Adr Tsn 2015 2016 Short 1st Exam

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

This is Alternative Dispute Resolution. One unit, but this is already a topic in your bar exam. It is under Remedial Law. So I will demand much from this subject.  This is more on memory work. Memory recall of the provisions, the procedure. So ADR will be divided into 2 parts. The first one: Law on Arbitration. The second part: Mediation and JDR (Judicial Dispute Resolution). (Note from the editor: All of Atty. Cathy’s questions and inputs are in bold form. Also, please read this TOGETHER WITH your codal and case digest compilation.)

November 23, 2015 (DJGolo) How do you define Alternative Dispute Resolution? S: ADR is a mode of resolving disputes which is not adjudicated by a judge. It includes mediation, arbitration, conciliation and other processes. Again, to illustrate, ADR refers to what? S: To processes where the disputes are not adjudicated in court. Atty. CGB: The leading case here class is the case of – LM Power Engineering: Alternative dispute resolution methods or ADRs provide solutions that are less time-consuming, less tedious, less confrontational, and more productive of goodwill and lasting relationship. It is 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 under the law, in which a neutral third party participates to assist in the resolution of issues, which includes arbitration, mediation, conciliation, early neutral evaluation, minitrial, or any combination thereof. Also class in the case of – RCBC v. BDO GR. 196171 and BDO v. CA 199238: ADR was envisioned as an important means to achieve speedy and impartial justice and declog court dockets. The most important feature of arbitration (one of the methods), and the key to its success, is the public’s confidence and trust in the integrity of the process. So what is the governing law? The Alternative Dispute Resolution Law or Republic Act No. 9285, April 2, 2004: AN ACT TO INSTITUTIONALIZE THE USE OF AN ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN THE PHILIPPINES AND TO ESTABLISH THE OFFICE FOR ALTERNATIVE DISPUTE RESOLUTION, AND FOR OTHER PURPOSES. What is the State’s Policy with regard to resolution of dispute?

S: According to LM Power case, being an inexpensive, speedy and amicable method of settling disputes, arbitration––along with mediation, conciliation and negotiation––is encouraged by the Supreme Court. Take note class RA 9285 is not limited to arbitration only. It includes other forms of ADR. SEC. 2. Declaration of Policy. It is hereby declared the policy of the State to actively promote party autonomy in the resolution of disputes or the freedom of the party to make their own arrangements to resolve their disputes. Towards this end, the State shall encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an important means to achieve speedy and impartial justice and declog court dockets. As such, the State shall provide means for the use of ADR as an efficient tool and an alternative procedure for the resolution of appropriate cases. Likewise, the State shall enlist active private sector participation in the settlement of disputes through ADR. This Act shall be without prejudice to the adoption by the Supreme Court of any ADR system, such as mediation, conciliation, arbitration, or any combination thereof as a means of achieving speedy and efficient means of resolving cases pending before all courts in the Philippines which shall be governed by such rules as the Supreme Court may approve from time to time. That is the State policy with regard to ADR. Under RA 9285, what are the forms of ADR? S: Arbitration, Court-referred and Court-annexed mediation, Mediation, Evaluation by a third person, mini-trial, negotiation, conciliation. How do you define mediation? S: Mediation is a voluntary process in which a mediator, selected by the disputing parties, facilitates communication and negotiation, and assists the parties in reaching a voluntary agreement regarding a dispute. How do you define Court-annexed Mediation (CAM) and Court-Referred Mediation (CRM)? Court-Annexed Mediation means any mediation process conducted under the auspices of the court, after such court has acquired jurisdiction of the dispute, while Court-Referred Mediation means mediation ordered by a court to be conducted in accordance with the Agreement of the Parties when an action is prematurely commenced in violation of such agreement. In both, did it already reach the court? In CAM, the case already reached the court. In CRM, although its already been filed in court, but there was an agreement between the parties to resort first to mediation. In effect, the case is filed prematurely. So in CRM, the court already acquired jurisdiction over the parties? S: Not yet. What are the distinctions between the two? S: In CRM, the court already acquired jurisdiction over the case. You mean to say, upon the filing of the case, the court Page 1 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

will refer the case to mediation? Which is which? Kailan nangyayari ang CAM? What stage? After the defendant files his answer or upon the filing of the complaint? In CAM, the court acquires jurisdiction. In CRM, the court acquires jurisdiction after filing of the answer. So, generic lang tayo? In CAM, the court has already acquired jurisdiction. But in CRM, no jurisdiction yet? Nalito na ako sa inyo class. In CAM, since there is already the filing of the answer, jurisdiction is acquired over the person of the defendant. However, in CRM, there is premature filing since there is no conciliation yet that should have been done before filing of the complaint.

How do you define Judicial Dispute Resolution (JDR)? S: A judge assists in resolution of dispute in cases when the parties failed to come up with an agreement. When does this happen? During what stage? S: During the CAM, when the court has acquired jurisdiction over the case, when the parties fail to agree, then the mediator will be the judge. So JDR will happen after the CAM? Why? Is it by agreement of the parties that JDR will take place? S: No. JDR is conducted by who? The judge, who acts as the arbitrator.

So, you mean to say, doon sa CRM, no jurisdiction yet?

What stage of the trial? What is your basis?

S: Yes.

S: During the pre-trial. Because in CAM, the court already acquired jurisdiction after the defendant has filed his answer.

Because it was prematurely filed? But in CAM, the court already acquired jurisdiction kasi sabi mo jurisdiction over the person of the defendant. In fact, it will happen after the defendant files his answer? Kailangan ba mag file ng answer? What stage of the court proceedings when you say CAM? S: During the pre-trial So the rule is that, when you say CAM, the case is refereed to mediation during the pre-trial stage of the case and not after the defendant has filed his answer? Pre-trial stage or preliminary conference? Civil case

tayo. Nalito na kayo no?

So, after the court has acquired jurisdiction and the defendant has already filed his answer. Because after that the court will conduct, a what? Is it during the pretrial or before the pre-trial stage? S: Before pre-trial stage. So before pre-trial stage e-refer natin ang case for mediation? Which is which? I’m confused. S: It will happen during the preliminary conference. That is CAM. How about CRM? S: After filing of the answer. Why? Kasi baka e-raise niya doon na, “Uy! Meron kaming agreement na hindi muna namin e-file ito in court. So suspend the proceedings, mediation muna

tayo.” Ganun ba yon?

So when mediation fails, JDR will happen? Is that correct? S: Yes. How do you define Mini-trial? S: Mini-trial is a structure dispute resolution method in which the merits of a case are argued before a panel comprising senior decision makers with or without the presence of a neutral third person after which the parties seek a negotiated settlement. The neutral third person may be asked to render a non-binding adversary opinion. What is the common denominator among the forms of ADR? S: Among them, there is a third party or parties who will serve as the mediator or arbitrator to resolve the dispute. So the common denominator is a neutral third party who will try to resolve the issue between or among the parties. What are the different kinds of arbitration under the ADR law? S: The different kinds of arbitration under RA 9285: 1.

Domestic arbitration (governed by Chapter 5)

2.

International commercial arbitration (Chapter 4)

3.

Individual arbitration

4.

Institutional arbitration

5.

Arbitration of construction disputes

6.

Court-referred arbitration (provided under Section 24 of RA 9285)

S: In CRM, the court did not acquire jurisdiction over the case yet.

How do you define Domestic arbitration (DA)?

Over the case? So hindi ka pa talaga nag file ng case in court? Kasi pag jurisdiction over the subject matter, it is acquired upon the filing of the complaint, right? Anong stage pag CRM?

How about International commercial arbitration (ICA)?

ITANONG KO YAN SA EXAM NIYO. YOU RESEARCH ON THAT.

S: Domestic arbitration is where the seat of arbitration is in the Philippines.

S: International Arbitration means an arbitration where: (a) the parties to an arbitration agreement have, at the time Page 2 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

of the conclusion of that agreement, their places of business in different states; or (b) one of the following places is situated outside the Philippines in which the parties have their places of business: a) the place of arbitration if determined in, or pursuant to, the arbitration agreement; b) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject matter of the dispute is most closely connected; or (c) the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country. How do distinguish the DA and ICA? S: The seat of arbitration of DA is in the PH while in ICA, it is not necessarily in the PH. What if the parties assume that the seat of arbitration is in PH. Dito sila nag conduct ng business. The contracts are to be performed here in PH. Tapos the parties agreed na ICA itong agreement namin. Is that correct? May they stipulate? S: it is correct because there are two general types of arbitration, the DA and ICA. So it is still covered.

It is one which contemplates arbitration under the auspices of a body, whether domestic or international, under which the arbitration proceedings are conducted. So there is submission of the arbitration to an institution, a particular body. Like what? S: NCMB (national Conciliation and Mediation Board) for disputes like before going on strike, they have to resort first to mediation. How about disputes including checks? What body? S: PCHC (Philippine Clearing House Corporation) for checkclearing disputes limited to banking institutions. How about construction disputes? S: CIAC (Construction Industry Arbitration Commission) How do you define Court-referred Arbitration? SEC. 24. Referral to Arbitration. A court before which an action is brought in a matter which is the subject matter of an arbitration agreement shall, if at least one party so requests not later that the pre-trial conference, or upon the request of both parties thereafter, refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed.

You mean to say that if the parties agreed, ok lang? What will govern is the agreement of the parties? Is that correct?

What are the two general types of arbitration that takes place in the PH under RA 9285? Under the law, DA is defined as that which is not international. Now my question is what is ICA?

S: yes. Under RA 9285, it shall be governed by the agreement of the parties.

International Arbitration means an arbitration where:

So when you say ICA, ok lang na ang seat of arbitration is in the PH? How will you distinguish that from the seat of DA? S: the distinguishing factor is the governing law. DA is governed by the Arbitration Law, while ICA is governed by the Model Law.

(d) the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different states; or (e) one of the following places is situated outside the Philippines in which the parties have their places of business:

How do you define Arbitration?

a) the place of arbitration if determined in, or pursuant to, the arbitration agreement;

S: Arbitration means a voluntary dispute resolution process in which one or more persons acting as arbitrators, appointed in accordance with the agreement of the parties, or rules promulgated pursuant to this Act, resolve a dispute by rendering an award.

b) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject matter of the dispute is most closely connected; or

How do you distinguish litigation from arbitration? S: Arbitration means a voluntary dispute resolution process in which one or more arbitrators, appointed in accordance with the agreement of the parties or these Rules, resolve a dispute by rendering an award, while Litigation is a lawsuit or legal action including all proceedings therein. How do you distinguish judge from arbitrator? S: a judge presides in court when an action is filed therein, whereas the arbitrator is the one who presides, as appointed by the parties, the arbitration process. How do you define Institutional Arbitration?

(f) the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country. In both DA and ICA, the seat of arbitration is in the Philippines. Both give rise to awards rendered in the Philippines or the Philippine Arbitral award. In both DA and ICA, they render what is known as domestic award. What are the exceptions to the application of RA 9285? SEC. 6. Exception to the Application of this Act. The provisions of this Act shall not apply to resolution or settlement of the following: Page 3 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

(a) labor disputes covered by Presidential Decree No. 442, otherwise known as the Labor Code of the Philippines, as amended and its Implementing Rules and Regulations;

thereof. These disputes may involve government or private contracts. For the Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary arbitration.

(b) the civil status of persons;

The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and workmanship; violation of the terms of agreement; interpretation and/or application of contractual time and delays; maintenance and defects; payment, default of employer or contractor and changes in contract cost.

(c) the validity of a marriage; (d) any ground for legal separation; (e) the jurisdiction of courts; (f) future legitime; (g) criminal liability; and (h) those which by law cannot be compromised. Labor disputes – This is governed by Labor Code. The civil status of persons – This cannot be subjected to compromise. The validity of a marriage – Again, this cannot be subjected to compromise. It is fixed by law. The jurisdiction of courts – This is conferred by law. Future legitime – Still inchoate; this cannot be the subject of compromise/ Criminal liability – This cannot be compromised. But the civil aspect may be compromised. How about status of a child, can that be compromised? S: No. Civil status is determined by law.

