WRITTEN REPORT ON:

 J PLUS ASIA DEVELOPMENT CORPORATION V. UTILITY

ASSURANCE CORPORATION
 SPECIAL RULES OF COURT ON ALTERNATIVE DISPUTE
RESOLUTION
 RA 876
 COURT OBSERVATION IN NATIONAL LABOR RELATIONS
COMMISSION (NLRC)

In Partial Fulfillment of the Requirements in Alternative Dispute Resolution

Submitted to:

Atty. Teresa Q. Blanco

Submitted by:

Group 2

Maria Corazon Raterta

Liam Laurence D. Lacayanga
Riel Arnulfo A. Estenzo, III
Jaliah D. Dalidig
Luke Andrei T. Ferraris
Marivic R. Escobido
Jay D. Piales
Francis Edu N. Albaran
Jeffrey C. Sabando
Ma. Denise Eve Q. Durias
Princess Maomina Dayana M. Pacasum
Melgen J. Sarra
Renato F. Tolinero, Jr.
Ricardo Tumala Jr.
Lucid

SPECIAL RULES OF COURT ON ALTERNATIVE DISPUTE RESOLUTION

 A.M. No. 07-11-08-SC

COVERAGE

• Relief on the issue of Existence, Validity, or Enforceability of the Arbitration

Agreement;
• Referral to Alternative Dispute Resolution ("ADR");
• Interim Measures of Protection;
• Appointment of Arbitrator;
• Challenge to Appointment of Arbitrator;
• Termination of Mandate of Arbitrator;
• Assistance in Taking Evidence;
• Confirmation, Correction or Vacation of Award in Domestic Arbitration;
• Recognition and Enforcement or Setting Aside of an Award in International
Commercial Arbitration;
• Recognition and Enforcement of a Foreign Arbitral Award;
• Confidentiality/Protective Orders; and
• Deposit and Enforcement of Mediated Settlement Agreements.

PROCEEDINGS

• A special proceeding is a variety of lawsuit. It is bought on with the simplicity

and speed of a motion.
• Summary process refers to an immediate process, issuing and taking effect
without intermediate applications or delays or enforcing a right that takes effect
faster and more efficiently.

SERVICE AND FILING OF PETITION

• The petitioner shall serve, either by personal service or courier, a copy of the
petition upon the respondent before the filing thereof. Proof of service shall be
attached to the petition filed in court.

PROHIBITED SUBMISSIONS

• Motion to dismiss;
• Motion for bill of particulars;
• Motion for new trial or for reopening of trial;
• Petition for relief from judgment;
• Motion for extension, except in cases where an ex-parte temporary order of
protection has been issued;
• Rejoinder to reply;
 • Motion to declare a party in default;

1-5-30

• In all cases, as far as practicable, the summary hearing shall be conducted in

one (1) day and only for purposes of clarifying facts.
• It shall be the court that sets the petition for hearing within five (5) days from the
lapse of the period for filing the opposition or comment.
• The court shall resolve the matter within a period of thirty (30) days from the day
of the hearing.

CONTENTS OF PETITION

• The facts showing that the persons named as petitioner or respondent have legal
capacity to sue or be sued;
• The nature and substance of the dispute between the parties;
• The grounds and the circumstances relied upon by the petitioner to establish his
position; and
• The relief/s sought.

GROUNDS

• invalid, void, unenforceable or inexistent.

• arbitral tribunal has no jurisdiction to resolve the dispute.
• that the dispute is covered by an arbitration agreement.

INTERIM MEASURES OF PROTECTION

• The need to prevent irreparable loss or injury;
• The need to provide security for the performance of any obligation;
• The need to produce or preserve evidence; or
• The need to compel any other appropriate act or omission.

CONFIRMATION, CORRECTION OR VACATION OF AWARD IN DOMESTIC

ARBITRATION
• procured through corruption, fraud, undue means, or misconduct;
• arbitrators’ disqualification, exceeded its authority;
• imperfectly executed; or
• party to arbitration is a minor or a person judicially declared to be incompetent.

