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Telefax: 822-4102Email: secretariat@pdrci.orgWebsite: www.pdrci.org

OfficerSAtty. Miguel B. VarelaChairmanAtty. Victor P. LazatinVice Chairman for Internal AffairsAtty. Eduardo R. CenizaVice Chairman for External AffairsMr. Gregorio S. NavarroPresidentAtty. Beda G. FajardoVice-President for Internal Affairs

Atty. Salvador S. Panga, Jr.Vice-President for External Affairs

Atty. Roberto N. DioSecretary GeneralAtty. Shirley F. AlineaDeputy Secretary GeneralAtty. Donemark Joseph L. CalimonTreasurerDr. Eduardo G. OngAssistant TreasurerAtty. Patricia-Ann T. ProdigalidadCorporate Secretary

Atty. Ricardo Ma. P.G. OngkikoAssistant Corporate SecretaryCJ Artemio V. PanganibanChaiman EmeritusAtty. Custodio O. ParladePresident Emeritus

BOard Of truSteeSAtty. Shirley F. AlineaAtty. Arthur P. AuteaAtty. Donemark Joseph L. CalimonEngr. Salvador P. Castro, Jr.Atty. Eduardo R. CenizaAtty. Gwen B. Grecia De VeraAtty. Roberto N. DioAtty. Beda G. FajardoAtty. Simeon G. HildawaAtty. Victor P. LazatinMr. Gregorio S. NavarroAtty. Rogelio C. NicandroDr. Eduardo G. OngAtty. Ricardo Ma. P. G. OngkikoAtty. Victoriano V. OrocioAtty. Salvador P. Panga, Jr.Atty. Patricia C. ProdigalidadASG Reynaldo L. SaludaresAtty. Edmund L. TanProf. Mario E. ValderramaAtty. Miguel B. Varela

The PhiliPPine

ADR ReviewBroadening its scope of arbitration advocacy

WhAT’S iNSiDE1 Philippines hosts 12th ASEAN General Assembly and ADR Workshop

2-3 The 2014 IBA Guidelines on Conflicts of Interest in International Arbitration

4 PDRCi adopts iBA Guidelines on Party Representation

Member Spotlight: Atty. Rio Sesinando E. Venturanza

Philippines hosts 12th aSeaN General assembly and adr WorkshopBy John Philip A. Baltazar

The Philippines hosted to the 12th General Assembly and Governing Council Meeting of ASEAN Law Association (ALA), which convened on February 25 to 28, 2015 at the Shangri-La Makati and on March 1 to 2, 2015 in Boracay.

One key activity of the General Assembly was the Workshop on Alternative Dispute Resolution (ADR) held on February 26. The Workshop was chaired by Mr. Lawrence Boo of Singapore, with former PDRCI President Victor Lazatin as co-chair.

During the Workshop, the participants presented the leading paper with the theme Strengthening ADR Mechanisms for ASEAN Integration. Following this theme, other papers presented at the Workshop dealt with such topics as: Accessibility, Costs and Third-Party Funding, the Role of National Courts in ADR, Transparency and Ethics in ADR, ADR Options in Investment Disputes Other than ICSID Arbitration, and Online Dispute Resolution. A number of chief justices from all over the ASEAN countries attended the Workshop.

The ALA comprises Brunei, Indonesia, Cambodia, Malaysia, Myanmar, Singapore, Thailand, Vietnam, Laos, and the Philippines as member nations. This year’s ALA General Assembly has been called truly historic, considering that ALA has pioneered mutual cooperation among members of the legal profession in the ASEAN, initiated harmonization of laws, and fostered free trade and cross-border dispute resolution. The ALA is the only civil society organization for law expressly designated as an affiliate in the 2007 ASEAN Charter.

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The 2014 IBA Guidelines on Conflicts of Interest in international arbitrationBy: Camille Khristine I. Aromas and Grace Anne C. Lazaro

On 23 October 2014, the International Bar Association (IBA) Council adopted the 2014 IBA Guidelines on Conflicts of Interest in International Arbitration (“2014 Guidelines”) to address the evolution of the global practice of international arbitration, including a number of issues that have received attention in international arbitration practice since the IBA Guidelines were first issued in 2004 (“2004 Guidelines”).

