Philippine ADR Act - Speedy Dispute

Policy and purposes on ADR use

The State actively promotes party autonomy and the freedom of parties to make their own arrangements to resolve disputes. (Section 2)
The State actively encourages the use of Alternative Dispute Resolution (ADR) as a means to achieve speedy and impartial justice and to de-clog court dockets. (Section 2)
The State provides means for ADR as an efficient tool and an alternative procedure for resolving appropriate cases. (Section 2)
The State enlists active private sector participation in ADR-based dispute settlement. (Section 2)
The Act does not prevent the Supreme Court from adopting any ADR system (including mediation, conciliation, arbitration, or combinations) for resolving cases pending before all courts under Supreme Court rules. (Section 2)

Core definitions and key concepts

An Alternative Dispute Resolution System is any dispute resolution process other than adjudication by a presiding judge or a government officer, where a neutral third party participates to assist the resolution of issues, including arbitration, mediation, conciliation, early neutral evaluation, mini-trial, or any combination. (Section 3)
An ADR Provider includes institutions or persons accredited as mediator, conciliator, arbitrator, neutral evaluator, or similar functions in ADR. (Section 3)
Parties may choose nonaccredited individuals to act as mediator, conciliator, arbitrator, or neutral evaluator without violating the Act. (Section 3)
ADR practitioners refer to individuals acting as mediator, conciliator, arbitrator, or neutral evaluator. (Section 3)
Authenticate means to sign, execute, or adopt a symbol or encrypt a record in whole or part to identify the authenticating party and to adopt, accept, or establish the authenticity of a record or term. (Section 3)
Arbitration is a voluntary dispute resolution process where one or more arbitrators resolve a dispute by rendering an award. (Section 3)
An Award includes any partial or final decision by an arbitrator resolving an issue in a controversy. (Section 3)
An arbitration is commercial if it covers matters arising from relationships of a commercial nature, whether contractual or not. (Section 3)
Confidential information in ADR includes defined categories of communications and materials related to mediation or arbitration that are intended not to be disclosed or reasonably expected to remain undisclosed, including defined mediation communications and arbitration-related pleadings and submissions. (Section 3)
Court-Annexed Mediation is mediation conducted under the auspices of the court after the court acquires jurisdiction. (Section 3)
Court-Referred Mediation is mediation ordered by a court in accordance with the parties’ agreement where an action was prematurely commenced in violation of the agreement. (Section 3)
Early Neutral Evaluation is an early pre-trial ADR where parties and their lawyers present case summaries and receive a nonbinding assessment by an experienced neutral with subject-matter expertise. (Section 3)
A Government Agency is any governmental entity, office, or officer (other than a court) with quasi-judicial power or dispute-resolving power involving government, its agencies and instrumentalities, or private persons. (Section 3)
An International Party has a place of business outside the Philippines and excludes domestic subsidiaries of such international party and excludes co-venturers in a joint venture with a party whose place of business is in the Philippines. (Section 3)
Mediation is a voluntary process where a mediator, selected by the disputing parties, facilitates communication and negotiation to assist parties in reaching a voluntary agreement. (Section 3)
A Mediator conducts mediation; a Mediation Party participates in mediation and whose consent is necessary to resolve the dispute. (Section 3)
Mediation-Arbitration (Med-Arb) is a two-step process involving both mediation and arbitration. (Section 3)
Mini-trial is a structured method where merits are argued before a panel of senior decision makers (with or without a neutral third person), after which parties seek a negotiated settlement. (Section 3)
Model Law refers to the UNCITRAL Model Law on International Commercial Arbitration adopted on 21 June 1985. (Section 3)
The New York Convention is the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards, approved in 1958 and ratified by the Philippine Senate under Senate Resolution No. 71. (Section 3)
A Convention Award is a foreign arbitral award made in a Convention State; a Non-Convention Award is a foreign arbitral award made in a Non-Convention State. (Section 3)
Convention State means a State that is a member of the New York Convention; Non-Convention State means a State not a member of the New York Convention. (Section 3)
Non-Party Participant is a person other than a party or mediator who participates in mediation as witness, resource person, or expert. (Section 3)
A Proceeding includes judicial, administrative, or other adjudicative processes, including related motions, conferences, and discovery. (Section 3)
A Record is information written in a tangible medium or stored in an electronic or similar medium, retrievable in perceivable form. (Section 3)
A Roster is a list of persons qualified to provide ADR services as neutrals or to serve as arbitrators. (Section 3)