January 4, 2016 (EAEscovilla)

CONSTRUCTION DISPUTES Arbitration of constructions disputes — it is governed by what law? S: Arbitration is governed by E.O. 1088 or the Construction Industry Arbitration Law. What is the condition for the Board to acquire jurisdiction? Meaning to say, parties to the contract, they should have a what? S: There should be a submission agreement. They should enter into an arbitration agreement, whether in the form of an arbitration clause, or submission agreement that all disputes arising from or connected to the contract shall be resolved before the CIAC. When did E.O. 1088 take effect? S: It took effect in 1985. Please take note. What is the jurisdiction of the CIAC again? Sec. 4. Jurisdiction. The CIAC shall 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

Excluded from the coverage of this law are disputes arising from employer-employee relationships which shall continue to be covered by the Labor Code of the Philippines. What if one of the parties to the construction contract which bears the arbitration agreement is not a domestic party but an international party. Does the CIAC have jurisdiction? Can it acquire jurisdiction? S: Yes, as long as there is a construction contract entered into in the Philippines. Even if one of the parties to the contract is an international party, the CIAC may still acquire jurisdiction over the same. Take note class, the jurisdiction of the CIAC may include, but is not limited to violations of specifications for materials and workmanship, violation of the terms of the agreement, interpretation or application of contractual time and place, maintenance, and defects, payments, default of employer or contractor and changes in the construction costs, claims, including valuation, pricing of work, interpretation of specification of construction practices, engineering technique, evaluation of work accomplishment, claim of price escalation, adequacy of structural design, adequacy of supervision, including damages arising from takeover. Please take note of that. Under Section 35 of R.A. 9285, the law expands and clarifies the original and exclusive jurisdiction of the CIAC to include disputes arising under the construction contract, not only between or among the parties who are bound thereto or who are otherwise bound by the arbitration agreement. But take note class, it also includes by reference, whether such parties are project owner, contractor, subcontractor, quantity surveyor, bondsman or issuer of an insurance policy in a construction project. May construction disputes be settled through other modes of settling disputes? A: Yes. Under RA 9285 Section 17. x x x (d) The parties may agree in the settlement agreement that the mediator shall become a sole arbitrator for the dispute and shall treat the settlement agreement as an arbitral award which shall be subject to enforcement under Republic Act No. 876, otherwise known as the Arbitration Law, notwithstanding the provisions of Executive Order No. 1008 for mediated dispute Page 4 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

outside of the CIAC.

is okay. Now my question is, what is the prevailing rule right now?

What is the requirement of the law so that they can settle their dispute through mediation?

General rule, if the parties file their construction dispute in the RTC, what should RTC do? It should dismiss the case because the RTC clearly has no jurisdiction pursuant to E.O. 1008, under Section 39.

Section. 36. Authority to Act as Mediator or Arbitrator. By written agreement of the parties to a dispute, an arbitrator may act as mediator and a mediator may act as arbitrator. The parties may also agree in writing that, following a successful mediation, the mediator shall issue the settlement agreement in the form of an arbitral award.

What if matigas ang ulo ng parties, hindi sila bilib sa CIAC. Ifile natin ito sa court kasi bright si judge, pwede

ba yun?

So here, the law recognizes the principle of party autonomy.

SEC. 39. Court to Dismiss Case Involving a Construction Dispute. A regional trial court which a construction dispute is filed shall, upon becoming aware, not later than the pretrial conference, that the parties had entered into an arbitration to be conducted by the CIAC, unless both parties, assisted by their respective counsel, shall submit to the regional trial court a written agreement exclusive for the Court, rather than the CIAC, to resolve the dispute.

How about the case of National Irrigation Administration vs. CA?

So they can do that, provided there is a written agreement made by them.

So based on the China Chang case, as long as there is a submission agreement made by the parties in their construction contract, they can submit their issues to a forum other than CIAC, because of that party autonomy principle. What is the prevailing rule right now? Can the parties agree to submit their construction issue to a body other than CIAC? Is that allowed?

Pero kung tanungin sa bar exam, can the courts take

There must be a written agreement between the parties that the arbitrator will act as a mediator. Please take note of that. Take note class, the leading case on construction disputes is the case of China Chang Jang vs. Rosal.

What happened in the case of Manila Insurance Company vs. Spouses Amurao? What are the requirements for the CIAC to acquire jurisdiction?

cognizance of a construction dispute?

General rule: NO. Because CIAC has jurisdiction over the same. EXCEPT: Under Section 39 of R.A. 9285. In other words, the law still recognizes the party autonomy principle, so that if the parties agree in writing to submit the construction dispute to the RTC instead of the CIAC, okay na yon, sabi ni Section 39 of R.A. 9285.

A: First, the subject matter must be somehow related to the construction contract, and second the parties should have agreed that the said matter shall be subject to arbitration.

How about in the case of FF Cruz vs. HR Construction?

That is based on the case of Manila Insurance vs. Spouses Amurao. Two requisites must concur:

A: Rule 43 of the Rules of Court.

1.

The subject matter must be somehow related to the construction contract; and

2.

The parties must have agreed to submit the dispute for arbitration proceeding.

What happened in the case of Metropolitan Cebu Water District vs. Mactan Rock? Does the CIAC have jurisdiction over a dispute arising out of a water supply contract? A: Yes, as held by the Court when it cited Section 4 of E.O. 1008.

What is your mode of appeal from the CIAC to the Supreme Court?

As a reiteration, based on FF, the general rule is that arbitral awards are final and executory, except on pure questions of law. The mode of appeal is Rule 43 of Rules of Court. CIAC is a quasi-judicial body, pwede ka pang mag-appeal before the Supreme Court under Rule 43. How about arbitral awards rendered in construction disputes? Is it required to be confirmed by the courts to be enforceable? The legal basis is found in E.O. 1008. It is immediately executory.

How about the case of Limconcen Inc. vs. Foundation Specialists?

So the general rule is all arbitral awards require confirmation by the court to be executory, except awards rendered in construction disputes because of E.O. 1008.

Going back to the China Chang Jang case, the rule is that as long as the parties agree to submit a construction dispute to a body other than the CIAC, that

January 18, 2015 (DJG)

CHECK-CLEARING DISPUTES Page 5 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

This is the 3rd kind of dispute under the auspices of PCHC for the PCHC ArbiCom. This was organized on May 19, 1977 principally to provide a means of clearing checks and other items pursuant to Section 102 of the New Central Bank Act or RA 7653. Who can be participants? The subject of these disputes are the banks. How do you define banks? Bank is defined as an entity engaged in the lending of funds obtained in the form of deposits. What is the condition sine qua non before the dispute can be a subjected to arbitration before the PCHC ArbiCom? 1.

It must be authorized.

2.

It must be banking institution.

3.

It must be a member of PCHC.

4.

The participation of the said banks in the clearing operations in the PCHC is a manifestation of its submission to its jurisdiction so that a mere fact that it is a banking institution, would not automatically subject issues to the PCHC.

Case: ALLIED BANKING CORPORATION vs. CA

Unsay labot sa trial court? It has no authority to decide cases involving check clearing disputes because it is the PCHC which has the primary authority over check-clearing disputes. How about the third-party complaint? Can that be resorted before the PCHC? What are the allowable pleading that may be filed before the PCHC? Can you read the procedure on how arbitration is conducted before the PCHC? 1)

Any dispute or controversy between two or more clearing participants involving any check or item cleared through the PCHC shall be submitted to the ArbiCom through a written complaint of any participant in the controversy.

2)

Five copies of the complaint shall be filed with the ArbiCom copy furnish the respondent who shall have 30 nonextendible days to file his answer.

3)

Upon the filing of the complaint by a member bank, the PCHC shall create an ArbiCom consisting of four members, three of whom are incumbent or retired senior officers of participating banks not involved in the dispute and a fourth member who shall be an attorney at law with at least five years experience as a bank lawyer without any previous or present relation with any of the participating bans involved and who shall only have advisory function without any right to vote.

4)

The hearing shall not last for more than 30 days after which the parties shall have a non- extendible period of 30 days to file their memoranda. The decision of the sole arbitrator or the ArbiCom shall be made within 45 days

from the preliminary conference or the submission of the parties respective memoranda. So usually if it is before the PCHC Arbicom, what pleadings are allowed? Only the complaint and the answer. So third-party complaint must be filed before the courts. In the case of Allied Bank, third party complaint was not allowed to be had because here, it refers to two banks that was already referred to the PCHC Arbicom. Case: HOME BANKERS AND TRUST COMPANY vs. CA In other words, even if arbitration is already commenced before a particular body, the court is not precluded from taking action in the said case? Why? The provisional remedy of preliminary attachment was filed before the court so the principle to be remembered is that even if arbitration proceedings is already pending, this will not preclude the court from taking action over the case, which we will later on learn under the Special ADR Rules. Case: UNION BANK OF THE PHILIPPINES vs. CA Case: INSULAR BANK vs. CA What is the principle? Even if a particular case is already pending arbitration in a particular body, the court is not precluded from taking cognizance over the case. Here, they filed a civil case before the court and they sought the issuance of a writ of preliminary attachment. So there are still judicial remedies that can still be availed of even if a particular issue is already lodged before a particular body that hears. Case: INSULAR SAVINGS vs. FAR EAST BANK What is the remedy of a party, assuming that a decision is already rendered by the PCHC ArbiCom, and he is not satisfied with the decision? What are the remedies before the Arbicom? The decision or award of the Arbitration Committee or of the Sole Arbitrator or of the Board of Directors, as the case may be, shall be appealable only on questions of law to any of the Regional Trial Courts in the National Capital Region where the Head Office of any of the parties is located. The appellant shall perfect his appeal by filing a notice of appeal to the Arbitration Secretariat and filing a Petition with the Regional Trial Court of the National Capital Region for the review of the decision or award of the committee or sole arbitrator or of the Board of Directors, as the case may be, within a non-extendible period of fifteen (15) days from and after its receipt of the order denying or granting said motion for reconsideration or new trial had been filed, within a non-extendible period of fifteen (15) days from and after its receipt of the order denying or granting said motion for reconsideration or of the decision rendered after the new trial if one had been granted. After that, what are his remedies? (provided in the case) 1.

Petition the proper RTC to issue an order vacating the award on the grounds provided for under Section 24 of the Arbitration Law.

2.

Petition for review under Rule 43 of the Rules of Court Page 6 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

with the Court of Appeals on questions of fact, of law, or mixed questions of fact and law. 3.

Petition for certiorari under Rule 65 of the Rules of Court on the ground that the Arbitrator Committee acted without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction.

So Arbicom is a quasi-judicial body? Yes. It was held in the case that, “since this case involves acts or omissions of a quasi-judicial agency, the petition should be filed in and cognizable only by the Court of Appeals.” What is the requirement for PCHC ArbiCom to render a valid judgment? That there be a quorum and a vote of any tow members. “The Chariman and any member shall be sufficient to constitute a quorum for the purpose of conducting conferences or hearings or trials before the ArbiCom but a vote of any two members of the ArbiCom shall be necessary to render and promulgate an order, resolution, award or decision of the case presented for arbitration except if it involves or the principal amount is 300,000 or less, then the arbitration shall be heard by a sole arbitrator and his vote shall be sufficient to render and promulgate the said decision.”

ARBITRATION AS A CONTRACT What is the importance of arbitration in contracts? Arbitration is important for the convenience of the parties. What are the two basic/general categories of arbitration that can be held in the PH under RA 9285? DA and ICA. Domestic Arbitration is governed by the Arbitration Law or RA 876. If it is International Commercial Arbitration it is governed by the Model Law. DA is an arbitration that is not international where the proceedings are held or the award is rendered or the seat of arbitration in the Philippines and does not have any of the characteristics that make it international. While ICA, if the parties made an agreement at the time of the conclusion of that agreement their place of business in the different states or where the place of arbitration as determined under the agreement of the place where the substantial part of the obligations of the commercial relationships is to be performed or with which the subject matter of the dispute is most closely connected and situated outside the state where the parties have their places of business or that the parties had expressly agreed that the subject matter of the arbitration agreement is international. When is an arbitration commercial? SEC. 21. Commercial Arbitration. An arbitration is "commercial" if it covers matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a 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. Take note class that both DA and ICA, the seat of arbitration is in the Philippines. Both takes place and give rise to awards rendered in the Philippines, So, the general premise is that arbitration, whether DA or ICA, can be ad hoc. When is arbitration ad hoc? It is when the adopted procedure is set by the agreement of the parties, as they deem applicable, without necessarily conducting arbitration within the auspices of any arbitral body. It is only among the parties themselves. When is arbitration institutional? It is when it involves an institutional body like in the case of labor, check-clearing and construction disputes. What is the rule that will govern the validity of an arbitration agreement? If DA, Philippine law. If ICA, the validity of the agreement is to be determined under the law agreed upon by the parties to the said agreement. If there is no law agreed by the parties as to what law will govern the validity of the agreement? What is the applicable rule? It is the Philippine law shall govern. So conflicts rule. Why is arbitration deemed as a separate contract from the main contract itself? It binds only the parties who agreed to it as well as their heirs or assignees. (Relativity of contract principle) In the case of GONZALES vs. CLIMAX MINING, GR 161957, January 22, 2007, the SC ruled that an arbitration agreement is contractual in nature. Necessarily, a contract is required for arbitration to take place and to be binding. So, if arbitration is deemed as a contract, here are the particular issues that are involved in the matter: 1.

