Department Circular No. 98-Irr of Adr Act of 2004

7/24/2019 Department Circular No. 98-Irr of Adr Act of 2004

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Republika ng PilipinasKAGAWARAN NG KATARUNGAN

DEPARTMENT OF JUSTICEM a n i l a

DEPARTMENT CIRCULAR NO. 98

IMPLEMENTING RULES AND REGULATIONS OF

THEALTERNATIVE DISPUTE RESOLUTION ACT OF 2004.

Where!"pursuant to Section 52 of Republic Act No. 9285,

otherwise known as the Alternati!e "ispute Resolution Act of2##$ %A"R Act&, the Secretar' of (ustice is )irecte) to con!ene a*o++ittee for the for+ulation of the appropriate rules an)regulations necessar' for the i+ple+entation of the A"R Act

Where!" the co++ittee was co+pose) of representati!es fro+the "epart+ent of (ustice, the "epart+ent of -ra)e an) n)ustr',

the "epart+ent of the nterior an) /ocal 0o!ern+ent, thePresi)ent of the ntegrate) 1ar of the Philippines, a representati!efro+ the A"R organiations.

Where#$re"the following rules an) regulations are hereb'a)opte) as the +ple+enting Rules an) Regulations of Republic Actno.9285.

IMPLEMENTING RULES AND REGULATIONS OF THEALTERNATIVE DISPUTE RESOLUTION ACT OF 2004 %R.A N$.

928&'

Pursuant to Section 52 of republic Act No. 9285, otherwise known

as the alternati!e "ispute Resolution Act of 2##$ %A"R Act&, thefollowing Rules an) Regulations %these Rules& are hereb'pro+ulgate) to i+ple+ent the pro!isions of the A"R Act3

Ch()er *GENERAL PROVISIONS

RULE * + P$,-/ 1 A((,-)-$

Ar)-,e *.*Purpose.-hese Rules are pro+ulgate) to prescribe theproce)ures an) gui)elines for the i+ple+entation of the A"R Act.

Ar)-,e *.2Declaration of policy.t is the polic' of the State3

%a& -o pro+ote part' autono+' in the resolution of )isputesor the free)o+ of the parties to +ake their own

arrange+ents to resol!e their )isputes

%b& -o encourage an) acti!el' pro+ote the use of

Alternati!e "ispute Resolution %A"R& as an i+portant+eans to achie!e spee)' an) i+partial 4ustice an) )eclog

court )ockets

%c& -o pro!i)e +eans for the use of A"R as an efficient toolan) an alternati!e proce)ure for the resolution ofappropriate cases an)

%)& -o enlist acti!e pri!ate sector participation in thesettle+ent of )isputes through A"R

Ar)-,e *.Exception to the Application of the ADR Act.-hepro!isions of the A"R Act shall not appl' to the resolution or

settle+ent of the following3

%a& labor )isputes co!ere) b' Presi)ential "ecree No. $$2,

otherwise known as the /abor *o)e of the Philippines, as aa+en)e), an) its +ple+enting Rules an) Regulations

%b& the ci!il status of persons

%c& the !ali)it' of +arriage

%)& an' groun) for legal separation

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%e& the 4uris)iction of courts

%f& future legiti+ate

%g& cri+inal liabilit'

%h& those )isputes which b' law cannot be co+pro+ise)an)

%i& )isputes referre) to courtanne6e) +e)iation.

Ar)-,e *.4.Electronic Signature and E-Commerce Act. -hepro!isions of the 7lectronic Signature an) 7*o++erce Act, an) its

i+ple+enting Rules an) Regulations shall appl' to procee)ingsconte+plate) in the A"R Act.

Ar)-,e *.&.Liability of ADR Proiders!Practitioners.-he A"Rpro!i)es practitioners shall ha!e the sa+e ci!il liabilit' for acts)one in the perfor+ance of their official )uties as that of publicofficers as pro!i)e) in Section 8 %:&, *hapter 9, 1ook : of theA)+inistrati!e *o)e of :98;, upon a clear showing of ba) faith,+alice or gross negligence.

RULE 23 De#--)-$ $# Ter!

Ar)-,e *.5Definition of "erms.


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continuing or recon!ening +e)iation or retaining a+e)iator an)

%c& plea)ings, +otions, +anifestations, witnessstate+ents, reports file) or sub+itte) in arbitration

or for e6pert e!aluation.

8. C$!e,+eans a law'er )ul' a)+itte) to the practice oflaw in the Philippines an) in goo) stan)ing who represents apart' in an' A"R process.

9. C$r)+eans Regional -rial *ourt 76cept insofar asotherwise )efine) un)er Mo)el /aw.

*0. G$7ere) Ae/+eans an' go!ern+ental entit',office or officer, other than a court that is !este) b' law with

=uasi4u)icial power or the power to resol!e or a)4u)icate)isputes in!ol!ing the go!ern+ent, its agencies an)instru+entalities or pri!ate persons.

**. M$1e, L:+eans the Mo)el on nternational*o++ercial Arbitration a)opte) b' the >nite) Nations*o++ission on nternational -ra)e /aw on 2: (une :985.

*2. Pr$ee1-!+eans 4u)icial, a)+inistrati!e or othera)4u)icati!e process, inclu)ing relate) prehearing or post

hearing +otions, conferences an) )isco!er'.

*. Re$r1+eans infor+ation written on a tangible

+e)iu+ or store) in an electronic or other si+ilar +e)iu+,

retrie!able in a percei!able for+.

*4. R$!)er+eans a list of persons =ualifie) to pro!i)e A"Rser!ices as neutrals or to ser!e as arbitrators.

*&. S(e-, ADR R,e!+eans the Special Rules of *ourton Alternati!e "ispute Resolution issue) b' the Supre+e*ourt on Septe+ber :, 2##9.


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C. Ter! A((,-6,e )$ )he Ch()er $ I)er)-$,C$er-, Ar6-)r)-$

*. A(($-)- A)h$r-)/as use) in the Mo)el /aw shall+ean the person or institution na+e) in the arbitration

agree+ent as the appointing authorit' or the regulararbitration institution un)er whose rules the arbitration isagree) to be con)ucte). @here the parties ha!e agree) to

sub+it their )ispute to institutional arbitration rules an)unless the' ha!e agree) to a )ifferent proce)ure, the' shallbe )ee+e) to ha!e agree) to the proce)ure un)er sucharbitration rules for the selection an) appoint+ent ofarbitrators. n a) hoc arbitration, the )efault appoint+ent ofan arbitrator shall be +a)e b' the National Presi)ent of thentegrate) 1ar of the Philippines %1P& or his her )ul'

authorie) representati!e.

2. Ar6-)r, Tr-6, %1er )he M$1e, L:'+eans a

sole arbitrator or a panel of arbitrators.

. Ar6-)r)-$+eans an' arbitration whether or nota)+inistere) b' a per+anent arbitration institution.

4. C$er-, Ar6-)r)-$+eans an arbitration thatco!ers +atters arising fro+ all relationships of a co++ercialnature, whether contractual or not. Relationships of aco++ercial nature inclu)e, but are not li+ite) to, thefollowing co++ercial transactions3 an' tra)e transaction for

the suppl' or e6change of goo)s or ser!ices )istributionagree+ents construction of works co++ercial

representation or agenc' factoring leasing consultingengineering licensing in!est+ent financing banking

insurance 4oint !enture an) other for+s of in)ustrial orbusiness cooperation carriage of goo)s or passengers b'air, sea rail or roa).

&. C$7e)-$ A:r1+eans a foreign arbitral awar) in a*on!ention State.

5. C$7e)-$ S))e+eans a state that is a +e+ber ofthe New ork *on!ention.

;. C$r)%un)er the Mo)el /aw& +eans a bo)' or organ ofthe 4u)icial s'ste+ of the Philippines %i.e., the Regional -rial

*ourt, *ourt of Appeals an) Supre+e *ourt&.

8. I)er)-$, Ar6-)r)-$+eans an arbitration where3

%a& the parties to an arbitration agree+ent ha!e, atthe ti+e of the conclusion of that agree+ent, theirplaces of business in )ifferent states or

%b& one of the following places is situate) outsi)e thePhilippines in which the parties ha!e their places ofbusiness3

%i& the place of arbitration if )eter+ine) in, orpursuant to , the arbitration agree+ent

%ii& an' place where a substantial part of theobligations of the co++ercial relationship is

to be perfor+e) or the place with the sub4ect+atter of the )ispute is +ost closel'connecte) or

%c& the parties ha!e e6pressl' agree) that thesub4ect +atter of the arbitration agree+ent relatesto +ore than one countr'.

$r? C$7e)-$+eans the >nite) Nations

*on!ention of the Recognition an) 7nforce+ent of


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Arbitral Awar)s appro!e) in :958 an) ratifie) b' thePhilippine Senate un)er Senate Resolution No.;:.

*0. N$3C$7e)-$ A:r1+eans a foreign arbitral war)+a)e in a state, which is not a *on!ention State.

**. N$3C$7e)-$ S))e+eans a state that is not a+e+ber of the New ork *on!ention.

D. Ter! A((,-6,e )$ )he Ch()er $ D$e!)- Ar6-)r)-$

*.Ad hocAr6-)r)-$+eans arbitration a)+inistere) b'

an arbitrator an)or the parties the+sel!es. An arbitrationa)+inistere) b' an institution shall be regar)e) as a) hocarbitration if such institution is not a per+anent or regulararbitration institution in the Philippines.

2. A(($-)- A)h$r-)/ -Ad HocAr6-)r)-$+eans, inthe absence of an agree+ent, the National Presi)ent of the

1P or hisher )ul' authorie) representati!e.

. A(($-)- A)h$r-)/ G-1e,-e!+eans the set of

rules appro!e) or a)opte) b' an appointing authorit' forthe +aking of a Re=uest for Appoint+ent, *hallenge,ter+ination of the Man)ate of Arbitrators an) for takingaction thereon.

4. Ar6-)r)-$+eans a !oluntar' )ispute resolutionprocess in which one or +ore arbitrators, Appointe) in

accor)ance with the agree+ent of the parties or these

Rules, resol!e a )ispute b' ren)ering an awar).

&. Ar6-)r, Tr-6,+eans a sole arbitrator or a panel,boar) or co++ittee of arbitrators.

5. C,-)+eans a persons with a clai+ against anotheran) who co++ences arbitration against the latter.

;. C$r)+eans, unless otherwise specifie) in these Rules,a Regional -rial *ourt.

8. D/+eans calen)ar )a'.

9. D$e!)- Ar6-)r)-$+eans arbitration that is not

international as )efine) in Article :%& of the Mo)e /aw.

*0. I!)-))-$, Ar6-)r)-$+eans arbitration

a)+inistere) b' an entit', which is registere) as a )o+esticcorporation with the Securities an) 76change *o++ission

%S7*& an) engage) in. a+ong others, arbitration of )isputesin the Philippines on a regular an) per+anent basis.

