Jurisdiction-of-arbitral-tribunal-pp-151-163-copy.docx

JURISDICTION OF ARBITRAL TRIBUNAL Mappang, Joy Francine| Menorca, Adrianne Shane M. JURISDICTION OF ARBITRAL TRIBUNAL I. Jurisdiction, in general: “Arbitration is a creature of contract. A party to a dispute has no legal duty to submit that dispute to arbitration unless he is obliged by contract to do so.”1 Judicial Determination -

Jurisdiction of the arbitral tribunal is not vested by law, but by a valid contract called an Arbitration Agreement (AA).

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The existence, validity, or enforceability of the arbitration agreement directly affects the jurisdiction of an arbitral tribunal.

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Can be raised in any stage of the proceedings Sources of Governing Law, Rules, and Regulations:

(1) International Source – Model Law on International Commercial Arbitration, Chapter IV: Jurisdiction of Arbitral Tribunal (a) Article 8. Arbitration agreement and substantive claim before court (b) Article 16. Competence of arbitral tribunal to rule on its jurisdiction (c) Article 17. Power of arbitral tribunal to order interim measures (2) Domestic Source – D.O. Circular No. 98: IRR of the ADR Act of 2004 (a) Chapter 4. International Commercial Arbitration. Rule 4. Jurisdiction of Arbitral Tribunal (i) Article 4.16. Competence of Arbitral Tribunal to Rule on its Jurisdiction (ii) Article 4.17. Power of Arbitral Tribunal to Order Interim Measures II. Issues Surrounding Judicial Determination Overview of the Story

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Uncooperative party refuses to appoint or participate in the appointment or selection of an arbitrator

The constitution of an arbitral tribunal is prevented

Aggrieved party is compelled to commence a proceeding for specific performance

Apply the governing law, rules, and regulations.

As a consequence, the jurisdiction of the arbitral tribunal is challenged

Uncooperative party (now Respondent) raises an issue challenging the Arbitration Agreement

C. Parlade, Alternative Dispute Resolution Act Of 2004, 152, par. 3, 2004 Ed., (2004).

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Article 8. Arbitration agreement and substantive claim before court (1) Upon request of a party, the court shall refer the parties to arbitration. XPN: The court finds that the arbitration agreement is: (i) null and void; (ii) inoperative; or (iii) incapable of being performed2  Nature of this finding by the court must submit the Policy of Judicial Restraint. Under this policy, where the court is asked to make a determination of the above issues, the court must make no more than a prima facie determination.  Absent of a prima facie determination, court must suspend the action before it and refer the parties to arbitration.  While request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award (2) Despite an issue pending in court, arbitral proceedings may still commence or continue, and an arbitral award may still be made. - The Model Law3 allows an appointing authority to appoint an arbitrator for the uncooperative party, if none. - The Special ADR Rules directs the court not to enjoin arbitration proceedings. Article 16. Competence of arbitral tribunal to rule on its jurisdiction (enunciated the twin principles) (1) Doctrine of Kompetenz-Kompetenz The arbitral tribunal may rule on its own jurisdiction, including the existence or validity or enforceability of the arbitration agreement. This policy applies to all proceedings.4 Policy of Judicial Deference - allow the arbitral tribunal the first opportunity to rule upon the issue of jurisdiction over the dispute Q: When to file a plea challenging jurisdiction? A: It depends on the ground. Ground Lack

Exceeding

When not later than the submission of the statement of defense (an Answer or Motion to Dismiss5 (reason behind: the same issue can be raised before the tribunal itself) Note: a party is not precluded by the fact that he has appointed, or participated in the appointment of, an arbitrator as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings

XPN: In either case, a delayed plea can be admitted if the delay justified.