Whether the arbitration agreement relied upon by the party is in existence; and

2.

If so, whether or not it is valid and enforceable.

What are the conditions for arbitration to proceed? There must be an (1) arbitration clause of a valid and enforceable arbitration agreement in the contract for future disputes, or (2) a submission agreement for arbitration of present dispute. Take note of these kay dili man automatic ang arbitration. What is the Freedom of contract principle? The parties are free to establish such stipulations as to what will govern their agreement as they may deem convenient provided Page 7 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

they are not contrary to law, morals, good customs, public policy or public order. How about the mutuality of contracts principle? The contract must bind both contracting parties. Its validity and compliance cannot be left to the will of anyone of them. In other words, if there is an arbitration agreement, then anyone of the parties have the right to compel the other party to refer the dispute to arbitration. Corollary to this rule, can a contract containing an arbitration clause be unilaterally rescinded? No on the basis of the mutuality of contract principle. How about Form? The formal requirements of an agreement to arbitrate are therefore the following: (a) it must be in writing and (b) it must be subscribed by the parties or their representatives. Section 4. Form of arbitration agreement. A contract to arbitrate a controversy thereafter arising between the parties, as well as a submission to arbitrate an existing controversy shall be in writing and subscribed by the party sought to be charged, or by his lawful agent. The making of a contract or submission for arbitration described in section two hereof, providing for arbitration of any controversy, shall be deemed a consent of the parties to the jurisdiction of the Court of First Instance of the province or city where any of the parties resides, to enforce such contract or submission. What is the Form for? Validity? Enforceability? How about the Parole Evidence Rule? YOU RESEARCH ON THAT.

January 30, 2016 (JRLumanag) CAPACITY TO CONTRACT When we talk of parties, we have to take into consideration the capacity of the parties to contract? So what is the rule with regard to the capacity of the parties to contract? If he is a Philippine national, then it is to be determined by the law of the contract. What about legal capacity of a foreigner in a contract? It is determined by his national law based on Article 15 of the Civil Code. Art. 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad. How about the capacity to contract of the State and its instrumentality? Apparently they can enter into arbitration contract. GASCON v. ARROYO: The State and its instrumentalities can resort to arbitration to

settle its disputes even with private parties. Take note that there are no provisions under the Philippine law prohibiting the state or its agencies from resorting to arbitration whether with Philippine nationals or Foreign nationals. Why? Because arbitration is regarded as an alternative mode to settle disputes in court. Likewise, in E.O 1008 (Construction Industry Arbitration Law), it expressly recognizes that arbitration may involve government contracts. What is the requirement in order that an arbitration agreement will be binding upon the State and its agencies? There should be consent or approval of the authorized public officers or governing boards as the case may be of the State or agencies concerned. Otherwise, such agreements will not be binding upon the State or its agencies. It is binding not only upon the parties but as well as their assigns and heirs. SALAS v. LAPERAL: A submission to arbitration is a contract. As such, the Agreement, containing the stipulation on arbitration, binds the parties thereto, as well as their assigns and heirs. But only they. Petitioners, as heirs of Salas, Jr., and respondent Laperal Realty are certainly bound by the Agreement. If respondent Laperal Realty, had assigned its rights under the Agreement to a third party, making the former, the assignor, and the latter, the assignee, such assignee would also be bound by the arbitration provision since assignment involves such transfer of rights as to vest in the assignee the power to enforce them to the same extent as the assignor could have enforced them against the debtor[18] or in this case, against the heirs of the original party to the Agreement. However, respondents Rockway Real Estate Corporation, South Ridge Village, Inc., Maharami Development Corporation, spouses Abrajano, spouses Lava, Oscar Dacillo, Eduardo Vacuna, Florante de la Cruz and Jesus Vicente Capellan are not assignees of the rights of respondent Laperal Realty under the Agreement to develop Salas, Jr.s land and sell the same. They are, rather, buyers of the land that respondent Laperal Realty was given the authority to develop and sell under the Agreement. As such, they are not assigns contemplated in Art. 1311 of the New Civil Code which provides that contracts take effect only between the parties, their assigns and heirs. Page 8 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

So they were not bound by the agreement since they were not the heirs of Salas. Take note that under Section 25 of RA 9285: SEC. 25. Interpretation of the Act. - In interpreting the Act, the court shall have due regard to the policy of the law in favor of arbitration. Where action is commenced by or against multiple parties, one or more of whom are parties who are bound by the arbitration agreement although the civil action may continue as to those who are not bound by such arbitration agreement. In relation to the relativity of contract principle, only those assigns and heirs are bound by the contract. What if a case is filed in court which involves multiple parties, some enter into arbitration and some did not, what will happen to the civil case? (Since it is the policy of the State na mauna ang arbitration before court action or policy of judicial restraint) So, the civil case should be suspended and allow the parties to arbitrate. Rule 4.7. Multiple actions and parties. - The court shall not decline to refer some or all of the parties to arbitration for any of the following reasons: a. Not all of the disputes subject of the civil action may be referred to arbitration; b. Not all of the parties to the civil action are bound by the arbitration agreement and referral to arbitration would result in multiplicity of suits; c. The issues raised in the civil action could be speedily and efficiently resolved in its entirety by the court rather than in arbitration; d. Referral to arbitration does not appear to be the most prudent action; or e. The stay of the action would prejudice the rights of the parties to the civil action who are not bound by the arbitration agreement. The court may, however, issue an order directing the inclusion in arbitration of those parties who are not bound by the arbitration agreement but who agree to such inclusion provided those originally bound by it do not object to their inclusion. Please take note of Section 25, RA 9285. Based on such section in relation to 4.7, arbitration agreement binds only the parties thereto except when the court issues an order directing the inclusion and arbitration of parties who are not bound by the agreement but who agree to such inclusion and those originally bound agree to their inclusion. SEC. 35. Coverage of the Law. - Construction disputes which fall within the original and exclusive jurisdiction of the Construction Industry Arbitration Commission (the "Commission") shall include those between or among parties to, or who are otherwise bound by, an arbitration agreement,

directly or by reference whether such parties are project owner, contractor, subcontractor, quantity surveyor, bondsman or issuer of an insurance policy in a construction project. The agreement to arbitrate may be effected by subsequent events that may prevent the non application of the arbitration agreement if the other parties who are involved and who are not privy thereto or bound by the arbitration agreement must be included in the suit so that a complete resolution of the dispute is possible. DEL MONTE VS. CA: A careful examination of the instant case shows that the arbitration clause in the Distributorship Agreement between petitioner DMC-USA and private respondent MMI is valid and the dispute between the parties is arbitrable. However, this Court must deny the petition. xxx The provision to submit to arbitration any dispute arising therefrom and the relationship of the parties is part of that contract and is itself a contract. As a rule, contracts are respected as the law between the contracting parties and produce effect as between them, their assigns and heirs. Clearly, only parties to the Agreement, i.e., petitioners DMC-USA and its Managing Director for Export Sales Paul E. Derby, Jr., and private respondents MMI and its Managing Director LILY SY are bound by the Agreement and its arbitration clause as they are the only signatories thereto. Petitioners Daniel Collins and Luis Hidalgo, and private respondent SFI, not parties to the Agreement and cannot even be considered assigns or heirs of the parties, are not bound by the Agreement and the arbitration clause therein. Consequently, referral to arbitration in the State of California pursuant to the arbitration clause and the suspension of the proceedings in Civil Case No. 2637-MN pending the return of the arbitral award could be called for but only as to petitioners DMC-USA and Paul E. Derby, Jr., and private respondents MMI and LILY SY, and not as to the other parties in this case, in accordance with the recent case of Heirs of Augusto L. Salas, Jr. v. Laperal Realty Corporation, which superseded that of Toyota Motor Philippines Corp. v. Court of Appeals. xxx The object of arbitration is to allow the expeditious determination of a dispute. Clearly, the issue before us could not be speedily and efficiently resolved in its entirety if we allow simultaneous arbitration proceedings and trial, or suspension of trial pending arbitration. Accordingly, the interest Page 9 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

of justice would only be served if the trial court hears and adjudicates the case in a single and complete proceeding.

jurisdiction over the cases at bar. xxx

Toyota filed an action for reformation of its contract with APT, the purpose of which is to look into the real intentions/agreement of the parties to the contract and to determine if there was really a mistake in the designation of the boundaries of the property as alleged by Toyota. Such questions can only be answered by the parties to the contract themselves. This is a controversy which clearly arose from the contract entered into by APT and Toyota. Inasmuch as this concerns more importantly the parties APT and Toyota themselves, the arbitration committee is therefore the proper and convenient forum to settle the matter as clearly provided in the deed of sale.

In Del Monte Corporation-USA v. Court of Appeals, even after finding that the arbitration clause in the Distributorship Agreement in question is valid and the dispute between the parties is arbitrable, this Court affirmed the trial courts decision denying petitioners Motion to Suspend Proceedings pursuant to the arbitration clause under the contract. In so ruling, this Court held that as contracts produce legal effect between the parties, their assigns and heirs, only the parties to the Distributorship Agreement are bound by its terms, including the arbitration clause stipulated therein. This Court ruled that arbitration proceedings could be called for but only with respect to the parties to the contract in question. Considering that there are parties to the case who are neither parties to the Distributorship Agreement nor heirs or assigns of the parties thereto, this Court, citing its previous ruling in Salas, Jr. v. Laperal Realty Corporation, held that to tolerate the splitting of proceedings by allowing arbitration as to some of the parties on the one hand and trial for the others on the other hand would, in effect, result in multiplicity of suits, duplicitous procedure and unnecessary delay. Thus, we ruled that the interest of justice would best be served if the trial court hears and adjudicates the case in a single and complete proceeding.

xxx

xxx

Having been apprised of the presence of the arbitration clause in the motion to dismiss filed by APT, Judge Tensuan should have at least suspended the proceedings and directed the parties to settle their dispute by arbitration (Sec. 7, RA 876). Judge Tensuan should have not taken cognizance of the case.

It is established that petitioners in the present cases who have presented legitimate interests in the resolution of the controversy are not parties to the PIATCO Contracts. Accordingly, they cannot be bound by the arbitration clause provided for in the ARCA and hence, cannot be compelled to submit to arbitration proceedings. A speedy and decisive resolution of all the critical issues in the present controversy, including those raised by petitioners, cannot be made before an arbitral tribunal. The object of arbitration is precisely to allow an expeditious determination of a dispute. This objective would not be met if this Court were to allow the parties to settle the cases by arbitration as there are certain issues involving nonparties to the PIATCO Contracts which the arbitral tribunal will not be equipped to resolve.

So the rule is that based on the relativity of contract principle, it will only bind the parties, their assigns and heirs. TOYOTA MOTOR PHIL. VS. CA: The contract of sale executed between APT and Toyota provides an arbitration clause xxx Contracts are respected as the law between the contracting parties. As such, the parties are thereby expected to abide with good faith in their contractual commitments. Toyota is therefore bound to respect the provisions of the contract it entered into with APT. xxx

Based on this ruling, the mere addition of a party who is not a party to the arbitration agreement does not render the arbitration clause ineffective. Is the prior recourse to arbitration necessary before the court could pass upon the merits of a case? No. AGAN VS. PIATCO: There is one more procedural obstacle which must be overcome. The Court is aware that arbitration proceedings pursuant to Section 10.02 of the ARCA have been filed at the instance of respondent PIATCO. Again, we hold that the arbitration step taken by PIATCO will not oust this Court of its

So which will come first? Arbitration. But the rule in this case is it states that it will not oust the court of its jurisdiction over the case. Page 10 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

GENERAL RULE: Arbitration recourse to the court.

precludes

immediate

Rule 2.2. Policy on arbitration.- (A) 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;

5.

criminal liability;

6.

those which by law cannot be compromised

These are matters which cannot be the subject of arbitration (Refer to Section 6, RA 9285 since enumeration given is incomplete) ESCANO VS. CA (100 SCRA 197): SC ruled that courts cannot create contracts. Another important principle is that under Article 1315 of the Civil Code. Art. 1315. Parties to a contract are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law.

g. One or more of the arbitrators are not Philippine nationals; or

And the area of agreement between the parties must extend to all points that the parties consider essential otherwise there is no contract between them. Thus, the parties are free to establish stipulations, terms and conditions in their contradict provided it is not contrary to law, morals and public policy.

h. One or more of the arbitrators are alleged not to possess the required qualification under the arbitration agreement or law.