“Peace is not absence of conflict, it is the ability to handle conflict by peaceful

means.” - Ronald Reagan

Jurisprudence
 J PLUS ASIA DEVELOPMENT CORPORATION V. UTILITY ASSURANCE
CORPORATION

GR NO. 199650 JUNE 26, 2013

TOPIC: Default or mora, INTERPRETATION of Contracts, PENAL CLAUSE/

LIQUIDATED DAMAGES

FACTS:

J Plus Asia, represented by its chairman Joo Han lee, and Martin Mabunay, entered into
a CONSTRUCTION AGREEMENT whereby Mabunay undertook to build the former’s
Condominium/hotel in Boracay. The project was to be completed within 1 yr from the
siigning of the NOTICE OF AWARD and receipt of 20% down payment (8.4 milllion) The
down payment was fully paid on January 14, 2008. Per the agreed work schedule, the
completion date of the project was December 31, 2008. Mabunay also submitted the
required Performance Bond issued by Utility Assurance Corporation (UTASSCO) in the
amount equivalent to 20% down payment or P8.4 million. Mabunay commenced work
on January 7, 2008. However, as evidenced by the Joint Construction Evaluation Result
and Status, signed by both parties, the project was only 31.39 % complete as of
November 14, 2008. Thus, J PLUS ASIA terminated the contract and sent demand
letters to Mabunay and the surety. J Plus Asia filed a request for arbitration before the
Construction Industry Arbitration Commission (CIAC) and prayed that MAbunay and
Surety be ordered to pay 8.9 Million as liquidated damages and 2.3 Million to the
unrecouped down payment or overpayment made to Mabunay. Mabunay’s answer
alleged that the delay was caused by retrofitting and other revision works ordered by
Joo Han Lee. The surety on the other hand filed a MTD for lack of cause of action. The
surety argued that the performance bond merely guaranteed the 20% down payment
and not the entire obligation of Mabunay. THE CIAC ruled in favor of JPLUS ASIA. THE
CA ruled that Mabunay has not yet incurred delay and that obligation was not yet
demandable because the contract was terminated prior to completion date.

ISSUES:

1. Whether Mabunay had incurred delay? (YES)

2. Whether the delay should be reckoned only after the lapse of the 1 year contract
period?

3. Whether Mabunay’s liability for liquidated damages arises only upon the happening of
such condition (DELAY MUST BE RECKONED FROM FILING OF COMPLAINT)
HELD:

Mabunay already incurred delay at the time the contract was terminated. Default or
mora on the part of the debtor is the delay in the fulfillment of the prestation by reason
of a cause imputable to the former. It is the nonfulfillment of an obligation with respect to
time. Article 1169 of the Civil Code provides that those obliged to deliver or to do
something incur in delay from the time the obligee judicially or extrajudicially demands
from them the fulfillment of their obligation. One who contracts to complete certain work
within a certain time is liable for the damage for not completing it within such time,
unless the delay is excused or waived.

The following requisites must be present in order that the debtor may be in default: (1)
that the obligation be demandable and already liquidated; (2) that the debtor delays
performance; and (3) that the creditor requires the performance judicially or
extrajudicially. Mabunay was already in delay. Article 1374 of the Civil Code requires
that the various stipulations of a contract shall be interpreted together, attributing to the
doubtful ones that sense which may result from all of them taken jointly. Here, the work
schedule approved by petitioner was intended, not only to serve as its basis for the
payment of monthly progress billings, but also for evaluation of the progress of work by
the contractor. The Construction Agreement provided that the contractor shall be
deemed in default, if among others, it had delayed without justifiable cause the
completion of the project by more than 30 calendar days based on official work
schedule duly approved by the owner. The Construction Agreement authorizes
petitioner to confiscate the Performance Bond to answer for all kinds of damages it may
suffer as a result of the contractor’s failure to complete the building. Having terminated
the contract, petitioner is entitled to the proceeds of the bond as indemnification for
damages it sustained due to the breach committed by Mabunay. Such stipulation
allowing the confiscation of the contractor’s performance bond partakes of the nature of
a penalty clause, which is an accessory undertaking to assume greater liability on the
part of the obligor in case of breach of an obligation. The Performance Bond guaranteed
not only the 20% down payment but the full and faithful compliance of Mabunay’s
obligations under the Construction Agreement. Nowhere in law or jurisprudence does it
state that the obligation or undertaking by a surety may be apportioned. The imposition
of interest on the claims of petitioner is in order. If a surety upon demand fails to pay, he
can be held liable for interest, even if in thus paying, its liability becomes more than the
principal obligation. The increased liability is not because of the contract but because of
the default and the necessity of judicial collection.

