@lendelacruz 1

Republic of the Philippines Whenever reffered to in this Act, the term "ADR
Congress of the Philippines practitioners" shall refer to individuals acting as
Metro Manila mediator, conciliator, arbitrator or neutral evaluator;

Twelfth Congress (c) "Authenticate" means to sign, execute or adopt a

Third Regular Session symbol, or encrypt a record in whole or in part,
intended to identity the authenticating party and to
adopt, accept or establish the authenticity of a record
or term;
Begun and held in Metro Manila, on Monday, the twenty-eight
day of July, two thousand three. (d) "Arbitration" means a voluntary dispute
resolution process in which one or more arbitrators,
appointed in accordance with the agreement of the
Republic Act No. 9285 April 2, 2004
parties, or rules promulgated pursuant to this Act,
resolve a dispute by rendering an award;
AN ACT TO INSTITUTIONALIZE THE USE OF AN
ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN THE
(e) "Arbitrator" means the person appointed to
PHILIPPINES AND TO ESTABLISH THE OFFICE FOR
ALTERNATIVE DISPUTE RESOLUTION, AND FOR render an award, alone or with others, in a dispute
OTHER PURPOSES that is the subject of an arbitration agreement;

Be it enacted by the Senate and House of Representatives of the (f) "Award" means any partial or final decision by an
Philippines in Congress assembled: arbitrator in resolving the issue in a controversy;

CHAPTER 1 - GENERAL PROVISIONS (g) "Commercial Arbitration" An arbitration is

"commercial if it covers matter arising from all
relationships of a commercial nature, whether
SECTION 1. Title. - This act shall be known as the "Alternative contractual or not;
Dispute Resolution Act of 2004."

(h) "Confidential information" means any

SEC. 2. Declaration of Policy. - it is hereby declared the policy information, relative to the subject of mediation or
of the State to actively promote party autonomy in the arbitration, expressly intended by the source not to
resolution of disputes or the freedom of the party to make their be disclosed, or obtained under circumstances that
own arrangements to resolve their disputes. Towards this end, would create a reasonable expectation on behalf of
the State shall encourage and actively promote the use of the source that the information shall not be disclosed.
Alternative Dispute Resolution (ADR) as an important means It shall include (1) communication, oral or written,
to achieve speedy and impartial justice and declog court made in a dispute resolution proceedings, including
dockets. As such, the State shall provide means for the use of any memoranda, notes or work product of the
ADR as an efficient tool and an alternative procedure for the neutral party or non-party participant, as defined in
resolution of appropriate cases. Likewise, the State shall enlist this Act; (2) an oral or written statement made or
active private sector participation in the settlement of disputes which occurs during mediation or for purposes of
through ADR. This Act shall be without prejudice to the considering, conducting, participating, initiating,
adoption by the Supreme Court of any ADR system, such as continuing of reconvening mediation or retaining a
mediation, conciliation, arbitration, or any combination thereof mediator; and (3) pleadings, motions manifestations,
as a means of achieving speedy and efficient means of witness statements, reports filed or submitted in an
resolving cases pending before all courts in the Philippines arbitration or for expert evaluation;
which shall be governed by such rules as the Supreme Court
may approve from time to time.
(i) "Convention Award" means a foreign arbitral
award made in a Convention State;
SEC. 3. Definition of Terms. - For purposes of this Act, the
term:
(j) "Convention State" means a State that is a member
of the New York Convention;
(a) "Alternative Dispute Resolution System" means
any process or procedure used to resolve a dispute or
controversy, other than by adjudication of a (k) "Court" as referred to in Article 6 of the Model
presiding judge of a court or an officer of a Law shall mean a Regional Trial Court;
government agency, as defined in this Act, in which
a neutral third party participates to assist in the (l) "Court-Annexed Mediation" means any mediation
resolution of issues, which includes arbitration, process conducted under the auspices of the court,
mediation, conciliation, early neutral evaluation, after such court has acquired jurisdiction of the
mini-trial, or any combination thereof; dispute;