Relate this to evidence. If there is contract, everything must be reduced in writing.

So to reiterate, GR is that arbitration agreement precludes immediate recourse to the court because of the policy of the law on arbitration.

Rule 2.2 The Special ADR Rules recognize the principle of separability of the arbitration clause, which means that said clause shall be treated as an agreement independent of the other terms of the contract of which it forms part. A decision that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.

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;

PLEASE MEMORIZE ENUMERATION ON RULE 2.2 Does the rule imply that there can be no judicial relief prior commencement of arbitration proceedings? No. Rule 3. Parties can file judicial relief involving the issue of existence, validity and enforceability of the arbitration agreement prior commencement of arbitration. When shall it commence? Rule 3.3. When the petition may be filed. - The petition for judicial determination of the existence, validity and/or enforceability of an arbitration agreement may be filed at any time prior to the commencement of arbitration. This applies only when the seat of arbitration is in the Philippines, so domestic arbitration and international commercial arbitration. What can be subject matter of arbitration? Anything EXCEPT: 1.

civil status of persons;

2.

validity of a marriage;

3.

any ground for legal separation;

4.

the jurisdiction of courts;

Does this principle of separability apply to domestic arbitration? How about international commercial arbitration? With regard to ICA, the basis there is Article 16 of the Modal Law. The invalidity of the main contract does not necessarily entail the invalidity of the arbitration agreement kasi nga yung arbitration clause or agreement is independent from the main contract. Article 16. xxx an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause. In DA: Under RA 9285, it did not extend benefit of Article 16 of the Modal Law to DA. So the basis of saying that this principle applies to DA is found in the provision of Civil Code which prescribes the separability of the provisions in a contract (Obligations and Contracts), Sections 2, 6 and 7 of the Arbitration Law. Section 2. xxx Such submission or contract shall be valid, enforceable and irrevocable, save upon such grounds as exist at law for the revocation of any contract xxx Page 11 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

Section 6. xxx A party aggrieved by the failure, neglect or refusal of another to perform under an agreement in writing providing for arbitration may petition the court for an order directing that such arbitration proceed in the manner provided for in such agreement xxx Section 7. Stay of civil action. If any suit or proceeding be brought upon an issue arising out of an agreement providing for the arbitration thereof, the court in which such suit or proceeding is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration, shall stay the action or proceeding until an arbitration has been had in accordance with the terms of the agreement: Provided, That the applicant, for the stay is not in default in proceeding with such arbitration. So principle of separability applies to both domestic and international commercial arbitrations. Is fraudulent inducement to contract arbitration? Is that an arbitrable issue?

subject

to

YES, it can be subject to arbitration. If you were fraudulently induced to contract, the contract is voidable since consent is vitiated. In all cases of fraud, the circumstances constituting fraud, it must be stated with particularity.

TIMELINESS AND WAIVER When do you invoke the existence of an arbitration agreement?

close to the trial date or delayed for a long period before asking for a stay of the suit •

Defendant seeking counterclaim asking proceedings

arbitration filed a for a stay of the

•

Important intervening steps such as resort to discovery procedure not otherwise available in arbitration have been taken

•

Delay affected, misled or prejudiced opposing party

•

Parties in fact litigate in a court of law a dispute that is subject to arbitration

GENERAL RULE: Invoke that there is existence of arbitration agreement.

Diba it precludes immediate recourse to court action but is this absolute? No. Rule 3.1 Rule 3.1.When judicial relief is available. - The judicial relief provided in Rule 3, whether resorted to before or after commencement of arbitration, shall apply only when the place of arbitration is in the Philippines. Okay so Rule 3 applies to both DA and ICA becase the seat is in the Philippines. Who may file for the petition?

You have to distinguish if ICA or DA. If ICA, invoked when the defendant files his answer. If DA, it must be invoked not later than the pre-trial conference of the said case. Why should it be timely invoked? It must be timely invoked because it will be deemed waived. It constitutes waiver of action. What is the effect of the failure of defendant to raise arbitration in a motion to dismiss? Obviously deemed waived. (Rules of Court) Rule 9, Section 1. Defenses and objections not pleaded. — Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. You have to invoke that to preclude waiver. Factors considered when a party is deemed to have waived his right to require arbitration:

Rule 3.2. Who may file petition. - Any party to an arbitration agreement may petition the appropriate court to determine any question concerning the existence, validity and enforceability of such arbitration agreement serving a copy thereof on the respondent in accordance with Rule 1.4 Rule 3.3. When the petition may be filed. - The petition for judicial determination of the existence, validity and/or enforceability of an arbitration agreement may be filed at any time prior to the commencement of arbitration. Despite the pendency of the petition provided herein, arbitral proceedings may nevertheless be commenced and continue to the rendition of an award, while the issue is pending before the court. Rule 3.4.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.

•

Party's action are inconsistent with the right to arbitrate

Rule 3.5. 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.

•

Litigation machinery has been substantially invoked

The grounds here are exclusive ha. Take note that this can be had before arbitration proceedings.

•

Party either requested arbitration enforcement Page 12 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

Rule 3.6.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; 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. Apart from other submissions, the petitioner must attach to the petition an authentic copy of the arbitration agreement.

What if the court determines that the arbitration agreement is void, inexistent and unenforceable? If the court determines that the agreement is void, inexistence and unenforceable, then the court may proceed to hear and decide the case. What can be raised (57) before the arbitral tribunal is when the court makes a prima facie finding that there exists a binding and enforceable arbitration agreement. You raise the issue of EVE of the arbitration agreement before the arbitral tribunal or the court in an action to vacate or set aside an arbitral award. Take note of this remedy and the rule on non forum shopping likewise applies. Rule 3 is a special proceeding ha, commenced through a verified petition, is summary in nature and the rule on non forum shopping is observed.

Through a verified petition ha.

Rule is that an arbitration agreement that is timely invoked precludes court action.

Rule 3.11. Relief against court action.

So if a case is prematurely filed in court, what should the court do?

- Where there is a prima facie determination upholding the arbitration agreement.

-A prima facie determination by the court upholding the existence, validity or enforceability of an arbitration agreement shall not be subject to a motion for reconsideration, appeal or certiorari.

In violation of the arbitration agreement. The court should not dismiss the case but merely suspend the proceedings. This is based on SC rulings: CHUNG FU VS. CA: SC ruled that the correc tprocedure is for the court to susopend the case and not to dismiss it and require the parties to proceed to arbitration in accordance with their agreement.

Such prima facie determination will not, however, prejudice the right of any party to raise the issue of the existence, validity and enforceability of the arbitration agreement before the arbitral tribunal or the court in an action to vacate or set aside the arbitral award. In the latter case, the court’s review of the arbitral tribunal’s ruling upholding the existence, validity or enforceability of the arbitration agreement shall no longer be limited to a mere prima facie determination of such issue or issues as prescribed in this Rule, but shall be a full review of such issue or issues with due regard, however, to the standard for review for arbitral awards prescribed in these Special ADR Rules. Why is it that the court makes only a prima facie determination under Rule 3.11? Because of the policy on judicial restrain or least intervention of the courts. Why is there such a policy? To encourage arbitration. If you file before the court a petition, you are questioning the existence, validity and enforceability of the arbitration agreement and the court makes a prima facie finding that the existence, validity and enforceability of the agreement, that is only prima facie determination or finding. Aside from the policy on judicial restraint, prima facie only because the parties can still raise the existence, validity and enforceability of the arbitration agreement before the arbitral tribunal. That is why the remedy is available before arbitration proceeding is commenced. Take note special ADR rules is included in bar exams.

APT VS. CA: SC ruled that it is erroneous for the court to issue a final order dismissing the case. Rather, the court should merely suspend the case. Among the reasons for merely suspending and not dismissing is that the parties later on may go back to the court where the case is pending to have the award confirmed by the said court.

REMEDIES If it will be asked in the exam, if a case is filed in court in contravention of agreement to arbitrate, what are your remedies? 1.

Motion to Suspend Court Proceedings

2.

Motion for Referral to ADR (found in Rule 4 of Special ADR Rules)

Rule 4.1 Who makes the request. - A party to a pending action filed in violation of the arbitration agreement, whether contained in an arbitration clause or in a submission agreement, may request the court to refer the parties to arbitration in accordance with such agreement. Rule 4.2. When to make request. - (A) Where the arbitration agreement exists before the action is filed. - The request for referral shall be made not later than the pre-trial conference. Page 13 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

After the pre-trial conference, the court will only act upon the request for referral if it is made with the agreement of all parties to the case. (B)Submission agreement. - If there is no existing arbitration agreement at the time the case is filed but the parties subsequently enter into an arbitration agreement, they may request the court to refer their dispute to arbitration at any time during the proceedings. Rule 4.3. Contents of request. - The request for referral shall be in the form of a motion, which shall state that the dispute is covered by an arbitration agreement. Apart from other submissions, the movant shall attach to his motion an authentic copy of the arbitration agreement. The request shall contain a notice of hearing addressed to all parties specifying the date and time when it would be heard. The party making the request shall serve it upon the respondent to give him the opportunity to file a comment or opposition as provided in the immediately succeeding Rule before the hearing. What is necessary? Notify all the parties concerned and should be dated and set the time and place of hearing. This is mandatory for reviving motions (Motions, comply with the Rules) Rule 4.5. Court action. - After hearing, the court shall stay the action and, considering the statement of policy embodied in Rule 2.4, above, refer the parties to arbitration if it finds prima facie, based on the pleadings and supporting documents submitted by the parties, that there is an arbitration agreement and that the subject-matter of the dispute is capable of settlement or resolution by arbitration in accordance with Section 6 of the ADR Act. Otherwise, the court shall continue with the judicial proceedings. If there is prima facie finding then refer to arbitration because precisely Rule 4 is Referral to ADR. Otherwise, continue with the judicial proceedings. Rule 4.6. No reconsideration, appeal or certiorari. - An order referring the dispute to arbitration shall be immediately executory and shall not be subject to a motion for reconsideration, appeal or petition for certiorari. An order denying the request to refer the dispute to arbitration shall not be subject to an appeal, but may be the subject of a motion for reconsideration and/or a petition for certiorari. Rule 4.8. Arbitration to proceed. - Despite the pendency of the action referred to in Rule 4.1, above, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the action is pending before the court. Even if an action is filed in court contrary to the arbitration agreement, arbitration proceedings will proceed independently of the civil action. What is your remedy if the other party to arbitration delays arbitration by delaying to choose an arbitrator?

Or simply refuses to agree to an arbitrator? You can ask the appointing authority to appoint an arbitrator. Who is this appointing authority? Rule 1.11 Appointing Authority" shall mean the person or institution named in the arbitration agreement as the appointing authority; or the regular arbitration institution under whose rule 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 arbitrators shall be made by the National President of the Integrated Bar of the Philippines or his duly authorized representative. The appointing authority is different from the arbitrator.

FUNCTION OF APPOINTING AUTHORITY The function of appointing authority is when the arbitrators agreed to by the parties are unable to discharge their functions. Sila ang magpili kung sino ang pwede maging arbitrator. Please take note of that.