REPUBLIC ACT 876

 AN ACT TO AUTHORIZE THE MAKING OF ARBITRATION AND SUBMISSION
AGREEMENTS, TO PROVIDE FOR THE APPOINTMENT OF ARBITRATORS AND
THE PROCEDURE FOR ARBITRATION IN CIVIL CONTROVERSIES, AND FOR
OTHER PURPOSES
In this segment of the report, we are going to conduct a panel conference involving
matters related to RA 876.
Questions and Answers

1. Who may submit matters to arbitrators?

2 or more persons where any controversy exist between them which may be the subject
of an action or a controversy in a contract.

2. The submission or contract may include question arising out of what?

Valuation
Appraisal
Other Controversies
w/c may be collateral, incidental, precedent or subsequent to any issue b/wn the parties

3. When cannot a controversy be arbitrated?

Where one of he parties is a:
a) Infant
b) Judicially declared to be incompetent, unless petitioned by the guardian or guardian
ad litem and approved by a court having jurisdiction

4. Where a person capable of entering into a submission or contract has knowingly

entered into the same with a person incapable of so doing, may the former object on the
ground of incapacity?

No. The incapacity can be taken only in behalf of the person so incapacitated.

5. What Controversies or cases not subject to the provisions of this Act?

Controversies and to cases which are subject to the jurisdiction of the Court of Industrial
Relations

6. What are the form of arbitration agreement?

In writing and subscribed by the party sought to be charged, or by his lawful agent.

7. The making of a contract or submission for arbitration described in section two

hereof, providing for arbitration of any controversy, shall be deemed what?

A consent of the parties to the jurisdiction of the Court of First Instance of the province
or city where any of the parties resides, to enforce such contract or submission.

8. In the case of a contract to arbitrate future controversies by the service by either party
Upon the other of a demand for arbitration in accordance with the contract. Such
demand shall be set forth

nature of the controversy,

amount involved,
relief sought,
true copy of the contract providing for arbitration

9. In the event that the contract between the parties provides for the appointment of a
single arbitrator,

the demand shall be set forth a specific time within which the parties shall agree upon
such arbitrator.

10. If the contract between the parties provides for the appointment of three arbitrators,
one to be selected by each party, the demand shall state what?
name the arbitrator appointed by the party making the demand; and shall require that
the party upon whom the demand is made shall within fifteen days after receipt thereof
advise in writing the party making such demand of the name of the person appointed by
the second party; such notice shall require that the two arbitrators so appointed must
agree upon the third arbitrator within ten days from the date of such notice.

11. In the event that one party defaults in answering the demand, the aggrieved party
has what remedy?
File with the Clerk of the Court of First Instance having jurisdiction over the parties,
A copy of the demand for arbitration under the contract to arbitrate,
with a notice that the original demand was sent by registered mail or delivered in person
to the party against whom the claim is asserted.

12. A party aggrieved by the failure, neglect or refusal of another to perform under an
agreement in writing providing for arbitration may do what?
Petition the court for an order directing that such arbitration proceed in the manner
provided for in such agreement.

13. how many days after notice of hearing of such application shall be served either
personally or by registered mail upon the party in default before ?

Five

14. The court shall hear the parties, shall make an order directing the parties to proceed
to arbitration in accordance with the terms of the agreement after what condition?

