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.
Alternative Dispute Resolution (ADR) also known as additional dispute resolution, is a name given to the various methods employed to resolve disputes that do not involve a courtroom trial. Individuals and organizations recognize the financial cost and divisiveness of courtroom trials and hence resort to alternative dispute resolution as a means of solving disputes. Many times, lawyers discourage ...
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. 1 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 The Spanish had brought with them their arbitration laws which were sophisticated enough to warrant its inclusion in the old Spanish Law of Civil Procedure, the Ley Enjuicinamente de Civil (Lim, 2001).
Unfortunately, this was repealed at the turn of the century. Applying common law, the Philippine Supreme Court in 1921 noted in Chan Linte v. Law Union and Rock Insurance Co. , et al. (1921) that: [t]he settlement of controversies by arbitration is an ancient practice at common law. In its broad sense, it is a substitution, by consent of the parties, of another tribunal for the tribunals provided by the ordinary processes of law. … Its object is the final disposition, in a speedy and inexpensive way, of the matters involved, so that they may not become the subject of future litigation between the parties.
However, this attitude was scarce as courts jealously guarded their jurisdiction and parties skirted arbitration due to doubts on the enforceability of arbitration resolutions (Laygo, 2010).
The significant increase in the role of international trade in the economic development of nations over the last few decades has been accompanied by a considerable increase in the number of commercial disputes as well. Today rapid globalization of the economy and the resulting increase in competition has led to an increase in commercial disputes. At the same time, however, the rate of industrial ...
The New Civil Code was passed in 1949. Three new provisions were added by Congress, the most important of which was, to wit, Article 2043 which stated that any stipulation that the arbitrators’ award or decision shall be final, is valid, without prejudice to Articles 2038, 2039, and 2040 of the same code (Ibid. ).
This had breathed new life into arbitration as involved parties now have basis for claims that awards rendered during arbitration were final and binding, though, not in the sense that they were beyond judicial review but, in that, reasons for such review would now be limited (Ibid. ).
The Supreme Court never had the chance to promulgate the rules of procedure in the 1949 Civil Code (Ibid. ).
Republic Act No. 876, otherwise known as the Philippine arbitration law of 1953, provided for a structured and definite statutory framework for arbitration in the Philippines.
This was a very important piece of legislation enacted by Congress as it would govern arbitration in the Philippines for the next fifty years, despite the fact that it made no reference to whether it was purely domestic or if it would recognize foreign awards. Fifty-odd years after the enactment of the Philippine Arbitration Law in 1953, Republic Act No. 9285 or the Alternative Dispute Resolution Act of 2004, was passed by Congress. This was the Philippines’ move to address the untenable questions arising from the mid-century arbitration law which, with the surge of globalization, the Philippines had outmoded.
The Philippines had no laws which covered proceedings of international arbitration before the enactment of Republic Act No. 9285 (Lazatin & Prodigalidad, 2006).
Prior to this, when issues had to be settled with regard to international contracts, Philippines parties are often mandated by contracts to settle disputes in the foreign country under the rules of the foreign arbitral institutions (Ibid. ).
Worse, no domestic legislation had been passed providing a specific procedure for the enforcement of foreign arbitral awards.
Thus, there have been instances in which international arbitral awards have been treated by Philippine courts as akin to foreign judgments for lack of specific invocation of the New York Convention (Ibid. ).
... court to set aside the award. This type of ground for annulment of the arbitral award is provided for by many laws on arbitration. ... agreement is not 20 UNCITRAL Model Law on International Commercial Arbitration valid under the law to which the parties have subjected ... be a ground for annulment of arbitral award, but is generally included in concept of international public policy. (Giovannini) The ...
As a consequence, foreign arbitral awards have sometimes been deemed only presumptively valid, rather than conclusively valid (“Each contracting state shall recognize arbitral awards as binding…”), as required by Article III of the New York Convention.
Under Republic Act No. 9285, Section 2, the Philippines unequivocally declared that it is its policy “to actively promote party autonomy in the resolution of disputes or the freedom of the parties to make their own arrangements to resolve their disputes” and “encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an important means to achieve speedy and impartial justice and de-clog court dockets. ” International Developments
Shortly after the first half of the 20th century, as the Philippines already had existing arbitration laws governing domestic disputes, a welcome and reinforcing international development was the New York Convention. The Philippines acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (“New York Convention”) in 1967. The New York Convention is a landmark international instrument (Lazatin & Prodigalidad, 2006).
