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Be It Enacted by The Senate and House of Representatives of The Philippines in Congress Assembled
Be It Enacted by The Senate and House of Representatives of The Philippines in Congress Assembled
This is without
Congress of the Philippines prejudice to the rights of the parties to choose nonaccredited individuals to
Metro Manila act as mediator, conciliator, arbitrator, or neutral evaluator of their dispute.
Twelfth Congress Whenever reffered to in this Act, the term "ADR practitioners" shall refer to
Third Regular Session individuals acting as mediator, conciliator, arbitrator or neutral evaluator;
(o) "Government Agency" means any government entity, office or officer, other
(bb) "Record" means an information written on a tangible medium or stored in
than a court, that is vested by law with quasi-judicial power to resolve or
an electronic or other similar medium, retrievable form; and
adjudicate dispute involving the government, its agencies and
instrumentalities, or private persons;
(cc) "Roster" means a list of persons qualified to provide ADR services as
neutrals or to serve as arbitrators.
(p) "International Party" shall mean an entity whose place of business is
outside the Philippines. It shall not include a domestic subsidiary of such
international party or a coventurer in a joint venture with a party which has SEC. 4. Electronic Signatures in Global and E-Commerce Act. - The provisions of
its place of business in the Philippines. the Electronic Signatures in Global and E-Commerce Act, and its implementing Rules
and Regulations shall apply to proceeding contemplated in this Act.
The term foreigner arbitrator shall mean a person who is not a national of the
Philippines. SEC. 5. Liability of ADR Provider and Practitioner. - The ADR providers and
practitioners shall have the same civil liability for the Acts done in the performance of
then duties as that of public officers as provided in Section 38 (1), Chapter 9, Book of
(q) "Mediation" means a voluntary process in which a mediator, selected by
the Administrative Code of 1987.
the disputing parties, facilitates communication and negotiation, and assist
the parties in reaching a voluntary agreement regarding a dispute.
SEC. 6. Exception to the Application of this Act. - The provisions of this Act shall
not apply to resolution or settlement of the following: (a) labor disputes covered by
(r) "Mediator" means a person who conducts mediation;
Presidential Decree No. 442, otherwise known as the Labor Code of the Philippines, as
amended and its Implementing Rules and Regulations; (b) the civil status of persons;
(s) "Mediation Party" means a person who participates in a mediation and (c) the validity of a marriage; (d) any ground for legal separation; (e) the jurisdiction of
whose consent is necessary to resolve the dispute; courts; (f) future legitime; (g) criminal liability; and (h) those which by law cannot be
compromised.
(t) "Mediation-Arbitration" or Med-Arb is a step dispute resolution process
involving both mediation and arbitration; CHAPTER 2 - MEDIATION
(u) "Mini-Trial" means a structured dispute resolution method in which the SEC. 7. Scope. - The provisions of this Chapter shall cover voluntary mediation,
merits of a case are argued before a panel comprising senior decision makers whether ad hoc or institutional, other than court-annexed. The term "mediation' shall
with or without the presence of a neutral third person after which the parties include conciliation.
seek a negotiated settlement;
SEC. 8. Application and Interpretation. - In applying construing the provisions of
(v) "Model Law" means the Model Law on International Commercial this Chapter, consideration must be given to the need to promote candor or parties
Arbitration adopted by the United Nations Commission on International Trade and mediators through confidentiality of the mediation process, the policy of fostering
Law on 21 June 1985; prompt, economical, and amicable resolution of disputes in accordance with the
principles of integrity of determination by the parties, and the policy that the decision-
making authority in the mediation process rests with the parties.
(w) "New York Convention" means the United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards approved in 1958
and ratified by the Philippine Senate under Senate Resolution No. 71; SEC. 9. Confidentiality of Information. - Information obtained through mediation
proceedings shall be subject to the following principles and guidelines:
(x) "Non-Convention Award" means a foreign arbitral award made in a State
which is not a Convention State; (a) Information obtained through mediation shall be privileged and
confidential.
(b) A party, a mediator, or a nonparty participant may refuse to disclose and (2) available to the public or that is made during a session of a
may prevent any other person from disclosing a mediation communication. mediation which is open, or is required by law to be open, to the
public;
(c) Confidential Information shall not be subject to discovery and shall be
inadmissible if any adversarial proceeding, whether judicial or quasi-judicial, (3) a threat or statement of a plan to inflict bodily injury or commit a
However, evidence or information that is otherwise admissible or subject to crime of violence;
discovery does not become inadmissible or protected from discovery solely by
reason of its use in a mediation.
