HISTORICAL BASIS OF OF ADR
− Philippines was a signatory to the United Nations
1. Civil Code
− Effective Aug. 30, 1950
Article 2035. No compromise upon the following
questions shall be valid:
(1) The civil status of persons;
(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime. (1814a)
2. RA 876 – Arbitration Law
− enacted on June 19, 1953
− supplement to the Civil Code
− did not supersede the provisions of Civil Code
3. Resolution No. 71 dated may 10, 1965
− May 10, 1965
− Philippine Senate adhered to the United Nations
Convention of the Recognition and Enforcement
of Foreign Arbitral Awards
− Philippines acknowledged international arbitration
as a system of settling disputes
− Reciprocal recognition
− Allowed enforcement of international agreements
between parties of different nationalities within a
contracting state
4. UNCITRAL (United Nations Commission On International
Trade Law)
− also known as “New York Convention of 1985”
− June 21, 1985
Commission on International Trade Law (UNCITRAL)
5. Republic Act No. 9285 (Alternative Dispute Resolution
Act of 2004)
− Effective on April 2, 2004
− It adopted the UNCITRAL Model Law on
International Commercial Arbitration. It paved the
way for the Philippines to be a venue for
international commercial arbitration.
The RTC must refer to arbitration in proper cases.
Foreign arbitral awards must be confirmed by the
RTC. It has jurisdiction to review foreign arbitral
awards. Grounds for judicial review different in
domestic and foreign arbitral awards. RTC decision
of assailed foreign arbitral award appealable
6. Labor Code of the Philippines
7. RA 7160 (Local Government Code of 1991)
8. CIAC (E.O. 1008) and the IRR (Dec. 15, 2005)
9. Rules of ADR for Disputes between National
Government Agencies
− enacted on March 22, 2010
10. Disputes on National Government Agency
1. EO 292 (Administrative Code of 1987)
2. can be resolved by the Office of the Solicitor
General or Department of Justice depending on
the questions of fact or law
11. Decisions of the Supreme Court
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Administrative Circular No. 14-93 July 15, 1993 a. Criminal cases where accused is under police
custody or detention (see Sec. 412 (b) (1),
All disputes are subject to Barangay conciliation pursuant
Revised Katarungang Pambarangay Law);
to the Revised Katarungang Pambarangay Law, and
b. Petitions for habeas corpus by a person illegally
prior recourse thereto is a pre-condition before filing a
deprived of his rightful custody over another or
complaint in court or any government offices, except in
a person illegally deprived or on acting in his
the following disputes:
behalf;
1. Where one party is the government, or any
c. Actions coupled with provisional remedies
subdivision or instrumentality thereof;
such as preliminary injunction, attachment,
2. Where one party is a public officer or employee,
delivery of personal property and support
and the dispute relates to the performance of his
during the pendency of the action; and
official functions;
d. Actions which may be barred by the Statute of
3. Where the dispute involves real properties located
Limitations.
in different cities and municipalities, unless the
9. Any class of disputes which the President may
parties thereto agree to submit their difference to
determine in the interest of justice or upon the
amicable settlement by an appropriate Lupon;
recommendation of the Secretary of Justice;
4. Any complaint by or against corporations,
10. Where the dispute arises from the Comprehensive
partnership or juridical entities, since only individuals
Agrarian Reform Law (CARL) (Sec. 46 & 47, R.A.
shall be parties to Barangay conciliation
6657);
proceedings either as complainants or respondents
11. Labor disputes or controversies arising from
(Sec. 1, Rule VI, Katarungang Pambarangay Rules);
employer-employee relations (Montoya vs.
5. Disputes involving parties who actually reside in
Escayo, et al., 171 SCRA 442; Art. 226, Labor Code,
barangays of different cities or municipalities,
as amended, which grants original and exclusive
except where such barangay units adjoin each
jurisdiction over conciliation and mediation of
other and the parties thereto agree to submit their
disputes, grievances or problems to certain offices
differences to amicable settlement by an
of the Department of Labor and Employment);
appropriate Lupon;
12. Actions to annul judgment upon a compromise
6. Offenses for which the law prescribes a maximum
which may be filed directly in court (See Sanchez vs.
penalty of imprisonment exceeding one (1) year or
Tupaz, 158 SCRA 459).
a fine over five thousand pesos (P5,000.00);
7. Offenses where there is no private offended party;
The Katarungang Pambarangay or Barangay Justice
8. Disputes where urgent legal action is necessary to
System is a community-based dispute settlement
prevent injustice from being committed or further
mechanism that is administered by the basic political unit
continued, specifically the following:
of the country, the barangay. As a community- based

