February 28, 2006

RULES GOVERNING THE EXERCISE BY THE OFFICE OF THE GOVERNMENT

CORPORATE COUNSEL (OGCC) OF ITS FUNCTIONS AND POWERS AS
PRINCIPAL LAW OFFICE OF ALL GOVERNMENT OWNED OR CONTROLLED
CORPORATIONS

Pursuant to the provisions of Section 10, Chapter 3, Title III, Book IV of the
Administrative Code of 1987 and Presidential Decree No. 242, and the relevant
provisions of Republic Act No. 9285, the Alternative Dispute Resolution Act of
2004, the Government Corporate Counsel hereby promulgates the following
rules to eciently discharge its functions and powers as principal law oce of all
government owned or controlled corporations, their subsidiaries, other corporate
osprings and government acquired asset corporations and eectively exercise
its power of control and supervision over all legal departments maintained
separately by them.
PART ONE
General Provisions
RULE 1
Title and Construction
SECTION 1.1. Title of the Rules . These Rules shall be known and cited as
the OGCC Rules.
SECTION 1.2. Applicability. These Rules shall apply to all matters/cases
properly brought or referred to the OGCC for advice or representation, as well as
to disputes, claims and controversies between or among government owned or
controlled corporations.
SECTION 1.3. Construction. These Rules shall be liberally construed in
order that justice may be administered in an ecient, eective, equitable, just,
speedy and inexpensive manner.
RULE 2
Declaration of Policy
It is hereby declared the policy of the Oce of the Government Corporate
Counsel (OGCC) to eciently discharge its functions and powers as principal law
oce of all Government Owned or Controlled Corporations (GOCCs), their
subsidiaries, other corporate osprings and government acquired asset
corporations as well as to promote and encourage the resolution and settlement
of disputes, claims and controversies between or among government oces,
agencies and instrumentalities, including GOCCs, through the appropriate mode
such as arbitration, negotiation and/or mediation/conciliation, even if there is a
private person or entity involved, always bearing in mind that in the ultimate
analysis, there is only one predominant real party-in-interest namely, the
Government that is instituted to serve the welfare of the Filipino people. HATICc

For purposes of these Rules, the term "Government Owned or Controlled

Corporations (GOCCs)" refers to a corporation organized as a stock or non-stock
corporation vested with functions relating to public needs, whether
governmental or proprietary in nature, and owned by the National Government
directly or through its instrumentalities either wholly or, where applicable as in
the case of stock corporations, to the extent of at least fty-one percent (51%) of
its capital stock. This term shall also include subsidiaries, osprings, acquired
asset corporations, and other government entities of which the OGCC is the
principal law office.
RULE 3
Powers of the OGCC
SECTION 3.1. Powers.
3.1.1 As principal law office and as supervisor. The OGCC, as principal
law office exercising control and supervision over the law
departments separately maintained by the GOCCs, shall have the
following powers:
a) Represent GOCCs in the litigation of appropriate cases brought
before the courts or quasi-judicial bodies in the Philippines or
abroad in accordance with Rule 5 hereof;
b) Review, revise or modify, as the case may be, all contracts referred
by GOCCs, as required by law, to make the same conform with
existing laws and applicable government rules and regulations,
and/or to prepare such contracts when so requested in
appropriate cases in accordance with Rule 6 hereof;
c) Render legal opinions, as required by law, on all important legal
questions referred by the GOCCs in accordance with Rule 6
hereof;
d) Mediate or arbitrate under P.D. 242, in relation to relevant
provisions of R.A. 9285 and the Administrative Code of 1987,
appropriate disputes, claims and controversies between or
among GOCCs in appropriate cases in accordance with Part III
hereof;
e) Investigate and, in appropriate cases, hear administrative
disciplinary cases involving all officials and employees of GOCCs
upon the request of the latter in accordance with Rule 7 hereof;
f) Conduct periodic performance audit of the legal departments
maintained by the GOCCs;
g) Require the legal departments of GOCCs to submit periodic reports
of work performed and/or accomplished;
h) Conduct fact-finding and preliminary investigation in appropriate
referred cases;
i) Enjoin GOCCs from hiring private lawyers or law firms to represent
them or to be their legal retainers except upon the conditions
stated in Rule 9 hereof; cIHCST
 j) Impose or recommend appropriate administrative or disciplinary
sanctions against erring lawyers in the legal departments of
GOCCs in accordance with Rule 7 hereof; and
k) Promulgate rules and regulations and exercise such other powers
as may be necessary or proper to effectively implement its
mandate.
In exercising its power of administrative supervision over the legal
departments of the GOCCs, the OGCC shall:
a) ensure that the legal positions adopted by GOCCs are not in
conflict with each other or the national government position;
b) hold regular consultations with the concerned GOCC on the
referred case/s to ensure satisfactory collaborative formulation
of legal strategies and evidence presentation and on relevant
legal matters; and
c) formulate and conduct capability-building programs.
3.1.2 Power to enforce the Property Insurance Law. The OGCC, upon its
own initiative, shall have the power to enforce the Property Insurance
Law pursuant to Republic Act No. 656, as amended by Presidential
Decree No. 245, in domestic or international transactions.
3.1.3 Power to make assessments and to receive attorney's fees.
a) In addition to the regular assessment mentioned in Sec. 4 of P.D.
1415, the Government Corporate Counsel is authorized to
make special assessments upon GOCCs serviced by its office, to
meet contingencies, obligations, and undertakings necessary to
maintain and promote the efficiency of the service.
b) The OGCC is authorized to receive attorney's fees adjudged in favor
of client GOCCs in judicial proceedings handled by the OGCC.
These attorney's fees shall accrue to a special fund of the OGCC,
and shall be deposited in an authorized government depository
as a trust liability and shall be made available for expenditure
without the need for a cash disbursement ceiling, for purposes
of upgrading facilities and equipment, granting of employees'
incentive pay, and other benefits, and defraying such other
incentive expenses not provided for in the General
Appropriations Act as may be determined by the Government
Corporate Counsel. (Sec. 10, Chapter 3, Title 3, Book 4,
Administrative Code of 1987)
SECTION 3.2. General guidelines for exercise of power . The OGCC, in
exercising its powers, shall be guided by due considerations of the universal
principles of fairness, justice, the rule of law and the welfare of the Filipino
people.EATcHD