Parties to the New York Convention recognize the validity and binding effect of foreign arbitral awards as stated in Article III of the New York Convention.
In addition, the New York Convention seeks to put international arbitration on equal footing with domestic arbitration by providing that the parties to the convention should not impose more onerous conditions on the enforcement of foreign arbitral awards than on the enforcement of domestic awards. To date, there are 142 signatories to the New York Convention (UNCITRAL, 1985); a testament to the near universal recognition of the validity and binding nature of foreign arbitral awards. On June 21, 1985, a Model Law on International Arbitration was adopted, and governed, by the United Nations Commission in International Trade (UNCITRAL).
The law was designed to serve as basis for States to reform and modernize their own laws on arbitral procedure, taking account the salient features and addressing the needs of international commercial arbitration. The Model Law is comprehensive in that it covers all stages of the arbitral process from the arbitration agreement, the composition and jurisdiction of the arbitral tribunal and the extent of court intervention through to the recognition and enforcement of the arbitral award (Laygo, 2010).
It is important to remember that these rules are secondary aids, and therefore used only within the context of our understanding of the provision as a whole. They are merely rules of grammar and a judge does NOT have to apply these rules if he or she believes the wording of the Act does not justify their use. Expression Units est Exclusion Alter ius: 'The inclusion of one thing is the exclusion of ...
The Model Law has obtained consensus in the international community having been accepted and used as basis by States of different legal and economic systems of the world (Ibid. ).
Arbitration is an alternative to, or a substitute for, traditional litigation in court, as observed in PHIVIDEC v. Hon. Alejandro M. Velez (1991).
With the preceding laws forming the foundation of sound arbitral guidelines, the Philippines can now freely adapt and implement such. Republic Act No. 9285 is now the primary statute used in domestic arbitration.
It is used in conjunction with Republic Act No. 876 and Articles 8, 10, 11, 12, 13, 14, 18 and 19 of the Model Law, which was especially designed to provide for domestic instances. Republic Act No. 9285 is also the current ruling statute for international commercial arbitration. Secondary statues to supplement the primary law include Articles 2028 to 2046 of the Civil Code of the Philippines, the New York Convention and the Model Law, and Supreme Court decisions forming the jurisprudence that applies or interprets these laws.
Legal Processes: Litigation v. Arbitration in the Philippine Context Litigation As defined in the Alternative Dispute Resolution Act of 2004, litigation means legal action brought between two private parties in a court of law. There are four levels of organization with regard to the regular Courts. The first consists of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts (SyCip Salazar Hernandez & Gatmaitan, n. d. ).
These are trial Courts that decide only particular types or classes of cases.
The second level consists of Regional Trial Courts, which are trial Courts, but also have general jurisdiction over cases not within the jurisdiction of Courts of the first level or any other tribunal, and particular classes of cases (Ibid. ).
The third level is Court of Appeals which reviews cases from the Regional Trial Courts and quasi-judicial agencies (Ibid. ).
Steps for a legal process To understand the operation of a legal process better, this article will brush on some steps of a legal litigation. It will allow you to grasp some legal terms and definitions used in litigations as well as briefly describe each step. Every case or claim begins with a complaint. The complaint is the key reason to why there are litigations in the first place. The Complaint ...
At the highest level is the Supreme Court, which exercises appellate and review jurisdiction over cases decided by the Court of Appeals or Regional Trial Courts (Bernas, 1996).
As a rule, only questions of law may be raised before the Supreme Court (Ibid. . The Philippine Court System provides for no juries. As arbiters, Courts have judges who are neutral and impartial who rule on questions of fact and law. Past judicial decisions of the Supreme Court are authoritative and precedent-setting, while those of the lower Courts and the Court of Appeals are merely persuasive (Ibid. ).
A civil action is commenced by filing an original complaint in Court (SyCip Salazar Hernandez & Gatmaitan, n. d. ).
A summons and a copy or copies of the complaint are then served on the defendant or defendants in accordance with the Rules of Court (ROC) (Ibid. . Then an exchange of pleadings between petitioner and respondent commences and issues to be tried are identified (Ibid. ).
The petitioner is obliged to set the case for pre-trial after the last pleading has been filed (Ibid. ).
This is usually the time that the possibility of an amicable settlement is considered and expedient ways of resolving the matter are explored (Ibid. ).