**. Re@e!) #$r A(($-)e)+eans the letterre=uest tothe appointing authorit' of either or both parties for the

appoint+ent of arbitrators or of the two arbitrators firstappointe) b' the parties for the appoint+ent of the thir)

+e+ber of an arbitral tribunal.

*2. Re(re!e))-7eis a person )ul' authorie) in writingb' a part' to a )ispute, who coul) be a counsel, a person in

hisher e+plo' or an' other person of hisher choice, )ul'authorie) to represent sai) part' in the arbitrationprocee)ings.

*. Re!($1e)+eans the persons against who+ theclai+ant co++ences arbitration.

*4. Wr-))e $-)-$+eans the plea)ing, +otion,+anifestation, notice, or)er, awar) an) an' other )ocu+ent

or paper sub+itte) or file) with the arbitral tribunal or)eli!ere) to a part'.

E. Ter! A((,-6,e )$ )he Ch()er $ O)her ADR F$r!

*. Er,/ Ne)r, E7,)-$+eans an A"R processwherein parties an) their law'ers are brought together earl'in the pretrial phase to present su++aries of their casesan) to recei!e a nonbin)ing assess+ent b' an e6perience)neutral person, with e6pertise in the sub4ect +atter or

substance of the )ispute.

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2. Me1-)-$3Ar6-)r)-$ $r Me13Ar6is a twostep)ispute resolution process in!ol!ing +e)iation an) then

followe) b' arbitration.

. M--3)r-,+eans a structure) )ispute resolution +etho)

in which the +erits of a case are argue) before a panelco+prising of senior )ecision+akers, with or without thepresence of a neutral thir) person, before which the parties

seek a negotiate) settle+ent.

CHAPTER 2THE OFFICE FOR ALTERNATIVE DISPUTE RESOLUTION

RULE *3 O##-e #$r A,)er)-7e D-!()e Re!$,)-$ %OADR'

Ar)-,e 2.*.Establishment of the #ffice for Alternatie Dispute

Resolution.-here is hereb' establishe) the ?A"R as an agenc'attache) to the "epart+ent of (ustice. t shall ha!e a Secretariatan) shall be hea)e) b' an 76ecuti!e "irector, who shall be

appointe) b' the Presi)ent of the Philippines, taking intoconsi)eration the reco++en)ation of the Secretar' of (ustice.

Ar)-,e 2.2.Po$ers of the #ADR.-he ?A"R shall ha!e thefollowing powers

%a& -o act as appointing authorit' of +e)iators an)

arbitrators when the parties agree in writing that it shall bee+powere) to )o so

%b& -o con)uct se+inars, s'+posia, conferences an) other

public fora an) publish procee)ings of sai) acti!ities an)rele!ant +aterialsinfor+ation that woul) pro+ote, )e!elopan) e6pan) the use of A"R

%c& -o establish an A"R librar' or resource center whereA"R laws, rules an) regulation, 4urispru)ence, books,articles an) other infor+ation about A"R in the Philippinesan) elsewhere +a' be store) an) accesse)

%)& -o establish training progra+s for A"Rpro!i)erspractitioners, both in the public an) pri!ate

sectors an) to un)ertake perio)ic an) continuing trainingprogra+s for arbitration an) +e)iation an) charge fees onparticipants. t +a' )o so in con4unction with or incooperation with the 1P, pri!ate A"R organiations, an)

local an) foreign go!ern+ent offices an) agencies an)international organiations

%e& -o certif' those who ha!e successfull' co+plete) theregular professional training progra+s pro!i)e) b' the?A"R

%f& -o charge for ser!ices ren)ere) such as, a+ong others,for training an) certifications of A"R pro!i)ers

%g& -o accept )onations, grants an) other assistance fro+local an) foreign sources an)

%h& -o e6ercise such other powers as +a' be necessar' an)proper to carr' into effect the pro!isions of the A"R Act.

Ar)-,e 2..%unctions of the #ADR.-he ?A"R shall ha!e thefollowing functions

%a& -o pro+ote, )e!elop an) e6pan) the use of A"R in the

pri!ate an) public sectors through infor+ation, e)ucationan) co++unication

%b& -o +onitor, stu)' an) e!aluate the use of A"R b' the

pri!ate an) public sectors for purposes of, a+ong others,polic' for+ulation

%c& -o reco++en) to *ongress nee)ful statutor' changes to)e!elop, strengthen an) i+pro!e A"R practices inaccor)ance with international professional stan)ar)s

%)& -o +ake stu)ies on an) pro!i)e linkages for the)e!elop+ent, i+ple+entation, +onitoring an) e!aluation of

go!ern+ent an) pri!ate A"R progra+s an) secure

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infor+ation about their respecti!e a)+inistrati!erulesproce)ures, proble+s encountere) an) how the' were

resol!e)

%e& -o co+pile an) publish a list or roster of A"R

pro!i)erspractitioners, who ha!e un)ergone training b' the?A"R, or b' such training pro!i)ersinstitutions recognie)or certifie) b' the ?A"R as perfor+ing functions in an' A"R

s'ste+. -he list or roster shall inclu)e the a))resses,contact nu+bers, e+ail a))resses, A"R ser!ices ren)ere)%e.g. arbitration, +e)iation& an) e6perience in A"R of theA"R pro!i)erspractitioners

%f& -o co+pile a list or roster of foreign or international A"Rpro!i)erspractitioners. -he list or roster shall inclu)e thea))resses, contact nu+bers, e+ail a))resses, A"R

ser!ices ren)ere) %e.g. arbitration, +e)iation& an)e6perience in A"R of the A"R pro!i)erspractitioners an)

%g& -o perfor+ such other functions as +a' be assigne) toit.

Ar)-,e 2.4.Diisions of the #ADR. -he ?A"R shall ha!e thefollowing staff an) ser!ice )i!isions, a+ong others3

%a& Sere)r-)B shall pro!i)e necessar' support an))ischarge such other functions an) )uties as +a' be)irecte) b' the 76ecuti!e "irector.

%b& P6,- -#$r)-$ 1 Pr$$)-$ D-7-!-$B shall

be charge) with the )isse+ination of infor+ation, thepro+otion of the i+portance an) public acceptance of

+e)iation, conciliation, arbitration or an' co+binationthereof an) other A"R for+s as a +eans of achie!ingspee)' an) efficient +eans of resol!ing all )isputes an) tohelp in the pro+otion, )e!elop+ent an) e6pansion of theuse of A"R.

%c& Tr-- D-7-!-$B shall be charge) with the

for+ulation of effecti!e stan)ar)s for the training of A"Rpractitioners con)uct of training in accor)ance with such

stan)ar)s issuance of certifications of training to A"Rpractitioners an) A"R ser!ice pro!i)ers who ha!e

un)ergone the professional training pro!i)e) b' the ?A"Ran) the coor)ination of the )e!elop+ent, i+ple+entation,+onitoring an) e!aluation of go!ern+ent an) pri!ate sectorA"R progra+s.

%)& Re$r1! 1 L-6rr/ D-7-!-$B shall be charge) with

the establish+ent an) +aintenance of a central repositor'of A"R laws, rules an) regulations, 4urispru)ence, books,articles, an) other infor+ation about A"R in the Philippinesan) elsewhere.

RULE 2 + The A17-!$r/ C$-,

Ar)-,e 2.&.Composition of the Adisory Council.-here is alsocreate) an A)!isor' *ouncil co+pose) of a representati!e fro+each of the following3

%a& Me)iation profession

%b& Arbitration profession

%c& A"R organiations

%)& 1P an)

%e& Aca)e+e.

-he +e+bers of the *ouncil, who shall be appointe) b' theSecretar' of (ustice upon the reco++en)ation of the ?A"R76ecuti!e "irector, shall choose a *hair+an fro+ a+ongthe+sel!es.

Ar)-,e 2.5.Role of the Adisory Council.-he A)!isor' *ouncilshall a)!ise the 76ecuti!e "irector on polic', operational an) other

rele!ant +atters. -he *ouncil shall +eet regularl', at least oncee!er' two %2& +onths, or upon call b' the 76ecuti!e "irector.

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CHAPTER MEDIATION

RULE * + Geer, Pr$7-!-$!

Ar)-,e .*.Scope of Application.-hese Rules appl' to !oluntar'

+e)iation, whether ad hocor institutional, other than courtanne6e) +e)iation an) onl' in )efault of an agree+ent of the

parties on the applicable rules.

-hese Rules shall also appl' to all cases pen)ing before ana)+inistrati!e or =uasi4u)icial agenc' that are subse=uentl'agree) upon b' the parties to be referre) to +e)iation.

Ar)-,e .2.Statement of Policy.n appl'ing an) construing thepro!isions of these Rules, consi)eration +ust be gi!en to the nee)

to pro+ote can)or of parties an) +e)iators through confi)entialit'of the +e)iation process, the polic' of fostering pro+pt,econo+ical an) a+icable resolution of )isputes in accor)ance with

principles of integrit' of )eter+ination b' the parties an) the polic'that the )ecision+aking authorit' in the +e)iation process restswith the parties.

A part' +a' petition a court before which an action is pre+aturel'brought in a +atter which is the sub4ect of a +e)iation agree+ent,

if at least one part' so re=uests, not later than the pretrialconference or upon the re=uest of both parties thereafter, to referthe parties to +e)iation in accor)ance with the agree+ent of theparties.

RULE 23 Se,e)-$ $# Me1-)$r

Ar)-,e ..%reedom to Select mediator.-he parties ha!e thefree)o+ to select +e)iator. -he parties +a' re=uest the ?A"R topro!i)e the+ with a list or roster or the resu+es of its certifie)

+e)iators. -he ?A"R +a' be re=ueste) to infor+ the +e)iator ofhisher selection.

Ar)-,e .4.Replacement of &ediator.f the +e)iator selecte) isunable to act as such for an' reason, the parties +a', upon beinginfor+e) of such fact, select another +e)iator.

Ar)-,e .&.Refusal or 'ithdra$al of &ediator.A +e)iator +a'refuse fro+ acting as such, with)raw or +a' be co+pelle) to

with)raw fro+ +e)iator procee)ings un)er the followingcircu+stances3

%a& f an' of the parties so re=uests the +e)iator towith)raw

%b& -he +e)iator )oes not ha!e the =ualifications, trainingan) e6perience to enable hi+her to +eet the reasonablee6pectations of the parties

%c& @here the +e)iatorCs i+partiall' is in =uestion

%)& f continuation of the process woul) !iolate an' ethicalstan)ar)s

%e& f the safet' of an' of the parties woul) be 4eopar)ie)

%f& f the +e)iator is unable to pro!i)e effecti!e ser!ices

%g& n case of conflict of interest an)

%h& n an' of the following instances, if the +e)iator issatisfie) that3

%i& one or +ore of the parties isare not acting ingoo) faith

%ii& the partiesC agree+ent woul) be illegal or in!ol!ethe co++ission of a cri+e

%iii& continuing the )ispute resolution woul) gi!e rise

to an appearance of i+propriet'

%i!& continuing with the process woul) cause

significant har+ to a nonparticipating person or tothe public or

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%!& continuing )iscussion woul) not be in the bestinterest of the parties, their +inor chil)ren or the

)ispute resolution process.

