order is issued, grave injustice and irreparable
injury will arise. The applicant shall file a bond, in an amount to be fixed by the court,
which bond shall accrue in favor of the government if the court should finally decide
that the applicant was not entitled to the relief sought.
If after due hearing the court finds that the award of the contract is null and void, the
court may, if appropriate under the circumstances, award the contract to the qualified
and winning bidder or order a rebidding of the same, without prejudice to any liability
that the guilty party may incur under existing laws.
On the application of RA 9285 vis-a-vis RA 8975, the case of Falcon is
instructive:
Republic Act No. 9285 is a general law applicable to all matters and
controversies to be resolved through alternative dispute resolution methods.
This law allows a Regional Trial Court to grant interim or provisional relief,
including preliminary injunction, to parties in an arbitration case prior to the
constitution of the arbitral tribunal.
This general statute, however, must give way to a special law governing
national government projects, Republic Act No. 8975 which prohibits courts,
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3H | CLASS NOTES | J. ALARAS
except the Supreme Court. from issuing TROs and writs of preliminary
injunction in cases involving national government projects
For further elucidation on the prohibition under RA 8975, the following
pronouncements in that case are quoted hereunder:
x x x In seeking to enjoin the government from awarding or implementing a
machine readable passport project or any similar electronic passport or visa
project and praying for the maintenance of the status quo ante pending the
resolution on the merits of BCA's Request for Arbitration, BCA effectively
seeks to enjoin the termination of the Amended BOT Agreement for the
MRP/V Project.
x x x Under Section 3(d) of that statute, trial courts are prohibited from
issuing a TRO or writ of preliminary injunction against the government to
restrain or prohibit the termination or rescission of any such national
government project/contract.
The rationale for this provision is easy to understand. For if a project
proponent — that the government believes to be in default — is allowed to
enjoin the termination of its contract on the ground that it is contesting the
validity of said termination, then the government will be unable to enter into a
new contract with any other party while the controversy is pending litigation.
Obviously, a court's grant of injunctive relief in such an instance is prejudicial
to public interest since government would be indefinitely hampered in its duty
to provide vital public goods and services in order to preserve the private
proprietary rights of the project proponent. On the other hand, should it turn
out that the project proponent was not at fault, the BOT Law itself
presupposes that the project proponent can be adequately compensated for
the termination of the contract. Although BCA did not specifically pray for the
trial court to enjoin the termination of the Amended BOT Agreement and
thus, there is no direct violation of Republic Act No. 8795, a grant of
injunctive relief as prayed for by BCA will indirectly contravene the same
statute.
Verily, there is valid reason for the law to deny preliminary injunctive relief to those
who seek to contest the government's termination of a national government contract.
The only circumstance under which a court may grant injunctive relief is the existence
of a matter of extreme urgency involving a constitutional issue, such that unless a
TRO or injunctive writ is issued, grave injustice and irreparable injury will result.
The MRT3 Contract was entered into as a result of a negotiated
procurement. That disputes are within the competence of the
Construction Industry Arbitration Commission to resolve shall be
referred thereto.
 Section 28: Grant of IMP. Vs RA 8975: While the ADR Law
provides for protection orders, RA 8975 prohibits the issuance of
TROs and preliminary injunction against national government
projects
ADR law is a general law applicable to all matters and
controversies
The general statute, however, must give way to a special law
governing national government projects which prohibits courts
except SC, from issuing TROs and injunctions in cases involving
the national government projects. Only the SC can issue such
orders and writ.
b.     DFA vs Falcon: IMP vs Prohibition of Injunction against natgov
projects
Issuance of the e-passports are national in scope. Applications are
received from the regional offices then forwarded to the national
office of the DFA. While the MRT3 project is only in NCR. 
CASE: DEPARTMENT OF FOREIGN AFFAIRS V. FALCON, G.R. No. 176657
(September 1, 2010)
Section 3(h)  of the same statute provides that the “Court” as referred to in
Article 6 of the Model Law shall mean a Regional Trial Court. Republic Act No. 9285
is a general law applicable to all matters and controversies to be resolved
through alternative dispute resolution methods. This law allows a Regional Trial
Court to grant Interim or provisional relief, including preliminary injunction, to
parties in an arbitration case prior to the constitution of the arbitral tribunal.
This general statute, however, must give way to a special law governing national
government projects, Republic Act No. 8975 which prohibits courts, except the
Supreme Court, from issuing TROs and writs of preliminary injunction in cases
involving national government projects.
However. as discussed above, the prohibition in Republic Act No. 8975 is
inoperative is this case, since PETITIONERS FAILED TO PROVE THAT THE E-
PASSPORT PROJECT IS NATIONAL GOVERNMENT PROJECT as defined
therein. Thus, the trial court bad jurisdiction to issue a writ of preliminary
injunction against the e-Passport Project.
Judge Alaras: This case is about issuance of E-Passports. All applications
for E-Passports are technically national in scope. 
ADR is the general law, it allows for the RTC to issue an IMP. However, the
general law must give way to a special law governing national projects. R.A.
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
8975 prohibits the courts except the Supreme Court from issuing TROs and what is illegal then provide for the remedies, and then implement it. This is
writs of preliminary injunction  in cases involving national projects. So in this something that a special proceeding court cannot do.
case the RTC should have prohibited from issuing the IMP but in DFA, they
did not prohibit such issuance. Also, in this case it was held that the In Special Proceedings, if the court does not agree with the award, it will just
prohibition in R.A. 8975 was inoperative because there is failure to prove drop the case and it will not recognize the award.
that the project is a national project. In the Busan case, they were able to
prove that it is  a national government project. In this case, the issuance by (3) appeal from the RTC decisions on (RECOGNITION) arbitral awards to the
the RTC of the IMP could have been prevented but it was not able to do so Court of Appeals,
mainly because the parties who asked for the relief to be set aside failed to
prove that it is a national government project. Judge Alaras: if the court recognizes the decision, then you go on appeal,
from the decision of the RTC recognizing the award, to the CA. Appeal is
granted when it is recognized, the appeal is not granted if it is not
recognized. The basis for the appeal in the CA is quite different.
CASE:  Department of Foreign Affairs v. BCA International Corp., G.. No.
The extent of court intervention in domestic arbitration is specified in the IRR of
225051, [July 19, 2017], 813 PHIL 1086-1103
RA No. 9285, thus:
*EXTENT OF COURT INTERVENTION IN ARBITRATION
Art. 5.4. Extent of Court Intervention. In matters governed by this Chapter, no court
PROCEEDINGS:
shall intervene except in accordance with the Special ADR Rules. Court intervention
in the Special ADR Rules is allowed through these remedies: 
Judge Alaras: The general rule is that there should be no court intervention,
but RA 9285 provides for instances when Court interventions are allowed.
with the RTC:
Court intervention is allowed under RA No. 9285 in the following instances:
Specific action
(1) Specific Court Relief, (Judge Alaras: It must be specified what you are asking
(1) when a party in the arbitration proceedings requests for an interim measure
the court to do.) which includes Judicial Relief Involving the Issue of:
of protection;
a. Existence, Validity and Enforceability of the Arbitral Agreement ( no
arbitral tribunal constituted; not an award),
Judge Alaras: because you should go first to the arbitral tribunal for the
interim measure of protection--Competence-Competence. So before you go
Judge Alaras: The Arbitral Tribunal is not yet constituted, just the Arbitral
to court for the intervention, you ask first the arbitral tribunal to issue an
Agreement. 
interim measure of protection. Failure to issue this, then that’s the time you
should go to the courts for interim measure of protection. Remember:
Arbitration Proceedings first, second after refusal or failure to issue interim
measure of protection, go to the courts.
b. Interim Measures of Protection,
(2) judicial review of arbitral awards by the Regional Trial Court (RTC); a. Arbitrators: i) Challenge to the appointment of Arbitrators; ii) Termination