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mechanism for dispute resolution, it covers disputes
between members of the same community (generally,
same city/municipality) and involves the Punong
Barangay and other members of the communities (the
Lupon members) as intermediaries (mediators,
conciliators, and, sometimes, arbitrators).
The establishment and operation of the Barangay Justice
System is mandated by Republic Act No. 7160 or the
Local Government Code of 1991.
Lupong Tagapamayapa (Lupon)
Is a body organized in every barangay composed of
Punong Barangay as the chairperson and not less than
ten (10) and more than twenty from which the members
of every Pangkat shall be chosen.
Pangkat Tagapagkasundo (Pangkat)
Is a conciliation panel constituted from the Lupon
membership for every dispute brought before the Lupon
consisting of three (3) members after the Punong
Barangay has failed in his mediation efforts.
Venue
A. Disputes between persons actually residing in the
same barangay shall be brought for amicable
settlement before the lupon of said barangay
B. These involving actual residents of different
barangays within the same city ormunicipality shall be
brought in the barangays where the respondent or
any of the respondents actually resides, at the
election of the complainant.
C. All disputes involving real property or any interest
therein shall be brought in the barangay where the
real property or the larger portion thereof is situated.
D. Those arising at the work place where the contending
parties are employed orat the institution where such
parties are enrolled for study, shall be brought in
thebarangay where such workplace or institution is
located.
Objections to venue shall be raised in the mediation
proceedings before the punong barangay; otherwise,
the same shall be deemed waived. Any legal question
which may confront the punong barangay in
resolving objections to venue herein referred to may
be submitted to the Secretary of Justice, or his
duly designated representative, whose ruling thereon
shall be binding (Section 409 of Administrative Circular
No 14-93)..
Procedure for Amicable Settlement
A. Who may initiate proceeding. -Upon payment of
the appropriate filing fee, any individual who has
acause of action against another individual involving
any matter within the authority of the lupon chairman
of the barangay.
B. Mediation by lupon chairman. - Upon receipt of the
complaint, the lupon chairman shall within the next
working day summon the respondent/s, with notice to
the complainant/s for them and their witnesses to
appear before him for a mediation of their conflicting
interests. If he fails in his mediation effort within fifteen
(15) days from the first meeting of the parties before
him, he shall forthwith set a date for the constitution of
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 the pangkat in accordance with the provisions of this
Chapter.
C. Suspension of prescriptive period of offenses.- While
the dispute is undermediation, conciliation, or
arbitration, the prescriptive periods for offenses and
cause of action under existing laws shall be
interrupted upon filing of the complaint with the
punong barangay. The prescriptive periods shall
resume upon receipt by the complainant of the
complaint or the certificate of repudiation or of the
certification to file action issued by the lupon or
pangkat secretary; Provided, however, That
such interruption shall not exceed sixty (60) days from
the filing of the complaint with the punong barangay.
D. Issuance of summons; hearing; grounds for
disqualification.- The Pangkat shall convene not
later than three (3) days from its constitution, on the
day and hour set by the lupon chairman, to hear
both parties and their witnesses, simplify issues, and
explore all possibilities for amicable settlement.
For this purpose, the pangkat may issue summons for
the personal appearance of parties and witnesses
before it. In the event that a party moves to disqualify
any member of the pangkat by reason of relationship,
bias, interest, or any other similar grounds discovered
after the constitution of the pangkat, the matter shall
be resolved by the affirmative vote of the majority of
the pangkat whose decision shall be final. Should
disqualification be dicidedupon, the resulting
vacancy shall be filled as herein provided for.
E. Period to arrive at a settlement. –The pangkat shall
arrive at a settlement or resolution of the dispute
within fifteen (15) days from the day it convenes in
accordance with this section. This period shall, at the
discretion of the pangkat, be extendible foranother
period which shall not exceed fifteen (15) days,
except in clearly meritorious cases (Section 410 of
Administrative Circular No 14-93)..
Form of Settlement
All amicable settlements shall be in writing, in alanguage
or dialect known to the parties, signed by them, and
attested to by the lupon chairman or the pangkat
chairman, as the case may be. When the parties to the
dispute do not use the same language or dialect, the
settlement shall be written in the language or dialect, the
settlement shall be written in the language or dialect
known to them (Section 411 of Administrative Circular No
14-93).
Conciliation
A. Pre-Condition to Filing of Complaint in Court.- No
complaint, petition, action, or proceeding involving
any matter within the authority ofthe lupon shall be
filed or instituted directly in court or any other
government office for adjudication, unless there has
been a confrontation between the parties before the
lupon chairman or the pangkat, and that no
conciliation or settlement has been reached as
certified by the lupon secretary or pangkat secretary
as attested to by the lupon or pangkat chairman or
unless the settlement has been repudiated by the
parties thereto.
B. Where Parties May Go Directly to Court.- The parties
may go directly to court in the following instances:
1. Where the accused is under detention
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 2. Where a person has otherwise been deprived of
personal liberty calling for habeaus corpus
proceedings;
3. Where actions are coupled with provisional
remedies such as preliminary injunction,
attachment, delivery of personal property, and
support pendent lite; and
4. Where the action may otherwise be barred by
the statute of limitations.
C. Conciliation among members of indigenous cultural
communities.- The customs and traditions of
indigenous cultural communities shall be applied in
settling disputes between members of the cultural
communities (Section 412 of Administrative Circular
No 14-93).
Proceedings Open to the Public; Exception
All proceedings fors settlement shall be public and
informal: Provided, however, that the lupon chairman or
the pangkat chairman, as the case may be, may motu
proprio or upon request of a party, exclude the public
from the proceedings in the interest of privacy, decency,
or public morals (Section 414 of Administrative Circular
No 14-93.
Appearance of Parties in Person
In all katarungang pambarangay proceedings, the
parties must appear in person without the assistance of
counsel or representative, except for minors and
incompetents who may be assisted by their next-of-kin
who are not lawyers (Section 415 of Administrative
Circular No 14-93.
Effects of Amicable Settlement and Arbitration
Award
The amicable settlement and arbitration award shall
have the force and effect of a final judgement of a
court upon the expiration of ten (10) days from the date
thereof, unless repudiation of the settlement has been
made or a petition to nullify the award has been filed
before the proper city or municipal court. However, this
provision shall not apply to court cases settled by the
lupon under the last paragraph of Section 408 of
this Code, in which case the compromise
settlement agreed upon by the parties before the
lupon chairman or the pangkat chairman shall be
submitted to the court and upon approval thereof, have
the force and effect of a judgement of said court
(Section 416 of Administrative Circular No 14-93).
Execution
The amicable settlemet or arbitration award may
been forced by execution by the lupon within six (6)
months from the date of settlement. After the lapse of
such time, the settlement may be enforced by
action in the appropriate city or municipal court
(Section 417 of Administrative Circular No 14-93).
Repudiation
Any party to the dispute may, within ten (10) days from
the date of the settlement, repudiate the same by filing
with the lupon chairman a statement to that effect sworn
to before him, where the consent is vitiated by fraud,
violence, or intimidation. Such repudiation shall be
sufficient basis for the issuance of the certification for
filing a complaint as herein above provided (Section 416
of Administrative Circular No 14-93).
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Power to Administer Oaths
The punong barangay, as chairman ofthe lupong
tagapamayapa, and the members of the pangkat are
hereby authorized toadminister oaths in connection
with any matter relating to all proceedings in
the implementation of the katarungang pambarangay
(Section 415 of Administrative Circular No 14-93).
Property Exempt From Execution
Except as otherwise expressly provided by law, the
following property, and no other, shall be exempt from
execution:
A. The debtor’s family home constituted in
accordance with the Family Code;
B. Tools and implements necessarily used by him in his
trade or employment;
C. Two horses, or two cows, or two carabaos , or other
beasts of burden, such as the debtor may select,
and necessary for housekeeping, and used for that
purpose by the debtor;
D. His necessary clothing, and that of all his family;
E. Household furniture and utensils necessary for
housekeeping, and used for that purpose by the
debtor,
F. Provisions for individual or family use sufficient for
four (4) months;
G. The professional libraries of attorneys, judges,
physicians, pharmacists, dentists, engineers,
surveyors, clergymen, teachers, and other
professionals;
H. One fishing boat, net, and other fishing
paraphernalias of the party obliged who is
fisherman, by the lawful use of which he earns a
livelihood;
I. So much of the earnings of the party obliged for his
personal services within the month preceding the
levy as are necessary for the support of his family;
J. Lettered gravestones;
K. All moneys, benefits, privileges, or annuniies
accruing or in any manner growing out of any life
insurance, provided the proceeds therefrom shall
not exceed One hundred thousand pesos
(P100,000.00)
L. The right to receive legal support, or money or
property obtained as such support, or any pension
or gratuity from the government;
M. Copyrights and other properties especially
exempted by law. But no article or species of
property mentioned in this section shall be exempt
from execution issued upon settlement or award for
its price or for a mortgage thereon (Section 7, Rule 7
of Administrative Circular No 14-93).
Motion to dismiss under Administrative Matter No. 19-10-
20-SC
1. Lack of Jurisdiction
2. Res Judicata
3. There is another pending action
4. Prescription
Miguel v. Motañez (G.R. No. 191336, January 25, 2012)
In the instant case, the respondent did not comply with the terms and
conditions of the Kasunduang Pag-aayos. Such non- compliance may be
construed as repudiation because it denotes that the respondent did not
intend to be bound by the terms thereof, thereby negating the very
purpose for which it was executed. Perforce, the petitioner has the option
either to enforce the Kasunduang Pag-aayos, or to regard it as rescinded
and insist upon his original demand, in accordance with the provision of
Article 2041 of the Civil Code. Having instituted an action for collection of
sum of money, the petitioner obviously chose to rescind the Kasunduang
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Pag-aayos.
Is Barangay Conciliation a mandatory requirement
before a party may file an action in court?
No. It’s a condition precedent but it not mandatory
− Circular no. 93
Celistino Malecdan v. Atty. SimpsonT. Baldo (A.C. Np. 12121, June 27, 2018)
As stated in the case of Ledesma v. Court of Appeals, Section 9 of P.D.
1508 mandates personal confrontation of the parties because “a personal
confrontation between the parties without the intervention of a counsel or
representative would generate spontaneity and a favorable disposition to
amicable settlement on the part of the disputants.”
Atty. Baldo's violation of P.D. 1508 thus falls squarely within the prohibition
of Rule 1.01 of Canon 1 of the Code of Professional Responsibility (CPR).
Canon 1 clearly mandates the obedience of every lawyer to laws and
legal processes. A lawyer, to the best of his ability, is expected to respect
and abide by the law: and thus, avoid any act or omission that is contrary
to the same. A lawyer's personal deference to the law not only speaks of
his character but it also inspires the public to likewise respect and obey
the law. Rule 1.01, on the other hand, states the norm of conduct to be
observed by all lawyers.
Alternative Dispute Resolution System
It 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
Hygenic Packaging Corporation v. Nutri Asia Inc.
The Court held that parties are allowed to constitute any stipulation on the
venue or mode of dispute resolution as part of their freedom to contract
under Article 1306 of the Civil Code of the Philippines. Here, however, the
records lack any written contract of sales containing the specific terms
and conditions agreed upon by the parties. The parties failed to provide
evidence of any contract, which could have contained stipulations on
the venue of dispute resolution. Since there is no contractual stipulation
that can be enforced on the venue of dispute resolution, the venue of
petitioner’s personal action will be governed by the 1997 Revised Rules of
Civil Procedure.
Insular Savings Bank v. Far East Bank and Trust Company
As provided in the PCHC Rules, the findings of facts of the decision or
award rendered by the Arbitration Committee shall be final and
conclusive upon all the parties in said arbitration dispute. Under Article
2044 of the New Civil Code, the validity of any stipulation on the finality of
the arbitrators’ award or decision is recognized. In the instant case,
petitioner and respondent have agreed that the PCHC Rules would
govern in case of controversy. However, since the PCHC Rules came
about only as a result of an agreement between and among member
banks of PCHC and not by law, it cannot confer jurisdiction to the RTC.
Thus, the portion of the PCHC Rules granting jurisdiction to the RTC to
review arbitral awards, only on questions of law, cannot be given effect.
Alternative Dispute Resolution
It is 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 litigation
⇒ All-encompassing which includes proceedings of
similar nature in quasi-judicial agencies
REPUBLIC ACT NO. 9285 (ADR ACT OF 2004)
ALTERNATIVE DISPUTE RESOLUTION: 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
⇒ Procedures of the same nature in quasi-judicial
agencies are not included
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State Policy on ADR (Section 2, ADR Act of 2004)
1. To actively promote party autonomy in the resolution
of disputes or the freedom of the parties to make their
own arrangement to resolve their disputes
2. The state shall encourage and actively promote the
use of ADR as an important means to achieve speedy
and impartial justice
3. declog court dockets.
4. The State shall provide means for the use of ADR as
an efficient tool and an alternative procedure for the
resolution of appropriate cases
Principles of ADR
1. Promotion of party autonomy and self-determination
in the resolution of disputes
2. Recognition of ADR as an efficient tool and an
alternative procedure for the resolution of cases
3. Enlisting of private sector participation
Objective and Benefits of ADR
1. Speedy and impartial disposition of cases
2. Declogging of court dockets
Preliminary Points
§ Conflict is a fact of life
§ Conflicts affect harmonious human relationships.
§ Conflicts happen because parties have unmet
substantive, procedural, and psychological needs,
which are often "obscured" by data problems,
relationship issues, and values differences.
§ We have various options available in dealing with
Modes of Resolving Disputes
A. Unilateral Mode
− Action taken by one party without regard to the
wishes of the other party
− Fight, flight or surrender, forgiveness
B. Bilateral Mode
− Direct negotiations between the parties to arrive at
a settlement that could be mutually beneficial
C. Third Party Intervention Mode
− Facilitative (conciliation, mediation)
Advantages of ADR
§ It is less expensive compared to the costs of litigation
and other forms of conflict resolution. It enables
parties to reach settlements speedily
§ It enables the parties to know and understand the
parties' interests and concerns.
§ Parties are generally more satisfied with the
agreements that they themselves crafted.
Position Interest
What cause the parties to
What parties say they want
want what they say
Claim, demand, decision, Reason or motivation
proposed solution behind the position
Forms of ADR
1. Arbitration
− A voluntary resolution process in which one or more
arbitrators are appointed in accordance with the
agreement of the parties, or rules promulgated
pursuant to the ADR Act, and who resolve a dispute
by rendering an award
− Intended to avoid the formalities. The delay, the
expense and vexation of ordinary litigation

