ADR TSN 2019 FULL (Without Reports)

ADDU LAW 3RD YEAR 2019
ILAGAN (11/20) sector participation? Remember that in Alternative

Dispute Resolution, there is always the participation of
PRELIMINARIES a neutral third party who will assist the parties in
arriving at an amicable settlement. Take note, the
ultimate objective of ADR is to change the litigious
RA 9285 or the Alternative Dispute Resolution Act
attitude of both litigants and their counsels to
of 2004. Take note that the law was approved on April
immediately resort to courts, which is why there is an
2, 2004 and took effect on April 28, 2004. RA 9285 is a
overwhelming backlog of court cases. So that note
special law which institutionalizes the use of Alternative
what Chief Justice stated, that the backlog of court
Dispute Resolution system in the Philippines and
cases is the overuse, misuse, and abuse of courts.
established the office for the Alternative Dispute
Again, the backlog of court cases is the overuse, the
Resolution, that is based on section 1 of RA 9285. So
misuse, and the abuse of the courts. Just for emphasis,
to understand what RA 9285 is, let’s visit the state
as a corollary measure, if we want to restore the proper
policy of the law.
rule of the judiciary, it should be the forum of the last
recourse of the private disputes.
STATE POLICY
DEFINITION
So RA 9285 aims to what?
1. To promote party autonomy and the
Let’s go to the definition of Alternative Dispute
resolution of disputes. Please take note of the Resolution. It is any process or procedure used to
term party autonomy. resolve a dispute or controversy, other than by
2. Promote the use of ADR as a means to adjudication of a presiding judge of a court or an
achieve speedy and impartial justice de-clog officer of a government agency, in which a neutral
court dockets. third party participates to assist in the resolution of
3. To provide the means for the use of ADR as issues, which includes arbitration, mediation,
an efficient tool and alternative procedure for conciliation, early neutral evaluation, mini-trial, or
the resolution of appropriate cases. Take note any combination thereof. Please take note that under
resolution of appropriate cases.
RA 9285, the choice is given to the parties to the
4. To enlist active private sector participation in
dispute to choose the mode of resolving their
the settlement of disputes through ADR
differences. Please take note of that.
Please take note of the state policy.
Let’s go first to promotion of party autonomy in the (a) "Alternative Dispute Resolution System" means any
resolution of disputes. What is meant by party process or procedure used to resolve a dispute or
autonomy? It is the freedom of the parties to make their controversy, other than by adjudication of a presiding
own arrangements for the resolution of their disputes. judge of a court or an officer of a government agency,
as defined in this Act, in which a neutral third party
Second state policy is the promotion of the use of ADR participates to assist in the resolution of issues, which
as a means to achieve speedy and impartial justice and includes arbitration, mediation, conciliation, early
declog court dockets. What is meant by this? So neutral evaluation, mini-trial, or any combination
assuming there is already a pending case in court and thereof;
that parties agreed to undergo mediation process, what
will happen to that case? The case will be dismissed What happened in the case of LM Power Engineering
because of the compromise agreement that will be vs Capitol Industrial Construction Groups? The
submitted to the Court for its approval. Please take Supreme Court ruled the ADRs provide solution that
note. So with regard to the second state policy are less consuming, less tedious, less confrontational
declogging court dockets because obviously it will put and more productive of goodwill and lasting
an end to a pending litigation through a compromise relationships. In the case of Cargill Philippines vs
agreement between the parties. San Fernando, please take note that the enactment of
RA 9285 on April 2, 2004 further institutionalized the
Third, it is an efficient tool and alternative procedure for use of Alternative Dispute Resolution systems
the resolution of appropriate cases. So what is being including arbitration in the settlement of disputes.
emphasized by the third state policy? What rule under Please take note of this case. Another case is RCBC
your Civil Procedure can be connected to the third state vs BDO and BDO vs CA, here the Supreme Court
policy? During the pre-trial under Rule 18 of your Rules ruled that ADR was envisioned as an important means
of Court. So again, with regard to the third state policy, to achieve a speedy and impartial justice and declog
it restores the importance of the priority position under the court dockets. The most important feature of
Rule 18 on pre-trial or amicable settlement of cases. arbitration and the key to its success is the public’s
Please take note of that. confidence and trust in the integrity of the process.
Please take note of these cases.
Lastly, enlist private sector participation in the
settlement of disputes. Why is there an active private HISTORY
1
Ilagan, Murray, Repolidon, Rodriguez, Singanon, Tan
Judicial Dispute Resolution, the judge is the neutral

Let’s go to the historical antecedent of Alternative third person
Dispute Resolution. First it is found in the Spanish Civil
Code of 1889. So under this, it empowers the parties What are the exemptions from the application of
to submit their dispute for an arbitral decision. The R.A 9285?
leading case here is the case of Contoba v. Conte 2
phil 445, it speaks about arbitration and the 1. Labor Disputes - the labor code provides for
enforceability of the arbitration clause its own method of arbitration
2. Civil Status of Persons - Under the Civil Code,
Next you have the Civil Code of 1950, specifically the status of the person is not subject to
under Art.2024, it recognizes the validity of a arbitration compromise
clause which provides that a arbitral award is final. 3. Jurisdiction of Courts - conferred by law
4. Future Legitim - since future legitim is not
Next we have RA 876 or the Arbitration Law was subject to compromise or a waiver
approved in June 19 1953. Then we have the 5. Criminal Liability - the interest person is the
construction industry arbitration law or E.O 1008, so all State
construction disputes is governed by E.O 1008. Lastly 6. Those which by law cannot be compromised
ADR act of 2004.
Did R.A 9285 repeal or amend our system of Barangay

ARBITRATION
Justice? It did not amend, it merely provided another
Lets go to the definition of Arbitration :
method to resolve disputes.
FORMS (d) "Arbitration" means a voluntary dispute resolution

process in which one or more arbitrators, appointed in
Let’s go to the forms of ADR. The first form is accordance with the agreement of the parties, or rules
mediation. What is meant by Mediation? There is a promulgated pursuant to this Act, resolve a dispute by
third party which is the mediator. When you say rendering an award;
mediator, there are two kinds of mediation. We have This a technical definition found in R.A 9285.
the court annexed mediation and court referred Arbitration comes from the latin term “Arbitraryo”
mediation. What is a court annexed mediation? It is a
mediation process conducted under the auspices of the BENEFITS OF ARBITRATION
court after the court has acquired jurisdiction. For court .
referred, the case was prematurely filed because there Arbitration as a form of ADR that is beneficial, there are
is an agreement between the parties. perceived benefits of arbitration.
What is an evaluation of third person? The neutral third 1. Arbitral awards as a general rule is
person will make a non-binding assessment of the immediately attained finality unlike court
case. During the judicial dispute resolution, the judge decisions which subject to several remedies.
becomes a neutral third person and will make a pre- 2. Subject to enforceability in foreign jurisdiction.
judgement, so there is a non-binding assessment It is through various international conventions
made by a neutral third person. especially on New York Convention signed by
120 countries including the Philippines. This
Mini trial? It means a structured dispute resolution foreign arbitral award is easier to enforce than
method in which the merits of a case are argued before a foreign judgment since foreign judgment
a panel comprising senior decision makers with or needs to proven as a fact.
without the presence of a neutral third person after 3. Neutrality means parties can submit
which the parties seek a negotiated settlement. Ganun themselve to equal footing since they can
pa din, mag re-refer siya ng non-binding advisory agree on the matters taken up in arbitration
opinion on the matter. 4. Specialized competence which means may
select highly specialized arbitrator of their
(u) "Mini-Trial" means a structured dispute resolution choice provided they are independent.
method in which the merits of a case are argued before 5. Party participation since in arbitration can
a panel comprising senior decision makers with or agree on most of the matter unlike courts
without the presence of a neutral third person after while are bound by the Rules of Court
which the parties seek a negotiated settlement; 6. Speedy
7. Privacy and Confidentiality means that parties
may stipulate that the proceedings and
Mediation Arbitration is a a combination of any of the
decision will be private
forms of ADR
8. Cost to some extent since you do not have to
pay Court fees, Sheriff fees, etc.
2
When is arbitration international? According to R.A

SALIENT FEATURES 9285
1. The parties to an arbitration agreement have
1. First they prescribed the rules of arbitration at the time of their agreement there place of
2. It incorporates as part of the model law of the business is in different states
international commercial arbitration. 2. Where either The place of arbitration under
3. It makes the model law applicable to that agreement or the place where the
international commercial arbitration. substantial part of the obligations of the
 So you take a look at the model commercial relationship is to be performed or
when talking about international the subject matter of the dispute is situated
commercial arbitration and outside the Philippines
strengthening it through specific 3. The Parties has expressly agreed
provision of RA 9285 and it
strengthens domestic arbitration by What makes it commercial in nature? Take a look at
making specific provisions of the Sec. 21 of R.A 9285
model and RA 9285 pertain to
international commercial arbitration SEC. 21. Commercial Arbitration. - An arbitration is
4. It designates an appointing authority with the "commercial" if it covers matters arising from all
power to designate a arbitrator for a party in relationships of a commercial nature, whether
default situations. contractual or not. Relationships of a transactions: any
5. It provides a broad and uniform form of trade transaction for the supply or exchange of goods
provisional relief in international commercial or services; distribution agreements; construction of
and domestic arbitration works; commercial representation or agency; factoring;
6. It sets the basic principles in the enforcement leasing, consulting; engineering; licensing; investment;
of foreign arbitral awards financing; banking; insurance; joint venture and other
forms of industrial or business cooperation; carriage of
Pertinent law which are the primary sources of goods or passengers by air, sea, rail or road.
arbitration:
1. RA 9258
Take note: Domestic arbitration of what law governs
2. RA 876 refers to domestic arbitration
domestic arbitration under Sec.32 of R.A 9285
3. E.O 1008 governs all construction disputes
4. Article 2042 - 2046 in relation Articles 2028- SEC. 32. Law Governing Domestic Arbitration. -
2041 of the civil code Domestic arbitration shall continue to be governed by
5. Provision of the Labor Code, rules and Republic Act No. 876, otherwise known as "The
regulations relating to the resolution of Arbitration Law" as amended by this Chapter. The term
grievance arising from the interpretation and "domestic arbitration" as used herein shall mean an
interpretation of the CBA arbitration that is not international as defined in Article
6. Clearing house rules and regulation, governs (3) of the Model Law.
arbitration on check disputes
7. Case laws SEC. 33. Applicability to Domestic Arbitration. - Article
8. New York Convention on the recognition and 8, 10, 11, 12, 13, 14, 18 and 19 and 29 to 32 of the
enforcement of foreign arbitral awards Model Law and Section 22 to 31 of the preceding
Chapter 4 shall apply to domestic arbitration.
Types of Arbitration taking place in the Philippines
1. Domestic Arbitration - An arbitration that is When we speak of international commercial arbitration
not international where the proceedings are that is governed by the model law and certain
held in and where the award is rendered or provisions of ADR law.
the seat of arbitration is in the Philippines and
does not have any of the characteristics which (v) "Model Law" means the Model Law on International
makes it international. Commercial Arbitration adopted by the United Nations
2. International commercial Arbitration - The Commission on International Trade Law on 21 June
arbitration proceeding is held in the 1985;
Philippines but it involves a dispute arising
from a commercial relationship that possess
any of the characteristics which makes it
international.
Note: The seat of the arbitration and the award is in the MURRAY (12/04)
Philippines
3
THE AREAS OF OPERATION OF 1. all unresolved grievances arising

from the interpretation or implementation of
ARBITRATION the Collective Bargaining Agreement and
2. those arising from the interpretation
Take note of the following terms:
1. Voluntary Arbitration or enforcement of company personnel
2. Compulsory Arbitration policies referred to in the immediately
3. Preventive Arbitration preceding article.
3. violations of a Collective Bargaining
I. ARBITRATION UNDER THE LABOR CODE Agreement, except those which are gross in
character, shall no longer be treated as unfair
So, first, we have Article 260 of the Labor Code.
labor practice and shall be resolved as
grievances under the Collective
ART. 260. Grievance machinery and voluntary
arbitration. - The parties to a Collective Bargaining Bargaining Agreement. For purposes of this
Agreement shall include therein provisions that will article, gross violations of Collective
ensure the mutual observance of its terms and Bargaining Agreement shall mean flagrant
conditions. They shall establish a machinery for the and/or malicious refusal to comply with the
adjustment and resolution of grievances arising from economic provisions of such agreement.
the interpretation or implementation of their
4. upon agreement of the parties, shall
Collective Bargaining Agreement and those arising
from the interpretation or enforcement of company also hear and decide all other labor disputes
personnel policies. including unfair labor practices and
bargaining deadlocks.
All grievances submitted to the grievance machinery 5. Also the disputes mentioned under
which are not settled within seven (7) calendar days Article 217 of the Labor Code or which the LA
from the date of its submission shall have original and exclusive jurisdiction
AUTOMATICALLY BE REFERRED TO VOLUNTARY
ARBITRATION prescribed in the Collective Bargaining
Agreement. The Commission, its Regional Offices and
the Regional Directors of the Department of
For this purpose, parties to a Collective Bargaining Labor and Employment shall not entertain
Agreement shall name and designate in advance a disputes, grievances or matters under the
Voluntary Arbitrator or panel of Voluntary exclusive and original jurisdiction of the
Arbitrators, or include in the agreement a procedure Voluntary Arbitrator or panel of Voluntary
for the selection of such Voluntary Arbitrator or
Arbitrators and shall immediately dispose
panel of Voluntary Arbitrators, preferably from the
listing of qualified Voluntary Arbitrators duly accredited and refer the same to the Grievance
by the Board. In case the parties fail to select a Machinery or Voluntary Arbitration provided
Voluntary Arbitrator or panel of Voluntary Arbitrators, in the Collective Bargaining Agreement
the Board shall designate the Voluntary Arbitrator or
panel of Voluntary Arbitrators, as may be necessary, What happened in the case of San Jose vs. NLRC
pursuant to the selection procedure agreed upon in the
Collective Bargaining Agreement, which shall act with VICENTE SAN JOSE vs NLRC
the same force and effect as if the Arbitrator or panel
of Arbitrators has been selected by the parties as
Vicente San Jose, in his position paper, states that
described above. he was hired sometime in July 1980 as a stevedore
continuously until he was advised in April 1991 to retire
What are the subject of voluntary arbitration under from service considering that he already reached 65
the Labor Code? years old. That accordingly, he did apply for retirement
and was paid P3,156.39 for retirement pay.
Take note of Article 261 regarding the jurisdiction
of the voluntary arbitrators Contentions of Ocean Terminal Services:
ART. 261. Jurisdiction of Voluntary Arbitrators or San Jose only worked on rotation basis and not
panel of Voluntary Arbitrators. - The Voluntary seven days a week due to numerous stevedores who
Arbitrator or panel of Voluntary Arbitrators shall have cannot all be given assignments at the same time; That
original and exclusive jurisdiction (take note of this) he performed stevedoring job only on call, so while he
to hear and decide: was connected with the company for the past 11 years,
he did not actually render 11 years of service;That the
burden of proving that San Joses latest salary was
4
P200.00 rests upon him; That he already voluntarily jurisdiction arising from the interpretation and
signed a waiver of quitclaim.The Labor Arbiter decided implementation of the CBA.
the case solely on the merits of the complaint. 3. The VA can exercise jurisdiction
over any other disputes between the
LA arrived at the computation that the retirement employer and a union and an individual which
differential is P25,443.70. includes disputes mentioned under 217 of the
LC which the LA has jurisdiction provided that
NLRC reversed LA on the ground that the differential there is an agreement between the Union and
being claimed by San Jose is based on their CBA and the management.
as provided under the Labor Code, interpretation or
implementation of CBA should be referred by the LA to So pwede pala i-subject to VA basta lang may
the grievance machinery or voluntary arbitrator. agreement. So termination disputes and ULP, can that
be subject to VA?
ISSUE: Who has jurisdiction over the dispute? VA
YES, provided that there is an agreement.
HELD: VA has exclusive jurisdiction over unresolved
grievances So please take note also of the case of San Miguel
As provided under the Labor Code, the NLRC Corporation vs NLRC (255 SCRA 133), here the SC
correctly ruled that the Labor Arbiter had no jurisdiction said the provision in the CBA stating that wages,
to hear and decide petitioners money-claim conditions of employment or of E-E, shall be settled by
underpayment of retirement benefits, as the arbitration is not sufficient to remove the ULP dispute
controversy between the parties involved an issue from the jurisdiction of the LA to VA. What happened
arising from the interpretation or implementation of a here?
provision of the collective bargaining agreement. The
Voluntary Arbitrator or Panel of Voluntary Arbitrators
has original and exclusive jurisdiction over the San Miguel Corporation vs NLRC
controversy under Article 261 of the Labor Code, and
not the Labor Arbiter. The court, however, will no longer
order the remand of the case The Court will not remand Petitioners posit the basic principle that a collective
the case to the Voluntary Arbitrator or Panel of bargaining agreement is a contract between
Voluntary Arbitrators for hearing. This case has management and labor that must bind and be enforced
dragged on far too long - eight (8) years. Any further in the first instance as between the parties thereto.
delay would be a denial of speedy justice to an aged
retired stevedore. There is further the possibility that In this case, the CBA between the petitioners and
any Decision by the Voluntary Arbitrator or Panel of respondent union provides, under Section 1, Article V
Voluntary Arbitrators will be appealed to the CA, and entitled ARBITRATION, that wages, hours of work,
finally to this Court. Formula adopted by LA will be conditions of employment and/or employer-employee
followed. To recapitulate; the Court hereby rules - relations shall be settled by arbitration.
1.That the NLRC correctly ruled that the LA had no
jurisdiction over the case, because the case involved Petitioners thesis is that the dispute as to the
an issue arising from the interpretation or termination of the union members and the unfair labor
implementation of a Collective Bargaining Agreement; practice should first be settled by arbitration, and not
2.That we adopt the computation formula for the directly by the labor arbiter, following the above
retirement benefits by the LA, and the basis thereof. provision of the CBA, which ought to be treated as the
The respondent must therefore pay the petitioner the law between the parties thereto.
additional amount of Twenty-Five Thousand Four
Hundred Forty-Three and Seventy Centavos The argument is unmeritorious. The law in point is
P25,443.70) Pesos. Article 217 (a) of the Labor Code. It is elementary that
Please take note of this case, here the SC laid down this law is deemed written into the CBA. In fact, the law
the following rules: speaks in plain and unambiguous terms that
1. The jursidiction of the LA and VA termination disputes, together with unfair labor
under 217 and 262 of the Labor Code can practices, are matters falling under the original and
possibly include MONEY CLAIMS arising exclusive jurisdiction of the Labor Arbiter, to wit:
from employer-employee relationship. This is
provided that it arises from the interpretation Article 217. Jurisdiction of Labor Arbiters and the
of the CBA. Commission - (a) Except as otherwise provided under
2. The exclusive and original this Code, the Labor Arbiters shall have original and
jurisdiction of the LA over money claims is exclusive jurisdiction to hear and decide x x x the
limited only to those arising from statutes or following cases involving all workers, whether
contracts other than a CBA whereas when we agricultural or non-agricultural:
say VA, they have original and exclusive (1) Unfair labor practice cases:
5
(2) Termination disputes; interpretation, contract-implementation, or

x x x x x x x x x. interpretation or enforcement of company personnel
policies. Illegal termination disputes - not falling within
The sole exception to the above rule can be found any of these categories - should then be considered as
under Article 262 of the same Code, which provides: a special area of interest governed by a specific
Aricle 262. Jurisdiction over other labor disputes - provision of law.
The voluntary arbitrator or panel of voluntary
arbitrators, upon agreement of the parties, shall also Take note again; UNEQUIVOCAL LANGUAGE pa
hear and decide all other labor disputes including unfair din
labor practices and bargaining deadlocks. (As added
by R.A. 6715) How about in the case of Apalisoc vs Radio
Philippines
We subjected the records of this case, particularly the
CBA, to meticulous scrutiny and we find no Apalisoc vs Radio Philippines
agreement between SMC and the respondent union
that would state in unequivocal language that Petitioner contends in any event that even assuming
petitioners and the respondent union conform to that the voluntary arbitrator had no jurisdiction over the
the submission of termination disputes and unfair case, it would not be in keeping with settled
labor practices to voluntary arbitration. Section 1, jurisprudence to allow a losing party to question the
Article V of the CBA, cited by the herein petitioners, authority of the voluntary arbitrator after it had freely
certainly does not provide so. Hence, consistent with submitted itself to its authority.[16]
the general rule under Article 217 (a) of the Labor The petition is impressed with merit.
Code, the Labor Arbiter properly has jurisdiction over The above-quoted Article 262 of the Labor Code
the complaint filed by the respondent union on provides that upon agreement of the parties, the
February 25, 1991 for illegal dismissal and unfair labor voluntary arbitrator can hear and decide all other labor
practice. disputes.
Contrary to the finding of the Court of Appeals,
The rule is that if we say ULP and termination voluntary arbitration as a mode of settling the
disputes, the LA has original and exlusive jurisdiction dispute was not forced upon respondents. Both
unless the partess AGREE that it will be heard by the parties indeed agreed to submit the issue of validity of
VA. the dismissal of petitioner to the jurisdiction of the
voluntary arbitrator by the Submission Agreement duly
Just for emphasis: the CBA must state in signed by their respective counsels.
UNEQUIVOCAL LANGUAGE that the parties As the voluntary arbitrator had jurisdiction over the
conform to the submission of termination disputes parties controversy, discussion of the second issue is
and unfair labor practices to voluntary arbitration no longer necessary.
What happened to Vivero vs CA. Whether or not the VA had jurisdiction over the case?
Yes, even ULP and bargaining deadlocks. In this
Vivero vs CA case, there is a Submission Agreement duly signed by
their respective counsels thus agreeing.
In San Miguel Corp. v. National Labor Relations What happened in Ludo vs Luym Corp vs SaornidoIn
Commission[21] this Court held that the phrase "all other the course of its business operations, LUDO engaged
labor disputes" may include termination disputes the arrastre services of Cresencio Lu Arrastre Services
provided that the agreement between the Union and (CLAS) for the loading and unloading of its finished
the Company states "in unequivocal language that [the products at the wharf. Accordingly, several arrastre
parties] conform to the submission of termination workers were deployed by CLAS to perform the
disputes and unfair labor practices to voluntary services needed by LUDO. These arrastre workers
arbitration."[22] Ergo, it is not sufficient to merely say were subsequently hired, on different dates, as regular
that parties to the CBA agree on the principle that "all rank-and-file employees of LUDO every time the latter
disputes" should first be submitted to a Voluntary needed additional manpower services. Said
Arbitrator. There is a need for an express stipulation in employees thereafter joined respondent union, the
the CBA that illegal termination disputes should be LUDO Employees Union (LEU), which acted as the
resolved by a Voluntary Arbitrator or Panel of Voluntary exclusive bargaining agent of the rank-and-file
Arbitrators, since the same fall within a special class of employees. The union entered into a collective
disputes that are generally within the exclusive original bargaining agreement with LUDO which provides
jurisdiction of Labor Arbiters by express provision of certain benefits to the employees, the amount of which
law. Absent such express stipulation, the phrase "all vary according to the length of service rendered by the
disputes" should be construed as limited to the areas availing employee.
of conflict traditionally within the jurisdiction of The union requested LUDO to include in its members
Voluntary Arbitrators, i.e., disputes relating to contract- period of service the time during which they rendered
6
arrastre services to LUDO through the CLAS so that mere errors of judgment either as to the law or as to
they could get higher benefits. LUDO failed to act on the facts. Courts are without power to amend or
the request. Thus, the matter was submitted for overrule merely because of disagreement with matters
voluntary arbitration. of law or facts determined by the arbitrators. They will
Petitioner contends that the appellate court gravely not review the findings of law and fact contained in an
erred when it upheld the award of benefits which were award, and will not undertake to substitute their
beyond the terms of submission agreement. Petitioner judgment for that of the arbitrators, since any other rule
asserts that the arbitrator must confine its would make an award the commencement, not the
adjudication to those issues submitted by the end, of litigation. Errors of law and fact, or an erroneous
parties for arbitration, which in this case is the sole decision of matters submitted to the judgment of the
issue of the date of regularization of the arbitrators, are insufficient to invalidate an award fairly
workers. Hence, the award of benefits by the arbitrator and honestly made. Judicial review of an arbitration is,
was done in excess of jurisdiction thus, more limited than judicial review of a trial.
Issue: W/N the arbitrator can award such Nonetheless, the arbitrators awards is not absolute
benefits? and without exceptions. The arbitrators cannot
In construing the above provisions, we held in San resolve issues beyond the scope of the submission
Jose vs. NLRC, that the jurisdiction of the Labor Arbiter agreement.The parties to such an agreement are
and the Voluntary Arbitrator or Panel of Voluntary bound by the arbitrators award only to the extent and
Arbitrators over the cases enumerated in the Labor in the manner prescribed by the contract and only if the
Code, Articles 217, 261 and 262, can possibly include award is rendered in conformity thereto Thus, Sections
money claims in one form or another. Comparatively, 24 and 25 of the Arbitration Law provide grounds for
in Reformist Union of R.B. Liner, Inc. vs. vacating, rescinding or modifying an arbitration
NLRC,compulsory arbitration has been defined both as award. Where the conditions described in Articles
the process of settlement of labor disputes by a 2038, 2039 and 2040 of the Civil Code applicable to
government agency which has the authority to compromises and arbitration are attendant, the
investigate and to make an award which is binding on arbitration award may also be annulled.
all the parties, and as a mode of arbitration where the Against the backdrop of the foregoing provisions and
parties are compelled to accept the resolution of their principles, we find that the arbitrators came out with an
dispute through arbitration by a third party (emphasis award in excess of their powers and palpably devoid of
supplied). While a voluntary arbitrator is not part of the factual and legal basis.
governmental unit or labor departments personnel,
said arbitrator renders arbitration services provided for What is this Submission Agreement, how will you
under labor laws. differentiate that from the arbitration clause?
Generally, the arbitrator is expected to decide only
those questions expressly delineated by the A submission agreement is one referring a
submission agreement. Nevertheless, the arbitrator PRESENT DISPUTE to arbitration, the dispute is
can assume that he has the necessary power to already existing. While an arbitration clause refers a
make a final settlement since arbitration is the final FUTURE dispute to arbitration. In a contract, what is
resort for the adjudication of disputes. In another included, submission agreement or arbitration clause?
case, thus, assuming that the submission empowers Usually, it is the arbitration clause since at the time the
the arbitrator to decide whether an employee was contract was made, the dispute is not yet in existence.
discharged for just cause, the arbitrator in this instance Dili na ta mudwell diria kay kay Father Nazareno na
can reasonable assume that his powers extended ni na area (sana dili pud mudwell sa exam :( )
beyond giving a yes-or-no answer and included the
power to reinstate him with or without back pay. Legal basis daw: 262
What the SC was saying is that even if the award of Lets go to 263 which speaks of Compulsory
benefit is not included in the Submission Agreement Arbitration
but since arbitration is meant to be the final say to the
dispute, then there is an implied power for the arbitrator When, in his opinion, there exists a labor dispute
to rule on that matter. causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the
Secretary of Labor and Employment may assume
How is it different from Asset Privitization Trust vs
jurisdiction over the dispute and decide it or certify the
CA?
same to the Commission for compulsory arbitration.
Such assumption or certification shall have the effect
Asset Privitization Trust vs CA of automatically enjoining the intended or impending
strike or lockout as specified in the assumption or
The nature and limits of the Arbitrators powers.As a certification order. If one has already taken place at the
rule, the award of an arbitrator cannot be set aside for time of assumption or certification, all striking or locked
out employees shall immediately return-to-work and
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the employer shall immediately resume operations and Lets proceed to Construction Contracts
readmit all workers under the same terms and
conditions prevailing before the strike or lockout. The II. CONSTRUCTION CONTRACTS
Secretary of Labor and Employment or the
Commission may seek the assistance of law When we say construction contracts, the specific
enforcement agencies to ensure compliance with this laws that govern are EO 1008, Section 17, 34, and 35
provision as well as with such orders as he may issue of RA 9285.
to enforce the same.
Which body has jurisdiction? CIAC (Construction
If the employees go to strike, is it subject to Industry Arbitration Commission)
mediation?
YES. It is subject to mediation. Legal basis, Article Sec. 4. Jurisdiction. The CIAC shall have original and
263 and Rule 22 of the Omnibus Rules Implementing exclusive jurisdiction over disputes arising from, or
the Provisions of the Labor Code. Ang tawag doon, connected with, contracts entered into by parties
prementive mediation, you read the case of San Miguel involved in construction in the Philippines (take
Corporation vs NLRC. So this mediation can be availed note, Philippines na naman ang seat) , whether the
thru the NCMB. Take note, the procedural requirement dispute arises before or after the completion of the
for a valid strike is a notification to the NCMB. This contract, or after the abandonment or breach thereof.
notice requirement, the absence of will make it illegal. 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.
So please take note of the EXPANDED jurisdiction of