(b) "ADR Provider" means institutions or persons (m) "Court-Referred Mediation" means mediation
accredited as mediator, conciliator, arbitrator, neutral ordered by a court to be conducted in accordance
evaluator, or any person exercising similar functions with the Agreement of the Parties when as action is
in any Alternative Dispute Resolution system. This is prematurely commenced in violation of such
without prejudice to the rights of the parties to agreement;
choose nonaccredited individuals to act as mediator,
conciliator, arbitrator, or neutral evaluator of their (n) "Early Neutral Evaluation" means an ADR
dispute. process wherein parties and their lawyers are
brought together early in a pre-trial phase to present
summaries of their cases and receive a nonbinding
assessment by an experienced, neutral person, with
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expertise in the subject in the substance of the (bb) "Record" means an information written on a
dispute; tangible medium or stored in an electronic or other
similar medium, retrievable form; and
(o) "Government Agency" means any government
entity, office or officer, other than a court, that is (cc) "Roster" means a list of persons qualified to
vested by law with quasi-judicial power to resolve or provide ADR services as neutrals or to serve as
adjudicate dispute involving the government, its arbitrators.
agencies and instrumentalities, or private persons;
SEC. 4. Electronic Signatures in Global and E-Commerce Act.
(p) "International Party" shall mean an entity whose - The provisions of the Electronic Signatures in Global and E-
place of business is outside the Philippines. It shall Commerce Act, and its implementing Rules and Regulations
not include a domestic subsidiary of such shall apply to proceeding contemplated in this Act.
international party or a coventurer in a joint venture
with a party which has its place of business in the SEC. 5. Liability of ADR Provider and Practitioner. - The ADR
Philippines. providers and practitioners shall have the same civil liability
for the Acts done in the performance of then duties as that of
The term foreigner arbitrator shall mean a person public officers as provided in Section 38 (1), Chapter 9, Book of
who is not a national of the Philippines. the Administrative Code of 1987.

(q) "Mediation" means a voluntary process in which SEC. 6. Exception to the Application of this Act. - The
a mediator, selected by the disputing parties, provisions of this Act shall not apply to resolution or
facilitates communication and negotiation, and assist settlement of the following: (a) labor disputes covered by
the parties in reaching a voluntary agreement Presidential Decree No. 442, otherwise known as the Labor
regarding a dispute. Code of the Philippines, as amended and its Implementing
Rules and Regulations; (b) the civil status of persons; (c) the
(r) "Mediator" means a person who conducts validity of a marriage; (d) any ground for legal separation; (e)
mediation; the jurisdiction of courts; (f) future legitime; (g) criminal
liability; and (h) those which by law cannot be compromised.

(s) "Mediation Party" means a person who

participates in a mediation and whose consent is CHAPTER 2 - MEDIATION
necessary to resolve the dispute;
SEC. 7. Scope. - The provisions of this Chapter shall cover
(t) "Mediation-Arbitration" or Med-Arb is a step voluntary mediation, whether ad hoc or institutional, other
dispute resolution process involving both mediation than court-annexed. The term "mediation' shall include
and arbitration; conciliation.

