ADR Notes

03-03

Chung-Fu Industries v. CA

Under Art 2044 of the Civil Code, the finality of the arbitrators’ award is not absolute
and without exceptions. Where the conditions described in Articles 2038, 2039 and
2040 applicable to both compromises and arbitrations are obtaining, the arbitrators’
award may be annulled or rescinded. Additionally, under Sections 24 and 25 of the
Arbitration Law, there are grounds for vacating, modifying or rescinding an arbitrator’s
award. Thus, if and when the factual circumstances referred to in the above-cited
provisions are present, judicial review of the award is properly warranted.

Even if the parties agreed that the decision of the arbitrator is final and unappealable,
such agreement is not valid. The decisions of the arbitrators is still subject to judicial
review.
 The mode of appeal in construction disputes is vial Rule 43 of the ROC

What if it is a commercial dispute (commercial arbitration)  petition to vacate the

arbitrator’s award by the RTC

Appeal is a privilege granted to a party, not a right  if not filed within the reglementary
period.

If there is no agreement between and among parties to submit dispute to an arbitration

or conciliation process  the courts will have the jurisdiction over the dispute  the
bedrock of the arbitration proceeding is the stipulation of the parties to submit
themselves in the proceeding, otherwise, the courts will have the jurisdiction over the
case.

Jurisdiction is not submitted to the stipulation of the parties.

Hi-Precision Steel Center vs. Lim Kim Steel Builder

Executive Order No. 1008, as amended, provides, in its Section 19, as follows:

Sec. 19. Finality of Awards. — The arbitral award shall be binding upon the parties. It
shall be final and inappealable except on questions of law which shall be appealable to
the Supreme Court.

Section 19 makes it crystal clear that questions of fact cannot be raised in proceedings
before the Supreme Court — which is not a trier of facts — in respect of an arbitral
award rendered under the aegis of the CIAC. Consideration of the animating purpose of
voluntary arbitration in general, and arbitration under the aegis of the CIAC in particular,
requires us to apply rigorously the above principle embodied in Section 19 that the
Arbitral Tribunal's findings of fact shall be final and inappealable.

BF Corporation vs. CA

The making of a contract or submission for arbitration, shall be deemed a consent of

the parties of the province or city where any of the parties resides, to enforce such
contract of submission. A contract may be encompassed in several instruments even
though every instrument is not signed by the parties, since it is sufficient if the unsigned
instrument are clearly identified or referred to and made part of the signed instrument/s.

Arbitration Agreement
1. Must be in writing
2. Subscribed  signed by the parties

PhilRock vs. CIAC

Section 4 of EO 1008 expressly vests in the CIAC original and exclusive jurisdiction
over disputes arising from or connected with construction contracts entered into by
parties that have agreed to submit their disputes to voluntary arbitration. Further,
petitioner continued participating in the arbitration even after the CIAC order has been
issued as evidenced by their concluding and signing of the Terms of Reference.

LM Power v. Capitol Industrial

Gonzalez v Climax Mining ltd.

a mining dispute is a dispute involving (a) rights to mining areas, (b) mineral
agreements, FTAAs, or permits, and (c) surface owners, occupants and
claimholders/concessionaires. Under Republic Act No. 7942 (otherwise known as the
Philippine Mining Act of 1995), the Panel of Arbitrators has exclusive and original
jurisdiction to hear and decide these mining disputes. The Court of Appeals, in its
questioned decision, correctly stated that the Panel’s jurisdiction is limited only to those
mining disputes which raise questions of fact or matters requiring the application of
technological knowledge and experience.

We agree that the case should not be brought under the ambit of the Arbitration Law,
but for a different reason. The question of validity of the contract containing the
agreement to submit to arbitration will affect the applicability of the arbitration clause
itself. A party cannot rely on the contract and claim rights or obligations under it and at
the same time impugn its existence or validity. Indeed, litigants are enjoined from taking
inconsistent positions. As previously discussed, the complaint should have been filed
before the regular courts as it involved issues which are judicial in nature.
RCBC vs. Magwin

Courts cannot compel the parties to enter into a compromise agreement, it must be
consensual and voluntary

E.O. 1008

Sec. 1. Title. This Executive Order shall be known as the "Construction Industry
Arbitration Law".