the CIAC, why expanded because of Section 35 of RA
9285.
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 Commission shall continue to exercise original
and exclusive jurisdiction over construction disputes
although the arbitration is "commercial" pursuant to
Section 21 of this Act.
So CIAC, ano ang mode of settling disputes? It is

thru arbitration.
Question: May construction disputes be settled
in other modes of settling disputes? Pwede ba?
Mediation.
SEC. 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.
So, if there is breach of construction contract, where do

you go? So, CIAC.
8
Anong mangyayari, kunwari mag-eenter kayo to agreement exclusive for the Court, rather than the
construction contract? This contract has arbitration CIAC, to resolve the dispute.
clause, pareha ra gihapon. Another question:
What is the principle? Party Autonomy Principle.
What is the condition sine qua non for the CIAC to
acquire jurisdiction over a construction dispute? In the case of China Chang jang Energy
Corporation
There should be a submission agreement or an
arbitration clause. Is it necessary? Yes of course, it is China Chang jang Energy Corporation
necessary.
Contrary to the claim of the DOH, CIAC has
Take note also of the jurisdiction of the CIAC, jurisdiction over the claim of HTMC. As stated in
included: Section 4 of Executive Order No. 1008, also known as
1. Violations of the term of the agreement the "Construction Industry Arbitration Law":
2. Interpretation and/or application of contractual SECTION 4. Jurisdiction. – The CIAC shall have
provisions original and exclusive jurisdiction over disputes arising
3. Award of damages from, or connected with, contracts entered into by
4. Penalties parties involved in construction in the Philippines,
5. Commencement time and delays whether the disputes arises before or after the
6. Maintenance and Defects completion of the contract, or after the abandonment or
7. Payment/Default of Employer or Contractor breach thereof. These disputes may involve
8. Changes in Contract Clauses government or private contracts. For the Board to
acquire jurisdiction, the parties to a dispute must agree
Please take note that the government can be a to submit the same to voluntary arbitration.
party in an arbitration proceeding before the CIAC. Furthermore, Article III, Section 1 of the CIAC Rules
Bakit? Because obviously nagaenter man ang of Procedure Governing Construction Arbitration
government into private contracts. provides:
Question: What happens to a case that is filed with SECTION 1. Submission to CIAC Jurisdiction – An
the RTC regarding a construction dispute? arbitration clause in a construction contract or a
It must be dismissed. Anong ground for the submission to arbitration of a construction dispute shall
dismissal? Legal basis, Section 39 of RA 9285 and be deemed an agreement to submit an existing or
Section 17(d) of RA 9285 future controversy to CIAC jurisdiction, notwithstanding
the reference to a different arbitration institution or
SEC. 39. Court to Dismiss Case Involving a arbitral body in such contract or submission. When a
Construction Dispute. - A regional trial court which a contract contains a clause for the submission of a
construction dispute is filed shall, upon becoming future controversy to arbitration, it is not necessary for
aware, not later than the pretrial conference, that the the parties to enter into a submission agreement before
parties had entered into an arbitration to be conducted the claimant may invoke the jurisdiction of CIAC.
by the CIAC, unless both parties, assisted by their It is undisputed that Article 12 of the four similarly-
respective counsel, shall submit to the regional trial worded consultancy agreements provides for
court a written agreement exclusive for the Court, submission to arbitration of any dispute arising from
rather than the CIAC, to resolve the dispute said agreements.
Petitioner’s reliance and interpretation of the
Supreme Court’s ruling in Jesco Services Incorporated
SEC. 17. Enforcement of Mediated Settlement vs. Vera is misplaced. The same was clarified in a
Agreement. - The mediation shall be guided by the subsequent resolution of the Third Division of the
following operative principles: Supreme Court dated September 30, 1996 in G.R. No.
xxx(d) The parties may agree in the settlement 125706 entitled "China Chang Jiang Energy
agreement that the mediator shall become a sole Corporation (Philippines) versus Rosal Infrastructure
arbitrator for the dispute and shall treat the settlement Builders, represented by its General Manager, Alberto
agreement as an arbitral award which shall be subject S. Surla, Construction Industry Arbitration
to enforcement under Republic Act No. 876, otherwise Commission, Prudencio F. Baranda, and the Court of
known as the Arbitration Law, notwithstanding the Appeals." In effect, the owner-consultant agreement
provisions of Executive Order No. 1008 for mediated entered into by petitioner and private respondents did
dispute outside of the CIAC. not divest CIAC of jurisdiction over the case. For even
if they elected another forum, their agreement will
remain to be within the jurisdiction of CIAC. In so doing,
So anong ibig sabihin non? Sabi natin CIAC, pero
they may not unilaterally divest CIAC of its jurisdiction
sabi naman ng Section 39, pwede pala ang RTC?
Provided that both parties, assisted by their respective as provided for by law.
counsel, shall submit to the regional trial court a written
9
Okay so klaro yun ha? Based on this case, parties to whom was nominated by the international
a construction contract need not specifically agree to party; and
submit a dispute arising thereunder to the CIAC as long (d) the foreign arbitrator shall be of different
as they agree to submit to voluntary arbitration, nationality from the international party.
regardless of what forum they choose, their agreement
will fall under the CIAC. How about International commercial arbitration
(ICA)?
Take note that an arbitration arising S: International Arbitration means an arbitration
where:
How do you define Domestic arbitration (DA)? (a) the parties to an arbitration agreement have, at
the time of the conclusion of that agreement, their
S: Domestic arbitration is where the seat of arbitration places of business in different states; or (b) one of the
is in the Philippines. The contract of construction is in following places is situated outside the Philippines in
the Philippines. It is subject to the jurisdiction of the which the parties have their places of business: a)the
CIAC even if one of the party is an international party place of arbitration if determined in, or pursuant to, the
or a foreign entity. arbitration agreement; b)any place where a substantial
part of the obligations of the commercial relationship is
What happened in the case of National Irrigation to be performed or the place with which the subject
Administration vs CA? matter of the dispute is most closely connected; or (c)
Okay so clear tayo ha, so Construction Disputes the parties have expressly agreed that the subject
again, CIAC ang original and exclusive jurisdiction. matter of the arbitration agreement relates to more than
one country.
Who is an international party?
12/11
(p) "International Party" shall mean an entity whose By: Darcy Repolidon
place of business is outside the Philippines. It shall not
include a domestic subsidiary of such international continuation of CONSTRUCTION DISPUTES
party or a coventurer in a joint venture with a party previous discussion based on the cases of
which has its place of business in the Philippines.  China Chiang Jiang vsRosal
Infrastructure
The term foreigner arbitrator shall mean a person  National Irrigation Administration vs
who is not a national of the Philippines CA
.
Take note that the only concession made by RA 9285 The Principle to be remembered:
to the international character of such arbitration is that - As long as a construction contract
the CIAC even if there is that foreign entitity or contains an Arbitration Clause, any party
international party is that the CIAC may appoint thereto as provide to compel the other to
FOREIGN ARBITRATOR as co-arbitrator or chairmain arbitration before the CIAC even if the other
of the tribunal who is not required to be credited by the party objects to the jurisdiction of the CIAC
CIAC, so please take note of that. because the arbitration calls for an arbitration
before another forum.
So if it will be asked in your exam? When can a In other words, any agreement to arbitrate a
foreign arbitrator be appointed? The answer is in construction dispute before a forum which is not the
Section 37 of RA 9285 CIAC is rendered ineffective.WHY?
- because when we say construction
SEC. 37. Appointment of Foreign Arbitrator. - The dispute, CIAC has exclusive and original
Construction Industry Arbitration Commission (CIAC) jurisdiction.
shall promulgate rules to allow for the appointment of a
foreign arbitrator or coarbitrator or chairman of a QUESTION: What will happen if a case involving
tribunal a person who has not been previously construction dispute is filed before the RTC in violation
accredited by CIAC: Provided, That: of their arbitration agreement? Should it be dismissed?
(a) the dispute is a construction dispute in If Yes, can it be motupropio?
which one party is an international party - because as we said the RTC has no
(b) the person to be appointed agreed to jurisdiction. If you are the other party to the
abide by the arbitration rules and policies of arbitration agreement, what is your remedy?
CIAC; Ano? Magfiletayo ng motion to dismiss or the court
(c) he/she is either coarbitrator upon the will dismiss it mot propio?
nomination of the international party; or Maam: (calling a Classmate) what do u think?
he/she is the common choice of the two CIAC- C: I think, the arbitration agreement should be
accredited arbitrators first appointed one of followed and the case filed in court should be dismiss.
10
M: a party should file a motion to dismiss or the court Take note that even if 1 of the parties in a
should dismiss it motupropio? construction dispute is an international party, that is still
- The Rule is either the court can considered as a DOMESTIC ARBITRATION.
dismiss motupropio the case or a party can Sabi ng law, the only concession provided for by law
file a motion to dismiss is that, the parties can appoint a FOREIGN
- Dahil in the 1st place ARBITRATOR to protect rights of the other party to the
walanamantalagang jurisdiction ang court so construction contract
pwedengipadismiss.
- Besides, the law is very clear that QUESTION: When can a FOREIGN ARBITRATOR
construction disputes falls exclusively within can be appointed?
the CIAC jurisdiction.
The General Rule is Dismiss, unless both party SEC. 37. Appointment of Foreign Arbitrator. -
through the assistance of their counsels, submit to the The Construction Industry Arbitration Commission
RTC a written agreement (agreeing that the court will
(CIAC) shall promulgate rules to allow for the
resolve the issue instead of the CIAC).
appointment of a foreign arbitrator or coarbitrator or
QUESTION: What is reason behind this chairman of a tribunal a person who has not been
EXCEPTION? previously accredited by CIAC: Provided, That:
- because of PARTY AUTONOMY (a) the dispute is a construction dispute
under section 17 (b) and section 39 RA 9285 in which one party is an international
party
SEC. 17. Enforcement of Mediated Settlement
Agreement. - The mediation shall be guided by the (b) the person to be appointed agreed
following operative principles: to abide by the arbitration rules and
(b) The parties and their respective policies of CIAC;
counsels, if any, shall sign the settlement (c) he/she is either coarbitrator upon
agreement. The mediator shall certify that the nomination of the international party;
he/she explained the contents of the or he/she is the common choice of the
settlement agreement to the parties in a
two CIAC-accredited arbitrators first
language known to them.
appointed one of whom was nominated
SEC. 39. Court to Dismiss Case Involving a by the international party; and
Construction Dispute. (d) the foreign arbitrator shall be of
- A regional trial court which a construction different nationality from the international
dispute is filed shall, upon becoming aware, party.
not later than the pretrial conference, that the
parties had entered into an arbitration to be
conducted by the CIAC, unless both parties, ARBITRAL AWARDS in construction disputes are
assisted by their respective counsel, shall IMMEDIATELY EXECUTORY and need not be
submit to the regional trial court a written confirmed by the courts or judicial confirmation (EO
agreement exclusive for the Court, rather than 1008).
the CIAC, to resolve the dispute.
General Rule: All arbitral awards need confirmation
Let’s proceed. from the court for it to be executory.
Under arbitration in RA 9285, take note that any Exception: Arbitral awards in construction disputes.
arbitration involving a dispute arising out of a contract
of construction is regarded as a DOMESTIC QUESTION: Is the rule absolute that awards under
ARBITRATION subject to the jurisdiction of the CIAC EO 1008 is immediately executory and need be
even if 1 of the parties is a foreign entity or an confirmed by the courts? So what happen in the case
International party. of FF Cruz vs HR Construction Corp.
QUESTION: Who is an INTERNATIONAL PARTY? Anginchargemagcase report kay absent.
- The law provides that an
International party is an entity that is existing Maam: dilinatamagsapot-sapotuy, masuko (referring
and organized under a law other than a to the class). walakoy time ana
Philippine law.
Take note that a subsidiary of a foreign law which is Case attached is from the 2015 notes
a subsidiary incorporated under the foreign law is not
considered as an international party. FF CRUZ & CO., INC. v HR CONSTRUCTION
CORP.,
(March 14, 2012)
11
FACTS: implementation of which is necessary and important

In 2004, FFCCI entered into a contract with DPWH for the realization of national development goals.
for a construction of the Magsaysay Viaduct, known Aware of the objective of voluntary arbitration in the
as the Lower Agusan Development Project. In turn, labor field, in the construction industry, and in any
FFCCI entered into a Subcontract agreement with other area for that matter, the Court will not assist
the HR Construction for the supply of materials, one or the other or even both parties in any effort to
labor, equipment and etc. Pursuant to the subvert or defeat that objective for their private
Subcontract Agreement, HRCC would submit to purposes. The Court will not review the factual
FFCCI a monthly progress billing which the latter findings of an arbitral tribunal upon the artful
would then pay, subject to stipulated deductions, allegation that such body had "misapprehended the
within 30 days from receipt thereof. The parties facts" and will not pass upon issues which are, at
agreed that the requests of HRCC for payment bottom, issues of fact, no matter how cleverly
should include progress accomplishment of its disguised they might be as "legal questions."
completed works as approved by FFCCI. HRCC The parties here had recourse to arbitration and
was able to submit 4 progress billing, however said chose the arbitrators themselves; they must have
billing amount were reduced by FFCCI. HRCC had confidence in such arbitrators. x xx (Citation
pursuant to the arbitration clause, filed with re CIAC omitted) Thus, in cases assailing the arbitral award
a complaint against the FFCCI. The CIAC held that rendered by the CIAC, this Court may only pass
the payment method adopted by FFCCI is actually upon questions of law. Factual findings of
what is known as the “back-to-back payment construction arbitrators are final and conclusive and
scheme” which was not agreed upon under the not reviewable by this Court on appeal.
Subcontract Agreement. As such, the CIAC ruled This rule, however, admits of certain exceptions.
that FFCCI could not impose upon HRCC its In Spouses David v. Construction Industry and
valuation of the works completed by the latter. It also Arbitration Commission, we laid down the instances
held that the nonpayment of FFCCI when this Court may pass upon the factual findings
gave HRCC the right to rescind the Subcontract of the CIAC, thus: We reiterate the rule that factual
and work stoppage. Thus, this petition. findings of construction arbitrators are final and
conclusive and not reviewable by this Court on
ISSUE: W/N the Factual finding of CIAC are final appeal, except when the petitioner proves
and conclusive. affirmatively that:
(1) the award was procured by corruption, fraud or
HELD: Generally, the arbitral award of CIAC is other undue means;
final and may not be appealed except on questions (2) there was evident partiality or corruption of the
of law. Executive Order (E.O.) No. 10081vests upon arbitrators or of any of them;
the CIAC original and exclusive jurisdiction over (3) the arbitrators were guilty of misconduct in
disputes arising from, or connected with, contracts refusing to postpone the hearing upon sufficient
entered into by parties involved in construction in the cause shown, or in refusing to hear evidence
Philippines. Under Section 19 of E.O. No. 1008, the pertinent and material to the controversy;
arbitral award of CIAC "shall be final and (4) one or more of the arbitrators were disqualified
inappealable except on questions of law which shall to act as such under section nine of Republic Act
be appealable to the Supreme Court." No. 876 and willfully refrained from disclosing such
In Hi-Precision Steel Center, Inc. v. Lim Kim Steel disqualifications or of any other misbehavior by
Builders, Inc., we explained raison d’ etre for the rule which the rights of any party have been materially
on finality of the CIAC’s arbitral award in this wise: prejudiced; or
Voluntary arbitration involves the reference of a (5) the arbitrators exceeded their powers, or so
dispute to an impartial body, the members of which imperfectly executed them, that a mutual, final and
are chosen by the parties themselves, which parties definite award upon the subject matter submitted to
freely consent in advance to abide by the arbitral them was not made. In this case, what was raised
award issued after proceedings where both parties by FFCCI is actually questions of law in interpreting
had the opportunity to be heard. The basic objective the Subcontract agreement.
is to provide a speedy and inexpensive method of
settling disputes by allowing the parties to avoid the (NB: in case i-ask ni mam about the costs of
formalities, delay, expense and aggravation which arbitration. Here man gud HRCC waived its right to
commonly accompany ordinary litigation, especially rescind contract since it actually continued its
litigation which goes through the entire hierarchy of obligation despite the dispute, contrary to the
courts. Executive Order No. 1008 created an stipulation in the subcontract agreement)
arbitration facility to which the construction industry The costs of arbitration should be shared by the
in the Philippines can have recourse. parties equally.
The Executive Order was enacted to encourage Section 1, Rule 142of the Rules of Court
the early and expeditious settlement of disputes in provides:
the construction industry, a public policy the Section 1. Costs ordinarily follow results of suit.
12
– Unless otherwise provided in these rules, Philippine Commercial International Bank vs

costs shall be allowed to the prevailing party as a CA,
matter of course, but the court shall have power, June 20, 2003
for special reasons, to adjudge that either party PCIB contracted WGCC to construct the 5th to
shall pay the costs of an action, or that the same 21st floors of PCIB Tower II in Makati. Alleging that
be divided, as may be equitable. the granite finish [of the tower] proved to be
No costs shall be allowed against the Republic defective such that after all efforts at negotiations
of the Philippines unless otherwise provided by proved futile it hired another contractor to redo the
law. (Emphasis supplied) defective finish, but that WGCC refused to pay it
actual damages incurred in the process, PCIB filed
Although, generally, costs are adjudged against a request for arbitration with the Construction
the losing party, courts nevertheless have Industry Arbitration Commission (CIAC), praying
discretion, for special reasons, to decree otherwise. that WGCC be held liable for construction
Here, considering that the work stoppage of HRCC deficiencies.
is not justified, it is only fitting that both parties WGCC denied PCIBs claim, it alleging that it
should share in the burden of the cost of arbitration accomplished the project faithfully and in
equally. HRCC had a valid reason to institute the accordance with the specifications-requirements of
complaint against FFCCI in view of the latter’s PCIB which accepted it after due inspection. It
failure to pay the full amount of its monthly progress counterclaimed that PCIB was actually indebted to
billings. However, we disagree with the CIAC and it for material cost adjustment since the cost of
the CA that only FFCCI should shoulder the materials substantially increased in the course of the
arbitration costs. The arbitration costs should be construction of the project.
shared equally by FFCCI and HRCC in view of the The CIAC, found that PCIB was entitled to recover
latter’s unjustified work stoppage. from WGCC the sum of P9,741,829.00 representing
cost of repairs done by another contractor on the
Maam: project. On WGCCs counterclaim, finding that under
1st issue: the decision rendered by the CIAC is the parties contract, increase for labor and materials
immediately final and executory and not subject to an under certain conditions was allowed but that PCIB
appeal. presented no strong, or at best, token opposition to
What are those instances that subject to judicial the evidence presented by WGCC for the escalated
review or When a court may pass upon a factual cost of materials, the CIAC awarded WGCC the
findings of the CIAC? amount of P5,777,157.84. The CIAC accordingly
EXCEPTIONS: disposed as follows:
(1) the award was procured by corruption, After summing up the award to both parties this
fraud or other undue means; TRIBUNAL hereby awards the amount of
(2) there was evident partiality or (P3,964,671.16) to CLAIMANT Philippine
corruption of the arbitrators or of any of them; Commercial Industrial Bank. Respondent William
(3) the arbitrators were guilty of Golangco Construction is hereby ordered to pay the
misconduct in refusing to postpone the stated amount with legal interest of six (6%) percent
hearing upon sufficient cause shown, or in from date of this decision until fully paid.
refusing to hear evidence pertinent and PCIB filed a Motion for Partial Reconsideration of
material to the controversy; the CIAC Decision which is not allowed under
(4) one or more of the arbitrators were Section 9, Article XV of the CIAC Rules of
disqualified to act as such under section nine Procedure. It subsequently filed before the CA a
of Republic Act No. 876 and willfully petition for Certiorari and/or Partial Reviewwhich
refrained from disclosing such may be treated as an original action for certiorari
disqualifications or of any other misbehavior under Rule 65 of the Rules of Court or as a petition
by which the rights of any party have been for review under Circular 1-95 of the Supreme Court,
materially prejudiced; or alleging that the CIAC acted in excess of its
(5) the arbitrators exceeded their powers, jurisdiction and contrary to law in awarding, without
or so imperfectly executed them, that a basis, an amount in favor of WGCC.
mutual, final and definite award upon the To PCIBs petition filed before the CA WGCC filed
subject matter submitted to them was not a Motion to Dismiss with Motion to Cite PCIB
made. In this case, what was raised by Counsel for Contempton the ground that it was filed
FFCCI is actually questions of law in beyond the 15-day reglementary period for filing an
interpreting the Subcontract agreement. appeal, in support of which it alleged that, contrary
to the allegation of counsel for PCIB that he
What happen in the case of Philippine Commercial acquired actual knowledge of the CIAC decision
International Bank vs CA, June 20, 2003 which to file before the CA a petition for
review. Since PCIB filed before the CA its petition
for Certiorari and/or Partial Review, WGCC
13
concluded that it was late by 3 days. WGCC the arbitration have been fully paid to the Secretariat
attached to its motion a certified photocopyof the by the parties or by one of them, the Secretariat shall
pertinent entry in the CIAC logbook showing that notify the parties of the text signed by the Arbitrator
Engineer Bong Nuno received a copy of the decision or Arbitral Tribunal.
for PCIB on June 24, 1996. Additional copies certified true by the Executive
By its assailed Resolution,the CA granted WGCCs Director of the Secretariat shall be made available,
Motion to Dismiss PCIBs petition upon a finding that on request and at any time, to
indeed PCIB received a copy of the CIAC decision the parties or their counsel but to no one
and, therefore, its petition was belatedly filed. On else. (Emphasis and underscoring supplied)
the nature of the petition, the CA held that an original From the immediately-quoted provision of the
action for certiorari under Rule 65 and a petition for CIAC Rules, it is the parties who are to be notified
review under Circular 1-95 of the Supreme Court of the text of the CIAC decision. This answers PCIBs
cannot be the subject of a single pleading. counsels jarring complaint that he was not officially
PCIBs Motion for Reconsideration having been served with a copy of the CIAC decision.
denied by the CA, it comes to this Court by the In fine, copy of the CIAC decision
present petition for Certiorari and Mandamus. having admittedly been served on and received
ISSUE: W/N it was proper for WGCC to file a by PCIB on June 24, 1996, PCIBs counsel cannot
petition for dismissal of the case. assail the validity of such service by now claiming
HELD: NO that the same was ineffective as it was not served
PCIBs counsel disclaims that Engineer Bong on him (counsel) as the duly authorized
Nuno is his employee but submits anyway that he representative of PCIB.
was not authorized to receive the CIAC decision for It is an elementary rule of procedure that
him in his (counsels) capacity as, by his claim, the perfection of an appeal within the reglementary
authorized representative of PCIB. period is not only mandatory but
The present petition fails. also jurisdictional so that failure to do so renders
In the petition for Certiorari and/or Partial Review the questioned decision final and executory, and
of CIAC filed before the CA by PCIB, inasmuch as deprives an appellate court of jurisdiction to alter the
the undersigned counsel ha[s] not officially received final judgment, much less to entertain the appeal.
its copy of the Decision sought to be reviewed PCIB having filed its petition for Certiorari and/or
because the Arbitral Tribunal had such copy served Partial Review after the CIAC decision had become
only on [PCIB], the reglementary period should be final and executory, the CA correctly granted
reckoned from the date when the undersigned WGCCs Motion to Dismiss the same.This leaves it
counsel actually acquired knowledge thereof which unnecessary to pass upon PCIBs plaint about the
was on 28 June 1996 when it filed [PCIBs] Motion CAs refus[al] to allow [its] alternative reliefs for
for Partial Reconsideration. Accordingly, treated as review and/or certiorari. Suffice it to state that the
a Petition for Review. following ruling of this Court instructs:
In the present petition before this Court, PCIBs We have time and again reminded members of the
counsel now alleges that in the CIAC decision, he bench and bar that a special civil action for certiorari
was specifically named as the representative and under Rule 65 lies only when there is no appeal nor
counsel for [PCIB], but since the decision was not plain, speedy and adequate remedy in the ordinary
served on him as the authorized representative of course of law. Certiorari cannot be allowed when a
PCIB but to an employee of [PCIB] on June 24, party to a case fails to appeal a judgment despite
1996, it was only on June 27 (sic), 1996 that [he] the availability of that remedy, certiorari not being a
had actual knowledge of the content of the substitute for lost appeal. The remedies of appeal
decision. (Emphasis supplied). PCIBs counsels and certiorari are mutually exclusive and not
latest position may not be entertained given his alternative or successive (Emphasis supplied,
glaring admission that copy of the CIAC decision citations omitted.)
was duly served on June 24 1996 on PCIB, a party PCIB, at all events, appeals for a relaxation of the
to the case which, as will now be discussed, CIAC Rules given the [substantial] issues and amounts
Rules mandates should be the one to be notified of involved. But even its present petition for certiorari
the text of the decision. and mandamus is not the proper remedy from the
The CIAC Rules of Procedure does not contain a CA Resolution. What it should have filed was a
provision similar to Section 2, Rule 13 of the Revised petition for review under Rule 45 of the Rules of
Rules of Court, reiterated in the 1997 Rules of Civil Court. But even if, in accordance with the liberal
Procedure, which provides that service to any party spirit pervading the Rules of Court and in the interest
represented by counsel should be made upon his of justice, this Court, in the exercise of its discretion,
counsel, unless service upon the party himself is treats the present petition for certiorari as one for
ordered by the court. Instead, Section 7, Article XV review under Rule 45, petitioner has failed to proffer
of the CIAC Rules of Procedure provides: meritorious reasons or arguments for its allowance.
Section 7. Notification of Award to Parties Once WHEREFORE, the present petition is hereby
an award has been made, provided that the costs of DISMISSED.
14
SO ORDERED. In the resolution of these issues, the CIAC

