Arbitration Procedures and Practice in Philippines Overview

Arbitration procedures and practice in Philippines: overview, Practical Law Country Q&A...
Arbitration procedures and practice in Philippines:

overview
by Simeon V. Marcelo, Cruz Marcelo & Tenefrancia
Law stated as at 01 Dec 2015 • Philippines
A Q&A guide to arbitration law and practice in Philippines.
The country-specific Q&A guide provides a structured overview of the key practical issues concerning
arbitration in this jurisdiction, including any mandatory provisions and default rules applicable under local
law, confidentiality, local courts' willingness to assist arbitration, enforcement of awards and the available
remedies, both final and interim.
To compare answers across multiple jurisdictions visit the Arbitration procedures and practice Country
Q&A tool.
This Q&A is part of the global guide to arbitration. For a full list of jurisdictional Q&As visit
www.practicallaw.com/arbitration-mjg.
Use of arbitration and recent trends

Legislative framework
Applicable legislation
Mandatory legislative provisions
Limitation
Arbitration Organisations
Jurisdictional issues
Arbitration agreements
Validity requirements
Unilateral or optional clauses
Separability
Breach of an arbitration agreement
Joinder of third parties
Arbitrators
Number and qualifications/characteristics
Independence/impartiality
Appointment/removal
Procedure
© 2021 Thomson Reuters. No claim to original U.S. Government Works. 1

Commencement of arbitral proceedings

Applicable rules
Arbitrator's powers
Evidence
Confidentiality
Courts and arbitration
Remedies
Costs
Enforcement of an award
Domestic awards
Foreign awards
Length of enforcement proceedings
Reform
Main arbitration organisations
Philippine Dispute Resolution Center, Inc. (PDRCI)
Construction Industry Arbitration Commission (CIAC)
Online resources
The Office of the Alternative Dispute Resolution
Contributor profiles
Atty. Simeon V. Marcelo, Founding Partner and Chief Executive Officer
Use of arbitration and recent trends
1. How is commercial arbitration used and what are the recent trends?
Use of commercial arbitration
The Republic of the Philippines has a strong and categorical government policy of promoting alternative modes of dispute
resolution, including mediation and arbitration, and a government-initiated mandate to include arbitration clauses in government
contracts. With this and the Supreme Court's recent issuance of procedural rules clarifying and limiting court intervention in
disputes with arbitration agreements, commercial arbitration is gaining ground in the mainstream Philippine dispute resolution
arena. In particular, the construction industry is the sector that commonly uses arbitration, due to the established presence of
the Philippine Construction Industry Arbitration Commission (CIAC), which was created pursuant to Executive Order No. 1008
signed on 04 February 1985.

Recent trends
A large number of commercial disputes in the Philippines relating to international business transactions are currently being
resolved through commercial arbitration. This trend began about two decades ago in the Philippines and most of the parties to
these commercial arbitrations use international arbitral institutions.
Based on available data in 2013 and 2014, the Philippine Dispute Resolution Center Inc. (PDRCI) handled 17 cases with total
values of PHP16.2 billion, respectively. Comparatively, the CIAC handled 46 cases in 2013 with a total value in dispute of
PHP835.2 million, which increased to 61 cases in 2014 with a total value of PHP4.6 billion (Source: PDRCI Official Report for
2014). A total number of 859 cases have been filed with the CIAC between 1989 and August 2015, with the total sum in dispute
of around PHP46 billion. Further, 682 of these cases were resolved by arbitral awards while 91 were settled through compromise
agreements for which arbitral awards were rendered based on the terms of settlement between the parties.
Alternative modes of dispute resolution are expected to become more popular and extensive in the coming years. This is
especially true considering the continuous promotion of arbitration and other modes of dispute resolution from the public and
private sectors. Another factor is the lack of credibility in the judicial system. This is due to allegations of corruption and an
inadequate number of courts, leading to notoriously slow proceedings, which take many years to reach completion. As a
consequence, big domestic commercial corporations that require a shorter period of time to resolve their dispute and require the
decision of a fair, independent and impartial tribunal are now starting to choose arbitration instead of court litigation.
Advantages/disadvantages
Arbitration is considered more advantageous than court litigation in the Philippines for the following reasons:
• Confidentiality.
• Shorter time-scale.
• Parties can appoint arbitrators based on their special knowledge, skill or experience.
• Parties have more flexibility in the conduct of and in selecting the rules that govern the proceedings.
• The finality of the award. The modification or reversal of arbitral awards is legally possible only on very stringent and
specified grounds unlike decisions rendered in court litigation.
• The guarantee of the impartiality, fairness and independence of arbitrator(s).
On the other hand, the disadvantages of resolving a dispute through arbitration in the Philippines are:
• The final decision of an arbitrator is difficult to overturn even if erroneous with respect to the merits.
• The cost of arbitration has risen dramatically in recent years.

• Some pieces of evidences which are, under the Rules of Court, obviously inadmissible, can be admitted and considered
by the arbitral tribunal.
• The weight placed on evidence by the tribunal may not be very clear to the parties.
• Third party joinder is limited or may even be prohibited
Legislative framework
Applicable legislation
2. What legislation applies to arbitration? To what extent has your jurisdiction adopted the UNCITRAL Model Law
on International Commercial Arbitration 1985 (UNCITRAL Model Law)?
Arbitration in the Philippines is regulated by the:
• Civil Code of the Philippines.
• Republic Act 9876 otherwise known as the Arbitration Law.
• Republic Act 9285 otherwise known as the Alternative Dispute Resolution Act of 2004 (Alternative Dispute Resolution
Act of 2004).
• Supreme Court's A.M. No. 07-11-08-SC 01 September 2009 or the Special Rules of Court on Alternative Dispute
Resolution.
Philippine law, under Alternative Dispute Resolution Act of 2004, has adopted in its entirety the UNCITRAL Model Law (Model
Law). Therefore, some provisions of the Model Law, such as the definition of international arbitration, appointment of arbitrators,
and jurisdiction of the arbitral tribunal, have been made applicable to domestic arbitration.
Mandatory legislative provisions
3. Are there any mandatory legislative provisions? What is their effect?