PART TWO
Rules of the OGCC
 RULE 4
Organizational Set-Up
SECTION 4.1. Composition. Unless otherwise provided by law, the Oce
of the Government Corporate Counsel (OGCC) shall be composed of the
Government Corporate Counsel (GCC), One Deputy Government Corporate
Counsel (DGCC), Ten (10) Assistant Government Corporate Counsels (AGCCs), all
of whom shall be appointed by the President of the Philippines. All other
members of the legal sta of the OGCC shall be appointed by the Government
Corporate Counsel, the numbers and ranks of which shall be as follows: Ten (10)
Government Corporate Attorney IV (GCA-IV), Fourteen (14) Government
Corporate Attorney III (GCA-III), Seventeen (17) Government Corporate Attorney
II (GCA II), Four (4) Government Corporate Attorney I (GCA I), One (1) Associate
Government Corporate Attorney II, and One (1) Associate Government Corporate
Attorney I.
SECTION 4.2. Administrative sta. The Oce of the Government
Corporate Counsel shall be supported by an administrative sta all of whom shall
be appointed by the Government Corporate Counsel and shall consist of the
following personnel: secretarial pool, records management, messengerial, library,
supply & property, utilities, accounting & nance, human resources and
management, paralegal and such other personnel as the exigency of the service
may require.
SECTION 4.3. Organization into teams. Unless otherwise determined by
the Government Corporate Counsel, the Legal Sta shall be divided into teams,
each to be headed by an AGCC as team leader. The classication of the teams
shall include, but shall not be limited to: (1) Gaming & Allied Services; (2)
Ecozones; (3) Information & Energy; (4) Environment & Water; (5) Banking &
Finance; (6) Transportation, Communication & Infrastructure; (7) Agriculture &
Trade; and (8) Housing & Urban Development.
4.3.1 Each team leader shall be designated by the Government Corporate
Counsel and shall be directly responsible for the supervision of the
members of his/her team. The Government Corporate Counsel,
assisted by the Deputy Government Corporate Counsel, shall have
over-all direct supervision and control over all the Teams.
4.3.2 Special Project Teams may be created by the Government Corporate
Counsel as the need arises.
SECTION 4.4. Arbitration and mediation group. A special group tasked to
handle cases for arbitration or mediation shall be formed or organized from
among the members of the various teams. Members of the legal sta who are
duly accredited arbitrators and/or mediators shall automatically become
members of the Arbitration and/or Mediation team.
SECTION 4.5. Special assignments. When the exigency of the service
requires, any member of the OGCC legal sta may be assigned or designated to
the client GOCC as a corporate ocer or to perform additional or special tasks;
provided, that the Government Corporate Counsel approves the assignment or
designation. In such cases, the designated legal ocer shall be entitled to receive
such additional compensation and privileges as may be granted him/her by the
GOCC concerned. SETAcC