Page 8
 by an experienced neutral person with expertise in
2. Mediation
the subject or in the substance of the dispute
− A mediator, selected by disputing parties, facilitates
− Availed of in the pre-trial phase
communication and negotiation, and assist the
parties in reaching a voluntary agreement 5. Mini-Trial
regarding a dispute A structured dispute resolution method in which the
− Mediation v. arbitration merits of a case are argued before a panel
composed of senior decision makers with or without
As to binding decision
the presence of a neutral third person after which the
v Arbitration – an arbitral tribunal or arbitrator
parties seek a negotiated settlement
evaluates the evidence and the merits of the
case and renders an arbitral award based on his 6. Any Combination of the Foregoing Med-arb
appreciation
7. Any Other ADR Form (Innominate ADR Form)
v Mediation – the parties to controversy are
− Valid contract that satisfies the requisites of ADR
convinced by a mediator to settle their
− Not contrary to law morals, good customs, public
controversy through voluntary agreement of the
order and public policy
parties themselves
Third Role of
Process Outcome
− Mediated settlement agreement v. arbitral awards Party Third Party
Mediation Facilitates
Voluntary
3. Conciliation Communication
agreement
Voluntary & negotiations,
The adjustment and settlement of a dispute in a Flexible Mediator assists the
Settlement
agreement
Informal parties in
friendly, antagonistic manner reaching an
Compromise
agreement
agreement
Conciliation Directs parties
Conciliation tries to individualize the optimal solution toward an
and direct parties towards a satisfactory common Voluntary
agreement
Conciliator Settlement
agreement. Informal
Proposes
The “conciliator” is an impartial person that assists the solutions to
parties
parties by driving their negotiations and directing them Arbitration Voluntary
Resolves the
towards a satisfactory agreement. Less Formal
than Litigation
Arbitrator
dispute
Arbitral award

Litigation Formal
Adjudicate
4. Neutral and Early Neutral Evaluation Rigid
Formal
Judge
Makes a ruling
Judgement

− An ADR process wherein the parties and their

lawyers are brought together to present summaries Classifications of ADR
of their cases and receive a non-binding assessment As to the number of parties
a. Bilateral or Bi-party

Page 9
 − When only two contending parties are involved b. International
b. Multilateral or Multi-party − Parties’ place of business are in different states
− More than two parties are involved − Place of arbitration is OUTSIDE THE PHILIPPINES
− Place where the substantial part of the obligation to
As to the number of issues be performed or the subject matter of the dispute is
a. Simple mostly closely connected is OUTSIDE THE PHILIPPINES
− Only a single issue is involved − If the parties agreed that the subject matter of the
b. Complex dispute relates to more than one country
− Two or more issues − Controlling law: ADR Act of 2004 on International
Commercial Arbitration
As to extent of conclusion
a. Complete Kinds of Arbitration as to the permanence of ADR
− All issues involved are resolved provider or Practicioner
b. Partial 1. Ad Hoc Arbitration
− One or more but not all issues are resolved − If the existence of the arbitrator (ADR provider) is
As to evidence only temporary for purpose of a particular dispute or
a. Evidentiary controversy
b. Non- Evidentiary 2. Institutional Arbitration
− If the arbitrator (ADR provider)’s existence is
As to the role of evidence in the proceedings permanent in character
a. Case-related
− If conducted in connection with or as a prerequisite Judicial Dispute Resolution
to trial JDR is conducted by a judge after parties fail to settle
E.g. CAM or JDR during Court Annexed Mediation. The JDR judge
b. Independent becomes a mediator, early neutral evaluator and
− Conducted irrespective of any pending court case conciliator. As a conciliator, the JDR judge persuades
involving the issue parties to reconsider their reluctance to compromise. As
an early neutral evaluator, the JDR judge gives a
As to the applicable law confidential, reasoned oral evaluation but nonbinding
a. Domestic opinion on the strengths and weaknesses of each party’s
− Parties’ place of business, place of arbitration, and case and their chances of success. Based on practice,
place of performance of the obligation involved or early neutral evaluation is conducted during private
subject matter of the dispute, are LOCATED in the caucus. As a mediator, the JDR judge actively facilitates
PHILIPPINES and assists negotiations among the parties.

