adr - palacios ebook

7/29/2019 Adr - Palacios eBook

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Transcribers:

Marc Roby de Chavez (MARX)Marc Roby de Chavez (MARX)Marc Roby de Chavez (MARX)Marc Roby de Chavez (MARX)

Professor: Atty. Albert R. Palacios


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ALTERNATIVE DISPUTE RESOLUTION reviewer by MARX

1

ADR2

A and B entered into a contract were it was stipulated that in

the event of a dispute arising in that contract they are going

to refer the case to the RTC in manila, will that document be a

subject of an ADR?

No

So, if they stipulate that it can be solve by the RTC of Manila

thru an ADR, will it be alright?

No, because the dispute covered by the ADR is to be

resolve by an impartial 3rd

party who is not a judge

and such 3rd

party is not an agent of the government

as well. So if it is the court that resolves the dispute,

such resolution is excluded in the ADR.

Does the constitution favor that the parties can go an ADR

among themselves? What does the Constitution provides?

Art XIII, Sec. 3 par. 3 of the Constitution provides

that The State shall promote the principle of sharedresponsibility between workers and employers and

the preferential use of voluntary modes in settling

disputes, including conciliation, and shall enforce

their mutual compliance therewith to foster

industrial peace.

The employers and employees are encouraged to go ADR

under the Constitution for the purpose of obtaining industrial

peace.

How about in the Civil Code, what does Article 1306 provides?

Does it encourage the parties to go to ADR?

What can the parties provide? Can they have a clause or

provision?

The Civil Code provides as well that the parties may

provide clauses or provisions in their contract to

encourage to come into an outside settlement of

their dispute for as long as it is not against the law.

Who are these parties referred to under the Civil Code?

Debtor-creditor in the event of an obligation

Obligor-obligee in the event of a contract

Under the ADR, who is supposed to provide the services of anADR?

ADR provider

Who are the people who are supposed to practice them?

ADR practitioners

How would we consider a party who is designated as an ADR

provider? Is it an ordinary person who provide an ADR service

or there is an appointment of that person? Who is an ADR

provider? What is the distinction between an ADR provider

and ADR practitioner?

ADR providers are institutions accredited by the

government to provide ADR services for an ADR. Like

in QC.

Are the practitioners a part of the providers? Are there

practitioners who were provided by ADR providers?The parties or the institution themselves may

provide the practitioners.

If there is an institution that provides ADR, can the parties go

there and obtain a settlement?

Yes

Once they obtain a settlement, what can the parties do to

complement the functions of the provider? Can they

recommend for accreditation their own arbitrators?

Yes, they can recommend for accreditation thei

own arbitrators

Thru what means is an ADR implements?

Arbitration Mediation/Conciliation Mini-trial Early Neutral Valuation

Who determines the use of these particular means when the

parties decide to go to an alternative dispute resolution?

The parties can implement the kind of dispute

resolution that they would like to avail of.

If they have elected, let say arbitration, is it necessary for the

parties to agree to the arbitrator that will be the one to

resolve the dispute?

Yes

What is the most important ingredient of the kind of

availment of the means of arbitration?

Agreement of parties

Can there be an appointment of arbitrator or conciliator of

the parties having disagreed to it?

None

Can the court come in to appoint an arbitrator or conciliator?

No

As a rule, who creates an appointment of arbitrators and

conciliators?

The parties, the consent of the parties are of primary

importance when it comes to arbitration or

conciliation, because without such consent, the

parties are not bound by the acts of an arbitrator or


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conciliator, neither will the court respect if the

parties did not elect thru their consent the

appointment of arbitrators or conciliators.

Parties A and B are heirs of X, they agreed in their contract

that both of them shall have equal division of the properties

that they will inherit from X. after they have signed the

contract, B refuses to respect that contract because he arguethat he should receive more than A. As a consequence of a

dispute the parties went to arbitration or conciliation. Is that

possible?

No, because section 6 provides Exceptions to the

Application of ADR. Future legitime cannot be a

subject of ADR despite the fact the parties agreed.

What are the other exceptions?

a) labor disputes covered by the Labor Codeb) the civil status of persons;c) the validity of a marriage;d)

any ground for legal separation;

e) the jurisdiction of courts;f) future legitime;g) criminal liability; andh) Those which by law cannot be compromised.

What is the difference between Arbitration and Mediation?

Arbitration means a voluntary dispute resolution

process in which one or more arbitrators, appointed

in accordance with the agreement of the parties, or

rules promulgated pursuant to this Act, resolve a

dispute by rendering an award

Mediation means a voluntary process in which a

mediator, selected by the disputing parties,facilitates communication and negotiation, and

assist the parties in reaching a voluntary agreement

regarding a dispute.

In mediation/conciliation the third person merely

facilitate and assist the disputing parties to

communicate and negotiate. The

mediator/conciliator merely brings the parties

together to come to an agreement while in

Arbitration, the arbitrator acts as a judge where he

can receive evidence and render an award.

If the parties elected to go to arbitration, how manyarbitrators they opt to have?

One or more

If the parties elected to go to mediation, how many mediators

they opt to have?

Only one

Is there a possibility that whatever settlement there is

between the parties in mediation/conciliation an award

would come out?

Yes, the parties may agree in the settlement

agreement that the mediator shall become a sole

arbitrator for the dispute and shall treat the

settlement agreement as an arbitral award which

shall be subject to enforcement under ArbitrationLaw. A mediator cannot render an award but the

parties may agree that they shall treat the

settlement agreement as an arbitral award.

In mediation, after the parties reached to an

agreement, agree now that their settlement

agreement be considered as an award.

What is the advantage of converting a settlement agreemen

to an award?

If there was a conversion, such converted award wil

be a subject of execution, because a settlement

agreement cannot be enforced unless it wasconverted to an award and become a subject for

execution.

If there is an award as a consequence of the agreement of the

parties in making their settlement agreement into an award

if one party do not agree to enforce the award, the other

party may go to court and file a petition for execution of the

award.

The mediator will advise the parties to convert the settlement

agreement to an award

There is a court proceeding between A and B, the issue inthat particular case is an accounting of claim of A to B, the

accounting will depend on the ___ of what is determined

from a volume of accounting records, can the court direct the

parties to go to an ADR, in order to determine whether tha

the particular claim of A is true with respect to the true

amount that A owe to B?

Yes, if the court is having difficulty in determining

the actual amount which A owes B and that wil

mean accounting, it is called "Court-Annexed

Mediation".

When can a court do that (Court-Annexed Mediation)?Once it has obtain jurisdiction over the case and of

the parties, then the court can direct the parties to

go to mediation to an annex court

Who is going to be the mediator in that situation?

Judge of an annex court

Can a judge be a mediator in that case?

Yes, as long as the judge is not the same judge to

which the case was first filed and the court in which


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the judge sits belongs in the same category or of

equal level

Let say there are 2 RTCs, one is the court where the complaint

is filed, can this court now direct the order court to conduct

mediation?

Yes, provided that the annex court belong in the

same category

Purpose of a court-annex mediation (to unclog the docket of

the court)

To shorten the proceedings To help in the evaluation of elements To bring the parties to settlement

A and B enter into an agreement that in the event of a

dispute they will resolve it thru arbitration. There was a

breach of obligation in that contract, and A now, filed an

action in court against B, during the hearing B did not present

the document containing the agreement that they will go toarbitration, and in the course of the proceeding the court

found out the existence of an arbitration clause in the

agreement, what will the court do if it knew the existence of

that agreement?

The court will suspend the proceedings And direct the parties to go to ADR on the basis of

their contract or agreement

After the ADR proceedings, and rendering an award,the arbitrator will refer the award to the court for

the parties to comply

Such situation is called Court-Referred Mediation

Court-Referred Mediation means mediation ordered by a

court to be conducted in accordance with the Agreement of

the Parties when as action is prematurely commenced in

violation of such agreement

The court accepts the case, the court may not be aware of

the fact that the parties had previously agreed to go to

mediation, in the course of the hearing, the court discovered

that there is a arbitration clause in the agreement by the

parties, the court can refer the parties to arbitration with the

consent of such parties pursuant to their agreement.