Electronic signatures and ADR provider liability

The Electronic Signatures in Global and E-Commerce Act applies to proceedings contemplated in the Act, including its Implementing Rules and Regulations. (Section 4)
ADR providers and practitioners have the same civil liability for acts done in the performance of their duties as that of public officers under Section 38, Chapter 9, Book I of the Administrative Code of 1987. (Section 5)

Exclusions from application of the Act

The Act does not apply to resolution or settlement of:
- Labor disputes covered by Presidential Decree No. 442 (Labor Code of the Philippines), as amended, and its Implementing Rules and Regulations. (Section 6)
- Civil status of persons. (Section 6)
- Validity of a marriage. (Section 6)
- Any ground for legal separation. (Section 6)
- Jurisdiction of courts. (Section 6)
- Future legitime. (Section 6)
- Criminal liability. (Section 6)
- Matters which by law cannot be compromised. (Section 6)

Voluntary mediation: coverage, confidentiality, enforcement

Voluntary mediation covered includes both ad hoc and institutional mediation, other than court-annexed mediation. “Mediation” includes conciliation. (Section 7)
In applying and construing mediation provisions, decision-makers must promote:
- candor of parties and mediators through confidentiality of the mediation process; (Section 8)
- prompt, economical, and amicable resolution consistent with integrity of determination by the parties; (Section 8)
- the policy that the decision-making authority rests with the parties. (Section 8)
Mediation communications are privileged and confidential, and a party, mediator, or nonparty participant may refuse to disclose and may prevent disclosure of mediation communications. (Section 9)
Confidential mediation information is not subject to discovery and is inadmissible in any adversarial proceeding (judicial or quasi-judicial). (Section 9)
Evidence or information that is otherwise admissible or subject to discovery does not become inadmissible solely because it was used in mediation. (Section 9)
In adversarial proceedings, specified persons may not be compelled to disclose confidential information obtained during mediation, including the parties, mediator(s), counsel for the parties, nonparty participants, mediation staff (secretary, stenographer, clerk, assistant), and other persons who obtain or possess confidential information by reason of profession. (Section 9)
Mediation confidentiality protections continue even if a mediator is found to have failed to act impartially. (Section 9)
A mediator may not be called to testify regarding information gathered in mediation. (Section 9)
A mediator wrongfully subpoenaed is entitled to reimbursement of the full cost of attorney’s fees and related expenses. (Section 9)
Privilege arising from mediation confidentiality may be waived in a record or orally during a proceeding by the mediator and mediation parties. (Section 10)
A privilege may also be waived by a nonparty participant if the information provided by such nonparty participant is waived. (Section 10)
A person who discloses confidential information is precluded from asserting the privilege to bar disclosure of the rest of information necessary for a complete understanding of the previously disclosed information. (Section 10)
A person suffering loss or damage due to disclosure of confidential information is entitled to damages in a judicial proceeding against the person who made the disclosure. (Section 10)
A person who discloses or makes representation about a mediation is precluded from asserting the privilege to the extent that the communication prejudices another person in the proceeding and it is necessary for the prejudiced person to respond to the representation or disclosure. (Section 10)
There is no privilege against disclosure if mediation communication is:
- in an agreement evidenced by a record authenticated by all parties to the agreement; (Section 11)
- available to the public, or made during a mediation session open to the public or required by law to be open; (Section 11)
- a threat or statement of a plan to inflict bodily injury or commit a crime of violence, intentionally used to plan a crime, attempt to commit, commit a crime, or conceal ongoing crime or criminal activity; (Section 11)
- sought or offered to prove or disprove abuse, neglect, abandonment, or exploitation in proceedings where a public agency protects an individual protected by law, except when a child protection matter is referred to mediation by a court or a public agency participates; (Section 11)