Page 10

Subject Matter of ADR
All adversarial disputes and controversies can be the
subject matter of ADR
Exceptions (Sec. 6 [b] to [h]of RA 9285)
1. The civil status of persons - matter determined by law
and is not subject to the discretion of the parties.
2. The validity of marriage or any ground for legal
separation - matters over which the State has a keen
interest to protect.
3. The jurisdiction of the courts - jurisdiction over the
subject matter of a case is determined by law and is
not dependent upon the allegations of parties
except in the case of jurisdiction by estoppel.
4. Future legitime - future legitime is inexistent and
cannot be waived.
5. Criminal liability - not susceptible of ADR.
6. In general, those which, by law, cannot be
compromised (refer to Art. 2035 of the Civil Code of
the Philippines) - examples of law, which cannot be,
compromised article 2035 of New Civil Code; it is
against public policy to waive or enter into
compromise regarding future support.
Office of the Alternative Dispute Resolution (OADR)
The President signed Executive Order No. 97 on October
18, 2012, giving the Office of the Alternative Dispute
Resolution (OADR) all the authority and functions being
discharged by the Office of the President (OP) over
disputes filed with the courts, quasi-judicial bodies or
administrative offices.
Composition
The secretary of justice shall convene a committee that
shall formulate the appropriate rules and regulations
necessary for the implementation of this Act. The
committee, composed of representatives from:
a) the Department of Justice;
b) the Department of Trade and Industry;
c) the Department of the Interior and Local
Government;
d) the President of the Integrated Bar of the Philippines;
e) A representative from the arbitration profession;
f) A representative from the mediation profession; and
g) A representative from the ADR organizations
Objective of the Office for Alternative Dispute Resolution
1. to promote, develop and expand the use of ADR in
the private and public sectors; and
2. To assist the government to monitor, study and
evaluate the use by the public and the private sector
of ADR, and recommend to Congress needful
statutory changes to develop, strengthen and
improve ADR practices in accordance with world
standards.
Powers and Functions of the Office for Alternative Dispute
Resolution
1. To formulate standards for the training of the ADR
practitioners and service providers;
2. To certify that such ADR practitioners and ADR service
providers have undergone the professional training
provided by the office;
3. To coordinate the development, implementation,
monitoring, and evaluation of government ADR
programs;
Page 11
4. To charge fees for their services; and
5. To perform such acts as may be necessary to carry
into effect the provisions of this Act.
MEDIATION
“A voluntary process in which a mediator selected by the
parties, facilitates communication and negotiation and
assists the parties in reaching a voluntary agreement
regarding a dispute
Classification of Mediation
1. Mediation is non-evidentiary or non-merit based.
a. Mediation focuses on the facilitation of
communication and negotiation between the
parties in order to encourage them voluntarily to
settle their dispute.
b. A mediator must refrain from giving legal or
technical advise or otherwise engaging in
counselling advocacy and must abstain from
expressing his personal opinion on the rights and
duties of the parties and the merits of any
proposal made.
2. Mediation is either institution when administered by,
and conducted under the rules of mediation and ad
hoc if it is other than institutional.
3. An agreement to submit a dispute to a mediation by
an institution shall include an agreement:
a. To be bound by the internal mediation and
administrative policies of such institution;
b. To have such rules govern the mediation of the
dispute and for the mediator, the parties and their
respective counsels and non-party participants to
abide by such rules.
Place of Mediation
Parties to mediation are given the freedom to agree on
the place of mediation. In the absence of such
agreement, place of mediation shall be any place
convenient and appropriate to all parties.
Stages of Mediation
1. Opening statement of Mediator
2. Statement of the paties
3. Exchange by the parties of the facts
4. Generalization of options
5. Closure
Mediation shall be closed and concluded by:
a) Execution of settlement agreement by the parties; or
b) By the withdrawal of any party from mediation; or
c) By the written declaration of the mediator that any
further effort at mediation would not be helpful.
Advantages of Mediation
1. Confidentiality in the mediation process;
2. Prompt, economical and amicable resolution of
disputes; and
3. The decision-making authority rests in the parties.
Confidential Information
Any information, relative to the subject of mediation or
abitration, expressly intended by the source not to be
disclosed
Confidential information includes:
1. Communication, oral or written, made in a dispute
resolution proceeding
2. An oral or written statement made or which occurs
during the mediation
Page 12
3. Pleadings, motions, manifestation, written statements,
reportsfiled or submitted in arbitration or for expert
evaluation.
Coverage of Confidential Communication
Information obtained through mediation proceedings
shall be subject to the following principles and guidelines:
(a) Information obtained through mediation shall be
privileged and confidential.
(b) A party, a mediator, or a nonparty participant may
refuse to disclose and may prevent any other person
from disclosing a mediation communication.
(c) Confidential Information shall not be subject to
discovery and shall be inadmissible if any adversarial
proceeding, whether judicial or quasi-judicial
However, evidence or information that is otherwise
admissible or subject to discovery does not become
inadmissible or protected from discovery solely by
reason of its use in a mediation.
(d) In such an adversarial proceeding, the following
persons involved or previously involved in a
mediation may not be compelled to disclose
confidential information obtained during mediation:
A. Parties to the dispute;
B. Mediator/s;
C. Counsel for the parties;
D. Non-party participants;
E. Any person hired or engaged in connection
with mediation such as secretary, stenographer,
clerk or assistant; and
F. Any person who obtains or possesses
confidential information by reason of his
profession.
(e) The protections of this Act shall continue to apply
even of a mediator is found to have failed to act
impartially.
(f) a mediator may not be called to testify to provide
information gathered in mediation. A mediator who
is wrongfully subpoenaed shall be reimbursed the full
cost of his attorney's fees and related expenses.
Remedy If the Mediator Disclosed the Information
1. Deny the allegation
2. File a case against the mediator
Exceptions Based on Agreement, Nature of Proceedings,
Crime or Social Justice
a) Those contained in an agreement evidenced by a
record authenticated by all the parties to the
agreement.
b) Those available to the public or made during a
session of mediation, which is open, or is required by
law to the public.
c) A threat or statement of a plan to inflict bodily injury
or commit a crime of violence.
d) Communication intentionally used to plan, attempt
to commit, or commit, a crime, or conceal an on-
going crime or criminal activity.
e) Communication sought or offered to prove or
disprove abuse, neglect, abandonment or
exploitation in a proceeding in which, a public
agency is protecting the interest of an individual
protected by law.
f) Communication sought or offered to prove or
disprove a claim or complaint of professional
Page 13
 misconduct or malpractice filed against a mediator
in a proceeding.
g) Communication sought or offered to prove or
disprove a claim or complaint of professional
misconduct or malpractice filed against a party,
non-party participant or representative of a party
based on conduct occurring during mediation.
Exceptions Based on Public Policy
1. A court proceeding involving a felony
2. A proceeding to prove a claim or defense that
under the law, it is sufficient to avoid liability in the
mediation
Limited Use of Evidence
Admission of the evidence for the limited purpose of the
exception does not render the evidence admissible for
any other purpose.
Privilege of the Mediator
General Rule: A mediator may not be compelled to
provide evidence of mediation communication.
Exception: A mediator may not make report to a court or
agency that will make a ruling on dispute that is subject
of mediation except with the following cases:
a. Where the mediation occurred or has terminated
or where a settlement was reached;
b. Permitted to be disclosed under Section 13 of the
ADR Act.
Waiver Of Confidentiality
- The protection of confidentiality is susceptible of
waiver.
- Waiver can either be expressed such as when it is
contained in record or implied by failing to timely
object to objectionable questions or by testifying or
presenting a witness to testify on confidential and
privileged information.
- Waiver can also come by way of estoppel.
SEC. 10. Waiver of Confidentiality. - A privilege arising from the
confidentiality of information may be waived in a record, or orally
during a proceeding by the mediator and the mediation parties.
A privilege arising from the confidentiality of information may
likewise be waived by a nonparty participant if the information is
provided by such nonparty participant.
A person who discloses confidential information shall be
precluded from asserting the privilege under Section 9 of this
Chapter to bar disclosure of the rest of the information necessary
to a complete understanding of the previously disclosed
information. If a person suffers loss or damages in a judicial
proceeding against the person who made the disclosure.
A person who discloses or makes a representation about a
mediation is preclude from asserting the privilege under Section 9,
to the extent that the communication prejudices another person
in the proceeding and it is necessary for the person prejudiced to
respond to the representation of disclosure.
The Mediator
- The mediation parties are given the freedom to select
their mediator and they may request the Office of
ADR to provide them with a list or roster of its certified
mediators.
- The role of the mediator is very crucial that his
presence and competence must be ensured. A
mediator who refuses to act as such may withdraw or
may be compelled to withdraw from mediation
Page 14
 proceedings under any of the following
circumstances:
a. If any of the parties requests the mediator to
withdraw.
⇒ This promotes and strengthens party
autonomy and self- determination in the
selection of the mediator.
b. The mediator does not have the qualifications,
training and experience to enable him to meet
the reasonable expectations of the parties. No
special qualification by background or
profession is required. However, if a mediator is