During the court-referred mediation/arbitration, the parties

presented their evidence to the arbitrator and as a

consequence of the presentation of that evidence, there is an

award. After the award was rendered and such award was

referred to the court, one of the parties questioned the

validity of the award. Can the party asked the court to allow

him to present additional evidence apart from the evidence

they have presented?

Yes, because the court has still jurisdiction, if court

found out that there was irregularity in the rendition

of the award, the court may allow the party-

applicant to present evidences apart from the

previous evidences presented.

In a separate case that existed between A and B, who has a

case in that court that directed them to go to arbitration

they needed evidence as well in that separate case involving

other issues, can any of these parties serve a request fordiscovery (mode of discovery)? Can anyone of the parties file

a petition to take deposition of any of the parties with respec

to the testimony they have given before the arbitrator/during

arbitration proceedings

No, they are considered confidential

How about the records presented by the parties as

documentary exhibits in that arbitration?

It is included as confidential

How about the pleadings?

It is included as confidential

Those testimonies, records and pleadings in the arbitration

proceedings cannot be used in a separate proceeding

Is there an exception?

Yes, if the parties agreed to waive the confidentiality

of the evidence presented.

Who are the parties that will agree?

The disputing parties, the non-participating party in

connection of the information is provided by such

nonparty participant.

SEC. 11. Exceptions to Privilege. -

(a) There is no privilege against disclosure under Section9 if mediation communication is:

(1) in an agreement evidenced by a recordauthenticated by all parties to the

agreement;

(2) available to the public or that is madeduring a session of a mediation which is

open, or is required by law to be open, to

the public;

(3)

a threat or statement of a plan to inflictbodily injury or commit a crime of violence;

(4) internationally used to plan a crimeattempt to commit, or commit a crime, or

conceal an ongoing crime or crimina

activity;

(5) sought or offered to prove or disproveabuse, neglect, abandonment, or

exploitation in a proceeding in which a

public agency is protecting the interest of

an individual protected by law; but this


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exception does not apply where a child

protection matter is referred to mediation

by a court or a public agency participates in

the child protection mediation;

(6) sought or offered to prove or disprove aclaim or complaint of professional

misconduct or malpractice filed against

mediator in a proceeding; or(7) sought or offered to prove or disprove a

claim of complaint of professional

misconduct of malpractice filed against a

party, nonparty participant, or

representative of a party based on conduct

occurring during a mediation.

(b) There is no privilege under Section 9 if a court oradministrative agency, finds, after a hearing in

camera, that the party seeking discovery of the

proponent of the evidence has shown that the

evidence is not otherwise available, that there is aneed for the evidence that substantially outweighs

the interest in protecting confidentiality, and the

mediation communication is sought or offered in:

(1) a court proceeding involving a crime orfelony; or

(2) a proceeding to prove a claim or defensethat under the law is sufficient to reform or

avoid a liability on a contract arising out of

the mediation.

(c) A mediator may not be compelled to provideevidence of a mediation communication or testify insuch proceeding.

(d) If a mediation communication is not privileged underan exception in subsection (a) or (b), only the

portion of the communication necessary for the

application of the exception for nondisclosure may

be admitted. The admission of particular evidence

for the limited purpose of an exception does not

render that evidence, or any other mediation

communication, admissible for any other purpose.

Suppose an information was given in a mediation by the non-

participating party (witness) who testified in that proceedingsdone in public, suppose there was an objection on the part of

the parties against the opening of the evidence the public but

the non-participating party waived that evidence and the

privilege of communication, is that proper waiver?

Yes, the evidence presented by the non-participating

party can be waived as evidence

Can the parties agree to appoint their own lawyer during the

mediation proceedings?

Yes, both of them can appoint

Is there any qualification for the participation of the lawyer

during the mediation or arbitration?

If there is no prohibition or limitation imposed by

the parties to the lawyers, the lawyers can act for

the interest of his client in the same way he would

act in a civil case.

If there is mediation, and the parties were persuaded by themediator to conclude and settle the case, who is going to

prepare the settlement agreement?

A settlement agreement following successfu

mediation shall be prepared by the parties with the

assistance of their respective counsel, if any, and by

the mediator.

What should be stated in that settlement?

The parties and their respective counsels, if any,

shall sign the settlement agreement. The mediator

shall certify that he/she explained the contents o

the settlement agreement to the parties in alanguage known to them.

Duty of the mediator/conciliator

To certify that he/she explained the contents of the

settlement agreement to the parties in a language

known to them.

ADR3

Is there a difference between early neutral evaluation and

mini-trial?

Early Neutral Evaluation means an ADR processwherein parties and their lawyers are brought

together early in a pre-trial phase to presentsummaries of their cases and receive a nonbinding

assessment by an experienced, neutral person, with

expertise in the subject in the substance of the

dispute

Mini-Trial means a structured dispute resolutionmethod in which the merits of a case are argued

before a panel comprising senior decision makers

with or without the presence of a neutral third

person after which the parties seek a negotiated

settlement

The difference lies is in ENE, there is a nonbindingassessment while in MT there is a negotiated settlement

The resolution in ENE is not binding upon parties.

What is the purpose of the nonbinding assessment?

A guide for the parties not to proceed anymore with

the case in court

In the case of Mini Trial, the resolution is binding upon parties

and it is enforceable upon them. Both parties requested and

the mini trial is conducted, then it may result to negotiated


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settlement. The parties will negotiate on the basis of advice

given to them or on the basis of the decision of the experts

In ENE, the resolution is merely an advice, the parties may

take such resolution or not, hence, not binding, in mini trial, it

is a decision and from that decision the parties are compelled

to go a mediated agreement, it will result in the termination

of the mediation, hence, binding.

The parties agreed in a settlement between them in writing,

that they will submit their dispute to a mediation, but they

have filed a case in court, then the court saw the agreement

of the parties, can the court motu propio direct the court for

mediation?

No, because the court has no basis in doing so. The

parties must invoke first the mediation agreement.

Failure to invoke such mediation agreement it will

deemed a waiver of such mediation agreement.

The parties can directly ask the court to direct them to go tomediation as they have agreed upon on or before the pre-

trial conference. With request of the parties, the court now is

justified in directing them to go to mediation or arbitration on

the basis of the request of the parties in their agreement. If

there is a waiver of such agreement, the parties jointly may

revive such agreement by requesting to the court to direct

them to mediation or arbitration. It is also known as Court-

Referred Mediation

Court-Referred Mediation means mediation ordered by a

court to be conducted in accordance with the Agreement of

the Parties when as action is prematurely commenced in

violation of such agreement;

The invocation of the mediation agreement must be done on

or before pre-trial conference, failure to timely invoke results

to a waiver, but such waiver may be revived during the pre-

trial.(Comment: in arbitration the parties may revive their agreement even after the pre-

trial provided that the parties jointly req uested for it, will it be applicable to mediation?)

The information that is gathered in mediation is confidential

and privilege, meaning to say it cannot be a subject of

disclosure.

What are the 2 modes of disclosure in this case? Discovery- Modes of Discovery

o Depositions either oral or writteno Request for admission

Presentation of records and testimoniesWho are the persons affected by this privilege?

(1) the parties to the dispute;(2) the mediator or mediators;(3) the counsel for the parties;(4) the nonparty participants;

(5) any persons hired or engaged in connection with themediation as secretary, stenographer, clerk or

assistant; and

(6) any other person who obtains or possessesconfidential information by reason of his/her

profession.

Suppose a lawyer of one of the mediating parties, whonegligently left his attach in a table which contains the

records of the case, such attach was taken by a hotel boy or

attendant, he opened such attach and learned a lot of things

from the records, then such attendant ask a journalist to

publish what he had known, is the attendant covered?