Sec. 2. Declaration of Policy. It is hereby declared to be the policy of the State to

encourage the early and expeditious settlement of disputes in the Philippine
construction industry.

Sec. 3. Creation. There is hereby established in the CIAP a body to be known as the
Construction Industry Arbitration Commission (CIAC). The CIAC shall be under the
administrative supervision of the PDCB.

Sec. 4. Jurisdiction. The CIAC shall have original and exclusive jurisdiction over
disputes arising from, or connected with, contracts entered into by parties
involved in construction in the Philippines, whether the dispute arises before or
after the completion of the contract, or after the abandonment or breach thereof.
These disputes may involve government or private contracts. For the Board to
acquire jurisdiction, the parties to a dispute must agree to submit the same to
voluntary arbitration.

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

Excluded from the coverage of this law are disputes arising from employer-employee
relationships which shall continue to be covered by the Labor Code of the Philippines.

Sec. 5. Composition of the Board. The Commission shall consist of a Chairman and two
(2) members, all to be appointed by the CIAP Board upon recommendation by the
members of the PDCB.

Sec. 6. Functions of the Commission. The Commission shall perform, among others
that may be conferred by law, the following functions:

1) To formulate and adopt an arbitration program for the construction industry;

2) To enunciate policies and prescribe rules and procedures for construction arbitration;
3) To supervise the arbitration program, and exercise such authority related thereto as
regards the appointment, replacement or challenging of arbitrators; and

4) To direct its officers and employees to perform such functions as may be assigned to
them from time to time.

Sec. 7. Compensation of the Commission. The members of the Commission shall

receive such per diems and allowances as may be fixed by the CIAP from time to time.

Sec. 8. Term. The term of office of the members of the Commission shall be six (6)
years; provided, however, that of the Commission members first appointed, the
chairman shall hold office for six years; the other member for four (4) years; and the
third for two (2) years. The appointment to any vacancy in the Commission shall only be
for the unexpired portion of the term of the predecessor.

Sec. 9. Quorum. The presence of a majority of the members of the Commission shall
constitute a quorum for the transaction of business.

Sec. 10. Deliberations. The decisions of the Commission shall be arrived at by majority
vote.

Sec. 11. Secretariat. The Commission shall have a Secretariat to be headed by an

Executive Director who shall be responsible for receiving requests for arbitration, and
other pleadings, for notifying the parties thereto; and, for fixing and receiving filing fees,
deposits, costs of arbitration, administrative charges, and fees. It shall be the duty of the
Executive Director to notify the parties of the awards made by the arbitrators.

The Secretariat shall have among others a Publication and a Training Division.

Sec. 12. Authority to appoint. The Commission is hereby authorized to appoint the
Executive Director, the consultants, the arbitrators, as well as personnel and staff.

Sec. 13. Authority to Collect Fees. The Commission is empowered to determine and
collect fees, deposits, costs of arbitration, as well as administrative and other charges
as may be necessary in the performance of its functions and responsibilities. The CIAC
is also authorized to use its receipts and deposits of funds to finance its operations
subject to the approval of the PDCB, the provisions of any law to the contrary
notwithstanding.

Sec. 14. Arbitrators. A sole arbitrator or three arbitrators may settle a dispute.

Where the parties agree that the dispute shall be settled by a sole arbitrator, they may,
by agreement, nominate him from the list of arbitrators accredited by the CIAC for
appointment and confirmation. If the parties fail to agree as to the arbitrator, the CIAC
taking into consideration the complexities and intricacies of the dispute/s has the option
to appoint a single arbitrator or an Arbitral Tribunal.
If the CIAC decides to appoint an Arbitral Tribunal, each party may nominate one (1)
arbitrator from the list of arbitrators accredited by the CIAC for appointment and for
confirmation. The third arbitrator who is acceptable to both parties confirmed in writing
shall be appointed by the CIAC and shall preside over the Tribunal.