selected by the parties on account of his special
qualifications which turn out to be false or
inaccurate, the mediation parties may ask for his
withdrawal.
c. The mediator’s impartiality is in question.
d. The continuation of the process will violate an
ethical standard.
e. The safety of any one of the parties will be
jeopardized.
f. The mediator is unable to provide effective
services.
g. In case of conflict of interest.
h. Other instances for under the IRR.
Duties And Functions Of Mediators
Apart from the general duty of mediators to conduct
mediation, mediators are required to perform the
following:
1. Prior to Mediation
a) On competence – a mediator should maintain and
continually upgrade his professional competence
in mediations skills.
b) On impartiality – before accepting mediation, the
mediator should make an inquiry that is reasonable
under the circumstances to determine whether
there are known facts that a reasonable individual
would consider likely to affect his impartiality.
2. During the Mediation
a) Confidentiality
b) On consent and self-determination – a mediator
shall exert reasonable efforts to ensure that each
party understands the nature and character of the
mediation proceedings.
c) On promotion of respect and control of abuse of
process – the mediator shall encourage mutual
respect between the parties.
Mediator’s Cost and Fees
− A mediator is allowed to charge costs, reasonable
fees and charges against the parties but he is under
obligation to fully disclose and explain the basis.
− In ad hoc mediation, the parties are free to make
their own arrangements as to mediation costs and
fees
− In institutional mediation, costs shall include the
administrative charges of the mediation institution,
fees and associated expenses.
− If mediator withdraws from the mediation, he shall
return any unearned fee and unused deposit.
Mediated Settlement Agreements
− The concluding argument in a successful mediation is
called the mediated settlements agreement or
settlement agreement.
− The following principles apply to these concluding
arrangements
Page 15
 a) Settlement agreement following a successful
mediation shall be prepared by the parties with
the assistance of a lawyer.
b) Parties and their respective counsels, shall sign the
settlement agreement and shall certify the
contents.
c) If the parties agree, settlement may be jointly or
deposited in:
⇒ Place of business of any of the parties
⇒ RTC where any of the individuals reside
⇒ Any RTC in the National Capital Region
This will be the venue.
d) When there is a need to enforce the settlement
agreement
e) Parties may agree In the settlement agreement
that mediator shall become a sole arbitrator for
the dispute and shall treat the agreement as an
arbitral award which shall be subject to
enforcement.
The Role of Counsel in Mediation
A party may designate a lawyer or any other person to
provided assistance in the mediation. This right may be
waived but the waiver must be in writing and can be
rescinded at any time.
The lawyer or counsel shall have the following roles:
a) Collaborate with the other lawyer in working together
towards the common goal of helping their clients
resolve their indifferences to their mutual advantage.
b) Encourage and assist the client to actively participate
in positive discussions and cooperate in crafting an
agreement to resolve their dispute.
c) Assist the client to comprehend and appreciate the
mediation process and its benefits.
d) Confer and discuss with the client the mediation
process and substance.
Role of Lawyers in mediation and in JDR Proceedings
Lawyers may attend mediation proceedings in the role of
adviser and consultant to their clients, dropping their
combative role in the adjudicative process, and giving
up their dominant role in judicial trials. They must accept
a less directive role in order to allow the parties more
opportunities to craft their own agreement.
In particular, they shall perform the following functions:
1. Help their clients comprehend the mediation process
and its benefits and allow them to assume greater
personal responsibility in making decisions for the
success of mediation in resolving the dispute.
2. Discuss with their clients the following:
a) The substantive issues involved in the dispute.
b) Prioritization of resolution in terms of
importance to client.
c) Understanding the position of the other side
and the underlying fears, concerns, and needs
underneath that position.
d) Need for more information or facts to be
gathered or exchanged with the other side for
informed decision making.
e) Possible bargaining options but stressing the
need to be open-minded about other
possibilities.
Page 16
 f) The best, worst, and most likely alternatives to a
negotiated agreement.
3. Assist in preparing a compromise agreement that is
not contrary to law, morals, good customs, public
order, or public policy so that the same may be
approved by the court, paying particular attention to
issues of voluntary compliance of what have been
agreed upon, or otherwise to issues of enforcement in
case of breach.
4. Assist, wherever applicable, in the preparation of a
manifestation of satisfaction of claims and mutual
withdrawal of complaint and counterclaim as basis
for the court to issue an order of dismissal.
Mandatory Coverage for Court-Annexed Mediation
(CAM) and Judicial Dispute Resolution (JDR)
The following cases shall be 1) referred to Court-Annexed
Mediation (CAM) and 2) be the subject of Judicial
Dispute Resolution (JDR) proceedings:
1. All civil cases and the civil liability of criminal cases
covered by the Rule on Summary Procedure,
including the civil liability for violation of B.P. 22,
except those which by law may not be
compromised;
2. Special proceedings for the settlement of estates;
3. All civil and criminal cases filed with a certificate to
file action issued by the Punong Barangay or the
Pangkat ng Tagapagkasundo under the Revised
Katarungang Pambarangay Law
4. The civil aspect of Quasi-Offenses under Title 14 of the
Revised Penal Code;
5. The civil aspect of less grave felonies punishable by
correctional penalties not exceeding 6 years
imprisonment, where the offended party is a private
person;
6. The civil aspect of estafa, theft and libel;
7. All civil cases and probate proceedings, testate and
intestate, brought on appeal from the exclusive and
original jurisdiction granted to the first level courts
under Section 33, par. (1) of the Judiciary
Reorganization Act of 1980;
8. All cases of forcible entry and unlawful detainer
brought on appeal from the exclusive and original
jurisdiction granted to the first level courts under
Section 33, par. (2) of the Judiciary Reorganization
Act of 1980;
9. All civil cases involving title to or possession of real
property or an interest therein brought on appeal
from the exclusive and original jurisdiction granted to
the first level courts under Section 33, par.(3) of the
Judiciary Reorganization Act of 1980; and
10. All habeas corpus cases decided by the first level
courts in the absence of the Regional Trial Court
judge, that are brought up on appeal from the
special jurisdiction granted to the first level courts
under Section 35 of the Judiciary Reorganization Act
of 1980.
The following cases shall not be referred to CAM and JDR:
1. Civil cases which by law cannot be compromised
(Article 2035, New Civil Code);
2. Other criminal cases not covered under paragraphs
3 to 6 above;
3. Habeas Corpus petitions;
Page 17
4. All cases under Republic Act No. 9262 (Violence
against Women and Children); and
5. Cases with pending application for Restraining
Orders/Preliminary Injunctions.
However, in cases covered under 1, 4 and 5 where the
parties inform the court that they have agreed to
undergo mediation on some aspects thereof, e.g.,
custody of minor children, separation of property, or
support pendente lite, the court shall refer them to
mediation.
ARBITRATION
Concept Of Arbitration
As defined, arbitration is a voluntary dispute resolution
process in which one or more arbitrators, appointed in
accordance with the agreement of the parties or rules
promulgated pursuant to the ADR Act, resolve a dispute
by rendering an award.
An arrangement for taking and abiding by the judgment
of selected persons in some disputed matter, instead of
carrying it to established tribunals of justice and is
intended to avoid formalities, the delay, the expense
and vexation of ordinary litigation (Uniwide Sales Realty
vs. Titan-Ikeda Construction 511 SCRA 335, 2006)
As to the role of evidence and merits of the case,
arbitration is a merit evidence based form of ADR.
Kinds Of Arbitration
A. Voluntary Arbitration – involves the reference of a
dispute to an impartial body, the members of which
are chosen by the parties themselves, which parties
freely consent in advance to abide by the arbitral
award issued after the proceedings where both
parties had the opportunity to be heard.
B. Compulsory Arbitration – process of settlement of
disputes by a government agency which has the
authority to investigate and to make an award which
is binding on all parties and as a mode of arbitration
where the parties are compelled to accept the
resolution of their dispute through arbitration by a 3rd
party.
Under the classification, arbitration is either:
(a) Domestic – if the components of parties’ places of
business. Place of arbitration, place of
performance of a substantial part of the
obligation and place where the subject matter of
the dispute is most closely connected, are all
located in the Philippines.
(b) Foreign - Place of arbitration, place of
performance of a substantial part of the
obligation and place where the subject matter of
the dispute is most closely connected, are located
outside the Philippines.
(c) International Commercial – if any of the following
instances occur.
i. Parties’ places of business, which at the
time of the arbitration, is in different states.
ii. Place of arbitration provided in the
arbitration agreement and in which the
parties have their places of business, is
outside the Philippines
Page 18
 iii. Place where a substantial part of the
obligation is to be performed or the place
with which the subject matter of the
dispute is most closely connected, and in
which the parties have their places of
business, is outside the Philippines
iv. The parties have expressly agree that the
subject matter of the arbitration agreement
relates to more than one country.
Arbitration is commercial if it covers matters arising
from all relationships of a commercial nature, whether
contractual or not.
Commercial Arbitration
An arbitration is "commercial" if it covers matters arising
from all relationships of a commercial nature, whether
contractual or not. Relationships of a transactions: any
trade transaction for the supply or exchange of goods or
services; distribution agreements; construction of works;
commercial 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.
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
(Section 19)
Language of the Arbitration
The parties are free to agree on the language or