No, the disqualification provided for by law refers to

acquisition of the knowledge thru an exercise of one

profession in relation to mediation proceedings

Can the parties waived the confidentiality or the privilege

attach to the information acquired in mediation?

Yes.

Under what situation that they can waive the privilege?

If one party discloses such information to the court

Who can waived this confidentiality or privilege?

The parties in dispute Mediator Non-party participants

Suppose a lawyer of one of the parties who participated in the

mediation proceedings, submit to the court during the court

proceedings a documents or exhibit gathered in mediation

proceedings but there was a timely objection by the othe

party contending that it cannot be submitted because it is a

record coming from the mediation proceedings hence

confidential and privilege, is the court confined to sustain such

objection?

Yes

When is a document or exhibits be considered as a part of the

records that is affected by the confidentiality or privilege?

When there is no objection on the part of the other

party, which is deemed a waiver

If an evidence is acquired during mediation, and suchevidence will be made to apply to inflict injury to someone

else, is that evidence covered by the confidentiality?

No

If an evidence falls under the exceptions provided for by law

there is no need for timely objection. It automatically forms

part of the evidence or record and cannot be excluded by the

confidentiality


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(1) in an agreement evidenced by a recordauthenticated by all parties to the agreement;

(2) available to the public or that is made during asession of a mediation which is open, or is required

by law to be open, to the public;

(3) a threat or statement of a plan to inflict bodily injuryor commit a crime of violence;

(4) internationally used to plan a crime, attempt tocommit, or commit a crime, or conceal an ongoing

crime or criminal activity;

(5) sought or offered to prove or disprove abuse,neglect, abandonment, or exploitation in a

proceeding in which a public agency is protecting the

interest of an individual protected by law; but this

exception does not apply where a child protection

matter is referred to mediation by a court or a public

agency participates in the child protection

mediation;

(6) sought or offered to prove or disprove a claim orcomplaint of professional misconduct or malpracticefiled against mediator in a proceeding; or

(7) sought or offered to prove or disprove a claim ofcomplaint of professional misconduct of malpractice

filed against a party, nonparty participant, or

representative of a party based on conduct occurring

during a mediation.

There is an on-going mediation proceedings, as a

consequence of that proceedings, a party filed a case in court

which involve the same issue, same parties that is the subject

of mediation. Then the parties subpoenaed the mediator as a

witness to testify about the mediation proceedings, can the

mediator testify?No

Can the mediator voluntarily testify?

No, because such situation will violate the rules on

confidentiality

If a party has been prejudiced in that situation, the recourse

will be an objection as to the presentation of evidence that is

privilege

Suppose the court did not sustain the objection, and allow the

mediator to continue his testimony, what will be the partysrecourse?

The court may allow the party the right to respondand repudiate whatever testimony that was given by

the mediator (right to rebut or counter-testimony)

File an action for damagesSuppose in the course of giving of testimony of the mediator,

the adverse party objected, the objection was sustained, but

the other party objected to the act of sustaining the objection

of the other party on the ground that the mediator should be

allowed to continue because he does not understand what is

the consequence of that statement of the mediator which

was unfinished, if u were the judge, will u allow the mediator

to continue his testimony?

I will allow the continuation of the testimony for the

purpose of complete understanding of the

previously disclosed communication given by the

mediator.

The mediator cannot be subpoenaed to bring the records of

the mediation proceedings

The neither of the parties can be subpoenaed to bring the

records of the proceedings

The nonparty participants cannot be subpoenaed to bring

the records of the proceedings

The parties agreed to appoint a mediator, what should the

mediator suppose to do?

Before accepting a mediation, an individual who isrequested to serve as a mediator shall:

(1) make an inquiry that is reasonable under thecircumstances to determinate whether there

are any known facts that a reasonable individua

would consider likely to affect the impartiality of

the mediator, including a financial or persona

interest in the outcome of the mediation and

any existing or past relationship with a party o

foreseeable participant in the mediation; and

(2) disclosure to the mediation parties any such factknown or learned as soon as is practical before

accepting a mediation.

Suppose that the proposed mediator did not disclose any of

the matters that he is supposed to disclose, and as a

consequence of that, he was appointed as a mediator,

immediately the parties knew such failure to disclose in the

middle of the mediation proceedings, what can the party do?

The party can remove the mediator and substitute

another one

Failure of the party to remove the mediator means there is a

waiver

Can the parties ask the mediator to establish hisqualification?

At the request of a mediation party, an individua

who is requested to serve as mediator shall disclose

his/her qualifications to mediate a dispute.

Who should determine the qualifications of the mediator?

The parties on their agreement


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Suppose the mediation has been agreed upon by the parties

to settle their dispute by a mediator, what is the job of the

mediator in the proceedings?

To facilitate the communication and negotiation of

the parties

In the midst of mediation could the mediator be removing as

a consequence of his acts being impartial to one of theparties?

He can be removed

Supposing that even there is a ground of impartiality but the

parties continue the proceedings, can the parties remove the

mediator?

No, the parties deemed waived that ground of

impartiality

Where should be the place of mediation?

The parties are free to agree on the place of

mediation. Failing such agreement, the place ofmediation shall be any place convenient and

appropriate to all parties.

Who will prepare the mediation settlement?

A settlement agreement following successful

mediation shall be prepared by the parties with the

assistance of their respective counsel, if any, and by

the mediator.

Who should sign the mediation settlement?

The parties and their respective counsels, if any,

shall sign the settlement agreement.

What should the certification of the mediator contain?

The mediator shall certify that he/she explained the

contents of the settlement agreement to the parties

in a language known to them.

In the absence of certification, would there be a completed

mediation settlement?

None

Is the absence of the signature of the mediator in mediation

settlement invalidates such mediation settlement?

No, for as long as the parties signed the mediationsettlement.

What should the parties do with the mediation settlement?

If the parties so desire, they may deposit such

settlement agreement with the appropriate Clerk of

a Regional Trial Court of the place where one of the

parties resides. Where there is a need to enforce the

settlement agreement, a petition may be filed by

any of the parties with the same court, in which

case, the court shall proceed summarily to hear the

petition, in accordance with such rules of procedure

as may be promulgated by the Supreme Court.

ADR4

What will be the ground of the parties for the enforcement of

the mediation settlement?

Failure to comply with such mediation settlementwill give the right to the parties to go to court for the

enforcement of that mediation settlement.

DIFFERENCE BETWEEN ARBITRATION AND MEDIATION

Mediation Arbitration

Resolution Mediation settlement-

As a rule a mediator

cannot make an award

but the mediation

settlement can be anaward provided that it

is reduced into writing

signed by the parties

and their counsel and

the mediator. Such

mediation agreement

can be an award when

there is a failure of the

parties to comply with

the mediation

settlement. Such

failure to comply with

such mediation

settlement will give the

right to the parties to

go to court for the

enforcement of that

mediation settlement.

Arbitral award

Appointment

of ADR

practioners

Appointed by the

parties

Appointed by the

parties, when the

situation falls to

an agreement that

only one

arbitrator to settletheir dispute, but

in case where the

parties agrees to

appoint each

arbitrator of thei

own choice, then

the 2 appointed

arbitrator wil

appoint he 3r

arbitrator


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Number of

ADR

practitioners

Only 1 1 or more,

normally the

maximum is 3

arbitrators

Intervention

of the court

There is no need for

the affirmation of the

court

The court has to

affirm the arbitral

award

Elements of Arbitration

The parties have mutually agreed to submit theirdispute to selected persons whose determination is

to be accepted as a substitute for the judgment of a

court

There is an actual dispute or matter in controversy The dispute or matter in controversy is capable of

being referred to arbitration

The parties agreed to go to arbitration in their contract in the

event that a dispute would arise between them, there is that

particular clause in the agreement of the parties to go toarbitration, what do u call that clause?

