Chapter 5: International Commercial Arbitration under the ADR Act of 2004 and its Implementing
Rules and Regulations
Source: Alternative Dispute Resolution by Justice Gabriel Robeniol
ADR Act of 2004
➔ Adopted the UNCITRAL Model Law on International
Commercial Arbitration
➔ Made the Model Law the governing statute for
international commercial arbitration (or “ICA”)
conducted in accordance with Philippine law. Article 19
of ADR Act
Implementing rules and Regulations of the ADR Act of
2004 (IRR) December 31, 2009
➔ Became the repository not only of the rules
implementing the ADR Act but also the rules
implementing the Model Law
International Commercial Arbitration
➔ Arbitration is International if any of the following
instances occurs:
1. Parties’ places of business, which at the time of the
conclusion of the arbitration agreement, is in
different state;
2. Place of arbitration provided in the arbitration
agreement and in which the parties have their
business, is outside the Philippines;
3. Place where a substantial part of obligation is to
be performed or the place with which the subject
matter of the dispute is mostly connected, and in
which the parties have their places of business, is
outside the Philippines; or
4. Parties have expressly agreed that the subject
matter of arbitration agreement relates to more
than one parties.
➔ Arbitration is Commercial if it covers matters arising
from all relationships of a commercial nature, whether
contractual or not (Sec. 21)
➔ Seat is Philippines: governed by the ADR Act and the
IRR, even if the place of arbitration is outside the
Philippines.
➔ Seat is outside the Philippines: foreign arbitration, even
if the place of arbitration is in the Philippines.
Coverage of IRR Provisions of ICA (Articles 4.1 to 4.6,
IRR)
➔ Applicable only to ICA conducted in accordance with
Philippine Law.
➔ The rules of procedure for ICA provided for under the
ADR act or its IRR may also be applied for
international commercial arbitration outside the
Philippines if they are adopted as rules of procedure by
the parties in the exercise of their privileged of party-
autonomy and self- determination
➔ Default nature of the provisions of the IRR on ICA was
adopted in recognition of the basic premises of party
autonomy and self-determination and are applicable
only in the absence of or in default contained in the ff:
1. an agreement in force between the Philippines and
ABUYO, ARCILLA, BAYABAO, LAGUNA, VERDAN
Atty. David Ballesteros
other state;
2. an agreement between the parties on the applicable
rules
Rules of Interpretation (Art 4.2, IRR)
1. Interpretation of the ADR act - court shall have due
regard to the policy of law favouring arbitration (Sec
25, ADR Act)
2. Interpretation of the Model Law - regard shall be given
to its international origin and to the need for uniformity
of its interpretation.
- Should be understood in the light of international
usage rather than its ordinary domestic or local
usage.(Sec 20, ADR Act)
3. Interpretation of the IRR
a. Same policy of the ADR Act and Model Law
b. Party autonomy should be promoted in the
resolution of the dispute.
c. Freedom of the parties to determine certain issues
d. Reference to an agreement of the parties
e. Rules applicable to claims are equally applicable to
counterclaims and those applicable to defenses are
equally applicable to defenses against
counterclaims. (Art. 4.2, IRR)
Rules of Receipt of Written Communication in ICA
(Article 4.3, IRR)
➔ Governing rules are those provided for by the parties in
their arbitration agreement.
➔ In default of such rules, communication is deemed
received:
1. If it is delivered to the address personally or at his
place of business, habitual residence or mailing
address
2. If there is none, delivery by registered mail or
attempt to deliver to last known place of business
➔ Under the IRR, written communication is deemed
received on the day it is “delivered” and not on the day
the mail is posted with the post office.