of Mandate of Arbitrator.
Judge Alaras: when the arbitral tribunal comes up with arbitral award, the Judge Alaras: Even if an Arbitrator is challenged, unless the challenge has
idea is that you are expected to follow it. If you do not follow, the arbitral been validly granted and the arbitrator is inhibited, the arbitrators should
tribunal cannot force you because they can only issue such order/s. In order continue to work even if the arbitrators are challenged (it is like objection to
to execute this arbitral award, you have to file it as a SPECIAL the appointment of the tribunal). This will still be in the Arbitral Tribunal even
PROCEEDING for recognition of arbitral award not a SPECIAL ACTION.  though they will be the one to decide, like in questioning the jurisdiction of
the courts, the courts will decide on the motion to dismiss or motion to
If the courts  in the judicial review in ordinary cases find that there are bases quash. 
that the decision of the lower courts should not be obeyed (violations of
policies, there are nuisances, etc.) the appellate court or the court exercising When is the tribunal considered in existence? When the last party accepts
judicial review has the right to change it, identifying what is not appropriate, the appointment and sends the acceptance to the parties.
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
d. Assistance in taking evidence: i) Search warrants
e. Confidentiality/Protective Orders
Judge Alaras: The Arbitral Tribunal can order the parties not to reveal
secrets, and issue protection orders.
f. [Special Proceeding] Confirmation, Correction or Vacation of Award in
Domestic ARBITRATION
Judge Alaras: Confirmation is recognition, Vacation is not to recognize,
Correction involves only minor issues which are more on typo in nature,
rather than major issues.
All to be filed with the RTC;
(2) a motion for reconsideration may be filed by a party with the RTC on the
grounds specified in Rule 19.1;
(3) an appeal to the Court of Appeals:
 Through a petition for review under Rule 19.2 or
 Through a special civil action for certiorari under Rule 19.26; and  proceedings. This agreement or determination, unless otherwise
(4) a petition for certiorari with the Supreme Court (from a judgment or final
order or resolution of the Court of Appeals, raising only questions of law)
Issues involved are: Procedural, Constitution of Arbitral Tribunal, SC: on
substantive issues.
Under the Special ADR Rules, reviewed by the Supreme Court of an appeal by
certiorari is not a matter of right (see Rule 19.36). The mere fact that the petitioner
disagrees with the Court of Appeals determination of questions of fact, of law,
or both questions of fact and law, shall not warrant the exercise of the Supreme
Court’s discretionary power. The error imputed to the Court of Appeals must be
grounded upon any of the above grounds for review or be closely analogous
thereto. (see also Rule 19.37)
PLACE OF ARBITRATION (Sec. 30, RA 9285)
SEC. 30. Place of Arbitration. - The parties are free to agree on the
place of arbitration. Failing such agreement, the place of arbitration
shall be in Metro Manila, unless the arbitral tribunal, having regard
to the circumstances of the case, including the convenience of the
parties shall decide on a different place of arbitration.
The arbitral tribunal may, unless otherwise agreed by the parties,
meet at any place it considers appropriate for consultation among
its members, for hearing witnesses, experts, or the parties, or for
inspection of goods, other property or documents.
Venue:
1. Upon agreement of the Parties
2. Metro Manila
3. Discretion of the Arbitral Tribunal
1. Appropriate Place for – 
1. Consultation among its members
2. Hearing for testimonies of witness, parties, experts
3. Inspection of goods, property, documents
LANGUAGE OF ARBITRATION (Sec. 31, RA 9285)
SEC. 31. Language of the Arbitration. - The parties are free to
agree on the language or languages to be used in the arbitral
proceedings. Failing such agreement, the language to be used shall
be English in international arbitration, and English or Filipino for
domestic arbitration, unless the arbitral tribunal shall determine a
different or another language or languages to be used in the
specified therein, shall apply to any written statement by a party,
any hearing and any award, decision or other communication by the
arbitral tribunal.
The arbitral tribunal may order that any documentary evidence shall
be accompanied by a translation into the language or languages
agreed upon by the parties or determined in accordance with
paragraph 1 of this section.
Preferred Language of Proceedings/Documents:
1. According to the agreement of the parties
2. If no agreement between the parties:
1. English (International Arbitration)
2. English or Filipino (Domestic Arbitration)
Note: Documentary evidence may be ordered to be accompanied by translations
(preferred: side-by-side)
DOMESTIC ARBITRATION (Chapter 5, RA 9285; Chapter 6, ADR by Robeniol)
“Arbitration is domestic if the components of parties’ places of business, place of
arbitration, place of performance of substantial part of the obligation, and place where
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
the subject matter of the dispute is most closely related, are located in the
Philippines.”
 Arbitration is an alternative mode of dispute resolution outside of the regular
court system
 Although adversarial in character, arbitration is technically not litigation
 It is a voluntary under the mandate of party autonomy
 Requires consent from both parties in the form of an arbitration clause
(that pre-existed the dispute or a subsequent submission agreement)
 Must be complied in good faith
 Purely private mode of dispute resolution
 Contractual and consensual in character – parties CANNOT implead a
third party (parties can ask third party, but cannot be compelled if he
declines)
 Parties have substantial autonomy over the proceedings (e.g. they select
the arbitrators, decide on the procedure observed during the proceedings)
Legal Qualifications of the Arbitrators
1. Legal age;
2. Full-enjoyment of their civil rights;
3. Ability to read and write
Note: The parties can tailor-fit the tribunal’s composition to the nature of their dispute.
Disadvantages
 Arbitrators do not necessarily have a background in law, they cannot be
expected to have the legal mastery of a magistrate (arbitrators may be
lawyers, but not all of the time)
 Greater risk of misapplication of law or misappreciate the facts en route to an
erroneous decision
 Absence of an effective appeal mechanism (errors of arbitral tribunal are not
subject or the correction by the judiciary
o Thus, the arbitral award is final and binding on the parties by
reason of their contract – the arbitration agreement
o Arbitration is meant to be the end, not the beginning, of litigation
NOTES:
 Court participation is not mandated
 Often proceeds independent of a court case
LAW GOVERNING DOMESTIC ARBITRATION (Sec. 32)
SEC. 32.  Law Governing Domestic Arbitration.  - Domestic
arbitration shall continue to be governed by Republic Act No. 876,
otherwise known as "The Arbitration Law" as amended by this
Chapter. The term "domestic arbitration" as used herein shall mean
an arbitration that is not international as defined in Article (3) of the
Model Law.
**IMPORTANT: IF THE ARBITRATION IS NOT INTERNATIONAL, IT IS
CONSIDERED DOMESTIC ARBITRATION** [definition by antonym: defining a term
by what it is not; contrasting]
Purpose of Distinction (International vs. Domestic)
 Available remedies
 Avoid intervention by domestic/local courts in the various phases of
international arbitration
DOMESTIC ARBITRATION = NOT INTERNATIONAL
 Domicile/Places of business are in one & the same state (at the time of the
conclusion of the agreement)
 Substantial part of the commercial agreement is to be accomplished or
concluded in the domestic state
 Per agreement of parties, places of business in different states:
o Where a party has more than one place of business, the place of
business is that which has the closest relationship to the arbitration
agreement
o If a party does not have a place of business, reference is to be
made to his habitual residence
UNCITRAL Model law (Art. 1)
(3) An Arbitration is INTERNATIONAL if:
(a) The parties to an arbitration agreement have, at the time of the
conclusion of that agreement, their places of business in different states; or
Note: Domestic Arbitration would likely be that the parties to the Arbitration
Agreement have their places of business in the same State, in this case, the
Philippines
(b) One of the following places is situated outside the state in which parties
have their places of business:
[PLACE OF BUSINESS]
(i) The place of arbitration if determined in, or pursuant to, the
arbitration agreement;
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(ii) Any place where a substantial part of the obligations of the International)
commercial relationship is to be performed or the place with which
the subject-matter of the dispute is mostly connected; or 1. Place of Business
2. Place of Arbitration
(c) The parties have expressly agreed that the subject-matter of the
arbitration agreement relates to more than one country 3. Place of Performance
4. Subject Matter of the Agreement
(4) For the purposes of par. 3 of this article:

