QuestionsQuestions (Republic Act No. 876)
RA 876 is titled the “Arbitration Law.” It authorizes arbitration and arbitration submission agreements, provides for the appointment of arbitrators, and sets the procedure for arbitration and enforcement in civil controversies.
Two or more persons/parties may submit any controversy existing between them at the time of submission, which may be subject of an action. Parties in a contract may also agree to settle future controversies arising between them via arbitration.
A written arbitration submission/contract is valid and enforceable and is generally irrevocable; it may be revoked only on grounds that exist at law for revocation of any contract.
Yes. The arbitration submission may include questions arising out of valuations, appraisals, or other controversies that may be collateral, incidental, precedent, or subsequent to issues between the parties.
A controversy cannot be arbitrated if one of the parties is an infant or judicially declared incompetent, unless the appropriate court having jurisdiction approves a petition for permission to arbitrate filed by the general guardian or guardian ad litem.
The agreement to arbitrate (for future controversies) and a submission to arbitrate (for existing controversies) must be in writing and subscribed by the party sought to be charged or by his lawful agent.
The arbitration agreement is deemed consent to the jurisdiction of the Court of First Instance of the province or city where any party resides to enforce the contract/submission.
By serving a written demand for arbitration consistent with the contract, stating the nature of the controversy, the amount involved (if any), the relief sought, and a true copy of the arbitration contract. It must be served personally or by registered mail, and the demand may specify timing for agreeing on a single arbitrator or the selection process for three arbitrators.
The aggrieved party may file with the Clerk of the Court of First Instance having jurisdiction a copy of the demand with notice that the original demand was sent by registered mail or delivered in person to the defaulting party.
The aggrieved party may petition the court for an order directing arbitration to proceed as per the written agreement, with five days written notice of the hearing served personally or by registered mail. The court must be satisfied that the making of the agreement or the default is not in issue; otherwise, the court summarily hears the issue.
If a suit is filed on an issue arising out of an arbitration agreement and the issue is referable to arbitration, the court shall stay the action/proceeding until arbitration is conducted according to the agreement, provided the applicant is not in default in proceeding with arbitration.
When the parties cannot agree on a single arbitrator; when an appointed arbitrator is unwilling/unable and a successor is not appointed properly; when a party fails/refuses to name its arbitrator within 15 days after receipt of the demand; or when arbitrators fail to agree/select the third arbitrator.
An arbitrator must be of legal age, fully enjoy civil rights, and know how to read and write; must not be related by blood or marriage within the sixth degree to either party; must not have financial/fiduciary/other interest or personal bias; and must not be chosen as a party’s advocate/champion. Arbitrators must immediately disclose circumstances likely to create a presumption of bias, after which parties may waive disqualification or declare the office vacant in writing.
Arbitrators may be challenged only for the reasons in Section 10 that arise after the arbitration agreement or were unknown at the time. The challenge is made before the arbitrators. If they do not yield, the challenging party may renew the challenge before the Court of First Instance. While the challenging incident is discussed, the arbitration hearing is suspended and then continued immediately after the court’s order.
Arbitrators are the sole judge of relevancy and materiality and are not bound to conform to the Rules of Court on evidence. They may receive documentary exhibits submitted by the parties, and exhibits are kept by the Clerk of Court during the arbitration.
Unless parties stipulate otherwise, the written award must be rendered within 30 days after the closing of hearings (or after proceedings in lieu of hearing are declared closed). The award must be in writing and signed and acknowledged by a majority of arbitrators (or by the sole arbitrator), and each party must be furnished a copy.
The award must be vacated if it was procured by corruption, fraud, or other undue means; if there was evident partiality/corruption; if arbitrators committed misconduct (e.g., refusing to postpone upon sufficient cause, refusing to hear pertinent and material evidence, or disqualification with willful non-disclosure) materially prejudicing rights; or if arbitrators exceeded their powers or so imperfectly executed them that a mutual final definite award was not made.
A party may apply to confirm within one month after the award is made. The movant must file the arbitration submission/contract, appointment of arbitrators and written extensions (if any), a verified copy of the award, and each notice/affidavit/paper used upon the application plus copies of the court orders. Judgment is docketed as if rendered in an action.