The 2014 Guidelines were drafted by the IBA Conflicts of Interest Subcommittee (“IBA Subcommittee”) composed of 27 arbitrators and arbitration practitioners based on the accumulated experience of parties and arbitration practitioners since that time. A review of the 2004 Guidelines was initiated in 2012 with the view that the Guidelines will “continue to be the leading reference point for parties, arbitrators and institutions on conflicts of interest issues and indeed reflect any new issues and concerns that may have arisen since their development.”

While the 2014 Guidelines were intended to address a number of issues, they do not substantially deviate from the 2004 Guidelines. Instead, the 2014 Guidelines made certain refined changes to address uncertainties as to their application and reflect the evolving standards and complexity in the analysis of disclosure and conflict of interest issues.

Several issues were also revisited, such as the “effects of so-called ‘advance waivers’, whether the fact of acting concurrently as counsel and arbitrator in unrelated cases raising similar legal issues warrants disclosure, ‘issue’ conflicts, the independence and impartiality of arbitral or administrative secretaries, and third-party funding.”

The 2014 Guidelines also sought to clarify that the Guidelines apply to both commercial and investment arbitration, and to both legal and non-legal professionals serving as arbitrators. The 2014 Guidelines likewise emphasize that the requirement of disclosure does not per se imply the existence of doubt as to the impartiality or independence of the arbitrator. However, disclosure is now required for certain circumstances not contemplated in the 2004 Guidelines.

Some of the key revisions are:

1. The arbitrator bears the identity of the firm.

General Standard 6(a) of the 2014 Guidelines provides new language by expressly stating that the “arbitrator is in principle considered to bear the identity of his or her law firm.” However, it maintains that “the fact that the activities of the arbitrator’s firm involve one

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About the Authors

of the parties shall not necessarily constitute a source of such conflict or a reason for disclosure.” This new language suggests that assessments must be made on a case-by-case basis where the “relevance of the activities of the arbitrator’s law firm, such as the nature, timing and scope of the work by the law firm, and the relationship of the arbitrator with the law firm” ought to be considered. [General Standard (6)(a) Explanation].

The IBA Subcommittee further explains that this standard endeavors to strike a balance between the interest of the parties to appoint the arbitrator of their choice, who may be a partner at a large law firm, and the effective implementation of the duty of impartiality and independence of all arbitrators.

2. Parties who have third-party funding arrangements must disclose the existence of such funding.

Under the 2004 Guidelines, when a party is a legal entity, its managers, directors or members of its supervising board are “considered to be the equivalent” of such legal entity (see General Standard 6[c]). The 2014 Guidelines extend the coverage of persons or entities which are “considered to bear the identity” of a party to those who have “direct economic interest in, or a duty to indemnify a party for, the award to be rendered in the arbitration” [see General Standard 6(b)].

The 2014 Guidelines explain that, in light of this revision, “third-party funders” or “insurers in relation to the dispute,” i.e., person or entity that is contributing funds, or other material support, to the prosecution or defense of the case and that has a direct economic interest in, or a duty to indemnify a party for, the award to be rendered in the arbitration, now bear the identity of a party.

Therefore, the existence of such funding arrangements, as well as the identity of the third-party funders, should now be disclosed and considered in determining whether an arbitrator has a conflict of interest. Previously, parties were not under an obligation to disclose the fact that they were receiving third-party funding. On this note, when an arbitrator “bears the identity of a party,” parties cannot waive the conflict of interest arising from such situation (see Non-Waivable Red List).

3. The 2014 Guidelines apply to investment arbitration and to non-lawyers serving as arbitrators.

To address the lingering uncertainty on their application, the 2014 Guidelines made it clear that the Guidelines apply to (a) both commercial and investment arbitration; and (b) both legal and non-legal professionals serving as arbitrator.

Further to this clarification, the 2014 Guidelines extended the duty of independence and impartiality (including the duty of disclosure) to arbitral or administrative secretaries and assistants (see General Standard 5[b]). In view of this, arbitrators now have the duty to carefully consider their administrative staff or secretaries.

Next issue: Effect of advance waiver of challenge to arbitrators, party’s duty to disclose its counsel, allowing arbitrators to assist in the settlement of disputes, and clarifications of and revisions to the Orange and Green Lists.