Waiver of the Rights to Object in ICA (Article 4.4, IRR)
➔ ADR act and its IRR is limited to the application of
rules on the waiver in the mediation proceedings to
waiver of confidentiality and privilege only
➔ IRR expands the application of the rules on waiver to
include non-compliance with the rules or requirements
➔ Objections to non compliance with the rules or any
requirements under the arbitration agreement must be
raised without undue delay or within the time
prescribed therefore, failing which, the right to object is
deemed waived. This rule is based on Doctrine of
Estoppel. The admission or representation cannot be
denied or disproved as against the person relying on it.
➔ Estoppel in pais happens when one, by his acts,
representation, or admissions, or by his own silicon
when he ought to speak out, intentionally or culpable
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 Chapter 5: International Commercial Arbitration under the ADR Act of 2004 and its Implementing
Rules and Regulations
Source: Alternative Dispute Resolution by Justice Gabriel Robeniol
negligence, induces another to believe certain facts to
exist and such belief in a manner that he will be
prejudiced if the former is permitted to deny the
existence of such facts. The existence of the fact in
issue cannot be denied or disproved as against the party
relying on it.
Confidentiality in ICA (Section 23, ADR Act; Article 4.41,
IRR)
➔ General Rule: In the case of mediation, the
proceedings, records, evidence, and arbitral awards are
confidential and shall not be disclosed.
➔ Exceptions:
1. With the consent of the parties; or
2. For the limited purpose of disclosing to the court
relevant documents in cases where resort to the
court is allowed
➔ The court in which the action or appeal is pending may
issue a protective order to prevent or prohibit disclosure
of documents or information containing secret
processes, developments, research and other
information where it is shown that the applicant shall be
materially prejudiced by an unauthorized disclosure
thereof.
Due Process in ICA (Article 4.18, IRR)
➔ Due process is complied with if a party is given an
opportunity to present his side of the dispute even if he
does not actually avail of such opportunity.
➔ A party should not be allowed to derail and delay an
arbitral proceeding if he has no real intention to present
his side but merely invokes due process to prolong or
prevent the procedure.
➔ The arbitral tribunal in an ICA is directed to give the
parties sufficient advance notice of any hearing and of
any meeting of the arbitral tribunal for the purpose of
inspecting goods, properties or documents.
➔ The party is directed to communicate to the other party
all statements, documents or other information that he
will supply to the arbitral tribunal.
Place or Venue of ICA (Article 4.20, IRR; Section 30,
ADR Act)
➔ Determined by the parties
➔ Default place - Metro Manila, unless the arbitral
tribunal decides on a different place of arbitration
taking into consideration the circumstances of the case.
Commencement of ICA proceedings (Article 4.21, IRR)
➔ Determined by the parties
➔ Default date - date of request for that dispute to be
referred to arbitration is received by the respondent
Language in ICA (Article 4.22, IRR)
➔ Determined by the parties
ABUYO, ARCILLA, BAYABAO, LAGUNA, VERDAN
Atty. David Ballesteros
➔ Default language - English
➔ Arbitral tribunal may order that any document evidence
shall be accompanied by a translation thereof in the
language or languages to be used in the proceedings.
Applicable Law in ICA (Article 4.22, IRR)
➔ Governing law generally is substantive law
➔ Substantive Law - law or legal system applicable to
complete resolution of dispute under which the rights
and obligations of the parties will be determined
➔ Conflicts of Law/Private International Law - set of
domestic laws that determines which between the
domestic laws of two or more states should apply to the
resolution of a dispute involving foreign elements.
➔ In the absence of agreement of the parties, the law is
determined by conflicts of law rules as determined by
the arbitral tribunal to be applicable taking into account
the terms of the contract and the usages of the trade,
shall be applied.
Appointing Authority in ICA (Article 1.2, C[1], IRR)
➔ The person or institution named in the arbitration
agreement as the appointing authority; or the regular
arbitration institution under whose rules the arbitration
is agreed to be conducted.
➔ Additional functions:
1. Take necessary measurements to appoint an
arbitrator in case any party, or the arbitrators
already appointed any third party fails to perform
any function necessary for the appointment of the
arbitrator
2. Decide on the challenge against an arbitrator if the
arbitral tribunal rejects the challenge.
