Title
Mandate ADR in PPP, BOT, and JV Contracts
Law
Executive Order No. 78
Decision Date
Mar 15, 2019
Executive Order No. 78 mandates the inclusion of Alternative Dispute Resolution mechanisms in contracts for public-private partnership projects, joint venture agreements, and contracts entered into by local government units, allowing parties to choose domestic or international ADR mechanisms to resolve disputes.
A

Legislative and Judicial Foundations for ADR

  • RA 876 (1953) allowed parties to submit controversies to arbitration either at the time of dispute or as agreed in contracts.
  • The Supreme Court authorized court-annexed mediation and incorporated other ADR forms like pre-trial, discovery, barangay certification, and small claims procedures to promote dispute resolution outside formal litigation.
  • RA 9285 (The ADR Act of 2004) established State policy to promote party autonomy and respect parties' freedom to arrange dispute resolution.
  • The Supreme Court’s Special Rules on ADR (2009) encourage arbitration and mediation to achieve speedy, efficient dispute resolution minimizing court intervention.

Policy Objectives and State Support for ADR

  • ADR is promoted to provide efficient, impartial justice, reduce court dockets, and offer less expensive, less tedious, and less complex dispute resolution.
  • This is especially advantageous for large-scale, capital-intensive infrastructure and development projects to create an inviting climate for private investments.

Implementing Agency and Issuance of Rules

  • The National Economic and Development Authority (NEDA), in coordination with appropriate government agencies, is responsible for issuing Implementing Rules and Regulations (IRR).
  • The IRR shall be binding on all government agencies and will guide LGUs entering into PPP, BOT contracts, and JVAs regarding ADR provisions.

Information Campaign and Funding

  • The Department of Justice (DOJ) through the Office of the Alternative Dispute Resolution (OADR), NEDA through the PPP Center, and government media will conduct a massive information campaign on the ADR mandate.
  • The campaign targets national and local government agencies, the private sector, and the general public to raise awareness of ADR mechanisms.
  • Initial funding will be shared by PPP Center, NEDA, OADR, and concerned agencies from their current appropriations.
  • Subsequent funding will be included in these agencies’ regular appropriations.

Repealing Clause

  • All previous issuances, orders, rules, and regulations inconsistent with this Executive Order are revoked or modified accordingly.

Separability Clause

  • If any provision is declared invalid or unconstitutional, the remaining provisions remain valid and effective.

Effectivity Clause

  • The Executive Order takes effect immediately upon publication in a newspaper of general circulation.

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