Kheynan C. Calvez Llb-IICHAPTER 4: INTERNATIONAL COMMERCIAL ARBITRATIONR.A. 9285 AND THE MODEL LAW: CONVERGENCE?The UNCITRAL Model Law on International Commercial Arbitration (The Model Law) was adopted by the United Nations Commission on International Trade Law (UNCITRAL) on June 21, 1985. The Model Law constitutes a sound basis for the desired harmonization and improvement of the national laws. It covers all stages of the arbitral process from the arbitration agreement to the recognition and enforcement of the arbitral awards and reflects a worldwide consensus on the principles and important issues of international arbitration practice. Since its adoption by UNCITRAL, the Model Law has come to represent the accepted international legislative standard for a modern arbitration law and a significant number of jurisdictions have enacted arbitration legislation based on the Model Law.In the Philippines, the Republic Act 9285 incorporated the UNCITRAL Model Law, as evidenced by Sections 19 and 20 of Chapter 4 of the latter law.SEC. 19. Adoption of the Model Law on International Commercial Arbitration. International commercial arbitration shall be governed by the Model Law on International Commercial Arbitration (the Model Law) adopted by the United Nations Commission on International Trade Law on June 21, 1985 (United Nations Document A/40/17) and recommended for enactment by the General Assembly in Resolution No. 40/72 approved on December 11, 1985, copy of which is hereto attached as Appendix A. SEC. 20. Interpretation of Model Law. In interpreting the Model Law, regard shall be had to its international origin and to the need for uniformity in its interpretation and resort may be made to the travaux preparatories and the report of the Secretary General of the United Nations Commission on International Trade Law dated March 25, 1985 entitled, International Commercial Arbitration: Analytical Commentary on Draft Trade identified by reference number A/CN. 9/264.International commercial arbitration has opened the doors for the Philippines to be to be a seat for international commercial arbitration. Thus, it can now be said that the Philippines has become an arbitration-friendly country..SALIENT FEATURES International commercial arbitration becomes such if it covers matters arising from all relationships of a commercial nature, whether contractual or not. These relationships are enumerated by the law under the same provision.A. Interpretation of the ActThe law provides that in interpreting R.A. No. 9285, the courts are directed to give due regard to the policy of favoring arbitration. Where action is commenced by or against multiple parties, one or more of whom are parties to an arbitration agreement, the court shall refer to arbitration those parties who are bound by the arbitration agreement although the civil action may continue as to those who are not bound by such arbitration agreement.

B. Legal Representation in International ArbitrationSection 22 provides that in international arbitration conducted in the Philippines, a party may be presented by any person of his choice.Provided, that such representative, unless admitted to the practice of law in the Philippines, shall not be authorized to appear as counsel in any Philippine court, or any other quasi-judicial body whether or not such appearance is in relation to the arbitration in which he appears. Consistent with the Philippines intention to be an international commercial arbitration center, this provision allows foreign lawyers, though not admitted to practice law in the territory of the seat of the arbitration, to represent a party before the international arbitral tribunal. Such foreign lawyers fall within the scope of any person and any interpretation to the contrary would defeat the spirit of the law.To summarize the above-quoted, allowing foreign lawyers to represent a party before an international arbitral tribunal does not tantamount to a surrender of sovereignty and in fact would be more beneficial not only to the image of the Philippines as an international commercial arbitration center, but also to the local bar as it exposed them to a new dimension of practice of law.C. Confidentiality of ProceedingsSection 23 of the ADR Law expressly declares arbitration proceedings, including the records, evidence, and arbitral award, to be confidential and shall not be published except (1) with the consent of the parties, or (2) for the limited purpose of disclosing to the court of relevant documents in cases where resort to the court is allowed herein. Absent in the Republic Act No. 876 or Philippine Arbitration Law, this provision is highly welcomed by businessmen who want to settle their commercial disputes unnoticed by the general public and to safeguard their trade secrets and strategies.At the same time, the provision sets out the grounds in which the courts may issue a protective order to prevent or prohibit disclosure of documents or information containing secret processes, developments, research and other information where it is shown that the applicant shall be materially prejudiced by an authorized disclosure thereof.D. Referral to ArbitrationThe ADR Law provides that a court before which an action is brought in a matter which is the subject matter of an arbitration agreement shall, if at least one party so requests not later that the pre-trial conference, or upon the request of both parties thereafter, refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed.It must also be noted that under the above-quoted provision, referral is dependent on the requests. The latter can only be done in two ways: first, request made by at least on party not late than the pre-trial conference, and second, request made both parties after the pre-trial conference. Now, absent these requests, the court cannot refer the parties to arbitration except upon the courts finding that the arbitration agreement is null and void, inoperative or incapable of being performed.

