CHAPTER 1.

- INTRODUCTION

During the term of Justice Artemio Panganiban as the then Chief Justice of the Supreme Court,
his main concern in the acute judiciary problem is what he calls it ACID, i.e., (1) limited Access to
justice by the poor due to financial constraint, (2) Corruption, (3) Incompetence in the conduct
of hearing and rendition of judgments, and (4) Delay in the delivery of quality judgments.

There are times also that contending/adversarial parties just because they have the financial
means, are so prone to have their legal controversy filed with court - which filing of case of
course entails expenses such as acceptance fee and appearances fee of their own respective
lawyer, filing fee for the plaintiff, and among other expenses relative to court litigations. This
renders the parties as "over-sue", the court as “overuse", and at times also renders the court as
"misused” because there are unscrupulous parties who use the court to harass the other party
or worse use the court as collecting agency particularly in collection of sum of money.

To avoid this ACID and the "over-sue" by the parties and the "overused and misued" of the
court, as an alternative to court litigations, came into existence of the Alternative Dispute
Resolution (ADR) system with which the disputing parties can voluntary agree to settle their
dispute through any of the several means under the ADR system such as conciliation,
mediation, arbitration, early neutral evaluation. mini-trial and any combination thereof (e.g.,
mediation-arbitration). In other words, ADR system is an out-of-court settlement of dispute
between parties. Among the ADR system, mediation and arbitration are the most popular.

Under the ADR system, the parties are given the freedom how to resolve their dispute which
freedom provides for the avenue of bright possibility of amicably settling their dispute. In fact,
there is here the P2.5 billion case involving Pacific Plaza Towers, Inc. built in Fort Bonifacio by
Metro Pacific Corporation where it was resolved through ADR system within a month. Another
P2.5 billion case is the Skyway Project in Alabang which was resolved also within a month. So,
you can now realize the beauty behind ADR system and you can also imagine the years of court
litigation if the legal controversy in those two (2) billion pesos cases were coursed through
judicial process.
Disputes among persons are inherent and cannot be avoided. There are two ways to resolve
this dispute, i.e., through court or outside court. In resolving disputes outside court, we have
the alternative dispute resolution (ADR) which the parties can voluntarily agree to undergo -
and it is alternative as it is alternative way of settling disputes instead of court litigation. In ADR,
I said voluntary because one disputant cannot force the other disputant to settle their dispute
through any of the several means provided under the ADR system - viz., the disputants must
voluntarily agree to settle their dispute through any of the means under the ADR system,
without such agreement, the ADR system cannot intervene between them. ADR system can be
conciliation, mediation, arbitration, early neutral evaluation, mini-trial, or any combination
thereof (e.g., mediation-arbitration). However, there are instances of ADR system which are
compulsory for the disputing parties to undergo, i.e., the mediation by Katarungang
Pambarangay under the Local Government Code, the arbitration of labor action under the Labor
Code and the judiciary court-annexed mediation