(u) "Mini-Trial" means a structured dispute SEC. 8. Application and Interpretation. - In applying
resolution method in which the merits of a case are construing the provisions of this Chapter, consideration must
argued before a panel comprising senior decision be given to the need to promote candor or parties and
makers with or without the presence of a neutral mediators through confidentiality of the mediation process,
third person after which the parties seek a negotiated the policy of fostering prompt, economical, and amicable
settlement; 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
(v) "Model Law" means the Model Law on with the parties.
International Commercial Arbitration adopted by the
United Nations Commission on International Trade
Law on 21 June 1985; SEC. 9. Confidentiality of Information. - Information obtained
through mediation proceedings shall be subject to the
following principles and guidelines:
(w) "New York Convention" means the United
Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards approved (a) Information obtained through mediation shall be
in 1958 and ratified by the Philippine Senate under privileged and confidential.
Senate Resolution No. 71;
(b) A party, a mediator, or a nonparty participant
(x) "Non-Convention Award" means a foreign may refuse to disclose and may prevent any other
arbitral award made in a State which is not a person from disclosing a mediation communication.
Convention State;
(c) Confidential Information shall not be subject to
(y) "Non-Convention State" means a State that is not discovery and shall be inadmissible if any adversarial
a member of the New York Convention. proceeding, whether judicial or quasi-judicial,
However, evidence or information that is otherwise
admissible or subject to discovery does not become
(z) "Non-Party Participant" means a person, other inadmissible or protected from discovery solely by
than a party or mediator, who participates in a reason of its use in a mediation.
mediation proceeding as a witness, resource person
or expert;
(d) In such an adversarial proceeding, the following
persons involved or previously involved in a
(aa) "Proceeding" means a judicial, administrative, or mediation may not be compelled to disclose
other adjudicative process, including related pre- confidential information obtained during mediation:
hearing motions, conferences and discovery; (1) the parties to the dispute; (2) the mediator or
mediators; (3) the counsel for the parties; (4) the
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nonparty participants; (5) any persons hired or by a court or a public agency participates in
engaged in connection with the mediation as the child protection mediation;
secretary, stenographer, clerk or assistant; and (6)
any other person who obtains or possesses (6) sought or offered to prove or disprove a
confidential information by reason of his/her claim or complaint of professional
profession. misconduct or malpractice filed against
mediator in a proceeding; or
(e) The protections of this Act shall continue to apply
even of a mediator is found to have failed to act (7) sought or offered to prove or disprove a
impartially. claim of complaint of professional
misconduct of malpractice filed against a
(f) a mediator may not be called to testify to provide party, nonparty participant, or
information gathered in mediation. A mediator who representative of a party based on conduct
is wrongfully subpoenaed shall be reimbursed the occurring during a mediation.
full cost of his attorney's fees and related expenses.
(b) There is no privilege under Section 9 if a court or
SEC. 10. Waiver of Confidentiality. - A privilege arising from administrative agency, finds, after a hearing in
the confidentiality of information may be waived in a record, camera, that the party seeking discovery of the
or orally during a proceeding by the mediator and the proponent of the evidence has shown that the
mediation parties. evidence is not otherwise available, that there is a
need for the evidence that substantially outweighs
A privilege arising from the confidentiality of information may the interest in protecting confidentiality, and the
likewise be waived by a nonparty participant if the information mediation communication is sought or offered in:
is provided by such nonparty participant.
(1) a court proceeding involving a crime or
A person who discloses confidential information shall be felony; or
precluded from asserting the privilege under Section 9 of this
Chapter to bar disclosure of the rest of the information (2) a proceeding to prove a claim or defense
necessary to a complete understanding of the previously that under the law is sufficient to reform or
disclosed information. If a person suffers loss or damages in a avoid a liability on a contract arising out of
judicial proceeding against the person who made the the mediation.
disclosure.
(c) A mediator may not be compelled to provide
A person who discloses or makes a representation about a evidence of a mediation communication or testify in
mediation is preclude from asserting the privilege under such proceeding.
Section 9, to the extent that the communication prejudices
another person in the proceeding and it is necessary for the (d) If a mediation communication is not privileged
person prejudiced to respond to the representation of under an exception in subsection (a) or (b), only the
disclosure. portion of the communication necessary for the
application of the exception for nondisclosure may be
SEC. 11. Exceptions to Privilege. - admitted. The admission of particular evidence for
the limited purpose of an exception does not render
(a) There is no privilege against disclosure under that evidence, or any other mediation
Section 9 if mediation communication is: communication, admissible for any other purpose.

(1) in an agreement evidenced by a record SEC. 12. Prohibited Mediator Reports. - A mediator may not
authenticated by all parties to the make a report, assessment, evaluation, recommendation,
agreement; finding, or other communication regarding a mediation to a
court or agency or other authority that make a ruling on a
dispute that is the subject of a mediation, except:
(2) available to the public or that is made
during a session of a mediation which is
open, or is required by law to be open, to (a) Where the mediation occurred or has terminated,
the public; or where a settlement was reached.

(3) a threat or statement of a plan to inflict (b) As permitted to be disclosed under Section 13 of
bodily injury or commit a crime of violence; this Chapter.