(4) internationally used to plan a crime, attempt to commit, or
commit a crime, or conceal an ongoing crime or criminal activity;
(d) In such an adversarial proceeding, the following persons involved or
previously involved in a mediation may not be compelled to disclose
(5) sought or offered to prove or disprove abuse, neglect,
confidential information obtained during mediation: (1) the parties to the
abandonment, or exploitation in a proceeding in which a public
dispute; (2) the mediator or mediators; (3) the counsel for the parties; (4) the
agency is protecting the interest of an individual protected by law;
nonparty participants; (5) any persons hired or engaged in connection with
but this exception does not apply where a child protection matter is
the mediation as secretary, stenographer, clerk or assistant; and (6) any other
referred to mediation by a court or a public agency participates in
person who obtains or possesses confidential information by reason of
the child protection mediation;
his/her profession.
(a) Where the mediation occurred or has terminated, or where a settlement SEC. 17. Enforcement of Mediated Settlement Agreement. - The mediation shall be
was reached. guided by the following operative principles:
(b) As permitted to be disclosed under Section 13 of this Chapter. (a) A settlement agreement following successful mediation shall be prepared
by the parties with the assistance of their respective counsel, if any, and by
the mediator.
SEC. 13. Mediator's Disclosure and Conflict of Interest. - The mediation shall be
guided by the following operative principles:
The parties and their respective counsels shall endeavor to make the terms
and condition thereof complete and make adequate provisions for the
(a) Before accepting a mediation, an individual who is requested to serve as a
contingency of breach to avoid conflicting interpretations of the agreement.
mediator shall:
(b) The parties and their respective counsels, if any, shall sign the settlement
(1) make an inquiry that is reasonable under the circumstances to
agreement. The mediator shall certify that he/she explained the contents of
determinate whether there are any known facts that a reasonable
the settlement agreement to the parties in a language known to them.
individual would consider likely to affect the impartiality of the
mediator, including a financial or personal interest in the outcome of
the mediation and any existing or past relationship with a party or (c) If the parties so desire, they may deposit such settlement agreement with
foreseeable participant in the mediation; and the appropriate Clerk of a Regional Trial Court of the place where one of the
parties resides. Where there is a need to enforce the settlement agreement, a
petition may be filed by any of the parties with the same court, in which case,
(2) disclosure to the mediation parties any such fact known or
the court shall proceed summarily to hear the petition, in accordance with
learned as soon as is practical before accepting a mediation.
such rules of procedure as may be promulgated by the Supreme Court.
(b) If a mediation learns any fact described in paragraph (a) (1) of this section
(d) The parties may agree in the settlement agreement that the mediator shall
after accepting a mediation, the mediator shall disclose it as soon as
become a sole arbitrator for the dispute and shall treat the settlement
practicable.
agreement as an arbitral award which shall be subject to enforcement under
Republic Act No. 876, otherwise known as the Arbitration Law,
At the request of a mediation party, an individual who is requested to serve as notwithstanding the provisions of Executive Order No. 1008 for mediated
mediator shall disclose his/her qualifications to mediate a dispute. dispute outside of the CIAC.
This Act does not require that a mediator shall have special qualifications by CHAPTER 3 - OTHER ADR FORMS
background or profession unless the special qualifications of a mediator are required
in the mediation agreement or by the mediation parties.
SEC. 18. Referral of Dispute to other ADR Forms. - The parties may agree to refer
one or more or all issues arising in a dispute or during its pendency to other forms of
SEC. 14. Participation in Mediation. - Except as otherwise provided in this Act, a ADR such as but not limited to (a) the evaluation of a third person or (b) a mini-trial,
party may designate a lawyer or any other person to provide assistance in the (c) mediation-arbitration, or a combination thereof.
mediation. A lawyer of this right shall be made in writing by the party waiving it. A
waiver of participation or legal representation may be rescinded at any time.
For purposes of this Act, the use of other ADR forms shall be governed by Chapter 2 of
this Act except where it is combined with arbitration in which case it shall likewise be
SEC. 15. Place of Mediation. - The parties are free to agree on the place of mediation. governed by Chapter 5 of this Act.
Failing such agreement, the place of mediation shall be any place convenient and
appropriate to all parties.