 ADR SYSTEMS SUPPORTED UNDER THE PHILIPPINE SETTING

1. ADR SYSTEM ENACTED BY THE LEGISLATIVE DEPARTMENT
(a) Compromises and Arbitration on civil cases under the Civil Code (Articles 2028 to 2046
NCC)
(1) Compromises
(a) Article 2028 NCC: A compromise is a contract whereby the parties in resolving
their dispute enters into a voluntary compromise agreement - thereby avoiding a
future court litigation, or to end the existing court litigation
(b) Article 2034 NCC: In criminal cases, there could be compromise agreement
between the private complainant and the accused but only on the civil aspect of
the criminal action (i.e., a compromise on civil damages such as moral damages,
compensatory damages such as medical and hospitalization expenses of the
victim of crime, death indemnity in case the victim died, and among other civil
liabilities)
(c) Article 2035 NCC: No compromise agreement can be valid upon the following
(hence, cannot undergo ADR System):
(1) Civil status of a person
(2) Validity of a marriage or a legal separation
(3) Any ground for legal separation
(4) Future support
(5) Jurisdiction of court
(6) Future legitime
(2) Arbitrations
(a) Article 2037 NCC: A compromise agreement of parties once approved by the
court, is final and executory (i.e., res judicata)
 (b) Article 2042 NCC: The parties can enter into a voluntary arbitration to settle their
dispute outside court - thereby avoiding a future court litigation, or to end the
existing court litigation
(c) Article 2043 NCC: The provisions on compromise agreement under Articles 2028
to 2041 NCC also applies to arbitration (e.g., Article 2034 and 2035)
(d) Article 2044 NCC: An agreement of parties that the decision of the arbitrator
shall be final, is valid (Note: Final decision is not yet executory)
(b) The Arbitration Law (R.A. 876; Domestic Arbitration Law)
(1) Section 2: Subject to arbitration
Any domestic controversy existing between parties, including dispute on contracts
(i.e., controversies that arise between parties within the Philippines [not
international controversy])
EXCEPT: Those domestic dispute pertaining to contract about construction which is
governed by EO 1008 (Construction Industry Arbitration Law), and also domestic
labor dispute which under the exclusive jurisdiction of NLRC (Labor Law)
(2) Section 3. Controversies or cases not covered by Arbitration Law under R.A. 876
Labor actions
(3) Section 23. Confirmation of arbitral award
If after the arbitrator/s rendered the arbitral award, but one of the arbitration
parties does not abide by such arbitral award, then the other party may file a Motion
(Petition) with RTC within one (1) month from time the arbitral award was rendered
for the issuance of an Order confirming the award - unless, RTC vacates, modifies or
corrects the arbitral award of the arbitrator
(4) Section 27. RTC Judgment
When RTC issued an Order confirming, modifying or correcting the arbitral award,
the RTC may issue in the Judgment for purposes of award for the costs of the
application for an Order (for the confirmation, modification or correction of arbitral
award) and also costs of the proceedings therein
(5) Section 29. Appeals against RTC Order that granted, modified, corrected or
vacated the arbitral award
The appeal must only be on pure questions of law under Rule 45 (Appeal by
Certiorari)
(c) Adoption of UN "Convention on the Recognition and Enforcement of Foreign Arbitral
Award" (Philippine Senate Resolution No. 71; New York Convention)
This adoption refers to the Philippine RTC recognizing and enforcing the foreign arbitral
award between parties of different nationalities which arbitral award was rendered by
 arbitral tribunal in another country - in case when one the parties does not abide by the
arbitral award rendered by the foreign arbitration tribunal (especially so when the
property involved therein is located in the Philippines)
Note: No treaty or international agreement [entered into by President] shall be valid
unless concurred by at least 2/3 of all the members of senate (Article 7 Section 21 of
1987 Constitution)
(d) Philippine as signatory to the United Nations Commission on International Trade Law
(UNCITRAL)
The Philippines as signatory to UNCITRAL, concomitantly thereby adopts the UNCITRAL
Model Law regarding international commercial arbitration. The reason for the Model
Law prepared by UNCITRAL is designed to harmonize different laws of different
countries regarding international commercial arbitration
Note: No treaty or international agreement [entered into by President] shall be valid
unless concurred by at least 2/3 of all the members of senate (Article 7 Section 21 of
1987 Constitution)
(e) Labor Code of the Philippines (P.D. 442)
This refers to a compulsory arbitration of labor cases brought before the Regional
Arbitration Board officiated by the regional labor arbiter, whose decision is appealable
to the NLRC. The decision of the NLRC shall be final and executory, subject to Petition
for Certiorari under Rule 65 filed with the Court of Appeals
(f) Construction Industry Arbitration Law (E.O 1008)
This refers to arbitration of dispute to be officiated by the Construction Industry
Arbitration Commission regarding dispute on contracts about any construction in the
Philippines
(g) Katarungang Pambarangay (Local Government Code [R.A. 7160)
Section 408: Subject matter of mediation under the Lupon Tagapamayapa
The Lupon Tagapamayapa has the power to mediate parties residing in the same
city/municipality ALL disputes - except:
(1) One party is the government agency, subdivision or instrumentality
(2) One party is a public officer/employee where dispute relates to performance of his
official function
(3) Crime with imposable penalty exceeding one (1) year or exceeding P5,000 fine
(4) Crime where there is no private offended party (e.g., illegal possession of
firearms/dangerous drugs)
 (5) Dispute involving real properties located in different cities/municipalities - unless
parties agree to submit their dispute for mediation by the proper Lupon
Tagapamayapa
(6) Dispute involving parties who reside in barangays of different cities/municipalities -
unless such barangays where parties respectively reside adjoin each other and the
parties agree to submit their dispute for mediation by proper Lupon Tagapamayapa
(7) Other disputes that the President may determine
However, on non-criminal cases filed in court but not within the authority/power of the
Lupon Tagapamayapa to mediate - then the court may before trial refer the case for
mediation by the Lupon Tagapamayapa (but only on the civil aspect of the criminal case
[e.g., damages])
(h) Alternative Dispute Resolution Act of 2004 (R.A. 9285)
This is a general law applicable to all forms of ADR systems in the Philippines - viz., it
unifies all forms of ADR systems existing in the Philippines such as mediation,
conciliation, arbitration, early neutral evaluation, mini-trial or any combination thereof
(e.g., mediation-arbitration), including the adoption of UNCITRAL Model Law. ADR Act of
2004 repeals all other ADR system existing in the Philippines inconsistent with any of its
provisions
2. ADR SYSTEM ISSUED BY THE JUDICIAL DEPARTMENT
This is the Court-annexed Mediation issued by Supreme Court (CAM; Judicial ADR). This
refers to a compulsory mediation of cases brought before the court which mediation is to
be officiated by the Philippine Mediation Center (Note: This mediation is part of the pre-trial
stage in court litigations). This mediation shall be ordered by the court during pre-trial stage
of the action, which action can refers to all civil action, or criminal action with imposable
penalty not exceeding one (1) year of imprisonment or fine not exceeding P5,000
3. ADR SYSTEM ISSUED BY THE EXECUTIVE DEPARTMENT
This is the Rules on ADR for Dispute between National Government Agencies (issued by the
SolGen). This refers to arbitration of disputes existing between national government
agencies
CHAPTER 2. - FUNDAMENTALS OF ADR

 DEFINITION OF ADR SYSTEM (Section 3 [a] ADRA [R.A. 9285])

Any process of resolving disputes between parties by means other than court or
government quasi-judicial agency (e.g., NLRC, Lupon Tagapamayapa, etc.) - which ADR
System can be by conciliation, mediation, arbitration, early neutral evaluation, mini-trial or
any combination thereof (e.g., mediation-arbitration) presided by a neutral 3rd person (e.g.,
conciliator, mediator, arbitrator, etc. as the case may be)

 MEDIATION (Section 3 [q] in relation to Article 1.6 B [6] DOJ IRR)

A form of ADR system where mediation parties voluntarily agree to settle their dispute
through mediation to be presided by the mediator chosen by the parties - which mediation
shall be conducted in accordance with the rules agreed upon by the parties, or in
absence/default of such agreement on rules, shall be in accordance with the ADRA and DOJ
IRR. The role of the mediator is not to make decision but rather to help the parties
voluntarily amicably settle their dispute (Note: Mediation is non-merit based - unlike
arbitration, med-arb, early neutral evaluation and mini-trial) - BUT: After the mediation, the
parties can either voluntarily enter into settlement, but not obliged to settle their dispute.
Mediation includes conciliation (Section 7 ADRA)

 CONCILIATION (Section 7 ADRA)

Considering that mediation includes conciliation, conciliation (presided by conciliator) is
therefore similar to mediation. Similar to mediation such that conciliation is also a form of
ADR system which adjusts and settles the dispute of the parties in a friendly manner
(Black's Law Dictionary) - presided by the conciliator is chosen by the parties whose role is
also not to make decision but rather to help the parties voluntarily amicably settle their
dispute - BUT: After the conciliation, the parties can either enter into settlement, or refuse
to settle their dispute amicably.
What makes then conciliation different from mediation: In mediation, the parties come to
the conciliator to resolve their dispute in accordance with the proposals made by the
conciliator - WHILE: In mediation, the parties come to the mediator to resolve their dispute
in accordance with their own proposals but assisted by the mediator to come up with a
workable settlement for common good. In other words, the conciliator plays more active
role than the mediator