(4) internationally used to plan a crime, SEC. 13. Mediator's Disclosure and Conflict of Interest. - The
attempt to commit, or commit a crime, or mediation shall be guided by the following operative
conceal an ongoing crime or criminal principles:
activity;
(a) Before accepting a mediation, an individual who
(5) sought or offered to prove or disprove is requested to serve as a mediator shall:
abuse, neglect, abandonment, or
exploitation in a proceeding in which a (1) make an inquiry that is reasonable
public agency is protecting the interest of under the circumstances to determinate
an individual protected by law; but this whether there are any known facts that a
exception does not apply where a child reasonable individual would consider
protection matter is referred to mediation likely to affect the impartiality of the
mediator, including a financial or personal
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interest in the outcome of the mediation (c) If the parties so desire, they may deposit such
and any existing or past relationship with a settlement agreement with the appropriate Clerk of a
party or foreseeable participant in the Regional Trial Court of the place where one of the
mediation; and parties resides. Where there is a need to enforce the
settlement agreement, a petition may be filed by any
(2) disclosure to the mediation parties any of the parties with the same court, in which case, the
such fact known or learned as soon as is court shall proceed summarily to hear the petition, in
practical before accepting a mediation. accordance with 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 after accepting a (d) The parties may agree in the settlement
mediation, the mediator shall disclose it as soon as agreement that the mediator shall become a sole
practicable. arbitrator for the dispute and shall treat the
settlement agreement as an arbitral award which
shall be subject to enforcement under Republic Act
At the request of a mediation party, an individual who is No. 876, otherwise known as the Arbitration Law,
requested to serve as mediator shall disclose his/her notwithstanding the provisions of Executive Order
qualifications to mediate a dispute. No. 1008 for mediated dispute outside of the CIAC.

This Act does not require that a mediator shall have special CHAPTER 3 - OTHER ADR FORMS
qualifications by 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 ADR such as but not
SEC. 14. Participation in Mediation. - Except as otherwise limited to (a) the evaluation of a third person or (b) a mini-trial,
provided in this Act, a party may designate a lawyer or any (c) mediation-arbitration, or a combination thereof.
other person to provide assistance in the 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 For purposes of this Act, the use of other ADR forms shall be
rescinded at any time. governed by Chapter 2 of this Act except where it is combined
with arbitration in which case it shall likewise be governed by
Chapter 5 of this Act.
SEC. 15. Place of Mediation. - The parties are free to agree on
the place of mediation. Failing such agreement, the place of
mediation shall be any place convenient and appropriate to all CHAPTER 4 - INTERNATIONAL COMMERCIAL
parties. ARBITRATION

SEC. 19. Adoption of the Model Law on International

SEC. 16. Effect of Agreement to Submit Dispute to Mediation
Commercial Arbitration. - International commercial
Under Institutional Rules. - An agreement to submit a dispute
arbitration shall be governed by the Model Law on
to mediation by any institution shall include an agreement to
International Commercial Arbitration (the "Model Law")
be bound by the internal mediation and administrative policies
adopted by the United Nations Commission on International
of such institution. Further, an agreement to submit a dispute
Trade Law on June 21, 1985 (United Nations Document
to mediation under international mediation rule shall be
A/40/17) and recommended approved on December 11, 1985,
deemed to include an agreement to have such rules govern the
copy of which is hereto attached as Appendix "A".
mediation of the dispute and for the mediator, the parties, their
respective counsel, and nonparty participants to abide by such
rules. SEC. 20. Interpretation of Model Law. - In interpreting the
Model Law, regard shall be had to its international origin and
to the need for uniformity in its interpretation and resort may
In case of conflict between the institutional mediation rules and
be made to the travaux preparatories and the report of the
the provisions of this Act, the latter shall prevail.
Secretary General of the United Nations Commission on
International Trade Law dated March 25, 1985 entitled,
SEC. 17. Enforcement of Mediated Settlement Agreement. - The "International Commercial Arbitration: Analytical
mediation shall be guided by the following operative Commentary on Draft Trade identified by reference number
principles: A/CN. 9/264."

(a) A settlement agreement following successful SEC. 21. Commercial Arbitration. - An arbitration is
mediation shall be prepared by the parties with the "commercial" if it covers matters arising from all relationships
assistance of their respective counsel, if any, and by of a commercial nature, whether contractual or not.
the mediator. Relationships of a transactions: any trade transaction for the
supply or exchange of goods or services; distribution
The parties and their respective counsels shall agreements; construction of works; commercial representation
endeavor to make the terms and condition thereof or agency; factoring; leasing, consulting; engineering;
complete and make adequate provisions for the licensing; investment; financing; banking; insurance; joint
contingency of breach to avoid conflicting venture and other forms of industrial or business cooperation;
interpretations of the agreement. carriage of goods or passengers by air, sea, rail or road.