discovered significant data, which were not evident
QUESTION: Who should be notified of the CIAC or explicit in the documents and records but
decision? otherwise revealed or elicited during the hearings,
- It is the PARTY to the action on which the CIAC deemed material and relevant to the
record should be notified complete adjudication of the case
Since the 15-day reglementary period is already
lapsed. The decision of the CIAC is final and executory. The CIAC disposed of the specific money claims
by either granting or reducing them. On Issue No. 9,
Maam: An Arbitration before the CIAC is held in i.e., whether CHATHAM failed to complete and/or
private and the pleadings are confidential. deliver the project within the approved completion
General Rule: With regard to arbitral awards, the period and, if so, whether CHATHAM is liable for
awards by the CIAC are not published. liquidated damages and how much.
Exception: CIAC itself publish a bulletin, in which it
may include abstract of cases in which it has decided. CIAC rendered JUdgement in favor of the
Claimant [MCI] directing Respondent [CHATHAM]
So, what happen in the case of metro Construction to pay Claimant [MCI] the net sum of SIXTEEN
vs Chatham Properties? MILLION ONE HUNDRED TWENTY SIX
METRO CONSTRUCTION, INC. vs. CHATHAM THOUSAND NINE HUNDRED TWENTY TWO &
PROPERTIES, INC. 91/100 (16,126,922.91) PESOS. Impugning the
G.R. No. 141897, September 24, 2001 decision of the CIAC, CHATHAM instituted a petition
for review with the Court of Appeals
FACTS: Respondent Chatham Properties, Inc.
(CHATHAM) and petitioner Metro Construction, Inc. In upholding the decision of the CIAC, the Court of
(MCI) entered into a contract for the construction of Appeals confirmed the jurisprudential principle that
a multi-storey building known as the Chatham absent any showing of arbitrariness, the CIAC's
House. In April 1998, MCI sought to collect from findings as an administrative agency and quasi
CHATHAM a sum of money for unpaid progress judicial body should not only be accorded great
billings and other charges and instituted a request respect but also given the stamp of finality. However
for adjudication of its claims with the CIAC. The the Court of Appeals found exception in the CIAC's
preliminary conference before the CIAC started in disquisition of Issue No.9 on the matter of liquidated
June 1998 and was concluded a month after with damages.
the signing of the Terms of Reference (TOR) of the
Case. In the meantime, the TOR was amended and ISSUE : W/N under existing law and rules the
finalized on 19 August 1998. The facts, as admitted Court of Appeals can also review findings of facts of
by the parties before the CIAC and incorporated in the Construction Industry Arbitration Commission
the original TOR, are as follows: (CIAC).
1. On 21 April 1994, the parties formally entered
into a contract for the construction of the "Chatham HELD:YES
House" . . . for the contract price of price of EO. No. 1008 vest upon the CIAC original and
P50,000,000.00 exclusive jurisdiction over disputes arising from, or
2. On 12 July 1994, a Supplemental Contract was connected with, contracts entered into by parties
executed by and between the parties whereby involved in construction in the Philippines, whether
CHATHAM authorized MCI to procure in behalf of the dispute arises before or after the completion of
the former materials, equipment, etc. the contract, or after the abandonment or breach
3. Under Section I.04 of the Supplemental thereof. By express provision of Section 19 thereof,
Contract, the total amount of procurement and the arbitral award of the CIAC is final and
transportation cost[s] and expenses which may be unappealable, except on questions of law, which are
reimbursed by MCI from CHATHAM shall not appealable to the Supreme Court.
exceed the amount of P75, 000,000.00.
4. In the course of the construction, Change The parties, however, disagree on whether the
Orders No. 1, 4, 8A, 11, 12 and 13 were subsequent Supreme Court issuances on appellate
implemented, procedure and R.A. No. 7902 removed from the
5. CHATHAM reimbursed MCI the amount of Supreme Court its appellate jurisdiction in Section
P60,000.00 corresponding to bonuses advanced to 19 of E.O. No. 1008 and vested the same in the
its workers by the latter for the 14th, 16th, and 17th Court of Appeals, and whether appeals from CISC
floors. awards are no longer confined to questions of law.
6. CHATHAM's payments to MCI totaled
P104,875,792.37, representing payments for Through Circular No. 1-91, the Supreme Court
portions of MCI's progress billings and x xx intended to establish a uniform procedure for the
additional charges.. review of the final orders or decisions of the Court of
15
Tax Appeals and other quasi judicial. The Circular which allegedly incurred delays both during the
designated the Court of Appeals as the reviewing original contract and period of extension. On the
body to resolve questions of fact or of law or mixed other hand, the Steel Builders claimed that the said
questions of fact and law. non-completion of the project was either excusable
or was due to HiPrecision’s own fault and issuance
It is clear that Circular No. 1-91 covers the CIAC. of change orders. The said project was taken over
In the first place, it is a quasi judicial agency. In the and completed by Hi-Precision. Steel Builders
second place, the language of Section 1 of Circular requested for an adjudication with CIAC (Public
No. 1-91 emphasizes the obvious inclusion of the Respondent) and sought payment of its unpaid
CIAC even if it is not named in the enumeration of billings, alleged unearned profits and other
quasi-judicial agencies. In sum, under Circular No. receivables. Hi-Precision on the other hand
1-91, appeals from the arbitral awards of the CIAC claimed for damages and reimbursement of alleged
may be brought to the Court of Appeals, and not to additional costs. The CIAC formed an Arbitral
the Supreme Court alone. The grounds for the Tribunal with 3 members and such tribunal
appeal are likewise broadened to include appeals rendered a decision in favor of Steel Builders Inc
on questions of facts and appeals involving mixed ordering Hi-Precision to pay Steel Builders their
questions of fact and law claim. Hi-Precision then asks the court to set aside
the award on the basis of misapprehension of facts
The jurisdiction of the Court of Appeals over under Rule 45 and 65.
appeals from final orders or decisions of the CIAC is
further fortified by the amendments to B.P. Blg. 129, ISSUE: Whether or not it was correct should set
as introduced by RA. No. 7902. With the aside the ruling of the Arbitral Tribunal.
amendments, the Court of Appeals is vested with
appellate jurisdiction over all final judgments, RULING: No. under Executive Order No. 1008,
decisions, resolutions, orders or awards of Regional as amended, provides, in its Section 19, as follows:
Trial Courts and quasi-judicial agencies, Sec. 19. Finality of Awards. —
instrumentalities, boards or commissions, except The arbitral award shall be
"those within the appellate jurisdiction of the binding upon the parties. It shall
Supreme Court in accordance with the Constitution, be final and inappealable except
the Labor Code of the Philippines under Presidential on questions of law which shall be
Decree No. 442, as amended, the provisions of this appealable to the Supreme Court.
Act, and of subparagraph (1) of the third paragraph Section 19 makes it crystal clear that
and subparagraph (4) of the fourth paragraph of questions of fact cannot be raised in
Section 17 of the Judiciary Act of 1948.". In view of proceedings before the Supreme Court —
all the foregoing, The Supreme Court rejects MCI's which is not a trier of facts — in respect of
submission that Circular No. 1-91, B.P. Blg. 129, as an arbitral award rendered under the aegis
amended by RA. 7902, Revised Administrative of the CIAC. Consideration of the
Circular 1-95, and Rule 43 of the 1997 Rules of Civil animating purpose of voluntary arbitration
Procedure failed to efficaciously modify the in general, and arbitration under the aegis
provision on appeals in E.O. No. 1008. of the CIAC in particular, requires us to
apply rigorously the above principle
QUESTION: What is the mode of appeal when we embodied in Section 19 that the Arbitral
say QUASI-JUDICIAL Bodies? The Petition for Review Tribunal's findings of fact shall be final and
under Rule 43 inappealable.
The court said that it will not assist one or the other
What happen in the case of Hi-Precision Steel Center or even both parties in an effort to subvert or defeat
vs Lim Kim Steel Builders? the objective for their private purposes and also, that
it will not review the factual findings of an arbitral
HI-PRECISION STEEL CENTER INC. v LIM KIM tribunal upon the allegation that such body
STEEL BUILDERS INC. misapprehended facts. The court will not, therefore,
G.R No. 110434, December 13, 1993 permit the parties to relitigatebefore it the issues of
facts previously presented and argued before the
FACTS: Hi-Precision (Petitioner) entered into a Arbitral Tribunal, save only where a very clear
contract with Steel Builders (Private Respondent) showing is made that, in reaching its factual
under which the latter as Contractor was to conclusions, the Arbitral Tribunal committed an error
complete a 21 Million Pesos construction project so hurtful to one party as to constitute a grave abuse
owned by Hi-Precision with a period of 153 days. of discretion resulting on lack or loss of jurisdiction.
The said completion of the project was then moved,
however, when the date came, only 75.8674% of
the project was actually completed. Petitioner Cargill Philippines vs San Fernando Regala
attributed this non-completion to Steel Builders Trading
16
FACTS: QUESTION: What is the proper remedy if you want

Respondent San Fernando Regala Trading filed to question the decision rendered by the CIAC?
with the RTC of Makati City aComplaint for - If the issue involves mix question of
Rescission of Contract with Damages against facts and law or question of law, we resort to
petitioner Cargill.It alleged that it agreed that it would Rule 43 (Petition for Review).
purchase from Cargill 12,000 metric tonsof Thailand
origin cane blackstrap molasses and that the Let’s go to the next case.
payment would beby an Irrevocable Letter of Credit Licomcen Incorporated vs Foundation
payable at sight. The parties agreed thatthe delivery Specialist
would be made in April/May. Cargill failed to comply
with itsobligations despite demands from FACTS: In a Decision promulgated last April 4,
respondent. The respondent then filed forrescission. 2011, the Philippine Supreme Court favored a liberal
reading of an agreement to submit a dispute to
The petitioner filed a Motion to Dismiss/Suspend arbitration before the Construction Industry
proceeding, arguing that theymust first resort to Arbitration Commission (CIAC), ruling that an
arbitration as stated in their agreement before going arbitration clause in a construction contract should
tocourt. However, the RTC ruled in favor of be interpreted in its “widest signification” to enable
the respondent. The CA affirmed theRTC decision, the CIAC to acquire jurisdiction over a construction
adding that the case cannot be brought under the claim.
ArbitrationLaw for the purpose of suspending the The ruling was rendered in the consolidated case
proceedings before the RTC, since inits Motion to of Licomcen, Inc. vs. Foundation Specialists, Inc.,
Dismiss/Suspend proceedings, petitioner alleged, G.R. Nos. 167022 and 169678. The dispute arose
as one of thegrounds thereof,that the between mall developer Licomcen, Inc. and
subjectcontract between the parties did not exist orit contractor Foundation Specialists, Inc. (FSI) over
was invalid; that the said contract bearing the the suspension of certain works and the payment of
arbitration clause was neverconsummated by the billings and other amounts. Licomcen and FSI had a
parties, thus, it was proper that such issue be Construction Agreement, with General Conditions of
firstresolved by the court through an appropriate Contract (GCC), whereby FSI undertook to
trial; that the issue involved aquestion of fact that the construct and install bored piles foundation for the
RTC should first resolve. LCC Citimall project in Legazpi City. Immediately
after signing the agreement, FSI began work on the
ISSUE:Whether the CA erred in finding that this project but in January 1998, Licomcen ordered it to
case cannot be broughtunder the arbitration law for halt construction due to an administrative case filed
the purpose of suspending the proceedings in against officials of the City Government of Legazpi
theRTC. and Licomcen before the Ombudsman.
The suspension was formalized through a letter of
HELD: YES, the petition is meritorious. Licomcen’s engineering consultant, E.S. de Castro
The Supreme Court held that the provision to & Associates (ESCA), to FSI on January 19, 1998.
submit to arbitration any dispute arising between In its reply letters, FSI claimed payment for work and
the parties is part of the contract and is itself a materials. ESCA rejected FSI’s claims in a letter
contract. The arbitration agreement is to be treated dated March 24, 1998. Three years later, FSI sent a
as a separate agreement and does not final demand letter to Licomcen for payment of its
automatically terminate when the contract of which claims. As this letter was ignored, FSI filed a request
it is a part comes to an end. To reiterate a contrary for arbitration with the CIAC in October 2002,
ruling would suggest that a party's mere repudiation claiming upaid billings, costs, unrealized profit,
of the main contract is sufficient to avoid arbitration; attorney’s fees and interest. Licomcen contested the
that is exactly the situation that the separability request, arguing, among others, that
doctrine seeks to avoid. (a) the claims were non-arbitrable because the
San Fernando Regala Trading filed a complaint for arbitration clause provides for the arbitration of
rescission of contract and damages with the trial disputes “in connection with, or arising out of the
court. In so doing, it alleged that a contract existed. execution of the Works,” but FSI’s money claims do
It was that contract which provided for an arbitration not involve a dispute as to the execution of the
clause which expressed the parties' intention that Works since they do not involve an issue as to
any dispute to arise between them, as buyer and physical construction activities; and
seller, should be referred to arbitration. It is for the (b) FSI failed to comply with the condition
arbitrator and not the court to decide whether a precedent that a dispute must first be referred to
contract between the parties exists or is valid. Licomcen for resolution, and such resolution may
Under the circumstances, the argument that only be assailed within 30 days from receipt thereof
rescission is judicial in nature is misplaced. through a notice to contest through arbitration.
The CIAC ruled in favor of FSI, which decision was
upheld with some modification by the Court of
17
Appeals. Both parties moved for reconsideration, contract to agree to submit their dispute to
which was denied. arbitration. The CIAC is given the original and
On appeal, the Supreme Court upheld the Court exclusive jurisdiction over disputes arising from, or
of Appeals’ decision with modification and affirmed connected with, contracts entered into by parties
that the CIAC properly acquired jurisdiction over the involved in construction in the Philippines.This
parties’ dispute. jurisdiction cannot be altered by stipulations
Expansive interpretation of arbitration clause The restricting the nature of construction disputes,
Supreme Court ruled that the CIAC’s jurisdiction appointing another arbitral body, or making that
cannot be limited by the parties’ stipulation that only body’s decision final and binding.
disputes in connection with or arising out of the
execution of the Works are arbitrable before the said
agency. Metropolitan Cebu Water District vs Mactan
According to the Supreme Court, the mere fact Rock Industries
that the parties incorporated an arbitration clause in
their contract ipso facto vested the CIAC with FACTS:MCWD entered into a Water Supply
jurisdiction over any construction controversy or Contract (the Contract) with MRII wherein it was
claim between the parties. The Supreme Court also agreed that the latter would supply MCWD with
added that the parties did not intend to limit resort to potable water, in accordance with the World Health
arbitration only to disputes relating to physical Organization (WHO) standard or the Philippine
construction activities, holding that “an arbitration national standard, with a minimum guaranteed
clause pursuant to E.O 1008 [Construction Industry annual volume. MRII filed a Complaint against
ArbitrationLaw] should be interpreted at its widest MCWD with the CIAC. MRII sought the reformation
signification.” The Tribunal liberally applied the of Clause 17 of the Contract, or the Price
parties’ arbitration clause so that FSI’s money Escalation/De-Escalation Clause, in order to include
claims were considered connected with or arising Capital Cost Recovery in the price escalation
out of construction activities, thereby making such formula, and to have such revised formula applied
claims arbitrable. from 1996 when the bidding was conducted, instead
CIAC jurisdiction not subject to condition of from the first day when MRII started selling water
precedent On the principle that the CIAC’s to MCWD. It also sought the payment of the unpaid
jurisdiction can neither be enlarged nor diminished price escalation/adjustment, and the payment of
by the parties, the Supreme Court also held that unpaid variation/extra work order and interest/cost
such jurisdiction cannot be subject to a condition of money up to December 31, 2003.
precedent. Hence, even if FSI failed to timely MCWD filed its Answer dated April 27, 2004,
contest Licomcen’s denial of its money claims by which included a motion to dismiss the complaint on
filing a proper notice of arbitration within 30 days the ground that the CIAC had no jurisdiction over the
from the denial, the Supreme Court ruled that the case, as the Contract was not one for construction
CIAC acquired jurisdiction of the parties’ dispute due or infrastructure.
to the mere presence of an arbitration clause in their
construction contract. Decision of the CIAC
The CIAC decision, ordering the reformation of
The CIAC was created through Executive Order Clause 17 of the Water Supply Contract and
No. 1008 (E.O. 1008), in recognition of the need to ordering Respondent Metropolitan Cebu Water
establish an arbitral machinery that would District to pay Claimant, MactanRockIndustries,
expeditiously settle construction industry disputes. Inc[.] under the reformed Clause 17 of the Water
The jurisdiction of the CIAC may include but is not Supply Contract, the net amount of
limited to violation of specifications for materials and Php12,126,296.70 plus legal interest of six percent
workmanship; violation of the terms of agreement; (6%) per annum from the (sic) March 15,2004, the
interpretation and/or application of contractual time date of filling (sic) of the case with the Construction
and delays; maintenance and defects; payment, Industry Arbitration Commission, the rate increased
default of employer or contractor and changes in to twelve percent (12%) per annum from the date
contract cost. Excluded from the coverage of this the herein Decision have(sic) become final and
law are disputes arising from employer-employee executory until the foregoing amounts shall have
relationships which shall continue to be covered by been fully paid[.]
the Labor Code of the Philippines.
The CIAC’s jurisdiction cannot be limited by the Decision of the CA in CA-G.R. SP No. 85579 -
parties’ stipulation that only disputes in connection Petition for certiorari under Rule 65 with the Court
with or arising out of the physical construction of Appeals questioning the jurisdiction of the CIAC
activities (execution of the works) are arbitrable Meanwhile, on October 28, 2005, the CA in its
before it. decision in the First Petition upheld
In fact, all that is required for the CIAC to acquire the jurisdiction of the CIAC over the case. The CA
jurisdiction is for the parties to a construction held that when parties agree to settle theirdisputes
18
arising from or connected with construction sake of argument, that it is indeed

contracts, the CIAC acquires primary jurisdiction. erroneous.
Citing Philrock Inc. v. Construction Industry  Where the law does not
Arbitration Commission, the CA statedthat the CIAC delineate, neither should we. Neither the
may resolve not only the merits of such provisions of the Civil Code on reformation
controversies, but may also awarddamages, of contracts nor the law creating CIAC
interest, attorneys fees, and expenses of litigation, exclude reformation in its jurisdiction.
when appropriate. And, Second,the CA held that the Therefore, because the CIAC has been
claims in question fall under the jurisdiction of the held to have jurisdiction over the contract,
CIAC. Thus:MCWDs motion for reconsideration of it follows that it has jurisdiction to order the
the decision in the First Petition was still pending reformation of the contract as well.
when itfiled the petition for review under Rule 43
(Second Petition) appealing the decision of the Maam: Please take note that the jurisdiction of the
CIAC.The motion for reconsideration was eventually CIAC as a quasi-judicial body is confined to
denied in a Resolution dated May 3, 2006.MCWD construction disputes,that is, those arising from, or
did not appeal from the denial of the motion. It, thus, connected to, contracts involving all on-site works on
became final and executory. buildings or altering structures from land clearance
through completion including excavation, erection and
ISSUE: W/N CIAC may exercise jurisdiction over assembly and installation of components and
disputed arising from a water supply contract. equipment.
The CIAC has jurisdiction over all such disputes
HELD: YES, CIAC has Jurisdiction over the case. whether the dispute arises before or after the
The jurisdiction of courts and quasi-judicial bodies completion of the contract.
is determined by the Constitution and the law. It
cannot be fixed by the will of the parties to the So SC interpreted again the jurisdiction of the CIAC.
dispute, nor can it be expanded or diminished by
stipulation or agreement. So what happen in Manila Insurance Company Inc.
The text of Section 4 of E.O. No. 1008 is broad vs Sps. Amurao
enough to cover any dispute arising from, or
connected with, construction contracts, whether Manila Insurance Company Inc. vs Sps.
these involve mere contractual money claims or Amurao
execution of the works. This jurisdiction cannot be
altered by stipulations restricting the nature of FACTS:
construction disputes, appointing another arbitral Spouses Roberto and Aida Amurao (Sps.
body, or making that body’s decision final and Amurao) entered into a Construction Contract
binding. Thus, unless specifically excluded, all Agreement (CCA) with Aegean Construction and
incidents and matters relating to construction Development Corp. (Aegean) for the construction of
contracts are deemed to be within the jurisdiction of a six-storey commercial building. To guarantee its
the CIAC. obligation, Aegean posted performance bonds
Based on the previously cited provision outlining secured by petitioner Manila Insurance Company,
the CIACs jurisdiction, it is clear that with regard to Inc. (Manila Insurance) and Intra Strata Assurance
contracts over which it has jurisdiction, the only Corporation (Intra Strata). Aegean failed to comply
matters that have been excluded by law are with its obligation. Hence, the spouses filed a
disputes arising from employer-employee complaint before the RTC to enforce its claim
relationships, which continue to be governed by the against the sureties.
Labor Code of the Philippines. Moreover, this is
consistent with the policy against split jurisdiction. During the pre-trial, Manila Insurance and Intra
Strata discovered that the CCA contained an
arbitration clause. Consequently, they filed a Motion
 The Court finds in the affirmative. to Dismiss on the grounds of lack of cause of action
The motion for reconsideration was and lack of jurisdiction. The RTC denied the motion
denied by CA and MCWD never appealed to dismiss.
the case. Thus, the decision of the CA Manila Insurance appealed to the Court of Appeals.
became final and executory. The Court The CA dismissed the petition.
has held time and again that a final and Hence, Manila Insurance elevated the matter to the
executory judgment, no matter how Supreme Court.
erroneous, cannot be changed even by Manila Insurance argues that it cannot be held liable
this Court. The CA affirming the CIAC’s as a surety because the claim of Sps. Amurao is
jurisdiction and it becoming final, is now premature. Manila Insurance contends that the
beyond the jurisdiction of the Court to dispute between the spouses and Aegean should be
review or modify, even supposing for the brought first before the CIAC for arbitration.
19
Let’s go to CHECK CLEARING DISPUTES.