If this is unsuccessful, it proceeds to trial. Once the trial ends, closing written memoranda may be submitted by the parties and the case is then deferred for the judge’s ruling (Ibid. ).
Recent data from the Supreme Court Annual Report of 2005 shows that, for the period January to November 2005, the cases filed continue to outnumber the cases resolved at the Regional trial court (RTC), Metropolitan Trial Court (MeTC), Municipal Trial Court in Cities (MTCC), Municipal Trial Court (MTC), Municipal Circuit Trial Court (MCTC) levels. As of 30 November 2005, the total number of pending cases was 785,670, with the trial courts bearing the brunt of the caseload as follows: RTC – 349,085; MeTC – 144,408; MTCC – 115,391; MTC – 85,452; MCTC – 65,692 (Ibid. ).
Clearly, the caseloads remain formidable and unwieldy insofar as the trial courts are concerned. Not surprisingly, the data likewise shows that the problem of the shortage in judges has persisted through the years. Calculations based on the data have shown that the vacancy rate has hovered at around 30% on average. This shortage in judges is largely due to the relatively low pay of judges. Based on Supreme Court figures of January 2005, an RTC judge receives P44,416. 33 monthly in salary and allowances. An MeTC judge receives slightly less. MCTC and MTC judges receive P36,501 monthly in salary and allowances.
Second or successive dishonour of the cheque :New of Supreme Court Ruling The Supreme Court has overruled its own judgment regarding the law on bounced cheques. The Supreme Court as well as high courts have been following the wrong judgment in several cases under the Negotiable Instruments Act. Now it has turned the law around. In this case, the payee did not issue notice to the drawer when the ...
The obvious solution to the problem is to increase the number of judges. However, this is easier said than done. The salaries of the judges are not determined by market forces but are subject to budget constraints and the priorities of our lawmakers (Bernas, 1996).
The result is that our courts have not been able to function efficiently. While there is no ready data on the average number of years that it takes the courts to resolve disputes, anecdotal evidence shows that it usually takes 3-5 years for a case to be resolved at the trial court level, and another 2-4 years for a case to be resolved on appeal.
Under the circumstances, the need to promote arbitration becomes pressing. Arbitration directly benefits the parties and indirectly benefits the courts since it diverts cases away from them and into the hands of arbitrators with much lesser caseloads. This indirect benefit has been recognized both by Congress (Section 2 of R. A. No. 9285 states that: 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 de-clog court dockets) and the Supreme Court through its acknowledgment, in Charles Bernard H.
Reyes v. Antonio Yulo Balde II, that it is the “wave of the future. ” Arbitration 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 (ADR Act, 2004).
Domestic and international commercial arbitration is governed primarily by the ADR Act of 2004, supplemented by the Arbitration Law of 1953, the Civil Code, the New York Convention and the Model Law framework.
In the Philippines, arbitration of construction disputes continues to be governed primarily by the Construction Industry Arbitration Law (SyCip Salazar Hernandez & Gatmaitan, n. d. ).
The Construction Industry Arbitration Commission has original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines (Ibid. ).
The Philippine Dispute Resolution Center, Inc. , and the arbitration arm of the Philippine Chamber of Commerce, provide commercial arbitration services (Ibid. ).
Under the ADR Act, a party may be represented by any person of their choice in international commercial arbitrations and domestic arbitrations in the Philippines. Under the same Act, only those admitted to the Integrated Bar of the Philippines may appear as counsel in any Philippine Court, or any other quasi-judicial body, whether or not such appearance is in relation to an arbitration in which they appear. In domestic arbitration, an agreement to arbitrate a current or future controversy between the parties must be in writing and subscribed by the party sought to be charged, or by their lawful agent (SyCip Salazar Hernandez & Gatmaitan, n. . ).
For international commercial arbitration, an arbitration agreement may be an arbitration clause in a contract or a separate agreement (Ibid. ).
It must be in writing; in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement. It may also be in an exchange of statements of claim and defense in which the existence of an agreement is alleged by one party and not denied by the other (Ibid. ).
Subject to the provisions of the ADR Act, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings. If the parties fail to agree, the arbitral tribunal may generally conduct the arbitration, including determining the admissibility, relevance, materiality and weight of any evidence, in such manner as it considers appropriate (Ibid. ).
In domestic arbitration, with reference to the ADR Act, arbitrators are mandated to set a time and place for the hearing of the matters submitted to them, and must cause notice to be given to each of the parties within a specified period.
