A.

ABOUT PDRC

1. What is the Philippine Dispute Resolution Center?

The Philippine Dispute Resolution Center (PDRC) is a non-stock, non-profit
organization incorporated in 1996 out of the arbitration committee of the Philippine
Chamber of Commerce and Industry . PDRC promotes the use of arbitration,
mediation and other alternative modes of settling commercial disputes such as
dispute adjudication, neutral evaluation, and mini-trial and provides alternative
dispute resolution (ADR) services to the business community. Its members are
mostly practicing lawyers, accountants, engineers, academicians, professionals,
bankers, and business persons.
2. What services does PDRC offer?
PDRC offers the following services:
-administration of commercial arbitration and mediation
-appointment of arbitrators, mediators and other neutrals
-seminars on commercial arbitration and mediation
-training and accreditation
-networking with international arbitration centers
-referral services
-information on arbitration agreements, rules, and arbitration law and
practice
- transcription of minutes and hearings

PDRC works closely with the three branches of the Philippine government (the
executive, through the Philippine Department of Justice and the Department of
Trade and Industry; the legislative, through the Philippine Congress; and the
judiciary through the Philippine Supreme Court) in drafting substantive laws and
procedural rules on ADR as well as in information dissemination and training on
matters concerning ADR, trade law, and commerce. It publishes The Philippine
ADR Review (PADRR), a monthly newsletter.

B. PDRC ARBITRATION

1. What is arbitration?
Arbitration is a process where the parties agree to submit their disputes to a
neutral arbitrator or tribunal, who renders an award after hearing the parties. Legally,
it is defined as a voluntary dispute resolution process whereby one or more
arbitrators, appointed in accordance with the agreement of the parties, or under
rules promulgated pursuant to Republic Act No. 9285 (2004) and its Implementing
Rules and Regulations (IRR), resolve a dispute by rendering an award. [Republic Act
No. 9285 (2004) or ADR Act of 2004, Sec. 3(d); DOJ DC No. 98, s. 2009; IRR of
ADR Act of 2004), Rule 2, Art. 1.6, Sec. A (3)].
2. How is arbitration different from mediation?
Mediation is facilitated negotiation. A third-party neutral called the mediator does
not render an award but facilitates communication between the parties and assists
them in reaching a voluntary resolution of their dispute.
3. How is arbitration different from court litigation?
Arbitration is different from court litigation in many ways. The basic difference,
however, is that arbitration is a private and voluntary dispute resolution process. It is
contractual in nature and is less formal. The tribunal derives its authority to resolve
the dispute from the consent of the parties. No one may compel another to arbitrate,
unless they have previously agreed to resolve their dispute by arbitration.
4. What are some advantages of arbitration over court litigation?
Some of the advantages of arbitration over court litigation are:
-The parties may choose the arbitrators, whether local or foreign, who have the
necessary skills and technical expertise to hear and adjudicate a dispute.
-Proceedings are private and confidential.
-Compared to court litigation, arbitration is generally faster and more cost
efficient.
-Parties can choose the place of arbitration and the venue of the proceedings.
-In international commercial arbitration, the parties can be represented by local or
foreign counsel.

As a general rule, arbitral awards are not appealable on the merits.

A foreign arbitral award, which may be enforced in the Philippines pursuant to the
New York Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, is generally easier to enforce compared to foreign court judgments.

5. What are the types of arbitration?

Arbitration may be institutional or ad hoc.
Institutional arbitration is administered by an entity registered as a domestic
corporation with the Securities and Exchange Commission (SEC) and engaged in,
among others, arbitration of disputes in the Philippines on a regular and permanent
basis, e.g., the PDRC [IRR of ADR Act of 2004, Sec. D (10)].
Ad hoc arbitration is arbitration administered by an arbitrator or by the parties
themselves. An arbitration administered by an institution shall be regarded as ad hoc
arbitration if such institution is not a permanent or regular arbitration institution in the
Philippines [IRR of ADR Act of 2004, Sec. D (1)].
6. What are some of the advantages of institutional arbitration compared to
ad hoc arbitration?
Generally, institutional arbitration has the advantage of predictability and
certainty. The arbitration undergoes a process that both parties accept in advance of
the dispute, from the appointment of the tribunal, to the venue and conduct of the
proceeding, to the time limit, up to the rendition and enforcement of the final award.
The parties are also familiar with the cost of institutional arbitration, which apply
uniformly to all disputes.
While there are advantages to an ad hoc arbitration, e.g., the parties will have more
control over the cost of the arbitration (as they are not subject to the fee schedule of
an arbitration center) or over the proceeding itself (as they can agree to their own
rules), there are disadvantages, including; (a) the parties in an ad hoc arbitration
may have to negotiate the rules of procedure instead of availing of tried and tested
arbitration rules (e.g., PDRC Rules); (b) the absence of a permanent secretariat with
an experienced staff who can provide administrative assistance; (c) lack of access to
skilled and experienced arbitrators who can resolve the dispute; (d) delay and
difficulty in the appointment of arbitrators in case of a challenge or if the parties fail
to timely appoint the arbitrators; (e) lack of readily available and convenient physical
facilities and equipment as well as support services for arbitration; and (f) difficulty in
encouraging reluctant parties to proceed with arbitration. An ad hoc arbitration may

take longer than institutional arbitration and, in some cases, even longer than court
litigation.