3. Consider the qualifications of an arbitrator, the
necessity of ensuring impartiality and
independence of the arbitrator, and the advisability
of appointing an arbitrator who is of a nationality
different from those of the parties.
➔ Where the parties have agreed to submit their dispute to
institutional arbitration rules, and unless they have
agreed to a different procedure they shall be deemed to
have agreed to the procedure under such arbitration
rules for the selection and appointment of arbitrators.
➔ In an ad hoc arbitration, the default appointment of an
arbitrator shall be made by the National President of the
Integrated bar of the Philippines or his representative.
(Sec. 26, ADR Act)
Arbitrators and Arbitral Tribunal in ICA (Articles 4.10
to 4.12, IRR)
➔ The number of arbitrators and the procedure for their
appointment are determined by the parties.
➔ The default number of arbitrators is three.
➔ Default: 3 arbiter – each party shall appoint 1 arbitrator
and both arbitrator shall appoint the third arbitrator.
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 Chapter 5: International Commercial Arbitration under the ADR Act of 2004 and its Implementing
Rules and Regulations
Source: Alternative Dispute Resolution by Justice Gabriel Robeniol
1. Sole arbiter – shall be appointed by the parties
2. If there is none, any party may request the
appointing authority to take measures to appoint an
arbitrator.
➔ The decision of the appointing authority on this matter
shall be immediately executor and shall not be subject
to a motion for reconsideration or appeal.
➔ Factors in Appointing Arbitrators:
1. Qualifications by the agreement of the parties;
2. Considerations as are likely to secure the
appointment of an independent and impartial
arbitrator.
3. In the case of sole or third arbitrators, the
advisability of appointing an arbitrator of a
nationality other than those of the parties
➔ Grounds for changeling an Arbitrator in ICA (Article
4.12, IRR)
1. Impartiality or independence
2. Possession of the qualifications agreed upon by the
parties
➔ Procedure for the challenge in ICA (Article 4.13, IRR)
- agreed upon by the parties
- Default procedure:
1. Sending of written agreement 15 days after
becoming aware of the constitution of arbitral
tribunal
2. The parties may request the appointing authority
within 30 days from notice of the decision
rejecting the challenge, to decide the challenge
➔ Procedure in case the Arbitrator fails to act in ICA
(Article 4.14, IRR)
1. If an arbitrator in an ICA becomes de jure or de
facto unable to perform his functions or fails to act
without undue delay his mandate terminates if he
withdraws or if the parties agrees in the
termination.
2. If the controversy remains, any party may request
the appointing authority to decide on the
termination of the arbitrator, which shall be
immediately executory, and not be subject to a
motion for reconsideration or appeal.
3. The appointment of the substitute arbitrator shall be
governed by the same rules applicable in the
appointment of the replaced arbitrator.
Jurisdiction of Arbitral Tribunal in ICA (Article 4.16,
IRR)
➔ The authority by virtue of which it can resolve disputes
in an arbitration proceeding by rendering an award
thereon.
➔ Jurisdiction over subject matter - conferred by ADR
Act of 2004 in the case of arbitration under the auspices
thereof including an ICA.
ABUYO, ARCILLA, BAYABAO, LAGUNA, VERDAN
Atty. David Ballesteros
➔ Two Instances when a court, quasi-judicial agency or
arbitral tribunal acts without jurisdiction and its
remedies:
1. Lack of jurisdiction - should be raised not later than
the submission of the statement of defense in the
answer or in a motion to dismiss otherwise, the
objection is deemed waived. However, a party is
not precluded from raising a jurisdictional
challenge even if he has participated in the
appointment of an arbitrator or has himself
appointed one.
2. Excess of jurisdiction - a party may raise the
objection as soon as the excess of jurisdiction over
a matter alleged to be beyond the scope of authority
becomes apparent otherwise the objection will be
deemed waived unless the delay is justified.
