A.

Issue Of Arbitrability

1. Subjective Arbitrability – the agreement must have been entered into by

parties with legal capacity or entitlement to submit their disputes to
arbitration, a matter that deals primarily with the capacity of state and state
entities to submit disputes to arbitration in view of the laws of some (but a
decreasing number of) states prohibiting state or state entities from submitting
their disputes to arbitration based on notions of public policy.

The government can validly enter into an agreement to arbitrate with a

private party, thus:

“The settlement of controversies is not vested in courts of justice alone to

the exclusion of other agencies or bodies. Whenever a controversy arises, either
or both parties to the controversy may file the proper action in court. However,
the parties may also resort to arbitration under RA 876 which is a much faster
way of settling their controversy.” Gascon v. Arroyo

2. Objective Arbitrability – this means that the agreement must relate to a

subject matter that is capable of settlement by arbitration.

Under Section 6 of RA 9285:

SEC. 6. Exception to the Application of this Act. – The provisions of this Act
shall not apply to resolution or settlement of the following: (a) labor disputes
covered by Presidential Decree No. 442, otherwise known as the Labor Code of
the Philippines, as amended and its Implementing Rules and Regulations; (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.

B. Procedure Under The Implementing Rules and Regulations of The

Alternative Dispute Resolution Act Of 2004.

1. Arbitration Agreement

i. Referral to arbitration

ii. Interim measures

To prevent irreparable loss or injury;

To provide security for the performance of an obligation;

To produce or preserve evidence; or

To compel any other appropriate act or omissions

2. Arbitral Tribunal

i. Parties are free to determine the number of arbitrators, in the absece of

such, there should be three (3).

ii. Qualifications:

Of legal age;

In full enjoyment of his/her civil rights;

Able to read and write;

Must have no interest of any kind with the controversy; and

Must not be related to either parties within sixth degree of

consanguinity or affinity

iii. Procedure of appointment or the absence thereof

iv. The appointment may be challenged on the following grounds:

Circumstances exist that give rise to justifiable doubts as to

his/her impartiality or independence;

He/she does not possess qualifications as provided for in this

Chapter or those agreed to by the parties;

He/she is disqualified to act as arbitration under the Rules;

He/she refuses to respond to questions by a party regarding the

nature and extent of his professional dealings with a party or its counsel.

3. Jurisdiction of Arbitral Tribunal

i. Grounds to object:

The arbitration agreement is inexistent, void, unenforceable or not

binding upon a person for any reason, including the fact that the adverse party
is not privy to said agreement; or

The dispute is not arbitrable or is outside the scope of the

arbitration agreement; or

The dispute is under the original and exclusive jurisdiction of a

court or quasi-judicial body

4. Arbitral Proceeding

i. The parties are free to agree on the procedure to be followed by the

arbitral tribunal, in the absence of agreement, the arbitral tribunal may,
subject to the provision of the ADR Act, conduct the arbitration in such
manner as it considers appropriate. The power conferred upon the arbitral
tribunal includes the power to determine admissibility, relevance, materiality
and weight of evidence

ii. The parties are free to agree on the place of arbitration. Failing such
agreement, the place of arbitration 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.

iii. The parties are free to choose the language to be used

5. Commencement of Arbitration

i. Arbitration is commenced through delivery of demand for arbitration,

or in case of Institutional Arbitration, through its rules

ii. Statement of claims and defense (within the period of time agreed
upon, or determined by the tribunal)

iii. Pre-hearing conference (within 30 days from appointment)

iv. Hearing – the date shall, in default of agreement, shall be fixed by the
tribunal after consultation with the parties

v. Default of a Party

vi. Decision (within 30 days after close of hearing or submission of the

parties’ briefs in lieu of hearing)

vii. Form and content of the award:

Signed by the arbitrator/s;

State the reasons upon which it is based; and

State the time and date of arbitration

6. Termination of Proceedings

i. The claimant withdraws his claim, unless the respondent objects

thereto for the purpose of prosecuting his counterclaims in the same
proceedings or the arbitral tribunal recognizes a legitimate interest on his part
in obtaining a final settlement of the dispute; or

ii. The parties agree on the termination of the proceedings; or

iii. The arbitral tribunal finds that the continuation of the proceedings
has for any other reason become unnecessary or impossible; or
iv. The required deposits are not paid in full
7. Correction and Interpretation of Award, Additional Award

i. Correction or interpretation may be made upon request or on the

tribunal’s own initiative

ii. Additional award as to claims presented in the proceedings, but

omitted from the award

8. Grounds to Vacate an Arbitral Award

i. The arbitral award was procured by corruption, fraud or other undue

means; or

ii. There was evident partiality or corruption in the arbitral tribunal or

any of its members; or

iii. The arbitral tribunal was guilty of misconduct or any form of

misbehavior that has materially prejudiced the rights of any party such as
refusing to postpone the hearing upon sufficient cause shown or to hear
evidence pertinent and material to the controversy; or

iv. One or more of the arbitrators was disqualified to act as such under
this Chapter and willfully refrained from disclosing such disqualification; or

v. The arbitral tribunal exceeded its powers, or so imperfectly executed

them, such that a complete, final and definite award upon the subject matter
submitted to it was not made.

9. Confirmation of Award

i. Confirmation or vacation of award may be filed with the RTC having

jurisdiction over the place in which one of the parties is doing business, where
any of the parties reside or where arbitration proceedings were conducted.
10. Appeal

i. A decision of the court confirming, vacating, setting aside, modifying or

correcting an arbitral award may be appealed to the Court of Appeals.

11. Fees and Costs

i. The fees of the arbitrators shall be agreed upon by the parties and the
arbitrator/s in writing prior to the arbitration.