RULE 5
Procedures and Policies in Handling Cases
SECTION 5.1. Policies in accepting referred cases.
5.1.1 The OGCC shall accept only important cases that are referred by the
GOCC and other client entities. Importance may be inferred from
issues that:
a) affect the GOCCs charter/mandate or their operations;
b) involve questions of law;
c) raise novel questions that may involve new jurisprudence and legal
policy; and
d) raise other matters that the Government Corporate Counsel may
deem important.
5.1.2 In cases where the GOCC has no legal department, all legal
matters/cases shall be referred to the OGCC for its appropriate action,
except in cases where the engagement of a private lawyer has been
authorized in accordance with Rule 9 hereof.
5.1.3 The OGCC shall accept only cases that have been officially endorsed
by the GOCC through its duly authorized representative.
5.1.4 The OGCC shall act on referred civil and criminal cases only if the
following are forthwith submitted or complied with:
a) detailed historical background of the case;
b) photocopies of pertinent documents;
c) the names of focal officials knowledgeable about the case; and
d) payment of the pertinent legal fees and other costs or a written
undertaking to pay the same.
5.1.5 Any referral of cases not in accordance with Section 5.1.4 may, at the
discretion of the Government Corporate Counsel, be returned to the
concerned GOCC without action.
5.1.6 The OGCC may, in exceptional cases and for cases that do not meet
the standards of importance as indicated in Section 5.1.1 above,
designate the legal department of the client GOCC as its handling
counsel, subject always to its control and supervision. For this
purpose, the GOCC's legal department shall submit periodic reports of
said cases. No compromise agreement may be entered upon by said
handling counsel unless approved by the OGCC. 1
SECTION 5.2. Assignment of cases. A request for the handling of cases
from GOCC shall be coursed through the Government Corporate Counsel who
shall assign the case to the appropriate team or to any member of the legal staff.
RULE 6
 Opinions and Contract Review
SECTION 6.1. Requests for legal opinion and contract review . Requests
for legal opinion and contract review shall be signed by the Head of the GOCC or
its duly authorized representative. aTADCE

6.1.1 Requests for legal opinion shall, as far as practicable, state the
position already taken by the GOCC concerned on the issue/s posed
for opinion. A proposed contract transmitted for review shall be
submitted in clear legible hard copy together with a soft copy thereof.
The transmittal letter shall contain background information on all
relevant circumstances and transactions that led to its preparation.
6.1.2 In reviewing the proposed contract or in drafting the opinion, the
OGCC shall be guided by the following considerations:
a) consistency with the economic policies and priorities of the
Government, particularly those formulated by the National
Economic and Development Authority (NEDA);
b) compliance with GOCC's charter or law of its creation and does not
violate the Constitution, any law, public order, public policy,
morals, good customs, or is not prejudicial to a third person with
a right recognized by law; and
c) is otherwise fair to all concerned.
6.1.3 A signed contract shall not be acted upon unless there is a provision
therein which states that the same shall be subject to review by the
OGCC and any amendment or revision made by the OGCC shall be
deemed incorporated therein.
SECTION 6.2. Report on action taken . The OGCC may require the legal
department or ocer of the client GOCC to submit proof of compliance with or
any action taken in relation to the review or opinion.
SECTION 6.3. Requests for reconsideration . Requests for reconsideration
of opinions and contract reviews shall be acted upon only if led by the
requesting client GOCC within fteen (15) days from receipt thereof. Such
request shall be signed by the Head of the GOCC or its duly authorized
representative and shall clearly state the grounds relied upon. As a general rule,
the request for reconsideration shall be assigned to the lawyer who drafted the
original opinion or contract review.
SECTION 6.4. Requests for copies of opinions and contract reviews by non-
client GOCCs or private persons or entities. In accordance with the provisions
of Section 3, Rule IV of R.A. 6713, otherwise known as the "Code of Conduct and
Ethical Standards for Public Ocials and Employees," the OGCC shall provide
copies of its opinions, contract reviews or other ocial information and records to
any private person or entity requesting the same, except if:
a) such opinion, contract review, information or record must be kept secret
in the interest of national defense or security or to the conduct of
foreign affairs;
b) such disclosure will put the life and safety of an individual in imminent
 danger;
c) the opinion, contract review, information or record sought falls within
the concepts of established privilege or recognized exceptions as
provided by law or settled policy or jurisprudence;
d) such opinion, contract review, information or record comprises of drafts
only of such opinion, review, information or record; SHTcDE