REVIEW (On timeliness) – An arbitration agreement invoked in a timely manner precludes court action. Does that mean that the court is automatically precluded from taking cognizance of the case? No. So merely suspended ang proceedings before the court and not to dismiss the same. Under Rule 3, sabi natin, yung judicial relief prior to arbitration proceedings is only a prima facie determination that is being made by the court, upholding the EVE of the arbitration agreement and if the court finds that the arbitration agreement then proceed to arbitration. What if nag proceed na tayo to arbitration. So punta na tayo sa arbitral tribunal. Before the tribunal, the issue of its jurisdiction is being questioned by the parties and the arbitral tribunal rules that it does not have the jurisdiction, what is your remedy? Rule 3.12.Who may file petition. - Any party to arbitration may petition the appropriate court for judicial relief from the ruling of the arbitral tribunal on a preliminary question upholding or declining its jurisdiction. Should the ruling of the arbitral tribunal declining its jurisdiction be reversed by the court, the parties shall be free to replace the arbitrators or any one of them in accordance with the rules that were applicable for the appointment of arbitrator sought to be replaced. So your remedy is to file a petition for judicial relief from the ruling of the arbitral tribunal on a preliminary question upholding or declining its jurisdiction. Page 14 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

Rule 3.14. Venue. - The petition may be filed before the Regional Trial Court of the place where arbitration is taking place, or where any of the petitioners or respondents has his principal place of business or residence. Rule 3.15. Grounds. - The petition may be granted when the court finds that the arbitration agreement is invalid, inexistent or unenforceable as a result of which the arbitral tribunal has no jurisdiction to resolve the dispute. Rule 3.18. Court action. x x x (B) No injunction of arbitration proceedings. - The court shall not enjoin the arbitration proceedings during the pendency of the petition. Rule 3.19. Relief against court action. - The aggrieved party may file a motion for reconsideration of the order of the court. The decision of the court shall, however, not be subject to appeal. The ruling of the court affirming the arbitral tribunal’s jurisdiction shall not be subject to a petition for certiorari. The ruling of the court that the arbitral tribunal has no jurisdiction may be the subject of a petition for certiorari. Assume that the case is already pending before the arbitral tribunal and you raise the issue na wala silay jurisdiction. Now the arbitral tribunal defers its ruling regarding its jurisdiction, what is your remedy? Rule 3.20.Where no petition is allowed. - Where the arbitral tribunal defers its ruling on preliminary question regarding its jurisdiction until its final award, the aggrieved party cannot seek judicial relief to question the deferral and must await the final arbitral award before seeking appropriate judicial recourse. A ruling by the arbitral tribunal deferring resolution on the issue of its jurisdiction until final award, shall not be subject to a motion for reconsideration, appeal or a petition for certiorari. Can you resort to judicial relief? No. 3.20 provides that it must await the final arbitral award before seeking appropriate judicial action.

RULE OF LIBERALITY So the rules of liberality in relation to arbitration agreement, the court in resolving the issue whether the controversy is subject to arbitration, the scope of arbitration of agreement byst be interpreted liberally so that any doubt concerning arbitrable issues should be resolved in favor of arbitration. LM POWER VS. CAPITAL INDUSTRIES: Ruled that so long as A CAUSE IS susceptible of an interpretation that covers the asserted dispute, an order to arbitrate should ebg ranted since any doubt should be resolved in favor of arbitration. If premature, remedy is Rule 4: Referral to Arbitration.

PROVISIONAL REMEDIES Are provisional remedies available during arbitration? Yes. So where do you apply for these provisional remedies? Before the courts. Rule 5.1.Who may ask for interim measures of protection. - A party to an arbitration agreement may petition the court for interim measures of protection. Rule 5.2.When to petition. - A petition for an interim measure of protection may be made (a) before arbitration is commenced, (b) after arbitration is commenced, but before the constitution of the arbitral tribunal, or (c) 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. So interim measures of protection can be availed of with the courts. Can there be provisional remedies to be granted by the arbitral tribunal? Yes. When? It is found under Rule 5.2 So provisional remedies may be availed before the court and before the arbitral tribunal. Rule 5.3.Venue. - A petition for an interim measure of protection may be filed with the Regional Trial Court, which has jurisdiction over any of the following places: a. Where the principal place of business of any of the parties to arbitration is located; b. Where any of the parties who are individuals resides; c. Where any of the acts sought to be enjoined are being performed, threatened to be performed or not being performed; or d. Where the real property subject of arbitration, or a portion thereof is situated. What are the grounds provisional remedies?

for

the

issuance

of

this

Rule 5.4.Grounds. - The following grounds, while not limiting the reasons for the court to grant an interim measure of protection, indicate the nature of the reasons that the court shall consider in granting the relief: a. The need to prevent irreparable loss or injury; b. The need to provide security for the performance of any obligation; c. The need to produce or preserve evidence; or d. The need to compel any other appropriate act or Page 15 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

omission. THROUGH A VERIFIED PETITION UNDER RULE 5.5 Rule 5.6.Type of interim measure of protection that a court may grant.- The following, among others, are the interim measures of protection that a court may grant: a. Preliminary injunction directed against a party to arbitration; b. Preliminary attachment against property or garnishment of funds in the custody of a bank or a third person; c. Appointment of a receiver; d. Detention, preservation, delivery or inspection of property; or, e. Assistance in the enforcement of an interim measure of protection granted by the arbitral tribunal, which the latter cannot enforce effectively. Added by ma’am: Temporary order of protection (letter F daw ana siya) What is a temporary order of protection? Rule 5.9 (third paragraph) In cases where, based solely on the petition, the court finds that there is an urgent need to either (a) preserve property, (b) prevent the respondent from disposing of, or concealing, the property, or (c) prevent the relief prayed for from becoming illusory because of prior notice, it shall issue an immediately executory temporary order of protection and require the petitioner, within five (5) days from receipt of that order, to post a bond to answer for any damage that respondent may suffer as a result of its order. The ex-parte temporary order of protection shall be valid only for a period of twenty (20) days from the service on the party required to comply with the order. Ex-parte meaning wala na syang hearing, similar sa TRO. What are the grounds for its issuance? Nasa rules. Take note, requirement should be complied by the party. Exparte temporary order of protection. The respondent can have temporary order of protection lifted by posting a counterbond in the amount to be determined by the court. Rule 5.10.Relief against court action. - If respondent was given an opportunity to be heard on a petition for an interim measure of protection, any order by the court shall be immediately executory, but may be the subject of a motion for reconsideration and/or appeal or, if warranted, a petition for certiorari. Rule 5.11. Duty of the court to refer back. - The court shall not deny an application for assistance in implementing or enforcing an interim measure of protection ordered by an arbitral tribunal on any or all of the following grounds:

a. The arbitral tribunal granted the interim relief ex parte; or b. The party opposing the application found new material evidence, which the arbitral tribunal had not considered in granting in the application, and which, if considered, may produce a different result; or c. The measure of protection ordered by the arbitral tribunal amends, revokes, modifies or is inconsistent with an earlier measure of protection issued by the court. If it finds that there is sufficient merit in the opposition to the application based on letter (b) above, the court shall refer the matter back to the arbitral tribunal for appropriate determination. Rule 5.13.Modification, amendment, revision or revocation of court’s previously issued interim measure of protection. - Any court order granting or denying interim measure/s of protection is issued without prejudice to subsequent grant, modification, amendment, revision or revocation by the arbitral tribunal as may be warranted. An interim measure of protection issued by the arbitral tribunal shall, upon its issuance be deemed to have ipso jure modified, amended, revised or revoked an interim measure of protection previously issued by the court to the extent that it is inconsistent with the subsequent interim measure of protection issued by the arbitral tribunal. IMPORTANT PROVISION DAW (Rule 5.13) So in other words, pwede ka mag apply for prov rem before the courts and after that pwede ka pa mag apply before the arbitral tribunal, provided that the two prov rem are not inconsistent with each other. Rule 5.14.Conflict or inconsistency between interim measure of protection issued by the court and by the arbitral tribunal. - Any question involving a conflict or inconsistency between an interim measure of protection issued by the court and by the arbitral tribunal shall be immediately referred by the court to the arbitral tribunal which shall have the authority to decide such question. Rule 5.15.Court to defer action on petition for an interim

measure of protection when informed of constitution of the arbitral tribunal. - The court shall defer action on any pending

petition for an interim measure of protection filed by a party to an arbitration agreement arising from or in connection with a dispute thereunder upon being informed that an arbitral tribunal has been constituted pursuant to such agreement. The court may act upon such petition only if it is established by the petitioner that the arbitral tribunal has no power to act on any such interim measure of protection or is unable to act thereon effectively. What are the different provisional remedies that can be granted by the arbitral tribunal? After the constitution of the arbitral tribunal, what are the prov rem that can be applied? Page 16 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

Sec. 28 (b) The following rules on interim or provisional relief shall be observed: (1) Any party may request that provision relief be granted against the adverse party: (2) Such relief may be granted: (i) to prevent irreparable loss or injury: (ii) to provide security for the performance of any obligation; (iii) to produce or preserve any evidence; or (iv) to compel any other appropriate act or omission. (3) The order granting provisional relief may be conditioned upon the provision of security or any act or omission specified in the order. (4) Interim or provisional relief is requested by written application transmitted by reasonable means to the Court or arbitral tribunal as the case may be and the party against whom the relief is sought, describing in appropriate detail the precise relief, the party against whom the relief is requested, the grounds for the relief, and evidence supporting the request. (5) The order shall be binding upon the parties. (6) Either party may apply with the Court for assistance in Implementing or enforcing an interim measure ordered by an arbitral tribunal. (7) A party who does not comply with the order shall be liable for all damages resulting from noncompliance, including all expenses, and reasonable attorney's fees, paid in obtaining the order's judicial enforcement. These remedies can be applied before the arbitral tribunal upon the constitution of the arbitral tribunal. When is the arbitral tribunal deemed constituted? The arbitral tribunal is deemed constituted when the sole arbitrator or the third arbitrator who has been nominated, has accepted the nomination and written communication of said nomination and acceptance has been received by the party making request (Sec 28, first paragraph, mid sentence). Just for emphasis, a party who does not comply with the provisional orders shall be liable for all damages (including all expenses and reasonable attorney's fees)

ARBITRATORS AND ARBITRAL TRIBUNAL PRINCIPLE OF COMPETENCE-COMPETENCE The Special ADR Rules recognize the principle of competence-competence, which means that the arbitral tribunal may initially rule on its own jurisdiction,

including any 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, Special ADR Rules) 2.4. Policy implementing competence-competence principle. - The arbitral tribunal shall be accorded the first Rule

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. 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. 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. Principle of competence-competence, may rule on its own jurisdiction and any objection with respect to the existence or validity of the arbitration agreement. Who appoints the arbitrators? The parties to the arbitration agreement.

QUALIFICATIONS ARBITRATORS Legal age and full enjoyment of civil rights Must know how to read and write

DISQUALIFICATION Section 10. Qualifications of arbitrators. - Any person appointed to serve as an arbitrator must be of legal age, in fullenjoyment of his civil rights and know how to read and write. 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. 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. 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 Page 17 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

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: (a) To waive circumstances; or

the

presumptive

disqualifying

(b) To declare the office of such arbitrator vacant. Any such vacancy shall be filled in the same manner as the original appointment was made. Modal Law disqualifications: •

Related by law or marriage within the 6th degree to either

•

re controversy or cause to be decided proceedings (please see Modal law)

•

if he has any personal bias which might prejudice the right of a party to a fair and impartial award