(a) If a party has more than one place of business, the place of business is A. PLACE OF BUSINESS
that which has the closest relationship to the arbitration agreement; - Broad and encompassing

(b) If a party does not have a place of business, reference is to be made to
his habitual residence
NOTE: If the arbitration is not international as defined above (Art. 1, UNCITRAL
Model Law), then it is considered domestic arbitration.
(5) This law shall not affect any other law of this State by virtue of which certain
disputes may not be submitted to arbitration only according to the provisions
other than those of this law
DOMESTIC ARBITRATION (IN THE PHILIPPINES) - Summary
1. Place of Arbitration per Arbitration Agreement Philippines
2. Obligations:  
    - Performance: Substantial part of the Obligations Philippines
> Grounds for Determination:
 Does not cover arbitration
o Of disputes between or among foreign businessmen with place of
business in one state
o Between nationals of the same state where one or both of them are
controlled and managed by foreign companies
 Even if the place of business is in the Philippines, the
arbitration will be considered international
Determine the different States to which the Parties to the Arbitration belong
Place of business not principal place of business
> Place of Business with the:
 Closest Relationship
 Connection to the Arbitration Agreement
 Relevant to the Purpose of the Arbitration Agreement

    - Subject Matter   > If party has no place of business, one may refer to his habitual residence

      > Place is closely connected Philippines B. PLACE OF ARBITRATION

      > Relates to more than one country
3. Several Place of Business:
    - Closest relationship to the
Agreement
    - Place of business (not Principal Place business)
4. No Place of Business:
    - Habitual Residence
 It is a common practice not to specify the place of Arbitration in the contract
Philippines o Difficulty in predicting the nature of the conflict in the contract
o Contentious Issue: leave to the parties the choice of arbitration
 
Arbitration  If contract is silent on the place of Arbitration
Philippines o Parties are free to agree on the place of Arbitration
o If  parties fail to agree: Arbitral Tribunal will determine
Philippines
UNCITRAL MODEL LAW: The Arbitration does not become international because the
  place of arbitration chosen by an arbitral tribunal or an arbitration institution is situated
outside the state which the parties have their place of business
Philippines

C. PLACE OF PERFORMANCE
TEST OF INTERNATIONALITY 
(to determine if Arbitration is Domestic or
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 If a substantial (not all) part of the obligation arises under a commercial
relationship which is to be performed in a state other than the one in which
the parties have their place of business
 Exceptions:
o Art. 1(3)(b)(ii), UNCITRAL Model Law:
 An arbitration would be international where the place
which the subject matter of the dispute is most closely
connected is outside the state in which the parties have
their places of business (international character is
ascertained)
 Contentious Issue
o Whether a substantial part of the obligation of the
commercial relationship is to be performed or is performed
in a state outside the place of business of the disputants,
which should be established if only for the purpose of
determining whether or not the arbitration should be
governed by the Model Law
D. SUBJECT MATTER OF ARBITRATION AGREEMENT
- The area in which might arise that was then to be settled by arbitration
Subject Matters of Arbitration
 Limited/Specific Arbitration Agreement: Those specifically provided in the
Arbitration Agreement, whether to limit the scope or by interference, expand
them
 Dependent on the Arbitration Agreement:
o General Arbitration Agreement: Any controversy, whether
contractual or non-contractual, maybe submitted to arbitration.
Such submission or contract may include questions which may be
collateral, incidental, precedent or subsequent to any issue
between the parties.
Residual Test of Internationality (Catch-All provision): When the subject matter of
the arbitration agreement (rather than the arbitration agreement itself) is related to
more than one test.
Not Subject to Arbitration
 Questions of Law
NOTE: The fact that foreign arbitrators are chosen for a dispute or the choice by the
parties to the dispute of foreign procedural law would not be a test of Arbitration
APPLICABILITY TO DOMESTIC ARBITRATION (Sec. 33)
SEC. 33. Applicability to Domestic Arbitration. - Article 8, 10, 11,
12, 13, 14, 18 and 19 and 29 to 32 of the Model Law and Section
22 to 31 of the preceding Chapter 4 shall apply to domestic
arbitration.
UNCITRAL MODEL LAW
Article 8. Arbitration agreement and substantive claim before court
1. A court before which an action is brought in a matter which is the
subject of an arbitration agreement shall, if a party so requests not
later than when submitting his first statement on the substance of
the dispute, refer the parties to arbitration unless it finds that the
agreement is null and void, inoperative or incapable of being
performed.
2. Where an action referred to in paragraph (1) of this article has been
brought, arbitral proceedings may nevertheless be commenced or
continued, and an award may be made, while the issue is pending
before the court.
CHAPTER III. COMPOSITION OF ARBITRAL TRIBUNAL
Article 10. Number of arbitrators
1. The parties are free to determine the number of arbitrators.
2. Failing such determination, the number of arbitrators shall be three.
Article 11. Appointment of arbitrators
1. No person shall be precluded by reason of his nationality from acting as an
arbitrator, unless otherwise agreed by the parties.
2. The parties are free to agree on a procedure of appointing the arbitrator or
arbitrators, subject to the provisions of paragraphs (4) and (5) of this article.
3. Failing such agreement,
1. in an arbitration with three arbitrators, each party shall appoint one
arbitrator, and the two arbitrators thus appointed shall appoint the
third arbitrator; if a party fails to appoint the arbitrator within thirty
days of receipt of a request to do so from the other party, or if the
two arbitrators fail to agree on the third arbitrator within thirty days
of their appointment, the appointment shall be made, upon request
of a party, by the court or other authority specified in article 6;
2. in an arbitration with a sole arbitrator, if the parties are unable to
agree on the arbitrator, he shall be appointed, upon request of a
party, by the court or other authority specified in article 6.
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4. Where, under an appointment procedure agreed upon by the parties,
a. a party fails to act as required under such procedure, or
b. the parties, or two arbitrators, are unable to reach an agreement
expected of them under such procedure, or
c. a third party, including an institution, fails to perform any function
entrusted to it under such procedure,
Any party may request the court or other authority specified in article 6 to
take the necessary measure, unless the agreement on the appointment
procedure provides other means for securing the appointment.
5. A decision on a matter entrusted by paragraph (3) or (4) of this article to the
court or other authority specified in article 6 shall be subject to no appeal.
The court or other authority, in appointing an arbitrator, shall have due
regard to any qualifications required of the arbitrator by the agreement of the
parties and to such considerations as are likely to secure the appointment of
an independent and impartial arbitrator and, in the case of a sole or third
arbitrator, shall take into account as well the advisability of appointing an
arbitrator of a nationality other than those of the parties.
October 12, 2021
Major principles of Arbitration under was part of the model law that was adopted by
international arbitration and domestic arbitration.
 
DOMESTIC ARBITRATION
-   Either be case filed in court or no case already. It is a contract based on
proceedings agreed upon the parties; Parties determines the proceedings.
-   You can enter in this without filing a case, you will opt to rely on arbitration.
Agreed to proceed that this will be the proceedings that will terminate the
issue/s.
-   Or you can file a case; defendant will usually raise the issue of arbitration;
arbitration clause, complaint filed a case in court, raise this as an affirmative
defense the presence of the arbitration clause.
-   This does not operate to dismiss the case; it will operate to stay proceedings
until such time that issues of facts are considered or resolved.
-   Raise as basis that there are factual issues. Stay proceedings because of
the presence of arbitrable issues of facts.
-   Not every issue will be subject of the arbitration. Parties may choose to solve
what issues to be resolved through arbitration. Simple issues may be
handled by the court.
Binding and Non-Binding Arbitration
 
Binding Arbitration – if the arbitration resolves into an award, then it will be binding if
you file a case in court; filing it as special proceedings of recognition of an arbitral
award and when confirmed the court, it will be binding. Parties are now subjected to
the jurisdiction of the court and court adopts or acknowledges the arbitration award
and order the parties to comply. If not complied, either party may ask for its execution.
Non-binding Arbitration- If the award by the parties is not subject to confirmation and
enforcement. Parties if they find that the award is not to their liking, they can simply
not comply with it; no one will be faulted.
  Even if the parties agreed to a non-binding arbitration, the court may order
to enforce it. But court may refer to arbitration because there are issues of
facts that the courts will find difficult to resolve (Court Ordered/referred
Arbitration-mandatory)
o Court-annexed Arbitration- included
This only means that arbitration may be imposed even if the parties refused to comply
with it when the court orders it. 
 Non binding arbitration and the party loses the arbitration, then the court
grants an option to a new trial (referred by the court), in this particular
circumstance, parties normally post a bond, so if the party is prejudiced, the
bond will answer for whatever liability that will result. 
Motions for execution- a non-litigious motion in accordance with rules of court. Ex
parte may be decided by the judge without the other party.
 
Contractual and Non-Contractual
 
Contractual- if the duty to arbitrate is created by contract, then the enforcement of that
duty is unlikely to violate the constitutional right to a jury trial.
-   Courts typically hold that, by forming a contract to arbitrate, a party waives
its right to a trial by jury
 
Non-Contractual- the parties to a non-contractual arbitration have rarely waived the
right to a jury trial
         -Generally must be non-binding to avoid violation of this right to a jury trial
 
While parties can agree to non-binding arbitration and courts have generally enforced
such agreements, most non-binding arbitration is.
 