Same as Section 24 of the ADR Act of 2004. Articles 10 to 15. 4 Parlade, supra at 155, par. 2. 5 In Section 24 of the ADR Act, this can be done not later than the pre-trial conference. 2 3

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JURISDICTION OF ARBITRAL TRIBUNAL Mappang, Joy Francine| Menorca, Adrianne Shane M. Q: How will the arbitral tribunal rule on a plea of challenging jurisdiction? A: In two ways: (1) as a preliminary question; or (2) in an award on the merits. Note: If the ruling is rendered using method (1) + ruling: It has jurisdiction: - within 30 days from notice of such ruling, any party may request a court to decide the matter - decision rendered is unappealable AS TO ARBITRATION AGREEMENT XPNs to the General Rule (Article 16): (i)

Civil action - there must be a request  in the form of a motion - absent of such request, right to arbitration is deemed waived - motion can be opposed on 3 grounds:  no agreement  agreement is null and void  subject is an exception under Sec. 6 of the ADR Act

Issue Whether or not the subject matter that is covered by the AA is excluded from the coverage of the ADR Act Whether or not the subject matter falls within the scope of the AA

Effect Court makes a determination on the basis of the pleadings and supporting documents No court determination – refer to arbitration because this is within the jurisdiction of an arbitral tribunal6 or if it finds prima facie that the subject matter is capable of arbitration.7

(ii)

Special proceeding - under Rule 3.3 of the Special ADR Rules - at any time before arbitration starts  When does it start? In international commercial arbitration, it is to be determined by the parties. By default, it is when claimant’s request for arbitration is received by the respondent.8 - Court must exercise judicial restraint, subject to exceptions as mention earlier in Article 8.

(iii)

Other situations - for example:  Rule 9.1 of the Special ADR Rules: assistance for taking evidence  Petition for an Interim Measure of Protection9

Rule 4.7 of the Special ADR Rules. Rule 4.5 of the Special ADR Rules. 8 Article 4.21, IRR of the ADR Act. 9 As illustrated in the case of Korea Technologies Co. Ltd. v. Lerma, et al, G.R. No. 143581, January 7, 2008, 542 SCRA 1 6 7

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(2) Principle of Separability An arbitration clause is an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is void does not entail ipso jure the invalidity of the arbitration clause. III. Two Basic Principles in International Commercial Arbitration Principle of Separability Subject: Existence or Validity of the Arbitration Clause Also known as Principle of Severability -

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An arbitration agreement is to be treated as a separate agreement and the arbitration agreement does not automatically terminate when the contract (also referred to as ‘container’ contract) of which it is a part comes to an end.10 Reason behind the doctrine: When the contract is terminated in any way, there might be residual and unresolved claims and counterclaims. Therefore, the dispute resolution provision becomes operative. It is a second agreement that survives the termination of the principal contract.11 In one case12, it was held that to enjoin arbitration, the alleged fraud must affect the arbitration clause itself. In general, the question of arbitrality must be addressed with a healthy regard for the federal policy favoring arbitration.13

Principle of Competence-Competence Subject: Competence of the Arbitral Tribunal to act on the claim The tribunal is competent to rule upon its own jurisdiction, including any objection with respect to the existence or validity of the arbitration agreement. -

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This was also expressed, among others, in the UNCITRAL Arbitration Rules, the ICC Rules of Conciliation and Arbitration, and the ICSID Arbitration Rules – all of which boils down to one statement: The tribunal shall be the judge of its own competence. The question of initial illegality of a contract not directly impeaching the arbitration clause was capable of being within the jurisdiction of an arbitrator.14 Arbitration clause is not an accessory contract.

Challenge to the Competency of Tribunal a) In General b) Existence or valditiy of the agreement, the governing law of the agreement c) Formaly validity of arbitration agreement Gonzales v. Climax Mining Ltd., G.R. No. 161957, January 22, 2007; 512 SCRA 148 Parlade, supra at 158, par. 1. 12 Prima Paint Corp. v. Flood & Conklin Mfg. Corp., 388 U.S. 395, 87 S. Ct. 1801, 18 L. Ed. 2d. 1270 (1970) 13 Mitsubishi v. Soler Chrysler-Plymouth, 374 U.S. 614. 105 S. Ct. 3346, 87 L. Ed. 2d. 444 (1985). 14 Harbour Assurance Co. (UK) Limited v. Kansa General International Insurance Co. Limited (1993) 3 WLR 42. Dispute Resolution Update [Newsletter of Committee D Procedures for Settling Disputes of the International Bar Association] Jan. 1994, Vol. 1, No. 1. 10 11

