Law Summary
Definitions of Key Terms
- "ADR System": Processes outside court adjudication involving a neutral third party, including arbitration, mediation, conciliation, early neutral evaluation, mini-trial, and combinations thereof.
- "ADR Provider/Practitioner": Accredited or chosen individuals who mediate, arbitrate, or evaluate disputes.
- Definitions include arbitration, arbitrator, award, commercial arbitration, mediator, mediation party, confidentiality, court-annexed mediation, government agency, international party, and more.
- Recognizes electronic signatures under the Electronic Signatures in Global and E-Commerce Act for ADR proceedings.
Liability of ADR Providers and Exceptions
- ADR providers/practitioners bear civil liability similar to public officers for duties performed.
- The Act excludes application to labor disputes under the Labor Code, matters involving civil status, marriage validity, legal separation, court jurisdiction, future legitime, criminal liability, and disputes by law incapable of compromise.
Mediation Provisions
- Covers voluntary mediation (including conciliation) outside court-annexed processes.
- Emphasizes confidentiality, party decision-making authority, and encourages candid communication.
- Mediation communications are privileged and confidential; they are inadmissible in court except under defined exceptions.
- Waiver of confidentiality must be express and can be rescinded; improper disclosure may lead to damages.
- Exceptions to confidentiality include written agreements, public mediation sessions, criminal threats or activities, protection proceedings for abuse, and professional misconduct allegations.
- Mediators cannot be compelled to testify or disclose mediation communications; wrongful subpoenas require reimbursement of legal fees.
- Mediators must disclose conflicts or interests affecting impartiality prior to or during mediation.
- Parties may have legal assistance during mediation; waivers must be in writing and can be rescinded.
- Parties can agree on mediation venue; absent agreement, place should be convenient to all.
Mediation Agreements and Enforcement
- Mediation under institutional rules binds parties to institutional policies and procedures, with this Act prevailing if conflicts occur.
- Mediated settlement agreements are prepared and signed with counsel and mediator assistance.
- Mediators certify agreement explanations to parties in understandable language.
- Agreements may be deposited in court and enforced summarily through court petition.
- Parties may agree for mediators to arbitrate disputes if mediation fails, with awards enforceable under the Arbitration Law.
Other ADR Forms
- Parties can refer disputes partially or wholly to other ADR forms like early neutral evaluation, mini-trials, or combined methods like med-arb.
- Provisions from mediation chapter apply except where arbitration is involved, then arbitration rules govern.
International Commercial Arbitration
- The Model Law on International Commercial Arbitration governs international arbitration in the Philippines.
- Interpretation requires uniformity and consideration of international origins.
- Commercial arbitration covers various commercial relationships, including contracts, trade, construction, finance, and transportation.
- Parties may choose any representative in arbitration; non-lawyer representatives cannot appear in Philippine courts.
- Arbitration proceedings and materials are confidential unless parties consent or limited court disclosure is required; courts may protect sensitive information.
- Courts must refer disputes covered by arbitration agreements to arbitration upon request before or during pre-trial unless agreement is void or inoperable.
- Courts favor arbitration policies and must refer parties bound by arbitration agreements even in multi-party cases.
- "Appointing Authority" appoints arbitrators per agreements or institutional rules; in ad hoc cases, the IBP National President may appoint arbitrators if parties fail to act.
- Courts or arbitral tribunals may grant interim protective measures before or during arbitration to prevent loss, secure obligations, or preserve evidence, enforceable by court assistance.
- Parties choose arbitration venue; lacking agreement, it defaults to Metro Manila. Arbitrators can meet elsewhere as appropriate.
- Parties select arbitration language; default is English for international, English or Filipino for domestic arbitration unless the tribunal decides otherwise.
Domestic Arbitration
- Governed by the amended Arbitration Law (RA 876) and applicable Model Law articles and procedural provisions from international arbitration.
Construction Disputes Arbitration
- Governed by Executive Order No. 1008 (Construction Industry Arbitration Law).
- CIAC exercises original and exclusive jurisdiction over construction disputes involving parties bound by arbitration, regardless of "commercial" classification.
- By written agreement, arbitrators may also mediate and mediators may arbitrate; settlement agreements may be issued as arbitral awards.
- CIAC rules allow appointment of foreign arbitrators under conditions involving international parties and nationality requirements.
- Court shall dismiss construction dispute cases subject to arbitration agreements and refer parties to arbitration, unless parties exclusively agree for court resolution.
Judicial Review of Arbitral Awards
- Domestic arbitral awards are confirmed by Regional Trial Courts, enforced as final court decisions. CIAC awards are executory without confirmation.
- Grounds to question domestic awards are limited to specific legal bases under RA 876.
- Recognition and enforcement of foreign arbitral awards follow the New York Convention procedures; non-Convention awards may be recognized on grounds of comity and reciprocity.
- Foreign arbitral awards confirmed abroad are enforced as arbitral awards, not foreign court judgments.
- Challenges to foreign awards are limited to New York Convention grounds; other challenges are disregarded.
- Court of Appeals reviews Regional Trial Court decisions on arbitral awards; appeal losers must post counterbond equal to award amount.
- Special proceedings for arbitration enforcement or review are filed with Regional Trial Courts at designated venues related to the arbitration or parties.
- Courts must notify parties of enforcement proceedings at least 15 days before hearings.
Office for Alternative Dispute Resolution (OADR)
- Established as attached to DOJ, headed by an Executive Director appointed by the President.
- Objectives include promotion, development, expansion of ADR in public and private sectors, monitoring, study, evaluation, and recommending statutory improvements.
- Powers include training standards formulation, certification, program coordination, and ability to charge fees.
Appropriations and Implementation
- Funding for the Act is provided through the General Appropriations Act following enactment.
- The Secretary of Justice convenes a multi-agency and professional committee within one month post-approval to draft implementing rules and regulations (IRR) within three months, subject to oversight committee approval.
Miscellaneous Provisions
- The Act does not repeal or modify Katarungang Pambarangay jurisdiction under the Local Government Code.
- Repeals existing inconsistent laws, decrees, executive orders, rules and regulations.
- Contains separability clause preserving remaining provisions if any part is invalidated.
- Takes effect 15 days after publication in at least two national newspapers.