➔ Lack of jurisdiction or excess of jurisdiction are the
proper grounds for certiorari as a special civil action
under Rule 65 of the 1997 Rules of Civil Procedure.
➔ Jurisdictional review of Jurisdictional Issue
- The decision of a court or quasi-judicial agency
without jurisdiction over the subject matter is null
and void ab initio.
- The arbitral award of an arbitral tribunal which
does not have jurisdiction is also null and void ab
initio unless there is a waiver of the absence of
jurisdiction.
- Petitions under Rule 43 (petition for review) and
Rule 65 (petition for certiorari) are not available.
- The arbitral tribunal whose acts are challenged for
lack or excess of jurisdiction may either:
1. Consider the challenge as a preliminary
question or a threshold issue and render a
ruling thereon before conducting the
arbitration, or
2. Defer the resolution thereof until the rendition
of the arbitral award and the resolution of the
jurisdictional issue shall form part thereof
especially in instances when the jurisdictional
challenge does not appear to be indubitable.
- If the arbitral tribunal renders a preliminary ruling
on the jurisdictional issue, an aggrieved party may
elevate the ruling for review by the RTC within 30
days from receipt of the ruling, and the decision of
the court therein shall be immediately executory
and not be subject to a motion for reconsideration
or appeal.
- If the arbitral tribunal defers the resolution of the
jurisdictional issue which will be resolved as part
of the arbitral award, the order of deferment is not
susceptible of judicial relief. However, the arbitral
award, including the ruling on the jurisdictional
issue, may be challenged in court in the same
manner and procedure for challenging an arbitral
award.
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 Chapter 5: International Commercial Arbitration under the ADR Act of 2004 and its Implementing
Rules and Regulations
Source: Alternative Dispute Resolution by Justice Gabriel Robeniol
➔ Jurisdiction over the parties
- Conferred by the consent of the parties to submit to
arbitration. This consent may be contained either in
an:
1. Agreement to submit to arbitration (for pre-
causal consent) which is entered into at the
time of execution of an arbitration agreement
or a contract which includes an arbitration
clause, or
2. Submission agreement (for present causal
consent) between parties who do not have an
arbitration agreement or a contract with an
arbitration clause but who nonetheless agree to
submit an existing dispute or controversy to
arbitration.
Interim Measures in ICA (Articles 4.17, IRR; Section 28,
ADR Act)
➔ The following rules are to be observed in connection
with the interim reliefs or provisional remedies
available:
1. Any party may request that provision relief be
granted against the adverse party;
2. Such relief may be granted:
a. To prevent irreparable loss or injury;
b. To provide security for the performance of any
obligation;
c. To produce or preserve any evidence; or
d. To compel any other appropriate act or
omission.
3. The order granting provisional relief may be
conditioned upon the provision of security or any
act or omission specified in the order;
4. Interim or provisional relief is requested by written
application transmitted by reasonable means to the
court or arbitral tribunal as the case may be and the
adverse party, describing the precise relief in
appropriate detail, the ground therefor, and the
evidence supporting the request.
5. The order shall be binding upon the parties and
either party may apply with the courts for
assistance in implementing or enforcing it.
6. A party who does not comply with the order shall
be liable for all damages resulting from
noncompliance, including all expenses, and
reasonable attorney’s fees, paid in obtaining the
order’s judicial enforcement.
Legal Representation in ICA (Section 22, ADR Act;
Article 4.40, IRR)
➔ A person may be represented by any person of his
choice even if a non-lawyer.
➔ A representative of a party in international arbitration
conducted in the Philippines shall not be authorized to
appear as counsel in any Philippine court or any quasi-
judicial body whether or not such appearance is in
ABUYO, ARCILLA, BAYABAO, LAGUNA, VERDAN
Atty. David Ballesteros
relation to the arbitration in which he appears, unless he
is admitted for the practice of law in this country.