Arbitration shall be men of distinction in whom the business sector and the government
can have confidence. They shall not be permanently employed with the CIAC. Instead,
they shall render services only when called to arbitrate. For each dispute they settle,
they shall be given fees.

Sec. 15. Appointment of Experts. The services of technical or legal experts may be
utilized in the settlement of disputes if requested by any of the parties or by the Arbitral
Tribunal. If the request for an expert is done by either or by both of the parties, it is
necessary that the appointment of the expert be confirmed by the Arbitral Tribunal.

Whenever the parties request for the services of an expert, they shall equally shoulder
the expert's fees and expenses, half of which shall be deposited with the Secretariat
before the expert renders service. When only one party makes the request, it shall
deposit the whole amount required.

Sec. 16. Arbitration Expenses. Arbitration expenses shall include the filing fee;
administrative charges, arbitrator's fees; fee and expenses of the expert, and others
which may be imposed by the CIAC.

The administrative charges and the arbitrator's fees shall be computed on the basis of
percentage of the sum in dispute to be fixed in accordance with the Table of
Administrative Charges and Arbitrator's Fees.

Sec. 17. Deposit to Cover Arbitration Expenses. The CIAC shall be authorized to fix the
amount to be deposited which must be equivalent to the expected arbitration expenses.
The deposit shall be paid to the Secretariat before arbitration proceedings shall
commence. Payment shall either be shared equally by the parties or be paid by any of
them. If one party fails to contribute his share in the deposit, the other party must pay in
full. If both parties fail to tender the required deposit, the case shall be considered
dismissed but the parties shall still be liable to pay one half (1/2) of the agreed
administrative charge.

Sec. 18. Reports. The Commission shall within three (3) months after the end of the
fiscal year, submit its annual report to the CIAP. It shall, likewise, submit such periodic
reports as it may be required from time to time.

Sec. 19. Finality of Awards. The arbitral award shall be binding upon the parties. It
shall be final and inappealable except on questions of law which shall be
appealable to the Supreme Court.
Subject to judicial review via rule 43 of the ROC under the Court of Appeals

Sec. 20. Execution and Enforcement of Awards. As soon as a decision, order to award
has become final and executory, the Arbitral Tribunal or the single arbitrator with the
occurrence of the CIAC shall motu propio, or on motion of any interested party, issue a
writ of execution requiring any sheriff or other proper officer to execute said decision,
order or award.

Sec. 21. Rule-Making Power. The CIAC shall formulate and adopt necessary rules and
procedures for construction arbitration.

Sec. 22. Separability Clause. The provisions of this Executive Order are declared to be
separable and if any provision on the application hereof is held invalid or
unconstitutional, the validity of the remaining provision not otherwise affected shall
remain in full force and effect.

Sec. 23. Repealing Clause. All provisions of existing laws, proclamations, decrees,
letters of instructions and executive orders contrary to or inconsistent herewith are
hereby repealed or modified accordingly.

Sec. 24. Effectivity Clause. This Executive order shall take effect immediately.

Assignment: 7 cases (#7 to 13)

R.A. 876 arbitration law of the Philippines

03/10/2021

Gonzales v. Climax Mining Ltd.  decision no longer applicable

Capitol Medical Center v NLRC  voluntary agreement DOLE  insofar as disputes

concerning the interpretation of a CBA jurisdiction is to a voluntary arbitrator of the
DOLE. ADR rules are not applicable insofar as labor cases involving the CBA
interpretation.

