2nd-sem-adr-review-material-sy-2018-2019-prelim-and-midterm-coverage.docx

CHAPTER 1. - INTRODUCTION During the term of Chief Justice Artemio Panganiban, his main concern in the acute judiciary problem is what he calls it ACID, i.e., (1) Access to justice by the poor is limited due to financial constraint, (2) Corruption, (3) Incompetence of [some] judges in the conduct of hearing and rendition of judgments, and (4) Delay in the delivery of quality judgments.

To avoid this ACID, as an alternative to court litigations, came into existence of the Alternative Dispute Resolution (ADR) system with which the disputing parties can voluntary agree to settle their dispute without court intervention (that is the controversy without even reaching the court) through any of the several means under the ADR system such as under Republic Act 9285 known as ADRA of 2004 where it comprises conciliation, mediation, arbitration, early neutral evaluation, mini-trial and any combination thereof (e.g., mediation-arbitration) - and among the ADR system, mediation and arbitration are the most popular.

There was a controversy worth P2.5 billion involving Pacific Plaza Towers, Inc. built in Fort Bonifacio by Metro Pacific Corporation where it was resolved through out-of-court ADR system within a month. Same happened to another controversy also worth P2.5 billion which is the Skyway Project in Alabang and was likewise resolved within a month through out-of-court ADR system. So, you can now realize the huge benefits just how fast, economical and convenient a controversy can be settled through out-of-court ADR system instead of judicial process where it could have dragged for many years or who knows because of huge amount of money involved it could have been pending to this date.

Now, don't be confused, there are types of dispute resolution system in the Philippines which is either voluntary or mandatory for the parties to undergo - which can be conciliation, arbitration, mediation, mini-trial, early neutral evaluation or any combination thereof. However, the most popular are mediation and arbitration.

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TYPES of DISPUTE RESOLUTION SYSTEMS IN THE PHILIPPINES

1. Mandatory Dispute Resolution Systems Being mandatory, it is an ADR System such that the disputants have no choice except to have their dispute undergo ADR System. There are three mandatory dispute resolution Systems: a. Katarungang Pambarangay (under Republic Act 7160 otherwise known as Local Government Code)

Mandatory ADR system such that under Section 412 (a) LGC no complaint, action, petition, or proceeding involving any dispute within the authority of the Lupon shall be filed directly in court or any other government office for adjudication, unless there has been a MEDIATION (i.e., a particular type of ADR system) between disputants to be conducted by the Punong Barangay, and if the latter is not successful, the controversy shall go through the Lupon Tagapamayapa. And under Section 408 LGC: Subject matter of mediation under the Lupon Tagapamayapa The Lupon Tagapamayapa has the power/authority to mediate parties residing in the same city/municipality ALL disputes - EXCEPT: (1) One party is the government agency, subdivision or instrumentality (2) One party is a public officer/employee where dispute relates to performance of his official function (3) Dispute involving real properties (i.e., real action) located in different cities/municipalities - unless parties agree to submit their dispute for mediation by the proper Lupon Tagapamayapa (4) Dispute involving parties (i.e., personal action) who actually reside in barangays of different cities/municipalities - unless such barangays where parties reside adjoin each other and the parties agree to submit their dispute for mediation by proper Lupon Tagapamayapa (5) Crime with imposable penalty exceeding one (1) year or exceeding P5,000 fine (6) Crime where there is no private offended party (e.g., victimless crimes meaning there is no private offended party such as illegal possession of firearms/dangerous drugs) (7) Other disputes that the President may determine HOWEVER: There are exceptions where the action can be filed directly in court without first undergoing mediation before the Lupon for under Section 412 (b) LGC it provides, (a) where the accused is presently detained, (b) where the person deprived of his liberty proper for habeas corpus, (c) when the action is coupled with provisional remedies such as injunction, attachment, delivery of personal property or support pendent lite, and (d) when the action would be barred by statute of limitation if the case will undergo barangay mediation Note: RA 7160 Sec. 410. Procedure for Amicable Settlement: (c) Suspension of prescriptive period of offenses. — While the dispute is under mediation, conciliation, or arbitration, the prescriptive periods for offenses and cause of action under existing laws shall be interrupted upon filing of the complaint with the punong barangay. The prescriptive periods shall resume upon receipt by the complainant of the complaint or the certificate of repudiation or of the certification

to file action issued by the lupon or pangkat secretary: Provided, however, That such interruption shall not exceed sixty (60) days from the filing of the complaint with the punong barangay. Note (*): How do you enforce compromise agreement between disputants successfully mediated through Punong Barangay or Lupon Tagapamaya? (BAR 2012) If any of the disputants did not repudiate within 10 days the dispute successfully settled in the barangay level reckoned from the date of execution of the amicable settlement then such amicably settled dispute can be enforced by: (1) Within 6 months from the date the parties executed the amicable settlement of their dispute, file Motion (for the execution of the settled dispute) with the Lupon Tagapamayapa; or (2) After the lapse of said 6 months, file an action with MTC HOWEVER: If any of the disputants repudiated the settlement within 10 days from the execution of the settlement, then the repudiator can file a "statement" sworn before and with the Lupon Chairman - by reason that his consent was obtained through fraud, intimidation, or violence, which repudiation shall render the Punong Barangay to issue a Certificate to File Action b. (*) Court-annexed Mediation (this is type of ADR though technically we call it Judicial Dispute Resolution [JDR]) This is another compulsory ADR system via an order issued by the court during pre-trial stage of the action ordering the parties to go to the Philippine Mediation Center (PMC) for them to undergo mediation (for the possible peaceful settlement of their controversy). This compulsory judicial mediation includes: (BAR 2013) 1. ALL civil cases including special proceeding particularly settlement of estates (e.g., judicial partition of estate) - EXCEPT when the Complaint filed with court is coupled with provisional remedy such as preliminary injunction, (preliminary) attachment, delivery of personal property (replevin [Rule 60 ROC]) or support pendent lite (Rule 61 ROC). But there are civil cases/special proceedings which by law cannot undergo JDR as they cannot be compromised such as under Article 2035 of NCC which provides: a. Civil status of a person b. Validity of a marriage or a legal separation However, the disputants can inform the court that they agree to undergo mediation which the court shall abide but only some aspects such as custody of minor children, separation of property, support pendent lite c. Future support d. Future legitime

2. On criminal cases - but only on the: a. Civil aspect (because crime cannot be compromised) of criminal cases where the imposable penalty not exceed 6 years imprisonment. However judicial mediation is not required to victimless crimes b. Civil aspect of quasi-offenses under RPC (e.g., reckless imprudence resulting to physical injury or damage to property) c. Civil aspect of theft (not qualified theft), estafa (not syndicated or large scale esafa), libel and BP 22 Now: On crime involving violation of Republic Act 9262 (Violence Against Women and Children [VAWC]), the court cannot mandate the accused and the private offended party to undergo compulsory mediation - UNLESS: They agree and inform the court that they would like to undergo mediation - BUT ONLY: On matters involving custody of minor children, separation of property, support pendent lite (*) There are three stages of JDR System: (BAR 2012) a. First stage: The court of origin whether MTC/RTC (as the case maybe) during pretrial stage, order the parties to undergo mediation before the PMC to be officiated by accredited mediators b. Second stage: If the parties fail to settle during the first stage, the JDR Judge of the PMC becomes the mediator-conciliator-early neutral evaluator. If this second stage still fails, then the JDR Judge shall return the case back to the court of origin (MTC/RTC as the case maybe) who will now continue with the pre-trial, proceed with the trial until Judgment c. Third stage: When the defeated party appeals the case to RTC (from MTC) / CA (from RTC), as the case maybe, the RTC/CA (as the case maybe) shall refer the case to PMC-ACM (Appeals Court Mediation) for another round of mediation, and if still not settled, then the appellate court shall decide the appeal c. Arbitration for labor cases (Presidential Decree 442) In labor cases, an ADR system particularly arbitration is mandatory, the reason why a labor complainant files his labor complaint with the Regional Arbitration Board (RAB), whose arbitral decision is appealable to NLRC located Quezon City (Note: The decision of the NLRC is not appealable because its decision is final and executory – so the remedy against NLRC decision is not appeal but an action in itself which is a Special Civil Action via Petition for Certiorari under Rule 65 filed with the Court of Appeals – and when the action from NLRC reaches the CA, the nature of the action is no longer ADR but an action via judicial intervention)

Note: The first two mandatory ADR systems which are Katarungang Pambarangay and JDR are mediations where the mediator does not render decision but only facilitate way to make the parties settle their dispute amicably. The third ADR system by the RAB is arbitration where the labor arbiter of the RAB renders a binding arbitral decision (though appealable to NLRC) 2. Voluntary Dispute Resolution Systems What makes it voluntary dispute resolution system is because the adversarial parties are not mandated by law to have their controversy undergo any of the proper ADR system – but the parties can voluntarily agree to have their controversy undergo any of the ADR system. And once the parties so agreed, then it becomes a binding agreement and such agreement now becomes their own private law and so therefore becomes mandatory for them to comply in good faith a. The Arbitration Law (R.A. 876; Domestic Arbitration Law) This is an ADR system particularly arbitration where the adversarial parties can voluntarily agree to have their dispute undergo arbitration. Under Section 2 of RA 876 includes “any domestic” controversy (i.e., domestic controversy refers to local dispute between disputants within the Philippines [not international controversy]), including dispute on contracts - EXCEPT: Arbitration on labor actions which is under the exclusive jurisdiction of the RAB-NLRC Note: Another exception though it is a domestic controversy is the arbitration on construction dispute pursuant to EO 1008 Section 4 - where it is the CIAC (Construction Industry Arbitration Commission ) has the exclusive jurisdiction thereof b. Construction Industry Arbitration Law (E.O 1008) This is an ADR system particularly arbitration where the adversarial parties can voluntarily agree to have their dispute undergo arbitration under the original and exclusive jurisdiction of Construction Industry Arbitration Commission (CIAC) This is arbitration refers any breach of contract regarding any construction conducted in the Philippines whether between private disputants or when one of the parties is a government c. ADR System by Solicitor General This is an ADR system where the adversarial parties particularly between National Government Agencies (e.g., between DENR vs. DAR) can voluntarily agree to have their dispute resolved by the SolGen under the ADR system which the SolGen deems best whether mediation, arbitration, or early neutral evaluation d. Alternative Dispute Resolution Act of 2004 (R.A. 9285; ADRA) This is a general law applicable to all forms of voluntary ADR systems in the Philippines viz., it unifies all forms of voluntary ADR Systems (not JDR) existing in the Philippines such

as mediation, conciliation, arbitration, early neutral evaluation, mini-trial or any combination thereof (e.g., mediation-arbitration), including the adoption of UNCITRAL Model Law into the Philippines (United Nations Commission on International Trade Law) pertaining to dispute that is both commercial and international in nature. ADRA repeals some provisions of other ADR system existing in the Philippines (such RA 876 known as Arbitration Law, EO 1008 known as Construction Industry Arbitration Law) - but only on those provisions inconsistent with ADRA

CHAPTER 2. - FUNDAMENTALS OF ADR under ADRA 

DEFINITION OF ADR SYSTEM (Section 3 [a] ADRA [R.A. 9285]) Any process where the adversarial parties can voluntarily agree to settle their dispute outside judicial or quasi-judicial (e.g., NLRC) – where the parties can choose whether by mediation, conciliation, arbitration, early neutral evaluation, mini-trial or any combination thereof (e.g., mediation-arbitration) and to be presided by a neutral 3rd person (e.g., conciliator, mediator, arbitrator, etc. as the case may be)



MEDIATION (Section 3 [q] ADRA in relation to Article 1.6 B [6] DOJ IRR) A form of ADR system where disputants voluntarily agree to settle their dispute through mediation (i.e., such agreement called "mediation agreement") to be presided by the mediator chosen by the parties – to be conducted according to the rules agreed upon by the parties, or in absence/default of such agreement in accordance with the ADRA and DOJ IRR. The role of the mediator is not to make decision but rather to assist/help the parties (by convincing them) to enter into amicable settlement (Note: Mediation is a process that is nonmerit based where the mediator will not delve on the factual and legal issues of the dispute - unlike arbitration, med-arb, early neutral evaluation and mini-trial) 1. CONCILIATION Mediation includes conciliation (Section 7 ADRA; i.e., mediation and conciliation have almost similar function). 