(b) The parties and their respective counsels, if any, SEC. 22. Legal Representation in International Arbitration. -
shall sign the settlement agreement. The mediator In international arbitration conducted in the Philippines, a
shall certify that he/she explained the contents of the party may be presented by any person of his choice. Provided,
settlement agreement to the parties in a language that such representative, unless admitted to the practice of law
known to them. in the Philippines, shall not be authorized to appear as counsel
in any Philippine court, or any other quasi-judicial body
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whether or not such appearance is in relation to the arbitration (b) The following rules on interim or provisional
in which he appears. relief shall be observed:

SEC. 23. Confidential of Arbitration Proceedings. - The (1) Any party may request that provision
arbitration proceedings, including the records, evidence and relief be granted against the adverse party:
the arbitral award, shall be considered confidential and shall
not be published except (1) with the consent of the parties, or (2) Such relief may be granted:
(2) for the limited purpose of disclosing to the court of relevant
documents in cases where resort to the court is allowed herein.
Provided, however, that the court in which the action or the (i) to prevent irreparable loss or
appeal is pending may issue a protective order to prevent or injury:
prohibit disclosure of documents or information containing
secret processes, developments, research and other (ii) to provide security for the
information where it is shown that the applicant shall be performance of any obligation;
materially prejudiced by an authorized disclosure thereof.
(iii) to produce or preserve any
SEC. 24. Referral to Arbitration. - A court before which an evidence; or
action is brought in a matter which is the subject matter of an
arbitration agreement shall, if at least one party so requests not (iv) to compel any other
later that the pre-trial conference, or upon the request of both appropriate act or omission.
parties thereafter, refer the parties to arbitration unless it finds
that the arbitration agreement is null and void, inoperative or
incapable of being performed. (3) The order granting provisional relief
may be conditioned upon the provision of
security or any act or omission specified in
SEC. 25. Interpretation of the Act. - In interpreting the Act, the the order.
court shall have due regard to the policy of the law in favor of
arbitration. Where action is commenced by or against multiple
parties, one or more of whom are parties who are bound by the (4) Interim or provisional relief is requested
arbitration agreement although the civil action may continue by written application transmitted by
as to those who are not bound by such arbitration agreement. 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 describing in appropriate detail the precise
Authority" as used in the Model Law shall mean the person or relief, the party against whom the relief is
institution named in the arbitration agreement as the requested, the grounds for the relief, and
appointing authority; or the regular arbitration arbitration evidence supporting the request.
institution 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 (5) The order shall be binding upon the
agreed to a different procedure, they shall be deemed to have parties.
agreed to procedure under such arbitration rules for the
selection and appointment of arbitrators. In ad hoc arbitration, (6) Either party may apply with the Court
the default appointment of an arbitrator shall be made by the for assistance in Implementing or enforcing
National President of the Integrated Bar of the Philippines an interim measure ordered by an arbitral
(IBP) or his duly authorized representative. tribunal.

SEC. 27. What Functions May be Performed by Appointing (7) A party who does not comply with the
Authority. - The functions referred to in Articles 11(3), 11(4), order shall be liable for all damages
13(3) and 14(1) of the Model Law shall be performed by the resulting from noncompliance, including
Appointing Authority, unless the latter shall fail or refuse to all expenses, and reasonable attorney's fees,
act within thirty (30) days from receipt of the request in which paid in obtaining the order's judicial
case the applicant may renew the application with the Court. enforcement.