RULE + E)h-, C$1) $# Me1-)$r

Ar)-,e .5 Competence. t is not re=uire) that a +e)iator shallha!e special =ualifications b' backgroun) or profession unless the

special =ualifications of a +e)iator shall 3

%a& +aintain the continuall' upgra)e hisher professionalco+petence in +e)iation skills

%b& ensure that hisher =ualifications, training an)e6perience are known to an) accepte) b' the parties an)

%c& ser!e onl' when hisher =ualifications, training an)e6perience enable hi+her to +eet the reasonablee6pectations of the parties an) shall not hol) hi+selfherself

out or gi!e the i+pression that heshe )oes not ha!e.

>pon the re=uest of a +e)iation part', an in)i!i)ual who is

re=ueste) to ser!e as +e)iator shall )isclose hisher =ualificationsto +e)iate a )ispute.

Ar)-,e .;(mpartially. A +e)iator shall +aintain i+partialit'.

%a& 1efore accepting a +e)iation, an in)i!i)ual who isre=ueste) to ser!e as a +e)iator shall3

%i& +ake an in=uir' that is reasonable un)er thecircu+stances to )eter+ine whether there are knownfacts that a reasonable in)i!i)ual woul) consi)erlikel' to affect the i+partialit' of the +e)iator,inclu)ing a financial or personal interest in the

outco+e of the +e)iation an) an' e6isting or pastrelationship with a part' of foreseeable participant inthe +e)iation an)

%ii& )isclose to the +e)iation parties an' such factknown or learne) as soon as practical before

accepting a +e)iation.

%b& f a +e)iator learns an' fact )escribe) in paragraph %a&

of this Article after accepting a +e)iation, the +e)iatorshall )isclose it as soon as practicable to the +e)iationparties.

Ar)-,e .8.Confidentiality. A +e)iator shall keep in ut+ostconfi)ence all confi)ential infor+ation obtaine) in the course of the+e)iation process.

A +e)iator shall )iscuss issues of confi)entialit' an) the e6tent ofconfi)entialit' pro!i)e) in an' pri!ate sessions or caucuses that the

+e)iator hol)s with a part'.

Ar)-,e .9.Consent and Self-Determination.%a& A +e)iator shall+ake reasonable efforts to ensure that each part' un)erstan)s the

nature an) character of the +e)iation procee)ing inclu)ing pri!atecaucuses, the issues, the a!ailable options, the alternati!es to nonsettle+ent, an) that each part' is free an) able to +ake whate!er

choices heshe )esires regar)ing participation in +e)iationgenerall' an) regar)ing specific settle+ent options.

f a +e)iator belie!es that a part', who is not represente)b' counsel, is unable to un)erstan), or full' participate, the+e)iation procee)ings for an' reason, a +e)iator +a'either3

%i& li+it the scope of the +e)iation procee)ings in a+anner consistent with the part'Cs abilit' to

participate, an)or reco++en) that the part' obtainappropriate assistance in or)er to continue with theprocess or

%ii& ter+inate the +e)iation procee)ings.

%b& A +e)iator shall recognie an) put in +in) that thepri+ar' responsibilit' of resol!ing a )ispute an) the shaping

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of a !oluntar' an) uncoerce) settle+ent rests with theparties.

Ar)-,e .*0.Separation of &ediation from Counseling and LegalAdice. %a& 76cept in e!aluati!e +e)iation or when the parties so

re=uest, a +e)iator shall3

%i& refrain fro+ gi!ing legal or technical a)!ice an)

otherwise engaging in counseling or a)!ocac' an)

%ii& abstain fro+ e6pressing hisher personal opinionon the rights an) )uties of the parties an) the +eritsof an' proposal +a)e.

%b& @here appropriate an) where either or both parties arenot represente) b' counsel, a +e)iator shall

%i& reco++en) that the parties seek outsi)eprofessional a)!ice to help the+ +ake infor+e)

)ecision an) to un)erstan) the i+plication of an'proposal an)

%ii& suggest that the parties seek in)epen)ent legalan)or technical a)!ice before a settle+entagree+ent is signe).

%c& without the consent of al parties, an) for a reasonableti+e un)er the particular circu+stance, a +e)iator who alsopractices another profession shall not establish a

professional relationship in that other profession with one of

the parties, or an' person or entit', in a substantiall' an)factuall' relate) +atter.

Ar)-,e .**.Charging of %ees.%a& A +e)iator shall full' )isclosean) e6plain to the parties the basis of cost, fees an) charges.

%b& -he +e)iator who with)raws fro+ the +e)iation shallreturn to the parties an' unearne) fee an) unuse) )eposit.

%c& A +e)iator shall not enter into a fee agree+ent, which iscontingent upon the results of the +e)iation or the a+ount

of the settle+ent.

Ar)-,e .*2Promotion of Respect and Control of Abuse of

Process. -he +e)iatorcle .:2 Pro+otion of Respect an) *ontrol ofAbuse of Process. of the settle +entcost ablish a professionalrelationship shall encourage +utual respect between the parties,

an) shall take reasonable steps, sub4ect to the principle of self)eter+ination, to li+it abuses of the +e)iation process.

Ar)-,e .*.Solicitation or Acceptance of any )ift.No +e)iator or

an' +e+ber of a +e)iatorDs i++e)iate fa+il' or hisher agentshall re=uest, solicit, recei!e or accept an' gift or an' t'pe ofco+pensation other than the agree) fee an) e6penses inconnection with an' +atter co+ing before the +e)iator.

RULE 4 + R$,e $# Pr)-e! 1 )he-r C$!e,!

Ar)-,e .*4.Designation of Counsel or Any Person to Assist&ediation. 76cept as otherwise pro!i)e) b' the A"R Act or b'these Rules, a part' +a' )esignate a law'er or an' other person to

pro!i)e assistance in the +e)iation. A wai!er of this right shall be+a)e in writing b' the part' wai!ing it. A wai!er of participation orlegal representation +a' be rescin)e) at an' ti+e.

Ar)-,e .*&.Role of Counsel.%a& -he law'er shall !iew hisherrole in the +e)iation as a collaborator with the other law'er inworking together towar) the co++on goal of helping their clients

resol!e their )ifferences to their +utual a)!antage.

%b& -he law'er shall encourage an) assist hisher client to

acti!el' participate in positi!e )iscussions an) cooperate incrafting an agree+ent to resol!e their )ispute.

%c& -he law'er +ust assist hisher client to co+prehen) an)appreciate the +e)iation process an) its benefits, as well asthe clientDs greater personal responsibilit' for the success of+e)iation in resol!ing the )ispute.

10


11/54

%)& n preparing for participation in +e)iation, the law'ershall confer an) )iscuss with hisher client the following3

%i& -he +e)iation process as essentiall' a negotiationbetween the parties assiste) b' their respecti!e

law'ers, an) facilitate) b' a +e)iator, stressing it its)ifference fro+ litigation, its a)!antages an)benefits, the clients heightene) role in +e)iation an)

responsibilit' for its success an) e6plaining the roleof the law'er in +e)iation procee)ings,

%ii& -he substance of the upco+ing +e)iation such

as

%aa& -he substanti!e issues in!ol!e) in the

)ispute an) their prioritiation in ter+s ofi+portance to hisher clientDs real interestsan) nee)s.

%bb& -he stu)' of other part'Ds position inrelation to the issues with a !iew toun)erstan)ing the un)erl'ing interests, fears,

concerns an) nee)s

%cc& -he infor+ation or facts to be gathere)

or sought fro+ the other si)e or to bee6change) that are necessar' for infor+e))ecision+aking

%))& -he possible options for settle+ent but

stressing the nee) to be open+in)e) aboutother possibilities an)

%ee& -he best, worst an) +ost likel'alternati!e to a nonnegotiate) settle+ent.

Ar)-,e .*5.#ther &atters $hich the Counsel shall do to Assist&ediation. -he law'er

%a& shall gi!e support to the +e)iator so that hisher clientwill full' un)erstan) the rules an) processes of +e)iation

%b& shall i+press upon hisher client the i+portance ofspeaking for hi+selfherself an) taking responsibilit' for

+aking )ecisions )uring the negotiations within the+e)iation process.

%c& +a' ask for a recess in or)er to gi!e a)!ice orsuggestions to hisher client in pri!ate, if heshe percei!esthat hisher client is unable to bargain effecti!el'

%)& shall assist hisher client an) the +e)iator put in writing

the ter+s of the settle+ent agree+ent that the parties ha!eentere) into. -hat law'ers shall see to it that the ter+s of

the settle+ent agree+ent are not contrar' to law, +orals,goo) custo+s, public or)er or public polic'.

RULE & + C$1) $# Me1-)-$

Ar)-,e .*;.Articles to be Considered in the Conduct of&ediation.%a& -he +e)iator shall not +ake untruthful ore6aggerate) clai+s about the )ispute resolution process, its costsan) benefits, its outco+e or the +e)iatorDs =ualifications an)abilities )uring the entire +e)iation process.

%b& -he +e)iator shall hel) the parties reach a satisfactor'resolution to their )ispute but has no authorit' to i+pose a

settle+ent on the parties.

%c& -he parties shall personall' appear for +e)iation an)+a' be assiste) b' a law'er. A part' +a'be represente) b'an agent who +ust ha!e full authorit' to negotiate an)settle the )ispute.

%)& -he +e)iation process shall, in general, consists of thefollowing stages3

%i& opening state+ent of the +e)iator

11


12/54

%ii& in)i!i)ual narration b' the parties

%iii& e6change b' the parties

%i!& su++ar' of issues

%!& generation an) e!aluation of options an)

%!i& closure

%e& -he +e)iation procee)ing shall be hel) in pri!ate.Person, other than the parties, their representati!es an)+e)iator, +a' atten) onl' with the consent of all the

parties,

%f& the +e)iation shall be close)3

%i& b' the e6ecution of a settle+ent agree+ent b'the parties

%ii& b' the with)rawal of an' part' fro+ +e)iationan)

%iii& b' the written )eclaration of the +e)iator thatan' further effort at +e)iation woul) not be helpful

RULE 5 + P,e $# Me1-)-$

Ar)-,e .*8.Agreement of Parties on the Place of &ediation.-he

parties are free to agree on the place of +e)iation.


13/54

Act No. 8;E, otherwise know as -he Arbitration /aw,notwithstan)ing the pro!isions of 76ecuti!e ?r)er No. :##8,

s. :985, other wise known as the *onstruction n)ustr'Arbitration /aw for +e)iate) )isputes outsi)e the*onstruction n)ustr' Arbitration *o++ission.

RULE 9 + C$#-1e)-,-)/ $# I#$r)-$

Ar)-,e .2*.Confidentiality of (nformation.nfor+ation obtaine)through +e)iation procee)ings shall be sub4ect to the followingprinciples an) gui)elines3

%a& nfor+ation obtaine) through +e)iation shall be

pri!ilege) an) confi)ential

%b& A part', +e)iator, or nonpart' participant +a' refuse

to )isclose an) +a' pre!ent an' other person fro+)isclosing a confi)ential infor+ation.