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d) Lack of legal capacity to enter into agreement e) Unenforceablity of the agreement f) Non-arbitrability of dispute

IN GENERAL

The challenge to the competency of the arbitral tribunal on jurisdictional grounds, may be based, according to Model Law Article 16 (1) (a) Upon the non-existence or invalidity of the arbitration agreement (b) Upon the nullity of the contract the breach of which has resulted in the dispute submitted to arbitration; or (c) Upon other grounds not specified in the article. The Special ADR Rules seeks to obviate a potential conflict between a trial court and an arbitral tribunal arising from the submission of the same issue of jurisdiction to the court and to the arbitral tribunal by providing that: a) The court should defer to an arbitral tribunal to rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement, or any condition precent to the filing of the petition. b) While a party may seek judicial intervention to determine the issue of the existence, validity or enforceablity of the arbitration clause, this intervention which should be in a form of a special proceeding may be filed at any time before the commencement of arbitration. Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a claimant’s request for that dispute to be referred to arbitration is received by the respondent. This precludes a party from commencing a proceeding in court to prevent an arbitral tribunal from being constituted or from proceeding with the arbitration. c) Assuming that the petition under Rule 3 of the Special ADR Rules was seasonably filed, the court is enjoined to exercise judicial restraint, and be guided by the policy implementing the competence-competence principle that the court must defer to the compliance of an arbitral tribunal to rule upon such issue, whether the tribunal was constituted before or after the case was filed. Under the policy of judicial restraint, the court must make no more than a prima facie determination, the court concludes that the arbitration agreement is null and void, inoperative, or incapable of being performed, the court must suspend the proceeding before it and refer the parties to arbitration. A different rule is followed when a civil action is commenced submitting to the court a dispute which under the relevant arbitration agreement should be submitted to arbitration. Republic Act No. 9285 SEC. 24. Referral to Arbitration. - A court before which an action is brought in a matter which is the subject matter of an arbitration agreement shall, if at least

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one party so requests not later that the pre-trial conference, or upon the request of both parties thereafter, refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed. SPECIAL RULES OF COURT ON ALTERNATIVE DISPUTE RESOLUTION Rule 2.2. Policy on arbitration.- (A) Where the parties have agreed to submit their dispute to arbitration, courts shall refer the parties to arbitration pursuant to Republic Act No. 9285 bearing in mind that such arbitration agreement is the law between the parties and that they are expected to abide by it in good faith. Further, the courts shall not refuse to refer parties to arbitration for reasons including, but not limited to, the following: a. The referral tends to oust a court of its jurisdiction; b. The court is in a better position to resolve the dispute subject of arbitration; c. The referral would result in multiplicity of suits; d. The arbitration proceeding has not commenced; e. The place of arbitration is in a foreign country; f. One or more of the issues are legal and one or more of the arbitrators are not lawyers; g. One or more of the arbitrators are not Philippine nationals; or h. One or more of the arbitrators are alleged not to possess the required qualification under the arbitration agreement or law.

EXISTENCE OF VALIDITY OF THE AGREEMENT; THE GOVERNING LAW OF THE AGREEMENT

Who decides whether or not an arbitration agreement legally exists, or if it does, whether it is valid? 1. Under Model Law 16, it is the arbitral tribunal which is called upon to decide the issue; 2. Under Model Law Article 8, it is the court. 3. The term “validity” in Model law Article 16 may be broadly interpreted to include within its meaning that the agreement is “inoperative or incapable of being performed” as provided in Model Law Article 8(1). 4. In Article 2(3) of the 1958 New York Convention, where the court of a contracting state is required to refer the parties to arbitration “unless it finds that the said agreement is null and void, inoperative or incapable of being performed.”

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5. Model Law Article 34(2) (a) (i), the national law to be applied in making this determination is the law to which the parties have subjected it. 6. Model Law 36(1) (a) (i), in default of agreement on the governing law, the national law of the place where the award was made.