The party that loses in arbitration may pursue the case in litigation and the court will
hear the case de novo, giving no deference to the arbitrator’s decision.
 
Kinds of Arbitration Agreement
1. Compromissoire
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 An arbitration agreement usually embedded in a contract in effect providing
that any future controversy arising from such contract shall be subject to
settlement by Arbitration
 
2. Compromis
 An Arbitration Agreement to submit an existing dispute to arbitration.
 It may be an agreement that was made not contained in a container contact
but a separate agreement to submit as existing dispute to arbitration
 
FORMAL REQUISITES OF AN AGREEMENT TO ARBITRATE:
1. It must be in writing;
2. It must be subscribed by the parties or their representatives.
 
         If the arbitration agreement or submission to arbitration is signed by an
agent, the law requires that the agent be equipped with a special power.
 
Can you seek the implementation of the arbitration agreement that was not
signed, but signed elsewhere?

BF CORP v. COURT OF APPEALS

The Supreme Court held that where a rigid application of the rule that certiorari
cannot be a substitute for appeal will result in a manifest or miscarriage of justice, the
provisions of the rules of court which are technical rules may be relaxed.
 
A contract need not to be contained in a single writing and may be
encompassed in several instruments even though every instrument is not
signed by the parties since it is sufficient if the unsigned instruments are
clearly identified or referred to and made part of the signed instrument/s.
 
“Reasonableness” is a relative term and it depends on the attendant circumstances.
Hence, a period of one month from the time the parties held a conference to the time
the party invoked the arbitration clause is reasonable.

Other Discussions:

  Even if the lack of jurisdiction may be raised for the first time in appeal, the
party who raised that took advantage of that lack of jurisdiction, only at the
last time, there was already estoppel to raise the question of jurisdiction.
Laches will be entered into. 
 Submission to arbitration must be in writing, signed by all parties, but as long
as intent is clear regarding the controversy of the arbitration and is always
referred to other documents, there may still be an arbitration agreement. 
 When can you raise the issue of arbitration?
o The matter may be raised if the party so requests not later than
submitting his first statement on the substance of the dispute. 
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FLOW OF RESOURCES: 
FINALS COVERAGE
 foreign investors may be able to rely upon certain provisions of international
INTERNATIONAL CONVENTION FOR THE SETTLEMENT OF INVESTMENT
law & bring their claim against the State in an Investor-State Arbitration so
DISPUTES (ICSID, WASHINGTON CONVENTION)
long as the State agreed to arbitrate such claims (State of will agree if
investment is substantial to affect growth of the economy) 
 Created by the 1965 Convention on the Settlement of Investment Disputes
Forms of arbitration between states & Nations of other States 
 World Bank Sponsored
1. Domestic arbitration 
2. International 
3. Investment 
PURPOSE: 
4. Consumer 
Provide facilities for conciliation & arbitration of investment dispute between
5. State to state (Pangilinan vs ICJ) - regarding the exit of the Philippines from
Contracting States & nationals of other Contracting states in accordance with the
the International court of justice 
ICSID Convention. 
6. Mixed arbitration 
JURISDICTION: 
Article 25 (1), ICSID Convention: 
BASIS: Businesses will often need to subject themselves to the power of a foreign
government, particularly if they choose to set up a long-term investment abroad,
rather than merely entering into a sales transaction with a foreign party.   the jurisdiction of the Centre shall extend to any legal dispute
arising directly out of an investment, between a Contracting State
(or any constituent subdivision or agency of a Contacting
DEFINITION:  Concerns disputes “ between a State, or its subdivision, agency,
designated to the Centre by that State) and  a national of another
instrumentality, and a national of another State arising out of a putative investment Contracting State [natural; juridical ], which the parties to the
within the territory of the State. “ 
dispute consent in writing to submit to the Centre. When the parties
 not the kind but the parties involved.  have given their consent, no party may withdraw its consent, no
party may withdraw its consent unilaterally. 
INVESTMENT TREATY - bilateral or multilateral treaty according to which states
undertake to accord protection to investors, and investments by investors, of another
State party to the treaty. INVESTMENT: not defined by the ICSID Convention 
 Definition often provided in the bilateral investment treaties & regional
 KINDS OF INVESTMENT ARBITRATIONS:  multilateral treaties. 

1. Statute/ Treaty based - based on legislation by which a State submits to the

Separate consent in writing by the parties is needed to establish ICSID jurisdiction 
arbitration of disputes that arise between it and foreign investors on its
territory.   Once consent is given, any other remedy is excluded
2. Contract based - arises under a commercial contract between a State and a
private party that contains an arbitration clause mandating arbitration of the NO DOMESTIC COURTS ARE AVAILABLE FOR SETTLEMENT OF DISPUTES
parties’ eventual dispute.  THAT HAVE BEEN SUBMITTED TO THE ICSID, unless otherwise agreed. 

  Does not create any investment-related rights or obligations  Additional Facility Rules:
 These rights & obligations must arise from some other: treaty  expands the application of ICSID facilities 
instrument  Include disputes which are not within the jurisdiction of the Centre 
  A purely procedural regime 
 functions as a vehicle for the assertion of rights  STATE IMMUNITY 
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Arigo v Swift GR. No. 206510 (Sept 16, 2014) 3. Recognized competence in the fields of: law, commerce, industry, finance ( relied
upon to exercise independent judgement) 
 the basic concept of state immunity is that no state may be subjected to the
jurisdiction of another state without its consent. According to Professor Ian
Brownlie, it is “ a procedural bar( not substantive defense) based on the CONCILIATION/ ARBITRATION PANEL: 
status and functions of the state or official in question. 
1. Each contracting state = 4 persons 
At the outset, however, the Court must observe that the proposition that the 2. Chairman of ICSID: 10 persons to each panel
availability of immunity will be to some extent dependent upon the gravity of the  Term of service of each panel members: 6 years 
unlawful act presents a logical problem.   Preferred method of Arbitration:  Tribunal of 3 arbitrators
 Conciliation rarely used
Immunity from jurisdiction is an immunity not merely  from being subjected to an
adverse judgment but from being subjected to the trial process. It is, therefore, ICSID ARBITRAL TRIBUNAL : SOLE Arbitrator or Uneven number of arbitrators
necessarily preliminary in nature. Consequently, a national court is required to appointed by agreement of the parties 
determine whether or not a foreign State is entitled to immunity as a matter of
international law before it can hear the merits of the case brought before it and before
the facts have been established. If immunity were to be dependent upon the State No agreement : 
actually having committed a serious violation of international human rights law or the
law of armed conflict, then it would become necessary for the national court to hold 1. 1 arbitrator appointed by each party 
an enquiry into the merits in order to determine whether it had jurisdiction. If, on the 2. 3rd party (president of the tribunal) appointed by agreement of the parties 
other hand, the mere allegation that the State had committed such wrongful acts were
to be sufficient to deprive the State of its entitlement to immunity, immunity could, in
effect, be negated simply by skillful construction of the claim.  DISQUALIFICATIONS: 
 Manifest Lack of Qualities: INTEGRITY
Principal Office: World Bank:   Most common ground: absence of impartiality or independence 
Office Administration/ COMPOSITION:   Decided by other member of the tribunal: Kompetenze-Kompetenze
 If divided, Chairman of ISCID Administrative Council shall take the decision
 administrative council &
 Secretariat
TIME LIMITS for Arbitration: Parties’ Consent 
COMPOSITION OF ARBITRAL TRIBUNAL: 
-ICSID itself DOES NOT CONCILIATE OR ARBITRATE DISPUTES  PROVISIONAL MEASURES: 
 To preserve the respective rights of either party 
 The settlement of these disputes is carried out on an AD HOC BASIS for each
specific dispute by either: Available to: 
o Conciliation commissions  Upon recommendation by Arbitral Tribunal 
o Arbitral Tribunals LEGALLY COMPULSORY: ordered by the Tribunal. Parties are
o MEMBERS OF CONCILIATION COMMISSIONS OR ARBITRAL under a legal obligation to comply with them. 
TRIBUNALS MAY BE APPOINTED FROM THE PANELS or outside   ICSID tribunal may modify or revoke its recommendation
o QUALIFICATIONS OF Conciliators / Arbitrators:  -Parties may avail of the remedy at any time during the proceedings 