Arbitration Clause

Upon the rise of the dispute the arbitration clause becomes

enforceable. The parties can invoke the arbitration clause

upon the existence of the dispute arising from their contract.

Suppose there a dispute already between the parties, and

they agreed to go to arbitration, is there a need for them to

draft contract an arbitration clause so that they can go to

arbitration?

No need, the parties may submit to the arbitration

of one or more arbitrators any controversy existing

between them at the time of the submission and

which may be the subject of an action. It is called

submission agreement

Submission agreement is when the parties immediately

submit in writing their dispute to arbitration that particular

issue between them had arisen already.

Arbitration clause refers to future controversies arising from

the contract they executed.

A contract to arbitrate a controversy thereafter arisingbetween the parties, as well as a submission to arbitrate an

existing controversy shall be in writing and subscribed by the

party sought to be charged, or by his lawful agent.

What should have the particular character that has arisen

between parties?

It must an actual controversy between the parties

arising from a previous contract or relation between

them.

Suppose A and B executed a contract, wherein B admitted

that he owes A 5000php, there is a failure to pay A. A would

want to go to arbitration on the basis of that agreemen

where B admitted that that latter owes the former. Could tha

be a subject of arbitration?

No, because there was no actual controversy, there

are no conflicting claims between the parties

In that case, B denies that he owes A, is that a subject of

arbitration?

Yes, because there is now a conflicting sides

What are the disputes that cannot be arbitrated?

(a) labor disputes Labor Code(b) the civil status of persons;(c) the validity of a marriage;(d) any ground for legal separation;(e) the jurisdiction of courts;(f) future legitime;(g)

criminal liability; and

(h) those which by law cannot be compromised.The elements required in arbitration are also required in

mediation but the difference lies in their procedure.

A and B agreed to go to arbitration, and they have tha

arbitration clause in their contract. Under the arbitration

clause, it was stipulated that they will settle their dispute only

thru arbitration and nothing else. Is that a valid stipulation?

No, such stipulation that the dispute will be resolve

thru arbitration only is against public policy. Such

stipulation will deprive the court to inquire in such

issue on questions of law arising from the questionsof facts.

Wahl vs Donaldon

Facts: Wahl and Donald Sims Co. entered in a lease contract

whereby Wahl leased to Donaldon, Sins Co. a certain ship for

the term of six months, under which contract the Wah

claimed that Donaldon Sims Co. were indebted to them a

balance of a certain sum in money.

Suit was instituted but the defendants failed to

answer the complaint. A judgment was rendered by default

against the defendants in favor of the plaintiffs.The defendants made an application to the Court of

First Instance for a new trial. Motion for a new trial was

granted by the Court of First Instance, and the judgment by

default against the defendants was set aside. After the

granting of the motion for a new trial a demurrer was made

by the defendants to the complaint which presented the

question of the competency of the Court of First Instance to

try the case. The objection was based upon the grounds that

there was a provision contained in the contract that should

arise any difference of opinion between the parties to the


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contract, whether it may be with reference to the principal

matter or in any detail, this difference shall be referred for

arbitration.

Issue: whether a provision of this character is invalid as being

against public policy.

Held: where there is a stipulation that all matters in disputeare to be referred to arbitrators and to them alone, such

stipulation is contrary to public policy because it is attempted

to prevent any right of action accruing at all.

Agreements to refer matters in dispute to arbitration

alone have been regarded generally as attempts to oust the

jurisdiction of the court, and are not enforced.

We reach the conclusion that the Court of First

Instance should have entertained jurisdiction in this case,

notwithstanding the clause providing for arbitration above

referred to.

The application of the defendants, upon which thejudgment was set aside, appears to be defective and not

sufficient to have justified the setting aside of the judgment

by default.

After the application to set aside the judgment had

been granted, instead of presenting this defense, a demurrer

is presented to the petition, based upon the purely technical

grounds that under the contract the parties had agreed to

settle the matters in dispute by arbitration at Hongkong. If

the answer had been prepared by the defendants and

presented to the Court of First Instance at the time of the

granting of the order, the Court of First Instance must have

concluded that the defense was based upon a technicality

and the application must have been overruled. But, as statedbefore, this view is not concurred in by the majority of the

court.

Chang vs Royal Exchange

Facts: Chang insured his property against fire to Royal

Exchange. The property insured was destroyed by fire. Chang

notified the agent of the Assurance Company of the loss but

the company informed Chang that the proof was insufficient.

A number of interviews about the loss but still the Company

refused to pay the loss and it didnt gave any indication as to

what other proofs should be furnished. On one of theinterview, it offered to settle a claim for an amount of 3k but

such offer was refused. In the final interview the agent of the

company that it cannot go on to the case anymore which led

to the plaintiff to commenced an action without seeking to

arbitration. The assurance company requested in writing to

settle the case thru arbitration in accordance with the terms

and conditions.

The arbitration in the contract says that: in case of

disagreement arising between the corporation and the

assured (unless the corporation shall deny liability by reason

of fraud or breach of any of the conditions or because the

claimant has by some other means waived his rights under

the policy) shall be referred to arbitration of some person to

be selected by agreement of both parties.

Issue: whether there has been such waiver of arbitration or

not

Held: the plaintiffs were fully justified in bringing the action

at once, without seeking any arbitration because the

assurance company had waived the arbitration when the

agent of the assured company said on its final interview that

it could go no further with the case. It was a sufficient

evidence to show that it did not intend to pay.

The mere silence of the company would not amount

to a waiver of its right to insist upon the condition of

arbitration but when it placed its determination upon the

grounds stated in the correspondence, which were such as

could not be submitted to arbitration under the provisions of

the policy, it must be held to have waived the conditionrequiring arbitration and especially is this so where the

assured would be misled to their prejudice into bringing suit

upon the policy without first having obtained an award.

Chan Linte vs Law Union

Facts: Chan Linte insured 30,992.5 kilos of hemp against fire

to Law Union. The property insured was destroyed by fire

Chan Linte notified Law Union about he loss but the

insurance company refused to pay Chan linte which led to a

commencement of an action against the insurance company.

insurance company requested that its liability should be

submitted to arbitration, in accord with the provisions of the

policy, and that " Chan Linte acceded to the requirement

made by said defendant as aforesaid, but not that the award

of arbitration should be conclusive or final, or deprive the

courts of jurisdiction, and by agreement of both Chan Linte

and Law Union Frank B. Ingersoll was named sole arbitrator

and both parties informally presented evidence before him

and he made return of arbitration to the effect that said Chan

Linte had only seven bales of hemp destroyed in the fire o

April 10, 1918, as hereinbefore set forth, with which return

the said plaintiff is dissatisfied, and comes to this court for

proper action.

Law Union in its answer alleges that claiming a loss under thepolicy, the plaintiff made a claim against the defendant for

P5,000, that a difference arose between them as to the

amount of the alleged loss, and that, under the terms of the

policy, an arbitrator was agreed upon and selected by the

mutual consent of both parties, for the purpose of deciding

the alleged difference; that on December 28, 1918, the

arbitrator found that only seven bales of hemp of the grade

"ovillo" were destroyed. In its supplemental answer, it alleges

that on July 8, 1919, the arbitrator filed a supplementa

report and award wherein he finds from the evidence


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submitted that the local value of the seven bales of plaintiff's

hemp destroyed by fire on April 10, 1918, was P608.34; that

in addition to the defendant's policy, the same property was

covered by two other fire insurance polices, by each of which

the property in question was insured to the value of P5,000

against the loss; that defendant has offered and is now willing

to pay plaintiff its one-third of the loss in full satisfaction of its

liability. The other insurance companies are Tokyo MarineInsurance Co., Ltd., and the Chine Fire Insurance Co., Ltd.,

The trial court rendered a decision in favor of the Insurance

companies that any liability arising out of the fire should be

borne by the defendants in equal parts; that each of them has

offered in writing to pay the plaintiff its one-third of the

amount of the plaintiff's loss, as ascertained by the arbitrator.