FORMAL VALIDITY OF ARBITRATION AGREEMENT

The arbitral tribubal will be referred to the law of the place of arbitration. Philippines Rule: applies lex loci contractus, that the formal validity of contracts shall be governed by the law of the country in which they are executed. Article 17. The forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the country in which they are executed. Old Egyptian Arbitration Law It was required that the arbitrator be named in the arbitration agreement; otherwise it shall not be enforced. Sweden and Germany Abolished the formal validity requirement, and thus the challenge to the validity of an arbitral agreement is limited to the issue of the substantive validity. Model Law Requires that an Arbitration agreement must be in writing, although the meaning of the term “writing” has been expanded. Article 7. Definition and form of arbitration agreement (1) The arbitration agreement shall be in writing. An agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is in writing and the reference is such as to make that clause part of the contract. Article 7. Definition and form of arbitration agreement (As adopted by the Commission at its thirty-ninth session, in 2006) (2) An arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means. (3) The requirement that an arbitration agreement be in writing is met by an electronic communication if the information contained therein is accessible so as to be useable for subsequent reference; “electronic communication”

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means any communication that the parties make by means of data messages; “data message” means information generated, sent, received or stored by electronic, magnetic, optical or similar means, including, but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy. (4) Furthermore, an arbitration agreement is in writing if it is contained in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other. (5) The reference in a contract to any document containing an arbitration clause constitutes an arbitration agreement in writing, provided that the reference is such as to make that clause part of the contract.

LACK LEGAL CAPACITY TO ENTER INTO AGREEMENT

The court may set aside award if a party to the arbitration agreement was under some incapacity to enter into that agreement. Article 34. Application for setting aside as exclusive recourse against arbitral award 2) An arbitral award may be set aside by the court specified in article 6 only if: (a) the party making the application furnishes proof that: (i) a party to the arbitration agreement referred to in article 7 was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of this State; or In the Philippines Article 15 of the New Civil Code provides: “Article 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad.”

May be construed to mean that the legal capacityvof a person will be determined in accordance with his national law.

UNENFORCEABILITY OF THE AGREEMENT

Art. 1403. The following contracts are unenforceable, unless they are ratified: (1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers;

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NON-ARBITRABILITY OF DISPUTE

Article 36. grounds for refusing recognition or enforcement (1) Recognition or enforcement of an arbitral award, irrespective of the country in which it was made, may be refused only: (b) if the court finds that: (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State; or (ii) the recognition or enforcement of the award would be contrary to the public policy of this State. Article V (2) (a) & (b) of the New York Convention Holtzman and Neuhaus: Considerable disagreement as to the law that should apply to determine the question of arbitrability of a dispute if it should arise during the stage contemplated under Model Law Article 16. 1. Whether it is the law of the forum 2. The law of the place of arbitration 3. Or the law of either of them The designation of the seat of arbitration implicitly selects the law of the situs to apply. England The rule appears to be that the conflicts rule of the situs must be consulted to determine the substantive law to apply to the dispute. ARTICLE 16 DOES NOT STATE THE LAW OF WHICH STATE THE ARBITRAL TRIBUNAL WOULD APPLY IN RESOLVING QUESTIONS RELATED TO JURISDICTION Model Law Art. 16 in relation to Art.8 The appropriate court allowed to intervene to support the arbitral process as provided in Model Law Article 6 should be the same court with jurisdiction to review that arbitral tribunal’s decision relating to its jurisdiction under Model Law Article 16 and to set aside the arbitral proceedings when an application is made under Model Law Article 34.

APPEAL TO THE RTC

Article 16. Competence of arbitral tribunal to rule on its jurisdiction (3) The arbitral tribunal may rule on a plea referred to in paragraph (2) of this article either as a preliminary question or in an award on the merits. If the arbitral tribunal rules as a preliminary question that it has jurisdiction,

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any party may request, within thirty days after having received notice of that ruling, the court specified in article 6 to decide the matter, which decision shall be subject to no appeal; while such a request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award. 