E. Appointing AuthorityThe ADR Law defines appointing authority as used in the Model Law, which refers to the person or institution named in the arbitration agreement as the appointing authority; or the regular arbitration arbitration institution under whose rules the arbitration is agreed to be conducted. Where the parties have agreed to submit their dispute to institutional arbitration rules, and unless they have agreed to a different procedure, they shall be deemed to have agreed to procedure under such arbitration rules for the selection and appointment of arbitrators. In ad hoc arbitration, the default appointment of an arbitrator shall be made by the National President of the Integrated Bar of the Philippines (IBP) or his duly authorized representative.There is nothing controversial in this provision except that the National President of the IBP or his duly authorized representative, as appointing authority, must be wary about exercising such authority. It must be exercised with wisdom and under the principles of independence, impartiality or neutrality, and transparency. It must be recognized the human decision-making is highly prone to prejudice and the appointing authority must ensure that the arbitration practice in the Philippines is ran by competent and credible arbitrators.F. Place and Venue of ArbitrationSection 30 of the ADR Law provides that the parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be in Metro Manila, unless the arbitral tribunal, having regard to the circumstances of the case, including the convenience of the parties shall decide on a different place of arbitration.It is widely recognized that in international commercial arbitration, parties may agree to conduct the arbitration proceedings in a place that guarantees impartiality or neutrality. However, when parties fail to agree, resort is had to the tribunal having regard to circumstances of the case and convenience of the parties. In addition, the law also provides that absent any agreement between the parties and any decision of the tribunal as the venue, the place or venue of arbitration shall be in Metro Manila.G. Interim and Provisional Measures of ProtectionThe ADR Law expanded the powers of the arbitrators and defined clearly the role of courts, as well as the arbitral tribunal, in the issuance and enforcement of interim/conservatory measures.Courts are permitted, as a rule, to grant interim and provisional reliefs during the pendency of arbitral proceedings. It is also recognized that arbitral tribunals are authorized authority to grant interim measures such as preliminary injunction, appointment of receivers, detention, preservation and inspection of property, among others. Even granting that both the courts and the arbitral tribunal are given the same power, parties cannot avail of these simultaneously. Court has only authority to grant interim measures to the extent that the arbitral tribunal has no power to act or is unable to act effectively. The law does not provide for concurrent power of the courts and the arbitral tribunal to grant interim measure of protection. The court must exercise this power sparingly, giving way or precedence to the exercise thereof by the arbitral tribunal.The ADR Act provides in Section 28, paragraph (a) that: It is not incompatible with an arbitration agreement for a party, before constitution of the arbitral tribunal, to request from a Court an interim measure of protection and for the Court to grant such measure. After constitution of the arbitral tribunal and during arbitral proceedings, a request for an interim measure of protection, or modification thereof, may be made with the arbitral tribunal or to the extent that the arbitral tribunal has no power to act or is unable to act effectively, the request may be made with the Court.Section 29 appear to extend and widen the scope of powers found in Section 28 although it is more a case of an elaboration of the powers set out in Section 28. Section 29 specifically refers to the granting of preliminary injunctions but includes also the power to appoint a receiver, powers of detention and preservation and inspection of property, which is the subject matter of the arbitration. Helpfully, Section 29 makes clear that a party may seek the courts assistance in enforcing the interim orders of an arbitral tribunal. I. Recognition and Enforcement of Foreign Arbitral AwardSection 42 of the ADR Law provides that the New York Convention shall govern the recognition and enforcement of arbitral awards covered by the said Convention. In addition, it provides that the recognition and enforcement of such arbitral awards shall be