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DOMESTIC ARBITRATION
Domestic Arbitration
- Arbitration is domestic if the components of parties’ place of business, place of arbitration,
place of performance of a substantial part of the obligation, and place where the subject matter
of the dispute is most closely connected, are all located in the Philippines.
- Arbitration is domestic if conducted in the Philippines.
Laws which govern Domestic Arbitration:
1. The Arbitration Law (R.A No. 876)
2. The Model Law (Articles 8, 10-14, 18 and 19)
3. The following provisions of the ADR Act on international commercial arbitration.
- Section 22 (Legal Representation in International Commercial Arbitration)
- Section 23 (Confidentiality of Arbitration Proceedings)
- Section 24 (Referral to Arbitration)
- Section 25 (Interpretation of the Act)
- Section 26 (Meaning of “Appointing Authority”)
- Section 27 (What Functions May Be Performed by Appointing Authority)
- Section 28 (Grant of Interim Measures)
- Section 29 (Further Authority for Arbitrator to Grant Measures of Protection)
- Section 30 (Place of Arbitration)
- Section 31 (Language of Arbitration)
- Section 32 (Laws Governing Domestic Arbitration)
- Section 33 (Applicability of Domestic Arbitration)
4. IRR of the ADR Act; and
5. All other rules applicable to international commercial arbitration which may be given suppletory
application in the absence of specific applicable provisions.
Two (2) sections under ADR Act of 2004 devoted to Domestic Arbitration:
a) Section 32 which distinguished domestic arbitration from international arbitration and declared
that “The Arbitration Law” remains to be applicable to domestic arbitration;
b) Section 33 which adopted certain provisions of the Model Law and the ADR Act on
international commercial arbitration to domestic arbitration.
Disputes Covered by Rules on Domestic Arbitration
(Articles 5, 1, IRR, Section 3, Arbitration Law)
- The provisions and rules on domestic arbitration cover both commercial and non-
commercial disputes provided they are susceptible of arbitration and do not fall within the
exclusive original arbitral jurisdiction of quasi-judicial bodies.
Due Process in Domestic Arbitration
(Articles 5, 17, IRR)
GROUP 6
ARUGAY, Mary Joy
BAGAS, Estela Claire
CANOSA, Ezra Joy
ROMILLA, Raquel
VILLAMAR, Maria Janice
- The rule in the determination of the language that will be used in the arbitral proceedings
is the same for domestic and international commercial arbitration inclyding the prerogative
of the arbitral tribunal to require a translation of documentary evidence if not in the official
language, except that Filipino is added to English as a default language in domestic
arbitration.
Confidentiality
(Articles 5, 42. IRR)
Arbitration proceedings, including the records, evidence and the arbitral award, shall be considered
confidential and shall not be published except:
a) with the consent of the parties; or
b) for the limited purpose of disclosing to the court relevant documents in cases where resort to the
court is allowed herein.
The court may issue protective orders to prevent or prohibit the disclosure of documents or information
containing secret processes, developments, research and other information.
Such communication shall be deemed to have been received on the date it is delivered at the addressee's
address of record, place of business, residence or last known address.
GROUP 6
ARUGAY, Mary Joy
BAGAS, Estela Claire
CANOSA, Ezra Joy
ROMILLA, Raquel
VILLAMAR, Maria Janice
WAIVER OF OBJECTIONS
A party may be estopped from questioning non-compliance or is deemed to have waived his objection
thereto if he fails to raise the objection without delay or within the time prescribed therefor (30 days if no
period is prescribed), provided he knows of such non-compliance.
RA No. 9285 allows the filling of provisional or interim measures with the courts whenever the arbitral
tribunal has no power to act or to act effectively.
If the arbitral tribunal decides to defer the resolution of preliminary issue of its jurisdiction over the
arbitration agreement, none of the parties can seek judicial relief from the deferment. Motions for
reconsideration, appeals and petition for certiorari are not available to challenge the decision of the
arbitral tribunal.
The conditions for judicial review of arbitral awards:
As a rule, the arbitrator’s award cannot be set aside for mere errors of judgement either as to the
law or as to the facts. Courts are generally without power to amend or overrule merely because
of disagreement with matters of law or facts determined by the arbitrators. Judicial review of an
arbitration award is, thus, more limited than judicial review of a trial.