7. How can a commercial dispute be arbitrated under the administration of

PDRC?
In the absence of a contractual stipulation that the dispute shall be resolved by
arbitration under the rules of the PDRC, the parties may agree to submit the dispute
to a binding arbitration to be administered by the PDRC under its rules of procedure.
The contractual stipulation is known as an arbitration clause, while the agreement to
arbitrate is known as an arbitration agreement or a submission agreement.
It is recommended that parties include an arbitration clause in their contract. For a
model arbitration clause, see item no. 8 below.
8. Is there a model arbitration clause?
PDRC recommends the following model arbitration clause:
Any dispute, controversy or claim arising out of or relating to this contract, or the
breach, termination or invalidity thereof, shall be finally resolved by arbitration in
accordance with the rules of the Philippine Dispute Resolution Center (PDRC).
The parties may wish to consider adding:
The appointing authority shall be (name of institution or person);
The number of arbitrator/s shall be (one or three)
The place of arbitration shall be (city or country)
The language(s) to be used in the arbitral proceedings shall be
9. What are the rules that PDRC follows in an arbitration?
The PDRC follows its Arbitration Rules and Administrative Guidelines.
What is the procedure followed in an arbitration with PDRC?
The procedure is set out in the 2015 PDRC Arbitration Rules. The provisions of the
national law on arbitration, Republic Act No. 865 (1953) or The Arbitration Law and
the ADR Act of 2004 and its IRR, and the Special Rules of Court on Alternative
Dispute Resolution also apply to an arbitration with PDRC.

10. How many arbitrators are appointed to resolve a dispute?

The parties may agree on any number of arbitrators, usually one (sole arbitrator) or
three (panel). In the absence of agreement, the number of arbitrators shall be three.
11. How is an arbitrator appointed?
The parties may agree on the procedure of appointing the arbitrator/s. If the
parties agree in the arbitration clause or in the submission agreement to a method of
appointing the arbitrator/s, such method shall be followed. Otherwise, the PDRC
Arbitration Rules shall apply in case of institutional arbitration administered by
PDRC. In ad hoc arbitration, the provisions of the IRR of ADR Act of 2004 shall
apply.
12. Who may be appointed as arbitrators?
In international commercial arbitration, any impartial and independent individual
may be appointed as arbitrator [UNCITRAL Model Law, Art. 12; IRR of ADR Act of
2004, Art. 4.12].
In domestic arbitration, an arbitrator must be of legal age, in full enjoyment of his
or her civil rights, and knows how to read and write. The arbitrator shall not be
related by blood or marriage within the sixth degree to either party. He or she shall
also have no financial, fiduciary, or other interest in the dispute or in the result of the
arbitration, and must have no personal bias that may prejudice the right of any party
to a fair and impartial award. The arbitrator may not act as a champion of any party
or to advocate its cause. [Rep. Act No. 876 (1953), Sec. 10; IRR of ADR Act of 2004,
Art. 5.10]
13. What happens when the arbitrator appointed dies or withdraws his
appointment as arbitrator while the proceeding is ongoing?
A substitute arbitrator shall be appointed in accordance with the rules that apply
to the appointment of the arbitrator being replaced (IRR of ADR Act of 2004, Art.
4.15).
14. What actions does the PDRC take, if any, with respect to an arbitrator who
is biased?
An arbitrator who is biased may be challenged. If the challenged arbitrator
objects to or disagrees with the challenge, the challenge may be raised with the
PDRC Board of Trustees, whose decision shall be final. If the PDRC Board of
Trustees fails to act on the challenge within 30 days, the challenge may be renewed
with the proper Regional Trial Court.

15. How long does the arbitration proceeding last?

An institutional arbitration usually lasts between six months to one year. Under
the PDRC Arbitration Rules, an award shall be made by the tribunal within one year
from its constitution [Art. 42 (1)]. An ad hoc arbitration may take one to two years or
more.

C. PDRC MEDIATION

1. What is mediation?
Mediation is a voluntary process in which a mediator, selected by the disputing
parties, facilities communication and negotiation, and assists the parties in reaching
a voluntary agreement regarding a dispute [ADR Act 2004, Sec. 3(q)].
2. How is mediation different from arbitration?
Although both arbitration and mediation involve a third party neutral, the latter
plays a different role in arbitration and mediation. In arbitration, the arbitrator/s
resolve a dispute by rendering an award, whereas in mediation the mediator assists
the disputing parties to communicate and reach a voluntary agreement. Mediation is
also known as assisted negotiation.
3. How is mediation different from litigation?
Mediation is a voluntary and private dispute resolution process where both
parties agree to engage a neutral third party to help them resolve their dispute
through a voluntary agreement. In litigation, the parties may immediately commence
an action by filing a complaint before the court or a government agency even without
the consent of the other party.
Generally, the Rules of Court or the rules of procedure of the government agency do
not apply to mediation. Because of the popularity and effectiveness of mediation as
an alternative form of dispute resolution, Philippine courts and government agencies
have required mediation as a condition to a trial or hearing on the merits.
4. When should parties avail of mediation?
Mediation should be used when the parties desire the assistance of a mediator to
help them reach a win-win resolution of their dispute. Parties can refer their dispute
to mediation at any time, more particularly: (a) if their contract contains a mediation