languages to be used in the arbitral proceedings. Failing
such agreement, the language to be used shall be
English in international arbitration, and English or Filipino
for domestic arbitration, unless the arbitral tribunal shall
determine a different or another language or languages
to be used in the proceedings. This agreement or
determination, unless otherwise specified therein, shall
apply to any written statement by a party, any hearing
and any award, decision or other communication by the
arbitral tribunal (Section 31, RA 9285).
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.
(Section 31)
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,
Page 19
experts, or the parties, or for inspection of goods, other
property or documents (Section 30)
Meaning Of Appointing Authority
As used in the Model Law shall mean the person or
institution named in the arbitration agreement as the
appointing authority; or the regular arbitration arbitration
institution under whose rules the arbitration is agreed to
be conducted. Where the parties have agreed to submit
their dispute to institutional arbitration rules, and unless
they have agreed to a different procedure, they shall be
deemed to have agreed to procedure under such
arbitration rules for the selection and appointment of
arbitrators. In ad hoc arbitration, the default
appointment of an arbitrator shall be made by the
National President of the Integrated Bar of the Philippines
(IBP) or his duly authorized representative (Section 26)
Policy On Arbitration
Being an inexpensive, speedy and amicable method of
settling disputes arbitration – along with mediation,
conciliation and negotiation – is encouraged by SC.
Aside from unclogging judicial dockets, arbitration also
hastens the resolution of disputes, especially of the
commercial kind. It is thus regarded as the “wave of the
future” in international civil and commercial disputes.
Brushing aside a contractual agreement calling for
arbitration between the parties would be a step
backward. (Korea Technologies Ltd. Vs. Lerma 542 SCRA
1, 2008)
Objectives Of Arbitration
The basic objective of arbitration is to provide a speedy
and inexpensive method of settling disputes by allowing
the parties to avoid formalities, delay, expense and
aggravation which commonly accompany ordinary
litigation, especially litigation which goes through the
hierarchy of courts.
Arbitrators
Is the person appointed to render an award, alone or
with others, in a dispute that is the subject of an
arbitration agreement.
Voluntary arbitrators act in a quasi-judicial capacity,
such that their decisions are within the scope of judicial
review.
Arbitration Agreement
An arbitration agreement is the agreement by the parties
to submit to arbitration all or certain disputes which have
arisen or which may arise between them in respect of a
defined legal relationship.
By nature, an arbitration agreement is contractual. It
should have the essential elements of a contract.
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the
contract;
(3) Cause of the obligation which is established (Article
1380, NCC)
The SC explained the contractual nature of an arbitration
agreement in the case ORMOC SUGARCANE PLANTERS’
ASSOCIATION VS. CA (596 SCRA 630, 2009) an
agreement to arbitrate is a contract, the relation of the
Page 20
parties is contractual and the rights and liabilities of the
parties are controlled by the law of contracts. In an
agreement to arbitrate some specific thing, and an
agreement to abide by the award, either in express
language or by implication.
There are two modes of submitting dispute or controversy
to arbitration depending on the existence or pendency
of the dispute or controversy to be submitted for
resolution, namely:
i. Agreement to submit to arbitration
ii. A submission agreement
Arbitration agreement is a formal contract; its validity is
dependent on the contract being executed in a
particular form. An arbitration agreement shall be in
writing and subscribed by the parties charged or by his
lawful agent.
An arbitration agreement may be included in the
container contract in which case, it is referred to as an
arbitration clause or a compromissoire or may be
constituted in a separate contract.
Doctrine Of Separability
Also known as DOCTRINE OF SEVERABILITY, enunciates
that an arbitration agreement is independent of the
main contract even if it is contained in an arbitration
clause. This is to be treated as a separate agreement
such that even the validity of the main contract is
challenged, the arbitration agreement or clause remains
valid and enforceable.
Judicial Review And Court Intervention
The decisions of an arbitral tribunal are subject to judicial
review. The inclusion of an arbitration clause in a
contract does not ipso facto divest the courts to pass
upon the findings of arbitral bodies.
In case of ABS-CBN BROADCASTING CORP. VS WINS
JAPAN LTD (544 SCRA 308, 2009) enumerated the judicial
remedies an aggrieved party to an arbitral award may
take, namely:
1. A petition in the proper RTC to issue an order to
vacate the award on the grounds provided in
Section 24 or RA876;
2. A petition for review in the CA under Rule 43 of ROC
on questions of fact, of law or mixed questions of
fact and law;
3. A petition for certiorari under Rule 65 of ROC should
the arbitrator have acted without or in excess of his
jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction.
In domestic arbitration, if the arbitral tribunal decides to
defer such ruling until the rendition of the arbitral award,
none of the parties can seek judicial relief from the
deferment.
Arbitration and court action are not incompatible. They
may proceed at the same time and independently of
each other. They may even complement each other.
Under the ADR Act and IRR, the court is directed to refer
to arbitration those who are parties to the arbitration
agreement and proceed with the court action as to
those who are not bound by such arbitration agreement.
Page 21
The declaration under the law that a decision of the
appointing authority or arbitrator or arbitral tribunal for
that matter is immediately executory and not subject to
appeal or motion for reconsideration does not foreclose
the possibility of judicial review. The remedy of the
aggrieved party under the situation is to avail of a
petition for certiorari under Rule 65 of ROC.
Interim Measures In Arbitration
Complementation between the arbitration and court
action is best exemplified in the area of interim measures.
Interim measures, otherwise referred to in the ADR Act as
“interim measure of protection” or “provisional reliefs”
are ancillary remedies intended for the protection of the
subject matter of the disputes.
As a rule, interim measures are applied with and secured
from the arbitral tribunal. However, there are instances
when the arbitral tribunal cannot grant the interim
measures such as when the arbitral tribunal is not yet
constituted, or when the arbitral tribunal already
constituted has no power to act or is unable to act
effectively.
A provisional remedy under the ROC cannot exist without
a principal cause of action. However, this principle is not
true for interim measure under the ADR Act and IRR. A
court cannot refuse to grant, implement or enforce a
petition for interim measure on the sole ground that the
petition is merely an ancillary relief and the principal
action is pending with the arbitral tribunal.
Coverage Of IRR Provisions On International Commercial
Arbitration
The provisions of the IRR on international arbitration are
default rules, they are applicable only in the absence of
or in default of applicable provisions contained in:
1. An agreement, in force between the Philippines and
other states; and
2. An agreement between the parties on the
applicable rules.
“THE ARBITRATION LAW”
(REPUBLIC ACT NO. 876)
Persons And Matters Subject To Arbitration
Two or more persons or parties may submit to the
arbitration of one or more arbitrators any controversy
existing between them at the time of the submission and
which may be the subject of an action, or the parties to
any contract may in such contract agree to settle by
arbitration a controversy thereafter arising between them.
Such submission or contract shall be valid, enforceable
and irrevocable, save upon such grounds as exist at law
for the revocation of any contract.
Such submission or contract may include question arising
out of valuations, appraisals or other controversies which
may be collateral, incidental, precedent or subsequent
to any issue between the parties.
A controversy cannot be arbitrated where one of the
parties to the controversy is an infant, or a person
judicially declared to be incompetent, unless the
appropriate court having jurisdiction approve a petition
Page 22
for permission to submit such controversy to arbitration
made by the general guardian or guardian ad litem of
the infant or of the incompetent.
But where a person capable of entering into a submission
or contract has knowingly entered into the same with a
person incapable of so doing, the objection on the
ground of incapacity can be taken only in behalf of the
person so incapacitated (Section 2)
Controversies Or Cases Not Subject To The Provisions Of
This Act
This Act shall not apply to controversies and to cases
which are subject to the jurisdiction of the Court of
Industrial Relations or which have been submitted to it as
provided by CA 103 (Section 3)
An Arbitration Shall Be Instituted By:
1. In the case of a contract to arbitrate future
controversies by the service by either party upon the
other of a demand for arbitration in accordance with
the contract. Such demand shall be set forth the
nature of the controversy, the amount involved, if any,
and the relief sought, together with a true copy of the
contract providing for arbitration. The demand shall
be served upon any party either in person or by
registered mail. In the event that the contract
between the parties provides for the appointment of
a single arbitrator, the demand shall be set forth a
specific time within which the parties shall agree
upon such arbitrator. If the contract between the
parties provides for the appointment of three
arbitrators, one to be selected by each party, the
demand shall name the arbitrator appointed by the
party making the demand; and shall require that the
party upon whom the demand is made shall within
fifteen days after receipt thereof advise in writing the
party making such demand of the name of the
person appointed by the second party; such notice
shall require that the two arbitrators so appointed
must agree upon the third arbitrator within ten days
from the date of such notice.
2. In the event that one party defaults in answering the
demand, the aggrieved party may file with the Clerk
of the Court of First Instance having jurisdiction over
the parties, a copy of the demand for arbitration
under the contract to arbitrate, with a notice that the
original demand was sent by registered mail or
delivered in person to the party against whom the