 ARBITRATION (Section 3 [d] ADRA; Article 1.6 A [3] DOJ IRR)

 Also a form of ADR system where the arbitration parties voluntarily agree to settle their
dispute through arbitration (called "arbitration agreement" or "submission agreement, as
the case maybe") which arbitration is to be presided by an arbitrator chosen by the parties
(or chosen in accordance with the Rules agreed upon the parties, or in the absence thereof,
in accordance with the Rules mandated under ADRA and DOJ IRR) - whose role (i.e.,
arbitrator) is to make a binding decision called arbitral award (Note: Arbitration is the only
ADR system under ADRA that decision is rendered [i.e., arbitral award] and binds the
parties)

 MEDIATION-ARBITRATION (Med-Arb; Note: "or any combination thereof"; Section 3 [t] in

relation with Section 1.6 E[2] DOJ IRR)
Also a form of ADR system that is two-phased, first is the mediation, and if mediation failed,
then arbitration follows

 EARLY NEUTRAL EVALUATION (Section 3 [n] in relation with Section 1.6 E [1] DOJ IRR)
Also a form of ADR system where parties voluntarily agree to settle their dispute through
early neutral evaluation (or neutral evaluation) to be presided by a neutral evaluator who is
expert on the subject-matter of the dispute. The neutral evaluator is chosen by the parties
(or if no such agreement, then shall be appointed in accordance with the IRR issued by DOJ).
During the proceeding, the parties (or their lawyers if any) shall submit the summary to
support their respective case alleging therein relevant facts and laws, attaching documents
and affidavit of witnesses - afterwhich, the evaluator shall issue a non-binding written
evaluation/assessment of the dispute stating the merits and demerits (strengths and
weaknesses) of the respective case of the parties and the estimated amount of damages
that may be incurred - and with such expert evaluation/assessment by the neutral
evaluator, the parties who trust the expertise of the neutral evaluator can be motivated in
settle their dispute out of court. It is called "early neutral evaluation" because it is
conducted before an action is filed with court by any of the parties or could be before any
other ADR System is thought of by any of the parties

 MINI-TRIAL (Section 3 [u] in relation Section 1.6 E[3] DOJ IRR)

Also a form of ADR system where parties voluntarily agree to settle their dispute through
mini-trial to be presided by panel of 2/more decision makers (with or without neutral 3rd
person [as opted by the parties and sits with the panel as moderator {not judge} in the mini-
trial proceedings]) in accordance with rules agreed upon by the parties. The parties will
submit their legal briefs and exhibits, and afterwhich, the parties will present their
 respective case (private and informal hearing), then afterwhich, the rebuttal stage, then
afterwhich, comes now panel to render a non-binding oral opinion (not decision) as regards
the outcome/result of the dispute (and the reason therefor) in the event an action is filed in
court - which opinion of the panel could motivate the parties to enter into an amicable
settlement of their dispute. However, any of the parties may ask the panel to issue such
opinion in written form.

 DISPUTES WHERE ADRA DOES NOT APPLY (Section 6 ADRA)