%c& *onfi)ential infor+ation shall not be sub4ect to )isco!er'an) shall be ina)+issible in an' a)!ersarial procee)ing,whether 4u)icial or =uasi4u)icial. Fowe!er, e!i)ence orinfor+ation that is otherwise a)+issible or sub4ect to)isco!er' )oes not beco+e ina)+issible or protecte) fro+)isco!er' solel' b' reason of its use in a +e)iation.

%)& n such an a)!ersarial procee)ing, the following personsin!ol!e) or pre!iousl' in!ol!e) in a +e)iation +a' not be

co+pelle) to )isclose) confi)ential infor+ation obtaine))uring the +e)iation3

%i& the parties to the )ispute

%ii& the +e)iator or +e)iators

%iii& the counsel for the parties

%i!& the nonpart' participants

%!& an' person hire) or engage) in connection withthe +e)iation as secretar', stenographer, clerk or

assistant an)

%!i& an' other person who obtains or possesses

confi)ential infor+ation b' reason of hisherprofession.

%e& -he protections of the A"R Act shall continue to appl'e!en if a +e)iator is foun) to ha!e faile) to act i+partiall'.

%f& A +e)iator +a' not be calle) to testif' to pro!i)econfi)ential infor+ation gathere) in +e)iation. A +e)iator

who is wrongfull' subpoenae) shall be rei+burse) the fullcost of hisher attorne'Ds fees an) relate) e6penses.

Ar)-,e .22.'aier of Confidentiality.%a& A pri!ilege arising fro+the confi)entialit' of infor+ation +a' be wai!e) in a recor) ororall' )uring a procee)ing b' the +e)iator an) the +e)iation

parties.

%b& @ith the consent of the +e)iation parties, a pri!ilegearising fro+ the confi)entialit' of infor+ation +a' likewisebe wai!e) b' a nonpart' participant if the infor+ation ispro!i)e) b' such nonpart' participant.

%c& A person who )iscloses confi)ential infor+ation shall bepreclu)e) fro+ asserting the pri!ilege un)er Article .2:

%*onfi)entialit' of nfor+ation& to bar )isclosure of the restof the infor+ation necessar' to a co+plete un)erstan)ing of

the pre!iousl' )isclose) infor+ation. f a person suffers lossor )a+age as a result of the )isclosure of the confi)ential

infor+ation, heshe shall be entitle) to )a+ages in a4u)icial procee)ing against the person who +a)e the)isclosure.

%)& A person who )iscloses or +akes a representation abouta +e)iation is preclu)e) fro+ asserting the pri!ilege+entione) in Article .2: to the e6tent that the

co++unication pre4u)ices another person in the procee)ing

13


14/54

an) it is necessar' for the person pre4u)ice) to respon) tothe representation or )isclosure.

Ar)-,e .2.Exceptions to the Priilege of Confidentiality ofinformation.%a& -here is no pri!ilege against )isclosure un)er

Article .2: in the following instances3

%i& in an agree+ent e!i)ence) b' a recor)

authenticate) b' all parties to the agree+ent

%ii& a!ailable to the public or +a)e )uring a sessionof a +e)iation which is open, or is re=uire) b' law tobe open, to the public

%iii& a threat or state+ent of a plan to inflict bo)il'in4ur' or co++it a cri+e of !iolence

%i!& intentionall' use) to plan a cri+e, atte+pt toco++it, or co++it a cri+e, or conceal an ongoing

cri+e or cri+inal acti!it'.

%!& sought or offere) to pro!e or )ispro!e abuse,

neglect, aban)on+ent or e6ploitation in a procee)ingin which a public agenc' is protecting the interest ofan in)i!i)ual protecte) b' law but this e6ception)oes not appl' where a chil) protection +atter is

referre) to +e)iation b' a court or where a publicagenc' participates in the chil) protection +e)iation

%!i& sought or offere) to pro!e or )isappro!e a clai+

or co+plaint of professional +iscon)uct or+alpractice file) against a part', nonpart'participant, or representati!e of a part' base) oncon)uct occurring )uring a +e)iation.

%b& f a court or a)+inistrati!e agenc' fin)s, after a hearingin ca+era, that the part' seeking )isco!er' of theproponent of the e!i)ence has shown that the e!i)ence is

not otherwise a!ailable, that there is a nee) for thee!i)ence that substantiall' outweighs the interest in

protecting confi)entiall', an) the +e)iation co++unicationis sought or offere) in3

%i& a court procee)ing in!ol!ing a cri+e or felon' or

%ii& a procee)ing to pro!e a clai+ or )efense that

un)er the law is sufficient to refor+ or a!oi) aliabilit' on a contract arising out of the +e)iation.

%c& A +e)iator +a' not be co+pelle) to pro!i)e e!i)ence ofa +e)iation co++unication or testif' in such procee)ing.

%)& f a +e)iation co++unication is not pri!ilege) un)er ane6ception in subsection %a& or %b& hereof, onl' the portionof the co++unication necessar' for the application of thee6ception for non)isclosure +a' be a)+itte). -he

a)+ission of a particular e!i)ence for the li+ite) purpose ofan e6ception )oes not ren)er that e!i)ence, or an' other+e)iation co++unication, a)+issible for an' other

purpose.

Ar)-,e .24.*on-Reporting or Communication by &ediator.A+e)iator +a' not +ake a report, assess+ent, e!aluation,reco++en)ation, fin)ing or other co++unication regar)ing a+e)iation to a court or agenc' or other authorit' that +a' +ake a

ruling on a )ispute that is the sub4ect of a +e)iation, e6cept3

%a& to state that the +e)iation occurre) or has ter+inate),

or where a settle+ent was reache) or

%b& as per+itte) to be )isclose) un)er Article .2%76ception to the Pri!ilege of *onfi)entialit' of nfor+ation&.

-he parties +a', b' an agree+ent in writing, stipulate that thesettle+ent agree+ent shall be seale) an) not )isclose) to an'thir) part' inclu)ing the court. Such stipulation, howe!er, shall notappl' to a procee)ing to enforce or set asi)e the settle+entagree+ent.

14


15/54

RULE *0 + Fee! 1 C$!) $# Me1-)-$

Ar)-,e .2&.%ees and Cost of Ad hoc &ediation. n a) hoc

+e)iation, the parties are free to +ake their own arrange+ent asto +e)iation cost an) fees. n )efault thereof, the sche)ule of cost

an) fees to be appro!e) b' the ?A"R shall be followe).

Ar)-,e .25.%ees and Cost of (nstitutional &ediation. %a& n

institutional +e)iation, +e)iation cost shall inclu)e thea)+inistrati!e charges of the +e)iation institution un)er which theparties ha!e agree) to be boun), +e)iatorDs fees an) associate)e6penses, if an'. n )efault of agree+ent of the parties as to the

a+ount an) +anner of pa'+ent of +e)iationDs cost an) fees, thesa+e shall be )eter+ine) in accor)ance with the applicableinternal rules of the +e)iation ser!ice pro!i)ers un)er whose rulesthe +e)iation is con)ucte).

%b& A +e)iation ser!ice pro!i)er +a' )eter+ine such+e)iation fee as is reasonable taking into consi)eration the

following factors, a+ong others3

%i& the co+ple6it' of the case

%ii& the nu+ber of hours spent in +e)iation an)

%iii& the training, e6perience an) stature of

+e)iators.

CHAPTER 4

INTERNATIONAL COMMERCIAL AR


16/54

Procee)ings&, refers to a clai+, it also applies to a counterclai+, an) where it refers to a )efense, it also applies to a

)efense to such counterclai+.

Ar)-,e 4..Receipt of 'ritten Communications.%a& >nless

otherwise agree) b' the parties3

%i& an' written co++unication is )ee+e) to ha!e

been recei!e) if it is )eli!ere) to the a))resseepersonall' or at hisher place of business, habitualresi)ence or +ailing a))ress if none of these can befoun) after +aking a reasonable in=uir', a written

co++unication is )ee+e) to ha!e been recei!e) if itis sent to the a))resseeDs last known place ofbusiness, habitual resi)ence or +ailing a))ress b'registere) letter or an' other +eans which pro!i)es

a recor) of the atte+pt to )eli!er it

%ii& the co++unication is )ee+e) to ha!e been

recei!e) on the )a' it is so )eli!ere).

%b& -he pro!isions of this Article )o not appl' to

co++unications in court procee)ings, which shall bego!erne) b' the Rules of *ourt.

Ar)-,e 4.4.'aier of Right to #b+ect.An' part' who knows thatan' pro!ision of this *hapter fro+ which the parties +a' )erogateor an' re=uire+ent un)er the arbitration agree+ent has not beenco+plie) with an) 'et procee)s with the arbitration without stating

the ob4ections for such nonco+pliance without un)ue )ela' or if a

ti+e li+it is pro!i)e) therefor, within such perio) of ti+e, shall be)ee+e) to ha!e wai!e) the right to ob4ect.

Ar)-,e 4.&.Extent of Court (nterention.n +atters go!erne) b'this *hapter, no court shall inter!ene e6cept where so pro!i)e) inthe A"R Act. Resort to Philippine courts for +atters within thescope of the A"R Act shall be go!erne) b' the Special A"R Rules.

Ar)-,e 4.5.Court or #ther Authority for Certain %unctions of

Arbitration Assistance and Superision.

%a& -he functions referre) to in paragraphs %c& an) %)& ofArticle $.:: %Appoint+ent of Arbitrators& an) paragraph %c&

of Article $.: %*hallenge Proce)ure& an) paragraph %a& ofArticle $.:$ %


17/54

contracts is writing an) the reference is such as to +ake thatclause part of the contract.

Ar)-,e 4.8Arbitration Agreement and Substantie Claim ,eforeCourt.%a& A court before which an action is brought in a +atter

which is the sub4ect of an arbitration agree+ent shall, if at leastone part' so re=uests of both parties thereafter, refer the parties toarbitration unless it fin)s that the arbitration agree+ent is null an)

!oi), inoperati!e or incapable of being perfor+e).

%b& @here an action referre) to in the pre!ious paragraphhas been brought , arbitral procee)ings +a' ne!ertheless

be co++ence) or continue), an) an awar) +a' be +a)e,while the issue is pen)ing before the court.

%c& @here the action is co++ence) b' or against +ultipleparties, one or +ore of who+ are parties to an arbitrationagree+ent, the court shall refer to arbitration those partieswho are boun) b' the arbitration agree+ent although the

ci!il action +a' continue as to those who are not boun) b'such arbitration agree+ent.

Ar)-,e 4.9Arbitration Agreement and (nterim &easures by Court.%a& t is not inco+patible with an arbitration agree+ent for a part'to re=uest fro+ a court, before the constitution of the arbitraltribunal or )uring arbitral procee)ings, an interi+ +easure ofprotection an) for a court to grant such +easure.

