RA 9285 The Alternative Dispute Resolution Act of 2004

- Promulgated April 2, 2004

- Effectivity date April 28, 2004 (publication April 13)
- General law applicable to all forms of alternative dispute resolution such arbitration,
mediation, conciliation, early neutral evaluation, mini trial or any combination thereof.
- It adopted the United Nations Commission on International Trade Law (UNCITRAL)
New York Convention of June 21, 1985.

Salient Features of ADR enumerated and explained in the case of Korea Technologies Co. vs.
Lerma (2008):
R-C-R-D-A

1. RTC must refer to arbitration proper cases;

- Section 24 of RA 9285 mandates referral to arbitration in cases not within the jurisdiction
of RTC.

2. Foreign Arbitral Awards must be confirmed by RTC;

- Foreign Arbitral Awards, although stipulated as final and binding, are not immediately
enforceable, pursuant to Section 35 (xxx must be recognized by a competent court for
enforcement) of RA 9285.

3. RTC has jurisdiction to review Foreign Arbitral Awards;

- Sec 42 in relation to Sec 45 of RA 9285 gives RTC the specific authority and jurisdiction
to set aside, reject or vacate based on the grounds enumerated in Sec 34(2) of
UNCITRAL.

4. The Grounds for judicial review different in Domestic and Foreign Arbitral Awards; and
- For Foreign Arbitral Awards, the grounds must be based on Art 34(2) of UNCITRAL,
while for Domestic Awards, the grounds must be based on Sec 25 of RA 9285. However,
both need confirmation from a competent court [RTC].

5. RTC decision of assailed Foreign Arbitral Awards appealable.

- Sec 46 of RA 9285 provides for an appeal before the CA as the remedy of an aggrieved
party. Thereafter, the CA decision may further be appealed or reviewed before the SC.

IRR of ADR Act of 2004

- Approved by Secretary of Justice on October 26, 2009, pursuant to Sec 52 of RA 9285

Special Rules of Court on ADR

- Procedural rules on the prosecution of ADR related actions and petitions
- Passed and approved by SC on Sept 1, 2009
- Effectivity date October 30, 2009.
ADR, Defined
- [Broad sense] a system, using means and methods allowed by law and approved by the
parties for the purpose of resolving or facilitating the resolution of disputes and
controversies between them, in an expeditious and speedy manner, without resorting to
court adjudication.

- As defined in the ADR Act of 2004: any process or procedure used to resolve a dispute or
controversy, other than by adjudication of a presiding judge of court or an officer of a
government agency xxx in which a neutral third party participates to assist in the
resolution of issues xxx.

Administrative agencies conducting arbitral proceedings

- Exercise Quasi-judicial Power, BUT not covered by ADR Act.
- Because there are specifil laws and rules governing their procedures.

Sec 2 - State Policy of ADR:

xxx to actively promote party autonomy in the resolution of disputes or the freedom of the party
to make their own arrangements to resolve their disputes. Towards this end, the State shall
encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an
important means to achieve speedy and impartial justice and declog court dockets. As such, the
State shall provide means for the use of ADR as an efficient tool and an alternative procedure for
the resolution of appropriate cases. Likewise, the State shall enlist active private sector
participation in the settlement of disputes through ADR. Xxx

Insular Savings Bank vs. Far East Bank (2006)

Facts:
The case involves dishonored checks due to insufficiency of funds. Far East Bank a complaint
before the Philippine Clearing House Corporation Arbitration Committee against Home Bankers Trust and
Company. Before the termination of the arbitration proceedings, Far East Bank filed another complaint but
this time with the RTC Makati City.
RTC suspended the proceedings pending the decision of the Arbitration Committee.

Ruling on the policy of ADR:

ADRs are encouraged by the SC. By enabling the parties to resolve their disputes amicably, they
provide solutions that are less time-consuming, less tedious, less confrontational and more productive of
goodwill and lasting friendships.xxx

RCBC vs. BDO (687 SCRA 583)

Facts:
This a consolidated case of 3 petitions.
All three petitions emanated from arbitration proceedings commenced by RCBC Capital pursuant
to the arbitration clause under its Share Purchase Agreement (SPA) with EPCIB involving the latters
shares in Bankard, Inc. In the course of arbitration conducted by the Tribunal constituted and administered
by the International Chamber of Commerce-International Commercial Arbitration (ICC-ICA), EPCIB was
merged with BDO which assumed all its liabilities and obligations.

Ruling on the policy of ADR:

ADRs are encouraged by the SC. By enabling the parties to resolve their disputes amicably, they
provide solutions that are less time-consuming, less tedious, less confrontational and more productive of
goodwill and lasting friendships.xxx
Principles of ADR: P-R-E
1. Promotion of party autonomy and self-determination in the resolution of disputes;
- Parties are given the freedom to choose the form of ADR they desire to avail of.

2. Recognition of ADR as an efficient tool and an alternative procedure in the resolution of

cases;
- ADR merely provides the parties with an alternative means of settling disputes in a
manner that is different, separate and independent from the court system.

3. Enlisting of private sector participation.

- ADR usually requires the participation of a neutral third party who do not necessarily
renders public service.

Objectives and Benefits of ADR: S-D

1. Speedy and impartial justice;
2. Declogging of court dockets.

Features of ADR: M-U-C-A-U

1. ADR is a means used to resolve a dispute or controversy;
2. ADR utilizes means and methods allowed by law.
3. ADR is contractual in nature.
4. ADR avoids court trial
5. ADR usually involves the participation of a neutral third party.

Sources of ADR Rules: D-A-D-I-G

1. Domestic laws and rules;
2. Acts of the Executive Branch;
3. Decisions of the SC;
4. International laws UNCITRAL Model Law; and
5. General principles of law and equity.