The following cannot be the subject-matter under ADRA:
(1) Labor dispute (which is under the jurisdiction of NLRC)
(2) Civil status of person
Note: Civil status refers to marriage status
[single/married/widow/widower/annulled/legally separated], birth, death, legitimation,
adoption, naturalization, loss/recovery of citizenship, civil interdiction after convicted of
crime, filiation, change of name. Also includes capacity of person for marriage or to
enter into contract, emancipation, etc.
Note: Article 2035 also prohibits the above-enumerated to be compromised
Note: Civil interdiction is an accessory crime penalty which is effective after conviction
by final judgment - which penalty consists of the deprivation of marital authority,
parental authority, guardianship, right to manage property or dispose of it inter vivos
(3) Validity of marriage (void or voidable)
Note: Also prohibited by Article 149 Family Code
(4) Ground for legal separation
Note: Also prohibited by Article 149 Family Code
(5) Jurisdiction of court
Reason: Jurisdiction of court is conferred by law, and not by the parties
(6) Future legitime
Reason: How can a party compromise his legitime when it is not yet existent?
Note: This is also prohibited by Article 905 NCC
(7) Criminal liability
Reason: Because the private complainant is the State, and the private complainant (e.g.,
victim) merely serves as witness for the State. That is the reason why in criminal cases, it
is entitled People of the Philippines vs. Juan dela Cruz
Note: However, the civil aspect/liability of the criminal action can be compromised
(8) Others that cannot be compromised under the law
Example: Article 2035 of the Civil Code regarding “future support”
 BASIC TERMINOLOGIES UNDER ADRA
(1) ADR Provider (Section 3 [b] ADRA)
He is person or an institution accredited under the law to render ADR service through
conciliation, mediation, arbitration, early neutral evaluation , mini-trial or any combination
thereof (e.g., med-arb) - but without prejudice to the right of disputing parties to choose a
non-accredited person/institution to preside the ADR proceedings
While "ADR Practitioner" refers to person/s who actually act as conciliator, mediator,
arbitrator, 3rd neutral evaluator in early neutral evaluation, or panel/3rd neutral person in
mini-trial
(2) Award (Section 3 [f] ADRA)
Refers to arbitral award rendered by arbitrator/s in arbitration
(3) Commercial arbitration (Section 3 [g] ADRA in relation to Section 21 ADRA and Section 1.6
C[4] DOJ IRR)
Arbitration is "commercial" if the subject matter refers to dispute arising from relationship
commercial in nature whether contractual or not (i.e., no contract). This dispute that is
commercial in nature can be but not limited to commercial transactions such as:
(a) Any trade transaction for the supply of goods/services (i.e., sales), or exchange of
goods/services (i.e., barter)
(b) Distribution agreements (Note: It refers to agreement between supplier and distributor
of goods)
(c) Construction works
(d) Commercial representation/agency (Note: Agent seeks customers on behalf of his
principal for commercial/business purposes)
(e) Factoring (Note: It refers to a financial transaction where a business sells its accounts
receivables [e.g., invoices, promissory notes, checks, etc. given by debtors] to a person
[factor] at a discounted price – and that the factor (as subrogee) will be the one now to
collect from the debtors at full amount of his debt plus damages. Factoring becomes
necessary when a business no longer has sufficient revolving cash to meet business
activities)
(f) Leasing
(g) Consulting (Note: It refers to a person [consultant] giving expert advice to a
person/company in connection with business)
(h) Engineering
 (i) Licensing (Note: It refers to licensing agreement where licensor gives the licensee the
right to produce and sell goods applying the brand name/trademark of the licensor [also
called “franchising”]; Jollibee franchise)
(j) Investment (Note: It refers to act of investing or committing/entrusting money/property
to another for a future income; e.g., buying stocks in the stock market; Multi-level
Marketing [MLM])
(k) Financing (Note: It refers to providing capital [money] to a person for the lattter’s
business or personal use, investment, etc.; bank lending institution)
(l) Banking (Note: It refers to business conducted by a bank accepting deposits from its
depositors in exchange for interests, and then lending it or investing it for a profit)
(m) Insurance
(n) Joint venture and other forms of industrial or business cooperation (Note: It refers to
agreement where 2/more parties pooling/combining their resources for business
purposes)
(o) Carriage of goods and/or passengers by air, water or land
 "Arbitration is "commercial" if the subject matter refers to dispute arising from
relationship commercial in nature whether contractual or not (i.e., no contract)"
How could there be dispute commercial in nature when there is no contract between
parties? There is when a person committed a wrongful/negligent act/omission that
caused damage to another person commercial in nature - such as (1) violation of
intellectual property, (2) cutthroat business competition, etc.
 International party (Section 3 [p] ADRA)
Refers to party whose place of business is outside Philippines. A party which has
business in the Philippines but merely subsidiary or co-venturer in a joint-venture of the
international party - is not an international party
"Foreign arbitrator" is an arbitrator who is not a Filipino
 Model Law (Section 3 [v] ADRA)
Refers to Model Law issued by UNCITRAL (United Nations Commission on International
Trade Law - with which Philippines is a signatory)
Note: UNCITRAL "Model Law" refers to ADR System called "international commercial
arbitration" - which is adopted by many countries such as the Philippines in order to
harmonize the laws on international commercial arbitration of different countries who
are members of the UN who have different laws on international commercial arbitration
(4) Confidential information (Section 3 [h] ADRA)
Any information relevant to subject matter of mediation/arbitration: (a) Which information
was obtained from a source who intends such information he gave not to be disclosed; or
 (b) Which information was obtained upon circumstances under reasonable expectation of
the source where such information obtained from that such information shall not be
disclosed
Confidential information obtained from source relevant to mediation/arbitration that shall
not be disclosed - includes:
(a) Insofar as mediation/arbitration is concerned:
Any communication (oral/written) made in the mediation/arbitration proceedings -
including memoranda, notes, or work products of non-party participant who
participated in the mediation/arbitration (e.g., as witness), and works of the
mediator/arbitrator
(1) Non-party participant (Section 3 [z] ADRA)
Refers to persons who participated in the mediation/arbitration not as party nor
mediator/arbitrator (e.g., witness whether as source of information, resource person
such as an expert)
(b) Insofar as mediation is concerned:
Any communication (oral/written) made during mediation, including statements made
by any of the mediation parties for purposes of considering, initiating or conducting
mediation, for purposes of participating in the mediation, or for purposes of continuing
or reconvening mediation (i.e., to resume mediation), or for purposes of retaining a
mediator
(c) Insofar as arbitration is concerned:
Any communication (oral/written) such as pleadings, motions, manifestations, witness
statements, reports filed with the arbitrator during arbitration proceedings, or report
submitted to an expert for his expert evaluation during arbitration proceedings
(5) Court (Section 3 [k] ADRA)
Refers to RTC (Note: "Court" also referred to under Article 6 of Model Law refers to RTC)
(a) Court-annexed Mediation (CAM; Section 3 [l] ADRA)
Refers to a compulsory mediation ordered by the court after it acquired jurisdiction over
the action particularly during the pre-trial stage of the action
Note: Cam is officiated by the Philippine Mediation Center (PMC)
(b) Court-referred Mediation (Section 3 [m] ADRA)
Refers to an order of the court for the case filed before it to first undergo mediation
when one of the parties prematurely filed action in court despite prior agreement (i.e.,
mediation agreement) that the dispute should first undergo mediation
(6) Convention award (Section 3 [i] ADRA in relation to [j])
 Refers to foreign arbitral award rendered by Convention State (i.e., State that is a member
of the 1958 New York Convention - i.e., UN Convention on the Recognition and Enforcement
of Foreign Arbitral Award)
(a) New York Convention (Section 3 [w] ADRA)
Refers to UN Convention on the Recognition and Enforcement of Foreign Arbitral Award
(Note: Philippine is a signatory thereto)
(7) Non-convention Award (Section 3 [x] ADRA)
Refers to foreign arbitral award rendered by Non-convention State (i.e., State that is not a
member of the 1958 New York Convention [Section 3 [y] ADRA])
(8) Proceeding (Section 3 [aa])
Refers to court or quasi-judicial proceeding
(9) Record (Section 3 [aa])
Refers to information written on tangible medium (e.g., paper), or in a retrievable electronic
or other similar medium (e.g., computer disc, hard disc, website, etc.; viz., retrievable soft
copy)
CHAPTER 3. - MEDIATION

 MEDIATION (Section 3 [q] in relation to DOJ IRR)

A form of ADR system where mediation parties voluntarily agree to settle their dispute
through mediation to be presided by the mediator chosen by the parties - which mediation
shall be conducted in accordance with the rules agreed upon by the parties, or in
absence/default of such agreement on rules, shall be in accordance with the ADRA and DOJ
IRR. The role of the mediator is not to make decision but rather to help the parties
voluntarily amicably settle their dispute (Note: Mediation is non-merit based - unlike
arbitration, med-arb, early neutral evaluation and mini-trial) - BUT: After the mediation, the
parties can either voluntarily enter into settlement, but not obliged to settle their dispute.
Mediation includes conciliation (Section 7 ADRA)

 SCOPE OF MEDIATION (Section 7 ADRA)