In this case, The plaintiff contends; First, that the arbitration

clauses are null and void as against public policy; second, that

the award of the arbitrator of December 28, 1918, without

finding the value of the property destroyed, was final, and

that on July 8, 1919, he had no authority to make a

supplemental finding as to the value of the property; and,third, that upon the evidence the court should have found for

the plaintiff.

Issue:

Whether the award of the arbitrator of December 28, 1918,

without finding the value of the property destroyed, was final

Whether he had no authority to make a supplemental finding

as to the value of the property

Held: Hence the award on the question submitted was not

complete or final. In the finding of the actual value of the

hemp, there was no change or revision of any previousfinding. It was simply the completion by the arbitrator of an

unfinished work. No formal notice was served on the

arbitrator, and he was not removed or discharged, and until

such time as his duties were fully performed, or he was

discharged, he would have the legal right to complete his

award. The plaintiff, having agreed to arbitration after the

action was commenced and submitted his proof to the

arbitrator, in the absence of fraud or mistake, is estopped

and bound by the award. Where a plaintiff has commenced

an action to recover upon an insurance policy, and then

voluntarily submits the amount of his loss to arbitration, he

cannot ignore or nullify the award and treat it as void uponthe ground that he is dissatisfied with the decision.

Freedom to contract for arbitration to this extent, imports no

invasion of the province of the courts, and there is no ground

upon which a right so essential to the convenient transaction

of modern business affairs can be denied," nor is such

agreement objectionable as being against public policy. In

order to give effect to such an agreement it must of course

appear that the matter proposed to be referred is a

difference, within the meaning of the agreement.

Discussion: there is nothing wrong when the parties go first

to arbitration (condition precedent) before the can go to

court. The SC recognizes the right of the parties to obtain an

arbitral award before enforcing it to court in the event that if

one of the parties failed to respect the arbitral award

Arbitration is considered as a mode of settling a dispute.

What are the advantages of going to an ADR?

Convenience Less expensive The ADR practioners are experts in technical matte

as compare to judges of court who have less

knowledge in the technical know-how to resolve

economic and technical issues

There is privacy in settling the dispute as compare togoing to court whereby it is open to the public

In ADR, it prevents rupture of relationship betweenparties as compare to courts where the environment

of having lawyers and judges tends to rupture therelationship between parties

In ADR, such proceedings are not bound by the strict Rules o

Court specifically exclusionary rules of evidence. The basis o

the resolution or judgment provided by the ADR practioners

is on the ground of equity, fairness and justice.

Suppose the ADR practitioners committed a serious legal error

in his judgment, what is the remedy of the parties?

The parties are allowed to appeal in cases of lega

errors submitted by the ADR practitioner

When we speak of commercial arbitration, what particular

aspect are we referring?

An arbitration is "commercial" if it covers matters

arising from all relationships of a commercial nature

whether contractual or not.

If a business transaction dispute was submitted to arbitration

there will economic consequences

Relationships of a transactions extends to:

any trade transaction for the supply or exchange ogoods or services;

distribution agreements; construction of works; commercial representation or agency; factoring; leasing, consulting; engineering; licensing; investment; financing; banking;


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insurance; joint venture other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or

road.

What law will govern in cases of International Commercial

Arbitration?

Model Law on International Commercial Arbitration

(the "Model Law") adopted by the United Nations

Commission on International Trade Law

What law will govern in Domestic Arbitration?

Republic Act 876

If there is deficiency in Republic Act 876, such deficiency may

be referred to the Model law

In international arbitration conducted in the Philippines, a

party may be represented by any person of his choice.

Provided, that such representative, unless admitted to thepractice of law in the Philippines, shall not be authorized to

appear as counsel in any Philippine court, or any other quasi-

judicial body whether or not such appearance is in relation to

the arbitration in which he appears.

ADR5

A and B entered into an agreement to have their dispute

arbitrated and they agreed that all their arbitrators are going

to come from abroad. All arbitrators, that the venue agreed is

in the Philippines. Each of them selected 1 arbitrator each and

the 2 selected arbitrators selected another foreign arbitrator.

In the course of the arbitration, the parties also obtain

lawyers from abroad to represent them. Can those lawyers

appear in the arbitration proceedings in representation of the

parties?

Yes

Can they (foreign Lawyers) present evidence? Can they submit

arguments in arbitration?

They can only represent but not appear as counsel.

They can only represent but they cannot act as a

lawyer because the nature of arbitration

proceedings is a quasi-judicial body. Foreign lawyers

who are not member of the Philippine Bar are not

allowed to appear.

Suppose during the presentation of evidence, the lawyers

participated and no one objects, are their acts considered

legitimate?

If there are no timely objections they are allowed to

appear because there is a waiver of that objection.

If the parties agreed to appoint foreign arbitrators who are

lawyers at the same time and not members of the Philippine

Bar, can those lawyers-arbitrators appear in arbitration

proceedings who are lawyers but not member of the

Philippine Bar?

Yes, there is no prohibition, because they are not

acting as lawyers they are acting as arbitrators. A

foreign arbitrator is allowed in our arbitration

proceedings, foreign arbitrators are allowed, but

they cannot act as lawyers.

The timely objection must be raised when a foreigne

appearing as a lawyer in an arbitration proceeding or in any

quasi-judicial hearing as well as judicial hearing. The reason

why they are allowed to continue acting as lawyers even not

a member of a Philippine Bar if there is no timely objection is

because of the waiver of that ground.

Failure to object on the ground that he is disqualified to act

as a lawyer not being a member of the Philippine Ba

behooves that ground to object and that justifies his

appearance in court.

But it is different to arbitrators, even if they are lawyers o

foreign ancestry and not being a member of the Philippine

Bar because arbitrators are not acting as lawyers, they act as

judges in a quasi-judicial proceeding.

Are information in the arbitration confidential?

Yes, they are confidential

What matters are covered by these confidential matters

during arbitrations?

records, evidence presented and the arbitral award

Can they be waived?Yes, with the consent of the parties, or for the

limited purpose of disclosing to the court of relevant

documents in cases where resort to the court is

allowed herein.

How can the parties consent?

If there is no objections in the disclosure or by

express consent of the parties during the hearing

Who can give their express consent?

The parties themselves Arbitrators Non-participating party witnesses

How about the witnesses in the arbitration proceedings?

Suppose the parties presented evidence, the parties did not

object to the confidentiality, can the witnesses object?

Yes, because the witnesses are the party themselves

The law does not distinguish.


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In the course of presentation of evidence in arbitration

proceedings, what measure can the parties take to protect

the confidentiality of the records, evidence or the

proceedings?

Filing a petition or a motion for securing a protective

order from the court

Is the other party entitled to a notice of such petition ormotion?

Yes

Which court?

Regional Trial Court on the place where the parties

resides

If the one of the parties resides in Bicol and the other one

resides in Metro Manila, which of the 2 RTCs have jurisdiction

over that arbitration, what is the determining factor?

The deposit of the arbitration agreement confirms

the jurisdiction of the court. The clerk of courtreceives the deposit and the parties confirm the

jurisdiction of that court.

The signing of the Arbitration agreement or submission to

arbitration in the place signifies the parties acceptance of the

jurisdiction of the court. The parties confirm that they accept

the jurisdiction by the deposit it to the clerk of court.