When the arbitral tribunal defers, until after hearing and as part of its award, its ruling on the issuance of existence, invalidity or enforceability of an arbitration agreement, a party may appeal that ruling to a Regional Trial Court with jurisdiction. When such an appeal is made, the arbitral tribunal may either suspend or continue the arbitration proceedings. In the latter case, it may make an award.

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If on the other hand, the arbitral tribunal finds that it has no jurisdiction, the model law contains no provision allowing judicial review of such determination, although the right of the affected party to seek judicial review of that determination is not open to question.

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The model law also contains no provision on whether the failure of a party to request the court to decided the matter after the ruling of the arbitral tribunal in favor of its own jurisdiction precludes it from raising the issue at the stage of enforcement of the award.

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When a court upon being requested to do so, decides the issue of validity of the arbitration agreement and the jurisdiction of the arbitral tribunal, the court’s decision “shall be subject to no appeal”.

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This does not imply that this determination is not subject to review by an appellate court, since the issue is one which can be submitted to the court for determination at the stage where a party applies with the court for setting aside the award under Model Law 34(2) (a) (i), the court can review the issue and the determination of the court on this issue is further subject to appellate review.

DISPUTES INVOLVING A MIX OF ARBITRABLE AND NON-ARBITRABLE ISSUES

Republic Act No. 9285 SEC. 25. Interpretation of the Act. - In interpreting the Act, the court shall have due regard to the policy of the law in favor of arbitration. Where action is commenced by or against multiple parties, one or more of whom are parties who are bound by the arbitration agreement although the civil action may continue as to those who are not bound by such arbitration agreement. Ensure compliance: A.M. No. 07-11-08-SC SPECIAL RULES OF COURT ON ALTERNATIVE DISPUTE RESOLUTION Rule 4.7. Multiple actions and parties. - The court shall not decline to refer some or all of the parties to arbitration for any of the following reasons: a. Not all of the disputes subject of the civil action may be referred to arbitration;

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b. Not all of the parties to the civil action are bound by the arbitration agreement and referral to arbitration would result in multiplicity of suits; c. The issues raised in the civil action could be speedily and efficiently resolved in its entirety by the court rather than in arbitration; d. Referral to arbitration does not appear to be the most prudent action; or e. The stay of the action would prejudice the rights of the parties to the civil action who are not bound by the arbitration agreement. The court may, however, issue an order directing the inclusion in arbitration of those parties who are not bound by the arbitration agreement but who agree to such inclusion provided those originally bound by it do not object to their inclusion.

TIMELINESS OF ISSUE OF COMPETENCE

Article 16. Competence of arbitral tribunal to rule on its jurisdiction (2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence. A party is not precluded from raising such a plea by the fact that he has appointed, or participated in the appointment of, an arbitrator. A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified.

IMMEDIATE JUDICIAL REVIEW OF TRIBUNAL’S DETERMINATION ON ITS JURISDICTION

Right to judicial relief: Who may file? Any party to arbitration may petition the appropriate court for judicial relief from the ruling of the arbitral tribunal on a preliminary question upholding or declining its jurisdiction. When? The petition may be filed within thirty (30) days after having received notice of that ruling by the arbitral tribunal. Basis of the court’s judgment The court shall render judgment on the basis of the pleadings filed and the evidence submitted by the parties. Rule :Pendency of the petition The court shall not enjoin the arbitration proceeding, the judicial recourse to the court shall not prevent the arbitral tribunal from continuing the proceedings and rendering its award.

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Motion for reconsideration from a decision of the court may be filed by a party. If the court affirms the arbitral tribunal’s jurisdiction: The decision is not appealable nor subject to a petition for certiorari If the court rules that the AT has no jurisdiction: The ruling may be subject to a petition for certiorari. If the arbitral tribunal defers its resolution until final award: No motion for reconsideration, appeal or certiorari is allowed. The aggrieved party must await the final award before seeking appropriate judicial recourse. If the court is unable to render decision: The petition shall become ipso facto moot and academic and shall be dimissed by the court.