Transfield v LHC: Banks were not a party to the arbitration agreement thus cannot be
compelled to the arbitration proceedings

KOGIES v. PGSMC: Why did KOGIES went to the Philippine RTC? To afford relief
from the country of origin

ABS-CBN v. WINS: Ad hoc arbitration  what is the mode of appeal  vacate the
award under Sec. 24 of RA 876. Mode of appeal in case you lost in CIAC  Rule 43 of
ROC

Heunghwa v DJ Builders:
Study ADR Law
Case 14-20

3-17-2020

HUTAMA v Citra

Section 1, Article III of the CIAC clearly provide that when in a construction contract an
arbitration clause exists, there is an agreement to submit an existing or future
controversy to the jurisdiction of the CIA regardless of the reference of the dispute to
another arbitral body. the jurisdiction of the CIAC is conferred by law therefore it cannot
be subjected to any condition, waived or diminished by a stipulation or any act or
omission as long as there is an arbitration clause in the contract or if the dispute is
submitted by agreement of the parties to arbitration.

 Parties may agree to conciliation, mediation, or other ADR before going to CIAC

Uy v. PEA

The CIAC found that PEA incurred delays in the turnover of work areas, on the days the
EDC was waiting for the turnover, it was paying rentals for the equipment on standby.
Yet, CIAC completely ignored these delays. The period of owner-caused delays was
564 days entitling Uy to an additional award of P36, 076,369.31 – or an aggregate
amount of P55,680,492.38 for the equipment rentals on standby.

Comment: no legal questions raised in this case

Petitioner has to wait for the decision of CIAC before elevating the issue to the Ca 
otherwise it will be premature

Positos v Chua

A dismissal without prejudice does not operate as a judgment on the merits, for there is
no unequivocal determination of the rights and obligations of the parties with respect to
the cause of action and subject matter thereof.

What is the remedy if the case is dismissed w/o prejudice? Should not be an
appeal but a petition for certiorari under rule 65

Dismissed w/o prejudice  can go back to the lupon or the Katarungan pambarangay
DFA and BSP v Falcon

Under the BOT Law, it expressly allows the government to terminate a BOT agreement
even without fault on the part of the project proponent but subject to the payment of the
actual expenses incurred plus reasonable rate of return. In order to be entitled to
injunctive relief, the party seeking relief must be able to show that thegrave, irreparable
injury is not capable of compensation. However in the case at hand, BCA failed to do
so.
 you cannot ask for a provisional remedy unless you have an action filed

Real Bank v. Samsung Mabuhay

Shinryo v RRN inc.

Findings of fact of quasi-judicial bodies, which have acquired expertise because their
jurisdiction is confined to specific matters, are generally accorded not only respect, but
also finality, especially when affirmed by the Court of Appeals. In particular, factual
findings of construction arbitrators are final and conclusive and not reviewable by this
Court on appeal. However, as an exception, factual
findings of construction arbitrators may be reviewed by the Supreme Court when the
petitioner proves affirmatively that:

1. The award was procured by corruption, fraud or other undue means;

2. There was evident partiality or corruption of the arbitrators or any of them;

3. The arbitrators were guilty of misconduct in refusing to hear evidence pertinent

and material to the controversy;

4. One or more of the arbitrators were disqualified to act as such under Sec. 9 of
R.A. 876 and willfully refrained from disclosing such disqualifications or of any
misbehavior by which the rights of any party have been materially prejudiced; or

5. The arbitrators exceeded their powers, or so imperfectly executed them, that a

mutual, final, anddefinite award upon the subject matter submitted to them was
not made.

Other exceptions include:

1. When there is a very clear showing of grave abuse of discretion resulting in lack
or loss of jurisdiction as when a party was deprived of a fair opportunity to
present its position before the Arbitral Tribunal or when an award is obtained
through fraud or the corruption of arbitrators;

2. When the findings of the Court of Appeals are contrary to those of the CIAC; and
 3. When a party is deprived of administrative due process.

Cargill v San Fernando

Doctrine of Separability or severability

Case 21 – 27 + Katarungan Pambarangay Law