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I. Historical Background: - This Code Specifically Provided For Arbitration in Book Compromisos
I. Historical Background: - This Code Specifically Provided For Arbitration in Book Compromisos
HISTORICAL BACKGROUND
A. Pre-Hispanic Period
Datu (chieftain) –settles the disputes of his constituents, and his decisions
were accepted as having authority and finality.
Elders and parents –acted as arbiters of family quarrels and their
decisions were binding upon the parties concerned.
B. Spanish Regime
Codigo Civil of Spain- Was extended by a Royal Decree (1889) to the
Philippines.
-This Code specifically provided for arbitration in Book
IV, Title XII “De los Transacciones y
compromisos”
-The Provisions on compromises were made
applicable to arbitration.
Procedure:
1. The agreement or submission was executed before a notary
public, if not, then, it is void.
C. American Regime
1. Cordoba V. Conde
Supreme Court held that the plaintiff was at liberty to
resort to the court for the resolution of the dispute at
hand because the method agreed upon the parties
had been abolished by the civil code of procedure
D. Post-American Regime
I. Civil Code of the Philippines
1950- The present Civil Code took effect.
Arbitration was adopted by the Philippine Congress as part of the statutes
(Articles 2042 to 2046).
Certain disputes are non-arbitrable, e.g. civil status of a person, future
support, jurisdiction of courts, and future legitime.
E. Marcos Regime
July 9, 1973, Presidential Decree No. 242 –was issued by then President
Marcos, which provided arbitration as a mens of resolving disputes
between and among government agencies, instrumentalities, and
government-owned and controlled corporations.
May 1, 1974, P.D. 442 (Labor Code of the Philippines –This decree
codified all labor laws for the country and provided for compulsory and
voluntary arbitration of labor disputes.
1978, P.D. 1508 was issued –This system provided conciliation and
arbitration as a mode of settling disputes among residents of the same
barangay.
1985, Executive Order No. 1008 (The Construction Industry Arbitration
Commission) was issued by President Marcos. The CIAC was vested with
the original and exclusive jurisdiction over disputes arising from or
connected with government or private construction contracts.
F. Post-EDSA Revolution
No new arbitration law has been enacted, this period has seen the
growing acceptance of arbitration as mode of settling disputes.
In 1992, The Philippine Clearing House Corporation, created an
Arbitration Committee to resolve disputes involving checks cleared
through PCHC.
In 1996, Philippine Dispute Resolution Center, Inc. (PCRCI) was created
to provide dispute resolution services to the business community and the
public at large.
In November 1998, The International Chamber of Commerce of the
Philippines (ICCP) was formed, to serve as the National committee under
the rules of arbitration of the International Chamber Commerce.
II. THE ARBITRATION
A. Arbitral Agreement
1. Consensual Nature –it is essential that two or more parties submit the
controversy to arbitration by, (a) agreeing, in the contract governing their
relationship, to settle by arbitration a controversy thereafter arising
between them of (b) submitting the dispute to arbitration after the dispute
has arisen.
2. Form –The arbitral agreement must be in writing and duly subscribed by the
parties.
It is not necessary that the contract must itself contain an arbitral clause,
it is enough that it adopts or refers to a document containing an arbitration
clause.
An Agreement to arbitrate maybe inferred from membership in
association whose rules prescribe arbitration as a mode for settling
dispute among its members.
B. Arbitral Disputes –Generally, all disputes are arbitrable under Philippine law.
C. Scope of Arbitration – The scope of arbitration under this law depends on the
terms of the arbitral agreement by the parties. It may be as general as the
parties wish it to be.
F. Interim/Conservatory Measures
The arbitration law allows any party to the proceedings to petition the court
to take measures to safeguard and/or conserve any matter which is
subject of the dispute in arbitration.
May a party go directly to a court for interim or conservatory measures
prior to the appointment of the arbitrator?
-Yes, despite an arbitration agreement, a request for interim
measures addressed to a judicial authority is not deemed incompatible
therewith. Arbitral agreements cannot shackle judicial authorities of their
inherent jurisdiction to prevent injustice and grave and irreparable injury to
parties prior to commencement of arbitration (Home Bankers Savings &
Trust Co. case).
G. The Arbitrators
3. Conduct of the Hearings –The arbitrator has full control of the proceedings,
and shall be the sole judge of the relevancy and materiality of the
evidence offered or produce. They may require the parties to produce
additional evidence as they deem necessary to an understanding and
determination of the dispute and not bound with the Rules of Court
provisions on evidence.
1. Forms and Contents –The arbitrators may grant remedy or relief which they
deem just and equitable and within the scope of agreements by the
parties. The award must be in writing, signed, and acknowledged by a
majority of the arbitrators. The decision must comply with the basic
requirements of a court judgment, including the need to present facts and
the law on which the award is based.
3. Enforcing the Arbitral Award –The arbitrator has no authority to enforce the
arbitral award. Any party to the controversy may ask for the judicial
confirmation of the arbitral award within one month in the court specified in
the arbitral agreement, if none, the Regional Trial Court where the parties
resides or is doing business on in which the arbitration was held.
4· Vacating the Arbitral Award –The following are grounds to vacate an arbitral
award (Section 24, R.A. No. 876):
a. The arbitral award was procured through corruption, fraud or other
undue means.
b. There is evidence of partiality or corruption in the arbitral tribunal or
any of its members.
c. The arbitral tribunal was guilty of misconduct or any form of
misbehavior that has materially prejudiced the rights of any party.
d. One or more of the arbitrators was disqualified to act as such under the
law and deliberately refrained from disclosing this disqualification.
e. The arbitral tribunal exceeded its powers, or imperfectly executed
them, so that a complete, final and definite award on the subject matter
submitted to them was not made.
f. The arbitration agreement did not exist, is invalid or is otherwise
unenforceable.
g. A party to arbitration is a minor or a person judicially declared to be
incompetent.
4. Modifying or Correcting the Arbitral Award –The following are grounds to file
petition to modify or correct the arbitral award (Section 25, R.A. No. 876):
c. Where the award is imperfect in a matter of form not affecting the merits
of the controversy, and if it had been a commissioner's report, the
defect could have been amended or disregarded by the court.
A. Philippine Reservations –In 1965, the Philippine senate, ratified the New York
Convention subject to the following reservations:
1. The Philippines will recognize and enforce arbitral awards made only in the
territory of another Contracting State; and
2. The New York Convention “will only apply to differences arising out of legal
relationships, whether contractual or not, which are considered as commercial
under the national law of the State making such decision.
E. No Implementing Local Legislation –Congress did not pass any law to implement
the Ney York Convention making it difficult to implement the provisions of the
convention in the Philippines.
IV.RECENT DEVELOPMENTS
Senate Bill no. (SB) 422 was introduced by Senator Franklin Drilon in
the Congress to adopt, with modifications, the UNCITRAL Model Law
on Commercial Arbitration,
The bill seeks to prescribe a new arbitration law which will address the
problems affecting business and to update Philippine arbitral system,
in keeping with the latest trends in world commercial transactions.
A. Arbitrable Disputes