e) it would disclose information of a personal nature where disclosure

would constitute a clearly unwarranted invasion of personal privacy;
and
f) other instances accepted by R.A. 6713.
Unless ocially endorsed by the client GOCC concerned or otherwise
approved by the Government Corporate Counsel, requests for copies of opinions
and contract reviews by parties other than the client-GOCC concerned and
private persons or entities shall be granted subject to the provisions of R.A. 6713
and its IRR.
RULE 7
Procedure on Administrative Disciplinary Cases
SECTION 7.1. Disciplinary cases involving GOCC employees. The Oce of
the Government Corporate Counsel may, upon request by the head of the GOCC,
handle administrative cases referred by client corporations.
7.1.1 Application of Rules. The internal rules of the client GOCC, if
available, shall apply in the conduct of administrative cases referred
to the OGCC. Otherwise, the Civil Service Rules on administrative
cases shall govern the procedure for client GOCCs with original
charters.
7.1.2 Assignment.
a) As Prosecutor. Upon request of the GOCC for a lawyer from the
OGCC to prosecute an administrative case, the Government
Corporate Counsel may assign a Government Corporate
Attorney (GCA) who is a member of the team assigned to the
GOCC concerned. The Government Corporate Counsel may
delegate the assignment of a lawyer to the DGCC or to the
team leader.
b) As Hearing Officer. Upon the request of the GOCC, the
Government Corporate Counsel may assign a Hearing Officer to
investigate the administrative case. However, the assignment
may be made to a lawyer who is not a member of the team
assigned to the particular requesting GOCC in order to ensure
impartiality, unless the composition of the hearing panel has
been specifically agreed upon between the OGCC and the GOCC
concerned. The assignment of a hearing officer may be
delegated by the Government Corporate Counsel to the DGCC.
7.1.3 Period to conduct administrative cases.
 a) As Prosecutor. The GCA assigned as prosecutor shall endeavor to
terminate presentation of his/her evidence within a reasonable
time.
b) As Hearing Officer. The GCA assigned as hearing officer shall
terminate the proceedings within thirty (30) days from receipt
of the complete records of the case. He shall have fifteen (15)
days from termination of proceedings to submit the formal
investigation report and his recommendations to the referring
GOCC through the Government Corporate Counsel. Said periods
may be extended for justifiable reason.
Venue of Administrative Cases.
a) The venue for every hearing and conferences of all administrative
cases shall, as far as practicable, be held at the OGCC offices. DHaECI

b) Out-of-town hearings and conferences shall be allowed only upon

agreement of the parties concerned as to expenses and
disbursements involved taking into consideration cost-benefit or
other justifiable reasons.
c) Transmittal of report. The formal investigation report prepared
by the hearing officer shall be endorsed by the Government
Corporate Counsel for transmittal to the proper disciplining
authority of the requesting GOCC.
SECTION 7.2. Disciplinary cases involving OGCC employees.
7.2.1 Application of Rules. The Civil Service Rules on administrative
cases shall govern the conduct of cases involving disciplinary action
filed against erring personnel of the OGCC.
7.2.2 Assignment of hearing officer/panel. The Government Corporate
Counsel shall, in his/her discretion, designate a hearing officer or
constitute a hearing panel which will be tasked to hear the
disciplinary action against an erring OGCC personnel. The
Government Corporate Counsel shall further designate a prosecuting
officer from among the members of the Legal staff for said purpose.
RULE 8
Rule on Criminal Cases
SECTION 8.1. Limited representation. Upon due request, the OGCC
shall handle only criminal cases led by the complaining GOCCs against any
party. 2
SECTION 8.2. Extent of legal assistance. The OGCC shall represent the
complaining GOCC in all stages of the criminal proceedings. The legal assistance
extended is not limited to the preparation of appropriate sworn statements but
shall include all aspects of an eective private prosecution including recovery of
civil liability arising from the crime, subject to the control and supervision of the
public prosecutor.
RULE 9
 Prohibition from Hiring Private Lawyers
SECTION 9.1. General rule prohibiting the hiring of private lawyers. All
GOCCs are enjoined from hiring private lawyers or law rms to handle their
cases and legal matters for the reason that the OGCC is expressly mandated by
law to be the principal law office of all GOCCs.
SECTION 9.2. Exception to general prohibition. Notwithstanding the
foregoing prohibition stated in Section 9.1.above, the GOCC may engage private
counsel in exceptional cases upon prior approval of the OGCC and with the
written concurrence of the Commission on Audit (COA). 3
9.2.1 Considerations in hiring private lawyers. In determining whether
or not to approve such hiring, the Government Corporate Counsel
may consider the following circumstances, in addition to the nature of
the case, among others:
a) the absence of a legal department or legal officer when the
exigencies of service so requires;
b) the venue is in a distant province and the hiring of a local lawyer in
that province would entail less expenses than in sending an
OGCC lawyer to handle the case; CDHcaS

c) the nature of the case requires immediate attention;