Upon being satisfied that the making of the agreement or such failure to comply
therewith is not in issue,

15. When shall the court not submit the matter to arbitration but proceed to summarily
hear the issue?
If the making of the agreement or default be in issue

16. When shall the proceeding be dismissed by the court upon petition for arbitration?

Court Finds that no agreement in writing providing for arbitration was made, or that
there is no default in the proceeding thereunder

17. The court shall decide all motions, petitions or applications filed under the provisions
of this Act, within how many days after such motions, petitions, or applications have
been heard by it?

Ten

18. If any suit or proceeding be brought upon an issue arising out of an agreement
providing for the arbitration thereof, the court in which such suit or proceeding is
pending, upon being satisfied that the issue involved in such suit or proceeding is
referable to arbitration, shall do what?

shall stay the action or proceeding until an arbitration has been had in accordance with
the terms of the agreement: Provided, That the applicant, for the stay is not in default in
proceeding with such arbitration.

19. The Court of First Instance shall appoint an arbitrator or arbitrators, as the case may
be, in the following instances:

AgAp-Na3-ID
(a) unable to AGREE upon a single arbitrator; or
(b) If an arbitrator APPOINTED by the parties is unwilling or unable to serve, and his
successor has not been appointed in the manner in which he was appointed; or
(c) If either party to the contract fails or refuses to NAME his arbitrator within fifteen
days after receipt of the demand for arbitration; or
(d) If the arbitrators shall fail to agree upon or to select the THIRD arbitrator.
(e) The court shall, in its discretion appoint one or three arbitrators, according to the
IMPORTANCE of the controversy involved in any of the preceding cases in which the
agreement is silent as to the number of arbitrators.
(f) In case of arbitrator DECLINES, the court, shall proceed to appoint a substitute or
substitutes for the arbitrator or arbitrators who decline or failed to accept his or their
appointments.

20. Where a submission or contract provides that two or more arbitrators therein
designated or to be thereafter appointed by the parties, may select or appoint a person
as an additional arbitrator, the selection or appointment must be in what?

In writing

21. Qualifications of arbitrators.

legal age,
full-enjoyment of his civil rights and
know how to read and write.

22. Disqualifications of arbitrators. (Reasons for challenge)

1. related by blood or marriage within the sixth degree to either party to the controversy.
2. financial, fiduciary or other interest in the controversy or cause to be decided or in the
result of the proceeding,
3. personal bias, which might prejudice the right of any party to a fair and impartial
award.

23. No party shall select as an arbitrator who is what?

person to act as his champion or to advocate his cause.

24. If, after appointment but before or during hearing, a person appointed to serve as an
arbitrator shall discover any circumstances likely to create a presumption of bias, or
which he believes might disqualify him as an impartial arbitrator, the arbitrator shall
immediately do what? The parties shall do what thereafter?

disclose such information to the parties. Thereafter the parties may agree in writing:

(a) to waive the presumptive disqualifying circumstances; or

(b) to declare the office of such arbitrator vacant. Any such vacancy shall be filled in the
same manner as the original appointment was made.

25. If the arbitrators do not yield to the challenge, the challenging party has what
remedy?

renew the challenge before the Court of First Instance of the province or city in which
the challenged arbitrator, or, any of them, if there be more than one, resides.

26.While the challenging incident is discussed before the court, what happens to the
hearing or arbitration?

shall be suspended, and it shall be continued immediately after the court has delivered
an order on the challenging incident.

27. Procedure by arbitrators. - Subject to the terms of the submission or contract, if any
are specified therein, are arbitrators selected as prescribed herein must

within five days after appointment if the parties to the controversy reside within the
same city or province, or within fifteen days after appointment if the parties reside in
different provinces,
set a time and place for the hearing of the matters submitted to them, and must
cause notice thereof to be given to each of the parties.
28. The hearing can be postponed or adjourned by the arbitrators only by what
condition?

agreement of the parties; otherwise, adjournment may be ordered by the arbitrators

upon their own motion only at the hearing and for good and sufficient cause.

29. Exception: No adjournment shall extend the hearing beyond the day fixed in the
submission or contract for rendering the award

1. extended by the written agreement of the parties to the submission or contract or

their attorneys,
2. parties have continued with the arbitration without objection to such adjournment.