Regardless of the agreement of the parties, domestic awards can be vacated on the following grounds (rule 11.4, Special Rules
of Court on Alternative Dispute Resolution):
• The arbitral award was procured through corruption, fraud or other undue means.
• There is evidence of partiality or corruption in the arbitral tribunal or any of its members.
• The arbitral tribunal was guilty of misconduct or any form of misbehaviour that has materially prejudiced the rights of any
party.
• One or more of the arbitrators was disqualified to act as such under the law and deliberately refrained from disclosing
this disqualification.
• The arbitral tribunal exceeded its powers, or imperfectly executed them, so that a complete, final and definite award on
the subject matter submitted to them was not made.
• The arbitration agreement did not exist, is invalid or is otherwise unenforceable.
• A party to arbitration is a minor or a person judicially declared to be incompetent.
4. Does the law of limitation apply to arbitration proceedings?
The following matters cannot be the subject of arbitration (section 6, Republic Act 9285 otherwise known as the Alternative
Dispute Resolution Act of 2004 and Article 2035, Civil Code of the Philippines):
• Labour disputes covered by the Labour Code.
• Civil status of persons.
• Validity of marriage.
• Any grounds for legal separation.

• Jurisdiction of courts.
• Future legitime (that is, the future right of an heir to the portion of the deceased's property which he is entitled under the
law regardless of the provisions in the predecessor's will).
• Criminal liability.
• Future support (that is, the right to the support of spouses, descendants, ascendants and siblings at some future time).
Limitation
5. Does the law of limitation apply to arbitration proceedings?
There is no specific Philippine legal provision that governs limitation periods in arbitration proceedings. However, as the right to
arbitrate arises from a written contract between the parties, the general law of limitation may apply, which states that proceedings
must be commenced within ten years from the date the right to institute arises under the written contract of the parties (Article
1144, Civil Code of the Philippines (Civil Code)).
However, nothing prohibits the parties, from agreeing on a different period of limitation as well as the grounds for suspension
of the time limits. The usual causes like force majeure are applicable and contracting parties can establish such stipulations,
clauses, terms and conditions as they deem convenient, provided they are not contrary to law, morals, good customs, public
order, or public policy (Article 1306, Civil Code).
However, the Philippine Supreme Court recognises the equitable defence of laches (that is, the failure or neglect, for an
unreasonable and unexplained length of time, to do that which, by exercising due diligence could or should have been done
earlier). It is negligence or omission not to assert a right within a reasonable time, warranting the presumption that the party
entitled to assert his right has either abandoned or declined to assert it (Heirs of Nieto vs. Municipality of Meycauayan, 540
SCRA 100 (2007)).
Arbitration Organisations
6. Which arbitration organisations are commonly used to resolve large commercial disputes?

The Construction Industry Arbitration Commission (CIAC) and the Philippine Dispute Resolution Center Inc (PDRCI) are
commonly used to resolve large commercial disputes in the Philippines. The subject matter of arbitration proceedings conducted
by the CIAC is limited to disputes arising out of construction contracts. Arbitration proceedings in the CIAC have been considered
by the Philippine Supreme Court as part of traditional judicial proceedings. Therefore, the decisions of CIAC may be appealed
to the Court of Appeals and subsequently, to the Supreme Court, but only on questions of law (rule 43, Revised Rules of Court
in the Philippines).
The ICC International Court of Arbitration, the Singapore International Arbitration Centre and the Hong Kong International
Arbitration Centre are the arbitration institutions that are commonly specified in contracts in the Philippines that have an
international component.
PDRCI is the arbitral organisation that most commonly administers arbitration proceedings, involving all kinds of subject matter
(with the exception of construction contracts).
See box, Main arbitration organisations.
Jurisdictional issues
7. What remedies are available where one party denies that the tribunal has jurisdiction to determine the
dispute(s)? Does your jurisdiction recognise the concept of kompetenz-kompetenz? Does the tribunal or the local
court determine issues of jurisdiction?
A party questioning the jurisdiction of an arbitral tribunal can apply to the local courts for judicial relief in determining the issue of
the existence, validity and enforceability of the arbitration agreement. However, when a court is asked to rule on issues affecting
the competence or jurisdiction of an arbitral tribunal in a dispute brought before it, 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 on such
issues (rule 2.4, Special Rules of Court on Alternative Dispute Resolution) (Special ADR Rules)).
However, the Special ADR Rules also recognise the principle of kompetenz-kompetenz, which means that the arbitral tribunal can
initially rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement
(rule 2.2, Special ADR Rules).
Arbitration agreements
Validity requirements

8. What are the requirements for an arbitration agreement to be enforceable?
Substantive/formal requirements
An arbitration agreement can arise in the following ways:
• Two more persons can agree to submit to an arbitration of one or more arbitrators, any controversy existing between
them at the time of the submission, which may be the subject of an action.
• The parties to any contract can agree to settle by arbitration a controversy thereafter arising between them.
Such submission or contract will be valid, enforceable, and irrevocable, save on such grounds that exist under the law for
revocation of any contract (section 2, Republic Act 9876 otherwise known as the Arbitration Law) (Arbitration Law).
A contract or a submission to arbitrate, must be in writing and signed by the parties or their lawful agents (section 4, Arbitration
Law).
Separate arbitration agreement
Under the law, an arbitration agreement is valid so long as it is in writing and signed by the parties to the agreement, or by their
lawful agents. Therefore, a clause in the main contract is sufficient and a separate arbitration agreement is not needed, so long
as the requirements for a contract are met (section 2, Arbitration Law).
Furthermore, the Republic Act 9285 otherwise known as the Alternative Dispute Resolution Act of 2004 (Alternative Dispute
Resolution Act of 2004), (which adopted the UNCITRAL Model Law in its entirety (Model Law)) provides that an arbitration
agreement can be in the form of an arbitration clause in a contract or in a separate agreement.
The Model Law states that the reference in a contract to a document containing an arbitration clause constitutes an arbitration
agreement, provided that the contract is in writing and the reference is such as to make that clause part of the contract (Article
7(6), Model Law, Alternative Dispute Resolution Act of 2004).
Unilateral or optional clauses
9. Are unilateral or optional clauses, where one party has the right to choose arbitration, enforceable?