ISSUE: Whether or not the RTC has jurisdiction
over the dispute? CHECK CLEARING DISPUTES
HELD:YES, the CIAC has jurisdiction over the case This is the third kind of dispute under the auspices of
and not the RTC (Under section 4 of RA 1008). the Philippine Clearing House Corporation
(PCHC ArbiCom).
Sec. 4. Jurisdiction. The CIAC shall have original Take note that it is open to all banking institutions
and exclusive jurisdiction over disputes arising from, authorized to operate by the BSP.
or connected with, contracts entered into by parties The PCHC was organized in May 19, 1977 principally
involved in construction in the Philippines, whether to provide a means of clearing checks and other items
the dispute arises before or after the completion of pursuant to Section 102 of the New Central Bank Act.
the contract, or after the abandonment or breach
thereof. These disputes may inlve government or When we say check- clearing disputes is limited
private contracts. For the Board to acquire to?
jurisdiction, the parties to a dispute must agree to A: Banks
submit the same to voluntary arbitration.
QUESTION: What kind of arbitration is the
The jurisdiction of the CIAC may include but is not hearing?
limited to violation of specifications for materials and A: INSTITUTIONAL ARBITRATION because it is
workmanship; violation of the terms of agreement; heard specifically by the PCHC. It is the ArbiCOm, the
interpretation and/or application of contractual time body that investigates, hears the disputes and decides
and delays; maintenance and defects; payment, the disputes.
default of employer or contractor and changes in
contract cost. QUESTION: How do you define a bank?
Under RA 8791(General Banking Act of 2000),
Excluded from the coverage of this law are Bank is define as an entity engaged in the lending of
disputes arising from employer-employee funds obtained in the form of deposits.
relationships which shall continue to be covered by
the Labor Code of the Philippines. QUESTION: What are the different kinds of
banks?
In order for the CIAC to acquire jurisdiction, 2 Under RA 8791(General Banking Act of 2000)
requisites must concur: 1. Universal Bank
1. the dispute must be somehow 2. Commercial Banks
connected to a construction contract; and 3. Thrift Banks
2. the parties must have agreed to 4. Rural Banks
submit the dispute to arbitration 5. Cooperative Banks
proceedings. 6. Islamic Banks
In this case, both requisites are present.
What is the condition sine qua non before the
dispute be a subject to arbitration before the PCHC
ArbiCom?
1. The participation of 2 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.
2. It must be authorized.
3. It must be banking institution.
4. It must be a member of PCHC.
Let’s go to the procedure before the PCHC

ArbiCombriefly.
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
20
written complaint of any participant in the

controversy; Note: The law provides that a preliminary
2. Five copies of the complaint shall be conferenceshould be conducted before the
filed with the ArbiCom copy furnish the ArbiCom. It is mandatory.
respondent who shall have 30 non-extendible
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 banks involved and who shall
only have advisory function without any right
to vote.
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 2 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;
4. If a Formal Hearing is required, then
the Sole Aribicom shall ask a clarificatory
questions of the witnesses. 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.
If the formal hearing is not required, then the
Arbicom can decide the case on the basis of
the affidavits and documents submitted by the
parties in the preliminary conference.Within a
non-extendible period of 15 days after the
receipt of the decision, a party may file his
Motion for Reconsideration and the other
party may file his Opposition thereto within 15
days.
5. After the lapsed of the 15-day
period, the motion shall be resolved by
majority vote of the PCHC and the decision
made by the ArbiCom for the resolution of the
MR shall be executory without necessity of
judicial confirmation of the said award.
Such executory decision is the basis in the
AUTOMATIC DEBIT of the awarded therein
from the clearing account of the losing party.
Even if the losing party files a Petition for
Review before the RTC in the National Capital
Region where office of any party is located.
21
12/15 RODRIQUEZ The separability of the arbitration agreement is

especially significant to the determination of whether
17 Haru Gwapo the invalidity of the main contract also nullifies the
arbitration clause. Indeed, the doctrine denotes that the
PRINCIPLE OF SEPARABILITY OF AN invalidity of the main contract, also referred to as the
ARBITRATION CLAUSE "container" contract, does not affect the validity of the
arbitration agreement. Irrespective of the fact that the
So let us proceed to the principle of separability of an main contract is invalid, the arbitration
arbitration clause. The law provides that the arbitral clause/agreement still remains valid and enforceable.”
agreement is independent from the main contract the So the arbitration clause per se is a separate contract
general premise is that the agreement is independent in itself, the arbitration agreement may thus be invoked
from the main contract so this is the General rule in regardless of the possible nullity or invalidity of the
domestic arbitration as well as international main contract. Also as ruled in this case as a further
commercial arbitration. So if it is domestic arbitration consequence of doctrine of seperability is: “even the
the basis is arbitration law specifically sec 2, 6, and 7. party who has repudiated the main contract is not
If it is international commercial arbitration, it is found prevented from enforcing its arbitration clause.”
under article 16-1 of the model law. The cases in point
are the cases of: In the case of PEZA v Edison G.R. NO. 179537 please
1.) Gonzales v Martinez read this case in its full. Here the Supreme Court
2.) CARGILL PHILIPPINES v San Fernando ruled that under the doctrine of separability an
arbitration agreement: “independent of the main
*please read these cases and be sure to distinguish the contract. The arbitration agreement is to be treated as
2 cases from each other a separate agreement and the arbitration agreement
does not automatically terminate when the contract of
So what is meant by the arbitral agreement is which it is a part comes to an end.” Moreover, “The
independent from the main contract? It simply separability of the arbitration agreement is especially
means that invalidity of the arbitration clause / significant to the determination of whether the invalidity
agreement does not or will not render the invalidity of of the main contract also nullifies the arbitration clause.
the main arbitration or the main contract it violated. Indeed, the doctrine denotes that the invalidity of the
main contract, also referred to as the "container"
Under Rule 2.2 of the special ADR rules of court it contract, does not affect the validity of the arbitration
provides that “The Special ADR Rules recognize the agreement. Irrespective of the fact that the main
principle of separability of the arbitration clause, which contract is invalid, the arbitration clause/agreement still
means that said clause shall be treated as an remains valid and enforceable.”
agreement independent of the other terms of the Bale in this case one of the parties ayaw I-enforce ang
contract of which it forms part. A decision that the main contract because the condition of the main
contract is null and void shall not entail ipso jure the contract is unconscionable because they were asking
invalidity of the arbitration clause.” (last paragraph) for the payment of taxes. Dapat daw di I enforce.
Why is this so? As a review on your obli con (Calls So balik tayo sa principle of seperability, we said that
Remmon) What do you think Remmon? Why does the the basis of the principle that the arbitration clause is a
invalidty of arbitration clause not affect the main separate contract is Arbitration law Sec 2, 6, 7. How
contract? ANS: it is severable. Take note that the about under the provisions of the New Civil Code do
arbitral agreement is mainly a clause in the main we have provision that would support that indeed
contract that is different from the main contract itself, arbitration laws are regarded as a separate contract?
hence, the rule is that the invalidity of the main contract The answer to that is YES. Under the Civil Code it
will not affect the validity of the said arbitration clause prescribes a presumption of divisibility or seperability if
and vice-versa. Please take not of rule 2.2 of the the provision of the said contract. The presumption of
special ADR rules of court. Divisibility or separability of the said contract.
So earlier I said you have distinguish the Gonzales How about Fraudulent inducement to contract.
case and the San Fernando case. In the San Fernando Question can the arbitral tribunal rule on the issue on
case here the supreme court ruled that: “The doctrine fraudulent inducement on the contract or creation of
of separability, or severability as other writers call it, contract? Is that an arbitrable issue? Yes, the arbitral
enunciates that an arbitration agreement is tribunal can rule on the issue of fraudulent inducement
independent of the main contract. The arbitration in the creation of the said contract. Why is that so? Why
agreement is to be treated as a separate agreement is there jurisdiction ang arbitral tribunal to say that “uy
and the arbitration agreement does not automatically one of the parties was fraudulently induced” in the
terminate when the contract of which it is a part comes making of the contract why is that so? Because there
to an end. is nothing in the law that bars the arbitral tribunal na
indeed one of the parties, and under the principle of
22
competence competence the arbitral tribunal can arbitration. You call the attention of the court,
initially or primarily rule WON it has jurisdiction in a although it is the duty of the court to dismiss, aka
particular issue. Thus a arbitral tribunal can rule and dismissal moto proprio because the court has no
such is deemed an arbitral issue in both international jurisdiction on the said matter. But in event na wala
commercial and as well as domestic arbitration. kabalo si judge aning Ra 9285, the parties should
call the attenetion of the court na dapat mag
Under International commercial arbitration with regard arbitrate sa mi bago mag kaso. If you do not do
to fraudulent inducement to contract. Yes the arbitral that it will constitute waiver of your right to
tribunal is empowered to decided in any objection with arbitrate.
regard the existence or validity of the arbitration Please take note Chung Fu industry vs CA G.R.
agreement and principle of competence compentent. No. 96283 as well as the case of Asset
And with regards with domestic arbitration, the law Privatization Trust v. Court of Appeals, here the
provides that it is subject to an arbitration if the law provides that “dispute or action subject of
language of the arbitration clause is broad enough, arbitration is instituted in a court of law, the court
such as when it provided for arbitration claims, or not in liberty to disregard the arbitration agreement
disputes arising out of or from or relating to the said and allow the action to proceed”. So duty bound
contract. When you fraudulent inducement to contract, ang court, it is not in liberty to disregard ang
it makes the contract what kind of contract? arbitration agreement and allow the action to
VOIDABLE, indi siya void. Voidable, bakit kasi meron proceed.
vitiation of consent.
What is the effect of failure of the defendant to
Lets go to the timeliness of waiver as well as the raise arbitration if a motion to dismiss or affirmative
operation and effect of the arbitration agreement, so defense on his answer? Again, waiver of the right
the rules are the following if it is international to arbitrate.
commercial arbitration as found under the Arbitration The first factor:
and Conciliation Act law, the law provides that an 1.) Whether the parties action are
arbitration agreement or any person claiming through inconsistent with the right to arbitrate.
or under him, so applies not later than the date of 2.) Whether the litigation machinery has
submitting his first statement on the substance of the
been substantially invoked
dispute
3.) Whether a party either requested
If it is domestic arbitration please take note of these arbitration enforcement close to trial date
rules, or delayed for a long period before
1.) First rule is that in case contract to seeking a stay of the suit
arbitrate future controversies you should 4.) Whether defendant seeking arbitration
serve to the other party a demand to filed a counterclaim without asking for a
arbitrate; stay of the proceedings
2.) in case you want to arbitrate an existing 5.) Whether important intervening steps had
controversy you have to file a motion to taken place
dismiss with the court having jurisdiction 6.) Whether the delay affected, misled, or
on the said matter ; prejudiced the opposing party
3.) Under R.A 9285 Sec 24- A court before
7.) When the parties litigate in a court of law
a dispute that is subject to arbitration
which an action is brought in a matter
which is the subject matter of an So 1-7 are some of the factors that may be considered
arbitration agreement shall, if at least one that a party has opted to waive his right to arbitration.
party so requests not later that the pre- So in the case of far east international vs nankai kogyo
trial conference, or upon the request of here the Supreme Court ruled that: having waived
both parties thereafter, refer the parties recourse through arbitration, the losing party cannot
to arbitration unless it finds that the thereafter question the jurisdiction of the court. Kasi
arbitration agreement is null and void, nga it has to be timely invoked. It applies to both
inoperative or incapable of being domestic and international commercial arbitration.
performed.
Effect of arbitration agreement
GR: The rule is that an arbitration agreement which is
What does this mean? The rule is that if there is timely invoked precludes court action.
an arbitration clause or agreement it has to be So what are the Rules? If a dispute or action subject to
timely invoked. Why need timely invocation? arbitration is subjected to a court of law, the court is not
Because if the party to the said agreement fails to in liberty to disregard the arbitration agreement and
do so it shall constitute a waiver to the said allow the action to proceed. Take note in the case of
23
Chung Fu industry vs CA the correct procedure is for including any objections with respect to the existence
the court to suspend the case and not to dismiss it and or validity of the arbitration agreement or any condition
require the parties to proceed to arbitration in precedent to the filing of a request for arbitration.
accordance with their agreement. Susped + refer to
arbitration = correct procedure. The Special ADR Rules recognize the principle of
separability of the arbitration clause, which means that
In the later case of Asset Privatization Trust v CA it is said clause shall be treated as an agreement
erroneous for the court to dismiss, to issue a final order independent of the other terms of the contract of which
dismissing the case because the court should only it forms part. A decision that the contract is null and
suspend the case. So what are the reasons for saying void shall not entail ipso jure the invalidity of the
do not dismiss the case but only suspend it. arbitration clause
1.) 1st reason: Rule 2.2 Special ADR rules of
court
2.) 2nd reason: And rule 2.4 Special ADR rules

Rule 2.2. Policy on arbitration.- (A) Where the parties Competence Competence
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 Rule 2.4. Policy implementing competence-
arbitration agreement is the law between the parties competence principle. - The arbitral tribunal shall be
and that they are expected to abide by it in good faith. accorded the first opportunity or competence to rule on
Further, the courts shall not refuse to refer parties to the issue of whether or not it has the competence or
arbitration for reasons including, but not limited to, the jurisdiction to decide a dispute submitted to it for
following: 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
a. The referral tends to oust a court of its competence or jurisdiction of an arbitral tribunal in a
jurisdiction; dispute brought before it, either before or after the
b. The court is in a better position to resolve arbitral tribunal is constituted, the court must exercise
the dispute subject of arbitration; judicial restraint and defer to the competence or
c. The referral would result in multiplicity of jurisdiction of the arbitral tribunal by allowing the
suits; arbitral tribunal the first opportunity to rule upon such
d. The arbitration proceeding has not issues.
commenced;
e. The place of arbitration is in a foreign
country; Where the court is asked to make a determination of
f. One or more of the issues are legal and one whether the arbitration agreement is null and void,
or more of the arbitrators are not lawyers; inoperative or incapable of being performed, under this
g. One or more of the arbitrators are not policy of judicial restraint, the court must make no more
Philippine nationals; or than a prima facie determination of that issue.
h. One or more of the arbitrators are alleged
not to possess the required qualification Unless the court, pursuant to such prima facie
under the arbitration agreement or law. determination, concludes that the arbitration
agreement is null and void, inoperative or incapable of
being performed, the court must suspend the action
(B) Where court intervention is allowed under ADR before it and refer the parties to arbitration pursuant to
Laws or the Special ADR Rules, courts shall not refuse the arbitration agreement.
to grant relief, as provided herein, for any of the
following reasons:
So Klaro kaayo, if a case Is prematurely filed in court
pursuant to the previous cases cited: na court should
a. Prior to the constitution of the arbitral merely suspend the case. So question what if a case if
tribunal, the court finds that the principal prematurely filed in court in contravention to the
action is the subject of an arbitration agreement arbitrate? You file a motion to dismiss the
agreement; or case by first remedy or move for the suspension of the
proceedings or move or file a motion to refer the case
b. The principal action is already pending to arbitration. Question why sabi naten na pwede mag
before an arbitral tribunal. file ng motion to dismiss the case, why is this a possible
remedy? (calls SHANE CASTRO) take note the case
is prematurely filed in court. Because under RULE 16
The Special ADR Rules recognize the principle of ROC the failure to do a condition precedent is a ground
competence-competence, which means that the for a motion to dismiss. Assume that yung issue ninyo
arbitral tribunal may initially rule on its own jurisdiction,
24
finally the case in court you are questioning the respondent and petitioner should be settled by means
existence, validity, or enforceability of the arbitration of arbitration. The SC, futher said the agreement of the
clause, Question, can the court take cognizance of the parties to refer any dspute or conflict as regards the
same? NO, it is subject to the jurisdiction of the arbitral interpretation or implementation under their contract to
tribunal following policy on Judicial restraint, but as an arbitration includes within is scope discrepancies as to
exception the court can make a prima facie the amount of the advances, unpayable
determination whether or not he arbitration agreement accomplishment, the provision on the application of the
is valid, operative, enforceable, but only limited to a provision of termination and consequent set of
PRIMA FACIE DETERMINATION. Assume that the expenses. Sabi ng SC this is an arbitrable issue.
court determines that the arbitration agreement is void,
unenforceable, and inoperative what will happen to the REFERRAL TO ARBITRATION
case? It is the DUTY of the court to take cognizance of
the case Rule 2.4 following the policy of competence-
competence. The rule is that, if an action is commenced before a
court on a matter that is the subject matter of arbitration
agreement, the court should not dismiss the action, but
What is the remedy against the order of the court which simply suspend it and await the final outcome of the
erroneously denied or referred the case for arbitration? arbitration for possible confirmation and enforcement
1.) Petition for prohibition or 2.) petition for certiorari of the award in court. Dito ina emphasize na suspend
under rule 65. Why Certiorari, because lack of ra ang proceedings, what is the basis rule 4 special adr
jurisdiction and there is no other remedy since the rules of court. Take note that the trial court does not
PRIMA FACIE DETERMINATION is a lose jurisdiction over the case when it refers to the party
INTERLOCUTORY ORDER. to arbitration kasi nga suspended lang ang proceeding,
if it is later finaly determined the controversy is subject
The mere existence of an arbitration agreement, does to arbitration.
not preclude a court from taking cognizance of a case
even if the defendant claims that recourse must first be PROVISIONAL REMEDIES
through arbitration, because nga the court can make a
prima facie determination with regard to the validity
enforceability of the arbitration clause and it is the duty We file before the court provisional remedies. Now can
of the court to determine WON the controversy is the arbitral tribunal grant provisional remedies? Yes
subject to arbitration. And unless, the court determines what is the basis?
that the arbitration agreement is null and void, the duty
of the court to suspend the action and refer to SEC. 28. Grant of Interim Measure of Protection. -
arbitration.
(a) It is not incompatible with an arbitration
In the case of western minolco corp vs cir, here the agreement for a party to request, before
supreme court ruled that, the court is not a bar to constitution of the tribunal, from a Court an
inquiring the question WON it has jurisdiction over the interim measure of protection and for the
case if the party claims it has NO jurisdiction over a Court to grant such measure. After
controversy. constitution of the arbitral tribunal and during
arbitral proceedings, a request for an interim
LIBERALITY measure of protection or modification thereof,
may be made with the arbitral tribunal or to the
extent that the arbitral tribunal has no power
Lets procedure to the rule on LIBERALITY to act or is unable to act effectively, the
request may be made with the Court. The
In the case of LM engineering v capitol an arbitration arbitral tribunal is deemed constituted when
agreement is liberally construed and should be the sole arbitrator or the third arbitrator who
resolved in favor of a arbitration. Because the policy of has been nominated, has accepted the
the law leans towards arbitration. So, because of the nomination and written communication of said
rule on liberality the arbitral tribunal in resolving the nomination and acceptance has been
issue WON the controversy is subject to arbitration ano received by the party making request.
gina tingnan ng court/ arbitral tribunal sabi ng SC, “it
looks into the scope of the arbitration agreement and it (b) The following rules on interim or
interprets it liberally so that any doubt is construed in provisional relief shall be observed:
favor of arbitration.” Why? We encourage Alternative
Dispute Resolution. The Subcontract agreement
provides the parties hereto agree that any dispute or (1) Any party may request that
coincide as regards the implementation of this provision relief be granted against
agreement which cannot be settled between the adverse party:
25
(2) Such relief may be granted: appointment of receivers or detention, preservation,

inspection of property that is the subject of the dispute
(i) to prevent irreparable in arbitration. Either party may apply with the Court for
loss or injury: assistance in implementing or enforcing an interim
measures ordered by an arbitral tribunal.
(ii) to provide security for
the performance of any Ok, yan nakasabi sa rule 5 yan sa special ADR rules
obligation; of court it refers to the provisional remedies that can be
applied in relation to arbitration kung mag adto n aka
before the court. Ano procedure if we are seeking for
(iii) to produce or preserve procedural remedies before the COURT before the
any evidence; or constitution of the arbitral tribunal or may inability mag
grant ang arbitral tribunal? Use rule 5 special ADR
(iv) to compel any other rules of court. Upon constitution of the arbitral tribunal
appropriate act or where do you file or ask for issuance of provisional
omission. remedies? You ask before the arbitral tribunal, unless
arbitral tribunal cannot grant or is not able to grant the
(3) The order granting provisional request of provisional remedies (sec 28, 29 RA 9285).
relief may be conditioned upon the
provision of security or any act or In the case of home bankers savings vs ca, a party to
omission specified in the order. a pending arbitration has the right without violating the
rule for forum shopping to institute an action to obtain
(4) Interim or provisional relief is a writ of preliminary attachment from the court to
requested by written application preserve the property which is the subject matter of the
transmitted by reasonable means to arbitration.
the Court or arbitral tribunal as the
case may be and the party against Let us now visit Rule 5 of the Special Rules of Court:
whom the relief is sought, describing
in appropriate detail the precise RULE 5: INTERIM MEASURES OF PROTECTION
relief, the party against whom the
relief is requested, the grounds for
the relief, and evidence supporting Rule 5.1. Who may ask for interim measures of
the request. protection. - A party to an arbitration agreement may
petition the court for interim measures of protection.
(5) The order shall be binding upon
the parties. (discussion) Kanusa gani makaask ug provisional
remedies sa court?
(6) Either party may apply with the
Court for assistance in Implementing Rule 5.2. When to petition. - A petition for an interim
or enforcing an interim measure measure of protection may be made (a) before
ordered by an arbitral tribunal. arbitration is commenced, (b) after arbitration is
commenced, but before the constitution of the arbitral
(7) A party who does not comply with tribunal, or (c) after the constitution of the arbitral
the order shall be liable for all tribunal and at any time during arbitral proceedings but,
damages resulting from at this stage, only to the extent that the arbitral tribunal
noncompliance, including all has no power to act or is unable to act effectively.
expenses, and reasonable
attorney's fees, paid in obtaining the (discussion) What are the grounds under rule 5.4:
order's judicial enforcement.
Rule 5.4. Grounds. - The following grounds, while not
SEC. 29. Further Authority for Arbitrator to Grant limiting the reasons for the court to grant an interim
Interim Measure of Protection. - Unless otherwise measure of protection, indicate the nature of the
agreed by the parties, the arbitral tribunal may, at the reasons that the court shall consider in granting the
request of a party, order any party to take such interim relief:
measures of protection as the arbitral tribunal may
consider necessary in respect of the subject matter of
the dispute following the rules in Section 28, paragraph a. The need to prevent irreparable loss or
2. Such interim measures may include but shall not be injury;
limited to preliminary injuction directed against a party,
26
b. The need to provide security for the Rule 5.7. Dispensing with prior notice in certain cases.
performance of any obligation; - Prior notice to the other party may be dispensed with
c. The need to produce or preserve evidence; when the petitioner alleges in the petition that there is
or an urgent need to either (a) preserve property, (b)
d. The need to compel any other appropriate prevent the respondent from disposing of, or
act or omission. concealing, the property, or (c) prevent the relief
prayed for from becoming illusory because of prior
notice, and the court finds that the reason/s given by
(discussion) ang venue ng interim measure for
the petitioner are meritorious.
protection
Rule 5.8. Comment/Opposition. - The

Rule 5.3. Venue. - A petition for an interim measure of comment/opposition must be filed within fifteen (15)
protection may be filed with the Regional Trial Court, days from service of the petition. The opposition or
which has jurisdiction over any of the following places: comment should state the reasons why the interim
measure of protection should not be granted.
a. Where the principal place of business of
any of the parties to arbitration is located; (discussion) Just read rule 5.9:
b. Where any of the parties who are Rule 5.9. Court action. - After hearing the petition, the
individuals resides; court shall balance the relative interests of the parties
and inconveniences that may be caused, and on that
c. Where any of the acts sought to be enjoined basis resolve the matter within thirty (30) days from (a)
are being performed, threatened to be submission of the opposition, or (b) upon lapse of the
performed or not being performed; or period to file the same, or (c) from termination of the
hearing that the court may set only if there is a need for
d. Where the real property subject of clarification or further argument.
arbitration, or a portion thereof is situated.
If the other parties fail to file their opposition on or
before the day of the hearing, the court shall motu
(discussion) what prov rem can a court grant?
proprio render judgment only on the basis of the
allegations in the petition that are substantiated by
Rule 5.6. Type of interim measure of protection that a supporting documents and limited to what is prayed for
court may grant.- The following, among others, are the therein.
interim measures of protection that a court may grant:
In cases where, based solely on the petition, the court
a. Preliminary injunction directed against a finds that there is an urgent need to either (a) preserve
party to arbitration; 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
b. Preliminary attachment against property or notice, it shall issue an immediately executory
garnishment of funds in the custody of a bank temporary order of protection and require the
or a third person; petitioner, within five (5) days from receipt of that order,
to post a bond to answer for any damage that
c. Appointment of a receiver; respondent may suffer as a result of its order. The ex-
parte temporary order of protection shall be valid only
d. Detention, preservation, delivery or for a period of twenty (20) days from the service on the
inspection of property; or, party required to comply with the order. Within that
period, the court shall:
e. Assistance in the enforcement of an interim
measure of protection granted by the arbitral a. Furnish the respondent a copy of the
tribunal, which the latter cannot enforce petition and a notice requiring him to comment
effectively. thereon on or before the day the petition will
be heard; and
(discussion) sabi sa rule 5.7 dispense prior notice,
itong rule 5.7 is similar to what provisional remedy b. Notify the parties that the petition shall be
under the Rules of Court? Similar to the provisional heard on a day specified in the notice, which
remedy of * (wala gi answer ni mam) kasi di notified Ex- must not be beyond the twenty (20) day
parte to siya. period of the effectivity of the ex-parte order.
27
The respondent has the option of having the temporary Rule 5.12. Security. - The order granting an interim
order of protection lifted by posting an appropriate measure of protection may be conditioned upon the
counter-bond as determined by the court. provision of security, performance of an act, or
omission thereof, specified in the order.
If the respondent requests the court for an extension of
the period to file his opposition or comment or to reset The Court may not change or increase or decrease the
the hearing to a later date, and such request is granted, security ordered by the arbitral tribunal.
the court shall extend the period of validity of the ex-
partetemporary order of protection for no more than (discussion) what is meant by rule 5.12? unsa man
twenty days from expiration of the original period. siya sa provisional remedy? Bond requirement yan!
The bond will answer for all damages if di tama ang
After notice and hearing, the court may either grant or Preliminary attachment.
deny the petition for an interim measure of protection.
The order granting or denying any application for
Rule 5.13. Modification, amendment, revision or
interim measure of protection in aid of arbitration must
revocation of court’s previously issued interim measure
indicate that it is issued without prejudice to
of protection. - Any court order granting or denying
subsequent grant, modification, amendment, revision
interim measure/s of protection is issued without
or revocation by an arbitral tribunal.
prejudice to subsequent grant, modification,
amendment, revision or revocation by the arbitral
Rule 5.10. Relief against court action. - If respondent tribunal as may be warranted.
was given an opportunity to be heard on a petition for
an interim measure of protection, any order by the court
An interim measure of protection issued by the arbitral
shall be immediately executory, but may be the subject
tribunal shall, upon its issuance be deemed to have
of a motion for reconsideration and/or appeal or, if
ipso jure modified, amended, revised or revoked an
warranted, a petition for certiorari.
interim measure of protection previously issued by the
court to the extent that it is inconsistent with the
(discussion) remedy to the court to the orders under subsequent interim measure of protection issued by
rule 5: the arbitral tribunal.
1) Motion for recon (discussion) so ni adto mog courte para mangayog