What makes then conciliation somehow different from mediation First: In conciliation, the disputants voluntarily agree to settle their dispute through conciliation to be presided by the conciliator - WHILE: In mediation, the disputants voluntarily agree to settle their dispute through mediation to be presided by the mediator Second: In conciliation, the conciliator proposes how to resolve the dispute - WHILE: In mediation, the disputants themselves propose how to resolve their dispute where

the role of the mediator is merely to facilitate the settlement of the dispute. In other words, the conciliator plays more active role than the mediator



ARBITRATION (Section 3 [d] ADRA; Article 1.6 A [3] DOJ IRR) Also a form of ADR system where the disputants voluntarily agree to settle their dispute through arbitration (i.e., such agreement called "arbitration agreement" or "submission agreement, as the case maybe") to be presided by an arbitrator chosen by the parties (or chosen in accordance with the Rules agreed upon the parties, or in the absence thereof, in accordance with the Rules mandated under ADRA/DOJ IRR) whose role (i.e., arbitrator) is to make a decision based on the merit called "arbitral award" binding upon the parties (Note: Arbitration is the only ADR system under ADRA that a binding decision is rendered)

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MEDIATION-ARBITRATION (Med-Arb; Note: Section 3 [a] ADRA "or any combination of the ADR System"; Section 3 [t] in relation with Section 1.6 E[2] DOJ IRR) Also a form of ADR system where the disputants voluntarily agree to settle their dispute through Med-Arb - which is a two-phased process, first is the mediation, and if mediation failed, then arbitration follows

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EARLY NEUTRAL EVALUATION (Section 3 [n] ADRA in relation with Section 1.6 E [1] DOJ IRR) Also a form of ADR system where disputants voluntarily agree to settle their dispute through early neutral evaluation (also known as neutral evaluation) to be presided by a neutral evaluator who is an expert on the subject-matter of the dispute. The neutral evaluator is chosen by the parties (or if no such agreement, then shall be appointed in accordance with the DOJ IRR). During the early neutral evaluation, the disputing parties (or their lawyers if any) shall submit the summary (in the form of Position Paper) to support their respective case alleging therein relevant facts, issues, and laws, attaching documents and affidavit of witnesses - afterwhich, the neutral evaluator shall issue a non-binding written evaluation/assessment of the dispute stating the merits and demerits (strengths and weaknesses) of the respective case of the parties and the estimated amount of damages that may be incurred by the possible losing party if the disputants decide to undergo court litigation. Note: As mentioned, the neutral evaluator must be expert on the subject matter of the dispute in order for the parties to trust his evaluation/assessment and thereby encourages amicable settlement. 1. Why it is called "early neutral evaluation"?

Because it is conducted for a possible amicable settlement of the dispute - before any of the disputants may decide to file action in court or before any other ADR System (especially arbitration)

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MINI-TRIAL (Section 3 [u] ADRA in relation Article 1.6 E[3] DOJ IRR and Section 7.7 DOJ IRR): Also a form of ADR system where disputants voluntarily agree to settle their dispute through mini-trial to be presided by a panel of 2/more decision makers (with or without the participation of a moderator who does not participate in the decision making but merely to preside the mini-trial proceeding as a neutral 3rd person) - where the rules to be observed depends the agreement of the disputants. In this kind of ADR System being so-called mini-trial, the decision is therefore based on the merits, as such the disputants will submit their respective written Summary (i.e., akin to Position Paper) which shall include the facts, factual issues , legal issues, and the applicable law and jurisprudence, and attached therewith documents/affidavit supporting their Summary - and afterwhich, the disputants will present their respective case (in a private and informal hearing) then afterwhich a rebuttal and sur-rebuttal stage may follow in both stages the decision makers can ask clarificatory questions, then afterwhich, the decision makers (will not make decision but rather) shall convince the disputants to settle their dispute voluntarily (but if there is a neutral 3rd person, he shall also assist the decision makers in trying to settle the disputants) - and if settlement fails, then the panel of decision makers will render a non-binding oral opinion (not decision) as regards the outcome/result of the dispute (and the reason of such outcome/result) in the event that the disputants decide to subsequently go to court. This non-binding oral opinion by the panel of decision makers could motivate the disputants to settle. However, any of the parties may ask the panel of decision makers to issue such non-binding written opinion.

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DISPUTES WHERE ADRA DOES NOT APPLY (Section 6 ADRA) The following cannot be the subject-matter under ADRA: (1) Labor dispute (which is under the jurisdiction of RAB-NLRC) (2) Civil status of person Note:

Civil

status

refers

to

marriage

status

[single/married/widow/widower/annulled/legally separated], facts of birth (i.e., all those entries on the certificate of live birth), facts of death (i.e., all those entries on the certificate of death), legitimation, adoption, naturalization, loss/recovery of citizenship, filiation, change of name and, civil interdiction after convicted of crime by final judgment (Civil interdiction is an accessory penalty for a crime consisting of deprivation of marital

authority, parental authority, guardianship, right to manage property or dispose of it inter vivos). Civil status also includes capacity of person to marry or to enter into contract, emancipation, etc. (3) Validity of marriage (void or voidable) (4) Ground for legal separation (5) Jurisdiction of court (court's jurisdiction is a matter of law and not by agreement of parties) (6) Future legitime Reason: How can a party compromise his legitime when it is not yet in existent being future? (7) Criminal liability Reason: Because the complainant is the State (that is why the criminal case is entitled People of the Philippines vs. Juan Dela Cruz), and the private complainant (e.g., victim) merely serves as witness for the State. Note: However, the civil aspect/liability of the criminal action can be compromised on those allowed by law or the Supreme Court (e.g., civil aspect of criminal cases where the imposable penalty not exceed 6 years imprisonment, civil aspect of quasi-offenses, BP 22, estafa [not syndicated or large scale estafa], theft [simple not qualified]) (8) Others that cannot be compromised under the law Example: Article 2035 of the Civil Code regarding “future support”, hence any settlement thereon is null and void for being against the law and also public policy

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BASIC TERMINOLOGIES UNDER ADRA

(1) ADR Provider (Section 3 [b] ADRA) "ADR Provider" refers to a person or an institution accredited under the law to render ADR service through mediation, conciliation, arbitration, early neutral evaluation , mini-trial or any combination thereof (e.g., med-arb) - but without prejudice to the right of the disputants to choose a non-accredited person/institution in rendering ADR service "ADR Practitioner" refers to a natural person/s who actually act as conciliator, mediator, arbitrator, 3rd neutral evaluator in early neutral evaluation, or panel of decision makers/3rd neutral person in mini-trial (2) Award (Section 3 [f] ADRA) Refers to arbitral award rendered by arbitrator/s in arbitration Note: When you see "award" under ADRA, it refers to arbitral award (3) Commercial arbitration (Section 3 [g] ADRA in relation to Section 21 ADRA and Section 1.6 C[4] DOJ IRR)

Arbitration is "commercial" if the subject matter of the dispute arises from relationship commercial in nature whether contractual or non-contractual (i.e., non-contractual such as violation of intellectual property law [e.g., unlawful use of trademark]; cutthroat business competition, etc.). This dispute that is commercial in nature are the following but not limited to: (a) Any trade transaction for the supply of goods/services (i.e., sales), or exchange of goods/services (i.e., barter) (b) Distribution agreements (Note: It refers to agreement between supplier and distributor of goods) (c) Construction works (Note: This is under the jurisdiction of Construction Industry Arbitration Commission [CIAC] provided the construction is conducted in the Philippines) (d) Commercial representation/agency (Note: Agent seeks customers on behalf of his principal for commercial/business purposes) (e) Factoring (Note: It refers to a financial transaction where a business sells its accounts receivables [e.g., invoices, promissory notes, checks, etc. given by debtor] to a person [factor] at a discounted price – and that the factor (as being now the subrogee) will be the one to collect from the debtor of the latter's debt in full amount plus damages. Note: Factoring becomes necessary when a business no longer has sufficient revolving cash (liquidated assets) to meet business activities) (f) Leasing (g) Consulting (Note: It refers to a person [consultant] giving expert advice to a person/company in connection with business) (h) Engineering (i) Licensing (Note: It refers to licensing agreement where licensor gives the licensee the right to produce and/or sell goods applying the brand name/trademark of the licensor [also called “franchising”]; e.g., using trademark for Levi's garments, Jollibee franchise) (j) Investment (Note: It refers to act of investing or committing/entrusting money/property to another for a future income; e.g., buying stocks in the stock market; Multi-level Marketing [MLM]) (k) Financing (Note: It refers to providing capital [money] to a person for the latter’s business or personal use, investment, etc.; e.g., banks lending money to loan borrowers) (l) Banking (Note: It refers to business conducted by a bank accepting deposits from its depositors in exchange for interests, and then the bank for its own income later lend the deposit to its loan borrowers for a higher interest profit or investing it for profit) (m) Insurance

(n) Joint venture and other forms of industrial or business cooperation (Note: It refers to agreement where 2/more parties pooling/combining their resources for business purposes) (o) Carriage of goods and/or passengers by air, water or land 

International party (Section 3 [p] ADRA) Refers to a party-disputant whose place of business is outside Philippines. An international party may have domestic subsidiary or co-venturer who is doing business in the Philippines but this domestic subsidiary or co-venturer is not deemed as international party, viz., they are rather domestic party (as they are doing business in the Philippines) Note: "Domestic subsidiary" is a domestic company where more than 40% of its stocks are owned by foreign company known as parent/holding company. Example of subsidiary company is the Coca-cola Bottlers Philippine, Inc. whose parent/holding company is the Coca-cola Company with main office in Delaware, United States "Foreign arbitrator" is an arbitrator who is not a Filipino



Model Law (Section 3 [v] ADRA) (*) Refers to "Model Law" issued by UNCITRAL (United Nations Commission on International Trade Law - where several countries have adopted including the Philippines) which deals on international commercial arbitration Note: UNCITRAL "Model Law" refers to ADR System called "international commercial arbitration" - which is adopted by many countries including the Philippines in order to harmonize different/conflicting arbitration laws of different countries regarding commercial dispute international in nature - thereby in harmonizing those conflicting laws, there will be a unified laws and rules (which we call it "Model Law") to be observed by different countries as regards the arbitration of commercial dispute international in nature

(4) Confidential information (Section 3 [h] ADRA) Any information relevant to the subject of mediation/arbitration - which information was obtained from a source who intends or who has reasonable expectation that such information will not to be disclosed (further asides from mediation/arbitration). Confidential information obtained from a source - includes: (a) Insofar as mediation and arbitration are concerned: Any

communication

or

information

(oral/written)

obtained

through

mediation/arbitration - including memoranda, notes, or work products of non-party participant who participated in the mediation/arbitration (e.g., witness)

(1) Non-party participant (Section 3 [z] ADRA) Refers to persons who participated in the mediation/arbitration not as party nor mediator/arbitrator (e.g., witness whether as source of information, resource person such as expert witness) (b) Insofar as mediation is concerned: Any communication or information (oral/written) obtained through mediation, INCLUDING statements made by any of the mediation parties for purposes of considering, initiating or conducting mediation, for purposes of participating in the mediation, or for purposes of continuing or reconvening mediation (i.e., to resume mediation), or for purposes of retaining a mediator (c) Insofar as arbitration is concerned: Any communication or information (oral/written) such as pleadings, motions, manifestations, witness statements, reports by any person (expert or not on the subject of arbitration) to the arbitrator during arbitration (5) Court (Section 3 [k] ADRA) Refers to RTC (Note: "Court" also referred to under Article 6 of Model Law refers to RTC; So remember whenever you see "court" under the ADRA, you refer to it as RTC) (a) Court-annexed Mediation (CAM; Section 3 [l] ADRA) Refers to a judicial compulsory mediation (known as JDR) particularly during the pre-trial stage of the action ordered by the court (a quo), or during appeal ordered by the appellate court - after such court acquired jurisdiction over the action (b) Court-referred Mediation (Section 3 [m] ADRA) Refers to an order of the court regarding a case filed with it to first undergo mediation (not with the court's PMC but rather under ADRA) when one of the parties prematurely filed action in court despite prior agreement of the parties (known as mediation agreement) to first settle their dispute through mediation (6) Convention award (Section 3 [i] ADRA in relation to [j]) Refers to foreign arbitral award rendered by Convention State (i.e., Convention State is a country that is a member of the 1958 New York Convention [e.g., the Philippines]) (a) 1958 New York Convention (Section 3 [w] ADRA) Refers to UN Convention on the matter of Recognition and Enforcement of Foreign Arbitral Award rendered/decided by one country and to be recognized and enforced by a host country (i.e., hot host country is where the foreign arbitral award is to be recognized and enforced/executed; Note: Philippine is a signatory to the 1958 New York Convention) Example: The arbitral award is rendered by US (foreign country) but the property subject of the arbitration is located in the Philippines. Here, the remedy of the winning party

when the losing party refuses to abide by the award is to file Petition with RTC in the Philippines (as a host country) for the recognition and enforcement of the foreign arbitral award (7) Non-convention Award (Section 3 [x] ADRA) Refers to foreign arbitral award rendered by Non-convention State (i.e., Non-convention State is a country that is not a member of the 1958 New York Convention [Section 3 [y] ADRA]) (8) Proceeding (Section 3 [aa]) Refers to court or quasi-judicial proceeding Note: So remember whenever you see "proceeding" under the ADRA, you refer to it as court or quasi-judicial proceeding (9) Record (Section 3 [bb]) Refers to information written on tangible medium (e.g., paper), or in a retrievable electronic or other similar medium (e.g., data encoded on computer disc, hard disc, website, etc.; viz., retrievable soft copy)

CHAPTER 3. - MEDIATION 

MEDIATION (Section 3 [q] ADRA in relation to Article 1.6 B [6] DOJ IRR)

A form of ADR system where disputants voluntarily agree to settle their dispute through mediation (i.e., such agreement called "mediation agreement") to be presided by the mediator chosen by the parties – to be conducted according to the rules agreed upon by the parties, or in absence/default of such agreement in accordance with the ADRA and DOJ IRR. The role of the mediator is not to make decision but rather to assist/help the parties (by convincing them) to enter into amicable settlement (Note: Mediation is a process that is non-merit based where the mediator will not delve on the factual and legal issues of the dispute - unlike arbitration, medarb, early neutral evaluation and mini-trial)



SCOPE OF MEDIATION UNDER ADRA (Section 7 ADRA)