An arbitration award is not absolute and without exceptions. Judicial review of an arbitration award
is warranted when the complaining party has presented proof of the existence of any grounds for
vacating, modifying or correcting an award.If an examination of the record reveals no support for
the arbitrator’s determinations, their award must be vacated. In the same manner, an award must
be vacated if it was made in “manifest disregard of the law.”
REPRESENTATION
A party may appear by himself or be represented or assisted by any person of his choice, provided that
such representative, unless admitted to the practice of law in the Philippines, shall not be authorized to
appear as counsel in any Philippine court or quasi-judicial body.
GROUP 6
ARUGAY, Mary Joy
BAGAS, Estela Claire
CANOSA, Ezra Joy
ROMILLA, Raquel
VILLAMAR, Maria Janice
ARBITRATION AGREEMENT
An arbitration agreement must be in writing and subscribed by the party sought to be charged, or by his
lawful agent.
Where one of the parties to the controversy is an infant, a person judicially declared to be incompetent,
the dispute is not capable of arbitration, unless the referral to the arbitration is made by a general guardian
or guardian ad litem.
A court before which an action is brought in a matter which is the subject matter of an arbitration
agreement shall, if a) at least one party so requests not later than pre-trial conference, or b) upon the
request of both parties thereafter, refer the parties to arbitration, unless it finds that the arbitration
agreement is null and void, inoperative or incapable of being performed.
commercial arbitration, the arbitrator is required to disclose these circumstances” and may be challenged
on account thereof.
Procedure for the Appointment of Arbitrators
The parties in a domestic arbitration are free to agree on the procedure for the appointment of
arbitrators except that, in order to prevent undue advantage, an agreement or clause giving a party the
power to choose more arbitrators than the other is void. The parties may, however, agree to empower
the arbitrators already appointed to select and appoint additional arbitrators who shall sit with the original
arbitrators.
If there is no agreement for the appointment, the following are the default rules:
1. Appointment by the parties- In an arbitration with three (3) arbitrators, each party shall
appoint one (1) arbitrator, and the two (2) arbitrators thus appointed shall appoint the third
arbitrator within thirty (30) days from receipt of a request to do so, failing which, the
appointment shall be made by the appointing authority.
Where, under an appointment procedure agreed upon by the parties, a party or the arbitrators
already appointed, or a third party, including an institution, or the multiple claimants or multiple
respondents, fail to appoint any arbitrator or fail to perform any function entrusted to them
preventing the appointment of any arbitrator, any party may request the appointing authority
to appoint an arbitrator. The appointing authority may make the appointment or give the
appointing party who objects to a default appointment time to make the appointment but not
more than thirty (30) days. The decision of the appointing authority on these matters shall be
immediately executory and shall not be subject to appeal or motion for reconsideration. The
principle is the same as that for international commercial arbitration.
In the case of sole arbitrators, Article 5.10 of the IRR additionally empower the appointing
authority to summon the parties and their counsel to appear before it in order to select and
appoint the sole arbitrator, failing which, the appointing authority shall make the appointment.
In making a default appointment, the appointing authority shall consider (i) the likelihood of
securing an impartial and independent arbitrator; and (ii) the place of residence or business
of the arbitrator to ensure a speedy dispensation of impartial justice and to moderate the cost
of arbitration.
3. Request for appointment- The Request for Appointment with proof of delivery to the adverse
party shall be filed with the appointing authority. Within seven (7) days from receipt of the
GROUP 6
ARUGAY, Mary Joy
BAGAS, Estela Claire
CANOSA, Ezra Joy
ROMILLA, Raquel
VILLAMAR, Maria Janice
Request for Appointment, the adverse party may file his objections to the Request or ask for
an extension not exceeding thirty (30) days to appoint an arbitrator.
4. Acceptance of appointment- An arbitrator, in accepting his appointment, shall submit an
acceptance letter which shall include statements that (i) he agrees to comply with the
applicable law and rules of arbitration; (ii) he accepts the applicable arbitrator’s fee’s; and (iii)
he agrees to devote as much time and attention to the arbitration as the circumstances may
require.
5. Oath of arbitrators. Before hearing any testimony, arbitrators shall take an oath to faithfully
and fully hear and examine the matters in controversy and to make a just award according to
the best of their and understanding.
1. The challenging party shall send a written statement of the reasons for the challenge to the arbitral
tribunal within 15 days after becoming aware of the constitution of the arbitral tribunal or
after becoming aware of the circumstances surrounding the ground for the challenge.