filed with regional trial court in accordance with the rules of procedure to be promulgated by the Supreme Court. Moreover, the applicant is required to establish that the country in which foreign arbitration award was made is a party to the New York Convention. Under this provision, arbitral awards in International Commercial Arbitration are readily enforced pursuant to the New York Convention of 1958 unlike in other foreign judgments. Participant countries to the Convention are obliged to enforce arbitral awards as if they were made domestically, subject to limited grounds on which enforcement may be refused. Attention must also be given to Section 43, which actually deals with the recognition and enforcement of non-New York convention awards. Unlike Section 42, this section gives consideration and attends to the recognition of non-New York Convention awards, which must be in accordance with the procedural rules to be promulgated by the Supreme Court. However, the provision refers to international comity and reciprocity as grounds for the recognition of such awards.Another provision worth discussing is Section 44, which distinguishes a foreign arbitral award from a foreign judgment. It is widely known that foreign judgments are generally not enforceable in other jurisdictions except in cases of reciprocity and comity. On the other hand, arbitral awards are more readily enforceable. The law provides that a party applying for the enforcement of the arbitral award only needs to file with the Regional Trial Court the original or duly authenticated copy of the award and the arbitration agreement. The law also provides that a foreign arbitral award, when confirmed by the RTC, shall be enforced in the same manner as final and executory decisions of courts of law of the Philippines. Indeed, this provision highlights the rationale why arbitration is considered the preferred alternative in the international setting.

CONCLUSIONThe enactment of the Alternative Dispute Resolution Act of 2004 (Republic Act No. 9285), adopting the provisions of the Model Law, has paved the way to make Philippines one of the international commercial arbitration in Asia. The law was indeed adopted not only to address the perennial problems besetting the Philippines courts system like the clogged court dockets, slow-paced litigation process, and costly litigation, but also to adjudicate international disputes arising from the increasing number of international commercial transactions. More importantly, the law was adopted to pave the way for transacting parties to make their own arrangements in settling their disputes without seeking the intervention of the courts.Indeed, the ADR Law has made promises and being a relatively new law, with its Implementing Rules and Regulation promulgated in the late 2000s, there is more to expect in its implementation by competent and credible arbitrators and arbitration institutions and in the interpretation of its provisions by the Supreme Court. Indeed, its implementation is still in its initial stage.There is a need to introduce arbitration to the general public as an alternative method of dispute resolution. Millions of Filipinos may, until now, have little awareness of arbitration as an alternative method of dispute resolution. And that is the reason why every time they engage in a dispute, it is almost automatic to them to file a case in court. Thus, efforts must be made to make it well-known and widely-practiced.To encourage foreign parties to resort to arbitration in the Philippines, the courts must provide minimal assistance to the arbitration proceedings. Unbridled intervention of the courts in arbitration proceedings will consequently prevent parties from resorting to arbitration and preclude foreign parties from choosing the Philippines as venue for arbitration.Finally, as an international commercial arbitration center, Philippines has long way to go. Efforts must be exerted by the government to improve the image of the Philippines and to promote it as the seat of international commercial arbitration in Asia. The government must show that Philippines is highly conducive to international commercial arbitration by showing to them that Philippines highly values transparency, neutrality and impartiality, and independence of judgment, and that only competent, conscientious and credible arbitrators are appointed to handle arbitration proceedings.Singapore and Hongkong may be ahead for now, but once the ADR centers in the Philippines have been fully equipped, who knows Philippines might be the premiere center for international commercial arbitration not only in Asia but also of the world?