ADR rules for disputes among government agencies

Key definitions and term scope

Alternative Dispute Resolution (ADR) means any process for resolving a dispute other than by judicial adjudication, including Mediation, Arbitration, or Early Neutral Evaluation, among others (Section 1.2.1).
Arbitration is a process where a neutral third party resolves a dispute by rendering an award (Section 1.2.2).
Mediation is a voluntary process where a neutral third party facilitates communication and negotiation and assists parties in reaching a voluntary agreement (Section 1.2.3).
Early Neutral Evaluation assesses, on a non-binding basis, the strengths and weaknesses of each party’s case to serve as a basis for a compromise agreement (Section 1.2.4).
National Government Agency (aNGAa) means any governmental entity, office, or officer other than a court vested by law with quasi-judicial power or the power to resolve or adjudicate disputes involving government, its agencies and instrumentalities, or private persons; aNGA does not include government-owned or controlled corporations as defined in Sec. 2 of P.D. No. 2029 (Section 1.2.5).

Coverage and appropriate dispute mode

The Solicitor General shall choose the most appropriate mode of dispute resolution according to the nature of the interests involved (Section 1.3).
Disputes involving constitutional issues, public order, public policy, morals, principles of public exemplarity, or other matters of public interest must be resolved through adjudication (Section 1.4).
All other disputes may be resolved through a compromise agreement secured through negotiation, mediation/conciliation, or other ADR mode, except those that by law cannot be the subject of compromise (Section 1.4).
ADR proceedings before the OSG do not require strict control by court rules of evidence prevailing in courts of law or equity, and arbitrators shall use reasonable means to ascertain facts speedily and objectively without regard to technicalities of law or procedure to ensure substantive due process (Section 1.6).

Core principles in mediation practice

Application and interpretation must give consideration to: active promotion of party autonomy, the need to promote candor through confidentiality of the mediation process, the policy fostering prompt, economical, amicable resolution, and that the decision-making authority rests with the parties (Section 1.5).
Mediation is covered for disputes, claims, and controversies—including incipient ones and those ongoing or pending cases with the OSG—between or among NGAs that do not involve constitutional issues, public order, public policy, morals, principles of public exemplarity, or other matters of public interest, even if a private third party is involved as long as the private third party is indispensable to final resolution and its involvement does not preclude application of the rules (Section 2.1).
After evaluating the nature of the dispute, the Solicitor General shall determine whether mediation is appropriate under Section 2.1 (Section 2.2).
After such determination, the Solicitor General, or a duly designated Assistant Solicitor General, shall direct parties—through duly authorized representatives—to appear before the assigned Assistant Solicitor General for a preliminary mediation conference specifying the date, time, and place (Section 2.3).
Representatives appearing in mediation must be fully authorized to appear, negotiate, and enter into (1) a stipulation of facts and (2) a compromise agreement, supported by an appropriate Board Resolution or Special Power of Attorney submitted to the mediator during the conference (Section 2.3).
During the preliminary conference, the process and benefits of mediation must be explained, including an assessment of the risks and cost of pursuing litigation, and an agreement to submit the dispute to mediation must be signed by the parties through their duly authorized representatives (Section 2.3).

Mediation conferences, mediator selection, timeline

After parties agree to mediation, they shall select the mediator from the rooster of accredited OSG lawyer-mediators; if they cannot agree, the assigned Assistant Solicitor General shall assign the mediator (Section 2.4).
The Solicitor General shall constitute a committee responsible for the training and accreditation of OSG lawyer-mediators (Section 2.4).
Lawyers of the parties may attend mediation proceedings and must cooperate with the mediator toward securing settlement, while observing the Supreme Court Guidelines on the Role of Lawyers during Mediation Proceedings (Section 2.5).
At the initial joint conference, the mediator must make an opening statement introducing himself/herself and informing parties of the process flow and the confidentiality stress required under Section 2.7, and the parties must make opening statements on how the controversy arose and their positions (Section 2.6).
The mediator must draw out underlying interests, explore common ground, and suggest settlement options; if practical or necessary, the mediator may seek assistance of a co-mediator or a technical expert (Section 2.6).
If no settlement is reached in the initial conference, the mediator may, with consent of both parties, hold separate caucuses to determine real interests and may thereafter hold another joint conference considering various options, including non-binding assessment of strengths and weaknesses (Section 2.6).
The mediator must not record proceedings; only personal notes may be taken for guidance (Section 2.6).
The OSG must not keep a file of mediation proceedings other than the mediator’s report; all other submitted documents must be returned to the parties (Section 2.6).
Mediation proceedings terminate thirty (30) working days after the initial mediation conference if no settlement is reached, unless the parties agree to continue mediation; then an extension of another thirty (30) working days may be granted by the mediator with the written approval of the Solicitor General (Section 2.6).