2. Within 15 days from receipt of a challenge, the arbitrator may either accept or reject the challenge.
GROUP 6
ARUGAY, Mary Joy
BAGAS, Estela Claire
CANOSA, Ezra Joy
ROMILLA, Raquel
VILLAMAR, Maria Janice
3. If ARBITRATOR rejects, he shall communicate within the same period of 15 days his rejection of the
challenge and state the facts and argument relied upon.
4. Within the same period of 15 days, the parties may agree to challenge and replace the challenged
arbitrator.
5. If the challenged arbitrator does not accept the challenge or withdraw from his office, and the parties
do not agree to the challenge, the arbitral tribunal shall decide the challenge within 30 days from receipt
of notice of the decision rejecting the challenge.
6. If the challenge before the arbitral tribunal is not successful, or a party shall decline to act, within 30
days from notice of the decision rejecting the challenge, the challenging party may request the
appointing authority to decide the challenge.
7. If the APPOINTING AUTHORITY shall fail to act on the challenge within 30 days from the date of its
receipt or within such further time as it may fix, the
requesting party may, without notice to the parties, renew the request with the court.
8. Until a decision is made, the arbitration proceeding shall continue notwithstanding the challenge and
the challenge arbitrator shall continue to
participate therein as arbitrator.
9. The decision to accept or reject a challenge shall be immediately executory and is not subject to appeal
or motion for reconsideration.
10. The appointment of a substitute arbitrator shall be made pursuant to the procedure applicable to the
appointment of the arbitrator being replaced.
If an arbitrator in a domestic arbitration becomes de jure or de facto unable to perform his functions or
fails to act
without undue delay, his mandates shall be terminated if:
The withdrawal of arbitrator in domestic arbitration does not carry with it the implication that he
being the arbitrator accepted the existence of ground for his termination.
Arbitral Proceedings
GROUP 6
ARUGAY, Mary Joy
BAGAS, Estela Claire
CANOSA, Ezra Joy
ROMILLA, Raquel
VILLAMAR, Maria Janice
1. Statement of Claims – the claimant in domestic arbitration is required to submit within the time agreed
upon by the parties or determined by the
arbitral tribunal his statement of claims including the supporting facts, points at issue and the relief sought.
2. Statement of defense – in the same manner and period, the respondent shall state his defenses.
3. Amendment of claims – the parties may amend or supplement their claims or defenses, as the case
maybe, unless the arbitral tribunal considers the
amendment appropriate or dilatory.
NOTE that there is a slight variance between the default procedure for ICA and domestic
arbitration.
When there is a SLIGHT VARIANCE IN PROCEDURE in the case of the DOMESTIC ARBITRATION,
the following procedure will be followed:
a. Pre-hearing conference – the parties in domestic arbitration are required to undergo a pre-hearing
conference within 30 days from the appointment of the arbitrator or the constitution of an arbitral tribunal
during which they shall DISCUSS THE FOLLOWING:
Venue of Arbitration
Recording of Proceedings
Periods of Statement of Claims
Answer
Answer to Counterclaims
Form and Contents of Claims
Offering of Evidence
Delivery of Communications
Issuance of Subpoena by the Arbitral Tribunal
Manner of Receiving Expert Testimony
Possibility of Interim Relief
Possibility of Ocular Inspection
Fees of Arbitral Tribunal
Other Matters
GROUP 6
ARUGAY, Mary Joy
BAGAS, Estela Claire
CANOSA, Ezra Joy
ROMILLA, Raquel
VILLAMAR, Maria Janice
NOTE on the possibility of a compromise is NOT among those that the parties and the arbitral
tribunal are supposed to discuss during the pre-hearing conference.
GENERAL RULE: No arbitrator shall act as mediator in any proceeding where he is acting as an
arbitrator
EXCEPTION: when the arbitrator, under a settlement agreement, the parties agree to constitute
the mediator as an arbitrator.
b. Threshold issues – issues on the jurisdiction of the arbitral tribunal over the claims and counterclaims
or the arbitrability of the claims or counterclaims, shall be resolved by the arbitral tribunal as threshold
issues if the parties so request, unless the issues are intertwined with the factual issues that they cannot
be resolve ahead of the hearing on the merits.
c. Hearing dates and postponements – arbitral tribunal shall in consultation with the parties fix the date
and time of
hearings.