There is no express prohibition on unilateral or optional clauses. Therefore, an arbitration agreement giving one party the right
to choose arbitration is likely to be enforceable under the principle of party autonomy (section 2, Republic Act 9285 otherwise
known as the Alternative Dispute Resolution Act of 2004 ).
10. In what circumstances can a third party that did not sign the contract incorporating the arbitral clause in
question be compelled to arbitrate disputes relating to the contract in question?
As a general rule, an arbitration agreement is consensual and therefore only binding on the contracting parties. Therefore, parties
that did not sign the contract cannot be compelled to arbitrate disputes relating to the contract, except when the contract contains
a reference to a document containing an arbitration clause to which the third party is a signatory.
11. In what circumstance is a third party that did not sign the contract incorporating the arbitral clause in question
entitled to compel a party that did sign the contract to arbitrate disputes relating to the contract?
A third party that did not sign a contract incorporating an arbitral clause may compel a party that did sign the contract to arbitrate, if
the contract contains a reference to a document containing an arbitral clause and the reference is such as to make that arbitration
clause part of the contract (section 7(2), UNCITRAL Model Law).
Separability
12. Does the applicable law recognise the separability of arbitration agreements?
The Special Rules of Court on Alternative Dispute Resolution (Special ADR Rules) recognise the principle of separability of the
arbitration clause. An arbitration clause must be treated as an agreement independent of the other terms of the contract of which
it forms part. Therefore, a decision that the contract is null and void will not necessarily lead to the invalidity of the arbitration
clause (rule 2.2, Special ADR Rules).

Breach of an arbitration agreement
13. What remedies are available where a party starts court proceedings in breach of an arbitration agreement or
initiates arbitration in breach of a valid jurisdiction clause?
Court proceedings in breach of an arbitration agreement
Where parties have agreed to submit their dispute to arbitration, the local courts must refer the parties to arbitration, bearing in
mind that the arbitration agreement is the law between the parties and they are expected to abide by it in good faith (rule 2.2 (A),
Special Rules of Court on Alternative Dispute Resolution (Special ADR Rules).
Arbitration in breach of a valid jurisdiction clause
A party who initiates arbitration in breach of a valid jurisdiction clause (whether contained in an arbitration clause or in a submission
agreement), can file a motion requesting the local court to refer the parties to arbitration in accordance with the jurisdiction clause
(rule 4.1, Special ADR Rules).
14. Will the local courts grant an injunction to restrain proceedings started overseas in breach of an arbitration
agreement?
Assuming that a valid application for an injunction has been filed in the local court with jurisdiction over matter, the court can
grant an injunction to restrain the parties to continue proceedings started overseas in breach of an arbitration agreement.
Joinder of third parties
15. In what circumstances can a third party be joined to an arbitration or otherwise be bound by an arbitration
award?

As a general rule, an arbitration agreement is consensual and therefore only binding on the contracting parties. However, a third
party can be joined to an arbitration or be bound by an arbitration award, if the contract between the main parties contains a
reference to a document containing a arbitration clause to which the third party is a signatory and the reference is such as to
make that arbitration clause part of the contract (section 7(2), UNCITRAL Model Law) (see Question 11).
Specific rules apply to third party securing loans between a lender and a borrower. Unless otherwise expressly agreed on by
the third-party securing the loan, his agreement to be bound by an arbitration agreement in a loan agreement will be limited
to disputes arising from or in connection with the relationship between the lender and the borrower, as well as the relationship
between the lender and such third-party (including the right of the lender to proceed against the collateral securing the loan)
However, it will exclude disputes arising out of the exclusive relationship between the borrower and the provider of security, such
as a claim by the provider of security for indemnification against the borrower (rule A.6, Special Rules of Court on Alternative
Dispute Resolution).
Arbitrators
Number and qualifications/characteristics
16. Are there any legal requirements relating to the number and qualifications/characteristics of arbitrators? Must
an arbitrator be a national of, or licensed to practice in, your jurisdiction in order to serve as an arbitrator there?
The parties are free to determine the number of arbitrators. However, if this is not expressly agreed, the default position is three
(Article 10, UNCITRAL Model Law (Model Law), section 19, Republic Act 9285 otherwise known as the Alternative Dispute
Resolution Act of 2004.
A person appointed as an arbitrator must be of legal age, have full civil rights and must know how to read and write. The person
appointed as an arbitrator must not (section 10, Republic Act 9876 otherwise known as the Arbitration Law) (Arbitration Law):
• Be related by blood or marriage up to the sixth degree to either party to the arbitration agreement.
• Have or have had any financial, fiduciary or other interest in the dispute.
• Have any personal bias that might prejudice the right of any party to a fair and impartial award.
No person shall be precluded by reason of his nationality from acting as an arbitrator, unless otherwise agreed by the parties
(Article 11(1), Model Law, section 19, Arbitration Law)
Independence/impartiality