d) the expertise or capability of the proposed private counsel in a
particular field is well known or respected, and the hiring of the
same will facilitate the completion of the negotiation or
termination of proceedings thereof; and
e) in highly exceptional cases as may be determined by the
Government Corporate Counsel
PART THREE
Rules on Alternative Dispute Resolution (ADR)
RULE 10
General Provisions
SECTION 10.1. Definition of terms.
10.1.1 Alternative Dispute Resolution (ADR) means any process for
resolving a dispute or controversy other than by judicial adjudication.
These include Mediation, Arbitration, or Early Neutral Evaluation.
10.1.2 Arbitration is a process by which a neutral third party resolves a
dispute by rendering an award.
10.1.3 Mediation is a voluntary process by which a neutral third party
facilitates communication and negotiation, and assists the parties in
reaching a voluntary agreement in resolving their dispute.
10.1.4 Early Neutral Evaluation is a process of assessing on a non-binding
basis the strengths and weaknesses of each party's case for the
purpose of serving as basis for a compromise agreement.
10.1.5 Arbitral tribunal means a sole arbitrator or a panel of three (3)
 arbitrators.
SECTION 10.2. Authority to conduct ADR. Pursuant to Presidential
Decree No. 242 in relation to Section 71, Chapter 14, Title I, Book III of Executive
Order (E.O.) No. 292, the Administrative Code of 1987, in conjunction with
Sections 10 and 11, Chapter 3, Book VII of said Code, the OGCC shall, in the
public interest, encourage settlement through early neutral evaluation,
mediation and/or arbitration to resolve disputes, and is accordingly vested with
authority to settle claims, disputes, and controversies involving GOCCs the legal
departments of which are under its control and supervision.
SECTION 10.3. Choice of appropriate mode. Consistent with the declared
policy under Rule 2 above, the Government Corporate Counsel shall choose the
most appropriate mode of dispute resolution according to the nature of the
interests involved.
SECTION 10.4. Selection criteria. Disputes involving constitutional
issues, public order, public policy, morals, principles of public exemplarity or other
matters of public interest shall be resolved through adjudication. All others may
be the subject of a compromise agreement secured through negotiation,
mediation/conciliation or other alternative mode of dispute resolution, except
those that by law cannot be the subject of a compromise.
SECTION 10.5. Application and interpretation. In applying and construing
the provisions of these ADR Rules, consideration must be given to the state policy
"to actively promote party autonomy in the resolution of disputes" 4 and the
need "to promote candor of parties and mediators through condentiality of the
mediation process, the policy of fostering prompt, economical and amicable
resolution of disputes in accordance with principles of integrity of determination
by the parties, and the policy that the decision-making authority in the
mediation process rests with the parties." 5
RULE 11
PROCEDURE IN MEDIATION
SECTION 11.1. Coverage. The rules on mediation shall apply to all
disputes, claims, and controversies, including incipient ones and those ongoing or
pending cases with the OGCC, between or among GOCCs that do not involve
constitutional issues, public order, public policy, morals, principles of public
exemplarity or other matters of public interest, which cases are better resolved
by adjudication, provided that the involvement of a private third party, which is
indispensable to the nal resolution of the dispute, will not preclude the
application of these Rules. IEaATD

SECTION 11.2. Preliminary determination. The Government Corporate

Counsel shall, after evaluating the nature of the dispute, determine whether it is
mediatable under the criteria set forth in Section 11.1.
SECTION 11.3. Preliminary mediation conference. Following such
determination, the Government Corporate Counsel, or his/her duly designated
Deputy or Assistant, shall direct the parties, through their duly authorized
representative, to appear before the assigned AGCC, for a preliminary mediation
conference specifying the date, time and place.
 The representatives of the parties appearing before the OGCC panel in
mediation proceedings must be fully authorized to appear, negotiate and enter
into 1) a stipulation of facts; and 2) a compromise agreement. For this purpose,
an appropriate Board Resolution and/or Special Power of Attorney issued by each
of the parties shall be submitted to the Mediator during the preliminary
mediation conference.
During such conference, the process and benets of mediation shall be
explained to the parties, together with an assessment of the risks and costs of
pursuing litigation. An agreement to submit the dispute to mediation shall be
signed by the parties through their duly authorized representatives.
SECTION 11.4. Selection of mediator. After agreeing to mediation, the
parties shall, assisted by the assigned AGCC, select from among the list of
accredited OGCC lawyer-mediators, who will be the Mediator of their dispute. If
the parties cannot agree on a common choice, the assigned AGCC shall proceed
to assign the Mediator.
SECTION 11.5. Presence of lawyers. Lawyers of the parties may attend
the mediation proceedings and shall cooperate with the Mediator towards
securing a settlement of the dispute. The Supreme Court Guidelines on the Role
of Lawyers during Mediation Proceedings shall be observed. 6
SECTION 11.6. Initial joint conference. During the initial joint
conference, the Mediator shall make an opening statement introducing
himself/herself and informing the parties of the process ow, including the
manner by which the proceedings will be conducted, and shall stress the
confidentiality thereof as provided in Section 11.7 hereunder.
The parties shall each make an opening statement of how the controversy
arose and their respective positions therein.
After the statements made by the parties, the Mediator shall:
a. draw out the parties' underlying interests behind the legal issues and
explore common ground for settlement; and
b. suggest options for parties to consider, and if practical or necessary seek
the assistance of a co-mediator or a technical expert, to help resolve
the dispute.
The parties, with the assistance of the Mediator, shall endeavor to resolve
their dispute.
If no settlement is reached at this conference, the Mediator may, with the
consent of both parties, hold separate caucuses with each party to enable the
Mediator to determine their respective real interests in the dispute. Thereafter,
another joint conference may be held to consider various options, including
assessment (on a non-binding basis) of the strengths and weaknesses of each
party's case, proposed by the Mediator to resolve the dispute. DECcAS