2) Appeal provisional remedy before na constitute ang arbitral
3) Certiorari tribunal unya ma constitute na karon ang arbitral
tribunal tapos naa gihapon koy prelimnary injunction sa
Rule 5.11. Duty of the court to refer back. - The court court ano mangyari sa PI ko sa court? It is assumed na
shall not deny an application for assistance in may consistency sa Prov rem issued by the arbitral
implementing or enforcing an interim measure of tribunal and that issued by the courts.
protection ordered by an arbitral tribunal on any or all
of the following grounds: 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
a. The arbitral tribunal granted the interim
inconsistency between an interim measure of
relief ex parte; or
protection issued by the court and by the arbitral
tribunal shall be immediately referred by the court to
b. The party opposing the application found the arbitral tribunal which shall have the authority to
new material evidence, which the arbitral decide such question.
tribunal had not considered in granting in the
application, and which, if considered, may
produce a different result; or (discussion) if naay conflict between the interim
measure of the court and arbitral tribunal, it shall be
referred to the arbitral tribunal which shall have the
c. The measure of protection ordered by the jurisdiction to decide on such questions.
arbitral tribunal amends, revokes, modifies or
is inconsistent with an earlier measure of
protection issued by the court. 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
If it finds that there is sufficient merit in the opposition defer action on any pending petition for an interim
to the application based on letter (b) above, the court measure of protection filed by a party to an arbitration
shall refer the matter back to the arbitral tribunal for agreement arising from or in connection with a dispute
appropriate determination.
28
thereunder upon being informed that an arbitral tribunal Who is this arbitrator? He is the person appointed, or
has been constituted pursuant to such agreement. The the person named under the arbitration agreement. He
court may act upon such petition only if it is established is the person appointed to render an award, alone or
by the petitioner that the arbitral tribunal has no power with other with a dispute that is subject under an
to act on any such interim measure of protection or is arbitration agreement. This is found in Sec 3 in RA
unable to act thereon effectively. 9876. Qualification of arbitrator, he should be in legal
age, full enjoyment of civil rights, he must know to read
and write.
What is this principle of competence competence?
The principle of competence competence states that
the arbitral tribunal may initially rule on its own So lets go to the disqualifications of an arbitrator this
jurisdiction including any objection with respect to the is found in Sec 10 of the arbitration law as well as article
existence and validity of the arbitration agreement or 12 of the model law: disqualification can occur if the
any condition precedent to the filing of a request of arbitrator (section 10,Republic Act 9876 otherwise
arbitration. Competence competence is found under known as the Arbitration Law ):
rule 2.4:  Is related by blood or marriage within the sixth
degree to either party to the controversy.
Rule 2.4. Policy implementing competence-  Has or had financial, fiduciary or other interest in
competence principle. - The arbitral tribunal shall be the controversy or cause to be decided or in the
accorded the first opportunity or competence to rule on result of the proceeding.
the issue of whether or not it has the competence or  Has any personal bias which might prejudice the
jurisdiction to decide a dispute submitted to it for right of any party to a fair and impartial award.
decision, including any objection with respect to the  person to act as his champion or to advocate his
existence or validity of the arbitration agreement. When cause
a court is asked to rule upon issue/s affecting the  where justifiable doubts as to the arbitrators
competence or jurisdiction of an arbitral tribunal in a impartiality
dispute brought before it, either before or after the  if he does not possess the qualifications agreed
arbitral tribunal is constituted, the court must exercise upon by the party.
judicial restraint and defer to the competence or
jurisdiction of the arbitral tribunal by allowing the So lets go to the 6th disqualification, pasabot inii na
arbitral tribunal the first opportunity to rule upon such pwede mag stipulate ang parties sa qualifications na
issues. gusto nila for the arbitrator. What if ig-agaw mo 4th
degree under the 1st disqualification dili ka pwede
Where the court is asked to make a determination of mahimong arbitrator Bawal because hantod 6th degree
whether the arbitration agreement is null and void, lang.
inoperative or incapable of being performed, under this
policy of judicial restraint, the court must make no more Let’s proceed to the choice of the arbitrators
than a prima facie determination of that issue.
Kailangan ba yung arbitrators if domestic arbitration
Unless the court, pursuant to such prima facie mga lawyers? Not need, pwede stipulated na lawyer
determination, concludes that the arbitration but GR: no need. But take not in international
agreement is null and void, inoperative or incapable of commercial arbitration and domestic arbitration, it is not
being performed, the court must suspend the action necessary na ang arbitrator has any special training, or
before it and refer the parties to arbitration pursuant to experience or admitted to the Philippine bar. But you
the arbitration agreement. will wonder na arbitrators will interpret the provision of
the contract but depende nay an if I stipulate sa parties
to the case. How about foreigners, can foreigners act
(discussion): The arbitral tribunal is given by law the as an arbitrators? Take note, if it is international
first opportunity to rule, determine WON it has commercial arbitration, Yes pwede foreigners. How
jurisdiction over a particular issue, or WON it has about domestic arbitration, pwede ba foreigners?
jurisdiction or competence to decide a on a issue There is no bias against such foreigners, unless the
submitted to it for decision, including any objection with parties by agreement impose nationality restrictions of
respect to the validity of the arbitration agreement. the said arbitrator. So pwede ang foreigners. Unsay
Policy under the law is judicial restraint. Please legal basis na pwede foreigners? Sec 37 of ra 9285:
remember the court can only may a prima facie
determination of the validity of the arbitration
agreement. SEC. 37. Appointment of Foreign Arbitrator. - The
Construction Industry Arbitration Commission (CIAC)
THE ABITRATOR shall promulgate rules to allow for the appointment of a
foreign arbitrator or coarbitrator or chairman of a
29
tribunal a person who has not been previously the parties, or in the absence thereof, within
accredited by CIAC: Provided, That: thirty (30) days from receipt of such request
for appointment;
(a) the dispute is a construction dispute in
which one party is an international party c. Where the parties agreed that their dispute
shall be resolved by three arbitrators but no
(b) the person to be appointed agreed to method of appointing those arbitrators has
abide by the arbitration rules and policies of been agreed upon, each party shall appoint
CIAC; one arbitrator and the two arbitrators thus
appointed shall appoint a third arbitrator. If a
party fails to appoint his arbitrator within thirty
(c) he/she is either coarbitrator upon the (30) days of receipt of a request to do so from
nomination of the international party; or the other party, or if the two arbitrators fail to
he/she is the common choice of the two CIAC- agree on the third arbitrator within a
accredited arbitrators first appointed one of reasonable time from their appointment, the
whom was nominated by the international appointment shall be made by the Appointing
party; and Authority. If the latter fails or refuses to act or
appoint an arbitrator within a reasonable time
(d) the foreign arbitrator shall be of different from receipt of the request to do so, any party
nationality from the international party. or the appointed arbitrator/s may request the
court to appoint an arbitrator or the third
(discussion) The GR: the parties are given a choice in arbitrator as the case may be.
both domestic arbitration and international commercial
arbitration to choose the arbitrators. (discussion) Please take note these are the instances
a-c wherein the court itself may appoint an arbitrator di
Pwede baa ng court mag appoint arbitrators? Yes legal ni siya automatic or moto propio, because you have to
basis? Rule 6 of special ADR rules of court: file a petition in court to get an arbitrator.
Rule 6.2. Who may request for appointment. - Any

RULE 6: APPOINTMENT OF ARBITRATORS party to an arbitration may request the court to act as
an Appointing Authority in the instances specified in
Rule 6.1 above.
Rule 6.1. When the court may act as Appointing
Authority. - The court shall act as Appointing Authority
only in the following instances:
Rule 6.4. Contents of the petition. -The petition shall
state the following:
a. Where any of the parties in an institutional
arbitration failed or refused to appoint an
arbitrator or when the parties have failed to a. The general nature of the dispute;
reach an agreement on the sole arbitrator (in
an arbitration before a sole arbitrator) or when b. If the parties agreed on an appointment
the two designated arbitrators have failed to procedure, a description of that procedure
reach an agreement on the third or presiding with reference to the agreement where such
arbitrator (in an arbitration before a panel of may be found;
three arbitrators), and the institution under
whose rules arbitration is to be conducted fails c. The number of arbitrators agreed upon or
or is unable to perform its duty as appointing the absence of any agreement as to the
authority within a reasonable time from number of arbitrators;
receipt of the request for appointment;
d. The special qualifications that the
b. In all instances where arbitration is ad hoc arbitrator/s must possess, if any, that were
and the parties failed to provide a method for agreed upon by the parties;
appointing or replacing an arbitrator, or
substitute arbitrator, or the method agreed
upon is ineffective, and the National President e. The fact that the Appointing Authority,
of the Integrated Bar of the Philippines (IBP) without justifiable cause, has failed or refused
or his duly authorized representative fails or to act as such within the time prescribed or in
refuses to act within such period as may be the absence thereof, within a reasonable
allowed under the pertinent rules of the IBP or time, from the date a request is made; and
within such period as may be agreed upon by
30
f. The petitioner is not the cause of the delay Lets proceed to Challenge and Disqualifications.
in, or failure of, the appointment of the
arbitrator. In both domestic and international arbitration the
parties are given the decision to decide the procedure
Apart from other submissions, the petitioner must for challenging the arbitrator. Ingon nato the parties can
attach to the petition (a) an authentic copy of the stipulate the qualifications of the arbitrator, they are
arbitration agreement, and (b) proof that the Appointing also given the power to stipulate the procedure to
Authority has been notified of the filing of the petition challenge the person appointed as arbitrator. A party
for appointment with the court. who wants to challenge an arbitrator is required to
present a written statement of the reasons for the
Rule 6.6. Submission of list of arbitrators. - The court challenge to the arbitral tribunal. If the challenge is not
may, at its option, also require each party to submit a successful you request the appointing authority to
list of not less than three (3) proposed arbitrators decide on the said challenge. Question you want to
together with their curriculum vitae. challenge the qualification of the arbitrator, unsay body
ang naay jurisdiction? Before the arbitral tribunal,
ngano arbitral tribunal man ang naay jurisdiction?
Rule 6.7. Court action. - After hearing, if the court finds Because of rule 7 (actually la gi answer ni mam)
merit in the petition, it shall appoint an arbitrator;
otherwise, it shall dismiss the petition.
Who is an appointing authority? "Appointing Authority"
shall mean the person or institution named in the
In making the appointment, the court shall have regard arbitration agreement as the appointing authority; or
to such considerations as are likely to secure the the regular arbitration institution under whose rule the
appointment of an independent and impartial arbitrator. arbitration is agreed to be conducted. Where the
parties have agreed to submit their dispute to
At any time after the petition is filed and before the court institutional arbitration rules, and unless they have
makes an appointment, it shall also dismiss the petition agreed to a different procedure, they shall be deemed
upon being informed that the Appointing Authority has to have agreed to procedure under such arbitration
already made the appointment. rules for the selection and appointment of arbitrators.
In ad hoc arbitration, the default appointment of
Rule 6.9. Relief against court action. - If the court arbitrators shall be made by the National President of
appoints an arbitrator, the order appointing an the Integrated Bar of the Philippines or his duly
arbitrator shall be immediately executory and shall not authorized representative. So, very technical ang term.
be the subject of a motion for reconsideration, appeal
or certiorari. An order of the court denying the petition So pwede b aka mag challenge sa appointment of
for appointment of an arbitrator may, however, be the arbitrator with the court? Yes allowed by sec 7 of
subject of a motion for reconsideration, appeal or special adr rules and art 13 of model law. John
certiorari. Sanchez please read, ay absent.
RULE 7: CHALLENGE TO APPOINTMENT OF

ARBITRATOR
Lets go to the method of appointing arbitrators what are
the rules. Ok if it is domestic arbitration the parties shall Rule 7.2. When challenge may be raised in court. -
simply provide in their arbitration agreement the When an arbitrator is challenged before the arbitral
method for the appointment of arbitrator, it na yung tribunal under the procedure agreed upon by the
default yung sabi natin sa rule 6 when a court shall be parties or under the procedure provided for in Article 13
appointing authority of said arbitrator. If it is (2) of the Model Law and the challenge is not
intenrnational Commercial arbitration, then the parties successful, the aggrieved party may request the
are free to agree on the said procedure for appointing Appointing Authority to rule on the challenge, and it is
the said arbitrator. In the absence of such agreement, only when such Appointing Authority fails or refuses to
if the arbitration is with 3 arbitrators each party shall act on the challenge within such period as may be
appoint arbitrator, and the 2 arbitrators shall appoint allowed under the applicable rule or in the absence
another arbitrator. The next rule is that if there is failure, thereof, within thirty (30) days from receipt of the
we will go again to the court to request the appointment request, that the aggrieved party may renew the
of an arbitrator. If it is with a sole arbitrator and the challenge in court.
parties are unable to agree who is the arbitrator, he
shall be appointed upon request of the party, adto (discussion) so di ka makaderecho sa court una sa
napud ta sa courte. So read rule 6 of special ADR rules arbitral tribunal and then you go to appointing authority,
of court. you go to the court only if the appointing authority
refuses or fails to act on the challenge.
31
The court shall allow the challenged arbitrator who

Rule 7.3. Venue. - The challenge shall be filed with the subsequently agrees to accept the challenge to
Regional Trial Court (a) where the principal place of withdraw as arbitrator.
business of any of the parties is located, (b) if any of
the parties are individuals, where those individuals The court shall accept the challenge and remove the
reside, or (c) in the National Capital Region. arbitrator in the following cases:
Rule 7.4. Grounds. - An arbitrator may be challenged
on any of the grounds for challenge provided for in a. The party or parties who named and
Republic Act No. 9285 and its implementing rules, appointed the challenged arbitrator agree to
Republic Act No. 876 or the Model Law. The nationality the challenge and withdraw the appointment.
or professional qualification of an arbitrator is not a
ground to challenge an arbitrator unless the parties b. The other arbitrators in the arbitral tribunal
have specified in their arbitration agreement a agree to the removal of the challenged
nationality and/or professional qualification for arbitrator; and
appointment as arbitrator.
c. The challenged arbitrator fails or refuses to
(discussion) So unsay grounds aning challenge? Diba submit his comment on the petition or the brief
tong mga disqualifications. Just for emphasis “The of legal arguments as directed by the court, or
nationality or professional qualification of an arbitrator in such comment or legal brief, he fails to
is not a ground to challenge an arbitrator unless the object to his removal following the challenge.
parties have specified in their arbitration agreement a
nationality and/or professional qualification for
appointment as arbitrator.” The court shall decide the challenge on the basis of
evidence submitted by the parties.
Rule 7.5. Contents of the petition. - The petition shall The court will decide the challenge on the basis of the
state the following: evidence submitted by the parties in the following
instances:
a. The name/s of the arbitrator/s challenged
and his/their address; a. The other arbitrators in the arbitral tribunal
agree to the removal of the challenged
arbitrator; and
b. The grounds for the challenge;
b. If the challenged arbitrator fails or refuses

c. The facts showing that the ground for the to submit his comment on the petition or the
challenge has been expressly or impliedly brief of legal arguments as directed by the
rejected by the challenged arbitrator/s; and court, or in such comment or brief of legal
arguments, he fails to object to his removal
d. The facts showing that the Appointing following the challenge.
Authority failed or refused to act on the
challenge.
(Discussion) What if the challenge in the procedure
The court shall dismiss the petition motu proprio unless agreed upon by the parties is not successful or the
it is clearly alleged therein that the Appointing Authority decision of the arbitral tribunal is that it rejects a
charged with deciding the challenge, after the challenge? Punta na tayu sa courte and wee use rule
resolution of the arbitral tribunal rejecting the challenge 7 of adr rules of court? party may request the
is raised or contested before such Appointing Authority, Appointing Authority to rule on the challenge, and it is
failed or refused to act on the challenge within thirty only when such Appointing Authority fails or refuses to
(30) days from receipt of the request or within such act on the challenge within such period as may be
longer period as may apply or as may have been allowed under the applicable rule or in the absence
agreed upon by the parties. thereof, within thirty (30) days from receipt of the
request, that the aggrieved party may renew the
Rule 7.7. Court action. - After hearing, the court shall challenge in court.
remove the challenged arbitrator if it finds merit in the
petition; otherwise, it shall dismiss the petition. So steps sa challenge Arbitral tribunal -> Appointing
authority -> Court to renew your challenge.
32
Lets go to the Equal right of the parties to appoint In the leading case of Cf Luzon development v
arbitrator, the rule is that the parties are entitled to association luzon bank employees, the rules on judges
choose an equal number of arbitrators subject to the should be similarly applicable to arbitrators, since
limitations as provided under article 2045 of the civil arbitrators act in quasi-judicial capacity and in fact
code: deemed instrumentality of the government.
Art. 2045. Any clause giving one of the parties power How about liability for civil liability for judicial
to choose more arbitrators than the other is void and of error? Santos vs Orlino The error must be gross or
no effect. (n) patent, deliberate and malicious, or incurred with
evident bad faith (Quizon v. Balthazar, Jr., 65 SCRA
(discussion) take note that additional arbitrators may 293 [1975]).
be appointed this is allowed under section 9 under the
arbitration law but the making of additional arbitrators The imputed error in this case not being in the
must be made in writing and the said additional premises gross, and the record being bereft of any
arbitrator must sit with the original arbitrator/s upon the persuasive showing of deliberate or malicious intent on
hearing. Take note, that a substitute arbitrator may also the part of respondent Judge to cause prejudice to any
be named. party, the instant administrative proceeding against the
latter must be given short shrift for what of basis. So
yes pwede siya civil liability.
magellan capital v zosa, In fairness and justice to the
plaintiff [defendant], the two defendants (MCMC and
MCHC)[herein petitioners] which represent the same
interest should be considered as one and should be
entitled to only one arbitrator to represent them in the
arbitration proceedings. Accordingly, the arbitration
clause, insofar as the composition of the panel of
arbitrators is concerned should be declared void and of
no effect, because the law says, Any clause giving one
of the parties power to choose more arbitrators than the
other is void and of no effect (Article 2045, Civil Code).
(in relt to the equal right to designate arbitrators)
And in relation to Magellan, The dispute or controversy

between the defendants (MCMC and MCHC) [herein
petitioners] and the plaintiff [herein defendant] should
be settled in the arbitration proceeding in accordance
with the Employment Agreement, but under the panel
of three (3) arbitrators, one (1) arbitrator to represent
the plaintiff, one (1) arbitrator to represent both
defendants (MCMC and MCHC)[herein petitioners]
and the third arbitrator to be chosen by the plaintiff
[defendant Zosa] and defendants [petitioners].
There is no law prescribing the liability of arbitrators, so

does the arbitrator incur any liability at all? Yes, if he
does not discharge his duties relied on him, the liability
of the arbitrator is only contractual liability. Why
contractual liability? Because dili man siya ma file-an
kung walay arbitration agreement, because of the
arbitration agreement, and he is named in the said
arbitration agreement, that is why his liability is
contractual in nature. So pasabot ani kay liable siya for
damages arising from breach of contract? What is that
exception under torts and damages? If the act itself is
tortuous in nature damages can still be claimed. Please
take note liability for wrong decision there is no liability
at all, but he will be liable if he does not discharge his
duty.
33
1/17 TAN Note: Read the full text.
PRINCIPLE OF SEPARABILITY OF ARBITRATION

CLAUSE FRAUDULENT INDUCEMENTS
The law provides that the arbitral agreement is The arbitral tribunal can rule on that issue of fraudulent
independent from the main contract. This is the general inducement in the creation of contract. The rationale for
rule in domestic arbitration, as well as in international this is that there is nothing in the law that bars the
commercial arbitration. If it’s domestic arbitration, the arbitral tribunal from ruling such, in lieu of the principle
basis is the arbitration law, specifically Sections 2,6, of competence-competence, whereby the arbitral
and 7. In the Civil Code, we have provisions on tribunal can initially and primarily rule whether or not it
divisibility or separability that support the fact of an has jurisdiction over a particular issue. So it can be an
arbitration clause being separate from the main arbitral issue in both international commercial and
contract. domestic arbitration.
If it’s international commercial arbitration, it’s found in
Articles 16 par 1 of the Model Law. Under international commercial arbitration in regards to
fraudulent inducement, the arbitral tribunal is
What is meant by “that the arbitral agreement is empowered to decide on any objection as to the
independent from the main contract”? The principle of existence or validity of the arbitration agreement.
separability means that the invalidity of the arbitration
clause will not render the main arbitration or contract Under domestic arbitration, the law provides that it is
invalid, and vice versa. As a review of Obligations and subject to arbitration if the language of the arbitration
Contracts, the arbitral agreement, while enclosed in the clause is broad enough such as to provide for
main contract, is still different from the main contract arbitration claims or disputes arising or relating to the
itself. Specifically, under Rule 2.2 of the Special ADR said contract.
Rules of Court:
When we say a contract is fraudulently induced, it
Rule 2.2. Policy on arbitration.- makes it merely voidable.
xxx
The Special ADR Rules recognize the principle of
separability of the arbitration clause, which means TIMELINESS OF WAIVER
that said clause shall be treated as an agreement If it is international commercial arbitration, the
independent of the other terms of the contract of arbitration agreement must be invoked to preclude
which it forms part. A decision that the contract is court action not later than when submitting the first
null and void shall not entail ipso jure the invalidity statement on the substance of the dispute.
of the arbitration clause.
If it is domestic arbitration, take note of the following
Cargill v. San Fernando rules:
One of the parties does not want to enforce the main 1. In case of contract to arbitrate future
contract, because he alleged that the conditions of controversies, you should serve to the other party
such is unconscionable. a demand to arbitrate
2. In case you want to arbitrate an existing
Under the doctrine of separability, an arbitration controversy, you have to file a Motion to Dismiss
agreement is independent from the main contract, with the court having jurisdiction on the said
so the former is a separate contract in itself. matter; and
The Supreme Court further ruled that as a
consequence of the doctrine of separability, even  What is the effect of failure of the defendant
the very party who repudiates the main contract may to raise arbitration in a Motion to Dismiss or
invoke its arbitration clause. as an affirmative defense in his answer?
Waiver of his right to arbitrate.
Note: Read the case of Gonzales v. Matinez as well, 3. The court before which an action is brought in a
and distinguish it from this case. matter which is the subject matter of an arbitration
agreement shall, if at least one party so requests
Philippine Economic Zone Authority v. Edison not later that the pre-trial conference, or upon the
(Bataan) Cogeneration Corporation request of both parties thereafter, refer the parties
GR No. 179537 to arbitration unless it finds that the arbitration
The arbitration agreement may thus be invoked, agreement is null and void, inoperative or
regardless of the possible invalidity of the main incapable of being performed (Section 24 of RA
contract. The arbitration agreement does not also 9285)
automatically terminate when the main contract
 What does #3 mean?The rule is that if
ends.
there is an arbitration clause or
34
agreement, it has to be timely invoked, An arbitration agreement timely invoked precludes