SEC. 28. Grant of Interim Measure of Protection. - SEC. 29. Further Authority for Arbitrator to Grant Interim
Measure of Protection. - Unless otherwise agreed by the
(a) It is not incompatible with an arbitration parties, the arbitral tribunal may, at the request of a party,
agreement for a party to request, before constitution order any party to take such interim measures of protection as
of the tribunal, from a Court an interim measure of the arbitral tribunal may consider necessary in respect of the
protection and for the Court to grant such measure. subject matter of the dispute following the rules in Section 28,
After constitution of the arbitral tribunal and during paragraph 2. Such interim measures may include but shall not
arbitral proceedings, a request for an interim be limited to preliminary injuction directed against a party,
measure of protection or modification thereof, may appointment of receivers or detention, preservation, inspection
be made with the arbitral tribunal or to the extent that of property that is the subject of the dispute in arbitration.
the arbitral tribunal has no power to act or is unable Either party may apply with the Court for assistance in
to act effectively, the request may be made with the implementing or enforcing an interim measures ordered by an
Court. The arbitral tribunal is deemed constituted arbitral tribunal.
when the sole arbitrator or the third arbitrator who
has been nominated, has accepted the nomination SEC. 30. Place of Arbitration. - The parties are free to agree on
and written communication of said nomination and the place of arbitration. Failing such agreement, the place of
acceptance has been received by the party making arbitration shall be in Metro Manila, unless the arbitral
request. tribunal, having regard to the circumstances of the case,
including the convenience of the parties shall decide on a
different place of arbitration.
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The arbitral tribunal may, unless otherwise agreed by the (a) the dispute is a construction dispute in which one
parties, meet at any place it considers appropriate for party is an international party
consultation among its members, for hearing witnesses,
experts, or the parties, or for inspection of goods, other (b) the person to be appointed agreed to abide by the
property or documents. arbitration rules and policies of CIAC;

SEC. 31. Language of the Arbitration. - The parties are free to (c) he/she is either coarbitrator upon the nomination
agree on the language or languages to be used in the arbitral of the international party; or he/she is the common
proceedings. Failing such agreement, the language to be used choice of the two CIAC-accredited arbitrators first
shall be English in international arbitration, and English or appointed one of whom was nominated by the
Filipino for domestic arbitration, unless the arbitral tribunal international party; and
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 (d) the foreign arbitrator shall be of different
statement by a party, any hearing and any award, decision or nationality from the international party.
other communication by the arbitral tribunal.
SEC. 38. Applicability to Construction Arbitration. - The
The arbitral tribunal may order that any documentary provisions of Sections 17 (d) of Chapter 2, and Section 28 and
evidence shall be accompanied by a translation into the 29 of this Act shall apply to arbitration of construction disputes
language or languages agreed upon by the parties or covered by this Chapter.
determined in accordance with paragraph 1 of this section.
SEC. 39. Court to Dismiss Case Involving a Construction
CHAPTER 5 - DOMESTIC ARBITRATION Dispute. - A regional trial court which a construction dispute
is filed shall, upon becoming aware, not later than the pretrial
conference, that the parties had entered into an arbitration to
SEC. 32. Law Governing Domestic Arbitration. - Domestic be conducted by the CIAC, unless both parties, assisted by
arbitration shall continue to be governed by Republic Act No. their respective counsel, shall submit to the regional trial court
876, otherwise known as "The Arbitration Law" as amended by a written agreement exclusive for the Court, rather than the
this Chapter. The term "domestic arbitration" as used herein CIAC, to resolve the dispute.
shall mean an arbitration that is not international as defined in
Article (3) of the Model Law.
CHAPTER 7 - JUDICIAL REVIEW OF ARBITRAL
AWARDS
SEC. 33. Applicability to Domestic Arbitration. - Article 8, 10,
11, 12, 13, 14, 18 and 19 and 29 to 32 of the Model Law and
A. DOMESTIC AWARDS
Section 22 to 31 of the preceding Chapter 4 shall apply to
domestic arbitration.
SEC. 40. Confirmation of Award. - The confirmation of a
CHAPTER 6 - ARBITRATION OF CONSTRUCTION domestic arbitral award shall be governed by Section 23 of R.A.
DISPUTES 876.