The authors are associate attorneys of Quisumbing Torres, a member firm of Baker & McKenzie International in Manila. They specialize in litigation and commercial arbitration.

Camille Khristine I. Aromas (left) studied economics and law at the University of the Philippines Diliman, while Grace Anne C. Lazaro studied law at the same school, where she received the Dean’s Medal for Academic Excellence. They were certified as lawyers in 2010 and 2013.

ThE PhiLiPPiNE ADR REViEW | FEBRuARy 2015

atty. rio Venturanza is the co-managing partner of Tan Ven-turanza Valdez law offices. His firm specializes in securities, tax, and cor-porate law.

He is also a trained commercial arbi-trator. Currently, he serves as direc-tor of Palm Concepcion Power Cor-poration, Peakpower San Francisco, Inc., Peakpower Soccsargen, Inc., Fuji-Haya International Corporation, and T&V Realty Corporation, among other companies.

He acts as corporate secretary of Sta. Clara International Corporation, Professional Parking and Manage-ment Corporation, Parkwise Philip-pines, Inc., Meridian Securities, Inc., and Red Dragon Culinary Concepts, Inc.

Atty. Venturanza studied economics in 1978 and law in 1982 at the Univer-sity of the Philippines in Diliman. He is a member of the U.P. Beta Sigma Alumni Association and is a director of the U.P. Law Class 82 Foundation, Inc. As a member of the Integrated Bar of the Philippines and the Inter Pacific Bar Association

Before joining his current firm, he was as an associate attorney of Quiason Makalintal Barot and Torres law firm, and later worked as a labor attorney of the Philippine National Oil Company.

His fields of practice include prop-erty and housing law, oil and gas, mining, and public utilities.

The Philippine ADR Review is a publication of the Philippine Dispute Resolution Center, Inc. All rights reserved. No part of the newsletter may be reproduced in any form without the written permission of the authors.

THE PHILIPPINE ADR REVIEW PUBLISHES MATTERS OF LEGAL INTEREST TO PDRCI’S MEMBERS AND READERS. THE ARTICLES PRINTED IN THE REVIEW CONTAIN INDIVIDUAL VIEWS OF THE AUTHORS AND DO NOT STATE PDRCI’S POLICY. CONTRIBUTIONS MAY BE SENT TO THE PDRCI SECRETARIAT. ALL MATERIALS SUBMITTED FOR PUBLICATION BECOME PROPERTY OF PDRCI AND ARE SUBJECT TO EDITORIAL REVIEW AND REVISIONS. TEXTS OF ORIGINAL LEGAL MATERIALS DIGESTED ARE AVAILABLE UPON REQUEST.

MEMBER SPOTLiGhT

rOBertO N. diO Editor

ShirleY aliNea and dONemark calimON

Contributors

arVeeN N. aGuNdaY, leONid c. NOlaScO, eric d. laVadia, and rickY a. SaBOrNaY

Staff Writers

Pdrci adopts iBa Guidelines on Party representation

At its meeting on February 16, 2015, PDRCI’s Board of Trustees approved the recommendation of the Secretary General Roberto Dio to adopt the Guidelines on Party representation adopted by the International Bar Association (IBA) on May 25, 2013.

The proposal to adopt the Guidelines was originally made by Trustee Donemark Calimon in late 2013 and recommended by Mr. Dio early last year. Before acting on the proposal, the Board required that it be sufficiently published and discussed. The recommendation was renewed at the last Board meeting, exactly one year after it was first made.

The Guidelines were adopted by IBA to address the diverse and conflicting domestic rules on professional conduct in international arbitration. It aims to reconcile the range of rules that may apply, which may include those of a party representative’s home jurisdiction, the arbitral seat, and the place where the arbitration is held. The Guidelines recognize that domestic rules developed for judicial litigation are ill suited to international commercial arbitration die to legal and cultural differences and the complex, multinational nature of the disputes.

The Guidelines are inspired by the principle that party representatives should act with integrity and should not engage in activities designed to produce unnecessary delay and expense, including tactics aimed at obstructing the arbitration. They offer the tribunal an approach to the to the issue of party representation designed to account for the multi-faceted nature of international arbitration, in lieu of a choice-of-law rule or a private international law analysis in choosing the applicable domestic or national rule.

PDRCI will feature in the next two issues a summary of the Guidelines.