because if the party fails to do so, it will court action.
constitute as a waiver of the said
arbitration. The court must be informed Chung Fu Industries v. CA
that there was a case filed before the The correct procedure is to suspend the case, and
court invoking a contract where this is an not dismiss it, and require the parties to proceed with
arbitration agreement. You call the the arbitration in accordance to their agreements.
attention of the court, although it is the
Asset Privatization Trust v. CA
duty of the court to immediately dismiss
If a dispute or action subject of arbitration is
motu proprio, because the court has no instituted within a court of law, the court is without
jurisdiction over the said matter. If the liberty to disregard the arbitration agreement, and
judge really has no knowledge, there is cannot allow the action to proceed It is erroneous
RA 9285 where the party to the said for a court to issue a final order dismissing the case,
arbitration agreement should call the because the court should suspend the case.
attention of the court that there is an
existing arbitration clause, so there must Reasons for suspending and not dismissing the case:
be arbitration first before a case can be 1. Rule 2.2
filed, because if the latter shall occur, it Rule 2.2. Policy on arbitration.-
will constitute as a waiver of the right to (A) Where the parties have agreed to submit
arbitrate. their dispute to arbitration, courts shall refer the
 The leading cases are Chung Fu v. CA parties to arbitration pursuant to Republic Act
and Asset Privatization Trust v. CA 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.
Asset Privatization Trust v. CA
Further, the courts shall not refuse to refer
If a dispute or action subject of arbitration is
parties to arbitration for reasons including, but
instituted within a court of law, the court is without
not limited to, the following:
liberty to disregard the arbitration agreement, and
a. The referral tends to oust a court of its
cannot allow the action to proceed.
jurisdiction;
b. The court is in a better position to resolve the
Factors considered when a party is deemed to have dispute subject of arbitration;
waived his right to require arbitration whether: c. The referral would result in multiplicity of suits;
a) Party’s action is inconsistent with the right to d. The arbitration proceeding has not
arbitrate commenced;
b) Litigation machinery has been substantially e. The place of arbitration is in a foreign country;
invoked f. One or more of the issues are legal and one or
c) Party either requested arbitration enforcement more of the arbitrators are not lawyers;
close to the trial date or delayed for a long period g. One or more of the arbitrators are not
before asking for a stay of the suit Philippine nationals; or
d) Defendant seeking arbitration filed a counterclaim h. One or more of the arbitrators are alleged not
asking for a stay of the proceedings to possess the required qualification under the
e) Important intervening steps such as resort to arbitration agreement or law.
discovery procedure not otherwise available in xxx
arbitration have been taken
2. Rule 2.4
f) Delay affected, misled or prejudiced the opposing
Rule 2.4. Policy implementing competence-
party
competence principle. –
g) Parties in fact litigate in a court of law a dispute
The arbitral tribunal shall be accorded the first
that is subject to arbitration opportunity or competence to rule on the issue
of whether or not it has the competence or
Far East International Import v. Nankai Kogyo jurisdiction to decide a dispute submitted to it for
Having waived recourse through arbitration, the decision, including any objection with respect to
losing party cannot thereafter question jurisdiction of the existence or validity of the arbitration
the court, because it has to be timely invoked. This agreement. When a court is asked to rule upon
applies to both domestic and international issue/s affecting the competence or jurisdiction
commercial arbitration. of an arbitral tribunal in a dispute brought before
it, either before or after the arbitral tribunal is
constituted, the court must exercise judicial
OPERATION AND EFFECT OF ARBITRATION restraint and defer to the competence or
AGREEMENTS jurisdiction of the arbitral tribunal by allowing the
35
arbitral tribunal the first opportunity to rule upon Remedies against the order of the court which
such issues. erroneously denied either of the three remedies?
1. File a petition for prohibition (in order to prohibit the
Where the court is asked to make a court from taking cognizance of the case)
determination of whether the arbitration 2. File a petition for certiorari (since it’s merely an
agreement is null and void, inoperative or interlocutory order)
incapable of being performed, under this policy
of judicial restraint, the court must make no more Western Minolco Corporation Case
than a prima facie determination of that issue. The court is not barred from inquiring into the
Unless the court, pursuant to such prima facie question whether or not it has jurisdiction over the
determination, concludes that the arbitration case if the party claims it has no jurisdiction over a
agreement is null and void, inoperative or controversy.
incapable of being performed, the court must
suspend the action before it and refer the parties
to arbitration pursuant to the arbitration RULE ON LIBERALITY
agreement. The arbitral tribunal or court, in resolving the issue
whether or not the controversy is subject to arbitration,
Comments: So take note of Rule 2.4 on the looks into the scope of the arbitration agreement and
policy of implementing competence- interprets it liberally, so that any doubt is construed in
competence and judicial restraint on the part of favor of arbitration, since we encourage alternative
the court. dispute resolution.
If a case is prematurely filed in court, pursuant to the LM Engineering v. Capitol Industry
cases of Asset Privatization Trust, the court should An arbitration agreement is liberally construed, and
merely suspend the case, because Rule 2.2 and 2.4. any doubt should be resolved in favor of arbitration,
since the policy of the law is on arbitration.
Remedies when a case is prematurely filed in
contravention with the agreement to arbitrate In the case before us, the Subcontract has the
1. File a Motion to Dismiss the case following arbitral clause:
 Rationale: Under Rule 16 of the 1997 Rules of
Civil Procedure, one of the grounds to dismiss “6. The Parties hereto agree that any dispute or
the case is failure to comply with the condition conflict as regards to interpretation and
precedent. implementation of this Agreement which cannot be
2. Move to suspend the court proceedings (in lieu of settled between [respondent] and [petitioner]
Asset Privatization Trust) amicably shall be settled by means of arbitration x x
3. File a motion to refer the case to arbitration x.”
Assume that the issue in filing the case is that you are Clearly, the resolution of the dispute between the
questioning the existence, validity, operation and parties herein requires a referral to the provisions of
enforcement of the arbitration clause. Can the court their Agreement. Within the scope of the arbitration
cognizance of the case, when such was prematurely clause are discrepancies as to the amount of
filed in contravention with the agreement to arbitrate? advances and billable accomplishments, the
No, but the court can make a prima facie determination application of the provision on termination, and the
as to the question. The mere existence of an arbitration consequent set-off of expenses.
agreement does not preclude the court from taking
cognizance of the case even if the defendant claims The Supreme Court then ruled that this is an
that recourse must first be through arbitration, since the arbitrable issue.
court can make a prima facie determination. It’s the
duty of the court to determine if the controversy should
be subject to arbitration REFERRAL TO ARBITRATION
If an action is commenced before a court on a matter
Assuming that the court determines that the arbitration that is the subject of an arbitration agreement, the court
agreement is valid etc., then it is the duty of the court is not allowed to dismiss the action. The court simply
to suspend the action and refer the parties to arbitration has to suspend the action to await the final outcome of
pursuant to the arbitration agreement. But if the the arbitration for possible confirmation and
determination was that the agreement was void, enforcement of the award before the court.
unenforceable, inoperative or incapable of being
performed, then the duty of the court is to take As what we said before in the case of Asset
cognizance of the case. Privatization, simply suspend the proceedings, with
Rule 4 of the Special ADR Rules of Court as basis.
36
When the court issues an order suspending the (6) Either party may apply with the Court
proceedings before it, it means it has taken jurisdiction for assistance in Implementing or enforcing
over the case, otherwise it would not issue such order. an interim measure ordered by an arbitral
The trial court does not lose jurisdiction over the case tribunal.
when it refers parties to arbitration, since again, the (7) A party who does not comply with the
proceedings are merely suspended even if the order shall be liable for all damages
controversy was later determined to be subject to resulting from noncompliance, including all
arbitration. expenses, and reasonable attorney's fees,
paid in obtaining the order's judicial
enforcement.
PROVISIONAL REMEDIES
The arbitral tribunal can grant provisional remedies, SEC. 29. Further Authority for Arbitrator to Grant
which may be found in Section 28 and 29 of RA 9285. Interim Measure of Protection. - Unless otherwise
agreed by the parties, the arbitral tribunal may, at
SEC. 28. Grant of Interim Measure of Protection. - the request of a party, order any party to take such
(a) It is not incompatible with an arbitration interim measures of protection as the arbitral
agreement for a party to request, before constitution tribunal may consider necessary in respect of the
of the tribunal, from a Court an interim measure of subject matter of the dispute following the rules in
protection and for the Court to grant such measure. Section 28, paragraph 2. Such interim measures
After constitution of the arbitral tribunal and during may include but shall not be limited to preliminary
arbitral proceedings, a request for an interim injuction directed against a party, appointment of
measure of protection or modification thereof, may receivers or detention, preservation, inspection of
be made with the arbitral tribunal or to the extent that property that is the subject of the dispute in
the arbitral tribunal has no power to act or is unable arbitration. Either party may apply with the Court for
to act effectively, the request may be made with the assistance in implementing or enforcing an interim
Court. The arbitral tribunal is deemed constituted measures ordered by an arbitral tribunal.
when the sole arbitrator or the third arbitrator who
has been nominated, has accepted the nomination Under Section 28, prior the constitution of the arbitral
and written communication of said nomination and tribunal, we can request for provisional remedies
acceptance has been received by the party making before the court. The procedure we use is Rule 5 of the
request. Special ADR Rules. After constitution of the arbitral
tribunal, you request for provisional remedies before
(b) The following rules on interim or provisional relief the arbitral tribunal, unless the latter cannot grant your
shall be observed: request for provisional remedies.
(1) Any party may request that provision
relief be granted against the adverse party: Home Bankers v. CA
(2) Such relief may be granted: A party to a pending arbitration has the right, without
(i) to prevent irreparable loss or violating the rule on forum shopping, to institute an
injury: action to obtain a writ of preliminary attachment from
(ii) to provide security for the the court in order to preserve the property which is
performance of any obligation; the subject matter of arbitration.
(iii) to produce or preserve any
evidence; or Rule 5 of Special ADR Rules only refers to provisional
(iv) to compel any other remedies that can be applied in relation to arbitration if
appropriate act or omission. we will actually go to the courts.
(3) The order granting provisional relief
may be conditioned upon the provision of Special ADR Rules:
security or any act or omission specified in RULE 5: INTERIM MEASURES OF PROTECTION
the order. Rule 5.1. Who may ask for interim measures of
(4) Interim or provisional relief is requested protection. - A party to an arbitration agreement may
by written application transmitted by petition the court for interim measures of protection.
reasonable means to the Court or arbitral
tribunal as the case may be and the party Rule 5.2. When to petition. - A petition for an interim
against whom the relief is sought, measure of protection may be made (a) before
describing in appropriate detail the precise arbitration is commenced, (b) after arbitration is
relief, the party against whom the relief is commenced, but before the constitution of the
requested, the grounds for the relief, and arbitral tribunal, or (c) after the constitution of the
evidence supporting the request. arbitral tribunal and at any time during arbitral
(5) The order shall be binding upon the proceedings but, at this stage, only to the extent that
parties. the arbitral tribunal has no power to act or is unable
to act effectively.
37
Rule 5.3. Venue. - A petition for an interim measure Rule 5.7. Dispensing with prior notice in certain
of protection may be filed with the Regional Trial cases. - Prior notice to the other party may be
Court, which has jurisdiction over any of the dispensed with when the petitioner alleges in the
following places: petition that there is an urgent need to either (a)
a. Where the principal place of business of preserve property, (b) prevent the respondent from
any of the parties to arbitration is located; disposing of, or concealing, the property, or (c)
b. Where any of the parties who are prevent the relief prayed for from becoming illusory
individuals resides; because of prior notice, and the court finds that the
c. Where any of the acts sought to be reason/s given by the petitioner are meritorious
enjoined are being performed, threatened
to be performed or not being performed; or Comments: The provisional remedy in Rule 5.7 is
d. Where the real property subject of issued ex parte.
arbitration, or a portion thereof is situated.
Rule 5.8. Comment/Opposition. - The
Rule 5.4. Grounds. - The following grounds, while comment/opposition must be filed within fifteen (15)
not limiting the reasons for the court to grant an days from service of the petition. The opposition or
interim measure of protection, indicate the nature of comment should state the reasons why the interim
the reasons that the court shall consider in granting measure of protection should not be granted.
the relief:
a. The need to prevent irreparable loss or Comments: Due process requirement, because you
injury; filed a petition in court. The next procedure should
b. The need to provide security for the be that you should require the other party to
performance of any obligation; comment or oppose whether or not the provisional
c. The need to produce or preserve remedy should be issued.
evidence; or
d. The need to compel any other Rule 5.9. Court action. - After hearing the petition,
appropriate act or omission the court shall balance the relative interests of the
parties and inconveniences that may be caused,
Rule 5.5. Contents of the petition. - The verified and on that basis resolve the matter within thirty (30)
petition must state the following: days from (a) submission of the opposition, or (b)
a. The fact that there is an arbitration upon lapse of the period to file the same, or (c) from
agreement; termination of the hearing that the court may set only
b. The fact that the arbitral tribunal has not if there is a need for clarification or further argument.
been constituted, or if constituted, is If the other parties fail to file their opposition on or
unable to act or would be unable to act before the day of the hearing, the court shall motu
effectively; proprio render judgment only on the basis of the
c. A detailed description of the appropriate allegations in the petition that are substantiated by
relief sought; supporting documents and limited to what is prayed
d. The grounds relied on for the allowance for therein.
of the petition
Apart from other submissions, the petitioner must In cases where, based solely on the petition, the
attach to his petition an authentic copy of the court finds that there is an urgent need to either (a)
arbitration agreement. preserve property, (b) prevent the respondent from
disposing of, or concealing, the property, or (c)
Rule 5.6. Type of interim measure of protection that prevent the relief prayed for from becoming illusory
a court may grant.- The following, among others, are because of prior notice, it shall issue an immediately
the interim measures of protection that a court may executory temporary order of protection and require
grant: the petitioner, within five (5) days from receipt of that
a. Preliminary injunction directed against a order, to post a bond to answer for any damage that
party to arbitration; respondent may suffer as a result of its order. The
b. Preliminary attachment against property ex-parte temporary order of protection shall be valid
or garnishment of funds in the custody of a only for a period of twenty (20) days from the service
bank or a third person; on the party required to comply with the order.
c. Appointment of a receiver; Within that period, the court shall:
d. Detention, preservation, delivery or a. Furnish the respondent a copy of the
inspection of property; or, petition and a notice requiring him to
e. Assistance in the enforcement of an comment thereon on or before the day the
interim measure of protection granted by petition will be heard; and
the arbitral tribunal, which the latter cannot b. Notify the parties that the petition shall
enforce effectively. be heard on a day specified in the notice,
38
which must not be beyond the twenty (20) The Court may not change or increase or decrease
day period of the effectivity of the ex-parte the security ordered by the arbitral tribunal.
order.
The respondent has the option of having the Comments: This is the bond requirement akin to
temporary order of protection lifted by posting an your subject in Provisional Remedies (ex.
appropriate counter-bond as determined by the preliminary
court. attachment)
If the respondent requests the court for an extension

of the period to file his opposition or comment or to Rule 5.13. Modification, amendment, revision or
reset the hearing to a later date, and such request is revocation of court’s previously issued interim
granted, the court shall extend the period of validity measure of protection. –
of the ex-parte temporary order of protection for no Any court order granting or denying interim
more than twenty days from expiration of the original measure/s of protection is issued without prejudice
period. to subsequent grant, modification, amendment,
revision or revocation by the arbitral tribunal as may
After notice and hearing, the court may either grant be warranted.
or deny the petition for an interim measure of
protection. The order granting or denying any An interim measure of protection issued by the
application for interim measure of protection in aid arbitral tribunal shall, upon its issuance be deemed
of arbitration must indicate that it is issued without to have ipso jure modified, amended, revised or
prejudice to subsequent grant, modification, revoked an interim measure of protection previously
amendment, revision or revocation by an arbitral issued by the court to the extent that it is inconsistent
tribunal. with the subsequent interim measure of protection
issued by the arbitral tribunal.
Rule 5.10. Relief against court action. - If Comments: You went to the court to issue a
respondent was given an opportunity to be heard on provisional remedy before the arbitral tribunal was
a petition for an interim measure of protection, any constituted. Now the tribunal was constituted, but
order by the court shall be immediately executory, there is already a preliminary injunction issued.
but may be the subject of a motion for What will happen to the preliminary injunction, will it
reconsideration and/or appeal or, if warranted, a still take effect? If the relief granted by the tribunal is
petition for certiorari. not inconsistent with the provisional remedy granted
by the court, the general rule is that it the provisional
Rule 5.11. Duty of the court to refer back. - The court remedy is not deemed modified or amended.
shall not deny an application for assistance in
implementing or enforcing an interim measure of Rule 5.14. Conflict or inconsistency between interim
protection ordered by an arbitral tribunal on any or measure of protection issued by the court and by the
all of the following grounds: arbitral tribunal. - Any question involving a conflict or
a. The arbitral tribunal granted the interim relief ex inconsistency between an interim measure of
parte; or protection issued by the court and by the arbitral
b. The party opposing the application found new tribunal shall be immediately referred by the court to
material evidence, which the arbitral tribunal had not the arbitral tribunal which shall have the authority to
considered in granting in the application, and which, decide such question.
if considered, may produce a different result; or
c. The measure of protection ordered by the arbitral Comments: Assuming there is inconsistency
tribunal amends, revokes, modifies or is inconsistent between the provisional remedy issued by the
with an earlier measure of protection issued by the tribunal and that of the court, apply Rule 5.14. Why
court. do we have to refer this back to the arbitral tribunal?
As a policy, we are upholding the agreement of the
If it finds that there is sufficient merit in the parties to submit into arbitration, so the rules provide
opposition to the application based on letter (b) in case of inconsistency, the arbitral tribunal’s
above, the court shall refer the matter back to the decision shall prevail.
arbitral tribunal for appropriate determination.
Rule 5.15. Court to defer action on petition for an
Rule 5.12. Security. - The order granting an interim interim measure of protection when informed of
measure of protection may be conditioned upon the constitution of the arbitral tribunal. - The court shall
provision of security, performance of an act, or defer action on any pending petition for an interim
omission thereof, specified in the order. measure of protection filed by a party to an
arbitration agreement arising from or in connection
with a dispute thereunder upon being informed that
39
an arbitral tribunal has been constituted pursuant to restraint. Again, the courts can take cognizance and
such agreement. The court may act upon such can only make a prima facie determination with regard
petition only if it is established by the petitioner that to the existence, validity, operation and enforceability
the arbitral tribunal has no power to act on any such of the arbitration agreement.
interim measure of protection or is unable to act
thereon effectively.
THE ARBITRATOR
Comments: This is an important provision. The arbitrator is the person appointed (or named in the
arbitration agreement) to render an award, alone or
Rule 5.16. Court assistance should arbitral tribunal with others, in a dispute that is the subject of an
be unable to effectively enforce interim measure of arbitration agreement (Section 3 of RA 9285)
protection. - The court shall assist in the
enforcement of an interim measure of protection Qualifications
issued by the arbitral tribunal which it is unable to 1. Of legal age
effectively enforce. 2. In full enjoyment of his civil rights and
3. Must know how to read and write
PRINCIPLE OF COMPETENCE-COMPETENCE Disqualifications of an arbitrator (as provided for in

The principle states that the arbitral tribunal may Section 10, RA 876 for domestic arbitration and Article
initially rule on its own jurisdiction, including any 12, Model Law for international arbitration)
objection with respect to the existence or validity of the a) Related by blood or marriage within the sixth
arbitration agreement or any condition precedent in the degree to either party to the controversy.
filing of a request for arbitration.This principle is found b) Has or has had financial, fiduciary or other interest
in Rule 2.4. in the controversy or cause to be decided or in the
result of the proceeding, or
Rule 2.4. Policy implementing competence-
c) Has any personal bias, which might prejudice the
competence principle. - The arbitral tribunal shall be
right of any party to a fair and impartial award.
accorded the first opportunity or competence to rule
d) Select as an arbitrator any person to act as his
on the issue of whether or not it has the competence
champion or to advocate his cause
or jurisdiction to decide a dispute submitted to it for
decision, including any objection with respect to the e) Justifiable doubts as to the arbitrator’s partiality
existence or validity of the arbitration agreement. f) Does not possess the qualifications agreed upon
When a court is asked to rule upon issue/s affecting by the parties
the competence or jurisdiction of an arbitral tribunal  As to letter F, the parties can actually stipulate
in a dispute brought before it, either before or after as to the qualifications they desire for the
the arbitral tribunal is constituted, the court must arbitrator.
exercise judicial restraint and defer to the
competence or jurisdiction of the arbitral tribunal by Choice of Arbitrators
allowing the arbitral tribunal the first opportunity to General Rule
rule upon such issues. In domestic and international commercial arbitration,
the parties are given the choice as to the arbitrators.
Where the court is asked to make a determination of The courts are also given the power to appoint
whether the arbitration agreement is null and void, arbitrators.
inoperative or incapable of being performed, under
this policy of judicial restraint, the court must make Special ADR Rules:
no more than a prima facie determination of that RULE 6: APPOINTMENT OF ARBITRATORS
issue. Rule 6.1. When the court may act as Appointing
Unless the court, pursuant to such prima facie Authority. - The court shall act as Appointing
determination, concludes that the arbitration Authority only in the following instances:
agreement is null and void, inoperative or incapable a) Where any of the parties in an institutional
of being performed, the court must suspend the arbitration failed or refused to appoint an
action before it and refer the parties to arbitration arbitrator or when the parties have failed to
pursuant to the arbitration agreement. reach an agreement on the sole arbitrator (in an
arbitration before a sole arbitrator) or when the
So this principle entails that the arbitral tribunal is given two designated arbitrators have failed to reach
by law. The first opportunity to rule and determine an agreement on the third or presiding arbitrator
whether or not it has jurisdiction over a particular issue (in an arbitration before a panel of three
or has competence or jurisdiction to the dispute arbitrators), and the institution under whose
submitted to it for decision, including any objection with rules arbitration is to be conducted fails or is
respect to the existence or validity of the arbitration unable to perform its duty as appointing
agreement. That’s why the policy of the law is judicial
40
authority within a reasonable time from receipt c. The number of arbitrators agreed upon
of the request for appointment; or the absence of any agreement as to the
b) In all instances where arbitration is ad hoc and number of arbitrators;
the parties failed to provide a method for d. The special qualifications that the
appointing or replacing an arbitrator, or arbitrator/s must possess, if any, that were
substitute arbitrator, or the method agreed upon agreed upon by the parties;
is ineffective, and the National President of the e. The fact that the Appointing Authority,
Integrated Bar of the Philippines (IBP) or his without justifiable cause, has failed or
duly authorized representative fails or refuses refused to act as such within the time
to act within such period as may be allowed prescribed or in the absence thereof, within
under the pertinent rules of the IBP or within a reasonable time, from the date a request
such period as may be agreed upon by the is made; and
parties, or in the absence thereof, within thirty f. The petitioner is not the cause of the
(30) days from receipt of such request for delay in, or failure of, the appointment of
appointment; the arbitrator.
c) Where the parties agreed that their dispute
shall be resolved by three arbitrators but no Apart from other submissions, the petitioner must
method of appointing those arbitrators has attach to the petition (a) an authentic copy of the
been agreed upon, each party shall appoint one arbitration agreement, and (b) proof that the
arbitrator and the two arbitrators thus appointed Appointing Authority has been notified of the filing of
shall appoint a third arbitrator. If a party fails to the petition for appointment with the court.
appoint his arbitrator within thirty (30) days of
receipt of a request to do so from the other Rule 6.5. Comment/Opposition. - The
party, or if the two arbitrators fail to agree on the comment/opposition must be filed within fifteen (15)
third arbitrator within a reasonable time from days from service of the petition.
their appointment, the appointment shall be
made by the Appointing Authority. If the latter Rule 6.6. Submission of list of arbitrators. - The court
fails or refuses to act or appoint an arbitrator may, at its option, also require each party to submit
within a reasonable time from receipt of the a list of not less than three (3) proposed arbitrators
request to do so, any party or the appointed together with their curriculum vitae.
arbitrator/s may request the court to appoint an
arbitrator or the third arbitrator as the case may Rule 6.7. Court action. - After hearing, if the court
be. finds merit in the petition, it shall appoint an
arbitrator; otherwise, it shall dismiss the petition.
Comments: These are the instances where the court
may appoint an arbitrator, but it’s not motu proprio In making the appointment, the court shall have
or an automatic appointment, because you have to regard to such considerations as are likely to secure
file a petition in court for the appointment of said the appointment of an independent and impartial
arbitrator. arbitrator.
Rule 6.2. Who may request for appointment. - Any At any time after the petition is filed and before the
party to an arbitration may request the court to act court makes an appointment, it shall also dismiss
as an Appointing Authority in the instances specified the petition upon being informed that the Appointing
in Rule 6.1 above. Authority has already made the appointment.
Rule 6.3. Venue. - The petition for appointment of Rule 6.8. Forum shopping prohibited. - When there
arbitrator may be filed, at the option of the petitioner, is a pending petition in another court to declare the
in the Regional Trial Court (a) where the principal arbitration agreement inexistent, invalid,
place of business of any of the parties is located, (b) unenforceable, on account of which the respondent
if any of the parties are individuals, where those failed or refused to participate in the selection and
individuals reside, or (c) in the National Capital appointment of a sole arbitrator or to appoint a party-
Region. nominated arbitrator, the petition filed under this rule
shall be dismissed.
Rule 6.4. Contents of the petition. -The petition shall
state the following: Rule 6.9. Relief against court action. - If the court
a. The general nature of the dispute; appoints an arbitrator, the order appointing an
b. If the parties agreed on an appointment arbitrator shall be immediately executory and shall
procedure, a description of that procedure not be the subject of a motion for reconsideration,
with reference to the agreement where appeal or certiorari. An order of the court denying
such may be found; the petition for appointment of an arbitrator may,
41
however, be the subject of a motion for Rule 1.11. Definition. - The following terms shall
reconsideration, appeal or certiorari. have the following meanings:
xxx
As to the method of appointment: b. "Appointing Authority" shall mean the person or
 In domestic arbitration, the parties will simply institution named in the arbitration agreement as the
provide (in their arbitration agreement) the method appointing authority; or the regular arbitration
for the appointment or naming of the arbitrator. institution under whose rule the arbitration is agreed
 In international commercial arbitration, the parties to be conducted. Where the parties have agreed to
are free to agree the said procedure for the said submit their dispute to institutional arbitration rules,
and unless they have agreed to a different
arbitrator. In absence of such agreement, if the
procedure, they shall be deemed to have agreed to
arbitration is with three arbitrators, each party shall
procedure under such arbitration rules for the
appoint one arbitrator and two arbitrators thus selection and appointment of arbitrators. In ad hoc
appointed shall appoint a third arbitrator. The arbitration, the default appointment of arbitrators
reason for this is because an arbitral tribunal is a shall be made by the National President of the
body. It can be one or three arbitrators to decide Integrated Bar of the Philippines or his duly
on an issue. authorized representative.
Xxx
In case of failure, the parties shall go to court to request
for an appointment of an arbitrator. If it’s a sole RULE 7: CHALLENGE TO APPOINTMENT OF
arbitrator, and the parties fail to agree on such ARBITRATOR
arbitrator, it shall be appointed upon the request of a Rule 7.1. Who may challenge. - Any of the parties to
party to the court, in lieu of Rule 6. an arbitration may challenge an arbitrator.
Lawyers Rule 7.2. When challenge may be raised in court. -

In domestic and international commercial arbitration, When an arbitrator is challenged before the arbitral
it’s not necessary for the arbitrators to have any special tribunal under the procedure agreed upon by the
training or experience or be admitted to the Philippine parties or under the procedure provided for in Article
bar, unless otherwise stipulated. 13 (2) of the Model Law and the challenge is not
successful, the aggrieved party may request the
Foreigners Appointing Authority to rule on the challenge, and it
In international commercial arbitration, foreigners are is only when such Appointing Authority fails or
allowed to be arbitrators. In domestic arbitration, there refuses to act on the challenge within such period as
is no bias unless the parties by agreement impose may be allowed under the applicable rule or in the
restrictions as to the nationality of the arbitrator. absence thereof, within thirty (30) days from receipt
of the request, that the aggrieved party may renew
SEC. 37,RA 9285. Appointment of Foreign the challenge in court.
Arbitrator. - The Construction Industry Arbitration
Commission (CIAC) shall promulgate rules to allow Comments: In both domestic and international
for the appointment of a foreign arbitrator or commercial arbitration, the parties are given the
coarbitrator or chairman of a tribunal a person who decision to decide on the procedure for challenging
has not been previously accredited by CIAC: an arbitrator. Without such agreement, the party
Provided, That: who intends to challenge is required to send a
(a) the dispute is a construction dispute in written statement of the reasons for the challenge to
which one party is an international party an arbitral tribunal. If the challenge is not successful,
(b) the person to be appointed agreed to you request the appointing authority to decide on the
abide by the arbitration rules and policies said challenge.
of CIAC;
(c) he/she is either coarbitrator upon the The body that has the primary jurisdiction to
nomination of the international party; or entertain on such challenge is with the arbitral
he/she is the common choice of the two tribunal (as agreed upon by parties or by the Model
CIAC-accredited arbitrators first appointed Law, as pursuant to Rule 7.2), not with the courts
one of whom was nominated by the just yet. You cannot automatically challenge the
international party; and qualification with regard appointment. You first go to
(d) the foreign arbitrator shall be of different the tribunal, then to the Appointing Authority, then to
nationality from the international party. the court.
Rule 7.3. Venue. - The challenge shall be filed with