SEC. 34. Arbitration of Construction Disputes: Governing A domestic arbitral award when confirmed shall be enforced
Law. - The arbitration of construction disputes shall be in the same manner as final and executory decisions of the
governed by Executive Order No. 1008, otherwise known as Regional Trial Court.
the Constitution Industry Arbitration Law.
The confirmation of a domestic award shall be made by the
SEC. 35. Coverage of the Law. - Construction disputes which regional trial court in accordance with the Rules of Procedure
fall within the original and exclusive jurisdiction of the to be promulgated by the Supreme Court.
Construction Industry Arbitration Commission (the
"Commission") shall include those between or among parties A CIAC arbitral award need not be confirmed by the regional
to, or who are otherwise bound by, an arbitration agreement, trial court to be executory as provided under E.O. No. 1008.
directly or by reference whether such parties are project owner,
contractor, subcontractor, quantity surveyor, bondsman or SEC. 41. Vacation Award. - A party to a domestic arbitration
issuer of an insurance policy in a construction project. may question the arbitral award with the appropriate regional
trial court in accordance with the rules of procedure to be
The Commission shall continue to exercise original and promulgated by the Supreme Court only on those grounds
exclusive jurisdiction over construction disputes although the enumerated in Section 25 of Republic Act No. 876. Any other
arbitration is "commercial" pursuant to Section 21 of this Act. ground raised against a domestic arbitral award shall be
disregarded by the regional trial court.
SEC. 36. Authority to Act as Mediator or Arbitrator. - By
written agreement of the parties to a dispute, an arbitrator may B. FOREIGN ARBITRAL AWARDS
act as mediator and a mediator may act as arbitrator. The
parties may also agree in writing that, following a successful SEC. 42. Application of the New York Convention. - The New
mediation, the mediator shall issue the settlement agreement York Convention shall govern the recognition and
in the form of an arbitral award. enforcement of arbitral awards covered by the said
Convention.
SEC. 37. Appointment of Foreign Arbitrator. - The
Construction Industry Arbitration Commission (CIAC) shall The recognition and enforcement of such arbitral awards shall
promulgate rules to allow for the appointment of a foreign be filled with regional trial court in accordance with the rules
arbitrator or coarbitrator or chairman of a tribunal a person of procedure to be promulgated by the Supreme Court. Said
who has not been previously accredited by CIAC: Provided, procedural rules shall provide that the party relying on the
That: award or applying for its enforcement shall file with the court
the original or authenticated copy of the award and the
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arbitration agreement. If the award or agreement is not made address of record in the arbitration, or if any party cannot be
in any of the official languages, the party shall supply a duly served notice at such address, at such party's last known
certified translation thereof into any of such languages. address. The notice shall be sent at least fifteen (15) days before
the date set for the initial hearing of the application.
The applicant shall establish that the country in which foreign
arbitration award was made is a party to the New York CHAPTER 8 - MISCELLANEOUS PROVISIONS
Convention.
SEC. 49. Office for Alternative Dispute Resolution. - There is
If the application for rejection or suspension of enforcement of hereby established the Office for Alternative Dispute
an award has been made, the regional trial court may, if it Resolution as an attached agency to the Department of Justice
considers it proper, vacate its decision and may also, on the (DOJ) which shall have a Secretariat to be headed by an
application of the party claiming recognition or enforcement of executive director. The executive director shall be appointed
the award, order the party to provide appropriate security. by the President of the Philippines.

SEC. 43. Recognition and Enforcement of Foreign Arbitral The objective of the office are:
Awards Not Covered by the New York Convention. - The
recognition and enforcement of foreign arbitral awards not (a) to promote, develop and expand the use of ADR
covered by the New York Convention shall be done in in the private and public sectors; and
accordance with procedural rules to be promulgated by the
Supreme Court. The Court may, grounds of comity and
reciprocity, recognize and enforce a nonconvention award as a To assist the government to monitor, study and evaluate the
convention award. use by the public and the private sector of ADR, and
recommend to Congress needful statutory changes to develop.
Strengthen and improve ADR practices in accordance with
SEC. 44. Foreign Arbitral Award Not Foreign Judgment. - A world standards.
foreign arbitral award when confirmed by a court of a foreign
country, shall be recognized and enforced as a foreign arbitral
award and not a judgment of a foreign court. SEC. 50. Powers and Functions of the Office for Alternative
Dispute Resolution. - The Office for Alternative Dispute
Resolution shall have the following powers and functions:
A foreign arbitral award, when confirmed by the regional trial
court, shall be enforced as a foreign arbitral award and not as
a judgment of a foreign court. (a) To formulate standards for the training of the
ADR practitioners and service providers;