B. Judicial Relief after Arbitration Commences Rule 3.12. Who may file petition. - Any party to arbitration may petition the appropriate court for judicial relief from the ruling of the arbitral tribunal on a preliminary question upholding or declining its jurisdiction. Should the ruling of the arbitral tribunal declining its jurisdiction be reversed by the court, the parties shall be free to replace the arbitrators or any one of them in accordance with the rules that were applicable for the appointment of arbitrator sought to be replaced. Rule 3.13. When petition may be filed. - The petition may be filed within thirty (30) days after having received notice of that ruling by the arbitral tribunal. Rule 3.18. Court action. – (A) Period for resolving the petition.- The court shall render judgment on the basis of the pleadings filed and the evidence, if any, submitted by the parties, within thirty (30) days from the time the petition is submitted for resolution. (B) No injunction of arbitration proceedings. - The court shall not enjoin the arbitration proceedings during the pendency of the petition. Judicial recourse to the court shall not prevent the arbitral tribunal from continuing the proceedings and rendering its award. (C) When dismissal of petition is appropriate. - The court shall dismiss the petition if it fails to comply with Rule 3.16 above; or if upon consideration of the grounds alleged and the legal briefs submitted by the parties, the petition does not appear to be prima facie meritorious. Rule 3.19. Relief against court action. - The aggrieved party may file a motion for reconsideration of the order of the court. The decision of the court shall, however, not be subject to appeal. The ruling of the court affirming the arbitral tribunal’s jurisdiction shall not be subject to a petition for certiorari. The ruling of the court that the arbitral tribunal has no jurisdiction may be the subject of a petition for certiorari. Rule 3.20. Where no petition is allowed. - Where the arbitral tribunal defers its ruling on preliminary question regarding its jurisdiction until its final award, the

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aggrieved party cannot seek judicial relief to question the deferral and must await the final arbitral award before seeking appropriate judicial recourse. A ruling by the arbitral tribunal deferring resolution on the issue of its jurisdiction until final award, shall not be subject to a motion for reconsideration, appeal or a petition for certiorari. Rule 3.21. Rendition of arbitral award before court decision on petition from arbitral tribunal’s preliminary ruling on jurisdiction. - If the arbitral tribunal renders a final arbitral award and the Court has not rendered a decision on the petition from the arbitral tribunal’s preliminary ruling affirming its jurisdiction, that petition shall become ipso facto moot and academic and shall be dismissed by the Regional Trial Court. The dismissal shall be without prejudice to the right of the aggrieved party to raise the same issue in a timely petition to vacate or set aside the award. D. SPECIAL CIVIL ACTION FOR CERTIORARI Rule 19.26. Certiorari to the Court of Appeals. - When the Regional Trial Court, in making a ruling under the Special ADR Rules, has acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law, a party may file a special civil action for certiorari to annul or set aside a ruling of the Regional Trial Court. A special civil action for certiorari may be filed against the following orders of the court. a. Holding that the arbitration agreement is inexistent, invalid or unenforceable;

OBJECTION THAT TRIBUNAL IS ACTING IN EXCESS OF ITS JURISDICTION

The party to the arbitration may question the exercise of authority by the arbitral tribunal and allege that it is acting in excess or beyond the scope of its authority. When? Model Law Article 16(2) requires a party to raise that issue promptly after the arbitral tribunal has so acted or has indicated an intention to decide on a matter allegedly beyond the scope of its authority. Otherwise, where such issue of the arbitral tribunal acting beyond the scope of its authority is not raised within this period, the party affected is precluded from raising it during a later stage of the proceedings or during the application for its enforcement and for setting it aside. Exceptions See Articles 34 and 36 of Model Law