- sought or offered to prove or disprove a claim or complaint of professional misconduct or malpractice filed against a mediator; (Section 11)
- sought or offered to prove or disprove a claim or complaint of professional misconduct or malpractice filed against a party, nonparty participant, or representative of a party based on conduct occurring during mediation. (Section 11)
There is no privilege under the confidentiality rules if a court or administrative agency, after an in camera hearing, finds that:
- the evidence is not otherwise available; and
- there is a need for the evidence that substantially outweighs the interest in protecting confidentiality;
- and the mediation communication is sought or offered in proceedings involving a crime or felony, or to prove a claim or defense sufficient under law to reform or avoid a liability on a contract arising out of the mediation. (Section 11)
A mediator may not be compelled to provide evidence of a mediation communication or testify in such proceedings. (Section 11)
If mediation communication is not privileged under an exception, only the portion necessary for the exception may be admitted, and admission for limited purpose does not make the evidence (or any other mediation communication) admissible for any other purpose. (Section 11)
A mediator may not make reports, assessments, evaluations, recommendations, findings, or other communications regarding a mediation to a court, agency, or authority that may rule on the subject dispute, except where the mediation occurred or terminated, or where a settlement was reached, or as permitted by the Act’s disclosure rules. (Section 12)
Before accepting mediation, a mediator must make a reasonable inquiry to determine known facts that may affect impartiality, including financial or personal interest in the outcome and any existing or past relationships with a party or foreseeable participant, and must disclose any such facts to the mediation parties as soon as practical before accepting mediation. (Section 13)
If a mediator learns after acceptance any facts described above, the mediator must disclose them as soon as practicable; on request of a mediation party, the mediator must disclose qualifications to mediate. (Section 13)
Mediators are not required to have special qualifications by background or profession unless required by the mediation agreement or by the mediation parties. (Section 13)
A party may designate a lawyer or any other person to provide assistance in mediation, and any waiver of that right must be in writing by the waiving party; waiver of participation or legal representation may be rescinded at any time. (Section 14)
Parties are free to agree on the place of mediation; absent agreement, the place shall be any place convenient and appropriate to all parties. (Section 15)
Agreements under institutional mediation rules include agreement to be bound by the institution’s internal mediation and administrative policies, including rules governing mediation and requiring mediator, parties, counsel, and nonparty participants to abide by such rules; if there is conflict between institutional rules and the Act, the Act prevails. (Section 16)
A mediated settlement agreement after successful mediation must be prepared by the parties with assistance of their respective counsel (if any) and the mediator. (Section 17)
Parties and their respective counsels must endeavor to make the terms complete and provide for contingencies of breach to avoid conflicting interpretations. (Section 17)
Parties and their counsels (if any) must sign the settlement agreement; the mediator must certify that the mediator explained the contents in a language known to the parties. (Section 17)
Parties may deposit the settlement agreement with the appropriate Clerk of a Regional Trial Court of the place where one of the parties resides, and if enforcement is needed, any party may file a petition in that court; the court must proceed summarily under rules of procedure promulgated by the Supreme Court. (Section 17)
Parties may agree in the settlement agreement that the mediator becomes a sole arbitrator and treat the settlement agreement as an arbitral award enforceable under Republic Act No. 876 (Arbitration Law), notwithstanding Executive Order No. 1008 for mediated disputes outside the Construction Industry Arbitration Commission (CIAC). (Section 17)