Mediation confidentiality and mediated settlement effects

Mediation proceedings and all incidents are kept strictly confidential, unless otherwise specifically provided by law (Section 2.7).
All admissions or statements made in mediation are inadmissible for any purpose in any proceeding (Section 2.7).
Communications by one party to the mediator during separate caucuses that are not intended to be known to the other party or parties—including documents, reports, position papers, and affidavits—must not be communicated or shown unless permitted in writing by that party (Section 2.7).
Evidence or information that is otherwise admissible or subject to discovery does not become inadmissible or protected from discovery solely because it was used in mediation (Section 2.7).
Parties must not rely on or introduce as evidence in any other proceeding: (a) views or suggestions made by the other party regarding settlement, (b) admissions made during mediation, (c) proposals suggested by the mediator, (d) the fact the other party indicated willingness to accept a proposal expressed to the mediator (Section 2.7).
No transcript or minutes of mediation proceedings shall be taken, and the mediator’s personal notes must not be furnished to any court or tribunal for any purpose; any such transcript, minutes, or notes are inadmissible as evidence in any other proceedings (Section 2.7).
If parties reach a full or partial compromise, the mediator must ensure written terms are immediately drafted with concurrence of parties or counsel, and must provide legal assistance in drafting the compromise agreement (Section 2.8).
The final compromise agreement must be signed by parties through duly authorized representatives together with respective counsels (Section 2.8).
The approved compromise agreement may be converted into an arbitral award under R.A. 9285, to be submitted to the Solicitor General and later to the Secretary of Justice under Section 70, Chapter 14, E.O. 292 for final approval (Section 2.8).
Mediation costs are imposed by special assessment under the attached schedule, as may be modified from time to time (Section 2.10).

Arbitration: coverage, condition precedent, commencement

NGAs with claims, disputes, or controversies with other agencies— including private individuals/entities indispensable to final resolution—may be parties in arbitration proceedings (Section 3.1).
Arbitration is available for cases between or among NGAs that were not earlier selected by the Solicitor General as appropriate for mediation, including: (a) cases of first instance where a petition for arbitration is filed, (b) cases forwarded after a failed mediation, and (c) matters referred by the Secretary of Justice (Section 3.2).
Purely legal questions, constitutional issues, and matters that cannot be compromised may not be submitted to arbitration (Section 3.2).
Arbitration is a condition precedent before an arbitrable dispute may be filed before regular courts (Section 3.3).
Arbitration is commenced by a request through a petition filed by the aggrieved party in sufficient copies to the OSG in the form required under Section 3.5 (Section 3.4).
The petition must be verified and must contain: (a) names and addresses of parties, (b) ultimate facts supporting the cause of action, (c) signature of the head of the government agency, and (d) disclosure on whether the matter is pending before another forum (Section 3.5).
Verification is by an affidavit that the affiant has read the pleading and that allegations are true and correct based on personal knowledge or authentic records, and must comply with the 2004 Rules on Notarial Practice, with the jurat indicating the affiant exhibited competent evidence of identity; “competent evidence of identity” means identification of an individual based on at least one current identification document issued by an official agency bearing the photograph and signature of the individual (Section 3.5).
The Solicitor General shall issue an Order within five (5) days from filing of the petition requiring respondents to answer within ten (10) days from receipt, attaching pertinent documents and furnishing the claimant a copy of the answer; the answer must include defenses and any counterclaim arising from the same incident, and counterclaims may also be subject to arbitration (Section 3.6).
If the respondent fails to answer, the dispute may be resolved based on the complaint and documents submitted (Section 3.6).
Extensions of time bars are not allowed except for the most compelling reasons, and any extension granted cannot exceed the original period (Section 3.7).