The Mediator shall not record the proceedings in any manner, although he
may take down personal notes to guide him.
The OGCC shall not keep a le of mediation proceedings, except the report
of the Mediator. All other records or documents that may have been submitted by
the parties during the mediation shall be returned to them.
Thirty (30) working days after the initial mediation conference with no
settlement having been reached, the mediation proceedings shall be terminated,
unless the parties agree to further continue the mediation, in which case an
extension of another thirty (30) working days may be granted by the Mediator,
with the written approval of the Government Corporate Counsel.
SECTION 11.7. Confidentiality. The Mediation proceedings and all
incidents thereto shall be kept strictly condential, unless otherwise specically
provided by law, and all admissions or statements made therein shall be
inadmissible for any purpose in any proceeding.
Communications by one party to the Mediator during the separate caucuses
that are not intended to be known by the other party or parties, including
documents, reports, position papers, and adavits, shall not be communicated or
shown to the latter, unless permitted in writing by such party. However,
evidence or information that is otherwise admissible or subject to discovery does
not become inadmissible or protected from discovery solely by reason of its use in
mediation.
The parties shall not rely on or introduce as evidence in any other
proceeding, the following matters:
a. views expressed or suggestions made by the other party in respect of a
possible settlement of the dispute;
b. admissions made by either party in the course of the mediation
proceedings;
c. proposals for settlement suggested by the Mediator; and
d. the fact that the other party had indicated willingness to accept any
particular proposal for settlement expressed to the Mediator.
No transcript or minutes of the mediation proceedings shall be taken, and
the personal notes of the Mediator, if any, shall not be furnished any court,
tribunal or body for whatever purpose. Any such transcript, minutes and notes
shall be inadmissible as evidence in any other proceeding.
SECTION 11.8. Successful settlement; compromise agreement. Where
parties agreed to a full or partial compromise, the Mediator shall see to it that the
written terms be immediately drafted with the concurrence of the parties or
counsel. And for this purpose, the OGCC shall provide legal assistance to their
clients in the drafting of the compromise agreement.
The nal compromise agreement shall be signed by the parties through
their duly authorized representatives together with their respective counsels.
The approved compromise agreement may be converted into an arbitral
award under R.A. 9285 which shall be submitted to the Secretary of Justice under
Section 70, Chapter 14, E.O. 292 for his final approval.
SECTION 11.9. Enforcement of mediated settlement agreements. The
rules for the deposit and enforcement of mediated settlement agreements
provided by R.A. 9285, together with such implementing rules as may be
promulgated by the Supreme Court, are hereby adopted. AaHcIT

SECTION 11.10. Costs of mediation. The costs of mediation shall be

imposed by way of special assessment in accordance with the schedule hereto
attached, as may be modified from time to time.
RULE 12
Procedure in Arbitration
SECTION 12.1. Parties. GOCCs which have claims, disputes or
controversies with other GOCCs, including private individuals/entities that are
indispensable to the nal resolution of the dispute, may be parties to the
arbitration proceedings.
SECTION 12.2. Coverage. The following cases between or among GOCCs,
which were not earlier selected by the Government Corporate Counsel as
appropriate for mediation, shall be submitted to the OGCC for adjudication
through Arbitration:
a) cases of first instance, where a petition for arbitration is filed;
b) cases forwarded or transmitted after a failed mediation; and
c) matters referred by the Secretary of Justice.
SECTION 12.3. How commenced. A petition shall be led by the
aggrieved party with the OGCC in the form required under the following Section.
SECTION 12.4. Form of petition . The petition shall be veried and shall
contain the following:
a) names and addresses of the parties;
b) the ultimate facts upon which the cause of action rests;
c) signature of the head of the GOCC; and
d) disclosure on whether the matter is pending before another forum.
SECTION 12.5. Order to le an answer. The Government Corporate
Counsel shall issue an Order for the respondent/s to answer the petition within a
period of ten (10) days from receipt thereof, attaching thereto all pertinent
documents, and furnishing the claimant with a copy of the answer. Said answer
shall contain facts admitted and those denied together with issues raised and
defenses interposed.
In the event of failure of the respondent to answer, the dispute may be
resolved on the basis of the complaint and documents submitted.
SECTION 12.6. Extension. Except for the most serious reasons, no
extension of time bars shall be allowed and if so allowed, the period of extension
shall not exceed the original period.
SECTION 12.7. Claim or defense based on documents. Whenever a claim
or defense is based upon a written instrument or document, the substance
thereof shall be set forth in the petition or answer, and the original or a copy
thereof shall be attached as an annex thereto.
SECTION 12.8. Selection of an arbitral tribunal. The Government
Corporate Counsel shall assign from among the list of accredited OGCC lawyer-
Arbitrators, those who will arbitrate the dispute. DaACIH