1. High moral character APPLICABLE LAW: 

2. Qualified Persons
 To decide a dispute in accordance with such rules of law as may be agreed
by the parties 
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 Municipal & international law   CIAC jurisdiction is UNCONDITIONAL
 Finding of Non-Liquet not allowed  Once agree to Arbitration, CIAC jurisdiction
 “Non liquet”  If filed with RTC, court may dismiss
 Commonly known as “lacuna in the law”   Jurisdiction may include but not limited violations of specifications for
 Is any situation where there is no applicable law  materials and workmanship; violation of the terms and agreement;
interpretation and/or application of contractual time and delay etc.
 Federal Builders v. Power Factors: formalities of the contract have nothing to
AWARD - NOT SUBJECT TO APPEAL OR ANY OTHER REMEDY do with the jurisdiction of the CIAC. Separability Clause
-except as those provided in the ICSID   CIAC JURISDICTION: RE Voluntary Arbitration
- not subject to domestic courts o Voluntary Arbitration is standard in CIAC
- must recognize & enforce pecuniary obligations o CIAC acquires jurisdiction when the parties to a dispute agree to
- execution of judgement in accordance with the laws where it is to be executed submit the same to voluntary arbitration
-May ask for interpretation of award from ICSID o Stipulated venue other than CIAC - additional forum
 If includes a foreign country
 If with immunity from execution  o Unlike a court that must issue summons to have jurisdiction, by
entering into a contract provided for settlement of disputes by
arbitration, a foreign party is deemed to have consented to
NON-COMPLIANCE:  arbitration under CIAC
 -Right of diplomatic protection will revived in case of non - compliance   Attorney’s fees
o Scope of CIAC because directly incidental to the dispute
ANNULMENT : exclusive! [REMEMBER BAKA LUMABAS SA EXAM]
GROUNDS: INTEGRITY o Should be interpreted in its widest form
 Tribunal was not properly constituted   The mere existence of an arbitration clause in the construction contract is
 Tribunal has manifestly exceeded its powers considered by law an agreement to submit existing or future controversies to
CIAC’s jurisdiction
 There was corruption on the part of a member of the Tribunal 
 Performance bond will ensure that projects will be completed
 There has been a serious departure from a fundamental rule or procedure
 Damages
 The award failed to state the reasons for which it was based
o Ang v. De Venecia - suit for damages of an adjoining owner is not a
party to a construction contract 
Gen Rule: No annulment of ICSID Award  o An adjoining owner is not a party to a construction contract
Except: integrity issues
 Contract to Sell
o Camp John Hay v. Charter Chemical - They are merely dev
 Form
o Shall be in writing , but need not be signed by parties, as long as
Arbitration of Construction Disputes/Constructional Arbitration
INTENT IS CLEAR that parties agree to submit present or future
 Law: EO 1008: Construction Industry Arbitration Law controversy arising from a construction contract to arbitration
 Napakalaki ng epekto ng construction sa ekonomiya e.g. employment
 There is a need to finish construction cases expeditiously. Kailangan tapusin IMPORTANCE OF ALTERNATIVE DISPUTE RESOLUTION IN THE PHILIPPINES
bag mag handle uli ng bagong construction case. JUDICIAL SYSTEM
 Definition of construction is not limiting. There are a lot of definitions.
 How do you know if it’s a construction issue? Is right to receivables a PARTY AUTONOMY
construction issue? No. (Fort Bonifacio Dev Corp. v. Domingo case)
 CIAC jurisdiction is ORIGINAL AND EXCLUSIVE Empower the parties to resolve their own disputes & give practical effect to the State Policy
expressed in the Alternative Dispute Resolution Act of 2004 (RA 9285, Sec 2):
 CIAC does not handle employee-employer relationship (LABOR)
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“…to actively promote PARTY AUTONOMY in the resolution of disputes or the freedom of the
parties to make their own arrangement to resolve disputes.
Towards this end, the State shall encourage & actively promote the use of Alternative Dispute
Resolution (ADR) as an important means to achieve speedy & impartial justice & de-clog court
dockets.”
Special ADR Rules
Rule 2.1:
PARTY AUTONOMY
• or the FREEDOM of the parties to make their OWN ARRANGEMENTS in the resolution of
disputes with the GREATEST COOPERATION of [courts] and the LEAST INTERVENTION from
the courts.
IP E-Game Ventures, Inc. v. Beijing Perfect World Software Co., Ltd., G.R. No. 220250,
[September 7, 2020]
Puts an end to pending litigation through a COMPROMISE AGREEMENT of the parties.
ADMINISTRATIVE INNOVATION
Attempts to settle cases based on legal rights & obligations of parties may not address the REAL
INTERESTS & NEEDS of the disputants.
FORMS OF ADR in the Philippines
R.A. 9285: Alternative Dispute Resolution (2004)
E.O. 1008: Construction Industry Arbitration Law (1985)
Recognition of ADR in the Civil Code
Title XIV. - COMPROMISES AND ARBITRATIONS CHAPTER 1.- COMPROMISES
ART. 2028.-A COMPROMISE is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced. (1809a)
ART. 2029.-The court shall endeavor to persuade the litigants in a civil case to agree upon some
fair compromise. (n)
CHAPTER 2 - ARBITRATIONS
ART. 2042 - The same persons who may enter into a compromise may submit their
controversies to one or more arbitrators for decisions. (1820a)
ART. 2043 - The provisions of the preceding Chapter upon compromises shall be applicable to
arbitrations. (1821a)
ART. 2044 - Any stipulation that the arbitrators' award or decision shall be final, is valid, without
prejudice to Articles 2038, 2039, and 2040. (n)
•ARE WE SUCCEEDING IN CAM & JDR?
CAM & JDR: Component Units of ADR in the Judiciary
SUPREME COURT ISSUANCES:
Criminal Cases:
A.M. No. 15-06-10
SC REVISED GUIDELINES FOR CONTINUOUS TRIAL OF CRIMINAL CASES
Civil Cases:
A.M. No. 19-10-20-SC 2020 GIUDELINES FOR THE CONDUCT OF THE COURT ANNEXED
MEDIATION (CAM) AND JUDICIAL DISPUTE RESOLUTION (JDR) IN CIVIL CASES (1 Mar
2021)
3 STAGES OF DIVERSION
1. Court Annexed Mediation (CAM)
- CAM on Wheels [Mobile Court Annexed Mediation (MCAM)]
2. Judicial Dispute Resolution (JDR)
3. Appellate Court Mediation (ACM)
Consolidated & Revised Guidelines to Implement the Expanded Coverage of Court-
Annexed Mediation & Judicial Dispute Resolution, A.M. No. 11-1-6-SC-PHILJA (Notice),
[January 11, 2011]
COURT DIVERSION is a 3-stage process. The 15T stage is the Court Annexed Mediation
(CAM) where the judge refers the parties to the Philippine Mediation Center (PMC) for the
mediation of their dispute by trained & accredited mediators.
Upon failing to secure a settlement of the dispute during the first stage, a second attempt is
made at the JDR (2ND) stage. There, the JDR judge sequentially becomes a mediator-
conciliator-early neutral evaluator in a continuing effort to secure a settlement. Still failing that
second attempt, the mediator-judge must turn over the case to another judge (a new one by
raffle or nearest/pair judge) who will try the unsettled case. The trial judge shall continue with the
pre-trial proper and, thereafter, proceed to try and decide the case.
The 3RD stage is during the appeal where covered cases are referred to the PMC-Appeals
Court Mediation (ACM) unit for mediation.
ATENEO DE MANILA UNIVERSITY V. DIESTRO, G.R. No. 197439 (Notice), [March 20, 2019]
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A.M. No. 11-1-6-SC-PHILJA or the Consolidated and Revised Guidelines to Implement the
Expanded Coverage of Court-Annexed Mediation (CAM) and Judicial Dispute Resolution (JDR)
dated January 11, 2011 (Guidelines) mandates the DIVERSION OF PENDING CASES both to Judicial Dispute Resolution
CAM and JDR to put an end to pending litigation through a compromise agreement of the parties
by empowering them to resolve their own disputes, and thereby help solve the ever-pressing JDR in Civil Cases
problem of court docket congestion.

