CHAPTER 1: INTRODUCTION ADR Act of 2004 (RA 9285)

- On February 04, 2004, Firs comprehensive ADR law in the

HISTORICAL NOTE Philippines was enacted
- June 19, 1953, the Philippine Legislator enacted RA 876 o Took effect on April 8, 2004
known as "The Arbitration Law". RA 876 did not revoke
and instead supplemented the - General law applicable to all types of ADR
provisions of the NCC on arbitration. o i.e., arbitration, mediation, conciliation, early
neutral evaluation, mini-trial or any combination
- May 10, 1965, another milestone in the Philippine ADR thereof.
was achieved when the Philippine Senate passed Resolution - adopted the UNCITRAL Model Law on International
No. 7 adhering to the UN Convention on the Recognition Commercial Arbitration
and Enforcement of Foreign Arbitral Awards of June (UCL)
10, 1958. o core legal body of the U.N,'s system in the field
 This convention gave reciprocal recognition and of international trade law.
allowed the enforcement of international o The official function of UNCITRAL is to
arbitration agreements between the parties of
modernize and harmonize the rules of
different nationalities.
international business.
o It is responsible for helping to facilitate
- The Philippines was a signatory to UN Commission on
international trade and investment.
International Trade
Law NY convention of June 21, 1985.
- paved way for the Philippines to be a venue of
JUDICIARY's ACTION international commercial arbitration
- The SC passed administrative issuances encouraging the
use of ADR through the Philippine Mediation Center or Korea Technologies vs. Lerma 542 SCRA 1, 2008
through Judicial Dispute Resolution. - enumerated and explained the salient features of RA 9285
applying and incorporating the UNCITRAL Model
- To emphasize the judiciary’s resolve in strengthening the namely:
system of ADR, the SC, speaking through Justice Vitug
said that “in an effort to unclog the courts of an increasing A. The RTC must refer to arbitration in proper cases
volume of workload and most importantly in order to  Under Sec. 24, the RTC has jurisdiction
accord contending parties with an expeditious alternative over disputes that are properly the subjects
for settling disputes, the law authorizes, indeed of arbitration pursuant to an arbitration
encourages out of court settlements or adjudications. clause.
Compromises and arbitrations are widely known and used
as such acceptable methods of resolving adversarial B. Foreign arbitral awards must be confirmed by the
claims.” RTC
(LA NAVAL DRUG CORPORATION VS. CA 236 SCRA 78, 1994).  Foreign arbitral awards while mutually
stipulated by the parties in the arbitration
- ADR methods like arbitration, mediation, negotiation, and clause to be final and binding are not
conciliation, are encouraged by the SC immediately enforceable.

LEGISLATION ACTION C. The RTC has jurisdiction to review foreign

- Special domestic legislation have been passed prescribing arbitral awards
arbitration, mediation and conciliation in specific types of  Sec. 42 in relation to Sec. 45 of RA9285
cases designated and vested the RTC with
specific authority and jurisdiction to set
EXAMPLES: aside, reject or vacate a foreign arbitral
1. Under PD 442, NLRC was created has been award on grounds provided.
dispensing cases involving: Unfair labor
practice, termination & condition of D. Grounds for judicial review are different in
employment, and damages arising from domestic and foreign arbitral awards.
employee-employer relationships.  For foreign and international arbitral
2. LGC (RA No. 7160) require conciliation, awards, which must be confirmed by RTC,
mediation or arbitration in barangay level the grounds setting aside, rejecting or
(Pangkat ng Tagapagsundo) in specified civil or vacating the award by the RTC are provided
criminal cases before resorting to court action under art. 34(2) of the UNCITRAL Model
Law; for final domestic awards, may be
assailed pursuant to sec. 23 of RA876.
EXECUTIVE BRANCH’S CONTRIBUTION E. RTC decision of assailed foreign arbitral award
- EO No. 1008 was issued, creating the Construction appealable.
Industry Arbitration Commission (CIAC) – responsible for  Sec. 46 of RA9285 provides for an appeal
the arbitration of disputes arising from construction before the CA as the remedy of an
agreement aggrieved party.

