Alternative Dispute Resolution I.

Introduction Who presides Participation in choosing presiding officer Composition of tribunal Who bears the cost for salary of presiding officer Governing law and rules in settling the dispute

arbitration; but once you agree, youre bound by it Parties cannot agree on presiding officer; judge is raffled Judge Philippine government Parties may select arbitrator Arbitrator(s)

iv. v. vi. vii. viii. ix. x. II. 1.

A. Definitions Alternative Dispute Resolution a process or procedure used to resolve a dispute or controversy, other than adjudication of a presiding judge of a court or an officer of a government agency as defined in this Act, in which a neutral third party participates to assist in the resolution of issues, which includes arbitration, mediation, conciliation, early neutral evaluation, mini-trial or any combination thereof (R.A. 9285, Sec 3(a)) Arbitration means a voluntary dispute resolution process in which one or more arbitrators, appointed in accordance with the agreement of the parties, or rules promulgated pursuant to this Act, resolve a dispute by rendering an award (R.A. 9285, Sec 3(d)) Mediation means a voluntary process in which a mediator, selected by the disputing parties, facilitates communication and negotiation, and assist the parties in reaching a voluntary agreement regarding a dispute. B. Overview of the Philippine Judicial System i. Basics regarding actions, causes of actions and right of action ii. Overview of Civil Procedure iii. Overview of Criminal Procedure iv. Overview of Special Proceedings C. Distinction between Conventional Litigation v. Arbitration Conventional Litigation Not Consensual Arbitration Consensual cannot be compelled to submit to

A.M. No. 07-11-08-SC Special ADR Rules (2009) New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) UNCITRAL Arbitration Rules Katarungang Pambarangay (LGC RA 7160) Pertinent Provisions in the Labor Code (1974) Pertinent Provisions in the Civil Code Pertinent Provisions in the Family Code. Arbitration Ad hoc A kind of arbitration where the parties are responsible for determining and agreeing on their own arbitration procedures rather than being supervised by the procedures of an arbitral institution. Institutional a kind of arbitration which is conducted under the auspices of an institution.

Philippine law governs

Venue

Venue depends on agreement

Speed of Procedure Parties

Longer Petitioner v. Defendant, Petitioner v. Respondent Public

Parties can select governing law that will determine their substantive rights Rules of Court applies; Venue may also depend on agreement shorter Claimant v. Respondent Private

2.

Examples of Institutional Arbitration: 3. 4. a. International Chamber of Commerce CIAC PDRCI Singapore International Arbitration Centre Hongkong International Arbitration Centre ICSPI Disp. American Arbitration Association Japan Commercial Arbitration Kuala Lumpur RCA KCAB ICC International Court of Arbitration ICA not a court of adjudication Domestic Arbitration not international International Art. 1.3 Unicitral Model Law the parties to an arbitration agreement have at the time of the conclusion of that

D. History of Arbitration in the Philippines i. ii. iii. R.A. 876 Arbitration Law (1953) E.O. 1008 Construction Industry Arbitration Law R.A. 9285 ADR Law of 2004

Nature

b.

agreement, their places of business in different States; or one of the following places is situated outside the State in which the parties have their places of business: a. the place of arbitration if determined in, or pursuant to, the arbitration agreement: b. any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or c. The parties have expressly agreed that the subject-matter of the arbitration agreement relates to more than one country.

(b) the civil status of persons (c) the validity of marriage Art. 48. In all cases of annulment or declaration of absolute nullity of marriage, the Court shall order the prosecuting attorney or fiscal assigned to it to appear on behalf of the State to take steps to prevent collusion between the parties and to take care that evidence is not fabricated or suppressed. In the cases referred to in the preceding paragraph, no judgment shall be based upon a stipulation of facts or confession of judgment. (d) any ground for legal separation Art. 60. No decree of legal separation shall be based upon a stipulation of facts or a confession of judgment.

