Arbitration is the way to settle

Published August 4, 2022, 12:02 AM

by Senator Francis Tolentino


Senator Francis N. Tolentino

Arbitration is one of the alternative dispute resolutions (ADR) available to parties of a dispute.

Here in the Philippines, our arbitration legal framework – namely, the Civil Code of the Philippines (Republic Act No. 386), the Arbitration Law (Republic Act No. 876), the Alternative Dispute Resolution Act of 2004 (Republic Act No. 9285) and its implementing rules, the Supreme Court’s Special Rules of Court on Alternative Dispute Resolution (A.M. No. 07-11-08-SC), and Executive Order No. 1008 creating the Construction Industry Arbitration Commission (CIAC) – provides that arbitration is consensual, contractual, and confidential.

Consensual. For any dispute to resort to arbitration, both parties must consent to such proceeding. Consent may be sourced from an arbitration clause either embedded in an earlier agreement relating to the contract under dispute or a subsequent agreement stating both parties’ desire to submit to arbitration. The parties must further specify the issues to be subject of the arbitration proceedings.

Contractual. Stemming from the consensual nature of arbitration, it is also contractual. Parties are free to stipulate the procedure and conduct of the proceedings and appoint arbitrators. As such, the parties are able to custom-fit the arbitration tribunal’s conduct and composition to the nature of the dispute.

Confidential. Arbitration proceedings, unlike disputes brought before domestic courts, are private and confidential. The papers, records, evidence, and the arbitral award itself are confidential and inaccessible by the public. As such, the parties avoid unwanted publicity.

In the international sphere, the Philippines, under the Alternative Dispute Resolution Act of 2004, adopted the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration specifically for international commercial arbitration matters. The same local law further referred to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, otherwise known as the New York Convention.

Notably, the Philippines is a state party to both the UNCITRAL Model Law on International Commercial Arbitration and the New York Convention.

The UNCITRAL Model Law on International Commercial Arbitration covers all stages of the arbitral process from the arbitration agreement, composition and jurisdiction of the arbitral tribunal, the extent of court intervention, and the recognition and enforcement of the arbitral award. This is said to conform with international contract and arbitration practices.

The New York Convention, as supported by the Supreme Court’s Special Rules of Court on Alternative Dispute Resolution, also recognizes the enforceability of foreign arbitral awards in the Philippines. Our local courts may, on the grounds of comity and reciprocity, recognize and enforce a foreign arbitral award made in a country that is not a signatory to the New York Convention. A party to a foreign arbitral proceeding may thus enforce the award by filing a petition with the proper Regional Trial Court for its recognition and enforcement.

While domestic arbitration provides for an alternative mode by which parties to a dispute may settle their claims and issues – in the international setting, the settlement of disputes proves to be a more cumbersome task with no ready international court or binding law to turn to. Thus, the importance of arbitration in the international setting is emphasized. Thankfully, we have the foregoing legal mechanisms in place to facilitate international arbitration for the Filipinos.