Forms of ADR: AM-CE-MAA

Definition Example
Arbitration An arrangement for taking
and abiding by the judgment
of selected persons in some
disputed manner, instead of
carrying it to established
tribunals of justice, and is
intended to avoid the
formalities, the delay, the
expense and vexation of
ordinary litigation.
Mediation A voluntary process in which
a mediator, selected by the
disputing parties, facilitates
communication and
negotiation, and assists the
parties in relating in reaching
a voluntary agreement
regarding a dispute.

Conciliation The adjustment and

settlement of a dispute in a
friendly, unantagonistic
manner.

Early Neutral and Neutral Neutral Evaluation a

Evaluation process wherein the parties
and their lawyers are brought
together to present summaries
of their cases and receive a
non-binding assessment by an
experienced neutral person
with expertise in the subject
or in the substance of the
dispute.

Early Neutral Evaluation

availed of early in the pre-
trial phase.

Mini Trial A structured dispute

resolution method in which
the merits of a case are
argued before a panel
composed of senior decision
makers, with or without the
presence of a neutral third
person, after which the
parties seek a negotiated
settlement.

Any Combination of the Any combination of the Med-Arb (Combi of

foregoing foregoing ADR Forms, mediation and arbitration)
approved by the parties, not
contrary to lamogpop

Any other ADR Form Any arrangement agreed

(Innominate ADR Form) upon by the parties that
satisfies the requisites of
ADR a valid contract, not
contrary to lamogpop, is an
acceptable form of ADR.

Classification of Forms of ADR

As to the number of parties Bilateral
Multi-lateral

As to the number of issues Simple

involved Complex

As to the extent of the Complete

conclusion Partial

As to the role of evidence in Evidentiary or Merit-based

the proceedings Non-evidentiary or Non-merit
based

As to the pendency of the Case-related

Court Independent

As to the applicable law Domestic

International

As to the performance of the Ad Hoc

ADR provider or practitioner Institutional

Components of ADR: C-D-A-F

1. Contending parties;
2. Dispute or Controversy;
3. Form of ADR;
4. ADR Provider or Practitioner.

Note: ADR Provider is an institution or a person accredited as mediator, conciliator, arbitrator,

neutral party or any person with similar functions in the ADR system. ADR Practitioner is an
individual acting as mediator, conciliator, arbitrator, neutral evaluator who is not necessarily
accredited as an ADR provider.

Subject matters of ADR: CCV-JIF

All adversarial disputes and controversies can be subject matter of ADR, except:
1. Civil Status of persons;
2. Validity of Marriage or any ground for legal separation;
3. Jurisdiction of Courts;
4. Future legitime;
5. Criminal liability
6. In general, those which, by law, cannot be compromised e.g. Art 2035 NCC, and labor
disputes which are under Labor Code and its IRR.

Seat of ADR
- is the jurisdiction under whose law the proceeding is being conducted.

Venue of ADR
- is the actual site where the arbitration is being conducted.

Basic Concepts

1. ADR proceedings are completed upon the execution of a concluding act or agreement:
a. Mediated settlement agreement or Compromise agreement, in case of mediation;

b. A judgment based on compromise, in case of a court annexed mediation;

c. Waiver or Quitclaim, in case of conciliation;

d. Arbitral awards, award on agreed terms, consent award or award based on

compromise, in case of arbitration.

2. ADR Providers and Practitioners

Arbitrators
- The person appointed and authorized to render a binding resolution of the dispute
between the parties, and as such, is bound to consider the merits of the controversy.

Mediator
- A person who conducts mediation and is precluded from discussing the merits of the
controversy and cannot render a binding assessment of the dispute.

Neutral Third Persons

- The ff are authorized to consider the merits of the controversy and required to render a
binding resolution:
a. Arbitrator;
b. Mediator-Arbitrator in Med-Arb process;
c. Neutral third person in Mini-trial, neutral evaluation, combi forms, or innominate
forms, upon the agreement of the parties.

3. Preference for ADR

 Koppel Inc. vs Makati Rotary Club (2013)
Facts:
This case involves the non-payment of rentals which resulted to a case of
unlawful detainer filed by Makati Rotary Club against Koppel before the MeTC
Paranaque, pursuant to a series of amended lease contracts between the parties.
The case was elevated to the RTC, then the CA, until it reached the SC.

Independently of the merits of the case, the MeTC, RTC and Court of Appeals all
erred in overlooking the significance of the arbitration clause incorporated in the
recent amended lease contract. As the SC sees it, that is a fatal mistake.

Ruling:
Judicial proceedings disregarding arbitration agreement, beyond the point when
the parties should have been referred to arbitration, are null and void, and the
decisions rendered therein shall be reserved and set aside in order to allow the
remand of the case to the trial court and the referral of the dispute to arbitration in
accordance with the arbitration agreement.

Office for ADR (OADR)

- created pursuant to RA 9285 and its IRR
- attached to DOJ
- headed by Executive Director, appointed by the President upon the recommendation of
the Secretary of Justice

Principal Objectives: P-A-A-C

1. To promote, develop and expand the use of ADR in the private and public sectors through
information, education and communication;
2. To assist the government to monitor, study and evaluate the use by the public and private
sectors of ADR, and recommend to Congress needful statutory changes to develop,
strengthen and improve ADR practices in accordance with world standards;
3. To act as appointing authority of mediators when the parties agree in writing that it shall
be empowered to do so; and
4. To compile and publish a list or roster of ADR providers and practitioners, and to compile
a list or roster of foreign or international ADR providers/practitioners.