%b& -o the e6tent that the arbitral tribunal has no power to

act or is unable to act effecti!el', a re=uest for interi+

+easure of protection, or +o)ification thereof as pro!i)e)for, an) in the +anner in)icate) in , Article $.:; %Power of-ribunal to ?r)er nteri+ Measures &, +a' be +a)e with thecourt.

-he rules of interi+ or pro!isional relief pro!i)e) for in paragraph %c & of Article $.:; of these Rules shall be obser!e).

A part' +a' bring a petition un)er this Article before the court in

accor)ance with the Rules of *ourt or the Special A"R Rules.

RULE + C$($!-)-$ $# Ar6-)r, Tr-6,

Ar)-,e 4.*0*umber of Arbitrators. -he parties are free to

)eter+ine the nu+ber of arbitrators


18/54

%iii& a thir) part', inclu)ing an institution, fails toperfor+ an' function entruste) to it un)er such

proce)ure,

An' part' +a' re=uest the appointing authorit' to take the

necessar' +easure to appoint an arbitrator, unless theagree+ent on the appoint+ent proce)ure pro!i)es other+eans for securing the appoint+ent.

%e& A )ecision on a +atter entruste) b' paragraphs %c& an)%)& of this to the appointing authorit' shall be i++e)iatee6ecutor' an) not be sub4ect to a +otion for

reconsi)eration or appeal. -he appointing authorit' shallha!e in appointing an arbitrator, )ue regar) to an'=ualifications re=uire) of the arbitrator b' the agree+ent ofthe parties an) to such consi)erations as are likel' to secure

the appoint+ent of an in)epen)ent an) i+partial arbitratoran), in the case of a sole or thir) arbitrator , shall take into

account as well the a)!isabilit' of appointing an arbitrator of

a nationalit' other than the Rules of *ourt of the SpecialA"R Rules.

Ar)-,e 4.*2)rounds for Challenge.%a& @hen a person isapproache) in connection with hisher possible appoint+ent as anarbitrator, heshe i+partialit' or in)epen)ence. An arbitrator, fro+

the ti+e of hisher appoint+ent an) throughout the arbitralprocee)ings shall, without )ela', )isclose an' such circu+stance tothe parties unless the' ha!e alrea)' been infor+e) of the+hi+her.

%b& An arbitrator +a' be challenge) onl' if circu+stancese6ist that gi!e rise to 4ustifiable )oubts as to hisher

i+partialit' or in)epen)ence, or if heshe )oes not possess=ualifications agree) to b' the parties. A part' +a'challenge an arbitrator appointe) b' hi+her, or in whoseappoint+ent heshe has participate), onl' for reasons ofwhich heshe beco+es aware after the appoint+ent hasbeen +a)e.

Ar)-,e 4.*.Challenge Procedure.%a& -he parties are free toagree on a proce)ure for challenging an arbitrator, sub4ect to the

pro!isions of this Article.

%b&


19/54

%b& f, un)er this Article or paragraph %b& of Article $.:%*hallenge Proce)ure&, an arbitrator with)raws fro+ hisher

office or a part' agrees for ter+ination of the +an)ate of anarbitrator, this )oes not i+pl' acceptance of the !ali)it' ofan' groun) referre) to in this Article or in paragraph %b& ofArticle $.:2 %)rounds for Challenge&.

Ar)-,e 4.*&. A(($-)e) $# S6!)-))e Ar6-)r)$r.@here the

+an)ate of an arbitrator ter+inates un)er Articles $.: %*hallengeProce)ure& an) $.:$ %


20/54

%cc& -o pro)uce or preser!e e!i)ence

%))& -o co+pel an' other appropriate acts or

o+issions.

%iii& -he or)er granting pro!isional relief +a' be

con)itione) upon the pro!ision of securit' or an' actor o+ission specifie) in or)er.

%i!& nteri+ or pro!isional relief is re=ueste) b'written application trans+itte) b' reasonable +eansto the arbitral tribunal an) the part' against who+relief is sought, )escribing in appropriate )etails of

the precise relief, the part' against who+ the reliefis re=ueste), the groun) for the relief, an) the

e!i)ence, supporting the re=uest.

%!& -he or)er granting or )en'ing an application forthe interi+ relief shall be bin)ing upon the parties.

%!i& 7ither part' +a' appl' with the court forassistance in i+ple+enting or enforcing an interi++easure or)ere) b' an arbitral tribunal.

%!ii& A part' who )oes not co+pl' with the or)ershall be liable for all )a+ages, resulting fro+

nonco+pliance, inclu)ing all e6penses, an)reasonable attorne'Cs fees, pai) in obtaining the

or)erCs 4u)icial enforce+ent.

RULE & + C$1) $# Ar6-)r, Pr$ee1-!

Ar)-,e 4.*8. Eual "reatment of Parties.-he parties shall betreate) with e=ualit' an) each shall be gi!en a full opportunit' ofpresenting hisher case.

Ar)-,e 4.*9. Determination of the Rules of Procedure.%a& Sub4ectto the pro!isions of this *hapter, the parties are free to agree onthe proce)ure to be followe) b' the arbitral tribunal in con)ucting

the procee)ings.

%b& N*-RA/ on 28 April :9;E an) the>N 0eneral Asse+ble on :5 "ece+ber :9;E shall appl'

sub4ect to the following clarification3 All references to theSecretar'0eneral of the Per+anent *ourt of Arbitration at

the Fague shall be )ee+e) to refer to the appointingauthorit'.

%c& -he power conferre) upon the arbitral tribunal inclu)esthe power to )eter+ine the a)+issibilit', rele!ance,+aterialit' an) weight of an' e!i)ence.

Ar)-,e 4.20. P,e $# Ar6-)r)-$. %a& -he parties are free to

agree on the place of arbitration. nlessotherwise agree) b' the parties, the arbitral procee)ings in respectof a particular )ispute co++ence on the )ate on which a re=uest

for that )ispute to be referre) to arbitration is recei!e) b' therespon)ent.

Ar)-,e 4.22. Le.%a& -he parties are free to agree on thelanguage or languages to be use) in the arbitral procee)ings.


21/54

%b& -he arbitral tribunal +a' or)er that an' )ocu+entar'e!i)ence shall be acco+panie) b' a translation into the

language or languages agree) upon b' the parties or)eter+ine) b' the arbitral tribunal in accor)ance withparagraph %a& of this Article.

Ar)-,e 4.2 S))ee)! $# C,- 1 De#e!e.%a& @ithin theperio) of ti+e agree) b' the parties or )eter+ine) b' the arbitral

tribunal, the clai+ant shall state the facts supporting hisheritsclai+, the points at issue an) the relief or re+e)' sought, an) therespon)ent shall state hisherits )efense in respect of theseparticulars, unless the parties ha!e otherwise agree) as to there=uire) ele+ents of such state+ents. -he parties +a' sub+it withtheir state+ents, all )ocu+ents the' consi)er to be rele!ant or+a' a)) a reference to the )ocu+ents or other e!i)ence the' will

sub+it.

%b& >nless otherwise agree) b' the parties, either part'

+a' a+en) or supple+ent hisher clai+ or )efense )uring

the course of the arbitral procee)ings, unless the arbitraltribunal consi)ers it inappropriate to allow such a+en)+entha!ing regar) to the )ela' in +aking it.

Ar)-,e 4.24 Her- 1 Wr-))e Pr$ee1-!.%a& Sub4ect toan' contrar' agree+ent b' the parties, the arbitral tribunal shall

)eci)e whether to hol) oral hearings for the presentation ofe!i)ence or for oral argu+ent, or whether the procee)ings shall becon)ucte) on the basis of )ocu+ents an) other +aterials.Fowe!er, unless the parties ha!e agree) that no hearings at an

appropriate stage of the procee)ings, if so re=ueste) b' a part'.

%b& -he parties shall be gi!en sufficient a)!ance notice of

an' hearing an) of an' +eeting of the arbitral tribunal forthe purposes of inspection goo)s, other propert' or)ocu+ents.

%c& All state+ents, )ocu+ents or other infor+ation supplie)to the arbitral b' one part' shall be co++unicate) to theother part'. Also, an e6pert report or e!i)entiar' )ocu+enton which the arbitral tribunal +a' rel' in +aking its )ecisionshall be co++unicate) to the parties.

Ar)-,e 4.2& De#,) $# Pr)/.>nless otherwise agree) b' theparties, if, without, showing sufficient cause,

%a& the clai+ant fails to co++unicate his state+ent of clai+in accor)ance with paragraph %a& Article $.2 %Statement of

Claim and Defense&, the arbitral tribunal shall ter+inate theprocee)ings

%b& the respon)ent fails to co++unicate hisheritsstate+ent of )efense in accor)ance with paragraph %a&Article $.2 %Statement of Claim and Defense&, the arbitraltribunal shall continue the procee)ings without treating such

failure in itself as an a)+ission of the clai+antDs allegations.

%c& an' part'Ds fails to appear at a hearing or to pro)uce

)ocu+entar' e!i)ence, the arbitral tribunal +a' continuethe procee)ings an) +ake the awar) on the e!i)encebefore it.

Ar)-,e 4.25. E=(er) A(($-)e1 6/ )he Ar6-)r,Tr-6,.>nless otherwise agree) b' the parties, the arbitraltribunal,

%a& +a' appoint one or +ore e6perts to report to it onspecific issues to be )eter+ine) b' the arbitral tribunal or

%b& +a' re=uire a part' to gi!e the e6pert an' rele!antinfor+ation or to pro)uce, or to pro!i)e access to, an'

rele!ant )ocu+ents, goo)s or other propert' for hisherinspection.

>nless otherwise agree) b' the parties, if a part' so re=uests or ifthe arbitral tribunal consi)ers it necessar', the e6pert shall, after)eli!er' of hisher written or oral report, participate in a hearingwhere the parties ha!e the opportunit' to put =uestions to hi+ an)

to present e6pert witnesses in or)er to testif' on the points atissue.

Ar)-,e 4.2;. C$r) A!!-!)e - T?- E7-1ee.-he arbitraltribunal or a part' with the appro!al of the arbitral tribunal +a're=uest fro+ a court of the Philippines assistance in taking

21


22/54

e!i)ence. -he court +a' e6ecute the re=uest within its co+petencean) accor)ing to its rules on taking e!i)ence.

-he arbitral tribunal shall ha!e the power to re=uire an' person toatten) a hearing as a witness. -he arbitral tribunal shall ha!e the

power to subpoena witnesses an) )ocu+ents when the rele!anc'of the testi+on' an) the +aterialit' thereof has been)e+onstrate) to it. -he arbitral tribunal +a' also re=uire the

retire+ent of an' witness )uring the testi+on' of an' otherwitness.

A part' +a' bring a petition un)er this Section before the court in

accor)ance with the Rules of *ourt or the Special A"R Rules.

Ar)-,e 4.28. R,e! A((,-6,e )$ )he S6!)e $#

D-!()e. %a& -he arbitral tribunal shall )eci)e the )ispute inaccor)ance with such rules of law as are chosen b' the parties asapplicable to the substance of the )ispute. An' )esignation of thelaw or legal s'ste+ of a gi!en state shall be construe), unless

otherwise e6presse), as )irectl' referring to the substanti!e law ofthat state an) not its conflict of laws rules.