30. T/F: The hearing may proceed in the absence of any party who, after due notice,
fails to be present at such hearing or fails to obtain an adjournment thereof.

True

31. T
T/F: An award shall be made solely on the default of a party.
F
Who shall be permitted by the arbitrators to represent before him or them any party to
the arbitration
1. party to said arbitration, or
2. person in the regular employ of such party duly authorized in writing by said party, or
3. practicing attorney-at-law
31/63

False
32. Who shall be permitted by the arbitrators to represent before him or them any party
to the arbitration

1. party to said arbitration, or

2. person in the regular employ of such party duly authorized in writing by said party, or
3. practicing attorney-at-law

33. Any party desiring to be represented by counsel is required to do what?

notify the other party or parties of such intention at least five days prior to the hearing

34. T/F: Persons having a direct interest in the controversy which is the subject of
arbitration shall have the right to attend any hearing; but the attendance of any other
person shall be at the discretion of the arbitrators.

true

35. Before hearing any testimony, arbitrators must be what?

sworn, by any officer authorized by law to administer an oath
Arbitrators shall have the power to administer the oaths to whom?
all witnesses requiring them to tell the whole truth and nothing but the truth in any
testimony which they may give in any arbitration hearing. This oath shall be required of
every witness before any of his testimony is heard.

sworn, by any officer authorized by law to administer an oath

36. Arbitrators shall have the power to administer the oaths to whom?
all witnesses requiring them to tell the whole truth and nothing but the truth in any
testimony which they may give in any arbitration hearing. This oath shall be required of
every witness before any of his testimony is heard.

37. Exception: An award by the majority of the arbitrators is valid

concurrence of all of them is expressly required in the submission or contract to

arbitrate

38. Arbitrators may, at the commencement of the hearing, ask both parties for what?

for brief statements of the issues in controversy and/or an agreed statement of facts.
Thereafter the parties may offer such evidence as they desire, and shall produce such
additional evidence as the arbitrators shall require or deem necessary to an
understanding and determination of the dispute.

39. T/F: The arbitrators shall be bound to conform to the Rules of Court pertaining to
evidence.

False

40. All exhibits shall remain in the custody of the whome during the course of the
arbitration and shall be returned to the parties at the time the award is made?

COC

41. The arbitrators may make an ocular inspection of any matter or premises which are
in dispute, but such inspection shall be made only under what condition? Exception?

in the presence of all parties to the arbitration, unless any party who shall have received
notice thereof fails to appear, in which event such inspection shall be made in the
absence of such party.
42. At the close of the hearings, the arbitrators shall do what?
specifically inquire of all parties whether they have any further proof or witnesses to
present; upon the receipt of a negative reply from all parties, the arbitrators shall declare
the hearing closed unless the parties have signified an intention to file briefs.

43. When shall the briefs be filed?

When shall the briefs be filed?

44. When shall the hearing be reopened?

upon good cause, shown at any time before the award is rendered.

45. Proceeding in lieu of hearing.

They may also submit their respective contentions to the duly appointed arbitrators in
writing; this shall include a statement of facts, together with all documentary proof.
Parties may also submit a written argument. Each party shall provide all other parties to
the dispute with a copy of all statements and documents submitted to the arbitrators.
Each party shall have an opportunity to reply in writing to any other party's statements
and proofs

46. Each party shall have an opportunity to reply in writing to any other party's
statements and proofs; but if such party fails to do so within seven days after receipt of
such statements and proofs, he shall be deemed what?

waived his right to reply

47. Time for rendering award

Unless the parties shall have stipulated by written agreement the time within which the
arbitrators must render their award, the written award of the arbitrators shall be
rendered within thirty days after the closing of the hearings.This period may be
extended by mutual consent of the parties.

48. The award must be made how?

in writing and signed and acknowledged by a majority of the arbitrators, if more than
one; and by the sole arbitrator, if there is only one.