•

appointing advocate

•

if there are justifiable doubts as to his impartiality

•

he does not possess the qualifications agreed upon by the parties

Take note that in both DA and ICA, it is not necessary that the arbitrators have any special training or experience or admitted to the Philippine bar. How about foreigners? Are they allowed to act as arbitrators? If it is ICA, yes. If it is DA, yes unless the parties impose qualifications on nationality. There can be an appointment of a foreign arbitrator under EO 1008. What if in the arbitration agreement, the parties failed to provide a method for replacing an arbitrator, what is the remedy? Rule 6.1 (Special ADR Rules) Rule 6.1.When the court may act as Appointing Authority. The court shall act as Appointing Authority only in the following instances: a. Where any of the parties in an institutional arbitration failed or refused to appoint an arbitrator or when the parties have failed to reach an agreement on the sole arbitrator (in an arbitration before a sole arbitrator) or when the two designated arbitrators have failed to reach an agreement on the third or presiding arbitrator (in an arbitration before a panel of 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; b. 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 upon is ineffective, and the National President of the Integrated Bar of the Philippines (IBP) or his duly authorized representative fails or refuses to act within such period as may be allowed under the pertinent rules of the IBP or within such period as may be agreed upon by the parties, or in the absence thereof, within thirty (30) days from receipt of such request for appointment; c. Where the parties agreed that their dispute shall be resolved by three arbitrators but no method of appointing those arbitrators has been agreed upon, each party shall appoint one arbitrator and the two arbitrators thus appointed shall appoint a third arbitrator. If a party fails to appoint his arbitrator within thirty (30) days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within a reasonable time from their appointment, the appointment shall be made by the Appointing Authority. If the latter 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 may request the court to appoint an arbitrator or the third arbitrator as the case may be. Take note that under this rule, appointment of arbitrators exclusive ito ha. The court shall act as appointing authority only in such cases. Rule 6.2.Who may request for appointment. - Any party to an arbitration may request the court to act as an Appointing Authority in the instances specified in Rule 6.1 above. Rule 6.3.Venue. - The petition for appointment of arbitrator may be filed, at the option of the petitioner, in the Regional Trial Court (a) where the principal place of business of any of the parties is located, (b) if any of the parties are individuals, where those individuals reside, or (c) in the National Capital Region. Rule 6.4.Contents of the petition. -The petition shall state the following: a. The general nature of the dispute; b. If the parties agreed on an appointment procedure, a description of that procedure with reference to the agreement where such may be found; c. The number of arbitrators agreed upon or the absence of any agreement as to the number of arbitrators; d. The special qualifications that the arbitrator/s must possess, if any, that were agreed upon by the parties; e. The fact that the Appointing Authority, without justifiable cause, has failed or refused to act as such within the time prescribed or in the absence thereof, Page 18 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

within a reasonable time, from the date a request is made; and f. The petitioner is not the cause of the delay in, or failure of, the appointment of the arbitrator. Apart from other submissions, the petitioner must attach to the petition (a) an authentic copy of the arbitration agreement, and (b) proof that the Appointing Authority has been notified of the filing of the petition for appointment with the court. This is through a verified petition. Rule 6.8.Forum shopping prohibited. - When there is a pending petition in another court to declare the arbitration agreement inexistent, invalid, unenforceable, on account of which the respondent failed or refused to participate in the selection and appointment of a sole arbitrator or to appoint a partynominated arbitrator, the petition filed under this rule shall be dismissed.

challenge the qualification of arbitrator. Where do you raise challenge on judicial restrain? Arbitral tribunal. If challenge is not successful, you raise it before the appointing authority. Before the court, only if the appointing authority refuses to act on the challenge. (So ang step kay arbitral tribunal – appointing authority – court) Challenge to the appointment. Rule 7.1.Who may challenge. - Any of the parties to an arbitration may challenge an arbitrator.

Rule 6.9.Relief against court action. - If the court appoints an arbitrator, the order appointing an arbitrator shall be immediately executory and shall not be the subject of a motion for reconsideration, appeal or certiorari. An order of the court denying the petition for appointment of an arbitrator may, however, be the subject of a motion for reconsideration, appeal or certiorari.

Rule 7.2.When challenge may be raised in court. - When an arbitrator is challenged before the arbitral tribunal under the procedure agreed upon by the parties or under the procedure provided for in Article 13 (2) of the Model Law and the challenge is not successful, the aggrieved party may request the Appointing Authority to rule on the challenge, and it is only when such Appointing Authority fails or refuses to act on the challenge within such period as may be allowed under the applicable rule or in the absence thereof, within thirty (30) days from receipt of the request, that the aggrieved party may renew the challenge in court.

How many arbitrators are to be appointed by the parties?

Nationality is not a ground unless the parties require or impose nationality qualifications.

If ICA, how many?

Rule 7.5. Contents of the petition. - The petition shall state the following:

Parties are free to agree on how many arbitrators are to be appointed. Failing such determination, number of arbitrators shall be 3. Additional arbitrators may also be appointed by the parties but the same must be in writing. Likewise a substitute arbitrator can also be appointed.

a. The name/s of the arbitrator/s challenged and his/their address; b. The grounds for the challenge;

Take note of the qualifications and the disqualifications.

c. The facts showing that the ground for the challenge has been expressly or impliedly rejected by the challenged arbitrator/s; and

Can you challenge the appointment of an arbitrator? If yes, what are the grounds?

d. The facts showing that the Appointing Authority failed or refused to act on the challenge.

Rule 7.4. Grounds. - An arbitrator may be challenged on any of the grounds for challenge provided for in Republic Act No. 9285 and its implementing rules, Republic Act No. 876 or the Model Law. The nationality or professional qualification of an arbitrator is not a ground to challenge an arbitrator unless the parties have specified in their arbitration agreement a nationality and/or professional qualification for appointment as arbitrator.

The court shall dismiss the petition motu proprio unless it is clearly alleged therein that the Appointing Authority charged with deciding the challenge, after the resolution of the arbitral tribunal rejecting the challenge is raised or contested before such Appointing Authority, failed or refused to act on the challenge within thirty (30) days from receipt of the request or within such longer period as may apply or as may have been agreed upon by the parties.

So based on the disqualifications if you want to challenge their appointment.

Rule 7.7. Court action. - After hearing, the court shall remove the challenged arbitrator if it finds merit in the petition; otherwise, it shall dismiss the petition.

Rule 7.3. Venue. - The challenge shall be filed with the Regional Trial Court (a) where the principal place of business of any of the parties is located, (b) if any of the parties are individuals, where those individuals reside, or (c) in the National Capital Region.

The court shall allow the challenged arbitrator who subsequently agrees to accept the challenge to withdraw as arbitrator. The court shall accept the challenge and remove the arbitrator in the following cases:

So immediately you resort to court action if you want to Page 19 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

a. The party or parties who named and appointed the challenged arbitrator agree to the challenge and withdraw the appointment. b. The other arbitrators in the arbitral tribunal agree to the removal of the challenged arbitrator; and c. The challenged arbitrator fails or refuses to submit his comment on the petition or the brief of legal arguments as directed by the court, or in such comment or legal brief, he fails to object to his removal following the challenge. The court shall decide the challenge on the basis of evidence submitted by the parties. The court will decide the challenge on the basis of the evidence submitted by the parties in the following instances: a. The other arbitrators in the arbitral tribunal agree to the removal of the challenged arbitrator; and b. If the challenged arbitrator fails or refuses to submit his comment on the petition or the brief of legal arguments as directed by the court, or in such comment or brief of legal arguments, he fails to object to his removal following the challenge. Rule 7.8. No motion for reconsideration, appeal or certiorari. Any order of the court resolving the petition shall be immediately executory and shall not be the subject of a motion for reconsideration, appeal, or certiorari. There is no law prescribing the liability of said arbitrators. In other words, no liability for wrong decisions of arbitrators. But he incurs liability if he does not discharge his duties as required of him (Contractual liability to the parties). His acceptance carries with it the undertaking to discharge his duties faithfully. CF LUZON DEVELOPMENT VS. ASSOCIATION OF DEVELOPMENT BANK: Rule applicable to judges by analogy to arbitrators? Since they act in a quasijudicial capacity? Yes. So dapat competent, impartial and independent. How about civil liability for judicial errors? SANTOS VS. ORLINO (296 SCRA 101): Yes, he can be liable for error that is gross, patent, deliberate or incurred with evident bad faith.

February 1, 2016 (EAE) Just a review: Can the arbitral tribunal grant provisional remedies? A: Yes, the arbitral tribunal can grant provisional remedies. How about the court? A: The court can also provide provisional remedies, under Rule 5 of the Special ADR Rules.

When can we go to the court for the grant of provisional remedies? Rule 5.2. When to petition. A petition for an interim measure of protection may be made (a) before arbitration is commenced, (b) after arbitration is commenced, but before the constitution of the arbitral tribunal, or (c) 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. Please take note class ha, interim measures of protection, to be applied before the court: How about challenging your arbitrator? You want to challenge the qualification of an arbitrator. Where do you raise your challenge? First with the arbitral tribunal; Second before the appointing authority if the aggrieved party so requests, and; Third before the court only if the appointing authority fails or refuses to act on your challenge. Take note that you cannot immediately go to the court to challenge the qualifications of the arbitrator. Because if you go immediately to the court, what will happen to your petition? It will be dismissed, motu proprio by the court, as provided for under Rule 7.5 of the Special ADR. In relation to an arbitrator, can you go to court to request it for the termination of the functions or mandate of an arbitrator? A: Yes, under Rule 8.1. Rule 8.1. Who may request termination and on what grounds.Any of the parties to an arbitration may request for the termination of the mandate of an arbitrator where an arbitrator becomes de jure or de facto unable to perform his function or for other reasons fails to act without undue delay and that arbitrator, upon request of any party, fails or refuses to withdraw from his office. Rule 8.2, when do you make a request? Rule 8.2. When to request. If an arbitrator refuses to withdraw from his office, and subsequently, the Appointing Authority fails or refuses to decide on the termination of the mandate of that arbitrator within such period as may be allowed under the applicable rule or, in the absence thereof, within thirty (30) days from the time the request is brought before him, any party may file with the court a petition to terminate the mandate of that arbitrator. Rule 8.3. Venue. A petition to terminate the mandate of an arbitrator may, at that petitioner’s option, be filed with the Regional Trial Court Page 20 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

(a) where the principal place of business of any of the parties is located, (b) where any of the parties who are individuals resides, or (c) in the National Capital Region. Where do you file? It is to be filed before the RTC where the principal place of business of any of the parties is located, or where any of the parties or individuals resides, or in the national capital region. Rule 8.4. Contents of the petition. - The petition shall state the following: a. b. c. d.

The name of the arbitrator whose mandate is sought to be terminated; The ground/s for termination; The fact that one or all of the parties had requested the arbitrator to withdraw but he failed or refused to do so; The fact that one or all of the parties requested the Appointing Authority to act on the request for the termination of the mandate of the arbitrator and failure or inability of the Appointing Authority to act within thirty (30) days from the request of a party or parties or within such period as may have been agreed upon by the parties or allowed under the applicable rule.

The petitioner shall further allege that one or all of the parties had requested the arbitrator to withdraw but he failed or refused to do so. That’s why you cannot immediately resort to court and request the court for the termination of the arbitrator, specifically under Rule 8.4 (D). So kailangan siya i-allege. Rule 8.6. Court action. After hearing, if the court finds merit in the petition, it shall terminate the mandate of the arbitrator who refuses to withdraw from his office; otherwise, it shall dismiss the petition. Rule 8.7. No motion for reconsideration or appeal. Any order of the court resolving the petition shall be immediately executory and shall not be subject of a motion for reconsideration, appeal or petition for certiorari. Rule 8.8. Appointment of substitute arbitrator. Where the mandate of an arbitrator is terminated, or he withdraws from office for any other reason, or because of his mandate is revoked by agreement of the parties or is terminated for any other reason, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced. So please take note of Rule 8 class.

A: It is the place designated by the parties themselves. Section 30, 9285. SEC. 30. Place of Arbitration. The parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be in Metro Manila, unless the arbitral tribunal, having regard to the circumstances of the case, including the convenience of the parties shall decide on a different place of arbitration. The arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts, or the parties, or for inspection of goods, other property or documents. Okay, so please take note of Section 30, place of arbitration. Firstly, based on the agreement of the parties, and in case of no agreement, then it shall be in Metro Manila, but the arbitral tribunal has to take into consideration the convenience of the parties, because precisely, arbitration is for the convenience of the parties. How about the language to be used? SEC. 31. Language of the Arbitration. The parties are free to agree on the language or languages to be used in the arbitral proceedings. Failing such agreement, the language to be used shall be English in international arbitration, and English or Filipino for domestic arbitration, unless the arbitral tribunal shall determine a different or another language or languages to be used in the 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. The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or determined in accordance with paragraph 1 of this section. Also in relation to the place chosen by the arbitral tribunal, just for emphasis, it has to take into consideration the convenience of the parties. By convenience, it is meant that it must have some relevant ot the contract and should not impose any undue hardship upon one or the other party of the contract in terms of attending the hearings or presenting the witnesses. That’s why it’s for the convenience of the parties. When is the commencement of arbitral proceedings? A: it is commenced on the date on which a request for that dispute to be referred to arbitration is received by the respondent. How about the law of procedure, what law will govern if it is domestic arbitration?

ARBITRATION PROCEEDINGS Where does the place of arbitration take place?

A: As a general rule it depends upon the agreement of the parties, but since both types of arbitration are to be held in the Philippines, it is subject to what limitation? Page 21 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

Since the seat of arbitration is in the Philippines, it is subject to Philippine law, under the doctrine of lex loci arbitrae. And you relate that to Rule 2.3. Rule 2.3. Rules governing arbitral proceedings. - The parties are free to agree on the procedure to be followed in the conduct of arbitral proceedings. Failing such agreement, the arbitral tribunal may conduct arbitration in the manner it considers appropriate. So please take note of Rule 2.3. Again, general rule, they are free to agree on the procedure to be followed in the conduct of arbitral proceedings, subject to the limitation of the Philippine law. When you say due process in relation to arbitral proceedings, what is meant by that? Please take note class ha, due process when applied to arbitration proceeds: 1.