%b&


23/54

hisherits part in obtaining a final settle+ent of the)ispute

%ii& -he parties agree the ter+ination of theprocee)ings

%iii& -he arbitral tribunal fin)s that the continuationof the procee)ings has for an' other reason beco+e

unnecessar' or i+possible.

%c& -he +an)ate of the arbitral tribunal en)s withter+ination of the arbitral procee)ings sub4ect to thepro!isions of Articles $. %*orrection an) nterpretation of

Awar), A))itional Awar)& an) paragraph %)& of Articles $.$%Application for Setting Asi)e an 76clusi!e Recourse against

Arbitral Awar)&.

%)& Notwithstan)ing the foregoing, the arbitral tribunal +a',for special reasons, reser!e in the final awar) or or)er, a

hearing to =uantit' costs an) )eter+ine which part' shallbear the costs or the )i!ision thereof as +a' be )eter+ine)to be e=uitable. Pen)ing )eter+ination of this issue, the

awar) shall not be )ee+e) final for purposes of appeal,!acation, correction, or an' postawar) procee)ings.

Ar)-,e 4..Correction and (nterpretation of A$ard AdditionalA$ard. %a& @ithin thirt' %#& )a's fro+ receipt of the awar),unless another perio) of ti+e has been agree) upon b' the parties3

%i& A part' +a', with notice to the other part',

re=uest the arbitral tribunal to correct in the awar)an' errors in co+putation, an' clerical or

t'pographical errors or an' errors of si+ilar nature

%ii& A part' +a', it so agree) b' the parties an) with

notice to the other part', re=uest the arbitral tribunalto gi!e an interpretation of a specific point or part ofthe awar).

%b& f the arbitral tribunal consi)ers the re=uest to be4ustifie), t shall +ake the correction or gi!e the

interpretation within thirt' %#& )a's fro+ receipt of there=uest. -he interpretation shall for+ part of the awar).

%c& -he arbitral tribunal +a' correct an' error of the t'pereferre) to in paragraph %a& of this Article on its own

initiati!e within thirt' %#& )a' fro+ the )ate of the awar)

%)& >nless otherwise agree) b' the parties, a part' +a',

with notice to the other part', re=uest, within thirt' %#&)a's receipt of the awar), the arbitral tribunal to +ake ana))itional awar) as to clai+s presente) in the arbitralprocee)ings but o+itte) fro+ the awar). f the arbitral

tribunal consi)ers the re=uest to be 4ustifie), it shall +akethe a))itional awar) within si6t' %E#& )a's

%e& -he arbitral tribunal +a' e6ten), if necessar', the perio)of ti+e within which it shall +ake a correction interpretationor an a))itional awar) un)er paragraphs %a& an) %b& of thisArticle.

%f& -he pro!isions of Article $.: %


24/54

the parties ha!e sub4ecte) it or, failing an'in)ication thereon, un)er the law of the

Philippines or

%bb& the part' +aking the application was not

gi!en proper notice of the appoint+ent of anarbitrator or of the arbitral procee)ings orwas otherwise unable to present his case or

%cc& the awar) )eals with a )ispute notconte+plate) b' or not failing within theter+s of the sub+ission to arbitration, or

contains, )ecisions on +atters be'on) thescope of the sub+ission to arbitration,pro!i)e) that, if the )ecisions on +atterssub+itte) to arbitration can be separate)

fro+ those not so sub+itte), onl' the part ofthe awar) which contains )ecisions on

+atters not sub+itte) to arbitration +a' be

set asi)e or

%))& the co+position of the arbitral tribunal orthe arbitral proce)ure was not in accor)ancewith the agree+ent of the parties, unlesssuch agree+ent was in conflict with a

pro!ision of A"R Act fro+ which the partiescannot )erogate, or, falling such agree+ent,was not in accor)ance with A"R Act or

%ii& the *ourt fin)s that3

%aa& the sub4ect+atter of the )ispute is notcapable of settle+ent b' arbitration un)er thelaw of the Philippines or

%bb& the awar) is in conflict with the publicpolic' of the Philippines.

%c& An application for setting asi)e +a' not be +a)e after

three +onths ha!e elapse) fro+ the )ate on which thepart' +aking that application ha) recei!e) the awar) or, f

a re=uest ha) been +a)e un)er Article $. %*orrection an)nterpretation of Awar), A))itional Awar)& fro+ the )ate on

which that re=uest has been )ispose) of b' the Arbitraltribunal

%)& -he court, when aske) to set asi)e an awar), +a',where appropriate an) so re=ueste) b' a part', suspen) thesetting asi)e procee)ings for a perio) of ti+e )eter+ine) b'

it in or)er to gi!e the arbitral tribunal an opportunit'resu+e the arbitral procee)ings or take such other action asin the arbitral tribunalCs opinion will eli+inate the groun)sfor setting asi)e.

%e& A part' +a' bring a petition un)er this Article before thecourt in accor)ance with the Special A"R Rules.

RULE 5 + Re$-)-$ 1 E#$ree) $# A:r1!

Ar)-,e 4.&.Recognition and Enforcement. %a& A foreign arbitral

awar) shall be recognie) as bin)ing an), upon petition in writingto the regional trial *ourt, shall be enforce) sub4ect to thepro!isions of this Article an) of Article $.E %0roun)s for Refusing

Recognition or 7nforce+ent&.

%b& -he petition for recognition an) enforce+ent of such

arbitral awar)s shall be fille) with the Regional trial *ourt naccor)ance with Special A"R Rules.

%i& *on!ention Awar) -he New ork *on!entionshall go!ern the recognition an) enforce+ent of

arbitral awar)s co!ere) b' sai) *on!ention. -hepetitioner shall establish that the countr' in which

the foreign arbitration awar) was +a)e is a part' tothe New ork *on!ention

%ii& Non*on!ention Awar) B -he recognition an)enforce+ent of foreign arbitral awar)s not co!ere)b' the New ork *on!ention shall be )one inaccor)ance with proce)ural rules to be pro+ulgate)

b' the Supre+e *ourt. -he court +a', on groun)s of

24


25/54

co+it' an) reciprocit', recognie an) enforce a noncon!ention awar) as a con!ention awar).

%c& -he part' rel'ing on an awar) or appl'ing for itsenforce+ent shall file with the Regional -rial *ourt the

original or )ul' authenticate) cop' of the awar) an) theoriginal arbitration agree+ent or a )ul' authenticate) cop'thereof. f the awar) or agree+ent is not +a)e in an official

language of the Philippines, the part' shall suppl' a )ul'certifie) translation thereof into such language.

%)& A foreign arbitral awar) when confir+e) b' a court of a

foreign countr', shall be recognie) an) enforce) as aforeign arbitral awar) an) not as a 4u)g+ent of a foreigncourt.

%e& A foreign arbitral awar) when confir+e) b' the Regional-rial *ourt, shall be enforce) in the sa+e +anner as finalan) e6ecutor' )ecisions of courts of law of the Philippines.

%f& f the Regional -rial *ourt has recognie) the arbitralawar) but an application for re4ection an)or& suspension of

enforce+ent of that awar) is subse=uentl' +a)e, theRegional -rial *ourt +a', if it consi)ers the application to beproper, !acate or suspen) the )ecision to enforce thatawar) an) +a' also, on the application of the part' clai+ingrecognition or enforce+ent of that awar), or)er the otherpart' seeking re4ection or suspension to pro!i)e appropriate

securit'.

Ar)-,e 4.5.)rounds for Refusing Recognition or Enforcement.

A CONVENTION AWARD.

Recognition or enforce+ent of an arbitral awar), +a)e in a state,

which is a part' to the New ork *on!ention, +a' be refuse), atthe re=uest of the part' against who+ it is pro!oke), onl' if thepart' furnishes to the Regional -rial *ourt proof that3

%a& -he parties to the arbitration agree+ent are, un)er thelaw applicable to the+, un)er so+e incapacit' or the sai)

agree+ent is not !ali) un)er the law to which the partiesha!e sub4ecte) it or failing an' in)ication thereon, un)er

the law of the countr' where the awar) was +a)e or

%b& the part' against who+ the awar) is in!oke) was not

gi!en proper notice of the appoint+ent of an arbitrator or ofthe arbitral procee)ings or was otherwise in able to presenthis case or

%c& the awar) )eals with )ispute not conte+plate) b' or notfailing within the ter+s of the sub+ission to arbitration, or itcontains )ecisions on +atters be'on) the scope of the

sub+ission to arbitration pro!i)e) that, if the )ecisions on+atters sub+itte) to arbitration can be separate) fro+those not so sub+itte), that part of the awar) whichcontains )ecisions on +atters sub+itte) to arbitration +a'

be recognie) an) enforce) or

%)& the co+position of the arbitral tribunal or the arbitral

proce)ure was not in accor)ance with the agree+ent of theparties or, failing such agree+ent, was not in accor)ancewith the law of the countr' where the arbitration too placeor

%e& the awar) has not beco+e bin)ing on the parties or hasbeen set asi)e or suspen)e) b' a court of the countr' inwhich, or un)er the law of which, that awar) was +a)e.

Recognition an) enforce+ent of an arbitral awar) +a' also be

refuse) if the Regional -rial *ourt where recognition an)

enforce+ent is sought fin)s that3

%a& the sub4ect+atter of the )ispute is not capable ofsettle+ent b' arbitration un)er the law of Philippines or

%b& the recognition or enforce+ent of the awar) woul) becontrar' to the public polic' of the Philippines.

A part' to a foreign arbitration procee)ing +a' oppose anapplication for recognition an) enforce+ent of the arbitral awar) inaccor)ance with the Special A"R Rules onl' on the groun)s

25


26/54

enu+erate) un)er paragraph %a& an) %c& of Article $.5%Recognition and Enforcement&. An' other groun) raise) shall be

)isregar)e) b' the Regional -rial *ourt.


27/54

hisher choice3 Pro!i)e), that such representati!e, unless a)+itte)to the practice of law in the Philippines, shall not be authorie) to

appear as counsel in an' Philippine court or an' other =uasi4u)icialbo)' whether or not such appearance is in relation to thearbitration in which heshe appears.

Ar)-,e 4.4*.Confidentially of Arbitration Proceedings. -hearbitration procee)ings, inclu)ing the recor)s, e!i)ence an) the

arbitral awar), shall be consi)ere) confi)ential an) shall not bepoolsi)e e6cept3

%a& with the consent of the parties or

%b& for the li+ite) purpose of )isclosing to the courtrele!ant )ocu+ents in cases where resort to the court is

allowe) herein.

Pro!i)e), howe!er, that the court in which the action or the appealis pen)ing +a' issue a protecti!e or)er to pre!ent or prohibit

)isclosure of )ocu+ents or infor+ation containing secretprocesses, )e!elop+ents, research an) other infor+ation where itis shown that the applicant shall be +ateriall' pre4u)ice) b' an

authorie) )isclosure thereof.