49. In the event that the parties to an arbitration have, during the course of such
arbitration, settled their dispute, they may request of the arbitrators to do what?

that such settlement be embodied in an award which shall be signed by the arbitrators.
No arbitrator shall act as a mediator in any proceeding in which he is acting as
arbitrator; and all negotiations towards settlement of the dispute must take place without
the presence of the arbitrators.

50. T/F: The arbitrators shall have the power to decide only those matters which have
been submitted to them. The terms of the award shall be confined to such disputes.

True

51. When shall the arbitrators have the power to assess in their award the expenses of
any party against another party?

when such assessment shall be deemed necessary.

52. What is the implication of an arbitration being deemed as a special proceeding?

the court specified in the contract or submission, or if none be specified, the Court of
First Instance for the province or city in which one of the parties resides or is doing
business, or in which the arbitration was held, shall have jurisdiction.

53. after the award is made, until when shall any party to the controversy which was
arbitrated may apply to the court having jurisdiction, as provided in section twenty-eight,
for an order confirming the award.

At any time within one month

54. Grounds for vacating award

MiPaCoPo
(a) The award was procured by COrruption, fraud, or other undue means; or

(b) That there was evident PArtiality or corruption in the arbitrators or any of them; or

(c) That the arbitrators were guilty of MIsconduct in refusing to (1) postpone the hearing
upon sufficient cause shown, or in refusing to (2) hear evidence pertinent and material
to the controversy; that one or more of the arbitrators was (3) disqualified to act as such
under section nine hereof, and wilfully refrained from disclosing such disqualifications or
of any other misbehavior by which the rights of any party have been materially
prejudiced; or

(d) That the arbitrators exceeded their POwers, or so imperfectly executed them, that a
mutual, final and definite award upon the subject matter submitted to them was not
made.

55. T/F: Where an award is vacated, the court, in its discretion, may direct a new
hearing either before the same arbitrators and never before a new arbitrator or
arbitrators
F. or before a new arbitrator or arbitrators to be chosen in the manner provided in the
submission or contract for the selection of the original arbitrator or arbitrators, and any
provision limiting the time in which the arbitrators may make a decision shall be deemed
applicable to the new arbitration and to commence from the date of the court's order.

56. Grounds for modifying or correcting award

Im-Ma-Mi
(a) Evident MISCALCULATION of figures, or an evident mistake in the description of
any person, thing or property referred to in the award; or

(b) Where the arbitrators have awarded upon a MATTER not submitted to them, not
affecting the merits of the decision upon the matter submitted; or

(c) Where the award is IMPERFECT in a matter of form not affecting the merits of the
controversy, and if it had been a commissioner's report, the defect could have been
amended or disregarded by the court.

57. Notice of a motion to vacate, modify or correct the award must be served upon the
adverse party or his counsel w/n how many days?

within thirty days after award is filed or delivered, as prescribed by law for the service
upon an attorney in an action.

58. Papers to accompany motion to confirm, modify, correct, or vacate award

(a) The submission, or contract to arbitrate; the appointment of the arbitrator or

arbitrators; and each written extension of the time, if any, within which to make the
award.

(b) A verified copy of the award.

(c) Each notice, affidavit, or other paper used upon the application to confirm, modify,
correct or vacate such award, and a copy of each of the court upon such application

59.How may an appeal be taken from an order made in a proceeding under this Act, or
from a judgment entered upon an award?

Certiorari

60. appeals shall be limited to what?

questions of law

61. The proceedings upon such an appeal, including the judgment thereon shall be
governed by what?

Rules of Court in so far as they are applicable.

62. Where a party dies after making a submission or a contract to arbitrate as

prescribed in this Act, what happens to the the proceedings?

the proceedings may be begun or continued upon the application of, or notice to, his
executor or administrator, or temporary administrator of his estate. In any such case, the
court may issue an order extending the time within which notice of a motion to confirm,
vacate, modify or correct an award must be served.

63. Upon confirming an award, where a party has died since it was filed or delivered,
the court must enter judgment in the name of whom?

name of the original party; and the proceedings thereupon are the same as where a
party dies after a verdict.