17. Are there any requirements relating to arbitrators' independence and/or impartiality?
See Question 16.
Appointment/removal
18. Does the law contain default provisions relating to the appointment and/or removal of arbitrators?
Appointment of arbitrators
The court must act as the appointing authority (the person or institution named as such in an arbitration agreement) to appoint
arbitrators in the following instances (rule 6.1, Special Rules of Court on Alternative Dispute Resolution (Special ADR Rules)):
• Where any of the parties in an institutional arbitration:
• fail or refuse to appoint an arbitrator; or
• fail to reach an agreement on the sole arbitrator (in an arbitration before a sole arbitrator).
• When the two designated arbitrators fail to reach an agreement on the third or presiding arbitrator (in an arbitration to be
conducted by three arbitrators), and the institution under whose rules arbitration is to be conducted fails or is unable to
perform its duty as appointing authority within a reasonable time from receipt of the request for appointment.
• In all instances where arbitration is ad hoc and:
• the parties failed to provide a method for appointing or replacing an arbitrator, or substitute arbitrator; or
• the method agreed on is ineffective; and
• the National President of the Integrated Bar of the Philippines or his duly authorised representative fails or refuses
to appoint an arbitrator.

• If the appointing authority fails or refuses to act or appoint an arbitrator within a reasonable time from receipt of the
request to do so, any party or the appointed arbitrator(s) can request the court to appoint an arbitrator or the third
arbitrator as the case may be.
Removal of arbitrators
An arbitrator can be removed in accordance with the procedure agreed by the parties or as provided for in Article 13(2) of the
UNCITRAL Model Law. If challenged, an arbitrator can be removed by an appointing authority or the court, on application, if the
appointing authority fail or refuses to act on the challenge (rule 7.2, Special ADR Rules). The disqualification can occur if the
arbitrator (section 10,Republic Act 9876 otherwise known as the Arbitration Law ):
• Is related by blood or marriage within the sixth degree to either party to the controversy.
• Has or had financial, fiduciary or other interest in the controversy or cause to be decided or in the result of the
proceeding.
• Has any personal bias which might prejudice the right of any party to a fair and impartial award.
Procedure
Commencement of arbitral proceedings
19. Does the law provide default rules governing the commencement of arbitral proceedings?
Philippine law does not provide for default rules governing the commencement of arbitral proceedings. The parties are free to
agree on the rules governing the commencement of arbitral proceedings. However, arbitration must commence by service to
the other party of a demand for arbitration (section 5, Republic Act 9876 otherwise known as the Arbitration Law and Article
21, UNCITRAL Model Law).
Applicable rules
20. What procedural rules are arbitrators likely to follow? Can the parties determine the procedural rules that
apply? Does the law provide any default rules governing procedure?

Applicable procedural rules
Arbitrators are likely to follow the UNCITRAL Rules of Procedure, International Chamber of Commerce Rules of Procedure and
the Philippine Dispute Resolution Center Inc Rules of Procedure. The parties are also free to agree on the procedure to be
followed in the conduct of arbitral proceedings, including the adoption of procedural rules of institutional arbitration (rule 2.3,
Special Rules of Court on Alternative Dispute Resolution (Special ADR Rules)).
Default rules
If parties fail to agree on the procedure to be followed, the arbitral tribunal can conduct arbitration in the manner it considers
appropriate (rule 2.3, Special ADR Rules), taking into account the provisions of the Republic Act 9876 otherwise known as the
Arbitration Law and the Alternative Dispute Resolution Act 2004.
Arbitrator's powers
21. What procedural powers does the arbitrator have under the applicable law? If there is no express agreement,
can the arbitrator order disclosure of documents and attendance of witnesses (factual or expert)?
Regardless of any agreement between the parties, the arbitrators have the power to (section 14, Republic Act 9876 otherwise
known as the Arbitration Law) (Arbitration Law):
• Require any person to attend a hearing as a witness.
• Subpoena witnesses and order the disclosure of documents when relevant to the case.
• Take measures to safeguard and/or conserve any matter that is the subject of the dispute in arbitration (at any time
before rendering the award).
An arbitrator can also require the parties to produce additional evidence that it deems necessary for the understanding and
determination of the dispute (section 15, Arbitration Law).
However, that the arbitral tribunal has no inherent contempt powers; accordingly, the arbitral tribunal must apply to the proper
court to enforce such orders and request sanctions in instances of non-compliance.

The parties can also request the court for assistance in taking evidence and the disclosure of documents (rule 9.5, Special Rules
of Court on Alternative Dispute Resolution).
Evidence
22. What documents must the parties disclose to the other parties and/or the arbitrator? How, in practice, does
the scope of disclosure in arbitrations compare with disclosure in domestic court litigation? Can the parties set
the rules on disclosure by agreement?
Scope of disclosure
Much like court litigation in the Philippines, the parties are not required by law to make any disclosures to the other party or the
arbitrator, unless directed by the arbitral tribunal in circumstances of necessity, relevance and materiality. However, the parties
are not precluded from making any voluntary disclosures.
Parties' choice
In accordance with the principle of party autonomy contained in the Civil Code and section 2 of the Alternative Dispute Resolution
Act 2004, nothing prohibits the parties in agreeing to set the rules on disclosure, including an agreement to require both parties
to disclose all relevant, material and necessary facts and documents.
Confidentiality
23. Is arbitration confidential? If so, what is the scope of that confidentiality and who is subject to the obligation
(parties, arbitrators, institutions and so on)?
The arbitration proceedings, including the records, evidence and the arbitral award, are confidential and must not be published
(section 23, Republic Act 9285 otherwise known as the Alternative Dispute Resolution Act of 2004 )(Alternative Dispute
Resolution Act of 2004).
Information is deemed confidential if it is intended by the source not to be disclosed, or obtained under circumstances that would
create a reasonable expectation on behalf of the source that the information must not be disclosed. This includes (section 3
(h),Alternative Dispute Resolution Act of 2004):