Ar)-,e 4.42.Summary nature of proceedings before the court. A

petition for recognition an) enforce+ent of awar)s brought beforethe court shall be hear) an) )ealt with su++aril' in accor)ancewith the Special A"R Rules.

Ar)-,e 4.4.Death of a Party. @here a part' )ies after +aking a

sub+ission or a contract to arbitrate as prescribe) in these Rules,the procee)ings +a' be begun or continue) upon the application

of, or notice to, hisher e6ecutor or a)+inistrator, or te+porar'a)+inistrator of hisher estate. n an' such case, the court +a'issue an or)er e6ten)ing the ti+e within which notice of a +otionto recognie or !acate an awar) +ust be ser!e). >pon recogniingan awar), where a part' has )ie) since it was file) or )eli!ere),the court +ust enter 4u)ge+ent in the na+e of the original part'

an) the procee)ings thereupon are the sa+e as where a part' )iesafter a !er)ict.

Ar)-,e 4.44.&ulti-Party Arbitration. @hen a single arbitrationin!ol!es +ore than two parties, the foregoing rules, to the e6tent

possible, shall be use), sub4ect to such +o)ifications consistentwith this *hapter as the arbitral tribunal shall )ee+ appropriate toa))ress possible co+ple6ities of a +ultipart' arbitration.

Ar)-,e 4.4&.Consolidation of Proceedings and Concurrent1earings. B -he parties an) the arbitral tribunal +a' agree B

%a& that the arbitration procee)ings shall be consoli)ate)with other arbitration procee)ings or

%b& that concurrent hearings shall be hel), on such ter+s as

+a' be agree).

>nless the parties agree to confer such power on the arbitral

tribunal, the tribunal has no power to or)er consoli)ation ofarbitration procee)ings or concurrent hearings.

Ar)-,e 4.45.Costs.%a& -he arbitral tribunal shall fi6 the costs ofarbitration in its awar). -he ter+ costs inclu)e onl'3

%i& -he fees of the arbitral tribunal to be state)separatel' as to each arbitrator an) to be fi6e) b'the tribunal itself in accor)ance with the paragraph%b& of this Article

%ii& -he tra!el an) other e6penses incurre) b' thearbitrators

%iii& -he costs of e6pert a)!ice an) of otherassistance re=uire) b' the arbitral tribunal

%i!& -he tra!el an) other e6penses of witnesses tothe e6tent such e6penses are appro!e) b' the

arbitral tribunal

%!& -he costs for legal representation an) assistance

of the successful part' if such costs were clai+e))uring the arbitral procee)ings, an) onl' to the

27


28/54

e6tent that the arbitral tribunal )eter+ines that thea+ount of such costs is reasonable

%!:& An' fees an) e6penses of the appointingauthorit'.

%b& -he fees of the arbitral tribunal shall be reasonable ina+ount, taking into account the a+ount in )ispute, the

co+ple6it' of the sub4ect +atter, the ti+e spent b' thearbitrators an) an' other rele!ant circu+stances of thecase.

f an appointing authorit' has been agree) upon b' the parties an)

if such authorit' has issue) a sche)ule of fees for arbitrators ininternational cases which it a)+inisters, the arbitral tribunal in

fi6ing its fees shall take that sche)ule of fees into account to thee6tent that it consi)ers appropriate in the circu+stances of thecase.

f such appointing authorit' has not issue) a sche)ule of fees forarbitrators in international cases, an' part' +a', at an' ti+ere=uest the appointing authorit' to furnish a state+ent setting

forth the basis for establishing fees which is custo+aril' followe) ininternational cases in which the authorit' appoints arbitrators. fthe appointing authorit' consents to pro!i)e such a state+ent, thearbitral tribunal, in fi6ing its fees, shall take such infor+ation intoaccount to the e6tent that it consi)ers appropriate in thecircu+stances of the case.

%c& n cases referre) to in the secon) an) thir) sub

paragraphs of paragraph %b& of this Article, when a part' sore=uests an) the appointing authorit' consents to perfor+the function, the arbitral tribunal shall fi6 its fees onl' afterconsultation with the appointing authorit' which +a' +akean' co++ent it )ee+s appropriate to the arbitral tribunal

concerning the fees.

%)& 76cept as pro!i)e) in the ne6t subparagraph of this

paragraph, the costs of arbitration shall, in principle, beborne b' the unsuccessful part'. Fowe!er, the arbitraltribunal +a' apportion each of such costs between the

parties if it )eter+ines that apportion+ent is reasonable,taking into account the circu+stances of the case.

@ith respect to the costs of legal representation an) assistancereferre) to in paragraph %c& of paragraph %a& %iii& of this Article, the

arbitral tribunal, taking into account the circu+stances of the case,shall be free to )eter+ine which part' shall bear such costs or +a'apportion such costs between the parties if it )eter+ines that

appoint+ent is reasonable.

@hen the arbitral tribunal issues an or)er for the ter+ination of thearbitral procee)ings or +akes an awar) on agree) ter+s, it shall

fi6 the costs of arbitration referre) to in paragraphs %b&, %c& an) %)&of this Article in the conte6t of that or)er or awar).

%e& -he arbitral tribunal, on its establish+ent, +a' re=uesteach part' to )eposit an e=ual a+ount as an a)!ance forthe costs referre) to in paragraphs %i&, %ii& an) %iii& ofparagraph %a& of this Article.

"uring the course of the arbitral procee)ings, the arbitral tribunal+a' re=uest supple+entar' )eposits fro+ the parties.

f an appointing authorit' has been agree) upon b' the parties an)when a part' so re=uests an) the appointing authorit' consents to

perfor+ the function, the arbitral tribunal shall fi6 the a+ounts ofan' )eposits or supple+entar' )eposits onl' after consultation withthe appointing authorit' which +a' +ake an' co++ents to thearbitral tribunal which it )ee+s appropriate concerning the a+ount

of such )eposits an) supple+entar' )eposits.

f the re=uire) )eposits are not pai) in full within thirt' %#& )a's

after receipt of the re=uest, the arbitral tribunal shall so infor+ theparties in or)er that the re=uire) pa'+ent +a' be +a)e. f suchpa'+ent is not +a)e, the arbitral tribunal +a' or)er thesuspension or ter+ination of the arbitral procee)ings.

After the awar) has been +a)e, the arbitral tribunal shall ren)eran accounting to the parties of the )eposits recei!e) an) return

an' une6pen)e) balance to the parties.

28


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CHAPTER &DOMESTIC AR


30/54

the sa+e )ate of its trans+ittal an) receipt in the +ailbo6%electronic inbo6&.

Ar)-,e &..'aier of Right to #b+ect.%a& A part' shall be )ee+e)to ha!e wai!e) his right to ob4ect to nonco+pliance with an' non

+an)ator' pro!ision of these Rules %fro+ which the parties +a')erogate& or an' re=uire+ent un)er the arbitration agree+entwhen3

%i& hesheit knows of such nonco+pliance an)

%ii& procee)s with the arbitration without statinghisherits ob4ections to such nonco+pliance

without un)ue )ela' or if a ti+eli+it is pro!i)e)therefor, within such perio) of ti+e.

%b& f an act is re=uire) or allowe) to be )one un)er this*hapter, unless the applicable rule or the agree+ent of theparties pro!i)es a )ifferent perio) for the act to be )one, it

shall be )one within a perio) of thirt' %#& )a's fro+ the)ate when such act coul) ha!e been )one with legal effect.

Ar)-,e &.4.Extent of Court (nterention. n +atters go!erne) b'this *hapter, no court shall inter!ene e6cept in accor)ance with theSpecial A"R Rules.

Ar)-,e &.&.Court or #ther Authority for Certain %unctions ofArbitration Assistance and Superision. -he functions referre) to in

paragraphs %c& an) %)& of Article 5.:# %Appoint+ent of Arbitrators&,paragraph %a& of Article 5.:: %0roun)s for *hallenge&, an)

paragraph %a& of Article 5.: %


31/54

has no power to act or is unable to act effecti!el', there=uest +a' be +a)e with the court.

%c& -he following rules on interi+ or pro!isional relief shallbe obser!e)3

%i& An' part' +a' re=uest that interi+ or pro!isionalrelief be grante) against the a)!erse part'.

%ii& Such relief +a' be grante)3

%aa& -o pre!ent irreparable loss or in4ur'

%bb& -o pro!i)e securit' for the perfor+anceof an obligation

%cc& -o pro)uce or preser!e e!i)ence or

%))& -o co+pel an' other appropriate act or

o+issions.

%iii& -he or)er granting pro!isional relief +a' be

con)itione) upon the pro!ision of securit' or an' actor o+ission specifie) in the or)er.

%i!& nteri+ or pro!isional relief is re=ueste) b'written application trans+itte) b' reasonable +eansto the arbitral tribunal an) the part' against who+relief is sought, )escribing in appropriate )etail of

the precise relief, the part' against who+ the relief

is re=ueste), the groun) for the relief, an) thee!i)ence supporting the re=uest.

%!& -he or)er either grating or )en'ing an applicationfor interi+ relief shall be bin)ing upon the parties.

%!i& 7ither part' +a' appl' with the court forassistance in i+ple+enting or enforcing an interi++easure or)ere) b' an arbitral tribunal.

%!ii& A part' who )oes not co+pl' with the or)ershall be liable for all )a+ages, resulting fro+

nonco+pliance, inclu)ing all e6penses, an)reasonable attorne'Ds fees, pai) in obtaining theor)erDs 4u)icial enforce+ent.

%)& >nless otherwise agree) b' the parties, the arbitraltribunal +a', at the re=uest of a part', or)er an' part' to

take such interi+ +easures of protection as the arbitraltribunal +a' consi)er necessar' in respect of the sub4ect+atter of the )ispute following the Rules in this Article.Such interi+ +easures +a' inclu)e but shall not be li+ite)to preli+inar' in4unction )irecte) against a part',appoint+ent of recei!ers or )etention, preser!ation,inspection of propert' that is the sub4ect of the )ispute in

arbitration. 7ither part' +a' appl' with the court forassistance in i+ple+enting or enforcing an interi+ +easureor)ere) b' an arbitral tribunal.

RULE . C$($!-)-$ $# Ar6-)r, Tr-6,

Ar)-,e &.9.*umber of Arbitrators. -he parties are free to)eter+ine the nu+ber of arbitrators.


32/54

arbitration or in the sub+ission, a pro!ision is +a)e for a+etho) of appointing an arbitrator or arbitrators, such

+etho) shall be followe).

%c&


33/54

wh' it is unable to )o so, in which later case, the proce)ure)escribe) un)er Article 5.5 %*ourt or ?ther Authorit' for

*ertain


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@ithin the afore+entione) perio)s, the part' seeking the e6tensionshall pro!i)e the appointing authorit' an) the a)!erse part' with a

cop' of the appoint+ent of hisher arbitrator, the latterDscurriculu+ !itae, an) the latterDs acceptance of the appoint+ent. nthe e!ent that the sai) part' fails to appoint an arbitrator withinsai) perio), the appointing authorit' shall +ake the )efault

appoint+ent.