The court of Appeals shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or Appeals must be continuous and must be completed within three (3) months, unless extended by the Chief Justice. (as amended by R.A. No. 7902.) Section 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original jurisdiction: 1. 2. In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or for civil actions in Metro Manila, where such the value exceeds Fifty thousand pesos (50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; In all actions in admiralty and maritime jurisdiction where he demand or claim exceeds One hundred thousand pesos (P100,000.00) or , in Metro Manila, where such demand or claim exceeds Two hundred thousand pesos (200,000.00); In all matters of probate, both testate and intestate, where the gross value of the estate exceeds One hundred thousand pesos (P100,000.00) or, in probate matters in Metro Manila, where such gross value exceeds Two hundred thousand pesos (200,000.00); In all actions involving the contract of marriage and marital relations; In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising jurisdiction or any court, tribunal, person or body exercising judicial or quasi-judicial functions; In all civil actions and special proceedings falling within the exclusive original jurisdiction of a Juvenile and Domestic Relations Court and of the Courts of Agrarian Relations as now provided by law; and In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs or the value of the property in controversy exceeds One hundred thousand pesos (100,000.00) or, in such other abovementioned items exceeds Two hundred thousand pesos (200,000.00). (as amended by R.A. No. 7691*)

3.

1.4. For the purposes of paragraph (3) of this article: a) if a party has more than one place of business, the place of business is that which has the closest relationship to the arbitration agreement; b) if a party does not have a place of business, reference is to be made to his habitual residence. Arbitration agreement determination of rights, obligations, procedures and rules Arbitration clause any dispute arising out of his contract shall be resolved by arbitration. Container contract a contract containing the arbitration clause.

In any case, the Court shall order the prosecuting attorney or fiscal assigned to it to take steps to prevent collusion between the parties and to take care that the evidence is not fabricated or suppressed. (e) the jurisdiction of courts

4.

5. Section 9. Jurisdiction. The Court of Appeals shall Exercise: 1. Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction; Exclusive original jurisdiction over actions for annulment of judgements of Regional Trial Courts; and Exclusive appellate jurisdiction over all final judgements, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commission, including the Securities and Exchange Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service Commission, Except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph 4 of the fourth paragraph od Section 17 of the Judiciary Act of 1948. 6.

7.

2. 3.

8.

B. Exclusions from the coverage of arbitration R.A. 9285, Sec. 6. Exception to the application of this Act. The provisions of this Act shall not apply to resolution or settlement of the following: (a) labor disputes covered by P.D. 442 or the Labor Code of the Philippines

Section 20. Jurisdiction in criminal cases. Regional Trial Courts shall exercise exclusive original jurisdiction in all criminal cases not within the exclusive jurisdiction of any court, tribunal or body, except those now falling under the exclusive and concurrent jurisdiction of the Sandiganbayan which shall hereafter be exclusively taken cognizance of by the latter.

Section 21. Original jurisdiction in other cases. Regional Trial Courts shall exercise original jurisdiction:

1.

1.
2.

In the issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction which may be enforced in any part of their respective regions; and In actions affecting ambassadors and other public ministers and consuls.

Section 22. Appellate jurisdiction. Regional Trial Courts shall exercise appellate jurisdiction over all cases decided by Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts in their respective territorial jurisdictions. Such cases shall be decided on the basis of the entire record of the proceedings had in the court of origin and such memoranda and/or briefs as may be submitted by the parties or required by the Regional Trial Courts. The decision of the Regional Trial Courts in such cases shall be appealable by petition for review to the Court of Appeals which may give it due course only when the petition shows prima facie that the lower court has committed an error of fact or law that will warrant a reversal or modification of the decision or judgment sought to be reviewed. Section 23. Special jurisdiction to try special cases. The Supreme Court may designate certain branches of the Regional Trial Courts to handle exclusively criminal cases, juvenile and domestic relations cases, agrarian cases, urban land reform cases which do not fall under the jurisdiction of quasi-judicial bodies and agencies, and/or such other special cases as the Supreme Court may determine in the interest of a speedy and efficient administration of justice. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in criminal cases. Except in cases falling within the exclusive original jurisdiction of Regional Trial Courts and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: 1. 2. Exclusive original jurisdiction over all violations of city or municipal ordinances committed within their respective territorial jurisdiction; and Exclusive original jurisdiction over all offenses punishable with imprisonment not exceeding six (6) years irrespective of the amount of fine, and regardless of other imposable accessory or other penalties, including the civil liability arising from such offenses or predicated thereon, irrespective of kind, nature, value, or amount thereof:Provided, however, That in offenses involving damage to property through criminal negligence they shall have exclusive original jurisdiction thereof. (as amended by R.A, No. 7691)

2.

3.