• Communications (oral or written) made in a dispute resolution proceedings, including memoranda, notes or work
products of the neutral party or non-party participant.
• Pleadings, motions manifestations, witness statements, reports filed or submitted in arbitration.
The restriction on confidentiality applies to all the participants in the arbitration proceedings, including parties, arbitrators and
non-party participants such as witnesses, resource persons or experts and institutions.
Courts and arbitration
24. Will the local courts intervene to assist arbitration proceedings seated in its jurisdiction?
As a general rule, the courts must exercise judicial restraint in relation to arbitration proceedings (rules 2.4 and 3.8, Special
Rules of Court on Alternative Dispute Resolution (Special ADR Rules)). However, they can intervene in arbitration proceedings
in certain limited instances.
Section 28(a) of the Republic Act 9285 otherwise known as the Alternative Dispute Resolution Act of 2004 provides that after the
constitution of the arbitral tribunal and during arbitral proceedings, a request for an interim measure of protection or modification
thereof can be made to the arbitral tribunal. A petition for interim measure of protection can be made with the court after the
constitution of the arbitral tribunal and at any time during the arbitral proceedings but only to the extent that the arbitral tribunal
has no power to act or is unable to act effectively (rule 5.2, Special ADR Rules).
The Philippine Regional Trial Court has jurisdiction over arbitration-related applications.
25.What is the risk of a local court intervening to frustrate an arbitration seated in its jurisdiction? Can a party
delay proceedings by frequent court applications?
Risk of court intervention
The Supreme Court has laid down a policy of judicial restraint when courts are asked to rule on issues affecting the competence
or jurisdiction of an arbitral tribunal, by allowing the tribunal to have the first opportunity to rule on such issues (rule 2.4, Special
Rules of Court on Alternative Dispute Resolution (Special ADR Rules)). Further, unless the courts conclude that the arbitration
agreement is null and void, inoperative or incapable of being performed; courts must suspend court proceedings and refer the

parties to arbitration under the arbitration agreement. Only in very specific instances, as expressly stated in the Special ADR
Rules are the courts allowed to intervene in arbitration proceedings, therefore, the risk of local court intervention to frustrate the
arbitration proceedings seated in its jurisdiction is minimal.
Delaying proceedings
A party cannot delay proceedings by frequent court applications and as a general rule, court applications during arbitration
proceedings must not suspend or postpone the arbitration proceedings.
Remedies
26. What interim remedies are available from the tribunal?
Interim measures
Unless otherwise agreed by the parties, the arbitral tribunal can, at the request of a party, order any party to take such interim
measures of protection as the arbitral tribunal may consider necessary. The interim measures include but are not limited to:
• Preliminary injunctions directed against a party.
• Appointment of receivers.
• Detention, preservation or inspection of property that is the subject of the dispute in arbitration.
Either party can apply to the court for assistance in implementing or enforcing interim measures ordered by an arbitral tribunal
(section 29, Republic Act 9285 otherwise known as the Alternative Dispute Resolution Act of 2004).
The court can only issue interim remedies in the following instances (rule 5.2, Special Rules of Court on Alternative Dispute
Resolution (Special ADR Rules)):
• Before arbitration has commenced.
• After arbitration has commenced, but before the constitution of the arbitral tribunal.
• After the constitution of the arbitral tribunal and at any time during arbitral proceedings but, at this stage, only to the
extent that the arbitral tribunal has no power to act or is unable to act effectively.

Ex parte
As a general rule, only courts can grant ex parte interim reliefs when the applicant alleges that there is an urgent need to (rule
5.7, Special ADR Rules):
• Preserve property.
• Prevent the respondent from disposing of, or concealing, the property.
• Prevent the relief applied for from becoming defunct.
The court must also find that the reasons given by the applicant have merit.
Security
The order issued by the arbitral tribunal, granting an interim measure of protection, may be conditioned on the provision of
security, the performance of an act, or omission thereof, specified in the order (rule 5.12, Special ADR Rules).
27. What final remedies are available from the tribunal?
Arbitrators have the power to award the expenses of any party against another party, when such assessment is deemed
necessary (section 20, Republic Act 9876 otherwise known as the Arbitration Law ).
The arbitral tribunal only has the power to decide and give a final award on matters which have been submitted to them by the
parties. Therefore, if the parties have raised the issue of damages, injunction, costs, interest or any other relief relating to the
subject matter, then the same may be awarded by the arbitral tribunal. If the parties have not raised these issues before the
arbitral tribunal, then it has no power to rule on them. As a general rule, the arbitral tribunal has the power to grant any award
or final remedy if these are submitted by the parties for resolution.
Appeals
28. Can arbitration proceedings and awards be appealed or challenged in the local courts? What are the grounds
and procedure? Can parties waive any rights of appeal or challenge to an award by agreement before the dispute
arises (such as in the arbitral clause itself)?