A foreign arbitral award, when confirmed by the regional trial

court, shall be enforced in the same manner as final and (b) To certify that such ADR practitioners and ADR
executory decisions of courts of law of the Philippines. service providers have undergone the professional
training provided by the office;

SEC. 45. Rejection of a Foreign Arbitral Award. - A party to a

foreign arbitration proceeding may oppose an application for (c) To coordinate the development, implementation,
recognition and enforcement of the arbitral award in monitoring, and evaluation of government ADR
accordance with the procedural rules to be promulgated by the programs;
Supreme Court only on those grounds enumerated under
Article V of the New York Convention. Any other ground (d) To charge fees for their services; and
raised shall be disregarded by the regional trial court.
(e) To perform such acts as may be necessary to carry
SEC. 46. Appeal from Court Decisions on Arbitral Awards. - A into effect the provisions of this Act.
decision of the regional trial court confirming, vacating, setting
aside, modifying or correcting an arbitral award may be SEC. 51. Appropriations. - The amount necessary to carry out
appealed to the Court of Appeals in accordance with the rules the provisions of this Act shall be included in the General
of procedure to be promulgated by the Supreme Court. Appropriations Act of the year following its enactment into
law and thereafter.
The losing party who appeals from the judgment of the court
confirming an arbitral award shall required by the appealant SEC. 52. Implementing Rules and Regulations (IRR). - Within
court to post counterbond executed in favor of the prevailing one (1) month after the approval of this Act, the secretary of
party equal to the amount of the award in accordance with the justice shall convene a committee that shall formulate the
rules to be promulgated by the Supreme Court. appropriate rules and regulations necessary for the
implementation of this Act. The committee, composed of
SEC. 47. Venue and Jurisdiction. - Proceedings for recognition representatives from:
and enforcement of an arbitration agreement or for vacation,
setting aside, correction or modification of an arbitral award, (a) the Department of Justice;
and any application with a court for arbitration assistance and
supervision shall be deemed as special proceedings and shall
(b) the Department of Trade and Industry;
be filled with the regional trial court (i) where arbitration
proceedings are conducted; (ii) where the asset to be attached
or levied upon, or the act to be enjoined is located; (iii) where (c) the Department of the Interior and Local
any of the parties to the dispute resides or has his place of Government;
business; or (iv) in the National Judicial Capital Region, at the
option of the applicant. (d) the president of the Integrated Bar of the
Philippines;
SEC. 48. Notice of Proceeding to Parties. - In a special
proceeding for recognition and enforcement of an arbitral (e) A representative from the arbitration profession;
award, the Court shall send notice to the parties at their and
 @lendelacruz 8

(f) A representative from the mediation profession;

and

(g) A representative from the ADR organizations

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
Rights, chairman of the House Committee on Justice, and one
(1) member each from the majority and minority of both
Houses.

The Joint Oversight Committee shall become functus officio

upon approval of the IRR.

SEC. 53. Applicability of the Katarungan Pambarangay. - This

Act shall not be interpreted to repeal, amend or modify the
jurisdiction of the Katarungan Pambarangay under Republic
Act No. 7160, otherwise known as the Local Government Code
of 1991.

SEC. 54. Repealing Clause. - All laws, decrees, executive

orders, rules and regulations which are inconsistent with the
provisions of this Act are hereby repealed, amended or
modified accordingly.

SEC. 55. Separability Clause. - If for any reason or reasons, any

portion or provision 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.

SEC. 56. Effectivity. - This act shall take effect fifteen days (15)
after its publication in at least two (2) national newspapers of
general circulation.

Approved,

FRANKLIN DRILON JOSE DE VENECIA JR.

President of the Senate Speaker of the House of
Representatives

This Act which is a consolidation of Senate Bill No. 2671 and

House Bill No. 5654 was finally passed by the Senate and the
House of Representatives on February 4, 2004.

OSCAR G. YABES ROBERTO P. NAZARENO

Secretary of Senate Secretary General
House of Represenatives

Approved: April 2, 2004

GLORIA MACAPAGAL-ARROYO
President of the Philippines