claim is asserted. Such demand shall set forth the
nature of the controversy, the amount involved, if any,
and the relief sought, and shall be accompanied by
a true copy of the contract providing for arbitration.
3. In the case of the submission of an existing
controversy by the filing with the Clerk of the Court of
First Instance having jurisdiction, of the submission
agreement, setting forth the nature of the controversy,
and the amount involved, if any. Such submission
may be filed by any party and shall be duly executed
by both parties.
4. In the event that one party neglects, fails or refuses to
arbitrate under a submission agreement, the
aggrieved party shall follow the procedure prescribed
in subparagraphs (a) and (b) of this section (Section
5)
Appointment Of Arbitrators
Page 23
The Court of First Instance shall appoint an arbitrator or
arbitrators, as the case may be, in the following
instances:
A. If the parties to the contract or submission are unable
to agree upon a single arbitrator; or
B. If an arbitrator appointed by the parties is unwilling or
unable to serve, and his successor has not been
appointed in the manner in which he was appointed;
or
C. If either party to the contract fails or refuses to name
his arbitrator within fifteen days after receipt of the
demand for arbitration; or
D. If the arbitrators appointed by each party to the
contract, or appointed by one party to the contract
and by the proper Court, shall fail to agree upon or to
select the third arbitrator.
E. The court shall, in its discretion appoint one or three
arbitrators, according to the importance of the
controversy involved in any of the preceding cases in
which the agreement is silent as to the number of
arbitrators.
F. Arbitrators appointed under this section shall either
accept or decline their appointments within seven
days of the receipt of their appointments. In case of
declination or the failure of an arbitrator or arbitrators
to duly accept their appointments the parties or the
court, as the case may be, shall proceed to appoint
a substitute or substitutes for the arbitrator or
arbitrators who decline or failed to accept his or their
appointments (Section 8)
Appointment Of Additional Arbitrators
Where a submission or contract provides that two or
more arbitrators therein designated or to be thereafter
appointed by the parties, may select or appoint a person
as an additional arbitrator, the selection or appointment
must be in writing. Such additional arbitrator must sit with
the original arbitrators upon the hearing (Section 9)
Qualifications Of Arbitrators
1. Must be of legal age
2. In full-enjoyment of his civil rights
3. Know how to read and write
Prohibition
A. No person appointed to served as an arbitrator shall
be related by blood or marriage within the sixth
degree to either party to the controversy
B. No person shall serve as an arbitrator in any
proceeding if he has or has had financial, fiduciary or
other interest in the controversy or cause to be
decided or in the result of the proceeding, or has any
personal bias, which might prejudice the right of any
party to a fair and impartial award.
C. No party shall select as an arbitrator any person to
act as his champion or to advocate his cause.
If, after appointment but before or during hearing, a
person appointed to serve as an arbitrator shall discover
any circumstances likely to create a presumption of bias,
or which he believes might disqualify him as an impartial
arbitrator, the arbitrator shall immediately disclose such
information to the parties. Thereafter the parties may
agree in writing:
i. to waive the presumptive disqualifying
circumstances; or
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 ii. to declare the office of such arbitrator vacant. Any
such vacancy shall be filled in the same manner as
the original appointment was made.
Challenge Of Arbitrators
The arbitrators may be challenged only for the reasons
mentioned in the preceding section which may have
arisen after the arbitration agreement or were unknown
at the time of arbitration.
The challenge shall be made before them.
If they do not yield to the challenge, the challenging
party may renew the challenge before the Court of First
Instance of the province or city in which the challenged
arbitrator, or, any of them, if there be more than one,
resides. While the challenging incident is discussed
before the court, the hearing or arbitration shall be
suspended, and it shall be continued immediately after
the court has delivered an order on the challenging
incident (Section 11).
Procedure By Arbitrators
Subject to the terms of the submission or contract, if any
are specified therein, are arbitrators selected as
prescribed herein must, within five days after
appointment if the parties to the controversy reside
within the same city or province, or within fifteen days
after appointment if the parties reside in different
provinces, set a time and place for the hearing of the
matters submitted to them, and must cause notice
thereof to be given to each of the parties. The hearing
can be postponed or adjourned by the arbitrators only
by agreement of the parties; otherwise, adjournment
may be ordered by the arbitrators upon their own motion
only at the hearing and for good and sufficient cause.
No adjournment shall extend the hearing beyond the
day fixed in the submission or contract for rendering the
award, unless the time so fixed is extended by the written
agreement of the parties to the submission or contract or
their attorneys, or unless the parties have continued with
the arbitration without objection to such adjournment.
The hearing may proceed in the absence of any party
who, after due notice, fails to be present at such hearing
or fails to obtain an adjournment thereof. An award shall
not be made solely on the default of a party. The
arbitrators shall require the other party to submit such
evidence as they may require for making an award.
No one other than a party to said arbitration, or a person
in the regular employ of such party duly authorized in
writing by said party, or a practicing attorney-at-law,
shall be permitted by the arbitrators to represent before
him or them any party to the arbitration. Any party
desiring to be represented by counsel shall notify the
other party or parties of such intention at least five days
prior to the hearing.
The arbitrators shall arrange for the taking of a
stenographic record of the testimony when such a
record is requested by one or more parties, and when
payment of the cost thereof is assumed by such party or
parties.
Persons having a direct interest in the controversy which
is the subject of arbitration shall have the right to attend
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any hearing; but the attendance of any other person
shall be at the discretion of the arbitrators.
Oath Of Arbitrators
Before hearing any testimony, arbitrators must be sworn,
by any officer authorized by law to administer an oath,
faithfully and fairly to hear and examine the matters in
controversy and to make a just award according to the
best of their ability and understanding. Arbitrators shall
have the power to administer the oaths to all witnesses
requiring them to tell the whole truth and nothing but the
truth in any testimony which they may give in any
arbitration hearing. This oath shall be required of every
witness before any of his testimony is heard (Section 13)
Subpoena And Subpoena Duces Tecum
Arbitrators shall have the power to require any person to
attend a hearing as a witness. They shall have the power
to subpoena witnesses and documents when the
relevancy of the testimony and the materiality thereof
has been demonstrated to the arbitrators. Arbitrators
may also require the retirement of any witness during the
testimony of any other witness. All of the arbitrators
appointed in any controversy must attend all the
hearings in that matter and hear all the allegations and
proofs of the parties; but an award by the majority of
them is valid unless the concurrence of all of them is
expressly required in the submission or contract to
arbitrate. The arbitrator or arbitrators shall have the
power at any time, before rendering the award, without
prejudice to the rights of any party to petition the court
to take measures to safeguard and/or conserve any
matter which is the subject of the dispute in arbitration
(Section 14)
Hearing By Arbitrators
Arbitrators may, at the commencement of the hearing,
ask both parties for brief statements of the issues in
controversy and/or an agreed statement of facts.
Thereafter the parties may offer such evidence as they
desire, and shall produce such additional evidence as
the arbitrators shall require or deem necessary to an
understanding and determination of the dispute. The
arbitrators shall be the sole judge of the relevancy and
materiality of the evidence offered or produced, and
shall not be bound to conform to the Rules of Court
pertaining to evidence. Arbitrators shall receive as
exhibits in evidence any document which the parties
may wish to submit and the exhibits shall be properly
identified at the time of submission. All exhibits shall
remain in the custody of the Clerk of Court during the
course of the arbitration and shall be returned to the
parties at the time the award is made. The arbitrators
may make an ocular inspection of any matter or
premises which are in dispute, but such inspection shall
be made only in the presence of all parties to the
arbitration, unless any party who shall have received
notice thereof fails to appear, in which event such
inspection shall be made in the absence of such party
(Section 14)
Briefs
At the close of the hearings, the arbitrators shall
specifically inquire of all parties whether they have any
further proof or witnesses to present; upon the receipt of
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a negative reply from all parties, the arbitrators shall
declare the hearing closed unless the parties have
signified an intention to file briefs. Then the hearing shall
be closed by the arbitrations after the receipt of briefs
and/or reply briefs. Definite time limit for the filing of such
briefs must be fixed by the arbitrators at the close of the
hearing (Section 16)
Reopening Of Hearing
The hearing may be reopened by the arbitrators on their
own motion or upon the request of any party, upon
good cause, shown at any time before the award is
rendered. When hearings are thus reopened the
effective date for the closing of the hearings shall be the
date of the closing of the reopened hearing (Section 17)
Proceeding In Lieu Of Hearing
The parties to a submission or contract to arbitrate may,
by written agreement, submit their dispute to arbitration
by other than oral hearing. The parties may submit an
agreed statement of facts. They may also submit their
respective contentions to the duly appointed arbitrators
in writing; this shall include a statement of facts, together
with all documentary proof. Parties may also submit a
written argument. Each party shall provide all other