Before hearing any testimony, arbitrators must be sworn, by any officer authorized by law to administer an oath, faithfully and fairly to hear and examine the matters in controversy and to make a just award according to the best of their ability and understanding. Witnesses must also take an oath before the arbitrator. Arbitrators are required to attend every hearing in that matter and hear all allegations and proofs of the parties. Arbitrators shall receive as exhibits in evidence any document that the parties may wish to submit.
At the close of the hearings, the arbitrators shall specifically inquire from all parties whether they have any further proof or witnesses to present. In international commercial arbitration, the arbitral tribunal holds oral hearings for the presentation of evidence or for oral argument at an appropriate stage of the proceedings, if so requested by a party, unless the parties have agreed that no hearings shall be held (SyCip Salazar Hernandez & Gatmaitan, n. d. ).
The parties shall be given sufficient advance notice of any hearing and meeting of the rbitral tribunal to inspect goods, other property, or documents (ADR Act, 2004).
A party aggrieved by the failure, neglect or refusal of another to perform under a written arbitration agreement may petition the proper Regional Trial Court for an order directing that such arbitration proceed in the manner provided for in the agreement (Ibid. ).
The Court also has the authority to appoint arbitrators when the parties to the contract or submission are unable to agree upon a single arbitrator, or when either party to the contract fails or refuses to name his arbitrator within 15 days of receipt of the demand for arbitration (Ibid. . A party may ask the Court to decide on a challenge against an arbitrator if the arbitral tribunal rejects the challenge (Ibid. ).
A party may also ask the Court to decide on the termination of the mandate of an arbitrator who is unable to perform their functions, or for other reasons fails to act without undue delay, if the arbitrator does not withdraw from office and the parties do not agree on the termination of the mandate (Ibid. . [In international commercial arbitration, a party may apply to the proper Court regarding the appointment of an arbitrator, the challenge against an arbitrator, and the termination of the mandate of an arbitrator, only when the “appointing authority” under the ADR Act, who is supposed to decide on these, fails or refuses to act within 30 days from receipt of the request (SyCip Salazar Hernandez & Gatmaitan, n. d. ).
A party may request the proper Court to grant an interim measure of protection before the constitution of the arbitral tribunal (ADR Act, 2004).
A party may also apply to the proper Court for assistance in implementing or enforcing an interim measure ordered by an arbitral tribunal (ADR Act, 2004).
In domestic arbitration, unless the parties stipulated otherwise in writing, the arbitrators must render the award within 30 days of the closing of the hearings (Ibid. ).
This period may be extended by mutual consent (Ibid. ).
There is no express rule on when an award must be delivered in international commercial arbitration. The award must be in writing, signed and acknowledged by a majority of the arbitrators, and should there be an instance, reason for any omitted signature must also be stated (Ibid. ).
The award shall outline the reasons upon which it is based, unless the parties have agreed otherwise or the award is on agreed terms. The award shall also state the date and place of arbitration. Each party shall receive a copy of the award.
The ADR Act provides specific grounds for the Court to set aside an arbitral award in a domestic arbitration. They include cases of corruption, fraud, partiality, misconduct, and disqualification of arbitrators. The ADR Act also provides specific grounds for the Court to modify or correct an arbitral award— including miscalculation of figures, mistake in the description of a person, thing or property referred to in the award, an award upon a matter not submitted for arbitration, and imperfect form of the award.
The Courts shall disregard any other ground raised against an arbitral award in a domestic arbitration (Ibid. ).
In the case of international commercial arbitration, a Court may set aside an arbitral award when the arbitration agreement is invalid; when a party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case (SyCip Salazar Hernandez & Gatmaitan, n. d. ).
Other reasons include situations where an award deals with a dispute which is not arbitrable or contains decisions on matters beyond the scope of the submission to arbitration; the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the parties’ agreement or the law; the subject matter of the dispute is incapable of settlement by arbitration under the law, or when the award is in conflict with the public policy of the Philippines (Ibid. ).