By the voluntary agreement of the parties, mediation includes all disputes except those that cannot be subjected under ADRA as provided under Section 6 ADRA (whether by mediation, conciliation, arbitration, early neutral evaluation, mini-trial or any combination). Mediation under ADRA does not include Court-annexed Mediation (CAM) because it is judiciary's own dispute resolution called JDR (in contrast mediation under ADRA is an out of court/quasi-judicial), and CAM is also a compulsory mediation where the court orders the parties to undergo mediation during pre-trial stage of the court a quo or during appeal (likewise excluded from ADRA is the mandatory mediation by Lupon Tagapamayapa under the LGC; in contrast with mediation under ADRA which is voluntary upon the parties). Such mediation under ADRA can either be ad hoc or institutional. Note: Section 6 ADRA: The following are not within the scope of ADRA: [a] labor disputes, [b] civil status of persons, [c] validity of a marriage (void or voidable), [d] legal separation, [e] jurisdiction of courts, [f] future legitime, [g] criminal liability, and [h] those disputes cannot be compromised under the Philippines law (1) Ad Hoc Mediation Refers to mediation whose existence is co-terminus with the termination of the mediation whether successful or not. The mediation rules to be observed depends upon the agreement of the parties Note: "Ad hoc" means for particular purpose only, and when that purpose is through or no longer exists, so also the ad hoc mediation. This ad hoc mediation is exemplified by mediation presided by a natural person (2) Institutional Mediation

Refers to mediation that being presided by an institution, its existence continues even after the termination of the mediation whether successful or not - AND: It continues to exist for other future mediation between other disputing parties (e.g., the accredited Philippine Dispute Resolution Center, Inc. [PDRCI]). If the mediation parties voluntarily agree to settle their dispute by the institutional mediation, then such agreement ipso jure includes that they shall observe the policies, rules and procedures of such Institutional Mediation - however, in case of conflict as to rules and procedures between Institutional Mediation and the ADRA provision, the latter shall prevail (Section 16 ADRA)



CONFIDENTIAL AND PRIVILEGE NATURE OF MEDIATION UNDER ADRA

(1) (*) "Confidentiality/Privileged" in mediation - explained When disputing parties personally confront each other regarding their dispute, of course one party gives statements in support of his case and contrary to the case of the adverse party, and so also the adverse party. When the confrontation is not successful for the amicable settlement of their dispute, the respective statements of the disputing parties during the confrontation can be given in evidence in the event an action is filed in court/quasi-judicial by either of the parties. Now, this is what the mediation under ADRA seeks to avoid by making mediation process and all information given through mediation as "privileged" and confidential," "privileged" meaning that the mediation process including information, documents and statements obtained through mediation cannot be given in evidence in court/quasi-judicial after an unsuccessful mediation - AND: Also "confidential" such that cannot be made known to others through publication or otherwise. And so by the privilege and confidentiality of mediation, the disputing parties are encouraged to be candor and honest about the true facts and circumstances of the status of their respective case, thereby a party who believes his case is weak is encouraged to admit his accountability/obligation and encourage the other party to enter into an amicable settlement (knowing that he has a losing case when brought to court/quasi-judicial) - which admission made during mediation is anyway protected by ADRA as being privileged and confidential Note: Confidential information, its definition - read Section 3 [h] ADRA (2) (*) "Confidentiality" and ""Privileged nature of Information in Mediation (Section 9 ADRA) Information obtained through mediation are subject to the following principles: (a) Information obtained through mediation are privileged and confidential (b) (Being confidential) The mediation parties, mediator and non-party participant (e.g., witness) may refuse to further disclose information that they disclosed through and during mediation, and they can also prevent others from further disclosing such

information (Note: But an eavesdropper during mediation who has no connection with the mediation [whether as party, representative, non-party participant, mediator or witness] may not be prohibited from disclosing such information - however, he can be made liable for damages to the mediation party that is prejudiced by such disclosure of the eavesdropper [Section 10 3rd Paragraph] ADRA) (c) (Being confidential) Information obtained through mediation cannot be subjected to discovery (under Rules 23-29 of the Civil Procedure), and (being privileged) shall also be inadmissible in evidence in court/quasi-judicial. However, evidence or information that is otherwise admissible in evidence (in court/quasi-judicial) does not become inadmissible or protected from discovery solely by reason of its USE during the mediation (e.g., during mediation, the lender used/introduced a document entitled "Loan Agreement" previously executed by the borrower, now, if the mediation is unsuccessful and the lender subsequently filed action in court for collection of sum of money, he can use such "Loan Agreement" as his evidence against the borrower) (d) When the mediation is unsuccessful, and an action is subsequently filed in court/quasijudicial, the following persons that were involved in the mediation cannot be compelled by the court/quasi-judicial to disclose or testify on information obtained through mediation: (because such information is confidential and privileged) (1) Mediation parties (2) Mediator/s (3) Counsel/representative of parties (4) Non-party participants (see Section 3 [z]; e.g., witness) (5) Any person hired in connection with the mediation as secretary, stenographer, clerk or assistant (whether or not personally and actually present during mediation proceeding room) (6) Other person who obtained or possessed information obtained through mediation by reason of his profession (e.g., records custodian of the ad hoc/institutional mediation despite not actually present during mediation) (e) Information obtained through mediation remains privileged and confidential - even if the mediator found to be impartial during the mediation (f) Mediator cannot be subpoenaed (ad testficandum/ad duces tecum) by court/quasijudicial in order to testify regarding information through mediation. And if he is wrongfully subpoenaed (due to request of a party) and he appeared in court/quasijudicial (and there he explained in court/quasi-judicial that the information is confidential and privileged and thereby granted), then he has the right to be reimbursed (by the party who requested the court to subpoena him) the full cost of his attorney's fees (if he hired

one) and other expenses relevant to such wrong subpoena (e.g., expenses on transportation and hotel) Comments: (a) Confidential information - its definition Read Section 3 [h] ADRA (b) "Privileged" nature of information obtained through/during mediation (Exemplified) Facts: Lender lend P1M to Borrower, where the Borrower executed a promissory note that he will pay his debt on January 1, 2016. Borrower failed on his obligation to pay despite demand from the Lender. Lender and Borrower agreed to settle their dispute through mediation which we call is "mediation agreement". During mediation, Lender presented the promissory note executed by Borrower, then Borrower admitted during mediation that he indeed executed the same and admitted his P1M debt. The mediation was terminated unsuccessful, and so Lender subsequently filed a civil action in court against Borrower for collection of sum of money. During the presentation of evidence in court by Lender, Lender testified that during the mediation, Borrower ADMITTED he indeed executed the promissory note and also admitted his P1M indebtedness. Question: Can Borrower object against such testimony of Lender? Answer: YES. Those statements of admissions by the Borrower are information obtained through mediation and so therefore confidential and privileged, and hence, inadmissible in evidence Question: Suppose Lender presented the promissory note executed by Borrower as documentary evidence in court - can Borrower object on such evidence as privileged hence inadmissible in evidence considering that Lender presented the same during mediation? Answer: NO. Section 9 [c]: Evidence or information that is otherwise admissible does not become inadmissible or protected from discovery solely by reason of its USE during the mediation (and in fact such "Promissory Note" is an information obtained not through/during mediation but in fact already existing even before the mediation). Remember that it is the USE of the promissory note by Lender during mediation that is not confidential and privileged. In fact under Section 3 (d) ADRA defining confidential information, it provides "Any information obtained through mediation/arbitration which information was obtained from a source who intends or who has reasonable expectation that such information not to be disclosed" - now, of course it would be absurd for the Lender as source of the information particularly that of the "Promissory Note" to intend or to expect that the promissory note he used/presented during mediation would

be privileged or confidential that he can no longer use/present the same promissory note as his evidence during trial in court Question: Suppose the lender insists that he is not yet paid but the borrower insists that he already paid his debt - and then the borrower enticed/persuaded the lender to settle their dispute through mediation under ADRA, and the lender agreed (we have now the "mediation agreement"). So mediation was conducted but turned unsuccessful, and the lender later filed an action in court against the borrower. During the presentation of evidence by the lender in court, he testified that the borrower went to him and persuaded him to settle their dispute through mediation. Can the borrower object on ground that such statement of his is privileged and confidential? Answer: YES. Remember Section 3 [h] [2]: Confidential/privileged information in mediation includes statements made by any of the mediation parties for purposes of considering, initiating or conducting mediation, for purposes of participating in the mediation, or for purposes of continuing or reconvening mediation (i.e., to resume mediation), or for purposes of retaining a mediator. In the case at bar, when the Borrower went to the Lender, his purpose was to consider the possibility of Lender agreeing to settle their dispute through mediation. Question: Suppose on January 1, the Borrower went to the Lender admitting his already due P1M debt but asked for longer period to pay but denied by the Lender. Then on January 2, the Borrower went back to the Lender and enticed/persuaded the Lender to settle their dispute through mediation under ADRA, and the Lender agreed (we have now the "mediation agreement"). So mediation was conducted but turned unsuccessful, and the Lender later filed an action in court against the Borrower. During the presentation of evidence by the Lender in court, he testified that on January 1 the Borrower went to him and admitted his P1M debt. Can the Borrower object on ground that such statement of his is privileged and confidential? Answer: NO. Section 3 [h] [2] does not apply in favor of the Borrower. Remember that when the Borrower went to the Lender on January 1 and there admitted his P1M debt, the Borrower did not approach the Lender for the purpose of considering mediation



(*) INSTANCES WHERE INFORMATION OBTAINED THROUGH/DURING MEDIATION - ARE NOT "PRIVILEGE" AND "CONFIDENTIAL"

(1) Waiver of confidentiality of information obtained through/during mediation (Section 10 ADRA; hence, such information admissible in evidence in court/quasi-judicial)

(a) Waived in a record (e.g., minutes of the mediation proceedings) by all mediation parties and mediator through manifestation (either oral or in writing) during "mediation proceeding" Note: Remember in this particular Section 10 ADRA, the law specifies that the proceeding is mediation. But if ADRA does not specifically provides that kind of proceedings, you refer to it as court/quasi-judicial proceedings because Section 3 [aa] refers to "proceedings" as court/quasi-judicial proceedings. Note: "Record" (Section 3 [bb] ADRA): Refers to information written on tangible medium (e.g., paper), or in a retrievable electronic or other similar medium [viz., retrievable soft copy such as those information contained in USB disk] (b) Waived by the non-party participant (e.g., witness) provided - (1) such information is sourced from him (Section 10 Par 2 ADRA) - PROVIDED: With the consent of all mediation parties (Section 3.22 [b] DOJ IRR) 

Doctrine of Estoppel (Section 10 Par 3 and 4 ADRA) A person (whether he be party, his representative, non-party participant or mediator) who disclosed confidential/privileged information is estopped from invoking privilege information under Section 9 ADRA, and he can be compelled to disclose the rest of the information necessary for the complete understanding of the confidential information he disclosed. But if another person is prejudiced by such disclosure and suffered loss/damages (e.g., mediation party), then he can file action in proper court for damages against such person who made disclosure of confidential information HOWEVER: A person who is prejudiced in a court/quasi-judicial proceeding (we call him prejudiced person) prejudiced by a person (we call him prejudicing person) due to the disclosure by the latter of confidential/privileged information relevant to mediation, then, the prejudiced person has the right to further disclose other privileged/confidential information obtained through mediation only to the extent necessary for him to respond and defend himself (Note: Such prejudiced person cannot be liable for any damages)

Note: "Person" who made disclosure of confidential information can refer to a mediation party,

mediator,

counsel,

non-party

participant,

mediation

secretary/stenographer/clerk/assistant, any person who obtains/possesses confidential information by reason of his profession (e.g., records custodian of the Ad Hoc mediation or institutionalized mediation), or any other person whether or not connected with the mediation (e.g., eavesdropper, or any other person) Question: In a court proceeding (not involving Lender and Borrower as parties), the Mediator testified and disclosed that during the mediation he previously presided between Lender and

Borrower, the latter admitted his debt. Can the court force the Mediator to further disclose other confidential/privileged information? Answer: YES. Provided those further disclosure are relevant to the case and will enable the court to fully understand about the debt of the Borrower to the Lender - such as what amount is the debt, when the debt incurred, when it is due and other relevant disclosures Question: Can the Borrower file damages against the Mediator? Answer: YES. The Borrower being prejudiced by the disclosure made by the Mediator, he can file an action for damages against the Mediator in the proper court Question: Supposed after or during the time the Mediator disclosed those confidential/privileged information in a certain action, there is also pending action between Lender and the Borrower - now, can the Borrower in a case pending between him and the Lender make further disclosure of confidential/privileged information? Answer: YES. But only to the extent necessary for the Borrower to respond to and defend himself against those disclosures by the Mediator Sub-question: Will the Borrower liable to the Lender for damages? Answer: NO. The Borrower is constrained to and has the right to defend himself against those disclosures made by the Mediator (2) Exceptions to privileged/confidential information obtained through/during mediation (Section 11 ADRA; hence, such information admissible in evidence in court/quasi-judicial)