CHALLENGE AND DISQUALIFICATION the Regional Trial Court (a) where the principal
Special ADR Rules place of business of any of the parties is located, (b)
if any of the parties are individuals, where those
42
individuals reside, or (c) in the National Capital to the challenge and withdraw the
Region. appointment.
b. The other arbitrators in the arbitral
Rule 7.4. Grounds. - An arbitrator may be tribunal agree to the removal of the
challenged on any of the grounds for challenge challenged arbitrator; and
provided for in Republic Act No. 9285 and its c. The challenged arbitrator fails or refuses
implementing rules, Republic Act No. 876 or the to submit his comment on the petition or
Model Law. The nationality or professional the brief of legal arguments as directed by
qualification of an arbitrator is not a ground to the court, or in such comment or legal brief,
challenge an arbitrator unless the parties have he fails to object to his removal following
specified in their arbitration agreement a nationality the challenge.
and/or professional qualification for appointment as
arbitrator. The court shall decide the challenge on the basis of
evidence submitted by the parties.
Comments: As discussed earlier, if the arbitrator is
cousins with one of the parties, then that is one of The court will decide the challenge on the basis of
the grounds to challenge. the evidence submitted by the parties in the
following instances:
Rule 7.5. Contents of the petition. - The petition shall a. The other arbitrators in the arbitral
state the following: tribunal agree to the removal of the
a. The name/s of the arbitrator/s challenged arbitrator; and
challenged and his/their address; b. If the challenged arbitrator fails or
b. The grounds for the challenge; refuses to submit his comment on the
c. The facts showing that the ground for the petition or the brief of legal arguments as
challenge has been expressly or impliedly directed by the court, or in such comment
rejected by the challenged arbitrator/s; and or brief of legal arguments, he fails to
d. The facts showing that the Appointing object to his removal following the
Authority failed or refused to act on the challenge.
challenge.
The court shall dismiss the petition motu proprio Rule 7.8. No motion for reconsideration, appeal or
unless it is clearly alleged therein that the Appointing certiorari. - Any order of the court resolving the
Authority charged with deciding the challenge, after petition shall be immediately executory and shall not
the resolution of the arbitral tribunal rejecting the be the subject of a motion for reconsideration,
challenge is raised or contested before such appeal, or certiorari.
Appointing Authority, failed or refused to act on the
challenge within thirty (30) days from receipt of the Rule 7.9. Reimbursement of expenses and
request or within such longer period as may apply or reasonable compensation to challenged arbitrator. -
as may have been agreed upon by the parties. Unless the bad faith of the challenged arbitrator is
established with reasonable certainty by concealing
Comments: So if the procedure set forth in Rule 7.2 or failing to disclose a ground for his disqualification,
was not followed, then the court can motu propio the challenged arbitrator shall be entitled to
dismiss the petition. reimbursement of all reasonable expenses he may
have incurred in attending to the arbitration and to a
Rule 7.6. Comment/Opposition. - The challenged reasonable compensation for his work on the
arbitrator or other parties may file a comment or arbitration. Such expenses include, but shall not be
opposition within fifteen (15) days from service of limited to, transportation and hotel expenses, if any.
the petition. A reasonable compensation shall be paid to the
challenged arbitrator on the basis of the length of
Rule 7.7. Court action. - After hearing, the court shall time he has devoted to the arbitration and taking into
remove the challenged arbitrator if it finds merit in consideration his stature and reputation as an
the petition; otherwise, it shall dismiss the petition. arbitrator. The request for reimbursement of
expenses and for payment of a reasonable
The court shall allow the challenged arbitrator who compensation shall be filed in the same case and in
subsequently agrees to accept the challenge to the court where the petition to replace the
withdraw as arbitrator. challenged arbitrator was filed. The court, in
determining the amount of the award to the
The court shall accept the challenge and remove the challenged arbitrator, shall receive evidence of
arbitrator in the following cases: expenses to be reimbursed, which may consist of air
a. The party or parties who named and tickets, hotel bills and expenses, and inland
appointed the challenged arbitrator agree transportation. The court shall direct the challenging
43
party to pay the amount of the award to the court for

the account of the challenged arbitrator, in default of The litigants here suffered injury on account of the
which the court may issue a writ of execution to award.
enforce the award.
Transcriber’s Note:
EQUAL RIGHTS OF PARTIES TO DESIGNATE THE Read the following cases, as they will be included in
ARBITRATORS the exam
The parties are entitled to choose an equal number of  Construction disputes
arbitrators, subject to the limitations provided in Art o Hutama case (GR#180540)
2045 of the Civil Code: o William Golangco Construction v. Ray
Burton (GR#163582)
Article 2045. Any clause giving one of the parties o Gammon Philippines v. Metro Rail
power to choose more arbitrators than the other is Transit (GR#144792)
void and of no effect.
 Review of arbitral awards
Additional arbitrators may be appointed under Section o Fruehauf case (GR#204197)
9 of the Arbitration Law, but the naming should be  Special ADR Rules
made in writing. The additional arbitrators must sit with o DENR v. United Planner’s Consultants
the original arbitrators during the hearing. (GR# 212081)
 Enforcement of foreign arbitral awards
A substitute arbitrator may also be named. o Tuna Processing v. Philippine King Ford
(GR# 185582)
Magellan Capital v. Zosa
The agreement for the composition of the arbitral
panel is invalid. The employee would never receive
justice in the arbitration proceeding from the panel
of arbitrators, because both companies representing
the same interest should be considered as one, and
can only be entitled to one arbitrator to represent
them in the arbitration proceedings.
The controversy should be settled in the arbitration

proceedings, in accordance with the employment
agreement, but under the panel of three arbitrators:
one arbitrator to represent the plaintiff, one to
represent both defendants, and one to be chosen by
Zosa and the said defendants.
Note: Read the full text.
LIABILITY FOR WRONG DECISIONS

There is no law prescribing liability of arbitrators, but
the arbitrator incurs liabilities if he does not discharge
the duties required of him. The liability would be
contractual in nature, because he is named as an
arbitrator in the arbitration agreement. He could then
be liable for damages arising from breach of contract.
CF Luzon Development Bank v. Association of

Luzon Development Bank Employees
The rule applicable to judges should, by analogy, be
applicable to arbitrators, since the latter act in a
quasi-judicial capacity and are deemed as
instrumentality of the government.
Santos v. Orlino
There can be civil liability for judicial error, if such
error was gross, patent, deliberate, malicious and
incurred with bad faith.
44
1/18 SINGANON contract, specially in terms of attending the hearings or

presenting the witnesses.
ARBITRATION PROCEEDINGS
In sum, in determining the place of arbitration, the
When is the Arbitral Tribunal deemed constituted? arbitral tribunal must take into account the following:
It is deemed constituted when the sole arbitrator or 1. Convenience to the parties, and
the third arbitrator who has been nominated has 2. Relevance of the place to the
accepted the nomination and a written communication contract.
of said nomination and acceptance has been received
by the party making a request. Law of Procedure
As a general rule, the number of members of the So what will govern the law of procedure in the said
arbitral tribunal depends upon the agreement between arbitration proceedings?
the parties. It can be a sole arbitrator or there can also
be three or even five arbitrators, depending on the Rule 2.3. Rules governing arbitral
agreement between the parties. proceedings. - The parties are free to agree on the
procedure to be followed in the conduct of arbitral
In the event that the parties failed to name the proceedings. Failing such agreement, the arbitral
arbitrator, what is the remedy? tribunal may conduct arbitration in the manner it
considers appropriate.
The court will appoint the arbitrator. The court will
now become the appointing authority pursuant to Rule The law provides that in both domestic and
7[Rule 6.1 is the correct provision] of the Special ADR international arbitration, the parties may agree on the
Rules of Court. application of the rules of procedure governing the
arbitration other than those set forth under Philippine
Place of Arbitration law.
SEC. 30. Place of Arbitration. - The parties are In case of failure, it is the arbitral tribunal who will
free to agree on the place of arbitration. Failing such decide the procedure in the manner it considers
agreement, the place of arbitration shall be in Metro appropriate.
Manila, unless the arbitral tribunal, having regard to
the circumstances of the case, including the Why are the parties given an option to decide the law
convenience of the parties shall decide on a of procedure? Why is it that it is the parties who will
different place of arbitration. decide what procedure will govern the arbitration
proceedings?
The arbitral tribunal may, unless otherwise agreed
by the parties, meet at any place it considers Because of the Principle of Autonomy of Contracts.
appropriate for consultation among its members, for
hearing witnesses, experts, or the parties, or for It should be noted that the choice of Philippines as
inspection of goods, other property or documents. the place or seat of arbitration means that the
arbitration itself is subject to Philippine Law.
Again, the place of arbitration is the place agreed
upon by the parties to the arbitration agreement. So in both Domestic Arbitration and International
Commercial Arbitration, the seat of arbitration is in the
In International Commercial Arbitration, if the parties Philippines. If the seat of arbitration isthe Philippines,
have not designated the place where the arbitration is so the law of procedure is subject to Philippine Law as
to take place, the arbitral tribunal may determine the the Lex Arbitrii or Lex Loci Arbitrii.
place of arbitration, having regard to the circumstance
of the case including convenience of parties. So please take note that is the limitation imposed by
law. Although the parties are free to agree on what
Take note, what is taken into account is the procedure will govern their arbitration proceedings, the
convenience of parties if it is the arbitral tribunal who governing procedure, it is subject to limitation or
will decide the place of arbitration. qualification.
With regard to the place of arbitration, what is What is the limitation or qualification imposed by law?
important is that if the arbitral tribunal chooses the
place of arbitration, the said place must have a The basic limitations and qualifications imposed by
relevance to the contract and it should not impose any law ensure that the basic requirements of due process
undue hardship upon any one of the parties to the are satisfied.
45
So the agreement is subject to due process

requirement. 2. The procedure for challenging an
arbitrator is subject to the provisions
So when we speak of due process requirement vis a authorizing the appointment of the appointing
vis the arbitration proceeding, what does it mean? authority to decide an unsuccessful challenge
to an arbitrator;
When you say due process as applied to arbitration
proceedings, it means that: 3. Those pertaining to the form and
content of the award;
a. The party is given a chance to be
heard and to submit his evidence; 4. Those pertaining to the correction or
interpretation of an award or making an
b. The tribunal must consider the additional award;
elements presented;
5. Those pertaining to the procedure
c. The tribunal must have something to for setting aside an award and the grounds for
support its decision; setting aside an award;
d. The evidence to support the decision 6. Those pertaining to the procedure

must be substantial (substantial evidence); for refusing enforcement of the award and
grounds for not enforcing the award.
e. The decision be rendered on the
evidence presented or at least contained in But the general rule is that thelaw on procedure
the record of the proceedings; depends upon the agreement of the parties.
f. The decision must be rendered in Hearings before the Arbitrators

such a manner that the parties can know the
issues involved and the reasons for the General Rule: There must be a hearing that should
decisions rendered. be conducted.
Please take note of due process in arbitration Exception:When the arbitral tribunal may or may not
procedure based on the case of Ang Tibay vs CIR69 hold hearings for the presentation of evidence or for
Phil 635. oral arguments.
Exception to the exception: The parties agreed in

How about if it is international commercial writing that no hearing shall be held and agreed to
arbitration? What is the governing law on procedure? submit their dispute to arbitration through other means
other than oral hearing.
Again, the general premise is that in both domestic
and international commercial arbitration, the place of What are “other means other than oral hearing”?
arbitration is the place agreed upon by the parties to
the arbitration agreement. Through position papers. That will stand in lieu of oral
hearing.
But if the seat of arbitration is the Philippines, it Is
subject to Philippine Law, and applying Lex Arbitrii or What is the rule if it is domestic arbitration?
Lex Loci Arbitrii.
The rule is found under Sections 12 and 15 of the
Limitations Arbitration Law.
International Commercial Arbitration Section 15. Hearing by arbitrators. -

Arbitrators may, at the commencement of the
The following are the limitations or qualifications hearing, ask both parties for brief statements of the
imposed under the Model Law in International issues in controversy and/or an agreed statement of
Commercial Arbitration: facts. Thereafter the parties may offer such
evidence as they desire, and shall produce such
1. The procedure for appointing additional evidence as the arbitrators shall require
arbitrators is subject to the provisions or deem necessary to an understanding and
concerning the appointing of appointing determination of the dispute. The arbitrators shall
authority and specifying instances when the be the sole judge of the relevancy and
appointing authority may designate an materiality of the evidence offered or produced,
arbitrator; and shall not be bound to conform to the Rules
46
of Court pertaining to evidence. Arbitrators shall allegations and proofs of the parties. Their dutyis
receive as exhibits in evidence any document which personal and cannot be delegated.
the parties may wish to submit and the exhibits shall
be properly identified at the time of submission. All Section 14. Subpoena and subpoena duces
exhibits shall remain in the custody of the Clerk of tecum. - Arbitrators shall have the power to require
Court during the course of the arbitration and shall any person to attend a hearing as a witness. They
be returned to the parties at the time the award is shall have the power to subpoena witnesses and
made. The arbitrators may make an ocular documents when the relevancy of the testimony and
inspection of any matter or premises which are in the materiality thereof has been demonstrated to the
dispute, but such inspection shall be made only in arbitrators. Arbitrators may also require the
the presence of all parties to the arbitration, unless retirement of any witness during the testimony of
any party who shall have received notice thereof any other witness. All of the arbitrators appointed
fails to appear, in which event such inspection shall in any controversy must attend all the hearings
be made in the absence of such party. in that matter and hear all the allegations and
proofs of the parties; but an award by the majority
At the close of the hearings, the arbitral tribunal shall of them is valid unless the concurrence of all of them
now inquire whether all the parties have proof or is expressly required in the submission or contract
witnesses to present. In the absence of any, they shall to arbitrate. The arbitrator or arbitrators shall have
declare the hearings closed, unless the parties prefer the power at any time, before rendering the award,
to file their respective briefs. without prejudice to the rights of any party to petition
the court to take measures to safeguard and/or
If the parties decide to file their briefs, then the conserve any matter which is the subject of the
hearings will close after the arbitral tribunal receivesthe dispute in arbitration.
trial briefs of the said parties.
Take note also that they have the power to issue
So in domestic arbitration, as a general rule, there is subpoena. They have subpoena power.
a need for a hearing.
Home Bankers Association vs CA
Please take note of Section 18 of the Arbitration Law:
Although arbitrators have the power to issue
Section 18. Proceeding in lieu of hearing. subpoena, the exercise of such power is without
- The parties to a submission or contract to prejudice to the right of a party to file a petition in
arbitrate may, by written agreement, submit their court to safeguard any matter which is the subject of
dispute to arbitration by other than oral hearing. The the dispute in arbitration.
parties may submit an agreed statement of facts.
They may also submit their respective contentions So before the arbitrators, can the parties file a motion
to the duly appointed arbitrators in writing; this shall to quash the subpoena?
include a statement of facts, together with all
documentary proof. Parties may also submit a You file a petition in court safeguard any matter which
written argument. Each party shall provide all other is the subject of the dispute in arbitration.
parties to the dispute with a copy of all statements
and documents submitted to the arbitrators. Each Language of the Arbitration
party shall have an opportunity to reply in writing to
any other party's statements and proofs; but if such SEC. 31. Language of the Arbitration. - The
party fails to do so within seven days after receipt of parties are free to agree on the language or
such statements and proofs, he shall be deemed to languages to be used in the arbitral proceedings.
have waived his right to reply. Upon the delivery to Failing such agreement, the language to be used
the arbitrators of all statements and documents, shall be English in international arbitration, and
together with any reply statements, the arbitrators English or Filipino for domestic arbitration,
shall declare the proceedings in lieu of hearing unless the arbitral tribunal shall determine a different
closed. or another language or languages to be used in the
proceedings. This agreement or determination,
So here again, it is through position papers. unless otherwise specified therein, shall apply to
any written statement by a party, any hearing and
Can the arbitrators not attend the hearings? Instead, any award, decision or other communication by the
they will delegate their authority in favor of others and arbitral tribunal.
to receive the evidence of the parties? Is that allowed?
The arbitral tribunal may order that any
Under Sec. 14 of the Arbitration Law, arbitrators are documentary evidence shall be accompanied by a
required to attend all the hearings and hear all the translation into the language or languages agreed
47
upon by the parties or determined in accordance

with paragraph 1 of this section. And the policy of the law when it comes to arbitration
is to settle the dispute as speedily as possible.
What are the rules?

General Rule: The parties are free to agree on the
language or languages to be used in the arbitral  Domestic Arbitration - The hearing
proceedings. may proceed in the absence of any party who
after due notice fails to be present at such
 International Arbitration - English hearing or fails to obtain an adjournment
 Domestic Arbitration - English or thereof.
Filipino
 International Commercial Arbitration
A foreign arbitrator can be appointed by the parties -
especially if it is before the CIAC.
o If the claimant fails to
Role of Arbitrators communicate his statement of claim,
then the arbitral tribunal shall
 The function of the arbitrator is akin terminate the proceedings.
to a judge. Thus, he should be impartial.
o If it is the respondent who
The rule of impartiality provides that they fails to file his answer, the duty of the
are not allowed to play an active part in the arbitral tribunal is to continue the
proceedings before them. proceedings without treating such
failure as admission of the claimant’s
However, during the hearings conducted allegations.
before the arbitral tribunal, they are allowed to
ask clarificatory questions. o If any of the party fails to
appear at the hearing or to produce
 The arbitrator is the sole judge of the documents, the arbitral tribunal shall
relevancy and the materiality of the evidence continue its proceedings and make
offered. an award based on the evidence
before them.
Are the arbitrators bound by the Rules of Court, such
as the Parole Evidence Rule? So please take note, no default awards under
Arbitration Law inDomestic Arbitration as well as
The arbitrators are not bound by the Revised Rules International Commercial Arbitration.
of Court.
Experts
Barbers vs Laguio
What are the rules?
They are like judges before them; they should be
accorded reasonable leeway in asking questions to  The first rule is that, if it is
witnesses as may be esssential to elicit the relevant International Commercial Arbitration, the
facts and to bring out the truth; he may properly arbitral tribunal may appoint experts to report
intervene in the presentation of evidence to expedite to it on specific issues that the arbitral tribunal
and prevent unnecessary waste of time. may deem appropriate;
Why is the arbitral tribunal allowed to name experts
So again, the arbitral tribunal is not bound to conform who are like commissioners under Rule 32 of the Rules
to the Rules of Court, as provided under Sec. 15 of the of Court? What is the basis?
Arbitration Law.
The basis for the appointment of experts is Art. 26 of
Default of a Party the Model Law.
Under the Arbitration Law, there is no default of a Article 26. Expert appointed by arbitral tribunal
party. There are no default awards.
(1) Unless otherwise agreed by the parties, the
Why is that? arbitral tribunal
Because arbitration proceedings are not bound by

the Rules of Court.
48
(a) may appoint one or more experts to

report to it on specific issues to be What do you file before the court?
determined by the arbitral tribunal;
A petition.
(b) may require a party to give the expert
any relevant information or to produce, or  The second rule is that after the
to provide access to, any relevant constitution of the arbitral tribunal and during
documents, goods or other property for his the arbitral proceedings, it is allowed before
inspection. the arbitral tribunal.
(2) Unless otherwise agreed by the parties, if a But if the request for the issuance of interim
party so requests or if the arbitral tribunal considers measures or its modification and the arbitral
it necessary, the expert shall, after delivery of his tribunal has no power to act or is unable to act
written or oral report, participate in a hearing where effectively, the petition may be filed before the
the parties have the opportunity to put questions to court.
him and to present expert witnesses in order to
testify on the points at issue. Here, there is a judicial remedy if the arbitral tribunal
is unable to act on your request for the issuance of a
 If it is Domestic Arbitration, it is also provisional remedy.
allowed even if RA 9285 has not made Artile
26 of the Model Law apply to domestic  Any party may request that the
arbitration. provisional relief be granted against the
adverse party.
So this right of the parties to call an expert, what kind
of right is this? Can that provisional remedy requested by the party
to the arbitration agreement be enforced against a third
It is related to the fundamental right of a party to be party? Is the provisional remedy or the writ enforceable
able to present evidence by an expert appointed by the against a third party? Or is it exclusive against the
arbitral tribunal. parties to the said agreement?
Grant of Provisional Remedies Under the law, the third person, the moment his
property is attached, he becomes a forced-Intervenor
The rule is that before the arbitral tribunal, any party in that case.
to the arbitration agreement may ask for provisional
remedies. Aside from that, there is already that bond to secure
and protect the rights of the parties against whom the
How about before the court? said writ is being issued.
Under Rule 5, that is also allowed after the [Ma’am Guerzo: You research on that. Let’s answer
constitution of the arbitral tribunal, the party to the that next meeting.]
arbitration agreement may go to court and ask for the
implementation of provisional remedies.  There is a bond requirement.
Take note regarding the power of the arbitral tribunal Order granting provisional relief is conditioned
to grant provisional remedies. It can grant anytime upon the provision of a security or any act or
before rendering the award but this is without prejudice omission specified in the said order.
to the right of the party to petition the court to take
measures necessary to safeguard or conserve the  The order of the provisional relief
matter, any subject matter, of the dispute. issued by the arbitral tribunal or by the court
shall be binding upon the parties to the said
Please take note of the grant of provisional remedies arbitration agreement.
before the arbitral tribunal and judicial before the courts
under Rule 5 of the Special ADR Rules of Court.  A party who does not comply with
the order shall be liable for all damages
Just a review: resulting from non-compliance including all
expenses and reasonable attorney’s fees,
 Under the Rules, prior to the paid in obtaining the order’s judicial
constitution of the arbitral tribunal if it is not enforcement.
incompatible with the arbitration agreement, a
party may apply for the issuance of Arbitration as Practice of Law
provisional remedies before the court.
49
So what are the rules?

Under Art. 29 of the Model Law:
Any individual who is not a member of the Philippine
Bar may represent any party in both international and Article 29. Decision-making by panel of arbitrators
domestic arbitration.
In arbitral proceedings with more than one
If it is International Commercial Arbitration, under arbitrator, any decision of the arbitral tribunal shall
Sec. 32 of RA 9285, a party may be represented by any be made, unless otherwise agreed by the parties, by
person of his choice. a majority of all its members.
If the representative is not a member of the Bar, he is However, questions of procedure may be decided
not authorized to appear as counsel in any Philippine by a presiding arbitrator, if so authorized by the
court or any quasi-judicial body and whether or not parties or all members of the arbitral tribunal.
such appearance is in relation to the arbitration in
which he appeared. Under the Arbitration Law, it does not state the rule
that a majority vote is required. The Arbitration Law is
But the premise is that Arbitration is deemed a silent on that matter.
practice of law.
But the rule is that:
Confidentiality of Arbitration Proceedings
 By majority vote, if the arbitral
General Rule: Arbitration proceedings including all tribunal consists of more than one arbitrator;
records, evidence and the arbitral award, shall be or
considered confidential and shall not be published.
 The award can be rendered by the
Exceptions: sole arbitrator
1) with the consent of the parties, or Separate or Partial Final Awards

2) for the limited purpose of disclosing
to the court of relevant documents in cases How about separate or final awards? Can the arbitral
where resort to the court is allowed herein. tribunal render partial award or judgement?
Provided, however, that the court in which the The rule is that the Model Law and the Arbitration
action or the appeal is pending may issue a Law is silent on that matter. So the presumption is that
protective order to prevent or prohibit disclosure of it is allowed and the arbitral tribunal may render
documents or information containing secret separate awards since the purpose of arbitration is to
processes, developments, research and other end the controversy.
information where it is shown that the applicant
shall be materially prejudiced by an authorized The basis is Rule 36 of Rules of Court which applies
disclosure thereof by analogy.
SEC. 23. Confidential of Arbitration Section 5. Separate judgments. — When

Proceedings. - The arbitration proceedings, more than one claim for relief is presented in an
including the records, evidence and the arbitral action, the court, at any stage, upon a
award, shall be considered confidential and determination of the issues material to a
shall not be published except (1) with the consent particular claim and all counterclaims arising
of the parties, or (2) for the limited purpose of out of the transaction or occurrence which is the
disclosing to the court of relevant documents in subject matter of the claim, may render a
cases where resort to the court is allowed herein. separate judgment disposing of such claim. The
Provided, however, that the court in which the action judgment shall terminate the action with respect to
or the appeal is pending may issue a protective the claim so disposed of and the action shall
order to prevent or prohibit disclosure of documents proceed as to the remaining claims. In case a
or information containing secret processes, separate judgment is rendered the court by order
developments, research and other information may stay its enforcement until the rendition of a
where it is shown that the applicant shall be subsequent judgment or judgments and may
materially prejudiced by an authorized disclosure prescribe such conditions as may be necessary to
thereof. secure the benefit thereof to the party in whose favor
the judgment is rendered.
Arbitral Award
How does the arbitral tribunal render an award?
50
Tamboan vs CA decide the case within 30 days after close of