CHAPTER 4 - INTERNATIONAL COMMERCIAL ARBITRATION
SEC. 25. Interpretation of the Act. - In interpreting the Act, the court shall have due
(3) The order granting provisional relief may be conditioned upon the
regard to the policy of the law in favor of arbitration. Where action is commenced by or
provision of security or any act or omission specified in the order.
against multiple parties, one or more of whom are parties who are bound by the
arbitration agreement although the civil action may continue as to those who are not
bound by such arbitration agreement. (4) Interim or provisional relief is requested by written application
transmitted by reasonable means to the Court or arbitral tribunal as
the case may be and the party against whom the relief is sought,
SEC. 26. Meaning of "Appointing Authority.". - "Appointing Authority" as used in
describing in appropriate detail the precise relief, the party against
the Model Law shall mean the person or institution named in the arbitration
whom the relief is requested, the grounds for the relief, and evidence
agreement as the appointing authority; or the regular arbitration arbitration institution
supporting the request.
under whose rules the arbitration is agreed to be conducted. Where the parties have
agreed to submit their dispute to institutional arbitration rules, and unless they have
agreed to a different procedure, they shall be deemed to have agreed to procedure (5) The order shall be binding upon the parties.
under such arbitration rules for the selection and appointment of arbitrators. In ad
hoc arbitration, the default appointment of an arbitrator shall be made by the National
(6) Either party may apply with the Court for assistance in
President of the Integrated Bar of the Philippines (IBP) or his duly authorized
Implementing or enforcing an interim measure ordered by an
representative.
arbitral tribunal.
(7) A party who does not comply with the order shall be liable for all SEC. 34. Arbitration of Construction Disputes: Governing Law. - The arbitration of
damages resulting from noncompliance, including all expenses, and construction disputes shall be governed by Executive Order No. 1008, otherwise
reasonable attorney's fees, paid in obtaining the order's judicial known as the Constitution Industry Arbitration Law.
enforcement.
SEC. 35. Coverage of the Law. - Construction disputes which fall within the original
SEC. 29. Further Authority for Arbitrator to Grant Interim Measure of and exclusive jurisdiction of the Construction Industry Arbitration Commission (the
Protection. - Unless otherwise agreed by the parties, the arbitral tribunal may, at the "Commission") shall include those between or among parties to, or who are otherwise
request of a party, order any party to take such interim measures of protection as the bound by, an arbitration agreement, directly or by reference whether such parties are
arbitral tribunal may consider necessary in respect of the subject matter of the dispute project owner, contractor, subcontractor, quantity surveyor, bondsman or issuer of an
following the rules in Section 28, paragraph 2. Such interim measures may include but insurance policy in a construction project.
shall not be limited to preliminary injuction directed against a party, appointment of
receivers or detention, preservation, inspection of property that is the subject of the
The Commission shall continue to exercise original and exclusive jurisdiction over
dispute in arbitration. Either party may apply with the Court for assistance in
construction disputes although the arbitration is "commercial" pursuant to Section 21
implementing or enforcing an interim measures ordered by an arbitral tribunal.
of this Act.
SEC. 30. Place of Arbitration. - The parties are free to agree on the place of
SEC. 36. Authority to Act as Mediator or Arbitrator. - By written agreement of the
arbitration. Failing such agreement, the place of arbitration shall be in Metro Manila,
parties to a dispute, an arbitrator may act as mediator and a mediator may act as
unless the arbitral tribunal, having regard to the circumstances of the case, including
arbitrator. The parties may also agree in writing that, following a successful mediation,
the convenience of the parties shall decide on a different place of arbitration.
the mediator shall issue the settlement agreement in the form of an arbitral award.
The arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it
SEC. 37. Appointment of Foreign Arbitrator. - The Construction Industry
considers appropriate for consultation among its members, for hearing witnesses,
Arbitration Commission (CIAC) shall promulgate rules to allow for the appointment of a
experts, or the parties, or for inspection of goods, other property or documents.
foreign arbitrator or coarbitrator or chairman of a tribunal a person who has not been
previously accredited by CIAC: Provided, That:
SEC. 31. Language of the Arbitration. - The parties are free to agree on the
language or languages to be used in the arbitral proceedings. Failing such agreement,
(a) the dispute is a construction dispute in which one party is an
the language to be used shall be English in international arbitration, and English or
international party
Filipino for domestic arbitration, unless the arbitral tribunal shall determine a different
or another language or languages to be used in the proceedings. This agreement or
determination, unless otherwise specified therein, shall apply to any written statement (b) the person to be appointed agreed to abide by the arbitration rules and
by a party, any hearing and any award, decision or other communication by the policies of CIAC;
arbitral tribunal.
(c) he/she is either coarbitrator upon the nomination of the international
The arbitral tribunal may order that any documentary evidence shall be accompanied party; or he/she is the common choice of the two CIAC-accredited arbitrators
by a translation into the language or languages agreed upon by the parties or first appointed one of whom was nominated by the international party; and
determined in accordance with paragraph 1 of this section.
(d) the foreign arbitrator shall be of different nationality from the international
CHAPTER 5 - DOMESTIC ARBITRATION party.