At any time within one month after an arbitral award is issued in a domestic arbitration, any party to the arbitration may apply to the appropriate Regional Trial Court for an order confirming the award. The Court must grant the order unless the award is vacated, modified or corrected. Upon the granting of an order that confirms, modifies or corrects an award, judgment may be entered. The judgment may then be enforced as an ordinary judgment of that Court. For foreign arbitral awards, the New York Convention applies, subject to the commercial and reciprocity reservations (Ibid. . The basic procedure for recognition and enforcement is as laid down by the Convention. Despite the many attractive draws of arbitration, it is best to note the instances when alternative dispute resolution proves inappropriate, and practice judgment accordingly. It would be more judicious to resort to litigation when: (1) there is a significant imbalance in the parties’ bargaining power, as the stronger party may cow down the weaker one; (2) the party who has the use of the money at issue may benefit from a delay in itigation; (3) substantial legal issues are involved and must be dealt with accordingly, mindful of national and international repercussions; (4) there are multiple parties involved as it may be more difficult to implement alternative dispute, particularly where a class action is desired; (5) one of the parties wishes to establish a judicial precedent; (6) adversary is irrational and unreasonable, thus barring resolution; and (7) extensive discovery is needed or desired, as the Courts have a more thorough and encompassing framework, arbitration being relatively vogue and young in experience as compared to Courts (Grenig, 2005).
Supporting Jurisprudence There have been two decisions in the field of arbitration that have set the tone of the Supreme Court and advanced the cause of arbitration in the Philippines. The first one is Transfield Philippines, Inc. vs. Luzon Hydro Corporation, G. R. No. 146717, 19 May 2006. There, the Supreme Court affirmed the enforceability of foreign arbitral awards and the right of the parties to an arbitration proceeding to obtain provisional relief from the courts. In Transfield, the Supreme Court had occasion – for the first time – to refer to Republic Act No. 285. What is significant in Transfield is the Supreme Court’s recognition that court-ordered provisional/interim relief extends to international arbitration. Such ruling sends a positive signal to future litigants that the Philippines is an arbitration-friendly jurisdiction. The second part of the ruling in Transfield affirms the right of a party to an international arbitration to enforce a final award in the Philippines, pursuant to the UNCITRAL Model Law and the New York Convention. The other, more recent case is Gonzales vs. Climax Mining Ltd. , G. R. Nos. 61957 and 167994, 22 January 2007, where the Supreme Court resolved petitioner Jorge Gonzales’s motion for reconsideration and respondents Climax Mining Ltd. , et al. ’s motion for partial reconsideration of the earlier Decision of 28 February 2005. The ruling in Gonzales is significant for several reasons. First, the ruling in Gonzales re-affirmed the summary nature of and the RTC’s limited and special jurisdiction over petitions to compel arbitration under Section 6 of R. A. No. 876. The jurisdiction of courts in a petition to compel arbitration is limited to determining the existence of an arbitration agreement.
Trial courts should not allow themselves to be drawn into the fatal pitfall of prolonging the proceedings or touching on the merits. Second, modifying its earlier ruling, the Supreme Court in Gonzales introduced the widely-accepted doctrine of separability, which states that the validity of the contract containing the agreement to submit to arbitration does not affect the applicability of the arbitration clause itself. This doctrine of separability is, as pointed out by the Supreme Court, found in Article 16(1) of the UNCITRAL Model Law, which governs international commercial arbitration.
Conclusion The efforts of Congress and the judiciary at improving the system of arbitration are welcome and timely. Today, two contemporary circumstances, one a local problem, the other an international phenomenon, acutely highlight the need to further promote and develop arbitration: hopelessly clogged court dockets and growing globalization. An inefficient court system impels aggrieved parties to look elsewhere for swift and impartial justice. On the other hand, international trade and transactions unavoidably give rise to disputes between nationals who come from different jurisdictions.
The foreign businessman will understandably be wary of or uncomfortable with the local courts. Thus, he will seek to bring his dispute before the more neutral forum of arbitration. Parties wishing to have their conflicts resolved expeditiously will be looking increasingly to alternative means of settling their disputes, especially business, which abhors indefinite uncertainty. Under the circumstances, arbitration is truly worth cultivating. It possesses many attractive features. First, unlike judges, arbitrators are not burdened by heavy caseloads. The data hows that, as of November 2005, there are 349,085 pending cases before the RTC. Yet, there are only 804 RTC judges, or an average of 434 cases per judge. Hearing cases, sifting through evidence, and writing decisions is not an easy task. It becomes almost unmanageable if a judge has to contend with 434 cases. In contrast, before appointing an arbitrator(s), litigants can first verify from a potential nominee whether he or she can devote time to the case. Second, there is a large pool of arbitrators to draw from. Unlike the traditional judges, arbitrators do not have to be lawyers.