Justice Reform Initiatives (JURIS) Project 2003-2008

CAM & JDR: Benefits Effective Tools
Its intention is to restore the importance of amicable settlement of cases & install innovative
a) Decongest Court Dockets procedures that will remove such apprehension.

b) Reduce Unnecessary Delay

c) Humanize the Judiciary JUDICIAL DISPUTE RESOLUTION [DEFINITION]

d) Enhance Access to Justice . CRUZ v. REPUBLIC G.R. No. 216825 (Notice), [October 14, 2019]

- JDR is a process whereby the JDR judge employs conciliation, mediation or early neutral
evaluation [ENE] in order to settle a case at the pre-trial stage.
Court Annexed Mediation
• Another innovation in the Philippine Court System
MEDIATION is a process of settling disputes with the assistance of an acceptable, impartial &
neutral third party called a mediator. • When CAM in civil cases fail, upon the discretion off the Presiding Judge, Civil cases will be
raffled to a pre designated JDR Judge who acts as:

• Conciliator
ADR Law of 2004 Sec. 3 (q) RA 9485:
• Mediator
"Mediation" means a voluntary process in which a mediator, selected by the disputing parties,
facilitates communication and negotiation, and assists the parties in reaching a voluntary • Neutral Evaluator
agreement regarding a dispute."

CONCILIATION
Court Annexed Mediation
• A poorly defined term, sometimes referring to mediation, sometimes to facilitation, &
Mediator assists parties to: sometimes to reconciliation in a relationship

1. identify issues • Another term commonly applied to numerous conceptionally related to mediation processes

2. develop proposals to resolve their disputes. • Sometimes it is applied to facilitation, sometimes it is applied to a non-binding evaluation &
sometimes it is given other meanings.
Once the parties have arrived at a mutually acceptable arrangement, the agreement becomes
the basis for the court's decision on the case. • Care should be taken to clarify if the use of conciliation is raised as an option.

Salient Points: Coltri, Laurie S. ALTERNATIVE DISPUTE RESOLUTION: A Conflict Diagnosis Approach, 2 ed.
2010, p.63.
1) Self-Determination

2) Impartiality & Neutrality

EARLY NEUTRAL EVALUATION
a) Conflict of Interest
• entails the submission of a dispute before a "JDR judge"
b) Competence
• who shall merely "facilitate settlement" between the parties in conflict or
3) Confidentiality
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
• make a "non-binding evaluation" or assessment of the chances of each party's case. • Only Court Annexed Mediation (CAM) in both selected Civil & Criminal Cases

KOPPEL, INC. V. MAKATI ROTARY CLUB FOUNDATION, INC., G.R. No. 198075, [September • NO JDR in CRIMINAL CASES
4, 20131. 717 PHIL 337-365
• JDR is DISCRETIONARY in CIVIL CASES (per: Presiding Judge)

• JDR Process must be observed

Judicial Dispute Resolution
• Referral to CAM is a prerequisite in civil cases
• If judge's intervention succeeds, case is concluded with a judgment based on a compromise
agreement • JDR proceedings are Discretionary based on the findings of the Presiding Judge

• If dispute remains unresolved or parties failed to settle, the case RETURNS TO THE • Trial Judge will not conduct the JDR proceedings
ORIGINAL TRIAL JUDGE for THE CONDUCT OF TRIAL PROPER
• JDR JUDGE conducts JDR proceedings

• If unsuccessful JDR, case will be returned to the Presiding Judge for the conduct of Trial
INTEREST BASED Proper

DISPUTE RESOLUTION

1. PRODUCT- compromise agreement (facilitated) The ADR Process

2. FOCUS- person Stages of ADR:

3. QUTLOOK- future; towards reconciliation 1) DELIVERING AN OPENING STATEMENT

4. PROCESS-informal (confidential), flexible 2) STATEMENT OF THE PARTIES

5. RESULT-WIN-WIN 3) NEGOTIATION

a) Applying Active Listening Skills

RIGHTS BASED b) Reflecting, reframing, restating, clarifying, paraphrasing positions/rights to interests

LITIGATION c) BATNA, WATNA, MLATNA, ZOPA

1. Judgment is imposed a. ZOPA: Zone of Potential Agreement

2. Act; punishment b. BATNA: Best Alternative to a Negotiated Agreement

3. Backward looking to past events c. WATNA: Worst Alternative to a Negotiated Agreement

4. Rigid; Formal (Documented) d. MLATNA: Most Likely Alternative to a Negotiated Agreement

5. WIN-LOSE d) Impasse & Caucusing Techniques

4) Settlement/ Closure or

HIGHLIGHTS: 5) TRIAL

• Focuses on Interests rather than Position

• 2 JUDGE SYSTEM: JDR Judge & Presiding/Trial Judge POSITIONS

• Skills Based R- Rights

• JDR Jurisdiction & Judge O- Obligations

 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
V- Violations e. OTHER DECEITS under Art. 318, RPC; &

I - Injuries

D – Damages d. GRAVE SLANDER (GRAVE ORAL DEFAMATION) - of a serious & insulting nature under Art.
358, par. 1, RPC;

e. SIMPLE SLANDER (ORAL DEFAMATION) not of a serious & a serious & insulting nature
INTERESTS under Art. 358, par. 2, RPC;

R- Relationships f. GRAVE SLANDER BY DEED - of a serious nature under Art. 359, par. 1, RPC;

E - Emotions, Expectations g. SIMPLE SLANDER BY DEED- not of a serious nature under Art. 359, par. 2, RPC; >>

V - Values h. Incriminating Innocent person under Article 363 RPC;

I - Interests i. Intriguing against Honor under Art. 364, RPC;

D - Data iv. Libel under RA 10175 (Cybercrime Prevention Act of 2012) where the liability may be civil in
nature;
S- Structures
v. Criminal Negligence under Title 14, RPC, where the liability may be civil in nature; &

vi. Intellectual property rights cases where the liability

IN CRIMINAL CASES

A.M. No. 15-06-10 SC

(b) The referral of the case for mediation to the Philippine Mediation Center (PMC) Unit shall be
REVISED GUIDELINES FOR CONTINUOUS TRIAL OF CRIMINAL CASES made only after the conduct of the arraignment & the pre-trial / preliminary conference.

The court shall serve the Order of Referral to the PMC Unit immediately after the arraignment &
the pre-trial / preliminary conference.
REVISED GUIDELINES FOR CONTINUOUS TRIAL OF CRIMINAL CASES

III. Procedure; 9. Mediation.

The mediation shall be terminated within a non-extendible period of thirty (30) calendar days
(a) The following cases shall be referred to mediation on the civil liability unless a settlement is from the date of referral by the court to the PMC Unit. After the lapse of the mediation period or if
reached earlier in the pre-trial/preliminary conference: mediation fails, trial shall proceed.
i. Crimes where payment may prevent criminal prosecution or may extinguish criminal liability,
such as violations of:
Except those cases mentioned above, criminal cases subject to the Rules on Summary
a. BP BLG. 22; Procedure shall not be referred to mediation.
b. SSS LAW (RA 1161, as amended by RA No. 8282; & Violations of - traffic laws, rules and regulations;
c. PAG-IBIG LAW (RA 9679) >> - municipal or city ordinances;
ii. CRIMES AGAINST PROPERTY under Title 10 of the Revised Penal Code (RPC), where the - the rental law;
obligation may be civil nature, such as:
All other criminal cases where the penalty prescribed by law for the offense charged is
a. THEFT under Art. 308, RPC, cognizable by the 1st courts; imprisonment not exceeding six months, or a fine not exceeding (P1,000,00), or both,
irrespective of other imposable penalties, accessory or otherwise, or of the civil liability arising
b. ESTAFA under Art. 315 (1), RPC, except estafa under Art. 315 (2) & (3);
therefrom: Provided, however, that in offenses involving damage to property through criminal
c. OTHER FORMS OF SWINDLING under Art. 316, RPC negligence, this Rule shall govern where the imposable fine does not exceed ten thousand
pesos (P10,000,00).
d. SWINDLING OF A MINOR under Art. 317, RPC;
 ALTERNATIVE DISPUTE RESOLUTION
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Note: NO JDR in CRIMINAL CASES (3) Any ground for legal separation;

(4) Future support;

IN CIVIL CASES (5) The jurisdiction of courts;

A.M. No. 19-10-20-SC (Resolution) (6) Future Legitime.