 No privilege information under Section 9 ADRA in the following (Section 11 [a] ADRA): (1) When all the mediation parties agree contained by a record (e.g., paper, minutes of the mediation proceedings, or tape recording) and authenticated (confirmed or signed) by all of them - then that information obtained through mediation is not privileged Note: Section 10 Par 1 ADRA: Waiver of mediation confidentiality: WAIVED by all mediation parties and mediator through oral manifestation during "proceeding" either in oral or in "record". Now, this waiver under Section 10 Par 1 ADRA speaks about "waiver" of mediation information, in contrast with Section 11 [a] [1] ADRA which speaks about "exception" to confidentiality/privileged mediation information (2) When the information obtained through/during mediation - (a) is available to the public (e.g., public document such as notarized document since notarized document is deemed as public document), or (b) is required by law to be open to the public, or (c) was obtained in a mediation proceeding that is open to the public (i.e., mediation was allowed by the parties to be conducted open to the public) Reason: Considering that the information is a public document or that law requires such information to be open to the public, then it is not confidential. Also considering

that the information was obtained through/during mediation was allowed by the parties to be open to the public, then the mediation parties intended that such information is not confidential (3) When the information obtained through/during mediation is a statement of threat or plan to inflict physical injury or crime of violence Reason: Mediation information confidentiality does not countenance/tolerate crime Example: During mediation, the Lender threatened to kill the Borrower if the latter will not pay his debt (4) When the confidentiality of mediation information was intentionally used (or taken advantaged of) to plan a crime, attempt to commit a crime, or conceal an ongoing crime/criminal activity Reason: Mediation under ADRA does not tolerate a crime to be committed, or to conceal an ongoing/continuing crime (e.g., rebellion) (5) When the information obtained through/during mediation refers to prove or disprove about the abuse, neglect, abandonment, or exploitation against a person protected by law which the government is protecting (e.g., DSWD protecting children) HOWEVER: Information obtained through/during mediation is still confidential and privileged when the court ordered a mediation to be conducted where the subject of such mediation is about child protection, or a government agency (e.g., DSWD) participates in a mediation regarding child protection (6) When

sought

to

be

proven/disproved

is

about

the

professional

misconduct/malpractice of the mediator during mediation Reason: Mediator cannot use the confidential and privilege given under mediation to protect his misconduct/malpractice he committed during mediation (7) When

sought

to

be

proven/disproved

is

about

the

professional

misconduct/malpractice of the mediation party, representative/counsel of the mediation party or non-party participant during mediation Reason: Such persons cannot use the confidential and privilege nature of mediation to conceal his misconduct/malpractice he committed during mediation

 No privilege information under Section 9 ADRA (Section 11 [b] ADRA) When after hearing "in camera" by the court/quasi-judicial, the latter found/believed that the evidence sought to be proven/disproved in said court/quasi-judicial is not available but only available in the information obtained through/during mediation - and there is a need for such evidence to be presented in court/quasi-judicial which substantially outweighs the policy of confidentiality/privilege of such information - THEN:

The confidentiality/privilege of such information obtained through/during mediation can be presented in evidence: (1) In the court proceeding that involves crime/felony; or (2) In the court/quasi-judicial proceeding to prove/disproved the contract which under the law could be reformed (reformation of contract as when the true intention of the parties is not reflected in a contract due to mistake, fraud, inequitable conduct such as force/intimidation, or due to accident) or the contract can be avoided (void/voidable contract) Note: "Camera" is a Latin word meaning "in chamber". So hearing "in camera” refers to court/quasi-judicial proceedings held privately and inside the chamber of the judge/hearing officer excluding the public; it is the opposite of public trial where public are allowed to observe the hearing. In relation to hearing "in camera" under Section 11 [b] ADRA, the hearing is held privately without the public for purposes of determining whether or not the mediation information is confidential/privilege

 Privileged of mediator Mediator cannot be compelled by court/quasi-judicial: 1. To provide information/evidence obtained through/during mediation (duces tecum), or to testify on information/evidence obtained through/during mediation (ad testificandum) (Section 11 [c] ADRA) 2. To provide report, assessment, evaluation, recommendation, finding, or other communication - relevant to mediation (duces tecum or ad testificandum) - BUT: The mediator can be compelled to provide information (Section 12 ADRA): (a) That the mediation was conducted, and/or that it was already terminated, and/or that an amicable settlement was reached by the disputing parties in the mediation - but only to that extent (b) Those that are allowed to be disclosed under Section 13 ADRA (i.e., to disclose facts likely to affect the impartiality of mediator, his financial or personal interest in the outcome/result of the mediation, his present/past relationship with any of the mediation parties/participants and his relation with those persons that are foreseeable to be party/participant in the mediation)

 "Limited evidentiary purpose" for the use of the confidential/privileged information/evidence/communication excepted under Section 11 [a] and [b] ADRA - in the court/quasi-judicial (Section 11 [d] ADRA) What can be presented in court/quasi-judicial is that only those portions of the confidential or privileged information/evidence obtained through/during mediation only for the purpose necessary to prove/disproved those that are mentioned under

Section 11 [a] and [b] ADRA (viz., such information that are not necessary to prove/disprove those that are mentioned under Section 11 [a] and [b] ADRA remains privileged/confidential)



ENFORCEMENT OF THE SETTLEMENT AFTER SUCCESSFUL MEDIATION (Section 17 ADRA)

When mediation is successful, the mediation parties shall sign a document called "Mediated Settlement Agreement", or "Settlement Agreement", or "Compromise Agreement" - or in any other nomenclature so long as such document embodies the settlement of the dispute In the execution of the mediated settlement agreement, there is no problem if the mediation parties faithfully comply and execute the settlement agreement. But the problem arises when one of the mediation parties does not abide by the settlement agreement, or that he questions the settlement agreement. Hence, the remedy of the other party is to Deposit and then file Petition to Enforce the mediation settlement agreement with the RTC to compel the nonperforming party to comply - and the rules to be observed once the Petition is filed with RTC is the Special ADR Rules promulgated by the Supreme Court (i.e., A.M. 07-11-08-SC effective 2009 [particularly Rule 15 of the Special ADR Rules). (1) In the mediated settlement agreement after successful mediation, can the mediation parties agree that the said mediated settlement agreement shall be treated as "arbitral award" instead as "mediated settlement agreement"? YES. In that case, when the other mediation party does not abide to execute the mediated settlement agreement converted to arbitral award, the remedy of the other mediation party is to file Petition to enforce the arbitral award with RTC (not Petition to Enforce Mediation Settlement Agreement)

CHAPTER 4. - ARBITRATION in GENERAL 

ARBITRATION (Section 3 [d]) (*) Also a form of ADR system where the disputants voluntarily agree to settle their dispute through arbitration (i.e., such agreement called "arbitration agreement" or "submission agreement, as the case maybe") to be presided by an arbitrator chosen by the parties (or chosen in accordance with the Rules agreed upon the parties, or in the absence thereof, in accordance with the Rules mandated under ADRA/DOJ IRR) whose role (i.e., arbitrator) is to make a decision based on the merit called "arbitral award" binding upon the parties (Note: Arbitration is the only ADR system under ADRA that a binding decision is rendered)



MAIN DISTINCTION BETWEEN MEDIATION AND ARBITRATION (1) Nature of proceeding In arbitration proceeding: It is merit-based proceeding because the arbitrator will delve upon the factual issues according to the evidence presented by the parties and thereafter the arbitrator will delve upon legal issues based on the evidence presented - and thereafter, the arbitrator will render a binding decision embodying arbitral award In mediation proceeding: It is not merit-based proceeding because the mediator will not delve upon factual and legal issues nor require the parties to present evidence, and being non-merit based, the mediator will not render decision rather the mediator will merely assist the parties voluntarily amicably settle their dispute who are free on how to settle their own dispute but they are not obliged to settle (2) Who presides on the dispute In arbitration: It is the arbitrator In mediation: It is the mediator



KINDS OF ARBITRATION

(1) Voluntary arbitration (whether domestic arbitration, construction industry arbitration, or international commercial arbitration; Note: All kinds of ADR systems under ADRA including arbitration - are voluntary) It is voluntary because the parties are free whether or not they want to settle their dispute through arbitration (which we call it arbitration agreement). But once they enter into arbitration agreement, then, being a contract itself, they are bound to undergo arbitration which after arbitration hearing, the arbitrator shall render a binding decision we call it arbitral award

 Kinds of voluntary arbitration under ADRA (a) Domestic Arbitration (under Chapter 5 ADRA in relation to RA 876) This arbitration covers any domestic controversy existing between parties, including dispute on contracts (i.e., controversies that arise between parties within the Philippines [EXCEPT: Dispute International in nature, or construction industry dispute, or labor dispute) (b) Construction Industry Arbitration (under Chapter 6 in relation to EO 1008) Arbitration on dispute on contract regarding construction in the Philippines (c) International Commercial Arbitration (Chapter 4 ADRA) To make it an "International Commercial" arbitration, such arbitration must be both "international" and "commercial"  When can the arbitration "international" (Article 1.6 [C] [8] DOJ IRR) Arbitration is "international" if any of the following exist: (1) When at the time the arbitration parties agreed to have their dispute undergo arbitration (i.e., arbitration agreement), their places of business are in different countries; or (2) One of the following places is located outside the Philippines where the parties have their places of business: (a) The venue of the arbitration (which is outside the Philippines) which is agreed by the parties in their arbitration agreement; or (b) The substantial portion of the obligations as determined in the commercial contract between the parties - is to be performed (which is outside the Philippines); or (c) The place where the subject matter of the dispute is most closely connected (which is outside the Philippines); or (d) The parties expressly agreed that the subject matter of the arbitration agreement relates to more than one country (which is outside the Philippines) Note: When the International Commercial Arbitration is conducted in the Philippines, then it is both "domestic and international" in character. But if such arbitration is conducted outside the Philippines, then it is a "foreign" arbitration  When can the arbitration is "commercial" (Section 3 [g] ADRA in relation to Section 21 ADRA and Section 1.6 C[4] DOJ IRR) Arbitration is "commercial" if the subject matter refers to dispute arising from relationship commercial in nature whether contractual or non-contractual (i.e., non-contractual such as violation of intellectual property law [e.g., unlawful use of

trademark]; cutthroat competition, etc.). This dispute that is commercial in nature are the following but not limited to: 1. Any trade transaction for the supply of goods/services (i.e., sales), or exchange of goods/services (i.e., barter) 2. Distribution agreements (Note: It refers to agreement between supplier and distributor of goods) 3. Construction works (Note: This is under the jurisdiction of Construction Industry Arbitration Commission [CIAC] provided the construction is conducted in the Philippines) 4. Commercial representation/agency (Note: Agent seeks customers on behalf of his principal for commercial/business purposes) 5. Factoring (Note: It refers to a financial transaction where a business sells its accounts receivables [e.g., invoices, promissory notes, checks, etc. given by debtors] to a person [factor] at a discounted price – and that the factor (as subrogee) will be the one now to collect from the debtors at full amount of his debt plus damages. Factoring becomes necessary when a business no longer has sufficient revolving cash to meet business activities) 6. Leasing 7. Consulting (Note: It refers to a person [consultant] giving expert advice to a person/company in connection with business) 8. Engineering 9. Licensing (Note: It refers to licensing agreement where licensor gives the licensee the right to produce and sell goods applying the brand name/trademark of the licensor [also called “franchising”]; Jollibee franchise) 10. Investment (Note: It refers to act of investing or committing/entrusting money/property to another for a future income; e.g., buying stocks in the stock market; Multi-level Marketing [MLM]) 11. Financing (Note: It refers to providing capital [money] to a person for the latter’s business or personal use, investment, etc.; e.g., BPI to the loan borrower) 12. Banking (Note: It refers to business conducted by a bank accepting deposits from its depositors in exchange for interests, and then the bank lending the deposit to another or investing it for profit) 13. Insurance

14. Joint venture and other forms of industrial or business cooperation (Note: It refers to agreement where 2/more parties pooling/combining their resources for business purposes) 15. Carriage of goods and/or passengers by air, water or land (2) Compulsory arbitration It is compulsory such that once dispute arises, the parties must settle their dispute through arbitration - even without prior arbitration agreement

 Example of compulsory arbitration Labor dispute under the Labor Code Note: Remember that ALL modes of settling dispute under ADRA are "voluntary"



ARBITRATION AGREEMENT (ITS NATURE)

Arbitration agreement is a written agreement subscribed by the parties (or their representative) agreeing that their dispute will undergo arbitration (whether domestic arbitration, construction industry arbitration, or international commercial arbitration) (Ormoc Sugarcane Planters' Association, Inc. Vs. Court of Appeals, GR 156660, August 24, 2009; Note: Insofar as arbitration before CIAC is concerned, the arbitration agreement must be in writing, but needed not be signed by the parties so long as intent to submit to arbitration is clear [e.g., phone text messages]; see Section 4.1.3 CIAC Rules) Where can we find the arbitration agreement: Arbitration agreement can be in the form of clause which is imbedded in the main contract of the parties (in this case, the main contract is called "container contract" and the imbedded arbitration agreement is called "arbitration clause"), or it could be in the form of another contract separated from but in reference to the main contract (this is called "submission agreement") - but whether arbitration clause or submission agreement, they are both basically arbitration agreement. Main contract contains the terms and conditions of the contractual relation of the parties (e.g., their transaction), while the arbitration agreement is another contract stating therein that in case dispute arises between the parties then such dispute will undergo arbitration As to time the arbitration agreement exists: The arbitration agreement can exist at the time the main contract was executed (which we call it arbitration agreement whether imbedded in the same main contract or in another contract). Arbitration agreement can also exist at a later date after the execution of the main contract (which we call it submission agreement) when the parties later agreed that in case of dispute, it will undergo arbitration As to the interpretation of arbitration agreement: Arbitration agreement between parties must be liberally construed - such that in case of doubt, it must be construed in favor of arbitration

(LM Power Engineering Corporation vs. Capitol Industrial Construction Groups, Inc., GR 141833, March 26, 2003).