SECTION 12.9. Arbitration proceedings of record; Arbitration and Mediation

Division (AMD) Secretariat. All arbitration proceedings under this Rule shall be
of record. The AMD Secretariat shall perform all the duties of a clerk of court and
act as custodian of all records relative to such proceedings.
SECTION 12.10. Authority of AMD Secretariat. The AMD Secretariat shall
exercise the same authority conferred by law upon an administrative or non-
judicial ocer authorized to take testimony or evidence. Persons who, without
lawful excuse, fail or refuse to obey orders issued in arbitration proceedings shall
be dealt with in accordance with the law.
SECTION 12.11. Preliminary conference. After all issues have been
joined, the arbitral tribunal shall send a notice to the parties setting the date,
time and place of the preliminary conference to discuss, among others, the
simplication of issues, necessity or possibility of obtaining stipulations of facts
and of documents to avoid unnecessary proof, the limitation of the number of
witnesses, the propriety of submitting the case for decision without trial, and
such other matters as may aid in the prompt disposition of the dispute.
In the event of failure of the petitioner to attend such conference, the
petition may be dismissed.
In the event of failure of the respondent to attend such conference, despite
having led an answer, the case may be deemed submitted for decision taking
into consideration both the petition and the answer, and after reception of the
evidence of the petitioner and such other evidence as may be necessary for the
arbitral tribunal to render a just and equitable resolution.
SECTION 12.12. Arbitrator's disclosure. During the preliminary
conference, the arbitrator/s shall make disclosures to the parties of such facts and
circumstances that may be perceived by them as aecting his/her impartiality
and independence.
SECTION 12.13. Place of arbitration. The place of arbitration shall
initially be held at the OGCC oce. Subsequent sessions or proceedings shall be
held at the venue mutually agreed upon by the parties and the arbitral tribunal.
SECTION 12.14. Subpoena and subpoena duces tecum . The arbitral
tribunal shall have the power to require any person to attend a hearing as a
witness. It shall have the power to subpoena witnesses and documents when the
relevancy of the testimony and the materiality thereof has been demonstrated.
SECTION 12.15. Hearing by arbitral tribunal. The order of trial in judicial
proceedings shall be followed subject to such modication thereof as may be
determined by the arbitral tribunal.
Upon agreement of the parties or upon the initiative of the arbitral
tribunal, a site inspection of the premises may be held. The expenses to be
incurred by such inspection shall be as agreed upon by the parties as to amount
and sharing thereof or as directed by the arbitral tribunal. The absence of a party
after an agreement or despite due notice shall not be a ground to suspend the
inspection.
 SECTION 12.16. Testimony of witnesses . The direct testimony of
witnesses shall be reduced to writing in adavit form in sequentially numbered
question and answer and shall be divided into as many parts as there are issues
that have been formulated by the parties. The adavit of the respective parties
shall be exchanged simultaneously not less than ve (5) days before the hearing,
furnishing copies thereof to the arbitrator.
IDCScA