All disputes can be mediated through mediation except those that cannot be compromised as
provided under Section 6 ADRA - which mediation can either be ad hoc or institutional.
Mediation includes "conciliation." Mediation under ADRA does not include Court-annexed
Mediation (CAM) which is a compulsory mediation conducted by the court because that is
judiciary's own mediation (likewise excluded from ADRA is the mediation under the Lupon
Tagapamayapa under the LGC).
(1) Ad Hoc Mediation
Refers to mediation whose existence is co-terminus with the mediation of the mediation
parties - such that when the mediation ends, so the Ad Hoc mediation also ends. When
mediation parties choose Ad Hoc Mediation, the mediaiton parties can agree on what
mediation rules and procedures to observe.
(2) Institution Mediation
Refers to mediation whose existence continues even after the end of the mediation - such
that Institution mediation subsists for other future mediation between other disputing
parties (e.g., Philippine Dispute Resolution Center, Inc. [PDRCI] which is an accredited ADR
Provider in the Philippines). When parties choose Institution Mediation (such as PDRCI),
then they must observe the mediation rules and procedures of the Institution Mediation

 RIGHT OF MEDIATION PARTIES TO BE REPRESENTED DURING MEDIATION (Section 14

ADRA)
Mediation parties in the mediation has the right to be assisted by his counsel/representative. If
a party desire not to be represented, he shall sign a written waiver - but at any stage during
mediation, the waiving party can rescind/revoke his previous waiver so as to have his own
representative

 EFFECT WHEN PARTIES AGREE TO SETTLE THEIR DISPUTE UNDER INSTITUTIONAL

MEDIATION (Section 16 ADRA)
If the mediation parties voluntarily agree to settle their dispute through mediation to be
presided by Institutional Mediation, then such agreement ipso jure includes that they shall
observe the policies, rules and procedures of such Institutional Mediation. However, in case of
conflict as to rules and procedures of Institutional Mediation and the ADRA, then the latter shall
prevail

 PLACE/VENUE OF MEDIATION (Section 15 ADRA)

Mediation parties can agree as to where mediation will take place - however, in the absence of
such agreement, the venue shall be at the place where it is convenient and appropriate for all
the parties

 ADVANTAGES OF MEDIATION UNDER ADRA

(1) Confidentiality of mediation proceedings an all information obtained through mediation
(2) Speedy settlement of the dispute; entails less expenses on parties than court litigation
(3) The decision to settle rests with the mediation parties