ISSUE OF PRECLUSION

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a. Where the arbitrability of a dispute is raised in court before arbitration is initiated, or while it is pending, and the decision of the court becomes final and executory, whether such decision precludes either party from taking action inconsistent with that action. b. Where the arbitrability of a dispute is raised as a challenge to the jurisdiction of an arbitral tribunal, the latter may resolve the issue in one of three ways: (a) grant the motion and declare itself without jurisdiction; or (b) deny the motion and uphold its jurisdictioj, or (c) defer resolution of the issue until after hearing on the merits and in its final award. c. Where a request is madecto a court to resolve the issue of arbitrability and consequently the issue of jurisdiction, and the court resolves it by reversing the ruling of the arbitral tribunal, the issue is whether the parties and the arbitral tribunal can continue with the arbitration proceedings or the arbitration will be terminated. Two situations where the issue of preclusion may arise: 1. Petition for judicial relief 2. a motion under rule 4 of the special ADR rules for the court before which a civil action is pending to refer the parties to arbitration because the subject matter of the action is covered by an arbitration agreement. C. APPEALS TO THE COURT OF APPEALS Rule 19.12. Appeal to the Court of Appeals. - An appeal to the Court of Appeals through a petition for review under this Special Rule shall only be allowed from the following final orders of the Regional Trial Court: a. Granting or denying an interim measure of protection; b. Denying a petition for appointment of an arbitrator; c. Denying a petition for assistance in taking evidence; d. Enjoining or refusing to enjoin a person from divulging confidential information; e. Confirming, vacating or correcting/modifying a domestic arbitral award; f. Setting aside an international commercial arbitration award; g. Dismissing the petition to set aside an international commercial arbitration award even if the court does not decide to recognize or enforce such award; h. Recognizing and/or enforcing an international commercial arbitration award; i. Dismissing a petition to enforce an international commercial arbitration award; j. Recognizing and/or enforcing a foreign arbitral award; k. Refusing recognition and/or enforcement of a foreign arbitral award; l. Granting or dismissing a petition to enforce a deposited mediated settlement agreement; and m. Reversing the ruling of the arbitral tribunal upholding its jurisdiction.

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Rule 19.26. Certiorari to the Court of Appeals. - When the Regional Trial Court, in making a ruling under the Special ADR Rules, has acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law, a party may file a special civil action for certiorari to annul or set aside a ruling of the Regional Trial Court. A special civil action for certiorari may be filed against the following orders of the court. SPECIAL CIVIL ACTION FOR CERTIORARI a. Holding that the arbitration agreement is inexistent, invalid or unenforceable; b. Reversing the arbitral tribunal’s preliminary determination upholding its jurisdiction; c. Denying the request to refer the dispute to arbitration; d. Granting or refusing an interim relief; e. Denying a petition for the appointment of an arbitrator; f. Confirming, vacating or correcting a domestic arbitral award; g. Suspending the proceedings to set aside an international commercial arbitral award and referring the case back to the arbitral tribunal; h. Allowing a party to enforce an international commercial arbitral award pending appeal; i. Adjourning or deferring a ruling on whether to set aside, recognize and or enforce an international commercial arbitral award; j. Allowing a party to enforce a foreign arbitral award pending appeal; and k. Denying a petition for assistance in taking evidence. A tribunal’s preliminary determination that it has jurisdiction is not intended to give the court ruling the finality which the principle of res judicata gives to final and executory judgments of a court. Rule 3.11. Relief against court action. - Where there is a prima facie determination upholding the arbitration agreement.-A prima facie determination by the court upholding the existence, validity or enforceability of an arbitration agreement shall not be subject to a motion for reconsideration, appeal or certiorari. Such prima facie determination will not, however, prejudice the right of any party to raise the issue of the existence, validity and enforceability of the arbitration agreement before the arbitral tribunal or the court in an action to vacate or set aside the arbitral award. In the latter case, the court’s review of the arbitral tribunal’s ruling upholding the existence, validity or enforceability of the arbitration agreement shall no longer be limited to a mere prima facie determination of such issue or issues as prescribed in this Rule, but shall be a full

ADR|JD2|MW|7:30-8:30 University of the Cordilleras| S.Y 2018-2019

JURISDICTION OF ARBITRAL TRIBUNAL Mappang, Joy Francine| Menorca, Adrianne Shane M.

16

review of such issue or issues with due regard, however, to the standard for review for arbitral awards prescribed in these Special ADR Rules. But when the RTC reverses the arbitral tribunal and declares that, contrary to its findings, it has no jurisdiction over the dispute, that aggrieved party is allowed to appeal to the Court of Appeals in the form of a petition for review.

ADR|JD2|MW|7:30-8:30 University of the Cordilleras| S.Y 2018-2019