(*) SEPARABILITY/SEVERABILITY DOCTRINE, APPLIES TO ARBITRATION AGREEMENT (Gonzales vs. Climax Mining Ltd., GR 167994 [ 2007])

While the general rule is that the invalidity of main contract carries with it the invalidity of the ancillary contract on ground that the latter is dependent on the former. This is not true in arbitration agreement (whether arbitration clause or submission agreement). As ruled in the case of

Gonzales

vs.

Climax

Mining

Ltd.

(supra),

arbitration

agreement

is

separable/severable from the main contract such that the invalidity of the main contract does not carry with it the invalidity of the arbitration agreement. This ruling in Gonzales vs. Climax Mining Ltd (supra) is reiterated in the case of Cargil Philippines, Inc. Vs. San Fernando Trading, Inc., GR 175404, January 31, 1011, where the Supreme Court ruled, An arbitration agreement which though forms part of the main contract shall not be regarded as invalid or non-existent just because the main contract is invalid or did not exist (i.e., void main contract), since the arbitration agreement is treated as separate agreement/contract independent from the main/container contract

In fact under Article 4.16 (a) DOJ IRR: The arbitration agreement (whether arbitration clause or submission agreement - both are deemed arbitration agreement) though forms part or related to the main contract, shall be treated as independent from the main contract - such that the nullity of the main contract does not carry with the nullity of the arbitration agreement Question: Suppose there is arbitration agreement but the main/container contract is void, or the parties did not really enter into main/container contract - the question is, should the parties still undergo arbitration in case of dispute? Answer: YES. As ruled by the Supreme Court, the arbitration agreement is distinct and independent from the main contract - under the Doctrine of Separability/Severability of arbitration agreement Question: Pursuant to the Doctrine of Separability, the arbitration agreement obliges the parties to undergo arbitration. Now, the question is, supposed during the arbitration proceeding, it is proven that the main contract is inexistent/invalid/unenforceable, should the arbitrator render arbitral award? Answer: NO. The arbitrator should dismiss the arbitration - considering that the main contract is void/voidable/unenforceable, then what is there for the arbitrator to render arbitral award? Note: Arbitral tribunal has the power to rule on the validity of the main/container contract as

void/voidable/unenforceable (This is by implication of Article 4.16 DOJ IRR). In fact the Supreme Court ruled: “The arbitration agreement clearly expressed the parties' intention that any dispute between them as buyer and seller should be referred to arbitration. It is for the arbitrator and not the courts to decide whether a contract between the parties exists or is valid” (Cargill Phils. Inc. San Fernando Regala Trading, Inc., GR 175404, January 31, 2011)



(*) FINDINGS of FACTS of the ARBITRATOR in the ARBITRATION (Uniwide Sales Realty vs. Titan-Ikeda Construction, GR 126619, December 20, 2006)

Court will not review the factual findings of an arbitral tribunal upon the artful allegation that the arbitral tribunal "misapprehended facts" no matter how cleverly disguised they might be as "legal questions" - UNLESS: Where a clear showing that the arbitral tribunal in reaching its factual conclusions, the arbitral tribunal committed an error so egregious (so obvious/flagrant) and hurtful/prejudicial to one party as to constitute a grave abuse of discretion resulting in lack or loss of jurisdiction. Typical examples would be factual conclusions of the arbitral tribunal which resulted in deprivation of one or the other party of a fair opportunity to present his case before the arbitral tribunal, and an arbitral award obtained through fraud or through the corruption of arbitrator

CHAPTER 5. - INTERNATIONAL COMMERCIAL ARBITRATION (ICA; UNDER ADRA AND ITS DOJ IRR) 

TWO FACETS of "INTERNATIONAL" "COMMERCIAL" ARBITRATION

Remember that to make it "International Commercial" Arbitration, it must not only be commercial but also be international. (1) When is it that the arbitration is "International" (Section 19 ADRA in relation to Article 1[3] Model Law) Arbitration is "international" if any of the following exist: (DOJ IRR) (a) When at the time the arbitration parties agreed to have their dispute undergo arbitration (i.e., arbitration agreement), their places of business are in different countries; or (b) One of the following places is located outside the Philippines where the parties have their places of business: 1. The venue of the arbitration (which is outside the Philippines) which is agreed by the parties in their arbitration agreement; or 2. The substantial portion of the obligations as determined in the commercial contract between the parties - is to be performed (which is outside the Philippines); or 3. The place where the subject matter of the dispute is most closely connected (which is outside the Philippines); or 4. The parties expressly agreed that the subject matter of the arbitration agreement relates to more than one country (which is outside the Philippines) (2) When is it that the arbitration is "Commercial" (Section 3 [g] ADRA in relation to 21 ADRA) Arbitration is "commercial" if the subject matter refers to dispute arising from relationship commercial in nature whether contractual or non-contractual (i.e., non-contractual such as violation of intellectual property law [e.g., unlawful use of trademark]; cutthroat competition, etc.). This dispute that is commercial in nature are the following but not limited to: a. Any trade transaction for the supply of goods/services (i.e., sales), or exchange of goods/services (i.e., barter) b. Distribution agreements (Note: It refers to agreement between supplier and distributor of goods) c. Construction works (Note: This is under the jurisdiction of Construction Industry Arbitration Commission [CIAC] provided the construction is conducted in the Philippines) d. Commercial representation/agency (Note: Agent seeks customers on behalf of his principal for commercial/business purposes)

e. Factoring (Note: It refers to a financial transaction where a business sells its accounts receivables [e.g., invoices, promissory notes, checks, etc. given by debtors] to a person [factor] at a discounted price – and that the factor (as subrogee) will be the one now to collect from the debtors at full amount of his debt plus damages. Factoring becomes necessary when a business no longer has sufficient revolving cash to meet business activities) f. Leasing g. Consulting (Note: It refers to a person [consultant] giving expert advice to a person/company in connection with business) h. Engineering i. Licensing (Note: It refers to licensing agreement where licensor gives the licensee the right to produce and sell goods applying the brand name/trademark of the licensor [also called “franchising”]; Jollibee franchise) j. Investment (Note: It refers to act of investing or committing/entrusting money/property to another for a future income; e.g., buying stocks in the stock market; Multi-level Marketing [MLM]) k. Financing (Note: It refers to providing capital [money] to a person for the latter’s business or personal use, investment, etc.; e.g., BPI to the loan borrower) l. Banking (Note: It refers to business conducted by a bank accepting deposits from its depositors in exchange for interests, and then the bank lending the deposit to another or investing it for profit) m. Insurance n. Joint venture and other forms of industrial or business cooperation (Note: It refers to agreement where 2/more parties pooling/combining their resources for business purposes) o. Carriage of goods and/or passengers by air, water or land



WHAT GOVERNS the ICA (Section 19 ADRA in relation to 4.2 DOJ IRR) Shall be governed by the Model Law

1. What is Model Law (Section 3 [v] ADRA) (*) "Model Law" is issued by UNCITRAL (United Nations Commission on International Trade Law - where several countries have adopted including the Philippines) which deals on international commercial arbitration Note: UNCITRAL "Model Law" refers to ADR System called "international commercial arbitration" - which is adopted by many countries including the Philippines in order to harmonize different/conflicting laws on international commercial arbitration of different

countries - thereby being harmonized, there will be a unified rules on commercial arbitration that is international in nature to be observed by different countries



(*) INTERPRETATION on MODEL LAW in relation to ICA (Section 20 ADRA in relation to Article 4.2 DOJ IRR)

When you interpret the provisions of Model Law in relation to ICA, due regard must be given as to its international origin (i.e., the UNCITRAL that issued the law) for the purpose of uniformity in the interpretation on the Model Law by different countries (who are signatories on the New York Convention) - so that in case of issue in the interpretation of Model Law, resort can be made on the travaux preparatoire and the report of the UNCITRAL Secretary General (which report entitled "International Commercial Arbitration: Analytical Commentary on draft Trade" with reference number A/CN 9/264) (1) In interpreting Model Law, due regard be given to its international origin Model Law is "international in origin" because it is issued by UNCITRAL where there are many countries who are signatories to the New York Convention pertaining to Model Law (hence, that what makes the Model Law as "international in origin") - and being international in origin, there would be uniformity in the interpretation on the provisions of Model Law by those signatory countries as regards the "International Commercial Arbitration" (2) Travaux Prepapatoire - as an aid in interpreting the Model Law This refers to the UNCITRAL documents, minutes of discussions and debates that were officially recorded during the drafting/making of the Model Law (just like the minutes of the debates and discussions made in the Congress regarding a bill before it is passed by the Congress to the President for his signature in order to become a law) (3) Report of the UNCITRAL Secretary General (which report entitled "International Commercial Arbitration: Analytical Commentary on draft Trade" with reference number A/CN 9/264) - as aid in interpreting the Model Law Report, notes and comments of the UNCITRAL Secretary General relevant to international trade law (or international commercial arbitration) though not binding upon countries that adopted Model Law, nevertheless, can give guidance/persuasion in interpreting Model Law (akin to DOJ Secretary/famous criminalists like Justice Regaldao and Justice Reyes where they can be taken as amicus curiae by the Supreme Court in helping the latter interpreting criminal laws)



(*) CONFIDENTIALITY in ICA (Section 23 ADRA; Article 4.41 DOJ IRR)

The following are confidential: (1) ICA proceedings, (2) ICA records, (3) evidence obtained through ICA, and (4) ICA award - UNLESS: (i.e., not confidential)

(1) With the consent of the ICA parties; or (2) When a petition is filed with RTC allowed under ADRA (e.g., Petition to Recognize and Enforce or Set-aside ICA Award) - but limited only to those documents/information relevant to issue/s in such Petition HOWEVER: When there is the Petition is pending in RTC, the RTC may issue a "Protective Order" to prevent disclosure of confidential documents/information containing secret processes, secret developments, secret research and other secret information - when the disclosure thereof would materially prejudice the applicant/movant Note: An example that can be given protective order: “Secret process” regarding the formula of certain commercial product, "secret research/development" regarding laboratory study on certain drug to be sold commercially, or "secret information" regarding marketing/commercial strategy, etc. - which mentioned secrets are critical to the business success that needed to kept confidential from business competitors



POWERS/JURISDICTIONS of ICA ARBITRAL TRIBUNAL (Article 4.16 DOJ IRR)

(a) The power of the ICA arbitral tribunal to rule on questions of its jurisdiction (Article 4.16 [a] DOJ IRR) The ICA arbitral tribunal has the power to rule when its jurisdiction is questioned by any of the

parties,

including

the

power

to

rule

on

questions

regarding

the

existence/validity/enforceability of the arbitration agreement, including also the power to rule on questions regarding conditions precedent to the filing of arbitration (i.e., condition/s that must be fulfilled before going to arbitration) This arbitration agreement can be included and form part of the main contract (in which case, the former is called "arbitration clause" and the latter as "container contract"; or the arbitration agreement can in another document but related to the main contract which is called "submission agreement") - which arbitration agreement is independent (separate and distinct from) container contract. Any decision of the arbitral tribunal that the container contract is null and void does not ipso jure carry with it the invalidity of the arbitration agreement (this is called "Doctrine of Separability [Gonzales vs. Climax Mining Ltd., GR 167994]; Note: In other words, the arbitration will proceed, but if during the arbitration, it is proven that the arbitration agreement is inexistent/invalid/unenforceable then the arbitral tribunal shall dismiss the arbitration. Same principle applies even if the arbitration agreement is separated from but has reference to the main contract) (b) Reglementary period within which to question the jurisdiction of the arbitral tribunal (Article 4.16 [b] DOJ IRR)

For "lack" of jurisdiction: Before the challenging-party submits the statement of his defense (i.e., before he files his Answer by filing Motion to Dismiss). At any rate, the challenging-party is not precluded from questioning such lack of jurisdiction even if he already appointed his or participated in the appointment of arbitrator Example: The arbitration agreement is inexistent/invalid/unenforceable For "excess" of jurisdiction: As soon as it becomes apparent during the arbitration proceeding Example: The arbitral tribunal is recognizing a dispute not included as dispute in the arbitration agreement Delay in questioning "lack" or "excess" of jurisdiction: The arbitral tribunal can nevertheless entertain the challenge by any party against its jurisdiction - PROVIDED: Such delay of challenging such jurisdiction is justified (c) (*) How does the arbitral tribunal rule when its jurisdiction is questioned (Article 4.16 [c] DOJ IRR) The ruling of the arbitral tribunal regarding the challenge against its jurisdiction can either be: (1) rendered as preliminary question [i.e., before the arbitral tribunal begins with the arbitration proceeding proper] or (2) rendered within the arbitral award [i.e., the arbitral tribunal deferred/suspended ruling on the challenge against its jurisdiction and instead continue with the arbitration and the ruling against its jurisdiction to be later included in the arbitral award - especially when the jurisdiction challenge is doubtful; Note: Unlike in court proceedings, when its jurisdiction is challenged, the court must first rule thereon before proceeding hearing the merit of the case] If the arbitral tribunal ruled that it has jurisdiction that is rendered in a preliminary question, then the challenging-party can file Petition with RTC (questioning the jurisdiction of the arbitral tribunal) within 30 days reckoned from his receipt of the Notice of the ruling of the arbitral tribunal - which decision of the RTC shall be immediately executory not subject to MR or appeal. NOW: Even pending such Petition with RTC, the arbitral tribunal can nevertheless continue with the arbitration proceedings and can even render arbitral award (Note: Pending the Petition with RTC questioning the jurisdiction of arbitral tribunal, the latter cannot issue TRO/injunction against the arbitral tribunal [Rule 3.18 {B} Special ADR Rules]) Note: When the arbitral tribunal continued with the arbitration proceedings and ultimately rendered decision via arbitral award, such decision of the arbitral tribunal can be challenged by filing Petition with RTC to Set Aside/Vacate such arbitral award on ground that the arbitral tribunal no jurisdiction 