2019 PROPOSED AMENDMENTS TO THE 1997 RULES OF CIVIL PROCEDURE

RULE 18: PRE-TRIAL: CAM & JDR (b) All special civil actions EXCEPT under Rules 63, 64, 65, 66 and 71 of the Rules of Court,

SECTION 8. Court-Annexed Mediation. - After pre-trial and, after issues are joined, the court Rules of Court Subject to CAM
shall refer the parties for mandatory court-annexed mediation.
62 Interpleader
The period for court-annexed mediation shall not exceed thirty (30) calendar days without further
extension. (n) 67 Expropriation

68. Foreclosure of Real Estate Mortgage

SECTION 9. Judicial Dispute Resolution. Only if the judge of the court to which the case was 69 Partition
originally raffled is convinced that settlement is still possible, the case may be referred to another
court for judicial dispute resolution. The judicial dispute resolution shall be conducted within a 70. Forcible Entry & Unlawful Detainer
non-extendible period of fifteen (15) calendar days from notice of failure of the court mediation.
Rules of Court Excluded from CAM
If judicial dispute resolution fails, trial before the original court shall proceed on the dates agreed
upon. 63 Declaratory Relief & Similar Remedies

ALL PROCEEDINGS during the court-annexed mediation and the judicial dispute resolution 64:Review of Judgments & Final Orders or Resolutions of the Commission on elections & the
shall be confidential. (n) Commission on Audit

65 Certiorari, Prohibition & Mandamus

SC Resolution 66. Quo Warranto

A.M. No. 19-10-20-SC 71: Contempt

2021 GUIDELINES FOR THE CONDUCT OF THE COURT ANNEXED MEDIATION (CAM) &
JUDICIAL DISPUTE RESOLUTION (JDR) IN CIVIL CASES
(c) Special proceedings cases for settlement of estate where the dispute involves claims against
estate, or the distribution or partition of estate in intestate proceedings;

Chapter 1. Coverage (d) All those cases involving issues under the Family Code and other laws in relation to support,
custody, visitation, property relations, guardianship of minor children, and other issues which can
Section 1. Mandatory coverage for CAM in Civil Cases, The following cases shall be referred to be the subject of a compromise agreement;
CAM:
(e) Intellectual Property cases;
(a) All ordinary civil cases, INCLUDING mediatable permissive or compulsory counterclaim or
cross claim as pleaded in the answer, complaint-in intervention, and third (fourth, etc.)-party (f) Commercial or intra-corporate controversies;
complaint, except those which cannot be the subject of a compromise under Article 2035 of New
(g) Environmental cases, subject to the provisions in Section 3, Rule 3 of the Rules of Procedure
Civil Code;
for Environmental Cases (A.M. No. 09-6-8-SC)
No compromise upon the following questions:

(1) The civil status of persons;

[Section 3. Referral to mediation - At the start of the pre-trial conference, the court shall inquire
(2) The validity of a marriage or a legal separation; from the parties if they have settled the dispute; otherwise, the court shall immediately refer the
parties or their counsel, authorized by their clients, to the Philippine Mediation Center (PMC) unit
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
for purposes of mediation. If not available, the court shall refer the case to the CLERK OF
COURT OR LEGAL RESEARCHER for mediation.
Mediation must be conducted within a non-extendible period of thirty (30) days from receipt of
notice of referral to mediation.
The mediation report must be submitted within ten (10) days from the expiration of the 30-day
period.]
Section 2. Referral to JDR in Civil Cases. The following cases may be referred to JDR:
(a) The cases enumerated in Section 1, except environmental cases, may be referred to JDR
upon failure of settlement or refusal to mediate in CAM only if the judge of the court to which the
case was originally filed is convinced that settlement is still possible;
(b) The following cases brought on appeal from the exclusive and original jurisdiction granted to
the first-level courts under the Judiciary Reorganization Act of 1980, may be referred to JDR in
areas declared as JDR sites, if the RTC Judge is convinced that settlement is still possible;
(1) all civil cases and settlement of estate, testate and intestate;
(2) all cases of forcible entry and unlawful detainer;
(3) all civil cases involving title to, or possession of, real property or an interest therein; and
(4) habeas corpus cases decided by the first level court in the absence of any Regional Trial
Court Judge.
JUDICIAL DISPUTE RESOLUTION ON APPEAL (JDRA):
UNITED DUMANGAS PORT DEVELOPMENT CORP. V. PHIL. PORTS AUTHORITY, G.R. No.
192943, [August 12, 2015), 766 PHIL 434-465
- The idea of settling cases on appeal is not at all unheard of, much less, irregular.
- After all, the stress on mediation and JUDICIAL DISPUTE RESOLUTION ON APPEAL has
been one of the Supreme Court's programs on judicial reform.
- With a "Compromise Agreement" on the line that settles this case with two (2) of the principal
protagonists emerging winners, and the third one not prejudiced as regards its rights and should
also be therefore happy, this Court can do no less but approve it and cut short the instant
litigation.
Section 3. Permissive Referral to CAM and JDR in Other Actions.
In all other actions or proceedings where compromise is not prohibited by law and there is a
significant likelihood of settlement, either or both of the parties may, by oral manifestation or
written motion after the pre-trial/preliminary conference, or any stage of the proceedings, request
the court to refer their dispute to CAM and JDR, provided there are still factual issues to be
resolved.
"catch-all provision"
Section 4. Cases not subject to compromise. The flowing cases shall not be referred to CAM
and JDR:
(a) Civil cases which cannot be the subject of a compromise, to wit:
(1) The civil status of persons;
(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future Support;
(5) The jurisdiction of courts; and
(6) Future Legitime.
(b) Habeas corpus petitions;
(c) Special proceedings cases for probate of a will; and (d) Cases with pending application for
restraining orders or preliminary injunctions.
[Article 2035, New Civil Code]
Chapter 2. Pre-Trial or Preliminary Conference Process
A. Preliminary to CAM and JDR
Section 1. Notice of Pre-Trial or Preliminary Conference Process.- After the last responsive
pleading has been served and filed, the clerk of court shall issue, within five (5) calendar days
from filing, a notice of pre-trial which shall be set not later than sixty (60) calendar days from the
filing of the last responsive pleading.
The notice of pre-trial/preliminary conference shall include the dates for
(a) Pre-Trial/Preliminary Conference,
(b) Court-Annexed Mediation, and (c) Judicial Dispute Resolution, if necessary.
The JDR proceedings may be conducted on the day/s civil cases are heard. For purposes pre-
setting, two (2) dates shall be allotted for JDR.
The PMC Unit (PMCU) shall be furnished with the Notice of Pre-Trial/Preliminary Conference to
ensure the availability of accredited mediators on the scheduled date for CAM.
The court shall also furnish the Office of the Clerk of court with a copy of the Notice of Pre-
Trial/Preliminary Conference for the purpose of raffling the case to a prospective JDR Judge
should CAM fail and the Judge is convinced that settlement is still possible.
 ALTERNATIVE DISPUTE RESOLUTION
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Chapter 2A. Section 3, par.2

B. CAM in Pre-Trial/Preliminary Conference The court may also render a SEPARATE JUDGMENT disposing of a claim:

Section 8. Duration of CAM Proceedings.- The mediator shall have a period of not exceeding • after the pre-trial/preliminary conference or
thirty (30) calendar days to complete the mediation process without further extension. Such
period shall be computed from the date of order referring the case to CAM. • at any stage,

• when more than one claim for relief is presented in an action &

SECTION 1. Receipt of Notice of Pre-Trial/Preliminary Conference. • there is already a determination of the issues:

SECTION 2. Initial Appearance of Parties and Counsels. • material to that particular claim &

SECTION 3. Selection of Mediator. • all counterclaims arising out of the transaction or

SECTION 4. Assignment of Mediator • occurrence which is the subject matter of the claim.

