Alternative Dispute Resolution in the Philippines: Arbitration's Under-Harnessed Potential

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Alternative Dispute Resolution in the Philippines: Arbitration’s under-harnessed potential

Zara Marie Dy

J.D. 2014

Silliman University

Atty. Norberto Denura

Law 109 – Legal Research & Writing

October 2010


Arbitration has steadfastly journeyed through Philippine legislative history in the past few centuries with roots tracing back to the Spanish Ley Enjuicinamente de Civil or the Spanish Law of Civil Procedure (Lim, 2001), re-established mid-century through the Arbitration Law of 1953 which was based on U.S. Federal Arbitration Law, and further refined another half a century later with the Philippine Alternative Dispute Resolution (ADR) Act of 2004 which had incorporated some of the more pertinent provisions from the Model Law on International Commercial Arbitration of 1985, exemplified by the United Nations Commission on International Trade Law (UNCITRAL). Philippine arbitration laws have continuously managed to survive and re-create itself to perpetually assume its place among the laws of the land. The alternative means for dispute resolution that these laws offer tip the scales with major strengths such as cost efficiency, impartiality and technical expertise of engaging arbitrators of your own choice, speed and flexibility in adaptation of laws and procedures, and confidentiality of extrajudicial hearings and awards, as mentioned in Parlade (2005). This paper explores the potential of ADR, focusing on the pitfalls of litigation in the Philippines and the burgeoning advantages arbitration provides.

Keywords: arbitration, alternative dispute resolution

Definition of Terms

For the purposes of this paper, and as defined in the Philippine Alternative Dispute Resolution Act of 2004, the term:

A. “Alternative Dispute Resolution (ADR)” means a process or procedure employed to settle a dispute extra-judicially. Instead of being adjudicated by a presiding judge, a neutral third party is employed to assist in resolving the issues in question through arbitration, mediation, conciliation, early neutral evaluation, mini-trial, or any combination thereof;

B. “Arbitration” means that a dispute is voluntarily submitted for resolution where one or more arbitrators, duly appointed and agreed upon by the parties beforehand, resolve a dispute by rendering an award;

C. “Arbitrator” means appointed person or persons in a dispute who sits to resolve the issue by rendering an award. The arbitrator is a neutral third party especially chosen to perform such task;

D. “Award” means any partial or final decision rendered by an arbitrator that resolves the issue in a dispute;

E. “International Party” shall mean a juridical person or entity whose place of business is outside the Philippines. A domestic subsidiary of such or a co-venturer which holds office in the Philippines shall not be included. A foreign arbitrator shall mean a person who is not a Filipino national;

F. “Litigation” means legal action brought between two private parties in a court of law;

G. “Model Law” means the International Commercial Arbitration Model Law which was implemented on 21 June 1985 by the United Nations Commission on International Trade (UNCITRAL);

H. “New York Convention” means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 1958 which was ratified under Senate Resolution No. 71 by the Philippine Senate;

I. “Proceeding” means such processes of judicial, administrative, or other adjudicative means which include pre-hearing or post-hearing motions, conferences and discovery;

J. “Record” means an information written in a way that can be reproduced or is kept electronically or in such similar medium, which can be retrieved and used.

Historical Evolution

Domestic Arbitration...
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