Referral to other ADR forms

Parties may agree to refer one or more or all issues arising in a dispute or during its pendency to other ADR forms such as third-person evaluation, mini-trial, mediation-arbitration, or combinations. (Section 18)
Other ADR forms are governed by Chapter 2 rules unless combined with arbitration, in which case Chapter 5 governs. (Section 18)

International commercial arbitration framework

International commercial arbitration is governed by the Model Law on International Commercial Arbitration (UNCITRAL) adopted on 21 June 1985 and recommended by UN General Assembly Resolution No. 40/72 approved on 11 December 1985, with the text attached as Appendix “A”. (Section 19)
In interpreting the Model Law, regard must be had to its international origin and the need for uniformity, and recourse may be made to UN travaux preparatories and the report of the UN Secretary-General dated 25 March 1985 titled “International Commercial Arbitration: Analytical Commentary on Draft Text identified by reference number A/CN. 9/264.” (Section 20)
An arbitration is “commercial” if it covers relationships of a commercial nature, including (without limitation) trade transactions for supply or exchange of goods or services; distribution; construction of works; commercial representation or agency; factoring; leasing; consulting; engineering; licensing; investment; financing; banking; insurance; joint venture; and other forms of industrial or business cooperation; and carriage of goods or passengers by air, sea, rail, or road. (Section 21)
In international arbitration conducted in the Philippines, a party may be represented by any person of the party’s choice; however, unless admitted to the practice of law in the Philippines, the representative is not authorized to appear as counsel in any Philippine court or any other quasi-judicial body, whether or not the appearance relates to the arbitration. (Section 22)
Arbitration proceedings, including records, evidence, and the arbitral award, are confidential and shall not be published except:
- with the consent of the parties; or
- for the limited purpose of disclosing to the court relevant documents in cases where resort to court is allowed.
The court with a pending action or appeal may issue a protective order preventing or prohibiting disclosure of documents or information containing secret processes, developments, research, or other information if the applicant shows material prejudice by the authorized disclosure. (Section 23)
A court where an action is brought on a matter subject to an arbitration agreement must refer the parties to arbitration if at least one party requests not later than the pre-trial conference, or both parties request thereafter, unless the court finds the arbitration agreement is null and void, inoperative, or incapable of being performed. (Section 24)
Courts must interpret and apply the Act with due regard to the law’s policy favoring arbitration; if a civil action involves multiple parties and one or more are bound by an arbitration agreement, the court shall refer the bound parties to arbitration while the action may continue as to those not bound. (Section 25)
Appointing Authority means the person or institution named in the arbitration agreement or the regular arbitration institution under whose rules institutional arbitration is conducted; if parties agreed to institutional rules and did not agree on a different procedure, they are deemed to have agreed to the rules on arbitrator selection and appointment; for ad hoc arbitration, the default appointment of an arbitrator is made by the National President of the Integrated Bar of the Philippines (IBP) or duly authorized representative. (Section 26)
The functions under Articles 11(3), 11(4), 13(3), and 14(1) of the Model Law are performed by the Appointing Authority; if the Appointing Authority fails or refuses to act within thirty (30) days from receipt of the request, the applicant may renew the application with the court. (Section 27)
Courts and arbitral tribunals may grant interim measures of protection:
- Before constitution of the tribunal, a party may request from a court; after constitution, requests are made to the tribunal, or to the court to the extent the tribunal has no power or is unable to act effectively. (Section 28(a))
- The arbitral tribunal is deemed constituted when the sole arbitrator or third arbitrator has accepted the nomination and written communication of nomination and acceptance has been received by the requesting party. (Section 28(a))
Parties may request provisional relief to:
- prevent irreparable loss or injury;
- provide security for performance of an obligation;
- produce or preserve evidence; or
- compel any other appropriate act or omission. (Section 28(b))
Provisional relief may be conditioned upon provision of security or an act or omission specified in the order. (Section 28(b))
Provisional relief requests must be made through a written application transmitted by reasonable means, detailing the precise relief, the parties, grounds, and evidence. (Section 28(b))
Interim or provisional relief orders are binding; either party may apply to court for assistance implementing or enforcing tribunal-ordered interim measures. (Section 28(b))
A party who does not comply with a tribunal order is liable for all damages resulting from noncompliance, including all expenses and reasonable attorney’s fees paid in obtaining judicial enforcement. (Section 28(b))
A tribunal may order interim measures necessary for the subject-matter following Section 28 rules upon request of a party, unless parties agreed otherwise; interim measures may include preliminary injunctions, appointment of receivers, detention, and preservation/inspection of property subject of dispute. (Section 29)
Parties may agree on place of arbitration; failing agreement, the place is Metro Manila, unless the arbitral tribunal decides a different place considering circumstances including convenience of parties; the tribunal may meet at any appropriate place for consultation, hearings, witness/expert hearings, or inspection of goods, other property, or documents. (Section 30)
Parties may agree on language; failing agreement, language is English for international arbitration and English or Filipino for domestic arbitration, unless the arbitral tribunal determines another language; such agreement/determination applies to written statements, hearings, and awards/decisions/communications; the tribunal may order documentary evidence to be accompanied by translation into the agreed or determined language(s). (Section 31)

Domestic arbitration: rules incorporated

Domestic arbitration continues to be governed by Republic Act No. 876 (Arbitration Law), as amended by the Act. (Section 32)
“Domestic arbitration” means an arbitration that is not international as defined in Article 1(3) of the Model Law. (Section 32)
For domestic arbitration, Articles 8, 10, 11, 12, 13, 14, 18, 19, and 29 to 32 of the Model Law, and Sections 22 to 31 of Chapter 4 apply. (Section 33)