Exclusive original jurisdiction over civil actions and probate proceedings, testate and intestate, including the grant of provisional remedies in proper cases, where the value of the personal property, estate, or amount of the demand does not exceed One hundred thousand pesos (P100,000.00) or, in Metro Manila where such personal property, estate, or amount of the demand does not exceed Two hundred thousand pesos (P200,000.00) exclusive of interest damages of whatever kind, attorney's fees, litigation expenses, and costs, the amount of which must be specifically alleged: Provided, That where there are several claims or causes of action between the same or different parties, embodied in the same complaint, the amount of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the causes of action arose out of the same or different transactions; Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided, That when, in such cases, the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession. Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where the assessed value of the property or interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and costs:Provided, That value of such property shall be determined by the assessed value of the adjacent lots. (as amended by R.A. No. 7691).

promulgated pursuant to this Act, resolve a dispute by rendering an award (R.A. 9285, Sec 3(d)). Principle of Party Autonomy R.A. 9285, Sec. 2. Declaration of Policy - it is hereby declared the policy of the State to actively promote party autonomy in the resolution of disputes or the freedom of the party to make their own arrangements to resolve their disputes. Towards this end, the State shall encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an important means to achieve speedy and impartial justice and declog court dockets. As such, the State shall provide means for the use of ADR as an efficient tool and an alternative procedure for the resolution of appropriate cases. Likewise, the State shall enlist active private sector participation in the settlement of disputes through ADR. This Act shall be without prejudice to the adoption by the Supreme Court of any ADR system, such as mediation, conciliation, arbitration, or any combination thereof as a means of achieving speedy and efficient means of resolving cases pending before all courts in the Philippines which shall be governed by such rules as the Supreme Court may approve from time to time Party autonomy freedom of the party to make their own arrangements to resolve their disputes. Objective: 1. 2. speedy and efficient resolution of disputes. declog court dockets

(f) future legitime Art. 886. Legitime is that part of the testators property which he cannot dispose of because the law has reserved it for certain heirs who are, therefore, called compulsory heirs. (g) criminal liability (h) those which by law cannot be compromised C. Domestic Arbitration Definition Arbitration a voluntary dispute resolution process in which one or more arbitrators, appointed in accordance with the agreement of the parties, or rules

Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in civil cases. Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:

SADR, Rule 2.1. It is the policy of the State to actively promote the use of various modes of ADR and to respect party autonomy or the freedom of the parties to make their own arrangements in the resolution of disputes with the greatest cooperation of and the least intervention from the courts. To this end, the objectives of the Special ADR Rules are to encourage and promote the use of ADR, particularly arbitration and mediation, as an important means to achieve speedy and efficient resolution of disputes,

impartial justice, curb a litigious culture and to declog court dockets. Objectives: 1. 2. 3. 4. achieve speedy and efficient resolution of disputes achieve speedy impartial justice curb a litigious culture declog court dockets

A controversy cannot be arbitrated where one of the parties to the controversy is an infant, or a person judicially declared to be incompetent, unless the appropriate court having jurisdiction approve a petition for permission to submit such controversy to arbitration made by the general guardian or guardian ad litem of the infant or of the incompetent. But where a person capable of entering into a submission or contract has knowingly entered into the same with a person incapable of so doing, the objection on the ground of incapacity can be taken only in behalf of the person so incapacitated. Two or more persons or parties may submit to the arbitration of one or more arbitrators any controversy existing between them at the time of the submission and which may be the subject of an action. Such submission or contract may include questions arising from: o Valuations o Appraisals o Other controversies which may be collateral, incidental, precedent or subsequent to any issue between the parties. A controversy cannot be arbitrated when one of the parties is: o An infant o Judicially declared incompetent unless the appropriate court having jurisdiction approve a petition for permission to submit such controversy to arbitration made by the general guardian or guardian ad litem of the infant or of the incompetent. Note: But where a person capable of entering into a submission or contract has knowingly entered into the same with a person incapable of so doing, the objection

on the ground of incapacity can be taken only in behalf of the person so incapacitated. Uncitral Model Law, Art. 7.1. Arbitration agreement is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. Arbitration agreement may be in the form of: Arbitration clause - any dispute arising out of his contract shall be resolved by arbitration. Container contract a contract containing the arbitration clause.