(*) LEGAL REPRESENTATION of PARTIES in ICA (Section 22 ADRA; Article 4.40 DOJ IRR)

A party can be represented by any person of his own choice - PROVIDED: Such representative cannot appear as counsel in any Philippine court or any quasi-judicial agency, whether or not such representation in court/quasi-judicial agency is in relation to the ICA arbitration which he appeared as representative (UNLESS: Such representative is admitted to the Philippine Bar) Note: Hence, when a representative represented one of the ICA parties in the arbitral tribunal, and after the arbitral tribunal rendered decision, a Petition is filed with RTC (e.g., Petition for the Recognition and Enforcement or Setting Aside of an Award in International Commercial Arbitration), such representative cannot appear as counsel for any of the parties unless he is admitted to the Philippine bar

CHAPTER 10. - GENERAL PROVISIONS of SPECIAL RULES OF COURT ON ADR (which for brevity, we shall call it "Special ADR Rules") 

INTRODUCTION

The Special ADR Rules is promulgated by the Supreme Court and took effect September 2009. These rules apply when the ADR under ADRA is elevated to the court for the latter's intervention particularly those 12 cases enumerated under Rule 1.1 Special ADR Rules (e.g., Petition for Interim Measure of Protection, Petition for Recognition and Enforcement of Foreign Arbitral Award, Petition for Recognition and Enforcement or Setting Aside of ICA Award, Petition for Confirmation/Correction/Vacation of Domestic Arbitral Award, etc.). But this court's intervention is not necessary only when there are no issues before, during and after the ADR between the parties, or between the any/all of the parties and the person/s officiating the ADR. In cases court's intervention cannot be avoided, the rules and procedures to govern now is of course the rules promulgated by the Supreme Court which in particular the Special Rules of Court on ADR. While we also have the DOJ IRR implementing the ADR, nevertheless such IRR being issued by the DOJ which is an executive branch of the government, it does not apply to court which is the judicial branch of the government, pursuant to the separation of powers under the Constitution. HENCE: In our discussions regarding incidents as regards ADR cases elevated to court, we will exclusively make the Special ADR Rules issued by the Supreme Court as our reference. (Note: "Court" refers to RTC - Section 3 [k] ADRA)



SUBJECT MATTER OF SPECIAL ADR RULES (Rule 1.1 Special ADR Rules)

(1) Petition for: (filed with RTC) (a) Relief on the issue of Existence, Validity, or Enforceability of the Arbitration Agreement (Ruler 3 Special ADR Rules); (b) Interim Measures of Protection (Rule 5 Special ADR Rule); (c) Appointment of Arbitrator (Rule 6 Special ADR Rules); (d) Challenge to Appointment of Arbitrator (Rule 7 Special ADR Rules); (e) Termination of Mandate (function) of Arbitrator (Rule 8 Special ADR Rules); (f) (RTC) Assistance in Taking Evidence (Rule 9 Special ADR Rules); (g) Confirmation, Correction or Vacation of Domestic Arbitral Award (Rule 11 Special ADR Rules); (h) Recognition and Enforcement or Setting Aside of an ICA Award (Rule 12 Special ADR Rules); (i) Recognition and Enforcement of a Foreign Arbitral Award (Rule 13 Special ADR Rules); (j) Confidentiality/Protective Orders;

Note: A "Motion" (not Petition) to Suppress Confidential Information can also be filed with the court where the case is pending (i.e., MTC/RTC/Any proper court [as the case maybe]) to stop a person from disclosing information obtained during ADR proceedings (Rule 10.3 2nd Par Special ADR Rules) (k) Deposit and Enforcement of Mediated Settlement Agreements (Rule 15 Special ADR Rules) (2) Motion for Referral to Alternative Dispute Resolution ("ADR"; particularly arbitration whether domestic/foreign/ICA/CIAC arbitration[see Rule 4 Special ADR Rules]); Note: This is filed with court not by way of Petition, but by Motion (Rule 4.3 Special ADR Rules). The court may be MTC/RTC, depending what court the action is prematurely filed despite there is a pre-existing arbitration agreement, in which case, the court shall refer the prematurely filed action/case for arbitration Note: These Petitions and Motion, to where filed? All herein petitions are filed with RTC, except for Motion for Referral for arbitration (under Rule 4.3 Special ADR Rules) where the court (MTC/RTC as the case maybe - depending where the case is pending) refers the case prematurely filed with it for arbitration - and, also for Motion to Suppress Confidential Information filed with court (under Rule 10.3 2nd Par Special ADR Rules) wherein the court (MTC/RTC, as the case maybe - depending where the case is pending) can issue an order of suppression



NATURE of COURT PROCEEDINGS under SPECIAL ADR RULES

(1) They are all special proceedings (the reason why Petitions are filed with RTC [not Complaint]; (Rule 1.2 Special ADR Rules). Note: And being special proceedings, no summon is required to be made by the court to the respondent in order for the court to acquire jurisdiction over his person – instead, the court acquires jurisdiction over the Petition/Motion by proof of "two jurisdictional facts" (i.e., [1] Service of the Petition to the respondent (served by the petitioner in case of petition summary in nature, or by the court in case of petition non-summary in nature), and the [2] “Notice of Hearing” to the adverse party [served by the court in case of Petition; served by movant-party in case of Motion] pursuant to Rule 1.3 [B] Special ADR Rules in relation with Rule 15 ROC) (2) The proceedings are also summary in nature insofar as: (Rule 1.3 Special ADR Rules) (a) Petition for: (i) Relief on the issue of Existence, Validity, or Enforceability of the Arbitration Agreement; (ii) Interim Measures of Protection; (iii) Appointment of Arbitrator;

(iv) Challenge on the Appointment of Arbitrator; (v) Termination of Mandate of Arbitrator; (vi) Assistance in Taking Evidence; (vii) Confidentiality/Protective Orders; and Note: A "Motion" to Suppress Confidential Information can also be filed with the court (MTC/RTC as the case may be) where the case is pending to stop a person from disclosing information obtained during ADR proceedings (Rule 10.3 2nd Par Special ADR Rules) (viii) Deposit and Enforcement of Mediated Settlement Agreements (b) Motion for Referral to Alternative Dispute Resolution ("ADR" particularly arbitration whether domestic/foreign/ICA/CIAC [see Rule 4 Special ADR Rules]); Note: Hence, the following petitions not being included as summary in nature, clearly then by implication, the following petitions are not summary in nature: (1) Petition for Confirmation, Correction or Vacation of Domestic Arbitral Award, (2) Petition for Recognition and Enforcement of a Foreign Arbitral Award, and (3) Petition for Recognition and Enforcement or Setting Aside of an ICA Award



RULES to OBSERVE on PETITION/MOTION - that is SUMMARY HEARING in nature

(a) Filing of Petition by Petitioner and his Service thereof to the Respondent (Rule 1.3 [A] Special ADR Rules) (For compliance of the first jurisdictional facts) The petitioner before he can file his Petition with the RTC, shall first serve a copy of his Petition to the respondent either by: (1) Personal service; or When the petition is served by personal service, the "Proof of Service" of the Petition shall be in the form of "Affidavit" executed by the server (i.e., petitioner himself or his messenger) who personally served the Petition to the respondent stating therein the time, place and manner of personal service to the respondent (2) By courier When the petition is served through courier, the "Proof of Service" of the Petition shall be in the form of "delivery receipt" (Note: Contents of Proof of Service – read Rule 1.8 [B] Special ADR Rules) -

AND: After the petitioner served copy of his Petition to the respondent, the petitioner shall attach to his Petition a "Proof of Service" (to prove to the court that the petitioner served copy of his Petition to the respondent), then the petitioner can now file his Petition with the RTC

NOW: If the service of the Petition is refused by the respondent, or in case of failure to serve the Petition, the server’s "Affidavit" or the "delivery receipt" (as the case maybe) shall state the circumstances of the attempt to serve the Petition and the refusal/failure of the service (Note: When respondent refuses, it is as good as validly served provided such "Affidavit" or "delivery receipt" states such respondent's refusal) (b) Notice of Hearing for the Petition/Motion (Rule 1.3 [B] Special ADR Rules) (After the Petition is filed with RTC) When the RTC finds the Petition sufficient in form and substance, RTC (through its court server) shall send "Notice of Hearing" of the Petition both to the petitioner and respondent directing them to appear at certain date and time for the hearing of the Petition - and in such Notice of Hearing, it directs the respondent to file his Comment/Opposition to the Petition within the reglementary period of 15 days reckoned from his receipt of the "Notice of Hearing", and such Notice of Hearing shall also set the date and time for the hearing on the Petition which shall be within five (5) days reckoned from the lapse of the reglementary period (i.e., after 15 days reckoned from respondent's receipt of the Notice of Hearing) NOW: With regards to Motion to Refer the case to ADR (i.e., court to have the case prematurely filed with it and refer it for arbitration), or Motion to Suppress Confidential Information (regarding information obtained through ADR proceedings) filed with court (MTC/RTC, as the case maybe), the date of hearing for the Motion shall be set by the movantparty himself stated in his own same Motion (which is commonly practiced written under the caption Notice of Hearing) - and such Motion in setting the date of Motion hearing, shall comply with Rule 15 of the Rules of Court (Rule 15 ROC: [Among other provisions of Rule 15 ROC] The date of the Motion hearing shall be stated by the movant-party in his own Motion which should be set within 10 days reckoned from the time he filed his Motion with the Court, however the movant-party should ensure that the adverse party must have received a copy of such Motion at least 3 days before the date of the Motion hearing set by movant in his Motion) Note: A Motion which does not observe the 10/3-day rule renders the Motion a worthless piece of paper - hence, it is not to be given due course by the court (Tan vs. CA, GR 130314, Sep. 22, 1998) (c) Summary hearing of the Petition/Motion (Rule 1.3 [C] Special ADR Rules) (As far as practicable) Being summary in nature, the hearing on the Petition/Motion shall be limited only for purposes of clarifying facts which shall be conducted for one (1) day hearing only (d) When shall the court render its Resolution/Decision on the Petition/Motion that is summary in nature (Rule 1.3 [D] Special ADR Rules)

Within 30 days reckoned from the date of the termination of the (summary) hearing of the Petition/Motion Note: All Petitions are filed with RTC. However, Motion to Refer the Action for ADR (particularly to arbitration), or Motion to Suppress Confidential Information, this can be filed with RTC or MTC (as the case maybe) depending where the action is filed and pending



SERVICE and FILING of INITIATORY PLEADINGS, and MOTIONS/OTHER PAPERS – regarding ACTIONS PENDING with COURT - for NON-SUMMARY PETITIONS (Rule 1.8 Special ADR Rules)

NOTE: The following petitions are not summary in nature: (1) Petition for Confirmation, Correction or Vacation of Domestic Arbitral Award, (2) Petition for Recognition and Enforcement of a Foreign Arbitral Award, and (3) Petition for Recognition and Enforcement or Setting Aside of an ICA Award Initiatory pleadings (i.e., pleading that is for first time filed in court; e.g., Petition) can be filed directly to the RTC - and for the court to acquire jurisdiction over the person of the respondent, it must serve a copy of the Petition to the respondent either by personal service or courier (but if courier is not available, by registered mail) Note: Unlike in petitions summary in nature where the petitioner serves a copy of his petition to the respondent before he can file his petition with the court). HOWEVER: For Petitions already filed and pending in RTC, any motions/other papers by movant must first served a copy thereof to the adverse party either by personal service or courier (but if courier is not available, by registered mail) before he can file the same with RTC (a) "Proof of Filing" of the Initiatory Pleading (i.e., Petition)/Motion/Other Papers - in RTC (Rule 1.8 [A] Special ADR Rules) Proven by its existence in the record of the case of the RTC. HOWEVER: If it does not exists on the court record, then it is proven by the written/stamped acknowledgment by the RTC clerk of court on the copy of the petitioner/movant of his pleading/motion he filed with the RTC HOWEVER: If the Petition/Motion is filed with RTC by a courier, then proof of filing is proven by the delivery receipt of the courier (b) "Proof of Service" of the Initiatory Pleading (i.e., Petition)/Motion/Other Papers - in RTC (Rule 1.8 [B] Special ADR Rules) When service of the Petition/Motion/Other Papers was made through personal service: Then "Proof of Service"" is proven by: (1) The admission of the adverse party written on the served Petition/Motion/Other Papers; or (2) The official return of server (i.e., the court server); or

(3) The affidavit of the person serving (i.e., the petitioner, or other person who personally made the service in behalf of the petitioner) - STATING: Therein the date, place and manner of personal service When service of the Petition/Motion/Other Papers was made through courier: Then "Proof of Service" is proven by affidavit of the person who deposited (e.g., petitioner/movant/court server) stating therein: (1) That he deposited the Petition/Motion/Other Papers to the courier company in a sealed envelope, addressed to the adverse party's office, if not known, to his residence; (2) That the postage fully pre-paid for the adverse party; and (3) That with instructions to the courier to immediately provide proof of delivery (i.e., delivery receipt)