Rights of appeal/challenge
There is no right of appeal for an arbitral award. An arbitral award is final and binding (rule 19.7, Special Rules of Court on
Alternative Dispute Resolution (Special ADR Rules)). Consequently, a party to an arbitration proceeding is precluded from filing
an appeal or a petition for certiorari (a writ seeking judicial review) questioning the merits of an arbitral award with the courts
(rule 19.7, Special ADR Rules). However, an arbitral award can be vacated, modified, corrected, or set aside under very limited
specified grounds by court action (sections 24 and 25, Republic Act 9876 otherwise known as the Arbitration Law , rule 11.1,
Special ADR Rules) (see Question 3).
The exception to the general rule is an arbitral award rendered by the Construction Industry Arbitration Commission (CIAC),
which can be appealed to the Court of Appeals (rule 43, Revised Rules of Court of the Philippines).
Furthermore, a party to an arbitration can petition the Regional Trial Court to confirm, correct or vacate an arbitral award (rule
11.1, Special ADR Rules). The decision and orders of the Regional Trial Court relating to the arbitral award can be reviewed by
the Court of Appeals and subsequently by the Supreme Court (rules 19.8, 19.12 and 19.36, Special ADR Rules).
Grounds and procedure
An appeal to the Court of Appeals can be made on at least one of the following final orders of the Regional Trial Court (rule
19.12, Special ADR Rules):
• Granting or denying an interim measure of protection.
• Denying a petition for appointment of an arbitrator.
• Denying a petition for assistance in taking evidence.
• Enjoining or refusing to enjoin a person from divulging confidential information.
• Confirming, vacating or correcting/modifying a domestic arbitral award.
• Setting aside an international commercial arbitration award.
• Dismissing the petition to set aside an international commercial arbitration award even if the court does not decide to
recognise or enforce such award.
• Recognising and/or enforcing an international commercial arbitration award.
• Dismissing a petition to enforce an international commercial arbitration award.
• Recognising and/or enforcing a foreign arbitral award.
• Refusing recognition and/or enforcement of a foreign arbitral award.

• Granting or dismissing a petition to enforce a deposited mediated settlement agreement.
• Reversing the ruling of the arbitral tribunal upholding its jurisdiction.
When the Regional Trial Court, has acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction, and there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law,
a party can file a special civil action for certiorari to annul or set aside the order on one of the following grounds] (rule 19.26,
Special ADR Rules):
• The arbitration agreement is inexistent, invalid or unenforceable.
• Reversing the arbitral tribunal's preliminary determination upholding its jurisdiction.
• Denying the request to refer the dispute to arbitration.
• Granting or refusing an interim relief.
• Denying a petition for the appointment of an arbitrator.
• Confirming, vacating or correcting a domestic arbitral award.
• Suspending the proceedings to set aside an international commercial arbitral award and referring the case back to the
arbitral tribunal.
• Allowing a party to enforce an international commercial arbitral award pending appeal.
• Adjourning or deferring a ruling on whether to set aside, recognise and or enforce an international commercial arbitral
award.
• Allowing a party to enforce a foreign arbitral award pending appeal.
• Denying a petition for assistance in taking evidence.
A party, who is not satisfied with the decision of the Court of Appeals, can appeal to the Supreme Court. However, review by
the Supreme Court is not a matter of right, but of sound judicial discretion, which will be granted only for serious and compelling
reasons resulting in grave prejudice to the aggrieved party (rule 19.36, Special ADR Rules).
Arbitral awards made by the CIAC can be appealed through the standard procedure for appeal for quasi-judicial bodies to the
Court of Appeals under Rule 43 of the Revised Rules of Court of the Philippines.
Excluding rights of appeal

Arbitration is a consensual agreement between the parties. As such, parties may include a stipulation regarding the waiver of
rights to challenge an award. However, such waiver may be questioned in court as being contrary to ''...morals, good customs,
public order, or public policy'' (Article 1306, Civil Code of the Philippines).
29. What is the limitations period applicable to actions to vacate or challenge and international arbitration award
rendered?
A petition to set aside an arbitral award can only be filed within three months of receiving the award. If a timely request is made
to the arbitral tribunal for the correction, interpretation or request for an additional award, the three month-period begins when
the applicant the resolution of this request (rule 12.2(B), Special Rules of Court on Alternative Dispute Resolution).
Costs
30. What legal fee structures can be used? Are fees fixed by law?
Like in court litigation, the legal fees are subject to agreement between the lawyer and his client such as:
• Hourly rates.
• Contingency basis.
• Based on tasks accomplished.
• Success fees.
• A combination of the enumerated fee structures.
Fees may be reduced if found to be unconscionable or unreasonable (section 24, rule 138, Revised Rules of Court ).
31. Does the unsuccessful party have to pay the successful party's costs? How does the tribunal usually calculate
any costs award and what factors does it consider?

Cost allocation
The arbitral tribunal has discretion as to how the costs of the arbitration process are awarded (section 20, Republic Act 9876
otherwise known as the Arbitration Law).
Cost calculation
Awarded costs usually include the expenses (or a portion of them) of any party against another party. Whether a successful
party’s costs (in full or partially), can be recovered is at the tribunal's discretion.
Following the general rule in evidence, the party who asserts that he is entitled to costs has the burden of proving the same. The
tribunal is prohibited from awarding costs that cannot be proved.
Factors considered
The tribunal can takes into consideration all the circumstances of the case. An example is whether the arbitration case presented
difficult questions of law and therefore, that the losing party acted sincerely in pursuing or resisting the claims.
Enforcement of an award
Domestic awards
32. To what extent is an arbitration award made in your jurisdiction enforceable in the local courts?
The petition for enforcement and recognition of an arbitral award can be filed anytime after the award is made. Once the court is
satisfied that the petition filed meets the requirements of rule 12 of the Special Rules of Court on Alternative Dispute Resolution
(Special ADR Rules), the court must serve a copy of it on the respondent, directing him to file an opposition within 15 days of
receipt. The respondent can file a petition to set aside the award in opposition to the applicant's petition to recognise and enforce,
or a petition to recognise and enforce the award in opposition to the applicant's petition to set aside (rule 12.8, Special ADR Rules).
A petition to recognise and enforce or set aside an arbitral award can be filed with the regional trial court (rule 12.3, Special
ADR Rules):