 CONFIDENTIAL AND PRIVILEGE NATURE OF MEDIATION UNDER ADRA

(1) "Confidentiality/Privileged" in mediation - explained
When disputing parties personally confront each other regarding their dispute, of course
one party gives statements in support of his case and contrary to the case of the adverse
party, and so also the adverse party. When the confrontation is not successful for the
amicable settlement of their dispute, these respective statements of the disputing parties
during the confrontation can be given in evidence in the event an action is filed in
court/quasi-judicial. Now, this is what the mediation under ADRA seeks to avoid by making
mediation process and all information given during such mediation as "privileged" and
confidential," meaning, "privileged" such that the mediation process including information,
documents and statements obtained through mediation cannot be given in evidence in the
event an action is filed in court/quasi-judicial after an unsuccessful mediation - AND: Also
"confidential" such that cannot be made known to others through publication or otherwise.
And so by the privilege and confidentiality of mediation under Section 9 ADRA, the disputing
parties are encouraged to be candor and honest about the true circumstances of their case
 against each other, such that the party who believes his case is weak, is encouraged to
admit his accountability/liability and requests the other party to enter into an amicable
settlement of their dispute - for anyway mediation is privileged and confidential
Note: Confidential information, its definition - read Section 3 [h] ADRA
(2) Application and Interpretation of the ADRA provisions about Mediation (Section 8 ADRA)
When you interpret the provisions of Chapter 2 ADRA (i.e., regarding Mediation), emphasis
is given:
(a) that mediation parties and mediator must be candor for anyway the mediation process
is privileged and confidential;
(b) for the prompt, economical and amicable settlement of the dispute; and
(c) that the success of the mediation leading to amicable settlement of dispute - rests with
the mediation parties
(3) "Confidentiality" and ""Privileged nature of Information in Mediation (Section 9 ADRA)
Information obtained through/during mediation are subject to the following principles:
(a) Information obtained through/during mediation are privileged and confidential
(b) The mediation parties, mediator and non-party participant can refuse to disclose
information obtained through/during mediation, and they can also prevent others from
disclosing such information (Note: This is confidentiality. This means such information
cannot be disclose to any person, publication, media, or whosoever. But an
eavesdropper during mediation who has no connection with the mediation cannot be
prohibited from disclosing such information - however, he can be made liable for
damages to the mediation party injured by such disclosure [Section 10 4th Paragraph]
ADRA)
(c) Information obtained through/during mediation cannot be subjected to discovery
(under Rules 23-29 of the Civil Procedure), and shall also be inadmissible in evidence in
court/quasi-judicial (Note: This is privileged) - HOWEVER: Those information/evidence
obtained through/during mediation is not protected from discovery or inadmissible in
evidence solely by reason of its USE during the mediation
(d) When the mediation is unsuccessful, and an action is filed in court/quasi-judicial, the
following persons that were involved in the mediation cannot be compelled by the
court/quasi-judicial to disclose/testify information obtained through/during mediation:
(This is privileged)
(1) Mediation parties
(2) Mediator/s
(3) Counsel/representative of parties
(4) Non-party participants (see Section 3 [z])
 (5) Any person hired in connection with the mediation as secretary, stenographer, clerk
or assistant (whether or not personally present inside the mediation proceeding
room)
(6) Other person who obtained or possessed information obtained through/during
mediation by reason of his profession (e.g., records custodian of the ad
hoc/institutional mediation)
Note: But an eavesdropper during mediation who has no connection with the mediation
cannot be prohibited from disclosing such information - however, he can be made liable
for damages to the mediation party injured by such disclosure (Section 10 4th Paragraph
ADRA)
(e) Information obtained through/during mediation remain privileged and confidential -
even if the mediator failed to be impartial during the mediation
(f) Mediator cannot be subpoenaed (ad testficandum/ad duces tecum) by court/quasi-
judicial in order to testify regarding information through/during mediation. And if he is
wrongfully subpoenaed, he has the right to be reimbursed (by the party who requested
the court to subpoena him) the full cost of his attorney's fees and other expenses
relevant to such wrong subpoena
Comments:
(a) Confidential information - its definition
Read Section 3 [h] ADRA
(b) "Privileged" nature of information obtained through/during mediation (Exemplified)
Facts: Jose lend P1M to Mario, where the Mario executed a promissory note that he will
pay his debt on January 1, 2016. Mario failed on his obligation to pay despite demand
from Jose. Jose and Mario agreed to settle their dispute through mediation (i.e.,
mediation agreement). During mediation, Jose presented the promissory note executed
by Mario, then Mario admitted during mediation that he indeed executed the same and
admitted his P1M debt. The mediation was terminated unsuccessful as no amicable
settlement reached. Because the mediation was unsuccessful, Jose later filed a civil
action in court against Mario for collection of sum of money. During the presentation of
evidence by Jose in court, Jose testified that during the mediation, Mario admitted he
indeed executed the promissory note and also admitted his P1M indebtedness.
Question: Can Mario object against such testimony of Jose?
Answer: YES. Those statements of Mario during mediation are information obtained
through/during mediation are confidential and privileged, and hence, inadmissible in
evidence
Question: Suppose Jose presented the promissory note executed by Mario as
documentary evidence in court - can Mario object on such evidence as privileged hence
inadmissible in evidence considering that Jose presented the same during mediation?
Answer: NO. Section 9 [c]: Information obtained through/during mediation cannot be
subjected to discovery (under Rules 23-29 of the Civil Procedure), and shall also be
inadmissible in evidence in court/quasi-judicial (Note: This is privileged) - HOWEVER:
Those information/evidence obtained through/during mediation is not protected from
discovery or inadmissible in evidence solely by reason of its USE during the mediation.
The use of the promissory note by Jose during mediation does not render the same as
privilege inadmissible in evidence in court/quasi-judicial, viz., Jose can validly present
the promissory note in court to prove the P1M debt of Mario.
Question: Suppose during mediation, Mario was forced to admit his P1M indebtedness
because Jose presented the promissory note - the question is, can Mario object when
Jose presented such promissory note as evidence during court proceeding on ground of
being privileged hence inadmissible as evidence in court/quasi-judicial?
Answer: NO (Same reason above). What is privileged that cannot be utilize by Jose as
evidence during court proceeding is the "statement" of Mario during mediation
"admitting" that he indeed executed the promissory note and "also his admission"
that he is indeed indebted for P1M to Jose because such statement/admission was
obtained through/during mediation that are confidential and privileged, and hence,
cannot be used as evidence in court and quasi-judicial - but not the promissory note
itself
Question: Suppose before mediation, Mario went to Jose admitting his P1M debt and
asked for more time to pay, but Jose rejected. Later, Jose and Mario agreed to settle
their dispute through mediation, and during mediation Mario admitted his P1M debt.
The question is, can Mario object when Jose testified in court that Mario admitted to
him his P1M debt being privileged hence inadmissible in evidence in court/quasi-
judicial?
Answer: It depends. YES (privileged): Mario can object if Jose testified in court that
Mario admitted his P1M during mediation - as such information/statement was
obtained through/during mediation. And NO (not privileged): Mario cannot object if
Jose testified in court that Mario admitted his P1M before the mediation as such
information/statement was not obtained through/during mediation and instead, such
admission was obtained before mediation.
 INSTANCES WHERE INFORMATION OBTAINED THROUGH/DURING MEDIATION - ARE NOT
"PRIVILEGE" AND "CONFIDENTIAL"
(1) Waiver of confidentiality of information obtained through/during mediation (Section 10
ADRA; hence, such information admissible in evidence in court/quasi-judicial)
(a) Waived by all mediation parties and mediator through oral manifestation during
court/quasi-judicial proceeding, or waived in a record (e.g., written manifestation or
document - filed with the court/quasi-judicial)
Note: "Proceeding" refers to judicial/court or quasi-judicial proceeding (Section 3 [aa]