NOTE on the hearings shall not be postponed except with the conformity of the arbitrator and for
good and sufficient cause.
d. Default of the Party –
CLAIMANT RESPONDENT ANY PARTY
fails to communicate his fails to communicate his fails to
statement of claims statement of defenses appear or produce evidence
arbitral tribunal shall arbitral tribunal shall the said party shall have
terminate the continue the proceedings deemed waived them
proceedings without treating such
failure in itself as an
admission of the
claimant’s allegation
NOTE on the arbitral tribunal may authorize its chairman to issue or release its decision on
interlocutory matters.
f. Consolidation or concurrent hearings – they may agree to consolidate the arbitration proceedings
with other arbitration proceedings or hold concurrent hearings.
g. Closure of hearing – no further motion, manifestation or submission maybe allowed except for post-
hearing briefs and reply briefs, unless the tribunal, motu propio or upon the request of a party allows the
reopening of the hearing.
5. Rules on taking evidence – the following rules on reception as well as the processes that the tribunal
may employ in taking evidence:
GROUP 6
ARUGAY, Mary Joy
BAGAS, Estela Claire
CANOSA, Ezra Joy
ROMILLA, Raquel
VILLAMAR, Maria Janice
a. Testimonial evidence – witnesses shall be required to take an oath or affirmation to tell the truth. The
parties may also agree in writing to submit their dispute to arbitration other than by oral hearing.
b. Documentary evidence – the tribunal may require the parties to submit or produce such other
necessary documents.
c. Subpoena – the tribunal shall have the power to issue subpoena duces tecum and/or ad testificandum.
d. Expert – the tribunal may appoint one or more experts to report to it on specific
issues, may require the parties to submit
relevant information or grant access to
such expert and may grant the parties
opportunity to ask questions of the expert and present their own experts to testify on the points at issue.
NOTE on domestic arbitration, upon the agreement of the parties, the finding of the expert
engaged by the tribunal shall be binding upon them and the tribunal.
issuance of subpoena
interim or provisional reliefs
protective orders with respect to confidentiality
orders that may affect third parties
examination of debtors
6. Decision – the decision of the tribunal shall be made by the sole arbitrator or unless otherwise
agreed upon by the parties, by the majority of the arbitrators in multi-arbitrator proceedings.
However, questions of procedure may be decided by the chairman of the tribunal if authorized by the
parties or by all members of the tribunal.
The tribunal shall render its written award within 30 days after the closing of the hearing, submission of
the parties’ briefs, or the declaration by the arbitral tribunal that the proceedings have been closed.
state the reason upon which it is based (unless the parties have agreed otherwise or the award
is an award on agreed terms, consent award or award based on compromise)
signed copy of the award shall be
delivered to each party
the award need NOT be acknowledged or sworn to unless required by the parties
the parties may require the tribunal to supply the omission within 30 days from receipt of the
award.
8. Settlement – the proceedings will be terminated by the execution of an arbitral award on agreed terms.
The said form of award shall have the same status and effect as any other award on the merits.
9. Termination of the claim – International and Domestic arbitration is terminated either by:
c. The finding by the arbitral tribunal that the continuation of the proceeding has become
unnecessary or impossible
Interim Measures
The parties to a domestic arbitration may seek from the arbitrator or tribunal interim measures including:
preliminary injunction
appointment of receiver
detention of property
preservation and inspection
Either party may also secure assistance from the courts for the implementation of interim measures.
1. After the tribunal has been constituted, any party may request for interim measures.
2. The relief may be granted in order to prevent irreparable loss, to provide security for the performance
of obligation, to produce or preserve
evidence, or to compel any other appropriate act or omission.
GROUP 6
ARUGAY, Mary Joy
BAGAS, Estela Claire
CANOSA, Ezra Joy
ROMILLA, Raquel
VILLAMAR, Maria Janice
3. The grant of the relief may be conditioned upon the provision of security or any act of or omission
specified in the order.
4. The order granting or denying the in the request for interim measures shall be binding upon the parties
and either party may apply with the courts for
assistance in the implementing or enforcing an interim measure.
5. A party who refuses to comply with the order shall be liable for damages resulting from noncompliance,
including all expenses and reasonable attorney’s fees paid in obtaining judicial enforcement.
6. Before the constitution of the arbitral tribunal, or to the extent that the arbitral tribunal already
constituted has no power to act effectively, the interim measures maybe requested from the court in
accordance with the Special Rules of Court on ADR.