- Rules on Alternative Dispute Resolution for Dispute The Lawyer’s Role

between National Government – observance to the - As an integral part of the judicial system lawyers have to
adherence amicable settlement to through ADR toe the line and contribute to the promotion of ADR.
 - DUTIES TO THE COURT: - Judicially recognized as speedy, inexpensive
o Assist the court in encouraging the parties to and amicable settlement of dispute.
avail the alternative means of dispute resolution
2. Declogging of Court Dockets
- DUTIES TO HIS CLIENT: – ultimate objective of ADR
o Inform the benefits of the system to them

- In fact, the lawyer may play the role of ADR provider and FEATURES of ADR (MAC-AN)
practitioner 1. ADR is a means used to resolve a dispute or controversy.
o A lawyer, in view of his excellent - The objective of ADR is to resolve or facilitate the
communication skills, probity, and legal resolution dispute or controversy in a speedy, amicable and
foresight, can be appointed as an arbitrator, inexpensive manner.
mediator, conciliator, or neutral evaluator
o By exerting genuine and sincere effort in - ADR should not be resorted to when the motive is to
delay or suspend the proceedings rather than to put an end
bringing the parties into settlement within the
or facilitate the conclusion of the controversy.
scope of their authority.
2. ADR utilizes means and methods allowed by law.
- The end objective is to attain simpler, inexpensive, and
- ADR act did not limit the forms of ADR. Any means or
amicable settlement of disputes and controversies
methods aim at resolving disputes outside the court trial
system may be recognized as an ADR form provided it is
not contrary to law, morals, good customs, public order or
public policy.
CHAPTER 2: FUNDAMENTALS OF ALTERNATIVE
DISPUTE RESOLUTION
3. ADR is contractual in nature.
- Parties to a dispute are given the freedom to agree to
ALTERNATIVE DISPUTE RESOLUTION
resolve their dispute and decide on the procedure.
BROAD DEFINITION:
- Any form of ADR that satisfies the essential requisites
- a system, using means and methods allowed by law and of a contract, which is not a contrary to law, morals, good
approved by the parties, customs, public order, or public policy is allowable as a
- for the purpose of resolving or facilitating the resolution form of ADR.
of disputes and controversies between them,
- in an expeditious and speedy manner, without resorting - The consent to undergo ADR may be:
to court adjudication a. PRE-CAUSAL CONSENT as when the
parties to a contract stipulate that any dispute that
ADR Act of 2004 will arise from the contract shall be resolved by
- any process or procedure used to resolve a dispute or arbitration.
controversy,
- other than by adjudication of the presiding judge of a b. PRESENT-CAUSAL CONSENT as when
court or an officer of a government agency the parties to an existing controversy voluntarily
- in which a neutral third party participates to assist in the submit themselves either to an arbitration or
resolution issues. mediation.
PRINCIPLES OF ADR (PRE) 4. ADR avoids court trial.
1. Promotion of party autonomy and self- - Conducted outside of the court trial system. It is in lieu of
determination in the resolution of disputes. and conducted precisely to avoid trial.
a. Freedom to choose the form of ADR they
desire to avail of; - JDR (Judicial Dispute Resolution) although not
b. Discretion to prescribe the procedure that governed by ADR Act of 2004, requires judges to conduct
will govern the ADR procedure; and mediation between the parties as part of the pre-trial and
c. Venue and terms of agreement prior to start of trial stage.