%o& An arbitrator, in accepting an appoint+ent, shall inclu)e,in hisher acceptance letter, a state+ent that3

%i& heshe agrees to co+pl' with the applicable law,

the arbitration rules agree) upon b' the parties, or in)efault thereof, these Rules, an) the *o)e of 7thicsfor Arbitrators in "o+estic Arbitration, if an'

%ii& heshe accepts as co+pensation the arbitratorDsfees agree) upon b' the parties or as )eter+ine) inaccor)ance with the rules agree) upon b' the

parties, or in )efault thereof, these Rules an)

%iii& he agrees to )e!ote as +uch ti+e an) attention

to the arbitration as the circu+stances +a' re=uirein or)er to achie!e the ob4ecti!e of a spee)',effecti!e an) fair resolution of the )ispute.

Ar)-,e &.**.)rounds for Challenge.%a& @hen a person isapproache) in connection with hisher possible appoint+ent as anarbitrator, heshe shall )isclose an' circu+stance likel' to gi!e rise

to 4ustifiable )oubts as to hisher i+partialit', in)epen)ence,=ualifications an) )is=ualifications. An arbitrator, fro+ the ti+e of

hisher appoint+ent an) throughout the arbitral procee)ings, shallwithout )ela', )isclose an' such circu+stances to the partiesunless the' ha!e alrea)' been infor+e) of the+ b' hi+her.

A person, who is appointe) as an arbitrator notwithstan)ing the)isclosure +a)e in accor)ance with this Article, shall re)uce the)isclosure to writing an) pro!i)e a cop' of such written )isclosure

to all parties in the arbitration.

%b& An arbitrator +a' be challenge) onl' if3

%i& circu+stances e6ist that gi!e rise to 4ustifiable)oubts as to hisher i+partialit' or in)epen)ence

%ii& heshe )oes not possess =ualifications aspro!i)e) for in this *hapter or those agree) to b'

the parties

%iii& heshe is )is=ualifie) to act as arbitration un)er

these Rules

%i!& he refuses to respon) to =uestions b' a part'regar)ing the nature an) e6tent of his professional)ealings with a part' or its counsel.

%c& f, after appoint+ent but before or )uring hearing, aperson appointe) to ser!e as an arbitrator shall )isco!er

an' circu+stances likel' to create a presu+ption of bias, orwhich heshe belie!es +ight )is=ualif' hi+her as ani+partial arbitrator, the arbitrator shall i++e)iatel' )isclose

such infor+ation to the parties. -hereafter, the parties +a'agree in writing3

%i& to wai!e the presu+pti!e )is=ualif'ingcircu+stances or

%ii& to )eclare the office of such arbitrator !acant.

An' such !acanc' shall be file) in the sa+e +annerthe original appoint+ent was +a)e.

%)& After initial )isclosure is +a)e an) in the course of the

arbitration procee)ings, when the arbitrator )isco!erscircu+stances that are likel' to create a presu+ption ofbias, heshe shall i++e)iatel' )isclose those circu+stancesto the parties. A written )isclosure is not re=uire) where itis +a)e )uring the arbitration an) it appears in a written

recor) of the arbitration procee)ings.

%e& An arbitrator who has or has ha) financial or

professional )ealings with a part' to the arbitration or to thecounsel of either part' shall )isclose in writing such fact tothe parties, an) shall, in goo) faith, pro+ptl' respon) to

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=uestions fro+ a part' regar)ing the nature, e6tent an) ageof such financial or professional )ealings.

Ar)-,e &.*2.Challenge Procedure. %a& -he parties are free toagree on a proce)ure for challenging an arbitrator, sub4ect to the

pro!isions of paragraph %c& of this Article.

%b&


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%n& 7!er' co++unication re=uire) or agree+ent +a)eun)er this Article in respect of a challenge shall be

)eli!ere), as appropriate, to the challenge) arbitrator, tothe parties, to the re+aining +e+bers of the arbitraltribunal an) to the institution a)+inistering the arbitration,if an'.

%+& A challenge) arbitrator shall be replace) if3

%i& heshe with)raws as arbitrator, or

%ii& the parties agree in writing to )eclare the officeof arbitrator !acant, or

%iii& the arbitral tribunal )eci)es the challenge an))eclares the office of the challenge) arbitrator

!acant, or

%i!& the appointing authorit' )eci)es the challenge

an) )eclares the office of the challenge) arbitrator!acant, or

%!& in )efault of the appointing authorit', the court)eci)es the challenge an) )eclares the office of thechallenge) arbitrator !acant.

%n& -he )ecision of the parties, the arbitral tribunal, theappointing authorit', or in proper cases, the court, to acceptor re4ect a challenge is not sub4ect to appeal or +otion for

reconsi)eration.

%o& >ntil a )ecision is +a)e to replace the arbitrator un)er

this Article, the arbitration procee)ing shall continuenotwithstan)ing the challenge, an) the challenge) arbitratorshall continue to participate therein as an arbitrator.Fowe!er, if the challenge inci)ent is raise) before the court,because the parties, the arbitral tribunal or appointingauthorit' faile) or refuse) to act within the perio) pro!i)e)

in paragraphs %4& an) %k& of this Article, the arbitrationprocee)ing shall be suspen)e) until after the court shallha!e )eci)e) the inci)ent. -he arbitration shall be continue)

i++e)iatel' after the court has )eli!ere) an or)er on thechallenging inci)ent. f the court agrees that the challenge)

arbitrator shall be replace), the parties shall i++e)iatel'replace the arbitrator concerne).

%p& -he appoint+ent of a substitute arbitrator shall be +a)epursuant to the proce)ure applicable to the appoint+ent ofthe arbitrator being replace).

Ar)-,e &.*.%ailure or (mpossibility to Act.%a& f an arbitratorbeco+es de +ureor de factounable to perfor+ hisher functions orfor other reasons fails to act without un)ue )ela', hisher +an)ate

ter+inates if heshe with)raws fro+ hisher office or if the partiesagree on the ter+ination. ?therwise, if a contro!ers' re+ainsconcerning an' of these groun)s, an' part' +a' re=uest theappointing authorit' to )eci)e on the ter+ination of the +an)ate,

which )ecision shall be i++e)iatel' e6ecutor' an) not sub4ect toappeal or +otion for reconsi)eration.

%b& f, un)er this Article or Article 5.:2 %*hallenge Proce)ure&, anarbitrator with)raws fro+ hisher office or a part' agrees to theter+ination of the +an)ate of an arbitrator, this )oes not i+pl'acceptance ?f the !ali)it' of an' groun) referre) to in this Article5.:2.

Ar)-,e &.*4.Appointment of Substitute Arbitrator. @here the+an)ate of an arbitrator ter+inates un)er Articles 5.:2 %*hallengeProce)ure& or 5.: %


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%i& the arbitration agree+ent is in e6istent, !oi),unenforceable or not bin)ing upon a person for an'

reason, inclu)ing the fact that the a)!erse part' isnot pri!' to sai) agree+ent or

%ii& the )ispute is not arbitrable or is outsi)e thescope of the arbitration agree+ent or

%iii& the )ispute is un)er the original an) e6clusi!e4uris)iction of a court or =uasi4u)icial bo)',

%b& f a part' raises an' of the groun)s for ob4ection, thesa+e shall not preclu)e the appoint+ent of the arbitrators

as such issue is for the arbitral tribunal to )eci)e.

-he participation of a part' in the selection an) appoint+ent

of an arbitrator an) the filling of appropriate plea)ingsbefore the arbitral tribunal to =uestion its 4uris)iction shallnot be construe) as a sub+ission to the 4uris)iction of the

arbitral tribunal or of a wai!er of hisherits right to assertsuch groun)s to challenge the 4uris)iction of the arbitraltribunal or the !ali)it' of the resulting awar).

%c& -he respon)ent in the arbitration +a' in!oke an' suchgroun)s to =uestion before the court the e6istence, !ali)it',

or enforceabilit' of the arbitration agree+ent, or thepropriet' of the arbitration, or the 4uris)iction of thearbitrator an) in!oke the pen)enc' of such action as groun)for suspension of the arbitration procee)ing. -he arbitral

tribunal, ha!ing regar) to the circu+stances of the case,an) the nee) for the earl' an) e6pe)itious settle+ent of the

)ispute, in light of the facts an) argu+ents raise) to=uestion its 4uris)iction, +a' )eci)e either to suspen) thearbitration until the court has +a)e a )ecision on the issueor continue with arbitration.

%)& f a )ispute is, un)er an arbitration agree+ent, to besub+itte) to arbitration, but before arbitration is

co++ence) or while it is pen)ing, a part' files an actionbefore the court which e+bo)ies or inclu)es as a cause ofaction the )ispute that is to be sub+itte) to arbitration the

filling of such action shall not pre!ent the co++ence+ent ofthe arbitration or the continuation of the arbitration until the

awar) is issue).

Ar)-,e &.*5Po$er of Arbitral "ribunal to #rder (nterim &easures.

%a& >nless otherwise agree) b' the parties, the arbitral tribunal+a', at the re=uest of a part', or)er an' part' to take such interi++easures of protection as the arbitral tribunal +a' consi)er

necessar' in respect of the sub4ect +atter of the )ispute followingthe rules in this Article. Such interi+ +easures +a' inclu)e, butshall not be li+ite) to preli+inar' in4unction )irecte) against apart', appoint+ent of recei!ers or )etention preser!ation,inspection of propert' that is the sub4ect of the )ispute inarbitration.

%b& After the constitution of the arbitral tribunal, an) )uring

arbitral procee)ings, a re=uest for interi+ +easures ofprotection, or +o)ification thereof, shall be +a)e with the

arbitral tribunal. -he arbitral tribunal is )ee+e) constitute)when the sole arbitrator or the thir) arbitrator, who hasbeen no+inate), has accepte) the no+ination an) writtenco++unication of sai) no+ination an) acceptance has been

recei!e) b' the part' +aking the re=uest.

%c& -he following rules on interi+ or pro!isional relief shall

be obser!e)3

%i& An' part' +a' re=uest that the pro!isional or

interi+ relief be grante) against the a)!erse part'.

%ii& Such relief +a' be grante)3

%aa& -o pre!ent irreparable loss or in4ur'

%bb& -o pro!i)e securit' for the perfor+ance

of an obligation

%cc& -o pro)uce or preser!e e!i)ence or

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%))& -o co+pel an' other appropriate act oro+issions.

%iii& -he or)er granting pro!isional relief +a' becon)itione) upon the pro!ision of securit' or an' act

or o+ission specifie) in the or)er.

%i!& nteri+ or pro!isional relief is re=ueste) b'

written application trans+itte) b' reasonable +eansto the arbitral tribunal an) the part' against who+relief is sought, )escribing in appropriate )etail theprecise relief, the part' against who+ the relief is

re=ueste), the groun) for the relief an) the e!i)encesupporting the re=uest.

%!& -he or)er either granting or )en'ing anapplication for interi+ relief shall be bin)ing uponthe parties.

Documents

Department Circular No. 98-Irr of Adr Act of 2004