Uncitral Model Law, Article 19 - [Determination of rules of procedure] 1) Subject to the provisions of this Law, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings. 2) Failing such agreement, the arbitral tribunal may, subject to the provisions of this Law, conduct the arbitration in such manner as it considers appropriate. The power conferred upon the arbitral tribunal includes the power to determine the admissibility, relevance, materiality and weight of any evidence. Arbitration Agreement v. (Submission agreement) R.A. 876, Sec. 2. Persons and matters subject to arbitration. - Two or more persons or parties may submit to the arbitration of one or more arbitrators any controversy existing between them at the time of the submission and which may be the subject of an action, or the parties to any contract may in such contract agree to settle by arbitration a controversy thereafter arising between them. Such submission or contract shall be valid, enforceable and irrevocable, save upon such grounds as exist at law for the revocation of any contract. Such submission or contract may include question arising out of valuations, appraisals or other controversies which may be collateral, incidental, precedent or subsequent to any issue between the parties.

RA 876, Sec. 8 Appointment of arbitrators If, in the contract for arbitration or in the submission described in section two, provision is made for a method of naming or appointing an arbitrator or arbitrators, such method shall be followed; but if no method be provided therein the Court of First Instance shall designate an arbitrator or arbitrators. The Court of First Instance shall appoint an arbitrator or arbitrators, as the case may be, in the following instances: (a) If the parties to the contract or submission are unable to agree upon a single arbitrator; or (b) If an arbitrator appointed by the parties is unwilling or unable to serve, and his successor has not been appointed in the manner in which he was appointed; or (c) If either party to the contract fails or refuses to name his arbitrator within fifteen days after receipt of the demand for arbitration; or

(d) If the arbitrators appointed by each party to the contract, or appointed by one party to the contract and by the proper Court, shall fail to agree upon or to select the third arbitrator. (e) The court shall, in its discretion appoint one or three arbitrators, according to the importance of the controversy involved in any of the preceding cases in which the agreement is silent as to the number of arbitrators. (f) Arbitrators appointed under this section shall either accept or decline their appointments within seven days of the receipt of their appointments. In case of declination or the failure of an arbitrator or arbitrators to duly accept their appointments the parties or the court, as the case may be, shall proceed to appoint a substitute or substitutes for the arbitrator or arbitrators who decline or failed to accept his or their appointments. Sec. 9 Appointment of addnal arbitrators Where a submission or contract provides that two or more arbitrators therein designated or to be thereafter appointed by the parties, may select or appoint a person as an additional arbitrator, the selection or appointment must be in writing. Such additional arbitrator must sit with the original arbitrators upon the hearing. RA 876, Sec. 5. Preliminary procedure. An arbitration shall be instituted by: (a) In the case of a contract to arbitrate future controversies by the service by either party upon the other of a demand for arbitration in accordance with the contract. Such demand shall be set forth the nature of the controversy, the amount involved, if any, and the relief sought, together with a true copy of the contract providing for arbitration. The demand shall be served upon any party either in person or by registered mail. In the event that the contract between the parties provides for the appointment of a single arbitrator, the demand shall be set forth a specific time within which the parties shall agree upon such arbitrator. If the contract between the parties provides for the appointment of three arbitrators, one to be

selected by each party, the demand shall name the arbitrator appointed by the party making the demand; and shall require that the party upon whom the demand is made shall within fifteen days after receipt thereof advise in writing the party making such demand of the name of the person appointed by the second party; such notice shall require that the two arbitrators so appointed must agree upon the third arbitrator within ten days from the date of such notice. (b) In the event that one party defaults in answering the demand, the aggrieved party may file with the Clerk of the Court of First Instance having jurisdiction over the parties, a copy of the demand for arbitration under the contract to arbitrate, with a notice that the original demand was sent by registered mail or delivered in person to the party against whom the claim is asserted. Such demand shall set forth the nature of the controversy, the amount involved, if any, and the relief sought, and shall be accompanied by a true copy of the contract providing for arbitration. (c) In the case of the submission of an existing controversy by the filing with the Clerk of the Court of First Instance having jurisdiction, of the submission agreement, setting forth the nature of the controversy, and the amount involved, if any. Such submission may be filed by any party and shall be duly executed by both parties. (d) In the event that one party neglects, fails or refuses to arbitrate under a submission agreement, the aggrieved party shall follow the procedure prescribed in subparagraphs (a) and (b) of this section.