clause stating that the parties should refer any dispute arising from the contract to
mediation or to an institution like PDRC which offers mediation services, in which
case their dispute can be referred to mediation according to the mediation clause;
(b) even if the parties did not sign an agreement to mediate before their dispute
arose, they may agree to have their dispute referred to mediation in order to reach a
negotiated solution under the guidance of a mediator; and (c) where other
proceedings have commenced (e.g., litigation or arbitration), the parties may still
agree to hold such proceedings in abeyance while they refer their dispute to
mediation.
5. What are the rules that PDRC follows for mediation proceedings?
PDRC is updating its rules on mediation. Nevertheless, PDRC may administer
mediation applying the provisions of ADR Act of 2004 and its IRR.
6. Can one party refer a case to mediation without the agreement of the other
party?
As with arbitration, mediation can only be commenced with the agreement of all
the parties.
If the parties have not agreed in advance on mediation before the dispute arose, one
party may propose mediation to the other party and the parties may enter into a
mediation agreement after the dispute has occurred.
7. What happens when mediation succeeds?
Once the parties have reached an agreement, they may put their agreement in
writing, oftentimes with the help of their counsel and the mediator, and thereafter
sign it. The mediator will review the agreement to make sure that it is consistent with
what the parties agreed to.
8. What happens if the parties fail to come to any settlement?
It may happen that the parties are unable to find a settlement to their dispute or
they reach only a partial solution, which leaves some points in dispute. Depending
on the reasons for this, the parties may wish to schedule another mediation session,
continue privately with negotiations, or turn to other modes of dispute resolution to
resolve their dispute such as litigation or arbitration. The parties should also consider
whether the terms of their contract state how they should proceed.
9. How many mediators are appointed to resolve a dispute?
Generally, only one mediator is appointed to assist the parties to resolve their
dispute.

10. How is a mediator appointed?

The parties may choose any person to act as mediator. The parties may request
PDRC or the Office of Alternative Dispute Resolution (OADR) to provide them with a
list or the resumes of their certified mediators. The OADR may be requested to
inform the mediator of his or her selection [IRR of ADR Act of 2004, Art. 3.3]. If the
parties fail or are unable to appoint a mediator, PDRC may appoint a mediator.
11. How long does the mediation last?
Depending on the complexity of the issues in the dispute, the mediation may take
anywhere from less than an hour to as long as one year or more. If the parties are
unable to reach an agreement during mediation, they may refer any unresolved
issues to arbitration.

D. COMMENCING ARBITRATION OR MEDIATION WITH THE PDRC

1. Who may avail of the services of PDRC?
Any person who is bound by an arbitration agreement may avail of the PDRCs
services relating to the administration of an arbitration. Any person may also avail of
PDRCs mediation services.
2. How does a party file a request for arbitration with the PDRC and what are
the procedures involved?
The procedure for commencing an arbitration under the PDRC Arbitration Rules
are described in Article 4 (Notice of Arbitration).
3. How may one avail of the services of PDRC?
Any of the parties to a contract with an arbitration clause or to an arbitration
agreement may contact the PDRC Secretariat to request assistance in filing a
notice. The submission of a Notice of Arbitration shall be accompanied by payment
of a non-refundable filing fee and payment of a provisional advance on cost.
A party desiring to avail of PDRCs mediation services may also contact the PDRC
Secretariat to request assistance in filing a request for mediation.

4. How many sets of the Notice or request does a party need to file with
PDRC?
For arbitration Three sets are needed if the arbitral tribunal is composed of a sole
arbitrator, and five sets if the arbitral tribunal is composed of three arbitrators.
For mediation Three sets.
5. When may these services be availed of?
Any time a dispute subject of an arbitration or mediation clause arises.
6. What are the fees to be paid to PDRC?
The Schedule of Administrative Fee is found on pages 74-75 of the 2015 Arbitration
Rules.
7. What are the fees involved and how much?
The Schedule of Arbitrators Fees is found on pages 73-74 of the 2015 Arbitration
Rules.
8. When are these fees paid and who shoulders them?
The PDRC Secretariat will set the schedule of payment of fees. Upon the filing of
a Notice, a filing fee of PhP50,000.00 will be paid to PDRC. The PDRC Secretariat
will invite the parties to make an advance payment to cover the costs of the
arbitration or mediation, including the arbitrators and mediators fees, subject to final
determination by the tribunal (in case of arbitration) as to who should ultimately
shoulder the cost.