That the party is given a chance to be heard and submit his evidence

2.

The tribunal must consider the tribunal presented

3.

The tribunal must have something to support its decision

4.

The evidence must be substantial, only substantial

5.

The decision be rendered on evidence presented or contained in the proceedings

6.

It must be rendered in such a manner that the parties can know the issues involved and the reasons for the decision (Ang Tibay vs. CIR)

Are hearing required to be conducted before the arbitrators? A: The general rule is that if it is international commercial arbitration, there should be hearing. The exception is if the arbitral tribunal may or may not hold hearings for the presentation of evidence or oral arguments. What is the exception to the exception? If the parties have agreed that no hearings shall be held. Please take note. Unless the parties agree that no hearings shall be held. What is the requirement of the law with regard to the exception of the exception? Walang hearings, paano magdecide ang tribunal? Section 18. 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 refers to what kind of arbitration? It refers to a domestic arbitration. Please don’t be confused. When you say R.A. 876, it refers to domestic arbitration. If it is international commercial arbitration, it is governed by the model law. If it is international commercial arbitration, can hearings be dispensed with by the arbitral tribunal? It can be dispensed with, and the basis for saying it is Article 24, Paragraph 1 of the Model Law. So domestic arbitration, proceeding without hearings is found under Section 18 of the Arbitration Law. International commercial arbitration, it is found under Article 24, Paragraph 1 of the Model Law. Role of arbitrators, we already know that they should be partial because diba, he performs quasi-judicial functions. The arbitrator is the sole judge of the relevancy and materiality of the evidence offered. But take note he is not bound by the Rules of Court, because decision is based only on substantial evidence. Barbers vs. Lavio, 351 SCRA 606: Here the SC ruled that arbitrators are like judges in cases before them. They should be afforded a reasonable leeway in asking questions to witnesses as may be essential to elicit relevant facts and bring out the truth. He can properly intervene in the presentation of evidence to prevent unnecessary delay. Is the arbitrator bound to conform to the Rules of Court? No. it is not, under Section 15 of Arbitration Law. How about presentation of experts during hearing? Is it required? In both international commercial arbitration as well as domestic arbitration, experts may be presented during the conduct of hearings before the arbitral tribunal.

DEFAULT AWARDS Can the arbitral tribunal declare the party in default? A: Remember, the arbitral tribunal is not bound to conform to the rules of court. Okay class, take note. If it is domestic arbitration there can be no declaration of default. That’s why no default award, because the hearing may proceed in the absence Page 22 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

of any party who after due notice fails to be present at such hearing or fails to obtain an adjournment thereof.

How about partial and separate sanctioned by the arbitration law?

Does it make mention of a declaration of default of the party?

Rendering of separate or partial award?

No. We do not follow the Rules of Court. So no declaration of default. If it is international commercial arbitration, the basis there is found in Section 25 of the Model Law. If the claimant fails to make his statement of claim, what is the effect? The arbitral tribunal will terminate the proceedings. If the respondent fails to communicate his statement of defense, what is the effect? The arbitral tribunal shall continue proceedings without treating such failure as an admission of the claimant’s allegations. And any party who fails to appear at a hearing or to produce documentary evidence, the effect is that the arbitral tribunal may continue proceedings and make award on evidence before it. It does not mention of declaration of default by a party unlike in your CivPro diba. Is arbitration considered a practice of law? An individual who is not a member of the Philippine bar may represent any party in both international and domestic arbitration. Under Section 22 of RA 9285, in international arbitration conducted in the Philippines, a party may be presented by any person of his choice. Provided, that such representative, unless admitted to the practice of law in the Philippines, shall not be authorized to appear as counsel in any Philippine court, or any other quasi-judicial body whether or not such appearance is in relation to the arbitration in which he appears.

FEBRUARY 22, 2016 (JRL)

ARBITRATION AWARDS Who renders the arbitral awards? It is the Arbitral Tribunal. How does this arbitral tribunal render its award? It is through voting. By a majority vote of its members providing that it is the tribunal composed of more than one arbitrator. General Rule: Majority vote UNLESS otherwise agreed upon by the parties. How about under the abitration law? Under the arbitration law, it can be assumed that by majority vote because the arbitration clause is silent on the matter so arbitration clause, same, by majority vote of the arbitrators. Otherwise, it can be rendered by the sole arbitrator.

PARTIAL AND SEPARATE AWARD

award?

Is

this

Section 5, Rule 36. So in other words, the arbitral tribunal can render partial or separate final award because the rules of court apply by analogy particularly section 5 of rule 36. Section 5 (Rules 35). Separate Judgments. When more than one claim for relief is presented in an action, the court, at any stage, upon a determination of the issues material to a particular claim and all counterclaims arising out of the transaction or occurence which is the subject matter of the claim, may render a separate judgment disposing of such claim. the judgment shall terminate the action with respect to the claim so disposed of and the action shall proceed as to the remaining claims. in case a separate judgment is rendered the court by order may stay its enforcement until the rendition of a subsequent judgment or judgments and may prescribe such conditions as may be necessary to secure the benefit thereof to the party in whose favor the judgment is rendered. Take note in the case of Tambaoan vs. CA, 365 scra 359: Separate awards are analogous to judgments that are partial but final in nature because they put an end to a particular matter or to some defined and separate branch of controversy. But there is a caveat: although arbitral tribunals can render separate awards, this prerogative should be used carefully and sparingly to achieve the objective of arbitration of rendering a speedy and expeditious resolution of the entire controversy and not just an aspect of it. What is this settlement in the form of arbitral award? Assuming in the course of arbitral proceedings, yung mga parties to the said case nag sabot sabot sila na mag compromise na lang ta kay dugay pa, what is that settlement award? Form of arbitral award? Section 20 of the Arbitration Law (RA 876). 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. This applies to domestic arbitration. How about under the Modal Law? Are they allowed to settle if it is international commercial arbitration? The same. Section 30 of the Modal Law. If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall Page 23 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed term.

Section 31, Modal Law 1)

The award shall be made in writing and shall be signed by the arbitrator or arbitrators. In arbitral proceedings with more than one arbitrator, the signatures of the majority of all members of the arbitral tribunal shall suffice, provided that the reason for any omitted signature is stated.

2)

During conduct of arbitration, if the parties will agree to settle then arbitral tribunals will render a settlement award. it applies to both domestic and international commercial arbitration.

The award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given or the award is an award on agreed terms under article 30.

3)

Sec 20, Arbitration Law. Arbitrators can decide only on those matters that have been submitted to them.

The award shall state its date and the place of arbitration as determined in accordance with article 20 (1). The award shall be deemed to have been made at that place.

4)

After the award is made, a copy signed by the arbitrators in accordance with paragraph (1) of this article shall be delivered to each party

An award on agreed terms shall be made in accordance with the provisions of article 31 and shall state that it is an award. Such an award has the same status and effect as any other award on the merits of the case.

This applies by analogy to international commercial arbitraiton. Asset Privatization vs. CA: SC ruled that arbitrators cannot resolve issues beyond the scope of the submission agreement, the parties to such an agreement are bound by the arbitrator's award, only to the extent and in the manner prescribed by the contract and only if the award is rendered in conformity thereto. Also the scope of arbitrators authority should be interpreted broadly so that the arbitration may serve its purpose. Even if it was not agreed upon by the parties, gi-resolve gihapon sa arbitrator because SC said that arbitration as a mode of settling dispute would put an end to the controversy. Pero we stick to the GR.

TIME TO RENDER AWARD When does the arbitral tribunal render its award? If it is ICA, depends upon the agreement of the parties wherein the tribunal has rendered an award. This is an alternative way of settling your dispute. No specific timeframe. If domestic, 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.

So, discretionary tanan sa parties. So much leeway is given to the parties.

FORM OF AWARD Regarding the form of award, statement of facts and law. Form as to the arbitral award. So distinguish again. If ICA

If domestic arbitration Section 20 (RA 876) 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. 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. Is this still applicable under RA 9285? (Rafael was citing cases which I cannot find in the TSN; Tama iya answer pero I can't hear him properly. Sorry)

RULES APPLICABLE TO THE SUBSTANCE OF DISPUTE What law will apply on the substance of the dispute that will be used by the arbitrators when it renders its award? If ICA Article 28 (Modal Law) Rules applicable to substance of dispute: 7.

The arbitral tribunal shall decide the dispute in accordance Page 24 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

with such rules of law as are chosen by the parties as applicable to the substance of the dispute. Any designation of the law or legal system of a given State shall be construed, unless otherwise expressed, as directly referring to the substantive law of that State and not to its conflict of laws rules.

In the absence of agreement, arbitral tribunal will decide on how the arbitral proceedings shall be conducted.

8.

Failing any designation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.

Article 19 of the Modal Law. Subject to the provisions of this Law, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings.

9.

The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorized it to do so.

10.

In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction.

Failing such agreement, the arbitral tribunal may, subject to the provisions of this Law, conduct the arbitration in such manner, as it considers appropriate. The power conferred upon the arbitral tribunal includes the power to determine the admissibility, relevance, materiality and weight of any evidence.

So ICA, the seat of arbitration is in the Philippines. Art. 28 says na it depends on the agreement of the parties. Ano mag-apply considering the seat is here? The law recognizes that the agreement of both the parties will be respect subject to limitations. What are these limitations? 

It is not contrary to public policy



It is not contrary to the unversally accepted principle of morality



Penal in nature



It is purely fiscal or administrative in character



Would work undeniable justice to the citizens or resident of the Philippines



Would work against the vital interest or national seciruity of the Philippines

If domestic It depends upon the agreement of the parties? Can the arbitral tribunal apply equity in resolving the dispute? Yes. Summary as to substative aspect of arbitration, the law grants the parties the freedom to choose the applicable substantive law and the option as regards the designation of the law applicable to the substance of the dispute. So, substantive law or law on the merits.

LAW OF PROCEDURE

If ICA (Wala na gi-differentiate ni Mam if naa ba difference sa DA and ICA kay same lang man pero I copied the provision on Modal Law para klaro)

CORRECTION, MODIFICATION AND INTERPRETATION OF ARBITRAL AWARD Is correction of an arbitral award allowed before the arbitral tribunal? If ICA Article 33 of the Modal Law. Within thirty days of receipt of the award, unless another period of time has been agreed upon by the parties: party, with notice to the other party, may request the arbitral tribunal to correct in the award any errors in computation, any clerical or typographical errors or any errors of similar nature; if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award. If the arbitral tribunal considers the request to be justified, it shall make the correction or give the interpretation within thirty days of receipt of the request. The interpretation shall form part of the award. The arbitral tribunal may correct any error of the type referred to in paragraph (1)(a) of this article on its own initiative within thirty days of the date of the award. Unless otherwise agreed by the parties, a party, with notice to the other party, may request, within thirty days of receipt of the award, the arbitral tribunal to make an additional award as to claims presented in the arbitral proceedings but omitted from the award. If the arbitral tribunal considers the request to be justified, it shall make the additional award within sixty days. The arbitral tribunal may extend, if necessary, the period of time within which it shall make a correction, interpretation or an additional award under paragraph (1) or (3) of this article.

It depends upon the agreement of the parties involved, DA and ICA. So the parties may agree on the application on rules of procedure governing the arbitration other than those set forth in the Philippine law. The choice of the Philippines as the seat of arbitration means that the arbitration itself is subject to Philippine law.

The provisions of article 31 shall apply to a correction or interpretation of the award or to an additional award.

Assuming hindi magka-agree upon in both, what law of procedure will apply?

In DA, correction of arbitral award before the arbitral tribunal is not allowed since the arbitral tribunal loses its authority or jurisdiction the moment it renders its

If domestic

Correction is allowed in ICA but not in DA. If DA

Page 25 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

decision. So if DA, recourse is not with the tribunal but with the courts.

arbitration proceedings; c)

The grounds relied upon by the parties in seeking the vacation of the arbitral award whether the petition is a petition for the vacation or setting aside of the arbitral award or a petition in opposition to a petition to confirm the award; and

d)

A statement of the date of receipt of the arbitral award and the circumstances under which it was received by the petitioner.