SECTION 5. Role of Mediator. "officer of the court”

SECTION 6. Conduct of Mediation. Rules of Court Rule 36: Rules Final Orders & Entry

SECTION 7. Disclosure and Inhibition SECTION 5. SEPARATE JUDGMENTS. -

SECTION 8. Duration of CAM Proceedings When more than one claim for relief is presented in an action, the court, at any stage, upon a
determination of the issues material to a particular claim & all counterclaims arising out of the
SECTION 9. Suspension of Periods transaction or occurrence which is the subject matter of the claim, may render a separate
judgment disposing of such claim.
SECTION 10. Successful Settlement in CAM
The judgment shall terminate the action with respect to the claim so disposed of & the action
SECTION 11. Non-settlement in CAM. shall proceed as to the remaining claims. In case a separate judgment is rendered, the court by
order may stay its enforcement until the rendition of a subsequent judgment or judgments & may
(a) When the parties mediate in good faith but no agreement was reached by them prescribe such conditions as may be necessary to secure the benefit thereof to the party in
despite the efforts exerted by the assigned mediator; or whose favor the judgment is rendered. (5a)
(b) When either one or both parties fail to appear after they have started to negotiate
in a previous mediation conference wherein the mediator exerted efforts to assist the
parties in settling their dispute. Section 3. Duration.- The JDR Judge shall conduct the JDR proceedings immediately upon
receipt of the referral order and terminate the proceedings within a non-extendible period of
SECTION 12. Submission of Mediator's Report. fifteen (15) calendar days from receipt of the said referral order. If the parties fail to settle during
the first JDR session, the JDR Judge shall set the case for another JDR session provided that
SECTION 13. Judgments in CAM the fifteen (15) calendar day period has not lapsed.

[NOTE: extensions are highly prohibited there being the remedy of a TRIAL should CAM & JDR
fail]
C. JDR IN Pre-Trial/Preliminary Conference

Section 1. Mediator's Report from the PMC Unit. Upon receipt of the Mediator's Report stating
that no settlement was reached in CAM, the referring Judge shall determine, in the hearing set Section 4. Who may conduct.-Unless otherwise directed by the Supreme Court, only those
for that purpose, if he/she is thus convinced. judges who have undergone skills-based training in JDR procedures and stationed in areas
declared as JDR sites are authorized to conduct JDR proceedings in accordance with these
In case of partial settlement, the Judge shall refer the unsettled part of the dispute to the JDR
Guidelines.
Judge, if convinced that settlement is still possible.

SEPARATE JUDGMENT:
 ALTERNATIVE DISPUTE RESOLUTION
3H | CLASS NOTES | J. ALARAS
Section 6. Non-suspension of period. The period during which the case is undergoing JDR shall
not be excluded from the regular and mandatory periods for trial and rendition of judgment in
ordinary cases and in cases covered by the Rules on Summary Procedure. SECTION 4. Imposition of Sanctions. In addition to paragraph (b) of the preceding Section, the
Judge, upon recommendation of the mediator or JDR Judge, or upon motion of the interested
[v. Chapter 2. B, section 8 CAM] party, or motu proprio, may impose sanctions upon the following:

(a) Any party who fails to appear before the mediator or JDR Judge despite due notice; or

• Section 7. Settlement in JDR... (b) Any person who engages in contemptuous conduct during mediation or JDR proceedings.

To ensure the equitable distribution of cases, the JDR Judge shall be entitled to a credit for
every successfully settled case in JDR, hence shall be exempt from receiving a newly-filed case
during raffle equivalent to the number of cases settled during JDR. This is regardless of any SECTION 5. Imposable Sanctions. - The trial court shall impose the following sanctions:
action which the Judge to whom the case was originally filed may take on the settlement
reached by the parties before the JDR Judge. (a) dismissal of the case, when there is failure of the plaintiff and counsel to appear without valid
cause when so required; or
[NOTE: If presiding judge refuses to adopt the Compromise Agreement & proceeds to trial, the
JDR Judge who arrived at a Compromise Agreement shall nonetheless, be entitled to credit] (b) ex parte presentation of plaintiff's evidence and dismissal of defendant's counterclaim when
there is failure of the defendant and counsel to appear without valid cause when so required.

D. Common Provision to CAM & JDR

SANCTIONS:
Section 1. Appearance of individual parties The parties and their respective counsels shall
personally appear before the mediator or the JDR Judge on the duly designated date for CAM or The court may, likewise, impose other sanctions, including but not limited to:
JDR.
(a) censure;
An individual party may be represented only for a valid cause, such as acts of God, force
majeure, or duly substantiated physical inability. The representative shall be fully authorized, (b) reprimand;
through a Special Power of Attorney, to appear and to offer, negotiate, accept, decide, and enter
(c) contempt; or
into a compromise agreement, without need of further approval by or notification to the
authorizing parties. (d) reimbursement by the absent party of the costs of the appearing party, including attorney's
fees for that day up to treble such costs, payable on or before the date of the re-scheduled
setting.
Section 2. Appearance of corporations, partnerships, or other juridical entities.

Corporations, partnerships, or other juridical entities shall be represented by a proper officer or

SECTION 6. Lifting or Setting Aside Sanction. – Upon motion of the sanctioned party, the trial
person, fully authorized by a Board Resolution or Secretary's Certificate to offer, negotiate,
court, in the exercise of its sound discretion, may lift, set aside, or modify the sanctions imposed.
accept, decide, and enter into a compromise agreement, without need of further approval by or
notification to the authorizing party

JDR APPEARANCE MANDATORY WHEN RULED:

Section 3. Effect of failure to bring required authorization
(a) In case of failure of the representative during CAM to bring the required authorization or,
having full authority, refuses to exercise the same or claims that further approval from their
principal is needed, the Mediator may reset the proceedings within the thirty (30)-calendar day
period referred to in Section 8, Part B of this Chapter.
(b) in case of failure of the representative during JDR to bring the required authorization without
valid cause or having full authority, refuses to exercise the same or claims that further approval
from their principal is needed, the said principal shall be deemed absent and the JDR
proceedings shall be terminated. The JDR Judge shall transmit the JDR Report to the referring
Judge indicating the outcome of the JDR and any appropriate recommendation.
PAGDADAMAYAN NG MAGKAKAPITBAHAY SA CONCEPCION, MALABON [PAMACO],
INC. v. SINGSON, UDK-16069 (Notice), [February 19, 2018]
a party who fails to appear on the date set for the JDR conference may be imposed the
appropriate sanction as provided under Section 5, Rule 18 of the Rules of Court. The latter
sanction refers to dismissal, with prejudice.
COMPROMISE AGREEMENT
A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a
litigation or put an end to one already commenced. [New Civil Code, Article 2028]
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The court may mitigate the damages to be paid by the losing party who has shown a sincere
desire for compromise. [New Civil Code, Article 2031]

There may be a compromise upon the civil liability arising from an offense, but such compromise
shall not extinguish the public action for the imposition of the legal penalty. [New Civil Code,
Article 2034]

RULES OF COURT, Rule 130; Confidentiality

Compromise Agreement

SECTION 28. Offer of Compromise Not Admissible.- In civil cases, an offer of compromise is not
an admission of any liability, and is not admissible in evidence against the offeror. Neither is
evidence of conduct nor statements made in compromise negotiations admissible, except
evidence otherwise discoverable or offered for another purpose, such as proving bias or
prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a
criminal investigation or prosecution.

In criminal cases, except those involving quasi-offenses (criminal negligence) or those allowed
by law to be compromised, an offer of compromise by the accused may be received in evidence
as an implied admission of guilt.

Spouses Garcia v. Spouses Soriano, GR No. 219431 [August 24, 2020]

A final judgment based on compromise agreement has the same force and effect of a final
judgment on the merits by a court of competent jurisdiction, and is, thus, subject to the same
prevailing principles on compromise agreements after final judgment.

Rights may be waived or modified through a compromise agreement even after a final judgment
has already settled the rights of the contracting parties.

The compromise, to be binding, must be shown to have been voluntarily, freely and intelligently
executed by the parties, who had full knowledge of the judgment. In consonance with the law on
contracts, the compromise must not be contrary to law, morals, good customs and public policy.

In Magbanua v. Uy, 27 the Court explained thus:

The issue involving the validity of a compromise agreement notwithstanding a final judgment is
not novel. Jesalva Bautista upheld V. a compromise agreement that covered cases pending trial,
on appeal, and with final judgment. The Court noted that Article 2040 (of the Civil Code)
impliedly allowed such agreements; there was NO LIMITATION AS TO WHEN THESE SHOULD
BE ENTERED INTO. Palanca v. Court of Industrial Relations sustained a compromise
agreement, notwithstanding a final judgment in which only the amount of back wages was left to
be determined. The Court found no evidence of fraud or of any showing that the agreement was
contrary to law, morals, good customs, public order, or public policy

Gatchalian v. Arlegul upheld the right to compromise prior to the execution of a final judgment.
The Court ruled that the final judgment had been novated and superseded by a compromise
agreement. Also, Northern Lines, Inc. v. Court of Tax Appeals recognized the right to
compromise final and executory judgments, as long as such right was exercised by the proper
party litigants.