• Where arbitration proceedings were conducted.
• Where any of the assets to be attached or levied on are located.
• Where the act ordered in the award will be or is being performed.
• Where any of the parties to the arbitration resides or has its place of business.
• In the National Capital Judicial Region.
If the court finds that the issue between the parties is mainly one of law, the parties may be required to submit briefs of legal
arguments, not more than 15 days of receipt of the order, which sufficiently discuss the legal issues and the legal basis for the
relief prayed (rule 12.9, Special ADR Rules).
Unless a ground to set aside an arbitral award has been fully established, the court must dismiss the petition. If, in the same
proceedings, there is a petition to recognise and enforce the arbitral award filed in opposition to the petition to set aside, the court
must recognise and enforce it (rule 12.13, Special ADR Rules).
Foreign awards
33. Is your jurisdiction party to international treaties relating to recognition and enforcement of foreign arbitration
awards, such as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New
York Convention)?
The recognition and enforcement of a foreign arbitral award in the Philippines is governed by the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) and the Special Rules of Court on Alternative Dispute
Resolution (Special ADR Rules).
However, the Philippines courts can, on grounds of comity and reciprocity, recognise and enforce a foreign arbitral award made
in a country that is not a signatory to the New York Convention (rule 13.4, Special ADR Rules). Therefore, countries that are
not a party to the New York Convention can still be accorded the privileges under the New York Convention if they accord the
Philippines the same treatment.
34. To what extent is a foreign arbitration award enforceable?

Any party to a foreign arbitration can petition the local courts to recognise and enforce a foreign arbitral award (rule 13.1, Special
Rules of Court on Alternative Dispute Resolution (Special ADR Rules)). At any time after receipt of a foreign arbitral award,
any party to the arbitration can petition the proper regional trial court to recognise and enforce the award (rule 13.2, Special
ADR Rules).
The petition to recognise and enforce a foreign arbitral award can be filed with the regional trial court (rule 13.3, Special ADR
Rules):
• Where the assets to be attached or levied on is located.
• Where the act ordered in the award will be or is being performed.
• Where any of the parties to the arbitration resides or has its place of business.
• In the National Capital Judicial Region.
If the court finds that the issue between the parties is mainly one of law, the parties can be required to submit briefs of legal
arguments, not more than 30 days from receipt of the order, which sufficiently discuss the legal issues and the legal bases for
the relief prayed for by each other (rule 13.8, Special ADR Rules).
The court must set the case for hearing, if on the basis of the foregoing submissions; there is a need to do so. The court must
give due priority to hearings on such petitions. During the hearing, the affidavits of witnesses must take the place of their direct
testimonies and they will immediately be subject to cross-examination. The court must have full control over the proceedings
in order to ensure that the case is heard without undue delay (rule 13.9, Special ADR Rules). This procedure must conform to
the Judicial Affidavit Rule, which states that:
• Judicial affidavits of witnesses take the place of their direct testimonies.
• The parties must file the judicial affidavits with the court and a serve copy of each judicial affidavit (personally or by
licensed courier) on the adverse party, not more than five days before the pre-trial/preliminary conference or the
scheduled hearing.
The court must recognise and enforce a foreign arbitral award unless one or more of the grounds for refusal as provided in rule
13.4 of the Special Rules of Court on Alternative Dispute Resolution, are established.
The decision of the court in recognising and enforcing a foreign arbitral award is immediately enforceable (rule 13.11, Special
ADR Rules).
US and UK foreign arbitral awards are enforceable in the Philippines jurisdiction under the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards 1958.

35. What is the limitations period applicable to actions to enforce international arbitration awards rendered outside
your jurisdiction?
There is no applicable limitation period to actions to enforce international arbitration awards rendered outside the Philippines so
a party can petition the proper regional trial court to recognise and enforce a foreign award at any time after receipt (rule 13.2,
Special Rules of Court on Alternative Dispute Resolution).
However, the Philippine Supreme Court has previously recognised the equitable defence of laches (the failure or neglect, for
an unreasonable and unexplained length of time, to do that which, by exercising due diligence could or should have been done
earlier). It is negligence to fail to assert a right within a reasonable time, warranting the presumption that the party entitled to
assert his right has either abandoned or declined to assert it (Heirs of Nieto vs. Municipality of Meycauayan, 540 SCRA 100
(2007)) Therefore, the application to enforce a foreign arbitral award should be filed within a reasonable period of time.
Length of enforcement proceedings
36. How long do enforcement proceedings in the local court take, from the date of filing the application to the
date when the first instance court makes its final order? Is there an expedited procedure?
Enforcement proceedings in the Philippine courts usually take six months to one year.
Reform
37. Are any changes to the law currently under consideration or being proposed?
Senate Bill No. 231 entitled, ''The Philippine Arbitration Act of 2013'' is currently pending. This Senate Bill aims to introduce
mandatory arbitration process for medical malpractice, maritime, insurance, intellectual property, and intra-corporate issues.

While the act will not change the current arbitration laws of the Philippines it will expand the issues/matters that are required
under the process of arbitration.
Main arbitration organisations
Philippine Dispute Resolution Center, Inc. (PDRCI)
Main activities. PDRCI offers the following dispute resolution services:
• Administration of commercial arbitration and mediation.
• Appointment of arbitrators and mediators.
• Organisation of seminars on commercial arbitration.
• Provision of training and accreditation.
• Networking with various international arbitration centres.
• Referral services.
• Information on arbitration agreements, rules and arbitration law and practice.
PDRCI maintains a panel of local and foreign accredited arbitrators and mediators. It has also has been actively
involved in the dissemination of information about legislative matters concerning arbitration, trade law and
commerce since its establishment.
W www.pdrci.org/
Construction Industry Arbitration Commission (CIAC)
Main activities. The CIAC is the body created by law to have original and exclusive jurisdiction over disputes
arising from, or connected with, contracts entered into by parties involved in construction in the Philippines,
whether the dispute arises before or after the completion of the contract, or after the abandonment or breach
thereof. These disputes involve government or private contracts. For CIAC to acquire jurisdiction, the parties to
a dispute must agree to submit the same to voluntary arbitration.
W www.ciap.dti.gov.ph/content/construction-industry-arbitration-commission