The significant acts of the parties acknowledging the

jurisdiction of the court:

Where the parties reside The depositing to the clerk of court

For instance, one party resides in metro manila and other

party resides in Bulacan, we determine now which of the

court does the agreement was deposited by the parties, was

it deposited in the RTC of bulacan or was it deposited in the

RTC of metro manila where one of the parties reside. If that is

done, that will confer the jurisdiction of the arbitral tribunal

and that confers also the jurisdiction of the court. The

election of the deposit of the arbitration let say in RTC of

Metro Manila excludes the jurisdiction now of the RTC in

Bulacan because RTC of Manila acquired first the jurisdiction

over the arbitration agreement. So the deposit of the

agreement to the clerk of court in a particular RTC where one

of the party resides determines which court that will acquirejurisdiction over the arbitration proceedings.

A party filed an application to the court having jurisdiction

over the arbitration for an interim order of protection, what

kind of protection does the court will provide on matters that

are mention in the proceedings or the evidence when it

concerns technical matters like medical formula which are

trade secrets of the parties?

An order prohibiting disclosure of what is contained

in those documents.

Suppose the testimonies that is presented before the judge

who is covered by the ___ agreement is necessary to resolve a

dispute in that court proceedings, can the court utilized that

information?

Yes, for the limited purpose of disclosing to the court

of relevant documents in cases where resort to the

court is allowed. In that particular case, the court

can issue an order for the production of certaindocuments that will provide the non-disclosure of

the consent of the parties except for the court to

know the relevance of the contents of the

documents to the issue in the case.

What is the difference between arbitration clause and

submission to arbitration?

Arbitration clause- future dispute that will arise fromtheir particular relation

Submission to arbitration- present disputeSuppose A and B executed a document to settle their futuredisputes thru an arbitration agreement/clause, A disregard

the arbitration clause and filed a case against B, during the

presentation of evidence, the court then saw the arbitration

clause and ordered the parties to submit themselves to

arbitration, is the court correct?

No, the parties must invoke first the arbitration

clause

What should be the motion to be submitted in court?

Motion to suspend the court proceedings then the

court will direct the parties to go to arbitration

At what stage that motion be raised?

if at least one party so requests not later that thepre-trial conference

upon the request of both parties thereafter, in otherwords even after the pre-trial conference both

parties can go and ask the court to direct them to go

to arbitration because of the arbitration clause

If none of the parties invoke that arbitration clause, can the

court directly order them to go to arbitration?

No, because it is deemed waived. The consent to

arbitration is deemed waived.

If the court did waive without the consent of the parties, can

the parties object to the order of the court that direct them to

arbitration?

Yes, because the parties did not give their consent to

go to arbitration, the court is bound by that.


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What if the court said regardless of your consent, this court

direct the parties now to go to arbitration pursuant to the

arbitration clause is there an abuse of discretion?

Yes, there is abuse of discretion. The parties can

object because arbitration is based on the express

consent of the parties. There is already a waiver of

that particular clause.

How about in submission to arbitration, is there a need for the

parties to expressly raise their consent that they should be

directed to go to arbitration?

No, because such submission to arbitration is their

express consent that they will submit themselves to

arbitration, there is no need for a movement or act

independently raised by the parties because the

document itself is their consent to arbitration.

How should the ADR act be interpreted?

In interpreting the Act, the court shall have due

regard to the policy of the law in favor of arbitration.In other words, the court should favor arbitration.

What are the 3 three grounds for which referral to arbitration

should not be permitted?

when the arbitration clause is:

null and void inoperative incapable of being performed

If an arbitration agreement is between a person of age and

the other who is a minor, is that arbitration operative?

Yes, provided that the minor is represented by his

legal guardian or guardian ad litem. Without such

guardian it will be inoperative.

When we speak of appointing authority under the ADR act,

what personality is referred here?

Natural persons and institutions. Appointing

Authority as used in the Model Law shall mean the

person or institution named in the arbitration

agreement as the appointing authority; or the

regular arbitration institution under whose rules the

arbitration is agreed to be conducted.

Institutions engaged in arbitration can appoint arbitratorswith the consent by the parties.

Natural persons who act as appointing authority are those

persons named by the parties as appointing authority in their

contract, they appoint arbitrators. In the absence of an

arbitrator or an arbitrator is disqualified, the appointing

authority appoints because the parties named as the

appointing authority in their contract.

What is the consequence when the arbitrator either de jure or

de facto did not perform his functions?

His mandates terminate/ his actions may be

withdrawn from the records or the parties may

request for his termination.

E.g when the de jure officer fails to perform his acts based to

the procedure in arbitration

De facto vs De jure

De facto- a person who took over the arbitrationproceedings as arbitrator without an express

consent of the parties. If without objection by the

parties, the actions of the de facto arbitrator will be

sustain but if the parties objected to it his action wil

be withdrawn.

De jure- one who is legally appointed by the partiesIf the parties did not agree to the actuation of a person acting

as arbitrator he is acting as de facto officer because theparties did not agree to his actuation and therefore the

parties has to object to his actuation and as a consequence

the de facto officer must be removed as arbitrator, but if the

parties did not object at the proper time then they agreed to

validate the result of the acts of that particular arbitrator.

A and B appointed each arbitrator ion accordance with thei

agreement and the 2 arbitrators appointed the third

arbitrator, when will be the arbitral tribunal be constituted?

The arbitral tribunal is deemed constituted when the

third arbitrator accepted the appointment with the

knowledge of the parties. The parties must receive

the acceptance by the third arbitrator, if not, the

arbitral tribunal is not deemed constituted.

Why is it necessary that the notice of acceptance is received

by the parties?

Because to give a chance to the parties to object to

the appointment of the 3rd

arbitrator. Failure to

received a copy of that acceptance will mean that

the arbitral tribunal is not yet deemed constituted.

In comparison to mediation or conciliation, is there a

necessity for the parties have a notice of acceptance by the

mediators or conciliators before mediation?None, because mediators facilitate the transfer o

communication and they do not render an award.

During the arbitration proceedings, one of the parties wanted

a court intervention to issue an interim measure of protection

Then the party must file an application, what must be allege

in the application?

Describing in appropriate detail the precise relief, The party against whom the relief is requested, The grounds for the relief,


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Evidence supporting the request.Upon application of A of an interim measure of protection,

the court order party B to prohibit the disclosure of certain

documents that has been presented during the arbitration

proceedings, what should party B do about the order of the

court? Is the party against whom the interim measure is

ordered be entitled to a copy of that order?

The party against whom the interim measure is

ordered is entitled to a copy of such order and the

party is expected to obey such order because it is

binding upon him. If he does not comply with the

order shall be liable for all damages resulting from

noncompliance, including all expenses, and

reasonable attorney's fees, paid in obtaining the

order's judicial enforcement.

The arbitral tribunal can issue an interim measure of

protection provided that it is within its jurisdiction.

If the arbitral tribunal has jurisdiction to a particular case with

respect to the purpose in which a requests for an interim

measure of protection sought by the parties then it can issue

such interim measure of protection.

If the arbitral tribunal is operated in Manila, it cannot issue an

interim measure of protection for a performance of an act

outside Metro Manila, because it is beyond its jurisdiction. So

the parties must go to court. But if it is within the jurisdiction

of the arbitral tribunal then the parties should go first to the

arbitral tribunal and receive that interim protection.

An interim protection issued by the arbitral tribunal may becorrected by the courts. If an arbitral tribunal issue an order

frustrating an act against party for which such interim

measure was issued, such party may present his objection in

a court which has jurisdiction in that arbitration proceedings.

In what form be the interim measure of protection be issued?

preliminary injunction directed against a party, appointment of receivers or detention, preservation of property, inspection of property that is the subject of the

dispute in arbitration

If the party against whom the interim measure of protection

is to be issued is not a party in an arbitration proceeding, who

is going to issue the interim measure?

The courts. If the matter to be restrained is with

respect to an act of a third party/ who is not a party

in an arbitration proceeding, the court will issue the

interim measure

If the party is one of the parties in arbitration who is going to

issue the interim measure?

The arbitral tribunal, because the arbitral tribuna

has jurisdiction over the parties.

Where should an arbitration proceeding be held?