Construction arbitration under CIAC rules

Arbitration of construction disputes is governed by Executive Order No. 1008, otherwise known as the Construction Industry Arbitration Law. (Section 34)
Construction disputes within the original and exclusive jurisdiction of the Construction Industry Arbitration Commission (CIAC) include disputes among or between parties who are project owner, contractor, subcontractor, fabricator, project manager, design professional, consultant, quantity surveyor, bondsman, or issuer of an insurance policy in a construction project, and parties who are otherwise bound by an arbitration agreement directly or by reference. (Section 35)
The CIAC continues to exercise original and exclusive jurisdiction over construction disputes even when the arbitration is “commercial” under Section 21. (Section 35)
By written agreement, an arbitrator may act as mediator and a mediator may act as arbitrator; the parties may also agree in writing that, following successful mediation, the mediator shall issue the settlement agreement in the form of an arbitral award. (Section 36)
The CIAC shall promulgate rules allowing appointment of a foreign arbitrator as co-arbitrator or chairman when:
- the dispute is a construction dispute with one party as an international party;
- the person to be appointed agrees to abide by CIAC arbitration rules and policies;
- the person is either co-arbitrator upon nomination by the international party or the common choice of the first two CIAC-accredited arbitrators (one nominated by the international party);
- the foreign arbitrator is of different nationality from the international party. (Section 37)
The provisions of Section 17(d) of Chapter 2 and Sections 28 and 29 of the Act apply to arbitration of construction disputes. (Section 38)
A Regional Trial Court must dismiss a construction dispute case upon becoming aware, not later than the pre-trial conference, that the parties entered into an arbitration agreement, and must refer the dispute to arbitration conducted by the CIAC, unless both parties, assisted by their counsel, submit a written agreement to resolve exclusively in court rather than CIAC. (Section 39)

Judicial review, confirmation, and enforcement of awards

Confirmation of a domestic arbitral award follows Section 23 of Republic Act No. 876. (Section 40)
A confirmed domestic arbitral award is enforced in the same manner as final and executory decisions of the Regional Trial Court; recognition and enforcement of international commercial arbitration awards are governed by Article 35 of the Model Law; confirmation of a domestic award is made by the Regional Trial Court in accordance with Supreme Court rules of procedure. (Section 40)
A CIAC arbitral award need not be confirmed by the Regional Trial Court to be executory under Executive Order No. 1008. (Section 40)
A party may question a domestic arbitral award with the appropriate Regional Trial Court only on the grounds enumerated in Section 25 of Republic Act No. 876; other grounds are disregarded by the Regional Trial Court. (Section 41)
The New York Convention governs recognition and enforcement of foreign arbitral awards covered by it; applications for recognition and enforcement must be filed with the Regional Trial Court under Supreme Court procedural rules requiring:
- the original or authenticated copy of the award and arbitration agreement; and
- if not in the required language(s), a duly certified translation into any such languages. (Section 42)
The applicant must establish that the country where the foreign award was made is a party to the New York Convention. (Section 42)
If an application for rejection or suspension is filed, the Regional Trial Court may vacate its decision if it considers it proper, and may order the party applying for recognition/enforcement to provide appropriate security when requested. (Section 42)
Foreign arbitral awards not covered by the New York Convention are recognized and enforced under Supreme Court procedural rules; on grounds of comity and reciprocity, the court may recognize and enforce a non-convention award as a convention award. (Section 43)
A foreign arbitral award confirmed by a foreign court is recognized and enforced as a foreign arbitral award, not as a foreign court judgment; once confirmed by the Regional Trial Court, it is enforced as final and executory decisions of Philippine courts. (Section 44)
A party to foreign arbitration may oppose an application for recognition and enforcement only on grounds enumerated under Article V of the New York Convention; other grounds are disregarded by the Regional Trial Court. (Section 45)
Decisions of the Regional Trial Court confirming, vacating, setting aside, modifying, or correcting an arbitral award may be appealed to the Court of Appeals under Supreme Court rules of procedure. (Section 46)
The appellant from a judgment confirming an arbitral award must post a counterbond in favor of the prevailing party equal to the amount of the award under Supreme Court rules. (Section 46)
Venue and jurisdiction for proceedings for recognition/enforcement of an arbitration agreement, vacation/setting aside/correction/modification of an arbitral award, and applications for court assistance/supervision are treated as special