Arbitration tribunal selection, qualifications, and proceedings control

Failure or refusal of respondent to arbitrate after proper invocation of the Solicitor General by filing does not affect proceedings; the Solicitor General must appoint a sole arbitrator or panel from the list of accredited arbitrators, and arbitration continues notwithstanding respondent’s absence, with the award made after evidence of the claimant is received (Section 3.8).
If respondent appears before the award and offers to present evidence, the arbitrator must reopen proceedings to allow respondent to present evidence, without affecting evidence already received (Section 3.8).
If a claim or defense is based on a written instrument or document, the substance must be set forth in the petition or answer and the original or copy must be attached as an annex (Section 3.9).
The dispute may be settled by a sole arbitrator or an arbitral tribunal of three (3) arbitrators; the Solicitor General has the option to appoint based on complexities and intricacies (Section 3.10).
The sole arbitrator, or tribunal members and chairman, must come from the list of accredited OSG lawyer-arbitrators; the Solicitor General constitutes a committee for training and accreditation of OSG lawyer-arbitrators (Section 3.10).
OSG lawyer-arbitrators must not be related by blood or marriage within the sixth degree to either party, must not have financial, fiduciary, or other interest in the controversy or result, and must not have personal bias that may prejudice a party’s right to a fair and impartial award (Section 3.11).
The arbitrator or arbitral tribunal exercises complete control over proceedings to ensure a speedy, adequate, and justifiable disposition (Section 3.12).
The arbitrator or arbitral tribunal decides only issues and related matters submitted for adjudication (Section 3.13).
All arbitration proceedings under the rules must be of record, and the Arbitration and Mediation Division (AMD) Secretariat performs duties of a clerk of court and custodian of records (Section 3.14).
The AMD Secretariat must exercise the authority conferred by law upon an administrative or non-judicial officer authorized to take testimony or evidence, and persons who fail or refuse to obey orders without lawful excuse are dealt with according to law (Section 3.15).

Arbitration conferences, order, disclosures, challenge

After all issues are joined, the arbitral tribunal sends notice setting date, time, and place of a preliminary conference to discuss simplification of issues, stipulations of facts and documents to avoid unnecessary proof, limitation of witnesses, whether case may be decided without trial, and other matters aiding prompt disposition (Section 3.16).
Parties may agree on procedures governing arbitration proceedings during preliminary conference; if no agreement, the rules govern; the Special Rules of Court on ADR (A.M. No. 07-11-08-SC) apply suppletorily (Section 3.16).
Failure of the petitioner to attend the preliminary conference may lead to dismissal of the petition (Section 3.16).
Failure of respondent to attend despite having filed an answer may cause the case to be deemed submitted for decision based on the petition and answer and after reception of evidence of petitioner and any other evidence needed for a just and equitable resolution (Section 3.16).
Before hearing, arbitrator(s) must issue a Preliminary Conference Order based on documents submitted and agreements reached; it must include: (a) names and addresses of parties where communications may validly be made, (b) summary of parties’ respective claims, (c) definition of issues, and (d) other particulars needed to make the award enforceable or helpful (Section 3.17).
The Preliminary Conference Order must be signed by parties and arbitrator(s) within ten (10) days from the preliminary conference (Section 3.17).
Arbitrator(s) must disclose facts and circumstances that may affect impartiality and independence during preliminary conference; if arbitrator discovers circumstances likely to create presumption of bias or believes might disqualify, arbitrator must immediately disclose to parties (Section 3.18).
Parties may agree in writing to (a) waive presumptive disqualifying circumstances or (b) declare the arbitrator’s office vacant; any vacancy must be filled in the same manner as original appointment (Section 3.18).
A party may challenge an arbitrator at any time after appointment but before award on grounds of partiality, bias, incompetence, or unprofessional conduct (Section 3.19).
The challenge must be a complaint under oath stating facts distinctly and concisely, supported by affidavits when available, and accompanied by copies of supporting documents; the Solicitor General gives the challenged arbitrator an opportunity to be heard (Section 3.19).
The challenged arbitrator may inhibit himself without admitting ground, subject to approval by the Solicitor General; if allowed to inhibit or removed, the Solicitor General promptly appoints replacement, and where the challenged arbitrator is the third member, the first two designate the replacement (Section 3.19).
The Solicitor General’s decision to retain or replace an arbitrator is final (Section 3.19).