The parties are free to agree on the place of

arbitration. Failing such agreement, the place oarbitration shall be in Metro Manila, unless the

arbitral tribunal, having regard to the circumstances

of the case, including the convenience of the parties

shall decide on a different place of arbitration.

Can the court set the place for arbitration?

Only in cases where there is no exercise of that

designation by the arbitrator

With respect to the place of arbitration, should it be within

the any of the parties resides or it could be in other place?

Place convenient to the parties no necessarily wherethe parties resides

May the arbitrators set a place apart from the place of

arbitration where they could discuss the issue in the

arbitration proceeding with respect to the witnesses, experts

etc?

The arbitral tribunal may, unless otherwise agreed

by the parties, meet at any place it considers

appropriate for consultation among its members, fo

hearing witnesses, experts, or the parties, or fo

inspection of goods, other property or documents.

What language should the parties adopt in the arbitrationproceedings?

The parties are free to agree on the language or

languages to be used in the arbitral proceedings

Failing such agreement, the language to be used

shall be English in international arbitration, and

English or Filipino for domestic arbitration, unless

the arbitral tribunal shall determine a different or

another language or languages to be used in the

proceedings. This agreement or determination

unless otherwise specified therein, shall apply to any

written statement by a party, any hearing and any

award, decision or other communication by thearbitral tribunal.

Can they adopt a language that is not known between the

two of them?

No

Can they adopt a language that is known by only one of the

parties?

No


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Must the language be known by the parties and arbitrators?

Yes, because it is required that the language should

be known by the parties and arbitrators.

ADR6

How do we choose an arbitrator?

It will depend on the nature of the dispute

E.G

If the dispute concerns interpretation of the contract

which is based in a legal issue, then the qualification

of an arbitrator who is required to be appointed is

that of a judge, because it involves interpretation of

the contracts, or a lawyer as the case may be

But if the issue involves technical matters like

construction or accounting of financial matters what

is required is an engineer or an architect or a CPA or

an account that matter.

So those are the measures in selecting the arbitrators, it willdepend on the nature of the dispute.

How are the arbitrators appointed?

Under the domestic law, the arbitrators are

appointed by the parties, first if the parties agreed to

submit a submission agreement. In which case the

parties have agreed that for a certain issue between

them, they have agreed to appoint a sole arbitrator

in that submission agreement or they have agreed

that each one of them will appoint an arbitrator, and

the 2 appointed arbitrator will elect the third

arbitrator.

If it is simply an agreement with an arbitration

clause, when the parties may agree later on when

the dispute arose, for the specific appointment of

arbitrator although they dont mention in that

arbitration clause, each of them will elect his own

arbitrator and the 3 elected arbitrators will elect the

third arbitrator.

In the absence of the parties appointment of an

arbitrator in either case, either in the arbitration

clause or submission agreement, then the parties

may ask the court to appoint an arbitrator.

When it is the court that is ask to appoint an arbitrator, the

qualification of an arbitrator depends on the discretion of

courts because it is the courts that is being asked by the

parties to appoint an arbitrator, and the court cannot be used

as an appointing power but it is given a discretion to select

the kind of arbitrator that is meant in that proceedings.

In arbitration, the arbitration proceeding is either conducted

thru the arbitrators appointed by the parties or appointed by

the court who are supposed to constitute the arbitra

tribunal. So arbitrators (3 arbitrators) duly appointed by the

parties by the court, they will constitute the arbitral tribunal

And that arbitral tribunal will conduct the arbitration and

render the award. The other process of conducting

arbitration is thru an institution which is what we call an

institutional arbitration. We have that now in our jurisdiction

under the ADR, we have institutional arbitration Section. Theparties may avail the services of the institutional arbitration

for a fee and the institution will provide the parties with the

arbitrator of their choices. Normally they have a list of

arbitrators who are qualified as arbitrators depending on the

nature of the controversy.

In foreign countries especially in the U.S., there are 2 kinds of

institutional arbitration commission

I.C.C.- International Chamber of Commerce A.A.A.- American Arbitration Association

So, if u are in the U.S. or possibly even the parties are in thePhilippines may agree to submit their arbitration either to the

I.C.C. or A.A.A.

The appointment of the ICC or AAA as the arbitra

institutional arbitration commission will depend on the

choice of the parties.

So if the parties agree to submit their dispute to any of these

institutional arbitration, the ICC or AAA will submit to the

parties a list of arbitrators for them to choose the arbitrators

of their choice.

The Rule under the ICC, the parties may each select their own

arbitrators of their choice from the list submitted by the ICC

and the 3rd

arbitrator is appointed by the ICC. The reason fo

the participation of the ICC in the appointment of the 3r

arbitrator is for the institution to be able to take control of

the proceedings.

In the case of AAA, they simply submit a list of arbitrators

that they will suggest and the arbitrators to arbitrate the

controversy between the 2 parties and the parties are given 7

days to select their own arbitrators. If they dont return the

list within 7 days, the parties are deemed to have accepted

the list of arbitrators noted in that particular list by the AAA.

The qualification of the arbitrator is not material in so far as

the ICC and AAA are concerned. The reason is that they take

it upon themselves the guaranty or warranty that the

arbitrators listed on their list are qualified and are impartial.

In our particular case, our domestic arbitration law prescribes

qualification for an arbitrator in our jurisdiction, some of

which require that he is of legal age, with full enjoyment o

their civil rights and they are able to read and write. They


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should not be related by marriage or blood in any of the

parties involve in the case or involve in arbitration within the

6 degree and those arbitrators should be free from any

fiduciary or financial interest in the controversy between the

2 parties and that is to prevent any partial act on the part of

the arbitrators. Such requirements are not required under

the AAA or ICC.

The citizenship is not a requirement. The arbitrator need not

be a Filipino; it is upon the choice of the parties. But it that

arbitrator is a foreigner or even a foreigner who is a lawyer,

that particular foreign lawyers may act as an arbitrator

without necessarily prohibited under our present law that he

cannot act as a counsel in a judicial or quasi-judicial

proceedings because the role of an arbitrator is not the role

of the lawyers who appear and protect the interest of the a

party in an arbitration proceedings. But even in arbitration

appoints an arbitrator who is a lawyer it does not matter at

all, because he is deemed to act as an arbitrator not as a

lawyer of any of the parties.

How is a party supposed to determine a good arbitrator in our

jurisdiction? Guideline on how to elect/select their own

arbitrator. There are 3 particular aspects/measure.

That arbitrator must be one that is persuasive.During arbitration proceedings that the cause of the

party to have elected the arbitrator, should be able

to receive a favorable consideration at the end of

the arbitration proceedings. He should be persuasive

in his acts, arguments. So if the arbitrator elected by

the party could hardly communicate, read, write,

etc.. he could never be a persuasive arbitrator and

therefore he does not acquire the first qualification.Persuasiveness is innate to a person.

The arbitrator selected by the parties must be a trulyaware what he had been elected by one of the

parties to be arbitrator in order to help resolve then

dispute and therefore he must be one who has

signed, read, cited, analyzed and determined the

validity of the cause of the party who elected him as

an arbitrator. In such a case he must be an

arbitrator, who has fully accepted the cause of the

party who elected him, he must be convinced that

the cause of the party who elected him as an

arbitrator should be upheld in that arbitration.Although the law says that an arbitrator cannot act

as a counsel of a party who could approved the

cause of that particular party. Nonetheless the

second measure of a true arbitrator is one who has

fully adopted the cause of the party who has

accepted him to act as an arbitrator. He must be

truly convinced that particular cause of a party who

elected him as the arbitrator should be the same in

the award after the proceedings.

The arbitrator must be able to persuade the otherarbitrators to adopt his position.

As we can see that in arbitration proceedings, the arbitrators

themselves clash against each other, they have a dispute, and

that is the reason why there is a need for an umpire or a 3r

arbitrator because if both of them had disagreed then there is

an unresolved situation hence the role of a 3rd arbitrator is

important in order to adopt a majority opinion in the

resolution of the case. The only exception here is if the

parties require that there should be a unanimous decision.