365 SCRA 359 hearing.
Separate awards are analogous to judgments that Form of Award

are partial but final in nature because they put an
end to a particular matter or to some defined and The rule is that:
separate branch of a controversy.
 Domestic Arbitration
Scope of Relief Regarding Arbitral Award
1. It must be in writing, signed
Under the Arbitration Law, the arbitral tribunal may and acknowledged by a majority of
grant remedy or relief that they may deem just and the arbitrators.
equitable and within the scope of the agreement of the
parties but not limited to a specific performance of the (in writing, signed, and
contract. acknowledged)
Earlier we learned that the arbitrators, even if it is not  International Commercial Arbitration
found in the arbitration agreement, they can interpret to
put an end to the said controversy. 1. It shall be in writing and
signed by the arbitrators;
Please take note that as long as the award derives its 2. It shall state the reasons
essence from the contract and is based on a plausible upon which it is based;
interpretation of the contract, they can grant the said 3. It shall state its date and
remedy. place of arbitration or where the
award is deemed to have been
Finally, as a caveat, any limitation upon the remedial rendered.
power of an arbitrator, it must either be explicitly
contained or clearly incorporated in the said arbitration Grogun Inc. vs NAPOCOR
clause.
An award that is not verified by the sole arbitrator
General Rule: They decide only those matters that or by a majority of the arbitrators as required by Sec.
have been submitted to them, as provided under Sec. 20 is invalid.
20 of the Arbitration Law.
But take note that this case is not applicable to
Asset Privatization Trust vs CA arbitral awards rendered after effectivity of RA 9285 in
both Domestic and International Commercial
Arbitrators cannot resolve issues beyond the Arbitration.
scope of such submission agreement. The parties to
such agreement are bound by the arbitrator’s award, Under RA 9285, the requirement is that the award
only to the extent and in the matter prescribed by the shall be in writing and signed by a majority of the
contract only if the award is rendered in conformity arbitrators.
thereto.
What if the parties settled during the conduct of the
Time to Render Decision arbitration?
In civil cases, the judge is mandated to decide a The arbitral tribunal shall terminate the proceedings
particular action within 90 days. and if requested by the parties and not objected to by
the arbitral tribunal, there will be rendered a settlement
In arbitration, the rule is that: award.
 International Commercial Arbitration The legal bases are Art. 30 of the Model Law and
- there is no time frame because the arbitral Sec. 20 of the Arbitration Law.
tribunal is given considerable leeway when to
decide unless the parties provide a period Article 30. Settlement
within which the arbitral tribunal should render
a decision (1) If, during arbitral proceedings, the parties settle
the dispute, the arbitral tribunal shall terminate the
 Domestic Arbitration - it depends proceedings and, if requested by the parties and not
upon the agreement of the parties and if there objected to by the arbitral tribunal, record the
is no agreement, the arbitral tribunal shall settlement in the form of an arbitral award on agreed
terms.
51
(2) An award on agreed terms shall be made in “In the absence of any agreement or statutory
accordance with the provisions of article 31 and limitation, the arbitrator may do justice as he sees fit,
shall state that it is an award. Such an award has applying his own sense of law and equity to the facts
the same status and effect as any other award on as he finds them to be making the award reflecting the
the merits of the case. spirit rather than the letter of the agreement, even
though the award exceeds the remedy requested by
Section 20. Form and contents of award. the parties.”
- The award must be made in writing and
signed and acknowledged by a majority of the How about in International Commercial Arbitration?
arbitrators, if more than one; and by the sole What is the rule?
arbitrator, if there is only one. Each party shall be
furnished with a copy of the award. The arbitrators  The first rule is that the applicable
in their award may grant any remedy or relief law is based on the agreed law of the parties
which they deem just and equitable and within which refers to the substantive law of the
the scope of the agreement of the parties, which State and not its Conflict Rule.
shall include, but not be limited to, the specific
performance of a contract.  In the absence of designation, then
the arbitral tribunal shall apply the national law
In the event that the parties to an arbitration determined by the Conflicts of Laws Rules.
have, during the course of such arbitration,
settled their dispute, they may request of the  The arbitral tribunal shall decide in
arbitrators that such settlement be embodied in accordance with the terms of the contract,
an award which shall be signed by the taking into account the usages of trade
arbitrators. No arbitrator shall act as a mediator in applicable to the transaction.
any proceeding in which he is acting as arbitrator;
and all negotiations towards settlement of the The choice of applicable law in International
dispute must take place without the presence of the Commercial Arbitration will be respected unless the
arbitrators. body of law chosen is:
The arbitrators shall have the power to decide only 1. Contrary to public policy of the
those matters which have been submitted to them. Philippines;
The terms of the award shall be confined to such 2. Contrary to the universally-accepted
disputes. principles of morality;
3. It is penal in character;
The arbitrators shall have the power to assess in 4. It is purely fiscal or administrative in
their award the expenses of any party against nature;
another party, when such assessment shall be 5. It would work undeniable injustice to
deemed necessary. the citizens or residents of the Philippines;
6. It would work against the vital
Please take note, amicable settlement in the form of interest of the national security of the
settlement award. Philippines.
Law on the Merits Confidentiality
Can the arbitrator decide based on equity in Just a reiteration, the arbitration proceedings
Domestic Arbitration? including all records, evidence, as well as arbitral
award, is considered confidential subject to limitations:
Yes. Under Sec. 20 of the Arbitration Law:
1) when the parties consent, or
“The arbitrators in their award may grant any 2) for the limited purpose of disclosing
remedy or relief which they deem just and to the court relevant documents, provided that
equitable and within the scope of the agreement of the same is pending before the said court.
the parties, which shall include, but not be limited
to, the specific performance of a contract.” Correction and Interpretation of Arbitral Award
But you stick to the general rule, that you apply what January 29, 2019
the law is and in the absence of applicable law, you G.R. It can be provided that the arbitration award or
may apply equity. So basis is substantive law. agreement is non-appealable and executory
But take note cororaliy to this is Rule 19.7
In one case, the SC ruled that:
52
Rule 19.7. No appeal or certiorari on the merits of an pag-international, iba yun, model law ang gagamitin
arbitral award. - An agreement to refer a dispute to mo.
arbitration shall mean that the arbitral award shall be
final and binding. Consequently, a party to an Section 24. Grounds for vacating award. - In any one
arbitration is precluded from filing an appeal or a of the following cases, the court must make an order
petition for certiorari questioning the merits of an vacating the award upon the petition of any party to the
arbitral award. controversy when such party proves affirmatively that
in the arbitration proceedings:
If the parties agree to submit their dispute to (a) The award was procured by corruption,
arbitration, then the parties are not allowed to file an fraud, or other undue means; or
appeal or a certiorari case to question the merits of the (b) That there was evident partiality or
same award. corruption in the arbitrators or any of them; or
(c) That the arbitrators were guilty of
1/29 FIRST PART MURRAY misconduct in refusing to postpone the
hearing upon sufficient cause shown, or in
So, regarding the GR that the arbitration award or refusing to hear evidence pertinent and
agreement is final, non-appealable and executory - material to the controversy; that one or more
what is the legal basis? of the arbitrators was disqualified to act as
such under section nine hereof, and wilfully
Under the law, particularly the Civil Code: refrained from disclosing such
disqualifications or of any other misbehavior
Article 2044. Any stipulation that the arbitrators' by which the rights of any party have been
award or decision shall be final, is valid, without materially prejudiced; or
prejudice to articles 2038, 2039, and 2040. (d) That the arbitrators exceeded their
powers, or so imperfectly executed them, that
Take note, this is still subject to judicial review based a mutual, final and definite award upon the
on the three articles: subject matter submitted to them was not
made.
Article 2038. A compromise in which there is Where an award is vacated, the court, in its
discretion, may direct a new hearing either before the
mistake, fraud, violence, intimidation, undue influence,
same arbitrators or before a new arbitrator or
or falsity of documents, is subject to the provisions of
arbitrators to be chosen in the manner provided in the
article 1330 of this Code.
submission or contract for the selection of the original
However, one of parties cannot set up a mistake of arbitrator or arbitrators, and any provision limiting the
fact as against the other if the latter, by virtue of the time in which the arbitrators may make a decision shall
compromise, has withdrawn from a litigation already be deemed applicable to the new arbitration and to
commenced. (1817a) commence from the date of the court's order.
Where the court vacates an award, costs, not
Article 2039. When the parties compromise exceeding fifty pesos and disbursements may be
generally on all differences which they might have with awarded to the prevailing party and the payment
each other, the discovery of documents referring to one thereof may be enforced in like manner as the payment
or more but not to all of the questions settled shall not of costs upon the motion in an action.
itself be a cause for annulment or rescission of the The additional grounds for vacating an award is
compromise, unless said documents have been found under Rule 11.4
concealed by one of the parties.
But the compromise may be annulled or rescinded if Rule 11.4. Grounds. - (A) To vacate an arbitral
it refers only to one thing to which one of the parties award. - The arbitral award may be vacated on the
has no right, as shown by the newly-discovered following grounds:
documents. (n) a. The arbitral award was procured through
corruption, fraud or other undue means;
Article 2040. If after a litigation has been decided by b. There was evident partiality or corruption
a final judgment, a compromise should be agreed in the arbitral tribunal or any of its members;
upon, either or both parties being unaware of the c. The arbitral tribunal was guilty of
existence of the final judgment, the compromise may misconduct or any form of misbehavior that
be rescinded. has materially prejudiced the rights of any
Ignorance of a judgment which may be revoked or set party such as refusing to postpone a hearing
aside is not a valid ground for attacking a compromise. upon sufficient cause shown or to hear
evidence pertinent and material to the
The next limitation is found under Section 24 of the controversy;
Arbitration Law. It provides for the vacating of an award d. One or more of the arbitrators was
- what award? Domestic arbitration award. Take note, disqualified to act as such under the law and
53
willfully refrained from disclosing such

disqualification; or False. If it is domestic arbitration, the arbitral tribunal
e. The arbitral tribunal exceeded its powers, loses its jurisdiction. that is why you cannot file such
or so imperfectly executed them, such that a complaint. What then is the remedy?
complete, final and definite award upon the
subject matter submitted to them was not File a complaint under RTC under Rule 11.
made. Rule 11.3. Venue. - The petition for confirmation,
The award may also be vacated on any or all of the correction/modification or vacation of a domestic
following grounds: arbitral award may be filed with Regional Trial Court
a. The arbitration agreement did not exist, having jurisdiction over the place in which one of the
or is invalid for any ground for the revocation parties is doing business, where any of the parties
of a contract or is otherwise unenforceable; or reside or where arbitration proceedings were
b. A party to arbitration is a minor or a conducted
person judicially declared to be incompetent.
So again, please take note of Section 24 in relation How about if it is international commercial
to Rule 11.4. arbitration?
Under Section 25 on the other hand provides for the Rule 12.3. Venue. - A petition to recognize and
grounds for correcting an arbitration. This is provided enforce or set aside an arbitral award may, at the
under RA 876 in relation to Section 40 of RA 9285 option of the petitioner, be filed with the Regional Trial
Court: (a) where arbitration proceedings were
Section 25. Grounds for modifying or correcting conducted; (b) where any of the assets to be attached
award. - In any one of the following cases, the court or levied upon is located; (c) where the act to be
must make an order modifying or correcting the award, enjoined will be or is being performed; (d) where any of
upon the application of any party to the controversy the parties to arbitration resides or has its place of
which was arbitrated: business; or (e) in the National Capital Judicial Region.
(a) Where there was an evident
miscalculation of figures, or an evident Okay, next, the judgement of the RTC either vacating
mistake in the description of any person, thing or modifying a domestic award is considered an order
or property referred to in the award; or or decision entered upon the award. Under Section 29
(b) Where the arbitrators have awarded of the Arbitration Law there are two judgments
upon a matter not submitted to them, not contemplated.
affecting the merits of the decision upon the
matter submitted; or 1. Judgment entered upon the award -
(c) Where the award is imperfect in a matter a judgment confirming, vacating, correcting or
of form not affecting the merits of the modifying an award. It is considered as a
controversy, and if it had been a judgment because
commissioner's report, the defect could have 2. It is considered as an order made in
been amended or disregarded by the court. a proceeding under RA 876. When you say
The order may modify and correct the award so as to order, it includes order which determines a
effect the intent thereof and promote justice between specific aspect of the arbitration.
the parties.
If it is considered as a judgment entered upon the
That is also reiterated under Rule 11.4. So if you are award, what are the effects? (review daw ng civprooo)
asked what are the distinctions between Section 24
and 25? Under Rule 39, it is subject to EXECUTIOON.
So Section 24, it involves grounds which affect the The ground raised to vacate an arbitratral award is
merits of the arbitral award so this is serious. As that the arbitrator commited errors of facts or law or
distinguished under Section 25, hindi naman sya errors of facts and law. Will the court entertain your
ganun katrivial pero mga typographical error, basta di petition? The answer here is no. Because as provided
naman naapektuhan ang merits ng arbitral award. for under Rule 19.10
Please take note of the grounds in relation to Rule Rule 19.10. Rule on judicial review on arbitration in
11.4 the Philippines. - As a general rule, the court can only
vacate or set aside the decision of an arbitral tribunal
Is a correction to vacate or arbitration domestic award upon a clear showing that the award suffers from any
allowed under the arbitral tribunal? of the infirmities or grounds for vacating an arbitral
award under Section 24 of Republic Act No. 876 or
You file a complaint for vacation of a domestic award under Rule 34 of the Model Law in a domestic
under the arbitral tribunal. True or false? arbitration, or for setting aside an award in an
54
international arbitration under Article 34 of the Model (2) An arbitral award may be set aside by the court
Law, or for such other grounds provided under these specified in article 6 only if:
Special Rules.
a) the party making the application
The court shall not set aside or vacate the award furnishes proof that:
of the arbitral tribunal merely on the ground that
the arbitral tribunal committed errors of fact, or of i. a party to the arbitration
law, or of fact and law, as the court cannot agreement referred to in article 7 was
substitute its judgment for that of the arbitral under some incapacity; or the said
tribunal. agreement is not valid under the law to
which the parties have subjected it or,
Take note, EXCLUSIVE KASI YUNG GROUNDS failing any indication thereon, under
SA 24 AND 25. the law of this State; or
What are your remedies if it is domestic award? ii. the party making the application
[to set aside or resist enforcement]
1. MR within 15 days from the was not given proper notice of the
receipt of a copy of the decision appointment of an arbitrator or of the
2. To file an appeal before the CA via arbitral proceedings or was otherwise
Petition for Review or Petition for unable to present his case; or
Certiorari from the receipt of a copy of the
decision or order or resolution...take note, iii. the award deals with a dispute not
this is ALTERNATIVE REMEDIES ONLY. contemplated by or not falling within
Why? the terms of the submission to
arbitration, or contains decisions on
matters beyond the scope of the
1/29 FIRST PART SINGANON submission to arbitration, provided
that, if the decisions on matters
Please read Rule 19.9 of the Special ADR Rules of submitted to arbitration can be
Court. separated from those not so
submitted, only that part of the award
Rule 19.9. Prohibited alternative remedies. - which contains decisions on matters
Where the remedies of appeal and certiorari are not submitted to arbitration may be set
specifically made available to a party under the aside; or
Special ADR Rules, recourse to one remedy shall
preclude recourse to the other. iv. the composition of the arbitral
tribunal or the arbitral procedure was
Awards in International Commercial Arbitration not in accordance with the agreement
of the parties, unless such agreement
There is Judicial Recourse, but you have to file that was in conflict with a provision of this
within 3 months after receipt of the award for the setting Law from which the parties cannot
aside of the award. That is found under Art. 34 of the derogate, or, failing such agreement,
Model Law. was not in accordance with this Law;
or
Article 34. Application for setting aside as
exclusive recourse against arbitral award b) the court finds that:
(3) An application for setting aside may not be i. the subject-matter of the
made after three months have elapsed from the date dispute is not capable of
on which the party making that application had settlementby arbitration under the
received the award or, if a request had been made law of this State; or
under article 33, from the date on which that request
had been disposed of by the arbitral tribunal. ii. the award is in conflict
with the public policy of this State.
Please take note of that in relation to Rule 12 of the

Special ADR Rules of Court.
What are the grounds to set aside or resist
enforcement? Judicial Review of Arbitral Awards
The rule is that judicial review is limited review only.
55
Asset Privatization Trust vs CA When we say Philippine Arbitral Awards, it refers to

Domestic Arbitral Awards as well as International
The courts will not review the findings of law and Commercial Awards.
fact contained in an award and will not undertake to
substitute its judgment for that of the arbitrators Is an arbitral award required to be judicially confirmed
since any other rule would make an award the by the court in order to be enforceable?
commencement and not the end of litigation.
Yes. Under Sec. 40 of RA 9285:
You relate that also to Rule 19.10 of the Special ADR
Rules of Court, that the court will not substitute its SEC. 40. Confirmation of Award. - The
judgment for that of the arbitral tribunal. confirmation of a domestic arbitral award shall be
governed by Section 23 of R.A. 876.
When is judicial review available to correct an arbitral
tribunal? A domestic arbitral award when confirmed shall be
enforced in the same manner as final and executory
We already know the grounds under Secs. 24 and decisions of the Regional Trial Court.
25.
The confirmation of a domestic award shall be
The following are the leading cases: made by the regional trial court in accordance with
the Rules of Procedure to be promulgated by the
Chung Fu vs CA Supreme Court.
If the arbitrator failed to apply the terms and A CIAC arbitral award need not be confirmed by
conditions of the agreement which forms part of the the regional trial court to be executory as provided
law applicable between the parties, thus committing under E.O. No. 1008.
grave abuse of discretion.
Why is there a need for judicial confirmation?
Asset Privatization Trust vs CA
Philippine arbitral awards require judicial
Where the arbitrators resolved the issue beyond confirmationfor it to be enforceable. For enforceability
the scope of the submission agreement, thereby of the said award.
committing grave abuse of discretion.
That is the general rule.
[Third,] If the arbitrators acted in manifest
disregard of the law.  Confirmation of Domestic Arbitral
Award - governed by Sec. 23 of the Arbitration
[And lastly,] Where the voluntary arbitrator failed Law
to apply the terms and provisions of the agreement
which formed part of the applicable law between the Section 23. Confirmation of award. - At any time
parties. within one month after the award is made, any party
to the controversy which was arbitrated may apply
to the court having jurisdiction, as provided in
So those are some cases wherein the SC ruled that section twenty-eight, for an order confirming the
the arbitral decision is subject to judicial review. award; and thereupon the court must grant such
order unless the award is vacated, modified or
Carpio vs Sulu Resources corrected, as prescribed herein. Notice of such
motion must be served upon the adverse party or
The SC enunciated why there is only limited or his attorney as prescribed by law for the service of
restricted scope review. such notice upon an attorney in action in the same
court.
Even if review by the CA of the CIAC decisions
included questions of fact and law,review of factual Take note also of Sec. 28 of the Arbitration Law:
findings were warranted only when such factual
findings were challenged to have been made with “At any time within 1 month after the award is made,
grave abuse of discretion. any party to the controversy which was arbitrated may
apply to the court having jurisdiction for an order
So again, there is only limited or restricted scope of confirming the award. Thereupon, the court must grant
judicial review. such order, unless the award is vacated or modified.”
Enforcement of Philippine Arbitral Awards When to request confirmation before the court?
56
 Domestic Arbitration - at any time So absence of either one, parties cannot proceed to
after lapse of 30 days from receipt by the arbitration.
petitioner of the arbitral award.
Special features of the Special ADR Rules of Court:
So you file a petition to confirm the said award.
Please take note of the time which is 30 days. 1. Intrinsic value—To respect party
autonomy or freedom of the parties to make
Is the other party to the arbitration agreement allowed their own arrangements in the resolution of
to file an opposition or a petition to vacate vis a vis the their dispute
petition to confirm? Is filing an opposition to the petition
to confirm arbitral award allowed? 2. Instrumental value— The law
recognizes that ADR, particularly arbitration
No, and this is specifically found under the Special and mediation, are important means to
ADR Rules of Court. The law provides that: achieve a speedy and efficient resolution of
disputes, impartial justice, curve a litigious
“The filing of a petition to confirm shall not authorize culture, and to de-clog court dockets
the filing of a belated petition to vacate.”
3. There is a need for Judicial
So it is not allowed to file a petition to vacate the Confirmation of the award to make it
domestic arbitral award. enforceable — Judicial confirmation is
necessary for the enforceability of the said
So if you wish to file a petition to vacate the domestic arbitral award. All awards made by the
award, you do that within the period of 30 days arbitrator or arbitral tribunal requires
because upon the lapse of the 30-day period, there will confirmation by the court for it to be
be a confirmation of the arbitral award. enforceable.
After 30 days, you are no longer allowed to petition What is the exception to this general rule?
the court to vacate the arbitral award because the
award has already become final. Under EO No. 1008, a CIAC award need not be
confirmed by the RTC for it to be executory and
Take note, petition to vacate may only be filed within enforceable.
30 days after receipt; while petition to confirm may be
filed at any time after lapse of the 30-day periodfrom 4. The Special ADR Rules of Court do
receipt of the award if it is domestic arbitration. not govern the arbitration proceeding itself, as
the proceedings are subject to the agreement
SPECIAL ADR RULES OF COURT between the parties to the arbitration
agreement.
Exclusions:
 The Special ADR Rules of Court do 5. The law and the Special ADR Rules
not apply to court-annexed mediation which recognize that construction disputes shall be
shall be governed by issuances of the governed by EO No. 1008 and it’s arbitration
Supreme Court. A.M. No. 11-1-6-SC-Philja rules.
governs court-annexed mediation as well as
judicial dispute resolution. 6. Construction disputes filed in court
shall be dismissed and referred to CIAC for
 Special ADR Rules of Court does arbitration. Exclusive jurisdiction belongs to
not apply to the resolution or settlement of CIAC involving construction disputes.
labor disputes under the Labor Code.
7. The Revised Rules of Court may not
As a review, emphasis on the Special ADR be resorted to even in a suppletory capacity.
Rules,what are the conditions for arbitration to
proceed? Under Rule 22.1:
 There is a need for a submission Rule 22.1. Applicability of Rules of Court. - The
agreement if you are to subject or submit your provisions of the Rules of Court that are applicable
present dispute to arbitration, and to the proceedings enumerated in Rule 1.1 of these
Special ADR Rules have either been included and
 A valid and enforceable agreement if incorporated in these Special ADR Rules or
you want to submit your future disputes to specifically referred to herein.
arbitration.
57
In connection with the above proceedings, the Rule 19.36. Review discretionary. - A review by
Rules of Evidence shall be liberally construed to the Supreme Court is not a matter of right, but of
achieve the objectives of the Special ADR Rules. sound judicial discretion, which will be granted
only for serious and compelling reasons
resulting in grave prejudice to the aggrieved
There is no longer a need to state that the party. The following, while neither controlling nor
Revised Rules of Court apply suppletorily because fully measuring the court's discretion, indicate the
the Rules of Court have already been incorporated serious and compelling, and necessarily, restrictive
in the Special ADR Rules of Court. nature of the grounds that will warrant the exercise
of the Supreme Court’s discretionary powers, when
8. The Special ADR Rules of Court the Court of Appeals:
now resolves conflicting procedural remedies
of appeal with the confirmation or vacation of a. Failed to apply the applicable standard or test
award. for judicial review prescribed in these Special ADR
Rules in arriving at its decision resulting in
Please take note of Rule 43 Sec. 1 of your Rules substantial prejudice to the aggrieved party;
of Court, which refers to Appeals before the Court
of Appeals from an award made by any Quasi- b. Erred in upholding a final order or decision
Judicial Agency in the exercise of its quasi-judicial despite the lack of jurisdiction of the court that
function. rendered such final order or decision;
So the CIAC is included as a quasi-judicial c. Failed to apply any provision, principle, policy or
agency. So from the CIAC, if you want to appeal, rule contained in these Special ADR Rules resulting
you go to the CA under Rule 43 Sec. 1. in substantial prejudice to the aggrieved party; and
9. All actions under the Special ADR d. Committed an error so egregious and harmful
Rules of Court are classified as Special to a party as to amount to an undeniable excess of
Proceedings. jurisdiction.
10. A large number of judicial The mere fact that the petitioner disagrees with the
intervention are by Summary Proceeding. Court of Appeals’ determination of questions of fact,
of law or both questions of fact and law, shall not
If you notice under the Rules, there issummary warrant the exercise of the Supreme Court’s
proceeding. When you say summary proceeding, discretionary power. The error imputed to the Court
it requires personal service and filing of a petition of Appeals must be grounded upon any of the above
or by a courier service. prescribed grounds for review or be closely
analogous thereto.
Since it is a summary hearing, there is still a
hearing but the hearing is conducted in one day A mere general allegation that the Court of
only and for purposes of clarifying the facts. Appeals has committed serious and substantial
error or that it has acted with grave abuse of
Further, the court is required to resolve the discretion resulting in substantial prejudice to the
matter within a period of 30 days from the date of petitioner without indicating with specificity the
the hearing. nature of such error or abuse of discretion and the
serious prejudice suffered by the petitioner on
11. The arbitration rule on Competence- account thereof, shall constitute sufficient ground for
Competence is now in force. the Supreme Court to dismiss outright the petition.
That if you are questioning the jurisdiction of the
arbitral tribunal, the arbitral tribunal is given the ***END***
first opportunity to rule on whether or not it has
jurisdiction over the matter arbitrated.
12. Appeal to the Supreme Court under

the Special ADR Rules of Court is “There is no gain without struggle”
discretionary only.
Under Rule 19.36: -Martin Luther King Jr.
58
59

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ADDU LAW 3RD YEAR 2019

ILAGAN (11/20) sector participation? Remember that in Alternative

Judicial Dispute Resolution, the judge is the neutral

Did R.A 9285 repeal or amend our system of Barangay

FORMS (d) "Arbitration" means a voluntary dispute resolution

When is arbitration international? According to R.A

THE AREAS OF OPERATION OF 1. all unresolved grievances arising

(2) Termination disputes; interpretation, contract-implementation, or

So please take note of the EXPANDED jurisdiction of

SEC. 35. Coverage of the Law. - Construction

So CIAC, ano ang mode of settling disputes? It is

SEC. 36. Authority to Act as Mediator or

So, if there is breach of construction contract, where do

FACTS: implementation of which is necessary and important

– Unless otherwise provided in these rules, Philippine Commercial International Bank vs

SO ORDERED. In the resolution of these issues, the CIAC

FACTS: QUESTION: What is the proper remedy if you want

arising from or connected with construction sake of argument, that it is indeed

Let’s go to CHECK CLEARING DISPUTES.

3. It must be banking institution.

4. It must be a member of PCHC.

Let’s go to the procedure before the PCHC

written complaint of any participant in the

12/15 RODRIQUEZ The separability of the arbitration agreement is

2.) 2nd reason: And rule 2.4 Special ADR rules

(2) Such relief may be granted: appointment of receivers or detention, preservation,

Rule 5.8. Comment/Opposition. - The

1) Motion for recon (discussion) so ni adto mog courte para mangayog

Rule 6.2. Who may request for appointment. - Any

RULE 7: CHALLENGE TO APPOINTMENT OF

The court shall allow the challenged arbitrator who

b. If the challenged arbitrator fails or refuses

And in relation to Magellan, The dispute or controversy

There is no law prescribing the liability of arbitrators, so

1/17 TAN Note: Read the full text.

PRINCIPLE OF SEPARABILITY OF ARBITRATION

agreement, it has to be timely invoked, An arbitration agreement timely invoked precludes

If the respondent requests the court for an extension

PRINCIPLE OF COMPETENCE-COMPETENCE Disqualifications of an arbitrator (as provided for in

Lawyers Rule 7.2. When challenge may be raised in court. -

Rule 7.3. Venue. - The challenge shall be filed with

party to pay the amount of the award to the court for

The controversy should be settled in the arbitration

Note: Read the full text.

LIABILITY FOR WRONG DECISIONS

CF Luzon Development Bank v. Association of

1/18 SINGANON contract, specially in terms of attending the hearings or

So the agreement is subject to due process

d. The evidence to support the decision 6. Those pertaining to the procedure

f. The decision must be rendered in Hearings before the Arbitrators

Exception to the exception: The parties agreed in

International Commercial Arbitration Section 15. Hearing by arbitrators. -

upon by the parties or determined in accordance

What are the rules?

Because arbitration proceedings are not bound by

(a) may appoint one or more experts to

So what are the rules?

1) with the consent of the parties, or Separate or Partial Final Awards

SEC. 23. Confidential of Arbitration Section 5. Separate judgments. — When