2. Recognition of ADR as an efficient tool and an - Pendency of the case does not foreclose resort to courts
alternative procedure for the resolution of cases. for provisional relief.
a. It does not altogether do away with the  RA 876 recognizes the right of any party to apply
Court trial system. with the court to take measures to safeguard
b. It merely provides the parties with an and/or conserve any matter which is the subject
alternative means of settling their disputes of the dispute arbitration
in a manner that is different, separate, and  It also allows the filing of petitions for
independent from the trial court system. provisional or interim measure with regular
courts whenever the arbitral tribunal has no
3. Enlisting of private sector participation. power to act or to act effectively
a. It usually requires the participation of
third parties who do not necessarily 5. ADR usually involves the participation of neutral third party.
dispense public service. - Third-party participants may either be the arbitrator/s,
mediator, conciliator or neutral evaluator.
OBJECTIVES and BENEFITS of ADR - It is imperative that the third-party participant observe
1. Speedy and Impartial Justice neutrality at all times
SOURCES OF ADR (DAD-IG) requisites of a valid contract and is not contrary to law,
1. Domestic laws and rules which may either be general or special. morals, good customs, public order or public policy is an
GENERAL: applicable to all form of dispute acceptable form of ADR.
 Sec. 16, Art III Consti – right to speedy disposition
of the case CLASSIFICATION OF FORMS OF ADR
 Chapter 1 & 2, Title 14, Book 4 CC – Obligations & 1. As to the number of parties
Contracts - May be bilateral or bi-party, or multilateral or multi-party.
 Arbitration Law (RA 826)
 ADR Act of 2004 (RA 9285) 2. As to the number of issues involve
- Simple when only a single issue is involved, or complex if there are
SPECIAL: specific subject two or more issues involved.
 LGC 3. As to the extent of conclusion - Complete when all issues involved
2. Acts of the executive branch. are resolved or partial if only one or some but not all issues are
3. Decisions of SC. resolved.
4. International Laws
5. General Principles of law and equity As to the role of evidence in the proceedings
 Evidentiary or merit-based when the resolution of
FORMS OF ADR (AMC-NMC-O) the dispute involved requires the presentation of
1. Arbitration evidence and evaluation of the merits of the case; and
- Is an arrangement for taking and abiding by the judgment  it is non-evidentiary or non-merit based if the merits
of selected persons in some disputed manner, instead of of the case is not indispensable in the resolution of the
carrying it to established tribunals of justice and dispute as in the case of mediation.
- is intended to avoid the formalities, the delay, the
5. As to the pendency of a court case
expense and vexation of ordinary litigation.
- ADR is case-related if conducted in connection with or as
a pre-requisite to trial as in the case of court annexed
- For purpose of ADR Act of 2004, it is a voluntary dispute
mediation or court-referred mediation; and
resolution process in which one or more arbitrators,
appointed in accordance with the agreement of the parties. - it is independent if conducted irrespective of any pending
court case involving the issue.
2. Mediation
- A voluntary process in which a mediator, selected by the 6. As to the applicable law
disputing parties, facilitates communication and negotiation - Domestic if the parties’ places of business, place of
and assists the parties in reaching a voluntary agreement arbitration and place of performance of the obligation
regarding the dispute. involved or subject matter of the dispute are located in the
Philippines;
ARBITRATION VS. MEDIATION  international if the parties’ places of business are in
1. In arbitration an arbitral tribunal or arbitrator evaluates different states or the place of arbitration is outside the
the evidence and the merits of the case and renders an Philippines.
arbitral award based on his appreciation; whereas
2. In mediation the parties to controversy are convinced by a 7. As to the permanence of the ADR provider
mediator to settle their controversy through voluntary  Either ad hoc if the existence of the ADR provider is only
agreement of the parties themselves. temporary for the purpose of a particular dispute;
o Ad hoc – “for this purpose only
3. Conciliation  Institutional if the ADR provider’s existence is permanent
- The adjustment and settlement of a dispute in a friendly, in character and is not dependent on any dispute.
unantagonistic manner.
COMPONENTS OF ADR
4. Neutral and early neutral evaluation 1. Contending parties who are involved in a dispute.
- An ADR process wherein the parties and their lawyers are 2. Dispute, which is susceptible of being subjected to
brought together to present summaries of their cases and ADR.
receive a non-binding assessment by an experienced 3. Form of ADR, which may either, be arbitration,
neutral person with expertise in the subject. mediation, conciliation, early neutral evaluation, mini-trial
or any combination of the foregoing.
5. Mini-trial 4. ADR provider
- Is a structured dispute resolution method in which the o is an institution of person accredited as mediator,
merits of a case are argued before a panel of composed of conciliator, arbitrator, neutral party evaluator or
senior decision makers, with or without the presence of a any person exercising similar functions; or
neutral third person, after which the parties seek a practitioner is an individual acting as mediator,
negotiated settlement. conciliator, arbitrator etc.

6. Any combination of the foregoing SUBJECT MATTERS OF ADR

- Any combination of the foregoing ADR forms, approved General Rule:
by the parties, not contrary to law, good customs, morals, All adversarial disputes can be subject matter of ADR,
public order or public policy, may be implemented.
EXCEPTION:
7. Any other ADR form Those, which by law or reasons of public policy are declared not
- Any arrangement agreed upon by the parties that satisfies capable of being subjected to ADR.
the requisites of ADR, complies with the essential The following issues are not susceptible of ADR:
 a. Civil status of persons – matter determined by law and
is not subject to the discretion of the parties.

b. Validity of Marriage or any ground for legal

separation – matters over which the State has a keen
interest to protect.

c. Jurisdiction of the courts – jurisdiction over the subject

matter of a case is determined by law and is not dependent
upon the allegations of parties except in the case of
jurisdiction by estoppel.

d. Future legitime – future legitime is inexistent and

cannot be waived.

e. Criminal Liability – not susceptible of ADR.

Exception: Civil liability arising from the offense
and separate civil liability arising from quasi delict, is a
proper subject of ADR

f. In general, those, which, by law, cannot be

compromised – examples of law, which cannot be,
compromised article 2035 of New Civil Code; it is against
public policy to waive or enter into compromise regarding
future support