ADRA). "Record" refers to information written on tangible medium (e.g., paper), or in a
retrievable electronic or other similar medium [viz., retrievable soft copy] (Section 3 [bb]
ADRA)
(b) Waived by the non-party participant provided - (1) such information originated
from/provided by him, and (2) with the consent of all mediation parties (DOJ IRR)
 Doctrine of Estoppel
A person who disclosed confidential/privileged information is estopped from
invoking privilege information under Section 9 ADRA, and he can be compelled by
the court/quasi-judicial to disclose the rest of the information necessary to
completely understand the confidential information he previously disclosed (Note:
Among other instances, this could possibly happen when a person testified in
court/quasi-judicial about confidential/privileged information obtained
through/during mediation proceedings and no timely objection is interposed
thereby). But if another person suffered loss/damages by reason of such disclosure
of confidential information (e.g., mediation party but now as party in court/quasi-
judicial), then he can file action in proper court for damages against such person
who made disclosure of confidential information
HOWEVER: The prejudiced person (i.e., "another person;" e.g., the party in court/quasi-
judicial) can validly disclosed confidential/privileged information but only to the extent
necessary to respond/counter to the disclosure of such person who was compelled to
disclose the rest of the confidential information (Note: Such prejudiced person cannot
be liable for any damages for such disclosure he made in responding to the disclosed
confidential/privileged information)
Note: "Person" who made disclosure of confidential information can refer to mediation
parties, mediator, counsel, non-party participant, mediation
secretary/stenographer/clerk/assistant, any person who obtains/possesses confidential
information by reason of his profession (e.g., records custodian of the Ad Hoc mediation
 or institutionalized mediation), or any other person whether or not connected with the
mediation (e.g., eavesdropper, or any other person)
(2) Exceptions to privileged/confidential information obtained through/during mediation
(Section 11 ADRA; hence, such information admissible in evidence in court/quasi-judicial)
 No privilege information under Section 9 ADRA in the following (Section 11 [a] ADRA):
(1) Agreement/contract of mediation parties during mediation contained in a record
(e.g., paper) authenticated (confirmed; signed) by them
Reason: This is not privileged and confidential because when the mediation parties
reduced their agreement/contract into a record during mediation (e.g.,
paper/writing), they thereby impliedly intended that such agreement is to be use in
future such as for legal/evidentiary purposes (e.g., contract of sale signed by both
mediation parties)
Note: Record (Section 3 [aa]): Refers to information written on tangible medium
(e.g., paper), or in a retrievable electronic or other similar medium (e.g., computer
disc, hard disc, website, etc.; viz., retrievable soft copy). But how is a electronic
medium authenticated? Answer: Rule 5 Section 2 on the Rules on Electronic
Evidence provides: (a) Digital signature, (b) by security procedures [e.g., inputting
credit card number], and (c) other evidence showing integrity and reliability to the
satisfaction of the judge
(2) When the information obtained through/during mediation - (a) is available to the
public (e.g., public document), or (b) is required by law to be open to the public, or
(c) was obtained in a mediation proceeding that is open to the public (i.e., not
private but public mediation proceedings)
Reason: Considering that the information is a public document or that law requires
such information to be open to the public, then it is not confidential. Also considering
that the information was obtained during a mediation that is open to the public,
then the mediation parties intended that such information is not confidential
(3) When the information obtained through/during mediation is a statement of threat
or plan - to inflict physical injury or crime of violence
Reason: State does not countenance/tolerate crime which by public policy should not
be protected by making it confidential and privileged
(4) When the information obtained through/during mediation (e.g., oral/written
statement) was intentionally used to plan a crime, attempt to commit a crime, or
conceal an ongoing crime/criminal activity
Reason: Criminals cannot use the confidentiality/privileged information obtained
through mediation intended by them to technically make such information
 inadmissible in evidence in court in the event criminal case is filed against them after
the mediation. State does not countenance/tolerate crime which by public policy
should not be protected by making it confidential and privileged
(5) When the information obtained through/during mediation refers to prove or
disprove in a court/quasi-judicial proceeding about the abuse, neglect,
abandonment, or exploitation against a person protected by law which the
government is protecting (e.g., DSWD protecting children; Reason: State does not
countenance/tolerate child abuse)
HOWEVER: Information obtained through/during mediation is still confidential and
privileged when it refers to child protection - where government agency
participates in such mediation (e.g., mediation either conducted by DSWD or as
party regarding child protection) or when such mediation is referred by the court
(e.g., as when an action is prematurely filed in court despite previous mediation
agreement, and so the court will suspend the proceeding and order the parties to
undergo mediation)
(6) When sought to be proven/disproved in court/quasi-judicial proceeding is the
professional misconduct/malpractice of the mediator during mediation
Reason: Mediator cannot use the confidential and privilege given under mediation to
conceal his misconduct/malpractice he committed during mediation
(7) When sought to be proven/disproved in court/quasi-judicial proceeding is the
professional misconduct/malpractice of the mediation party,
representative/counsel of the mediation party or non-party participant during
mediation
Reason: Such persons cannot use the confidential and privilege given under
mediation to conceal his misconduct/malpractice he committed during mediation
 Section 11 [b] ADRA: When after trial by camera by the court/quasi-judicial, the latter
found/believed that the evidence sought to be proven/disproved in said court/quasi-
judicial is not available, but such evidence is available in the information obtained
through/during mediation - and there is a need for such evidence to be presented in
court/quasi-judicial which substantially outweighs the policy of
confidentiality/privilege of such information obtained through/during mediation -
THEN: The confidentiality/privilege of such information obtained through/during
mediation is disregarded and can be presented:
(1) In the court proceeding involving crime/felony; or
 (2) In the court/quasi-judicial proceeding to prove/disproved the contract which under
the law could be reformed (reformation of contract) or avoided (void/voidable
contract)
Note: “Trial in camera” refers to trial proceedings by camera where public is not
allowed to observe the hearing; it is the opposite of trial in open court where public are
allowed to observe the hearing. This trial in camera can happen if the witness in court is
a child whereby to allow him testify through public trial could cause him psychological
harm, or hinder his ability to accurately communicate/testify in court
 Privileged of mediator
(1) Mediator cannot be compelled by court/quasi-judicial to provide evidence (Section
11 [c] ADRA)
Mediator cannot be compelled by court/quasi-judicial to provide
information/evidence obtained through/during mediation (duces tecum), or to
testify on information/evidence obtained through/during mediation (ad
testificandum)
(2) Mediator cannot be compelled by court/quasi-judicial to make report, assessment,
evaluation, recommendation, finding, or other communication - relevant to
mediation (Section 12 ADRA)
But mediator can be compelled by court/quasi-judicial to state:
(a) That the mediation was conducted, or that it was already terminated, or that an
amicable settlement was reached by the disputing parties in the mediation
(b) Those that are allowed to be disclosed under Section 13 ADRA (i.e., to disclose
facts likely to affect the impartiality of mediator, his financial or personal
interest in the outcome/result of the mediation, his present/past relationship
with any of the mediation parties/participants and with those persons that are
foreseeable to be party/participant in the mediation)
 "Limited evidentiary purpose" for the use of the confidential/privileged
information/evidence/communication excepted under Section 11 [a] and [b] ADRA - in
the court/quasi-judicial (Section 11 [d] ADRA)
What can be presented in court/quasi-judicial is that only those portions of the
confidential or privileged information/evidence/communication obtained
through/during mediation - necessary to prove/disproved in court/quasi-judicial only
those that are mentioned under Section 11 [a] and [b] ADRA, and not admissible in
evidence for any other purpose (i.e., cannot be used in another purpose)

