Chief Justice Alexander G. Gesmundo underscored the role of alternative dispute resolution (ADR) in civil cases, particularly arbitration, that “offers faster, more flexible, and often more cost-effective solutions than traditional court litigation.”

In his message during the 3rd International Chamber of Commerce Philippines Arbitration Day in Taguig City, Chief Justice Gesmundo pointed out that the integration of modern technologies, including artificial intelligence (AI), “only amplifies arbitration’s potential to deliver even faster and more efficient solutions.”

“As we embrace this evolving landscape, not only will arbitration transform how we resolve conflicts but it will also shape the future of justice in the Philippines,” he said.

In the Philippines, the primary modes of ADR are mediation, conciliation, and arbitration. While ADR can be used in criminal cases, “it only applies to the civil aspect of the claim.”

Tracing the roots of arbitration, Gesmundo said its formal recognition was in 1949 and later strengthened in 1953 with the passage into law of Republic Act No. 876, the Arbitration Law.

The Philippines, he said, was one of the first signatories to the 1958 New York Convention on the recognition and enforcement of foreign arbitral awards.

In 1985, he also said, “the setting up of the Construction Industry Arbitration Commission (CIAC) further bolstered arbitration, particularly within the construction industry, and in 2004, the Alternative Dispute Resolution Act institutionalized arbitration alongside other ADR mechanisms, affirming the State's policy to actively promote party autonomy and foster expedited, impartial justice.”

The Supreme Court (SC), he cited, has been in advancing the policy to promote arbitration with the Action Program for Judicial Reform (APJR) which was further enhanced under the court’s Strategic Plan for Judicial Innovations (SPJI) that was launched in 2022.

In 2009, the SC issued the Special ADR Rules for expeditious resolution of disputes and “in due time, the Court will be revising these rules to address current developments in arbitration and dispute resolution,” the Chief Justice said.

He cited that “in the revision of the Rules of Court, one of the key proposals with respect to Civil Procedure is to make two (2) ADR modes a condition precedent before parties may initiate a civil action.”

“With this, regardless of the modality of ADR, the parties resort to and whatever settlement agreement is achieved, the parties must go to court, this time, only to seek approval of the agreement, similar to a compromise agreement which becomes final judgment in a case,” he said.

The court procedure “ensures that the parties are protected, and the agreements achieved are enforced,” also said.

He added: “Once the court approves it, it becomes immediately final and executory, and the parties can ask for a writ of execution. This is so that no party can renege on the agreement without court sanction. And, should the ADR prove unsuccessful, then the usual court trial follows, but this time, the triable issues have been limited. This is the innovation which we want to introduce in our new Rules of Civil Procedure.”

Chief Justice Gesmundo also cited past SC decision that supported arbitration in resolving disputes.  He said in 2020, the SC upheld the finality of arbitral judgments, while in 2023 the exclusive jurisdiction of the CIAC over construction disputes was affirmed.

To the organizers of the event, Gesmundo said:

“Conferences such as this are invaluable in fostering greater cooperation and advancing common goals. These events not only facilitate training and information dissemination but also promote respect for the arbitration processes, both locally and across the region. Needless to say, a vibrant and effective ADR regime in commerce and trade ensures a stable environment for local businesses and foreign investments alike.”