Cross-examination of witnesses for the petitioner shall immediately be

commenced on the day of hearing. No additional direct examination questions
shall be allowed. Thereafter, cross-examination of witnesses for the respondent
shall follow.
Re-direct and re-cross examination of a witness may be allowed upon the
discretion of the arbitral tribunal.
Claricatory questions may be asked at any stage of the hearing by the
arbitral tribunal.
SECTION 12.17. Oer of documentary evidence. The parties shall submit
together with the adavits required above, a formal oer of documentary
evidence in appropriate matrix form divided into markings, description, and
purpose.
SECTION 12.18. Postponement. Except for the most serious reasons, no
postponement of hearing shall be allowed.
SECTION 12.19. Draft decisions. After termination of presentation of
evidence, the arbitral tribunal shall require the simultaneous submission of the
parties' memorandum of arguments in the form of draft decisions in their
respective favors within ten (10) days therefrom. Said draft decisions shall be
divided into as many parts as there are issues.
SECTION 12.20. Reopening of hearing. The hearing may be reopened by
the arbitral tribunal upon the request of any party, upon good cause shown, for
the purpose of receiving newly-discovered evidence, at any time before an
arbitral award is made.
SECTION 12.21. Submission for decision without hearing. After
considering the stipulation of facts that have been made and the documentary
evidence submitted, the parties may agree to submit their dispute for decision,
without need of formal presentation of further evidence, on the basis of their
pleadings and upon submission of draft decisions in their respective favor.
SECTION 12.22. Award. The arbitral tribunal, after evaluating the
evidence presented and the draft decisions submitted by the parties, shall, within
thirty (30) days from submission of the parties' draft decisions, render a decision
in the form of an award stating clearly and distinctly the facts and the law on
which it is based. The arbitral tribunal shall sign the award and le it with the
AMD Secretariat.
SECTION 12.23. Prohibited pleading. A motion for reconsideration or for
new trial shall be considered a prohibited pleading.
SECTION 12.24. Motion for correction. A motion for correction may be
allowed on the following grounds:
 a) evident miscalculation of figures or evident mistake in the description of
a person, thing or property referred to in the award; and
b) where the arbitral tribunal made an award upon an issue not submitted
for resolution by the parties. 7
SECTION 12.25. Transmittal to the Secretary of Justice . After ten (10)
days from notice to the parties, the award shall be transmitted to the Secretary
of Justice for nal action, approving, disapproving or modifying the award made.
SCaEcD

SECTION 12.26. When award becomes nal and binding. The award, as
approved or modied by the Secretary of Justice, shall become nal and binding
upon the parties.
SECTION 12.27. Appeal to the Oce of the President. An appeal may be
taken to the Oce of the President by ling a notice of appeal and serving the
same upon all parties within a period of fifteen (15) days from receipt of a copy of
the nal action taken by the Secretary of Justice. In such event, the award shall
become nal only upon armation/approval by the Oce of the President. If no
appeal is taken to the Oce of the President within the said period, the action
taken by the Secretary of Justice shall become nal upon the expiration of the
said period.
SECTION 12.28. Costs of arbitration. The costs of arbitration shall be
imposed by way of special assessment in accordance with the schedule hereto
attached, as may be modified from time to time.
RULE 13
Procedure for Amendment of Rules
SECTION 13.1. Creation of a committee to study proposed amendment.
Any amendment or revision of any provision of these Rules shall be made by the
Government Corporate Counsel, who shall create a committee to carefully study
and analyze whether there are suciently weighty reasons to amend the same.
Report thereon by said committee containing its recommendation shall be
submitted to the Government Corporate Counsel within thirty (30) days from
assignment.
SECTION 13.2. Action on the committee report. Upon receipt of the
report, the Government Corporate Counsel may, at his/her discretion, approve or
amend, alter and modify said report.
SECTION 13.3. Prospective application. Any provision/s of the Rules that
have been amended, altered or modified shall only have prospective application.
SECTION 13.4. Eectivity of amendment. The amended Rules duly
approved by the Government Corporate Counsel shall take eect fteen (15)
days after its publication in a newspaper of general circulation.
RULE 14
Final Provisions
SECTION 14.1. Application of Rules of Court . The Rules of Court shall not
apply to proceedings under these Rules, except by analogy or in a suppletory
character, whenever practicable and convenient and to make eective the
authority vested in the OGCC.
SECTION 14.2. Supplemental rules. Supplemental rules shall be issued
from time to time as may be necessary to ensure the fair and expeditious
disposition of cases.
SECTION 14.3. Repealing clause. All rules, circulars, memoranda or other
issuances or any part thereof inconsistent with the provisions of these Rules are
hereby repealed, amended or modified accordingly.
SECTION 14.4. Separability clause. If for any reason or reasons, any
portion or provision of these Rules shall be held unconstitutional or invalid, all
other parts or provisions not aected shall thereby continue to remain in full
force and effect. caHASI

SECTION 14.5. Eectivity clause. These Rules shall take eect fteen
(15) days after publication in a newspaper of general circulation.
Date Filed: 18 April 2006
Adopted: 28 February 2006

Approved by:

(SGD.) AGNES VST DEVANADERA

Government Corporate Counsel

Footnotes

1. Landbank of the Philippines vs. Panlilio-Luciano, G.R. No. 165428, July 13, 2005;
Landbank of the Philippines vs. Heirs of Fernando Alsua, G.R. No. 167361,
September 28, 2005.

2. OGCC order no. 026; Urbano v. Chavez, 183 SCRA 347.

3. Presidential Memorandum Circular No. 9 dated 27 August 1998, and as ruled in

PHIVIDEC Industrial Authority and Adaza vs. Capitol Steel Corporation, G.R. No.
155692, October 23, 2003.

4. Section 2, RA 9285

5. Section 8, RA 9285

6. A.M. No. 04-3-15-SC, 23 March 2004.

7. Section 25, R.A. 876.