 Filing and Service of Petition/Motion/Other Papers - through electronic means (e.g., email, mobile phone messages, etc.; Rule 1.8 [C] Special ADR Rules) This is allowed by the agreement of the parties and such agreement approved by the RTC in which case, "Proof of Filing" and "Proof of Service" are made in accordance with the Rules on Electronic Evidence



VERIFICATION - in the PLEADING/MOTION (Rule 1.4 Special ADR Rules)

ALL pleadings (Petition by petitioner, Comment/Opposition to the Petition by respondent, Claim by petitioner, Defense by respondent) and Motions (to Refer the Action to ADR (particularly arbitration); to Suppress Confidential Information [filed by either parties to the action pending before the court [MTC/RTC]) - must be verified, which verification shall state (1) that the petitioner/respondent/movant has read the pleading/motion, and (2) that the factual allegations in the pleading/motion are true and correct based on his own personal knowledge or based on authentic documents which documents are attached to the pleading/motion as annexes (Note: Verification is merely a formal, not jurisdictional, requirement, affecting merely the form of the pleading such that non-compliance therewith does not render the pleading fatally defective. Verification is simply intended to provide an assurance that the allegations are true and correct and not a product of the imagination or a matter of speculation, and that the pleading is filed in good faith. [Pagadora vs. Ilao, GR 165769, December 12, 2011]) The pleading/motion may attach therewith the legal brief stating the relevant factual and legal issues and the applicable law and jurisprudence - which legal brief must be verified by the lawyer who filed it with the court (Note: Legal brief - is a pleading containing facts, factual and legal issues, citation of legal authorities [i.e., applicable laws and jurisprudence], and other matters arose during the proceedings; Rule 1.11 [e] Special ADR Rules)



CERTIFICATION AGAINST FORUM SHOPPING - in the PLEADING/MOTION (Rule 1.5 Special ADR Rules)

Initiatory pleadings (i.e., all Petitions, including Motion to Suppress Confidential Information [except Motion to Refer the case to ADR]) must include "Certification Against Forum Shopping" stating therein under oath the following: (Note: All initiatory pleadings, i.e., pleading for the first time filed with court must have Certification Against Forum Shopping) (a) That the petitioner/movant has not commenced/filed any action/claim involving the same issues in any court, tribunal or quasi-judicial agency (b) That to the best of his knowledge, no such action/claim is pending in such court, tribunal or quasi-judicial agency - AND IF: There be pending, declare the complete statement of the status thereof; and (c) That if the petitioner/claimant should later learn that the same/similar action/claim has been filed/pending, he shall report that fact to the court (where the petition/motion is filed) within 5 days from knowledge thereof NOW: This "Certification Against Forum Shopping"shall attached to the pleading/motion (to suppress confidential information), except "Motion to Refer the Action to ADR" (particularly arbitration; the latter Motion must be verified) Comments: (1) By actual practice, the verification and certification against forum shopping joined and attached/included to the Petition/Motion under same caption "Verification and Certification Against Forum Shopping" (2) Effect when Pleading/Motion has no "Certificate Against Forum Shopping" (In contrast with unverified pleading) Cannot be cured by amendment/supplement, rather the court has to dismiss the case but generally without prejudice unless the court in its order of dismissal state therein that it is dismissed with prejudice (Rule 7 Section 5 Par 2 ROC)



PROHIBITED PLEADINGS/MOTION (Rule 1.6 Special ADR Rules)

The following pleadings/motions are not allowed in cases under the Special ADR Rules (a) Prohibited pleadings (1) Petition for Relief from Judgment (under Rule 38 ROC [on ground of FAME; fraud, accident, mistake and excusable negligence]) (2) Rejoinder

to

Reply

(filed

by

petitioner

after

the

Comment/Opposition/Defense) (3) Other pleading specifically prohibited under Special ADR Rules (b) Prohibited Motions

respondent

filed

his

(1) Motion for Extension of Time to File pleading/motion (except when court issued "ex parte" Temporary Order of Protection [TOP]; see Rule 5.9 Par 5 Special ADR Rules allowing the respondent to file Motion for Extension of Time to file "Comment/Opposition") (2) Motion for Bill of Particulars (3) Motion to declare respondent in default (under Rule 9 Section 3 ROC [for failure to respondent to file his Comment/Opposition/Defense - within the reglementary period]) (4) Motion to Dismiss (e.g., filed by respondent) (5) Motion for New Trial (under Rule 37 ROC [for FAME, or newly discovered evidence]) (6) Motion to Re-open Trial (e.g., for miscarriage of justice) NOW: These prohibited pleadings/motions shall not be accepted by the clerk of court HOWEVER: If the clerk of court inadvertently accepted the same, the court can just ignore it and can even motu proprio expunge the same from the records of the case when found to be dilatory in nature



COMPUTATION of TIME (Rule 1.7 Special ADR Rules)

The first day excluded, the last day included. If the last day is Saturday/Sunday/holiday, it shall be excluded and the working day following shall be included. If the last day is effectively interrupted (e.g., typhoon), the duration of such interruption shall be excluded, and the counting shall start again after the cessation of the cause of the interruption



NO SUMMONS required to be made by the COURT to the adverse party (Rule 1.9 Special ADR Rules)

When a Petition/Motion (i.e., Motion to suppress confidential information; to refer the case to ADR [particularly arbitration]) is filed with the court, the court acquires jurisdiction over such Petition/Motion by "proof of the two jurisdictional facts" (i.e., [1] Service of the Petition to the respondent (served by the petitioner in case of petition summary in nature, or by the court in case of petition non-summary in nature), and the [2] “Notice of Hearing” to the adverse party [served by the court in case of Petition; served by movant-party in case of Motion] pursuant to Rule 1.3 [B] Special ADR Rules in relation with Rule 15 ROC) (a) Proof of Service (whether by personal service, courier or registered mail; Rule 1.9 [A] Special ADR Rules) Read Rule 1.8 [B] Special ADR Rules (supra) regarding "Proof of Service"; and Rule 1.3 [B] Special ADR Rules (supra) regarding "Notice of Hearing" Note: Unlike ordinary action under Rules of Court, the court acquires jurisdiction over the person of the defendant by valid Summon served by the court

(b) Burden of Proof to prove "Proof of Service" and "Notice of Hearing" - were served against the Adverse Party (Rule 1.9 [B] Special ADR Rules) Belongs to the petitioner/movant

TOPIC CHAPTER 11. - SPECIFIC COURT RELIEFS under SPECIAL ADR RULES 

SPECIFIC COURT RELIEFS under ADR (Rule 3 to 13 Special ADR Rules)

(1) Petition regarding the existence, validity and enforceability of the Arbitration Agreement (filed with RTC; Rule 3 Special ADR Rules) Note: Arbitration agreement refers to agreement between parties to have their dispute (if any in the future) settled through arbitration before any court intervention (2) Motion

to

Refer

the

Action

for

Arbitration

(whether

the

arbitration

is

domestic/foreign/ICA/CIAC arbitration] filed with court where action is pending; Rule 4 Special ADR Rules) Note: A situation where either of the parties filed an action with regular court despite the preexistence of arbitration agreement (3) Petition for Interim Measure of Protection/Provisional Relief (filed with RTC; Rule 5 Special ADR Rules) Note: Petition for interim measure of protection is filed with and ask the RTC for a protection/relief either - before or after the arbitration is commenced but before the constitution of the arbitral tribunal, or after the constitution of the arbitral tribunal (4) Petition for the Appointment of Arbitrator/s (filed with RTC; Rule 6 Special ADR Rules) Note: This petition can be filed with RTC when the arbitration parties failed/refused to appoint their arbitrators (5) Petition to Challenge the Appointment of Arbitrator (filed with RTC; Rule 7 Special ADR Rules) Note: This petition is filed with RTC when any of the parties challenged the appointment of one of the arbitrators before the arbitral tribunal and such challenge was denied, and then after its denial, the challenging-party requested the appointing authority (of the arbitrators) to rule on the challenge but the appointing authority either failed/refused to act on such request within the reglementary period (6) Petition for the Termination of the Mandate of Arbitrator (filed with RTC; Rule 8 Special ADR Rules) Note: This petition is filed with RTC when the arbitrator is unable to perform his duty, or already unduly delayed to perform his duty and he refused to voluntarily vacate his post as arbitrator despite demand by any of the arbitration parties, and then after such refusal to vacate the post, the any of the arbitration party requested the appointing authority (of the arbitrators) to terminate the arbitrator but the appointing authority either failed/refused to act on such request within the reglementary period

(7) Petition for Assistance in Taking Evidence (filed with RTC pending the arbitration; Rule 9 Special ADR Rules) Note: Arbitration is a merit-based kind of ADR and with that, it requires presentation and proving pieces of evidence during the arbitration proceeding (whether testimonial, documentary or object evidence). When a person is subpoenaed by the arbitrator/arbitral tribunal whether ad testificandum or ad duces tecum or both, but such person refused to obey such subpoena, the problem is that the arbitrator/arbitral tribunal (being not a court) has no coercive power to coerce such person to obey the subpoena. The solution to this problem to compel said person to obey the subpoena issued by the arbitrator/arbitral tribunal is to file a Petition with RTC to assist the arbitrator/arbitral tribunal in taking the evidence (because for the person to refuse the order of the RTC constitutes contempt of court) (8) Petition to Prevent Disclosure of Confidential Information/Protective Order (filed with RTC; Rule 10 Special ADR Rules) Note: This petition is filed with RTC when any of the confidential information that was obtained during/through arbitration is/are being unduly disclosed - and when such petition is granted by the RTC, the latter would issue an Order to prevent the disclosure/further disclosure of such confidential information (9) Petition to Confirm/Correct/Vacate Domestic Arbitral Award (filed with RTC; Rule 11 Special ADR Rules) (10) Petition to Recognize and Enforce, or Set Aside - ICA Award (filed with RTC; Rule 12 Special ADR Rules) (11) Petition to Recognize and Enforce Foreign Arbitral Award (filed with RTC; Rule 13 Special ADR Rules) (12) Petition for Deposit and Enforcement of Mediated Settlement Agreement Note: When the mediator in mediation successfully settled their dispute of the mediation parties, and so a written settlement/compromise agreement is executed by the mediation parties,

then

any/all

of

the

mediation

parties

can

deposit

such

written

settlement/compromise agreement with the RTC for latter's enforcement if any of the mediation parties does not fully comply with the settled agreement Comments: Notice that all specific court reliefs are all filed via Petition filed with RTC - EXCEPT: For Rule 4 of the Special ADR Rules, which is filed by "Motion" (to Refer the Case for ADR particularly arbitration) filed with the court whether MTC/RTC depending where the action is pending Note: The Rules on specific court reliefs insofar as they refer to arbitration - are also applicable to Other ADR Forms (Rule 1.12 Special ADR Rules) – and relating Rule 1.12 with Rule 18.3: “Applicability of rules on arbitration. – If other ADR form/process is more akin to arbitration [i.e.,

there is a neutral 3rd party is agreed by parties to render a binding resolution/decision], then the rules on arbitration is applicable thereto”)

CHAPTER 12. - SPECIFIC COURT RELIEF particularly PETITION regarding EXISTENCE, VALIDITY and ENFORCEABILITY of the "ARBITRATION AGREEMENT" (Rule 3 Special ADR Rules) 

PRELIMINARY The kind of arbitration where "arbitration agreement" is referring to under Rule 3 are domestic arbitration, ICA arbitration or CIAC arbitration - where the place of arbitration is the Philippines (Rule 3.1 Special ADR Rules). Unlike Motion to Refer the Action to ADR (particularly arbitration) under Rule 4 Special ADR Rules, the place of arbitration can be in the Philippines or abroad (Reason: Rule 4 Special ADR Rules does not distinguished whether the place of arbitration which the court [RTC/MTC] will refer the action is in the Philippines or abroad)



(*) WHEN is this PETITION (regarding issues on the existence, validity or enforceability of Arbitration Agreement) can be FILED with RTC (Rule 3.1 Special ADR Rules) It can be filed with RTC whether before/after the commencement of the arbitration - BUT: Only when the venue of arbitration is in the Philippines (i.e., regardless of the country where the arbitration agreement was executed by the parties - so long as the venue or place of arbitration is in the Philippines)

Comments: (1) Commencement of Arbitration (Article 5.20 DOJ IRR) In case of ad hoc arbitration, it is commenced by claimant by delivering to the respondent a demand for arbitration. And in case of institutional arbitration, it commenced in accordance with the rules of the ADR institution concerned (unless the parties agreed otherwise) Note: "Ad hoc" ADR means it exists only while the purpose still exists (i.e., purpose is arbitration), and when that purpose no longer exists (i.e., arbitration is already finished/terminated), so also the ad hoc ADR; while an institutionalized ADR still exists despite the arbitration for particular parties is already finished/terminated, viz., institutional arbitration still exists to render its arbitration services to those other parties-to-be who would like to procure its arbitration service (e.g., Philippine Dispute Resolution Center, Inc. [PDRCI] an accredited ADR provider located in Taguig, MM)



PETITION (regarding issues on the existence, validity or enforceability of Arbitration Agreement) - "BEFORE" the ARBITRATION is COMMENCED

(1) Who can and when to file the Petition (Rule 3.2 in relation to Rule 3.3 Special ADR Rules)