 QUALIFICATION AND ETHICAL CONDUCT OF MEDIATOR

(1) Qualification and competence of Mediator (Section 13 2nd and 3rd Paragraph ADRA)
A person requested by the mediation parties to be the mediator, does not need to present
his qualification as mediator - unless requested by the mediation parties
Mediator need not also possess "special qualifications" unless required by the mediation
parties (e.g., such special qualification of mediator is mentioned in their mediation
agreement)
Note: When the mediator after being appointed, turned out he does not possess the
qualification/s and/or special qualification/s required by the mediation parties - any of the
mediation parties can demand the withdrawal of the mediator
(2) Emphasis on the Impartiality of Mediator especially Conflict of Interest
(a) Before the mediator accepts his appointment as mediator: (Section 13 1st Paragraph
ADRA)
(1) Mediator shall make effort that a reasonable man would do, whether there are facts
likely to affect his impartiality - including (but not limited to) financial or personal
interest in the outcome/result of the mediation, any past/existing relationship with
any of the mediation parties/participant or with those persons that are foreseeable
to become a party/participant in the mediation
Note: Mediator cannot enter into agreement with mediation parties that the
mediator's fee is contingent (depends/conditioned upon the result of the mediation,
or upon the amount of settlement by the mediation parties) (Article 3.11 [C] DOJ IRR;
Reason: By doing so would thereby make the mediator having illicit
financial/personal interest in the mediation)
Note: Mediator or members his immediate family or his agent shall not request or
accept any gift/compensation relevant to the mediation - other than mediator's fee
and other expenses legitimately related to mediation (Article 3.13 DOJ IRR)
Reason: Same reason immediately above
(2) Mediator shall disclose to the mediation parties as soon as practicable such
aforementioned fact/s known to him or learned by him
(b) After the mediator accepted his appointment as mediator, he learned such
aforementioned fact/s, then he shall disclose such fact/s to the disputing parties as
soon as practicable (Section 13 1st Paragraph ADRA)
Note: When after the appointment as mediator, it is found out that he possesses any
conflict of interest, then any of the disputing parties can demand for his withdrawal
(3) Other causes for the withdrawal of the Mediator (Articles 3.4 and 3.5 DOJ IRR)
(a) When any of the mediation parties for any reason, requests the mediator to withdraw
Reason: This is to promote disputing party autonomy/freedom to choose mediator
 (b) When the mediator is unable to act as mediator (e.g., physically or mentally indisposed)
(c) Mediator does not have the qualification/s, training and experience - which though not
required by the mediation parties, nevertheless, of reasonable expectation of the
mediation parties from the mediator (which he supposed to possess as mediator; e.g.,
knowledge of the basics in mediation)
(d) When the mediator is unable to provide effective mediation service
(e) When the impartiality of the mediator is questionable
(f) The mediator conducts the mediation that violates any ethical standard (e.g., hot
temperament of mediator)
(4) Causes for the Mediator to validly Refuse to act as such (Article 3.5 DOJ IRR)
(a) When the mediation parties violating ethical standard (e.g., parties keep shouting at
each other during mediation)
(b) When in conducting mediation, the safety of any of the mediation parties is
jeopardized (e.g., one party threatened another party)
(c) When any of the mediation parties does not act in good faith (e.g., one party keeps on
absenting in the mediation without valid reason)
(d) The mediation parties agreed to something illegal or unlawful
(e) When to continue the mediation, it would give rise to an appearance in impropriety
(f) When to continue the mediation, would cause significant harm/injury to non-
participant or to the public (e.g., one party threatened the non-party participant)
(g) When to continue the mediation, it would not be for the best interest of the mediation
parties, or of their minor children, or for the settlement of the dispute (e.g., mediation
about child custody, and during the mediation, one party agrees to surrender the
custody to another who does not possess good moral character)

 THE POWER OF MEDIATOR TO LIMIT THE SCOPE OF MEDIATION, OR THE POWER TO

MOTU PROPRIO TERMINATE THE MEDIATION (Article 3.9 DOJ IRR)
Mediator shall exert effort to ensure that the mediation parties understand the nature of
mediation including private caucus (private [not public] mediation proceeding), the issues,
available options, settlement options, alternatives in case disputing parties do not reach
settlement, and freedom on how to participate as party in the mediation - BECAUSE: The
mediator must remember that in mediation, the parties are to settle their dispute freely,
voluntarily and amicably (i.e., autonomy and self-determination of the mediation parties
through mediation)
Now, as mentioned, the mediation parties have the right to be represented by
counsel/representative (Section 14 ADRA). If any of the mediation parties waived his right to
be represented by his representative in the mediation, and the mediator believes that such
waiving party is unable to understand the nature of mediation (or the mediation party unable
to fully intelligently participate in the mediation proceedings) - THEN: The mediator must
advise the waiving party to have his representative, and if such party refused, then the
mediator can either:
(1) To continue the mediation but limit the scope of the mediation according to the waiving
party's ability to understand and participate; or
(2) Motu proprio terminate the mediation

 ENFORCEMENT OF THE SETTLEMENT AFTER SUCCESSFUL MEDIATION (Section 17 ADRA)

When mediation is successful, the mediation parties sign a document called "Mediated
Settlement Agreement", or "Settlement Agreement", or "Compromise Agreement" - or in any
other nomenclature so long as such document embodies the settlement of the mediation
parties after a successful mediation
In the execution of the mediated settlement agreement after a successful mediation, there is
no problem if the mediation parties faithfully abide and execute the settlement agreement.
But the problem arises when one of the mediation parties does not abide by the settlement
agreement, or that he questions the settlement agreement. Hence, the remedy of the other
party is to file Petition to Enforce with the RTC to compel the non-performing party to comply
with the mediated settlement agreement - and the rules to be observed once the Petition is
filed with RTC, is the Special ADR Rules promulgated by the Supreme Court (i.e., Special Rules
of Court on ADR; A.M. 07-11-08-SC; effective 2009).
(1) In the mediated settlement agreement after successful mediation, can the mediation
parties agree that the said mediated settlement agreement shall be treated as "arbitral
award" instead as "mediated settlement agreement"?
YES. In that case, when the other mediation party does not abide to execute the mediated
settlement agreement converted to arbitral award, the remedy of the other mediation
party is to enforce the arbitral award in accordance with (domestic) Arbitration Law (R.A.
876) despite the provision of Construction Industry Arbitration Law (E.O. 1008; i.e., in case
the mediated settlement agreement turned "arbitral award" was about dispute on contract
regarding construction in the Philippines)
Note: Enforcement of arbitral award under Arbitration Law (R.A. 876; domestic arbitratoin)
is by filing Motion with RTC to compel the non-performing party to comply with the arbitral
award (Section 23 in relation with Section 28 R.A. 876). However, under Rule 11 Special
Rules of Court on ADR (issued by Supreme Court), it provides that what is to be filed in the
RTC is "Petition" to Confirm the arbitral award and not Motion.