They can be architects, engineers, investment bankers, stock brokers, or even laymen, depending on the subject matter or nature of the dispute. Third, the fees of arbitrators are not fixed by law. They are flexible and adjust according to the complexities of the case and the reputation of the arbitrator. Hence, litigants will be assured of an adequate supply of arbitrators. There is also reason for arbitrators to resist the temptation of corruption. The more competent, honest, and prominent the arbitrator, the higher the price he or she can command.
Fourth, arbitration has the indirect benefit of de-clogging the court dockets by diverting cases away from them. The data shows that the number of cases filed outpace the number of cases decided. Judges can dispose of only so many cases at a time, especially given the restrictions that are imposed upon them. While the courts can only do so much in terms of the outflow of cases, arbitration has the potential of controlling the inflow of cases into the judicial system, especially at the RTC level where the number of cases filed annually have been more or less steady through the years. The court ystem can begin to work more efficiently only if the number of cases decided exceeds the number of cases filed. Until then, the courts find themselves trapped in a cycle of inefficiency. Thus, the courts also have a high stake in the success of arbitration. Fifth, arbitration addresses the concern of partiality. One of the appealing features of arbitration is that the parties get to choose their own arbitrators. Sixth, the costs of arbitration are borne by the parties. Arbitration pays for itself. Litigants who are dissatisfied with the judicial system can opt out of the judicial system.
The potentially higher fees can be offset be a speedier resolution of the case and more satisfactory judgment. The Supreme Court first touted arbitration to be the “wave of the future” in BF Corporation v. Court of Appeals (1998).
Eight years later, the Supreme Court repeated the same observation in Charles Bernard H. Reyes v. Antonio Yulo Balde II, G. R. No. 168384, 7 August 2006, that: It bears to stress that being an inexpensive, speedy and amicable method of settling disputes, arbitration — along with mediation, conciliation and negotiation – is encouraged by the Supreme Court.
Aside from unclogging judicial dockets, arbitration also hastens the resolution of disputes, especially of the commercial kind. It is thus regarded as the “wave of the future” in international civil and commercial disputes. Brushing aside a contractual agreement calling for arbitration between the parties would be a step backward. ” References Books and Journals Bernas, J. , S. J. (1996).
The 1987 Constitution of the Republic of the Philippines: A commentary 2009 Ed. ).
Manila, Philippines: Rex Book Store. Grenig, J. E. (2005).
Alternative dispute resolution (2nd Ed. . Minnesota: West Publishing Co. Laygo, J. (2010).
Arbitration: A brief. Makati: Intellectual Property Office of the Philippines. Lim, F. E. (2001).
Commercial arbitration in the Philippines. The Ateneo Law Journal, 46(2).
Cases BF Corporation v. Court of Appeals, G. R. No. 120105 (1998).
Chan Linte v. Law Union and Rock Insurance Co. , et al. , 42 Phil. 548 (1921).
Charles Bernard H. Reyes v. Antonio Yulo Balde II, G. R. No. 168384 (2006).
Gonzales v. Climax Mining Ltd. , G. R. Nos. 161957 and 167994 (2007).
Philippine Veterans Investment Development Corp. PHIVIDEC) v. Hon. Alejandro M. Velez, G. R. No. 84295 (1991).
Transfield Philippines, Inc. v. Luzon Hydro Corporation, G. R. No. 146717 (2006).
Laws New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958. Republic Act No. 876, Philippine Arbitration Law of 1953. Republic Act No. 9285, Philippine Alternative Dispute Resolution Act of 2004. UNCITRAL Model Law on International Commercial Arbitration of 1985. Online Resources Lazatin, V. P. & Prodigalidad, P. A. (2006).
Arbitration in the Philippines. Retrieved from http://www. seanlawassociation. org/9GAdocs/w4_Philipines. pdf Parlade, C. O. (2005).
Why litigate? Arbitrate! Retrieved from http://www. pdrci. org/web1/art001. html Supreme Court of the Philippines Annual Report. (2005).
Adjudication: Caseload and disposition [Data file]. Retrieved from http://sc. judiciary. gov. ph/announce/sc_annual_report_2005. pdf SyCip Salazar Hernandez & Gatmaitan Law. (n. d. ).
A Guide to Dispute Resolution in Asia. Retrieved from http://www. herbertsmith. com/uploads/HSpdfs/Asia-guides-006/dispute resolution/12_Philippines. PDF