SEC. 32. Law Governing Domestic Arbitration. - Domestic arbitration shall SEC. 38. Applicability to Construction Arbitration. - The provisions of Sections 17
continue to be governed by Republic Act No. 876, otherwise known as "The Arbitration (d) of Chapter 2, and Section 28 and 29 of this Act shall apply to arbitration of
Law" as amended by this Chapter. The term "domestic arbitration" as used herein shall construction disputes covered by this Chapter.
mean an arbitration that is not international as defined in Article (3) of the Model Law.
SEC. 39. Court to Dismiss Case Involving a Construction Dispute. - A regional trial
SEC. 33. Applicability to Domestic Arbitration. - Article 8, 10, 11, 12, 13, 14, 18 court which a construction dispute is filed shall, upon becoming aware, not later than
and 19 and 29 to 32 of the Model Law and Section 22 to 31 of the preceding Chapter 4 the pretrial conference, that the parties had entered into an arbitration to be
shall apply to domestic arbitration. conducted by the CIAC, unless both parties, assisted by their respective counsel, shall
submit to the regional trial court a written agreement exclusive for the Court, rather
than the CIAC, to resolve the dispute.
CHAPTER 6 - ARBITRATION OF CONSTRUCTION DISPUTES
The applicant shall establish that the country in which foreign arbitration award was SEC. 48. Notice of Proceeding to Parties. - In a special proceeding for recognition
made is a party to the New York Convention. and enforcement of an arbitral award, the Court shall send notice to the parties at
their address of record in the arbitration, or if any party cannot be served notice at
such address, at such party's last known address. The notice shall be sent at least
If the application for rejection or suspension of enforcement of an award has been
fifteen (15) days before the date set for the initial hearing of the application.
made, the regional trial court may, if it considers it proper, vacate its decision and may
also, on the application of the party claiming recognition or enforcement of the award,
order the party to provide appropriate security. CHAPTER 8 - MISCELLANEOUS PROVISIONS
SEC. 43. Recognition and Enforcement of Foreign Arbitral Awards Not Covered SEC. 49. Office for Alternative Dispute Resolution. - There is hereby established
by the New York Convention. - The recognition and enforcement of foreign arbitral the Office for Alternative Dispute Resolution as an attached agency to the Department
awards not covered by the New York Convention shall be done in accordance with of Justice (DOJ) which shall have a Secretariat to be headed by an executive director.
procedural rules to be promulgated by the Supreme Court. The Court may, grounds of The executive director shall be appointed by the President of the Philippines.
comity and reciprocity, recognize and enforce a nonconvention award as a convention
award.
The objective of the office are:
(a) to promote, develop and expand the use of ADR in the private and public
sectors; and
To assist the government to monitor, study and evaluate the use by the public and the Rights, chairman of the House Committee on Justice, and one (1) member each from
private sector of ADR, and recommend to Congress needful statutory changes to the majority and minority of both Houses.
develop. Strengthen and improve ADR practices in accordance with world standards.
The Joint Oversight Committee shall become functus officio upon approval of the IRR.
SEC. 50. Powers and Functions of the Office for Alternative Dispute Resolution. -
The Office for Alternative Dispute Resolution shall have the following powers and
SEC. 53. Applicability of the Katarungan Pambarangay. - This Act shall not be
functions:
interpreted to repeal, amend or modify the jurisdiction of the Katarungan
Pambarangay under Republic Act No. 7160, otherwise known as the Local Government
(a) To formulate standards for the training of the ADR practitioners and Code of 1991.
service providers;
SEC. 54. Repealing Clause. - All laws, decrees, executive orders, rules and
(b) To certify that such ADR practitioners and ADR service providers have regulations which are inconsistent with the provisions of this Act are hereby repealed,
undergone the professional training provided by the office; amended or modified accordingly.
(c) To coordinate the development, implementation, monitoring, and SEC. 55. Separability Clause. - If for any reason or reasons, any portion or provision
evaluation of government ADR programs; of this Act shall be held unconstitutional or invalid, all other parts or provisions not
affected shall thereby continue to remain in full force and effect.
(d) To charge fees for their services; and
SEC. 56. Effectivity. - This act shall take effect fifteen days (15) after its publication
in at least two (2) national newspapers of general circulation.
(e) To perform such acts as may be necessary to carry into effect the
provisions of this Act.
SEC. 51. Appropriations. - The amount necessary to carry out the provisions of this
Act shall be included in the General Appropriations Act of the year following its
enactment into law and thereafter.
SEC. 52. Implementing Rules and Regulations (IRR). - Within one (1) month after
the approval of this Act, the secretary of justice shall convene a committee that shall
formulate the appropriate rules and regulations necessary for the implementation of
this Act. The committee, composed of representatives from:
shall within three (3) months after convening, submit the IRR to the Joint
Congressional Oversight Committee for review and approval. The Oversight Committee
shall be composed of the chairman of the Senate Committee on Justice and Human