Rule 11.1. Who may request confirmation, correction or vacation. Any party to a domestic arbitration may petition the court to confirm, correct or vacate a domestic arbitral award. 11.2. When to correction/modification or vacation. Rule

request

confirmation,

(A) Confirmation. - At any time after the lapse of thirty (30) days from receipt by the petitioner of the arbitral award, he may petition the court to confirm that award. (B) Correction/Modification. Not later than thirty (30) days from receipt of the arbitral award, a party may petition the court to correct/modify that award.

Apart from other submissions, the petitioner must attach to the petition the following: a)

An authentic copy of the arbitration agreement;

b)

An authentic copy of the arbitral award;

(C) Vacation. Not later than thirty (30) days from receipt of the arbitral award, a party may petition the court to vacate that award.

c)

A certification against forum shopping executed by the applicant in accordance with Section 5 of Rule 7 of the Rules of Court; and

Rule 11.4. Grounds. – x x x

d)

An authentic copy or authentic appointment of an arbitral tribunal.

(B) To correct/modify an arbitral award. - The Court may correct/modify or order the arbitral tribunal to correct/modify the arbitral award in the following cases: 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;

b)

Where the arbitrators have awarded upon a matter not submitted to them, not affecting the merits of the decision upon the matter submitted;

c)

Where the arbitrators have omitted to resolve an issue submitted to them for resolution; or

d)

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.

copies

of

the

REVIEW | REVIEW | REVIEW Correction of an arbitral award – If DA - Not allowed before the arbitral tribunal becase the arbitral tribunal loses its jurisdiction upon rendition of award. So any of the parties to the arbitration agreement where there is correction, remedy is judicial recourse before the RTC through a petition to correct or modify a domestic arbitral award. If ICA - correction is allowed before the tribunal provided such correction refers only to errors in computation, any clerical or typographical errors or to any errors of similar nature. When will this be filed? Within 3 month period because under the law, an award rendered in ICA becomes final after 3 months from receipt of the decision.

Please take note of these grounds. FINALITY OF AWARDS VENUE Rule 11.3. Venue. The petition for confirmation, correction/modification or vacation of a domestic arbitral award may be filed with Regional Trial Court having jurisdiction over the place in which one of the parties is doing business, where any of the parties reside or where arbitration proceedings were conducted.

CONTENTS OF PETITION Rule 11.6. Contents of petition. The petition must state the following: a)

The addresses of the parties and any change thereof;

b)

The jurisdictional issues raised by a party during

If ICA, 3 months from receipt of decision. If it is DA, it becomes final upon lapse of 30 days after the award is delivered to the parties or lawyers if they are reprsented by counsel.

CONFIDENTIALITY RULE Everything that is connected to the arbitration proceeding is considered as confidential. As a GR, records, etc are considered confidential. SEC. 23. Confidential of Arbitration Proceedings. The arbitration proceedings, including the records, evidence and the arbitral award, shall be considered confidential and shall not be published except (1) with the consent of the parties, or (2) for the limited purpose of disclosing to the court of relevant Page 26 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

documents in cases where resort to the court is allowed herein. Provided, however, that the court in which the action or the appeal is pending may issue a protective order to prevent or prohibit disclosure of documents or information containing secret processes, developments, research and other information where it is shown that the applicant shall be materially prejudiced by an authorized disclosure thereof.

Enforceability of the Arbitration Agreement; b. Referral to ADR; c. Interim Measures of Protection; d. Appointment of Arbitrator; e. Challenge to Appointment of Arbitrator; f. Termination of Mandate of Arbitrator;

Feb 29, 2016

g. Assistance in Taking Evidence;

Coverage for First Exam: Up to before Recourse Against Awards, so that is everything before our topic tonight.

h. Confidentiality/Protective Orders; and

So our final exam: Recourse Against Awards, Enforceability of Awards, then Mediation and lastly JDR.

March 7, 2016 (JRL) Coverage for First Exam: Everything up to the Special Rules of ADR. Rule 1.1. Subject matter and governing rules. 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;

i. Deposit and Enforcement of Mediated Settlement Agreements. Please take note in certain cases, it is governed by summary proceedings. When you say summary proceedings, under the special ADR rules, what is meant by that? (A) Service and filing of petition in summary proceedings. The petitioner shall serve, either by personal service or courier, a copy of the petition upon the respondent before the filing thereof. Proof of service shall be attached to the petition filed in court. For personal service, proof of service of the petition consists of the affidavit of the person who effected service, stating the time, place and manner of the service on the respondent. For service by courier, proof of service consists of the signed courier proof of delivery. If service is refused or has failed, the affidavit or delivery receipt must state the circumstances of the attempted service and refusal or failure thereof. Just read letter B. (C) Summary hearing. In all cases, as far as practicable, the summary hearing shall be conducted in one (1) day and only for purposes of clarifying facts. (D) Resolution. The court shall resolve the matter within a period of thirty (30) days from the day of the hearing.

j. Recognition and Enforcement of a Foreign Arbitral Award;

Just read Rule 1.4

k. Confidentiality/Protective Orders; and

Rule 1.5. Certification Against Forum Shopping. A Certification Against Forum Shopping is one made under oath made by the petitioner or movant:

l. Deposit and Enforcement of Mediated Settlement Agreements. Please take note of the subject matter and governing rules. Rule 1.2. Nature of the proceedings. All proceedings under the Special ADR Rules are special proceedings. These are regarded as special proceedings.

(a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and

Rule 1.3. Summary proceedings in certain cases. The proceedings in the following instances are summary in nature and shall be governed by this provision:

(c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforementioned petition or motion has been filed.

a. Judicial Relief Involving the Issue of Existence, Validity or

A Certification Against Forum Shopping shall be appended to all Page 27 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

initiatory pleadings except a Motion to Refer the Dispute to Alternative Dispute Resolution. What is the effect if there is no CAFS? It will be dismissed because it is mandatory in character. Rule 1.6. Prohibited submissions. The following pleadings, motions, or petitions shall not be allowed in the cases governed by the Special ADR Rules and shall not be accepted for filing by the Clerk of Court: a. Motion to dismiss; b. Motion for bill of particulars; c. Motion for new trial or for reopening of trial; d. Petition for relief from judgment; e. Motion for extension, except in cases where an ex-parte temporary order of protection has been issued; f. Rejoinder to reply; g. Motion to declare a party in default; and h. Any other pleading specifically disallowed under any provision of the Special ADR Rules. The court shall motu proprio order a pleading/motion that it has determined to be dilatory in nature be expunged from the records. Rule 1.7, just read the provision. Rule 1.8. Service and filing of pleadings, motions and other papers in non-summary proceedings. - The initiatory pleadings shall be filed directly with the court. The court will then cause the initiatory pleading to be served upon the respondent by personal service or courier. Where an action is already pending, pleadings, motions and other papers shall be filed and/or served by the concerned party by personal service or courier. Where courier services are not available, resort to registered mail is allowed.

(A) Proof of filing. - The filing of a pleading shall be proved by

its existence in the record of the case. If it is not in the record, but is claimed to have been filed personally, the filing shall be proved by the written or stamped acknowledgment of its filing by the clerk of court on a copy of the same; if filed by courier, by the proof of delivery from the courier company.

(B) Proof of service. - Proof of personal service shall consist of a

written admission by the party served, or the official return of the server, or the affidavit of the party serving, containing a full statement of the date, place and manner of service. If the service is by courier, proof thereof shall consist of an affidavit of the proper person, stating facts showing that the document was deposited with the courier company in a sealed envelope, plainly addressed to the party at his office, if known, otherwise at his residence, with postage fully pre-paid, and with instructions to the courier to immediately provide proof of delivery.

(C) Filing and service by electronic means and proof thereof. Filing and service of pleadings by electronic transmission may be allowed by agreement of the parties approved by the court. If the filing or service of a pleading or motion was done by electronic transmission, proof of filing and service shall be made in accordance with the Rules on Electronic Evidence. This refers to non-summary proceedings. In relation to Rule 1.6, why is it that letters A-H are prohibited submissions? Because allowing that would be dilatory and those submissions are dilatory in nature. Imbis mag dali ka,

madugay na nuon.

Rule 1.9. No summons. - In cases covered by the Special ADR Rules, a court acquires authority to act on the petition or motion upon proof of jurisdictional facts, i.e., that the respondent was furnished a copy of the petition and the notice of hearing. (A) Proof of service. - A proof of service of the petition and notice of hearing upon respondent shall be made in writing by the server and shall set forth the manner, place and date of service. (B) Burden of proof. - The burden of showing that a copy of the petition and the notice of hearing were served on the respondent rests on the petitioner. The technical rules on service of summons do not apply to the proceedings under the Special ADR Rules. In instances where the respondent, whether a natural or a juridical person, was not personally served with a copy of the petition and notice of hearing in the proceedings contemplated in the first paragraph of Rule 1.3 (B), or the motion in proceedings contemplated in the second paragraph of Rule 1.3 (B), the method of service resorted to must be such as to reasonably ensure receipt thereof by the respondent to satisfy the requirement of due process. Please take note of Rule 1.9. No summons will be issued by the court because the respondent was furnished with a copy of the petition. Rule 1.11 Definitions. x x x "Appointing Authority" shall mean the person or institution named in the arbitration agreement as the appointing authority; or the regular arbitration institution under whose rule 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 arbitrators shall be made by the National President of the Integrated Bar of the Philippines or his duly authorized representative. So, appointing authority, that is a technical term. Just read Rule 1.12 and 1.13. Page 28 of 29

ALTERNATIVE DISPUTE RESOLUTION TRANSCRIPTION © From the lectures of Atty. Catherine Guerzo-Barrion | AY 2015 to 2016 Ateneo de Davao College of Law | Tres Manresa

Rule 2.1. General policies. - It is the policy of the State to actively promote the use of various modes of ADR and to respect party autonomy or the freedom of the parties to make their own arrangements in the resolution of disputes with the greatest cooperation of and the least intervention from the courts. To this end, the objectives of the Special ADR Rules are to encourage and promote the use of ADR, particularly arbitration and mediation, as an important means to achieve speedy and efficient resolution of disputes, impartial justice, curb a litigious culture and to de-clog court dockets. The court shall exercise the power of judicial review as provided by these Special ADR Rules. Courts shall intervene only in the cases allowed by law or these Special ADR Rules. With regard to the second paragraph, that is a reiteration on the policy of judicial restraint that the courts will intervene only in the cases allowed by law or special adr rules. Rule 2.2. Policy on arbitration.- (A) 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.

(B) Where court intervention is allowed under ADR Laws or the Special ADR Rules, courts shall not refuse to grant relief, as provided herein, for any of the following reasons:

a. Prior to the constitution of the arbitral tribunal, the court finds that the principal action is the subject of an arbitration agreement; or b. The principal action is already pending before an arbitral tribunal. The Special ADR Rules recognize the principle of competencecompetence, which means that the arbitral tribunal may initially rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement or any condition precedent to the filing of a request for arbitration.

The Special ADR Rules recognize the principle of separability of the arbitration clause, which means that said clause shall be treated as an agreement independent of the other terms of the contract of which it forms part. A decision that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause. Take note that under Rule 2.2. So the policy of the law here is policy on arbitration. Even if the case is still pending, and the court finds that there is an arbitration agreement, it should suspend its proceedings and refer the case to arbitration. What is meant by (B), even if it is already pending before the arbitral tribunal, you can still go to the court to seek judicial relief, pwede ka mag ask for provisional remedies. It will not be ousted of its jurisdiction. 2.4. Policy implementing competence-competence principle. - The arbitral tribunal shall be accorded the first Rule

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. 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. 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. The court makes only a prima facie finding. With regard the third paragraph, take note, if the court finds that the arbitration agreement is valid, effective and capable of being performed, what should the court do? The case should be referred to arbitration. Please take note of this. So rule 3, the issue here is on the existence, validity and enforceability of the arbitration agreement. Can you resolve to court action prior (to) commencement of arbitration? Of course you can (that is in Rule 3). I will include in your exam Rules 1, 2, 3, 4, 5, 6, 7, 8, (9, 10 excluded, 13, 14 excluded) 18, 19 (specifically mentioned 19.12, 19.26, 19.36) Please take note of those. Yung di na mention, I will exclude that. (***So excluded ang 11 na murag important?) END OF FIRST EXAM COVERAGE (KJ)

Page 29 of 29