Arbitration hearing, evidence, interim measures

The initial hearing must be held at the OSG office, and subsequent sessions are held at a venue mutually agreed upon by parties and the tribunal (Section 3.20).
The arbitral tribunal has power to require attendance of witnesses and to subpoena witnesses and documents when relevancy and materiality are demonstrated (Section 3.21).
Hearings must be opened with recording of place, time, date; presence of arbitrator(s), parties, and witnesses; witness names and addresses and exhibits in order received must be part of the record (Section 3.22).
A tribunal quorum for conducting a hearing is two (2) members (Section 3.22.1).
At initial hearing, arbitrator(s) must inform parties of general rules and procedures to ensure speedy and adequate disposition (Section 3.22.2).
Initial proceedings may include opening statements or explanations of issues, brief allegations, what it proposes to prove, and the relief sought (Section 3.22.3).
Arbitrator(s) must clarify and redefine issues if necessary after opening statements (Section 3.22.4).
Arbitrator(s) determine order of presentation, generally requiring the party seeking to enforce a right or establish a claim to present evidence first (Section 3.22.5).
Arbitrator(s) must adopt the most expeditious procedures for introduction and reception of evidence while affording full and equal opportunity to all parties to present relevant evidence (Section 3.22.6).
The parties may offer evidence and must produce additional documents and witnesses deemed necessary; decisions must be based on justice and equity and merits, without regard to technicalities or legal forms, and are not bound by technical rules of evidence (Section 3.22.7).
Evidence must be taken in presence of the arbitrator or majority of arbitrators and all parties, except where a party is absent or has waived right to be present (Section 3.22.7).
On motion or initiative, arbitrator(s) may request persons, boards, bodies, tribunals, government offices, agencies, or instrumentalities, or corporations to produce real or documentary evidence necessary for proper adjudication (Section 3.22.7).
Arbitrator(s) may request any person to give testimony (Section 3.22.7).
Direct testimony must be reduced to writing in affidavit form using sequentially numbered questions and answers and divided into parts corresponding to issues formulated by parties; affidavits must be exchanged simultaneously at least five (5) days before the hearing, furnishing copies to the arbitrator (Section 3.22.8).
Cross-examination of petitioner witnesses begins on the day of hearing with no additional direct examination questions allowed; afterward, cross-examination of respondent witnesses follows (Section 3.22.8).
Re-direct and re-cross may be allowed at tribunal discretion, and clarificatory questions may be asked at any stage (Section 3.22.8).
Arbitrator(s) may conduct searching of witnesses whether or not parties are represented by counsel; counsel may be allowed on motion to ask additional direct or cross-examination questions (Section 3.22.9).
Parties must submit formal offers of documentary evidence in appropriate matrix form divided into markings, description, and purpose (Section 3.22.10).
Arbitrator(s) may issue interim measures before award to safeguard and conserve matters in dispute without prejudicing rights of parties, including orders for: (a) security for performance, (b) prevention of irreparable loss or injury, (c) prevention of loss or deterioration of property, (d) production or preservation of evidence, or (e) other necessary measures to prevent miscarriage of justice or abuse of rights (Section 3.22.11).
Non-compliance with interim orders makes the non-complying party liable for all damages from non-compliance, including expenses and reasonable attorney’s fees paid to obtain judicial enforcement (Section 3.22.11).
Parties may make brief oral summation and arguments at the end of hearing (Section 3.22.12).
After asking parties whether they have further proofs or witnesses, tribunal closes hearing and records minutes (Section 3.22.13).
Tribunal requires simultaneous submission of parties’ memoranda of arguments in the form of draft decisions in their respective favor within ten (10) days after termination of evidence presentation (Section 3.22.14).
Parties may agree to submit for decision without presentation of evidence based on pleadings and draft decisions on the basis of stipulation of facts and documentary evidence (Section 3.22.15).
Arbitrator(s) may adjourn for good cause upon initiative or request (Section 3.22.16).
Tribunal may reopen hearing upon request for good cause to receive newly-discovered evidence at any time before award is made (Section 3.22.17).