Any party to the arbitration agreement can file the Petition with RTC before the commencement of the arbitration - and serving copy of the Petition to the respondent in accordance with Rule 1.3 [A] Special ADR Rules (Note: The "Proof of Service" must be attached to the Petition [Reason: The Petition is summary in nature]) (*) HOWEVER: Despite the pendency of the Petition with RTC, any of the parties can commence the arbitration, arbitration constituted and the arbitral tribunal can continue hearing the arbitration until the rendition of its arbitral award (2) RTC venue (Rule 3.4 Special ADR Rules) The Petition can be filed in RTC either (a) where the petitioner (or any of the petitioners) or the respondent (or any of the respondents) has his principal place of business, or (2) where petitioner (or any of the petitioners) or the respondent (or any of the respondents) has his residence, - at the option of the petitioner (3) (*) Grounds for the Petition (Rule 3.5 Special ADR Rules) That the arbitration agreement is: (a) Invalid (b) Void (c) Inexistent (d) Unenforceable Comments: (a) That the arbitration agreement is "invalid" (1) Arbitration agreement is "incapable of being performed" Arbitration agreement is “incapable of being performed” as when it is too vaguely worded so as it is incapable to determine what is the subject matter of the arbitration agreement, or the intention of the parties cannot be determined whether to submit their dispute to arbitration or not, or that the arbitration agreement contains “coequal forum selection clause” (i.e., there are 2/more arbitration venues from which the parties could select) but the parties cannot unanimously agree as to where is the arbitration venue, etc. (b) That the arbitration agreement is "voidable" (Article 1390 NCC) Such as when: (1) One of the parties when he entered into agreement with the other party, was incapable of giving consent (Note: When both parties are incapable of giving consent, then the agreement is not voidable but rather unenforceable under Article 1403 [3] NCC); or (2) Consent of one of the parties in the agreement was vitiated by mistake, violence, intimidation or undue influence

(c) That the arbitration agreement is "void" (1) Contrary to law, morals, good customs, public policy or public order (2) Absolutely simulated (not merely relatively simulated contract) (3) The subject-matter refers to things outside the commerce of men (4) The subject-matter refers to service (physically or legally) impossible to perform (d) That the arbitration agreement is "unenforceable" Unenforceable contracts are those that are mentioned under Article 1403 NCC (e.g., arbitration agreement entered by a person without authority from the party, the arbitration agreement is not in writing and signed by all parties, or all parties are incapable of giving consent to the arbitration agreement) Remedy: Ratification. Note: Void agreement/contract cannot be ratified as there is nothing to ratify because such agreement/contract did not exist since the beginning (e) That the arbitration agreement is "inexistent" Meaning there is really no arbitration agreement, or that the petitioner is not privy to the arbitration agreement

 Arbitration agreement becomes is "inoperative" (a) The arbitration agreement contains period within which such agreement is effective and such period already lapsed; or (b) The parties previously validly revoked/rescinded their arbitration agreement (4) Form and Contents of the Petition (Rule 3.6 Special ADR Rules) The Petition must be verified(executed by person who has personal knowledge of the facts alleged in such Petition [e.g., petitioner]), and shall state the following: (a) That the petitioner and respondent has the capacity to sue and be sued; (b) The nature and substance of the dispute (c) The grounds and circumstances relied upon by the petitioner - to establish his case (d) The relief/s prayed for by the petitioner - AND: Attached with the Petition is the authentic copy of the arbitration agreement (asides from other attachments [if any]) Note: The petitioner must serve copy of the Petition to the respondent considering that the Petition is summary in nature pursuant to Rule 1.3 [A] Special ADR Rules. The Petition asides from "Verification", must also state "Certificate Against Forum Shopping" pursuant to Rule 1.5 Special ADR Rules the Petition being an "initiatory pleading" (5) Comment/Opposition by respondent against the Petition (Rule 3.7 Special ADR Rules) Must be filed by the respondent within 15 days reckoned from his receipt of the Petition (served by the Petitioner)

Note: Unlike in Petition, the Comment/Opposition need not state "Verification" and "Certificate Against Forum Shopping" (6) (*) RTC in resolving the Petition (Rule 3.8 Special ADR Rules) RTC must remember judicial restraint taking into consideration Rule the policy of "Competence-Competence Principle" set forth under 2.4 Special ADR Rules giving the arbitral tribunal the first opportunity to rule on the issue of its jurisdiction and competence to preside over the arbitration dispute

 (*) Principle of "Competence-Competence" (Rule 2.4 Special ADR Rules) When the Petition (flied with RTC) is about the issue of jurisdiction and/or competence of the arbitral tribunal to hear the arbitration, including the issue with regards to the inexistent or invalidity of the arbitration agreement - THEN: The RTC instead of ruling on such issue, must exercise judicial restraint and give the arbitral tribunal the first opportunity to resolve upon such issues When the Petition is about the issue that the arbitration agreement is void, inoperative or incapable of being performed - STILL: The RTC instead of ruling on such issue, must also exercise judicial restraint (not about giving the arbitral tribunal the first opportunity to hear the issue about its jurisdiction but rather) by way of giving prima facie validity of the arbitration agreement - UNLESS: The RTC concludes that the arbitration agreement is void, inoperative or incapable of being performed, then it will grant the Petition (and order the arbitral tribunal to cease from taking cognizance of or continuing with the arbitration if any already commenced)

 Petitioner's relief/remedy against RTC's finding of prima facie that the arbitration agreement exists, valid or enforceable (Rule 3.11 Special ADR Rules) The Petitioner cannot file MR, appeal or certiorari (viz., immediately executory) (*) HOWEVER (i.e. no res judicata): The ruling of the RTC on the Petition being merely prima facie finding for the existence, validity or enforceability of the arbitration agreement, the Petitioner is not precluded from raising the same issues in the arbitral tribunal (if the Petition is filed with RTC before the arbitration is commenced where the RTC ruled on the Petition that the arbitral agreement exists, valid and enforceable, then after such RTC decision, the arbitral tribunal is subsequently constituted and here, the arbitral tribunal can rule on the same issue whether the arbitration agreement exists, valid and enforceable), or in a Petition to Vacate/set-aside the Arbitral Award filed with RTC (i.e., after the arbitral tribunal is constituted, the latter ruled that arbitration agreement exists, valid and enforceable, afterwhich, arbitral tribunal rendered arbitral award, afterwhich, the Petition to Vacate/Set-aside arbitral award is filed with RTC). (*) Now, in the Petition to Vacate/Set-aside the Arbitral Award filed with RTC, when the issue raised

is the same issue the arbitration agreement is inexistent, invalid or unenforceable, the RTC will not merely rule based on prima facie finding but rather by conclusion via full review of the said issue/s (7) When the Petition is accompanied with application for interim measure of protection (Rule 3.10 Special ADR Rules) The petitioner must also comply with the requirements of Rule 5 Special ADR Rules (i.e., regarding Petition for Interim Measure of Protection)



PETITION (regarding issues on the existence, validity or enforceability of Arbitration Agreement) - "AFTER" the ARBITRATION is COMMENCED (or pending the arbitration proceedings)

(1) Who can and when to file the Petition (Rule 3.12 in relation to Rule 3.13 Special ADR Rules) Any party to the arbitration agreement can file the Petition with RTC within 30 days reckoned from his receipt of the ruling of the arbitral tribunal (finding for the existence/non-existence, validity/invalidity or enforceability/unenforceability of the arbitration agreement) (*) NOW: When the arbitral tribunal ruled that the arbitration agreement is inexistent, invalid or unenforceable, but afterwhich the RTC ruled in the Petition reversed the ruling of the arbitral tribunal (i.e., RTC ruling that the arbitration agreement exists, valid or enforceable), then the parties have the option to replace the present arbitrator/s with new arbitrator/s are to be appointed in the same procedure that the replaced arbitrator/s was appointed Notes: (a) The petitioner must serve his Petition to the respondent pursuant Rule 1.3 [A] Special ADR Rules the Petition being a summary in nature (b) (*) When Petition is not allowed to be filed with RTC (Rule 3.20 Special ADR Rules) When one of the parties in the arbitration raised the issue in the arbitral tribunal that the latter has no jurisdiction on ground that the arbitration agreement is inexistent, invalid or unenforceable, but the arbitral tribunal issued an Order to defer ruling on such issue, the questioning party cannot go to RTC and file Petition (to seek RTC ruling to declare the arbitration agreement as inexistent, invalid or unenforceable) nor to question the inappropriateness of arbitral tribunal deferring the ruling on such issue and compel the arbitral tribunal through mandatory injunction to rule on such issue - IN WHICH CASE: The questioning party cannot but wait until the arbitral tribunal renders arbitral award (before he can file Petition with RTC to Vacate/Set-aside the Arbitral Award) (2) RTC venue (Rule 3.14 Special ADR Rules) The Petition can be filed in RTC either: (1) where arbitration is taking place, or (2) the petitioner (or any of the petitioners) or the respondent (or any of the respondents) has his

principal place of business, or (3) where petitioner (or any of the petitioners) or the respondent (or any of the respondents) has his residence - all at the option of the petitioner (3) Grounds for the Petition - when the arbitral tribunal ruled that the arbitration agreement exists, valid or enforceable (Rule 3.15 Special ADR Rules) That the arbitration agreement is: (a) Invalid (b) Inexistent (c) Unenforceable - AS A RESULT OF WHICH: The arbitral tribunal has no jurisdiction Note: It is believed that the arbitration agreement is void/voidable should also be included (2) Form and Contents of the Petition (Rule 3.16 Special ADR Rules) The Petition must be verified (pursuant to Rule 1.4 Special ADR Rules; executed by person who has personal knowledge of the facts alleged in such Petition [e.g., petitioner]), and shall state the following: (a) That the petitioner and respondent has the capacity to sue and be sued; (b) The nature and substance of the dispute (c) The grounds and circumstances relied upon by the petitioner - to establish his case (d) The relief/s prayed for by the petitioner - AND: Attached with the Petitioner is the copy of the demand for arbitration and the ruling of the arbitral tribunal (asides from other attachments [if any]) The arbitrators must be impleaded in the Petition also as respondent but merely as nominal party, and they are also entitled to notices of the progress of the Petition (Note: A "nominal party" is otherwise known as "pro forma" party, is a party joined in the action/petition as plaintiff/petitioner or as defendant/respondent but has no real interest in the action/petition, but merely impleaded because the rules require him to be impleaded and nothing more) Notes: (1) The petitioner must serve copy of the Petition to the respondent considering that the Petition is summary in nature pursuant to Rule 1.3 [A] Special ADR Rules. The Petition asides from "Verification", must also state "Certificate Against Forum Shopping" pursuant to Rule 1.5 Special ADR Rules the Petition being an "initiatory pleading" (2) The arbitral tribunal is only a nominal party (Rule 3.22 Special ADR Rule) The petitioner in his Petition must implead the arbitral tribunal also as respondent (along with the respondent-party) but merely as nominal party - such that it will not be required by RTC to submit any pleadings/papers to the Petition - HOWEVER: The RTC may allow the arbitral tribunal to participate in the Petition and file pleadings/papers but still as nominal party(Note: A "nominal party" is otherwise known as "pro forma" party, is a party

joined in the action/petition as plaintiff/petitioner or as defendant/respondent but has no real interest in the action/petition, but merely impleaded because the rules require him to be impleaded and nothing more) (4) Comment/Opposition by respondent against the Petition (Rule 3.17 Special ADR Rules) Must be filed by the respondent within 15 days reckoned from his receipt of the Petition (served by the Petitioner) Note: Just like in Petition, the Comment/Opposition must include "Verification" (Rule 1.4) – but need not include "Certificate Against Forum Shopping" being not an initiatory pleading (Rule 1.5) (5) The RTC in resolving the Petition (Rule 3.18 Special ADR Rules) (a) Period within which RTC shall decide on the Petition Within 30 days reckoned from the time the Petition is submitted for decision - which decision is merely on the basis of the pleadings and evidence of the parties (Note: No formal oral hearing in RTC on reason that the Petition is summary in nature under Rule 1.3 [a] Special ADR Rules) Note: Pleadings consists of Petition of the petitioner, Comment/Opposition of the respondent, and the respective legal briefs of the parties (Note: Legal brief - is a pleading containing facts, factual and legal issues, citation of legal authorities [i.e., applicable laws and jurisprudence], and other matters arose during the proceedings; Rule 1.11 [e] Special ADR Rules) (b) (*) RTC pending the Petition, cannot issue TRO/Injunction against the arbitral tribunal Despite the filing of Petition with RTC, the latter cannot enjoin the arbitral tribunal from continuing with the arbitration proceedings - and in fact during Petition pendency, the arbitral tribunal can even render arbitral award (c) (*) When can the RTC dismiss the Petition When the Petition: (1) Fails to comply with Rule 3.16 Special ADR Rules (i.e., contents of Petition); or (2) When on the basis of the respective legal briefs of the parties - the Petition does not appear to be prima facie meritorious (6) Relief/remedy against RTC Ruling - either granting/dismissing the Petition (Rule 3.19 Special ADR Rules) The aggrieved party (whether petitioner or respondent as the case may be) can file MR- BUT: Cannot appeal When RTC declares that the arbitration agreement exists, valid or enforceable - such ruling cannot be subjected to certiorari

When RTC declares that the arbitration agreement is inexistent, invalid or unenforceable such ruling can be subjected to certiorari under Rule 19.26 Special ADR Rules

 (*) Suppose the arbitral tribunal rendered arbitral award - before the RTC could rule on the Petition (Rule 3.21 Special ADR Rule) The RTC shall dismiss the being already rendered moot and academic - BUT: Without prejudice to any of the parties to file later with RTC a Petition to Vacate/Set-aside the arbitral award