The fees of the arbitrators under our jurisdiction, the

arbitrator are not paid Php50. The parties will stipulate in the

arbitration that one party will select an arbitrator and as to

how much that particular arbitrator be paid by him. The other

party will do the same with the arbitrator that he chose. The

problem arise when to the fee of the third arbitrator because

if both parties now will agree on how much on the 3r

arbitrator suppose to pay and what would be hisparticipation. Normally its 50-50. And the amount to be paid

is going to be agreed upon by the parties.

What are the pleadings that are to be submitted in cases of

arbitration most especially in commercial arbitration?

Complaint or petition Copy of submission of agreement to arbitrate the

matters disputed by the parties. That particular copy

should contain:

o Name and addresses of the partieso Nature of the disputeo Amount involve (if there is any)o Agreed procedure on the appointment of

arbitrator

o Signature of the parties on the documento Reservation- refers to a situation when the

parties reserve the right to terminate the

arbitration proceedings jointly, if they fee

that the purposes for which they had

sought to avail in the arbitration

proceedings may not be obtain after all. So

if there is a reservation of the parties to

terminate the arbitration proceedings at

any stage the parties may terminate the

same. If there is no reservation, once thearbitration has begun in a case of

submission agreement then the arbitration

proceedings would have to be finished and

terminated.

o Relief sought Demand letter for arbitration, the dispute between

the 2 parties. If that demand filed in the court wil

turn out to be a complaint or a petition, most

especially in when the party demand with the othe

party to go to arbitration and there was a refusal to


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accept the demand. Under our rules, the party

(applicant) can go to court and file the demand in

court and ask the court to direct the parties to go to

arbitration then that demand when it was filed in

court becomes a complaint or a petition. In a normal

court proceeding, a petition or complaint would

have to be answered by the other party. If there is

no answer after the lapse of 15 days upon the returnof the summons the party will be declared in default.

In arbitration, the other party who received the

demand need not answer if that is his choice. He can

just wait on whatever is the consequence of that

arbitration proceeding without his active

participation. What is the consequence is arbitration

if there is no answer? If there is no answer coming

from the other party who had received the demand

for as long as he was served a copy of that demand

or an order of the court, but he did not file answer

or a reply or a response and neither did he appear in

the arbitration proceedings that particular refusal tofile an answer is tantamount to a repudiation of the

claim of the other party in that demand. In other

words, he does not accept whatever is laid against

him because in arbitration the filing of an answer is

not mandatory, it is permissive. Failure to answer

will result in a repudiation of all allegations of the

other party as if he had answer. In that particular

case, the issues are joined because there is

repudiation. If he answers, he can offer all kinds of

defenses, special and affirmative defenses, he can

even file a counterclaim and specific relief from the

other party on the basis of that counterclaim.

The parties may be required to submit an arbitrationmemorandum after the presentation of their

evidence. And that brief will make the arbitrators to

be able to determine and hand down a valid arbitral

award. The arbitration brief is not mandatory, the

parties may submit the entire evidence they had

presented or documents simply after they have been

marked as exhibits and identify during the

arbitration proceedings. Once they have been

identified and marked as exhibits that will be

sufficient for the arbitration to consider in rendering

an arbitral award.

Where do u file the pleading?

The pleading during the arbitration proceedings is to

be filed with the arbitral tribunal. If the matter have

been submitted to the court for a resolution for a

certain disputes arising during the arbitration

proceedings like an issue challenging the

qualification of an arbitrator then the pleadings

connected with that issue should be filed in court

and the arbitration proceedings in that instance will

be suspended until such time the court proceedings

had been terminated. So it depends on particular

stage of the arbitration proceedings with respect to

where to file ur pleadings. Normally it is filed with

the arbitral tribunal but if the matter are of the

court, then the court will hear the party and received

evidence.

What dispute should be submitted to arbitration?Any controversy between the parties, the parties has a

choice onto what issue should be the subject of

arbitration except:

(a) labor disputes covered Labor Code(b) the civil status of persons;(c) the validity of a marriage;(d) any ground for legal separation;(e) the jurisdiction of courts;(f) future legitime;(g) criminal liability; and(h) Those which by law cannot be compromised.

Is the court bound to accept a particular issue elected by the

parties that would be a subject of arbitration in the event that

the party (applicant) who make a demand for arbitration and

the other party refuse to such demand and the party

(applicant) goes to court and ask the court to direct them to

go to arbitration, is the court bound to order to the issue of

these parties to be a subject of arbitration?

Yes, as long as such issue do not fall under the

exceptions above

What are the other grounds that the court may use to refuse

to allow the parties to go to arbitration?

When the arbitration is: Null and void, Inefficacious or Incapable of being performed

Is an issue concerning an evaluation of claim for a sum of

money a matter that is covered by arbitration?

Yes

How about with respect to whether or not the claim is

commercial or not, let say, an agreement was signed by

parties A and B, and B refuse to accept the agreement late

on and he said that the agreement concerns a commerciarelations between them, can that be a subject of arbitration?

A determination of the commercial nature of that transaction

between the parties?

Yes

Should it be contractual all the time?

No, it may be contractual or not for as long as such

issue does not fall within the exceptions


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A and B entered into a contract, B is a minor, at the signing of

the consummation of the contract, A knew that B was a

minor. Nonetheless A makes a demand for arbitration, can A

claim later on his demand for arbitration should not be

considered because B is of legal age?

No, A cannot make a claim later on demanding that

the arbitration should not be considered because B

is a minor because he knew upon the consummationof the contract that B was still a minor. It is only B

who can make use of such defense of incapacity

(being a minor).

What if the claimant (A) did not knew that B is a minor?

Then A can raise an issue that B was incapacitated

(minor) to block the arbitration proceedings

In what form of arbitration agreement should the submission

of agreement to arbitration be?

It shall be in writing and subscribed by the party

sought to be charged, or by lawful agent.

If the parties agreed orally that their present dispute should

be submitted to immediately to arbitrate, is that binding to

both parties?

No, the law requires that it should be in writing and

subscribed by the parties, as if there is no agreement

constituted by the parties.

Suppose both parties now agreed to submit their present

dispute to arbitration, they agreed in that particular contract,

what is the effect of that agreement?

The making of a contract or submission for

arbitration, providing for arbitration of anycontroversy shall be deemed a consent of the parties

to the jurisdiction of the Court. The signing of the

document confers jurisdiction of the court (RTC) of

either parties where they deposited such document.

How do the parties confer that agreement to accept the

jurisdiction of the court?

By the act of depositing of agreement to the clerk of

court where one of the parties resides

How is the Arbitration agreement initiated by the parties?

In case of arbitration agreement, by the service byeither party upon the other of a demand for

arbitration in accordance with the contract.

When should such demand be available?

When the dispute arises

What should the demand consist of?

Nature of the controversy Amount involve (if any) Relief sought

Together with a true copy of the contract providingfor arbitration

If there is an agreement with respect to theappointment of a single arbitrator, the demand shal

be set forth a specific time within which the parties

shall agree upon the arbitrator

If there is an agreement with respect to theappointment 3 arbitrators, one to be selected by

each party, the demand shall name the arbitrator

appointed by the party making the demand and shal

require that the party upon whom the demand is

made shall within fifteen days after receipt thereof

advise in writing the party making such demand of

the name of the person appointed by the second

party; such notice shall require that the two

arbitrators so appointed must agree upon the third

arbitrator within ten days from the date of such

notice.

If the party upon whom the demand is made and within 15days he did not respond neither he respected the arbitration

agreement, what will be his remedy?

The demanding party may file a motion for the court

to direct them to arbitration

May the demanding party file a motion to declare the other

party in default?

No

If the other party did not respond to the reque

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