Arbitration award, review, finality, and enforcement

After evaluation and draft decisions, arbitrator(s) must render a decision in the form of an award within thirty (30) days from submission of draft decisions; the award must state clearly and distinctly the facts and the law, be signed, and filed with the AMD Secretariat (Section 3.23).
If tribunal has multiple members, each indicates concurrence or dissent, and majority prevails (Section 3.23).
Awards generally state the issues, a brief statement and discussion of facts, and the authority relied upon (Section 3.23.1).
If parties settle during arbitration, upon request, tribunal may set forth the agreed settlement as an award (Section 3.23.2).
Jurisdiction over dispute terminates upon finality of award or decision; if an appeal is taken and appellate body directs re-hearing or merits review of any issue, jurisdiction terminates only upon final disposition by appellate body or final determination of all issues (Section 3.23.3).
Once award is made, after arbitration costs are fully paid to the AMD Secretariat by parties or one party, the Secretariat must notify parties of the signed text; certified true copies must be made available on request at reasonable office hours to parties or counsel only (Section 3.23.4).
Original award copies must be deposited with the AMD Secretariat, and arbitrators and Secretariat must assist parties in further formalities (Section 3.23.5).
Motion for correction may be allowed on grounds of (a) evident miscalculation of figures or evident mistake in description of person/thing/property referred to, and (b) award on an issue not submitted for resolution by the parties (Section 3.23.6).
A motion for reconsideration or for new trial is a prohibited pleading (Section 3.23.7).
Secretary of Justice may issue an order vacating an award upon petition of any party when the party affirmatively proves in arbitration proceedings that: (a) award procured by corruption, fraud, or undue means; (b) evident partiality or corruption in arbitrators; (c) arbitrators guilty of misconduct refusing to postpone hearing on sufficient cause, refusing to hear pertinent and material evidence, having a disqualification under Section 9 and willfully refrained from disclosing it or any misbehavior materially prejudicing rights; (d) arbitrators exceeded powers, or so imperfectly executed them, or a mutual final and definite award was not made (Section 3.23.8).
If an award is vacated, Secretary of Justice may direct a new hearing either before same arbitrators or new arbitrators chosen similarly; time limits applicable to arbitrators in original arbitration apply to new arbitration and commence from date of Secretary’s order (Section 3.23.8).
Notice of motion to vacate/modify/correct must be served within ten (10) days from receipt of the award (Section 3.23.9).
After ten (10) days from notice to parties, award is transmitted to Secretary of Justice for final action approving, disapproving, or modifying (Section 3.24).
Award approved or modified by Secretary of Justice becomes final and binding upon parties and has the same force and effect as final decisions of court of justice (Section 3.25).
Appeal to Office of the President may be taken by filing a notice of appeal and serving all parties within fifteen (15) days from receipt of copy of final action of Secretary of Justice; in that case, award becomes final only upon affirmation/approval by Office of the President; absent appeal within period, Secretary’s action becomes final upon expiration of the period (Section 3.26).
A final arbitral award approved by Secretary of Justice becomes executory upon lapse of fifteen (15) days from receipt by parties (Section 3.28).
If a final award is appealed and appellate body issues a stay or restraining order, award becomes executory upon entry of judgment of the appellate court or upon expiration/lifting of stay/restraining order without preliminary injunction (Section 3.29).
Appeal does not stay execution unless appellate body directs otherwise on just terms (Section 3.30).
Once a decision/order/award becomes final and executory, arbitral tribunal/sole arbitrator with concurrence of the Solicitor General may issue a writ of execution motu proprio or on motion of prevailing party (Section 3.31).
After issuance of a writ of execution post-appeal, tribunal/sole arbitrator with concurrence of Solicitor General may require prevailing party to post a sufficient bond equivalent to the amount of award as restitution if award is reversed partially or totally (Section 3.32).
Execution pending appeal may be stayed upon approval by tribunal/sole arbitrator with concurrence of Solicitor General of a bond or counter-bond conditioned on performance of appellate court judgment in case appellate court upholds award in whole or in part (Section 3.33).
If award is partially or totally reversed on appeal, tribunal/sole arbitrator on proper motion may issue restitution or reparation order as equity and justice warrant (Section 3.34).

Arbitration procedural mechanics and costs

Pleadings and written statements must be printed in sufficient copies to provide one copy for each party, one for each arbitrator, and one for the AMD Secretariat (Section 3.27.1).
Notices/communications from AMD Secretariat and/or arbitrator(s) are valid if delivered against receipt or forwarded by registered mail to the address or last known address of the intended party, as notified by the party or other party; notice is deemed effected on date received (Section 3.27.2).
Arbitration proceedings are considered confidential and must not be published except with consent of parties (Section 3.27.3).
Proceedings may be recorded by audio or audio-visual equipment or by stenographic notes/minutes if a stenographer is available; recordings remain in OSG custody for safekeeping and eventual disposal after case resolution; copies including transcripts and minutes may be made available to parties upon request for a fee (**Section 3.27.4