Online resources
The Office of the Alternative Dispute Resolution
W http://oadr.doj.gov.ph/
Description. The Office of the Alternative Dispute Resolution is the official government agency, which promotes,
develops and expands the use of alternative dispute resolution (ADR) in the private and public sectors, assists the
government to monitor, study and evaluate the use to ADR by the public and the private sectors and recommends
to Congress needful statutory changes to develop, strengthen and improve ADR practices.
Contributor profiles
Atty. Simeon V. Marcelo, Founding Partner and Chief Executive Officer
Cruz, Marcelo, & Tenefrancia

T +63 02 8105858
F +63 02 8103838
E sv.marcelo@cruzmarcelo.com
W www.cruzmarcelo.com/
Professional qualifications. The Republic of the Philippines, Solicitor, May 1980
Areas of practice. Commercial litigation and alternative dispute resolution; tax litigation; telecommunications
and information and communications technology; appellate practice; banking litigation; international civil service
law; corporate recovery/rehabilitation and insolvency.
Non-professional qualifications. Member, Pi Gamma Mu International Social Science Honor Society; Member,
Order of the Purple Feather Honor Society, U.P. College of Law
Recent transactions
• Member, The World Bank Independent Advis3-518-8905ry Board (2008-2014).
• Co-Arbitrator, ICC International Court of Arbitration (2012-2014).
• Consultant, USAID Anti-Corruption Project in the Philippines (2012-2014).
• Head-Legal Panel that secured this year a very significant favourable Award in an arbitration
proceedings conducted by the Construction Industry Arbitration Commission (2015).

• Chairman of the Arbitration Panel of an ongoing arbitration proceedings (2015).
• Gamechanger of the Year (Litigation & Dispute Resolution – Philippines) – ACQ Global Awards (2015).
Languages. English, Filipino
Professional associations/memberships. Integrated Bar of the Philippines; Philippine Bar Association;

Philippine Dispute Resolution Center, Inc.
Publications
• Alternative Dispute Resolution – Philippines, Lawyer Monthly, March 2015
• Getting the Deal Through – Dispute Resolution – Philippines Chapter, Law Business Research Ltd, 2015.
• Acquisition International - Philippines: Immeasurable Strength, Acquisition International Global Media

Publication, 2014.
• Getting the Deal Through – Enforcement of Foreign Judgments – Philippines Chapter, Law Business
Research Ltd, 2014.
• Virtual Round Table – Litigation & Dispute Resolution 2014, Corporate Livewire, 2014.
• The Asset Tracing And Recovery Review – Philippines Chapter, The Law Reviews, 2014.
• Expert Guide – Litigation & Dispute Resolution 2013, Corporate Livewire, 2013.
• ''The long road from Zurich to Manila: The recovery of the Marcos Swiss dollar deposits'' Recovering
Stolen Assets, 2008.
• ''Denying safe havens through judicial cooperation: The experience of the Philippines'', Knowledge
Commitment Action Against Corruption in Asia and the Pacific, 30 September 2005.
• “Challenges to the Coercive Investigative and Administrative Powers of the Office of the Ombudsman”,
Philippine Law Journal, June 2004.
• “Combating Corruption in the Philippines” Controlling Corruption in Asia and the Pacific, Asian
Development Bank, 05 December 2003.
• “Corporate Recovery in the Philippines”, Asian Revival, published by Asia Law & Practice [A Division of
Euromoney Publications (Jersey) Ltd], 1999.

Arbitration Procedures and Practice in Philippines Overview

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Arbitration procedures and practice in Philippines: overview, Practical Law Country Q&A...

Arbitration procedures and practice in Philippines:

A Q&A guide to arbitration law and practice in Philippines.

Use of arbitration and recent trends

Mandatory legislative provisions

Breach of an arbitration agreement

Joinder of third parties

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 1

Commencement of arbitral proceedings

Length of enforcement proceedings

Construction Industry Arbitration Commission (CIAC)

Use of arbitration and recent trends

Use of commercial arbitration

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 2

• The guarantee of the impartiality, fairness and independence of arbitrator(s).

• The cost of arbitration has risen dramatically in recent years.

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 3

• Third party joinder is limited or may even be prohibited

Arbitration in the Philippines is regulated by the:

• Civil Code of the Philippines.

• Republic Act 9876 otherwise known as the Arbitration Law.

Mandatory legislative provisions

3. Are there any mandatory legislative provisions? What is their effect?

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 4

• The arbitration agreement did not exist, is invalid or is otherwise unenforceable.

• A party to arbitration is a minor or a person judicially declared to be incompetent.

4. Does the law of limitation apply to arbitration proceedings?

• Labour disputes covered by the Labour Code.

• Civil status of persons.

• Any grounds for legal separation.

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 5

5. Does the law of limitation apply to arbitration proceedings?

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See box, Main arbitration organisations.

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 7

8. What are the requirements for an arbitration agreement to be enforceable?

An arbitration agreement can arise in the following ways:

Separate arbitration agreement

Unilateral or optional clauses

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 8

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 9

Breach of an arbitration agreement

Court proceedings in breach of an arbitration agreement

Arbitration in breach of a valid jurisdiction clause

Joinder of third parties

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Number and qualifications/characteristics

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 11

See Question 16.

• Where any of the parties in an institutional arbitration:

• fail or refuse to appoint an arbitrator; or

• In all instances where arbitration is ad hoc and:

• the method agreed on is ineffective; and

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 12

Commencement of arbitral proceedings

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 13

Applicable procedural rules

• Require any person to attend a hearing as a witness.

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• Pleadings, motions manifestations, witness statements, reports filed or submitted in arbitration.

Courts and arbitration