parties to the dispute with a copy of all statements and
documents submitted to the arbitrators. Each party shall
have an opportunity to reply in writing to any other
party's statements and proofs; but if such party fails to do
so within seven days after receipt of such statements and
proofs, he shall be deemed to have waived his right to
reply. Upon the delivery to the arbitrators of all
statements and documents, together with any reply
statements, the arbitrators shall declare the proceedings
in lieu of hearing closed (Section 18)
Time For Rendering Award
Unless the parties shall have stipulated by written
agreement the time within which the arbitrators must
render their award, the written award of the arbitrators
shall be rendered within thirty days after the closing of
the hearings or if the oral hearings shall have been
waived, within thirty days after the arbitrators shall have
declared such proceedings in lieu of hearing closed. This
period may be extended by mutual consent of the
parties (Section 19)
Form And Contents Of Award
The award must be made in writing and signed and
acknowledged by a majority of the arbitrators, if more
than one; and by the sole arbitrator, if there is only one.
Each party shall be furnished with a copy of the award.
The arbitrators in their award may grant any remedy or
relief which they deem just and equitable and within the
scope of the agreement of the parties, which shall
include, but not be limited to, the specific performance
of a contract.
In the event that the parties to an arbitration have,
during the course of such arbitration, settled their dispute,
they may request of the arbitrators that such settlement
be embodied in an award which shall be signed by the
arbitrators. No arbitrator shall act as a mediator in any
proceeding in which he is acting as arbitrator; and all
negotiations towards settlement of the dispute must take
place without the presence of the arbitrators.
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The arbitrators shall have the power to decide only those
matters which have been submitted to them. The terms
of the award shall be confined to such disputes.
The arbitrators shall have the power to assess in their
award the expenses of any party against another party,
when such assessment shall be deemed necessary.
(Section 20)
Arbitration Deemed A Special Proceeding
Arbitration under a contract or submission shall be
deemed a special proceeding, of which the court
specified in the contract or submission, or if none be
specified, the Court of First Instance for the province or
city in which one of the parties resides or is doing business,
or in which the arbitration was held, shall have jurisdiction.
Any application to the court, or a judge thereof,
hereunder shall be made in manner provided for the
making and hearing of motions, except as otherwise
herein expressly provided (Section 21)
Confirmation Of Award
At any time within one month after the award is made,
any party to the controversy which was arbitrated may
apply to the court having jurisdiction, as provided in
section twenty-eight, for an order confirming the award;
and thereupon the court must grant such order unless
the award is vacated, modified or corrected, as
prescribed herein. Notice of such motion must be served
upon the adverse party or his attorney as prescribed by
law for the service of such notice upon an attorney in
action in the same court (Section 23)
Grounds For Vacating Award
1. The award was procured by corruption, fraud, or
other undue means; or
2. That there was evident partiality or corruption in the
arbitrators or any of them; or
3. That the arbitrators were guilty of misconduct in
refusing to postpone the hearing upon sufficient
cause shown, or in refusing to hear evidence
pertinent and material to the controversy; that one or
more of the arbitrators was disqualified to act as such
under section nine hereof, and wilfully refrained from
disclosing such disqualifications or of any other
misbehavior by which the rights of any party have
been materially prejudiced; or
4. That the arbitrators exceeded their powers, or so
imperfectly executed them, that a mutual, final and
definite award upon the subject matter submitted to
them was not made (Section 24)
Where an award is vacated, the court, in its discretion,
may direct a new hearing either before the same
arbitrators or before a new arbitrator or arbitrators to be
chosen in the manner provided in the submission or
contract for the selection of the original arbitrator or
arbitrators, and any provision limiting the time in which
the arbitrators may make a decision shall be deemed
applicable to the new arbitration and to commence
from the date of the court's order.
Where the court vacates an award, costs, not exceeding
fifty pesos and disbursements may be awarded to the
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prevailing party and the payment thereof may be
enforced in like manner as the payment of costs upon
the motion in an action.
Grounds For Modifying Or Correcting Award
A. Where there was an evident miscalculation of figures,
or an evident mistake in the description of any person,
thing or property referred to in the award; or
B. Where the arbitrators have awarded upon a matter
not submitted to them, not affecting the merits of the
decision upon the matter submitted; or
C. Where the award is imperfect in a matter of form not
affecting the merits of the controversy, and if it had
been a commissioner's report, the defect could have
been amended or disregarded by the court (Section
25)
Motion To Vacate, Modify Or Correct Award: When Made
Notice of a motion to vacate, modify or correct the
award must be served upon the adverse party or his
counsel within thirty days after award is filed or delivered,
as prescribed by law for the service upon an attorney in
an action (Section 26)
Papers To Accompany Motion To Confirm, Modify,
Correct, Or Vacate Award
The party moving for an order confirming, modifying,
correcting, or vacating an award, shall at the time that
such motion is filed with the court for the entry of
judgment thereon also file the following papers with the
Clerk of Court;
A. The submission, or contract to arbitrate; the
appointment of the arbitrator or arbitrators; and each
written extension of the time, if any, within which to
make the award.
B. A verified of the award
C. Each notice, affidavit, or other paper used upon the
application to confirm, modify, correct or vacate
such award, and a copy of each of the court upon
such application.
The judgment shall be docketed as if it were rendered in
an action.
The judgment so entered shall have the same force and
effect in all respects, as, and be subject to all the
provisions relating to, a judgment in an action; and it
may be enforced as if it had been rendered in the court
in which it is entered (Section 28)
Death Of Party
Where a party dies after making a submission or a
contract to arbitrate as prescribed in this Act, the
proceedings may be begun or continued upon the
application of, or notice to, his executor or administrator,
or temporary administrator of his estate. In any such case,
the court may issue an order extending the time within
which notice of a motion to confirm, vacate, modify or
correct an award must be served. Upon confirming an
award, where a party has died since it was filed or
delivered, the court must enter judgment in the name of
the original party; and the proceedings thereupon are
the same as where a party dies after a verdict (Section
30)
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SPECIAL RULES OF COURT ON ALTERNATIVE
DISPUTE RESOLUTION (A.M. No. 07-11-08-SC )
The Special Rules of Court on Alternative Dispute
Resolution (the "Special ADR Rules") shall apply to and
govern the following cases:
A. Relief on the issue of Existence, Validity, or
Enforceability of the Arbitration Agreement;
B. Referral to Alternative Dispute Resolution ("ADR");
C. Interim Measures of Protection;
D. Appointment of Arbitrator;
E. Challenge to Appointment of Arbitrator;
F. Termination of Mandate of Arbitrator;
G. Assistance in Taking Evidence;
H. Confirmation, Correction or Vacation of Award in
Domestic Arbitration;
I. Recognition and Enforcement or Setting Aside of an
Award in International Commercial Arbitration;
J. Recognition and Enforcement of a Foreign Arbitral
Award;
K. Confidentiality/Protective Orders; and
L. Deposit and Enforcement of Mediated Settlement
Agreements (Rule 1.1)
Policy On Arbitration
Where the parties have agreed to submit their dispute to
arbitration, courts shall refer the parties to arbitration
pursuant to Republic Act No. 9285 bearing in mind that
such arbitration agreement is the law between the
parties and that they are expected to abide by it in
good faith. Further, the courts shall not refuse to refer
parties to arbitration for reasons including, but not limited
to, the following:
A. The referral tends to oust a court of its jurisdiction;
B. The court is in a better position to resolve the dispute
subject of arbitration;
C. The referral would result in multiplicity of suits;
D. The arbitration proceeding has not commenced;
E. The place of arbitration is in a foreign country;
F. One or more of the issues are legal and one or more
of the arbitrators are not lawyers;
G. One or more of the arbitrators are not Philippine
nationals; or
H. One or more of the arbitrators are alleged not to
possess the required qualification under the
arbitration agreement or law (Rule 2.2)
Principle Of Competence-Competence
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 (Rule
2.2)
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.
Page 30

Where the court is asked to make a determination of
whether the arbitration agreement is null and void,
inoperative or incapable of being performed, under this
policy of judicial restraint, the court must make no more
than a prima facie determination of that issue.
B. The nature and substance of the dispute between
the parties;
C. The grounds and the circumstances relied upon by
the petitioner to establish his position; and
D. The relief/s sought (Rule 3.6)

Unless the court, pursuant to such prima facie

determination, concludes that the arbitration agreement
is null and void, inoperative or incapable of being
performed, the court must suspend the action before it
and refer the parties to arbitration pursuant to the
arbitration agreement (Rule 2.4)

Venue
A petition questioning the existence, validity and
enforceability of an arbitration agreement may be filed
before the Regional Trial Court of the place where any of
the petitioners or respondents has his principal place of
business or residence (Rule 3.4)

Grounds
A petition may be granted only if it is shown that the
arbitration agreement is, under the applicable law,
invalid, void, unenforceable or inexistent (Rule 3.5)

Contents of petition
The verified petition shall state the following:
A. The facts showing that the persons named as
petitioner or respondent have legal capacity to sue
or be sued;

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