Multi-Party Arbitration
4. Correction of typographical error and similar errors initiated by a party – a party may ask the tribunal
for the correction of the award within thirty (30) days from the receipt of the award and with notice to the
other party.
5. Interpretation of the award – within the same period, the parties may agree to request the tribunal to
give an interpretation on a specific point or part of the award.
6. Correction of the typographical errors initiated by the tribunal – within thirty (30) days from the date of
the award, the tribunal may motu propio correct any typographical error
7. Additional award – within thirty (30) days from receipt of the award, a party with notice to the other,
may request the tribunal to make an additional award as to claims presented in the arbitral proceedings
but omitted in the award. If justified, the tribunal shall make the additional award within sixty (60) days
from the receipt of the request.
The general rule is that the parties may ask for correction, interpretation or the rendition of an
additional award within thirty (30) days from the receipt of the award except when the parties have granted
upon any period of time.
The foregoing grounds for amendment or modification of an arbitral award by the tribunal should
be differentiated from the grounds for the amendment or modification of an arbitral award by the court. A
court may amend or modify a domestic arbitral award in the following instances:
1. Where there is an evident miscalculation of figures or an evident mistake in the description of any
person, thing or property referred to in the award;
2. Where the arbitrators have awarded upon a matter not submitted to them, not affecting the merits of
the decision upon the matter submitted;
3. Where the award is imperfect in a matter of form not affecting the merits of the controversy and if it
has been a commissioner’s report, the defect could have been amended or disregarded by the court.
If the award upon a matter not submitted for arbitration, or if the imperfect form of the award,
affects the merits of the decision or controversy, the award should be vacated instead of merely being
amended or modified by the court.
The notice of a motion to vacate, modify or correct an award must be served upon the adverse
party within thirty (30) days after the award is filed or delivered.
The judgment of RTC rendered in a motion to confirm, modify, correct or vacate an award shall
have the same force and effect as judgment in an action and may be enforced as if it had been rendered
in the court in which it is entered.
2. There was evident partiality or corruption in the tribunal or any of its members;
3. The tribunal was guilty of misconduct or any form of misbehavior that has materially prejudiced the
rights of any party;
4. One or more of the arbitrators was disqualified to act as such and willfully refrained from disclosing
such disqualification;
5. 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.
Compare the foregoing grounds with those applicable to the setting aside of international
commercial arbitral awards, to wit:
1. The petitioner furnishes proof that there was:
a. Defect in the arbitration agreement because a party was under some incapacity or agreement is not
valid under applicable law;
b. Violation of due process because the petitioner was not given proper notice of the appointment of an
arbitrator or the proceeding or unable to present his case;
c. Lack or excess of jurisdiction on the part of the tribunal because the award deals with a dispute not
contemplated by or not falling within the terms of the submission to arbitration, subject to the application
of doctrine of severability/separability;
d. Violation of the arbitration agreement because the composition of the arbitral tribunal or the arbitral
process was not in accordance with the agreement of the parties unless such agreement was in conflict
with a provision of the ADR act from which the parties cannot derogate or failing such agreement, was
not in accordance with the ADR act,
2. Or the court finds that:
a. The subject of the dispute is not capable of settlement under the laws of Republic of the Philippines;
b. The award is in conflict with public policy of Philippines.
The court before which the petition for setting-aside a domestic arbitral award is filed has the
prerogative and option to suspend the court proceedings in the following instances:
1. The court may suspend the setting aside proceedings to give the tribunal an opportunity to resume the
arbitral award proceedings or take such action which will eliminate the grounds for setting aside an award;
2. The petitioner or the oppositor may petition the court to remit the case to the same tribunal for the
purpose of making new or revised final and definite award or to direct a new hearing before the same or
new tribunal; or
GROUP 6
ARUGAY, Mary Joy
BAGAS, Estela Claire
CANOSA, Ezra Joy
ROMILLA, Raquel
VILLAMAR, Maria Janice
3. If the ground for vacating an arbitral award does not affect the merits of the case and may be cured or
remedied, the adverse party may oppose the petition and instead request the court to suspend the
vacation or setting aside proceedings to give the arbitral tribunal an opportunity to cure or remedy the
award or resume the arbitration proceedings or take such action as will eliminate the grounds for vacation
or setting aside.
In the foregoing instances, opportunity is being given to the tribunal to cure any defect in its
proceedings and award.