Previous Guidelines and Issues Raised
- The earlier 2008 guidelines required the nominating party to shoulder airfare and per diems capped at PHP 20,000 per day.
- Air travel class entitlement depended on flight duration (economy if ≤4 hours, business if >4 hours).
- Arbitrator's fees were set at two to five times existing CIAC rates, shared proportionally or equally by parties.
- Administrative fees and CIAC staff expenses outside CIAC premises were to be paid by parties.
- A formula for foreign arbitrator’s fees based on hourly rate and total service hours was adopted in 2009.
- Concerns regarding prohibitive costs arose, potentially undermining the right to nominate foreign arbitrators or disadvantaging financially weaker parties.
Review and Recommendations by PICAM
- The PICAM was tasked in 2010 to review the system considering practical experiences.
- Recommendations submitted in 2011 included:
- Retention of existing guidelines on travel costs and per diems to be borne by the nominating party.
- Retention of administrative fees including Arbitration Development Fund fees.
- Removal of elevated fee rates for foreign arbitrators to avoid financial injustice between parties.
- Introduction of extra compensation for foreign arbitrators to reflect international competitiveness and compensate lost income.
New Payment Guidelines for Foreign Arbitrators
- Travel expenses (to and from the Philippines) and per diems are fully borne by the nominating party.
- The nominating party must pre-deposit estimated costs with CIAC which reimburses the arbitrator upon submission of receipts.
- Per diem allowance is capped at US $500 per day for hotel, food, and land transportation.
- Flight class entitlement remains economy for ≤4 hours travel and business for travel >4 hours.
- Administrative fees and Arbitration Development Fund fees are unaffected by foreign arbitrator appointment.
- Arbitrator’s fees for local and foreign arbitrators shall be the same and paid in Philippine currency unless a foreign arbitrator requests direct foreign exchange payment, the cost of which is charged to the arbitrator.
Extra Compensation for Foreign Arbitrators
- Foreign arbitrators are entitled to additional compensation for travel and stay calculated at US $250/hour for 8 hours daily, max fourteen (14) days, amounting to up to US $2,000 per day.
- This extra compensation is paid by the nominating party, deposited in U.S. currency with CIAC, and paid after the final award or as agreed in Terms of Reference.
- Excess deposits are returned to the nominating party.
Non-Reimbursability Clause and Effective Date
- Travel expenses, per diems, and extra compensation paid to foreign arbitrators shall not be subject to recovery as reimbursable costs in the arbitral award.
- The guidelines took effect fifteen (15) days after receipt of certified copies by the National Administrative Register, maintaining uniformity and clarity in arbitration cost administration involving foreign arbitrators.