Rules of Procedure in ICA
➔ General rule: The parties in an ICA are free to
determine the rules that will govern their arbitration
proceedings.
➔ In default of an agreement of the parties, the procedure
is as follows:
1. Statement of claims
2. Statement of defenses
3. Default of the parties
4. Amendment of claims or defenses
5. Hearings
6. Conclusion/closure
a. By an award/ settlement
b. By termination
➔ Requisites for an Arbitral Award to be Final
1. Rendition of the arbitral award.
2. Hearing on the quantification of the costs and the
determination of the party liable therefor, or the
division thereof between the parties.
3. The expiration of the periods for correction and
interpretation of the award, or for making an
additional award.
Costs in ICA
➔ Costs in ICA includes only:
1. Fees of the Arbitral Tribunal
2. Travel and other expenses
3. Costs of expert advise
4. Travel and other expenses of witnesses
5. Costs of Legal Representation and Assistance
6. Fees and expenses of the Appointing Authority
➔ In Principle, the cost shall be borne by the unsuccessful
party, but, the Arbitral Tribunal may apportion the costs
among the parties if reasonable under the circumstances
of the case.
Correction and Interpretation of ICA award
➔ ICA awards may be amended by the parties before it
becomes executory under the following manners:
1. Agreement of the Parties
2. Quantifications of the costs and determination of
the party liable, or the division between the parties
– provided that there’s a reservation
3. Correction of typographical and similar errors on
the award initiated by a party.
4. Correction of typographical error initiated by the
Arbitral tribunal – motu proprio
5. Interpretation of the award – as requested by the
party
6. Additional Award – claims presented in the Arbitral
proceeding but omitted in the award.
➔ Note: Courts can only set aside, extend recognition, or
refuse recognition of an International commercial
Arbitral award.
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 Chapter 5: International Commercial Arbitration under the ADR Act of 2004 and its Implementing
Rules and Regulations
Source: Alternative Dispute Resolution by Justice Gabriel Robeniol
Setting aside an ICA award
➔ The Courts may set aside an ICA Arbitral Award
provided that:
1. The Petitioner furnishes proof that there was:
a. Defect in the Arbitration agreement
b. Violation of due process
c. Lack or excess of jurisdiction on the part of
Arbitral Tribunal
d. The Arbitration agreement was violated
2. Or, the courts finds that
a.
The subject of the dispute is not capable of
settlement under the laws
b. The award is in conflict with public policy
Note: It is an exclusive list for setting aside an ICA
Award
➔ Time for filing the petition to set aside
The petition for setting aside must be filed within 3
months or 90 days from the date on which the party
making that application received the award, or from the
date on which a request for correction, interpretation, or
additional award has been disposed of by the Arbitral
Tribunal.
Recognition and Enforcement of ICA awards and
Foreign Arbitral Awards
➔ Recognition - Means by which a Philippine Court gives
legal acknowledgement to a foreign arbitral award and
confers upon it the capability to be enforced under
Philippine law.
➔ Confirmation -Judicial affirmation of a domestic
arbitral award
Note: The terms Recognition and Confirmation have
been used interchangeably, despite the difference in
their definition, by the Supreme Court
➔ Enforcement - The execution and implementation of
the foreign arbitral award through Philippine Legal
Processes
➔ Foreign Arbitral Award - one made in a country other
than the Philippines
- rendered in an arbitration whose seat is outside the
Philippines
➔ Note: A Foreign Arbitral award must go through the
process of “Recognition” in order to be entitled to
enforcement in the Philippines.
➔ Philippine ICA and Foreign ICA awards require
recognition by the Philippine Courts but the latter is not
susceptible to vacation or setting aside by the Philippine
Courts.
➔ An ICA award or a foreign arbitral award recognize by
the Regional Trial Court, shall be enforced in the same
manner as final and executor decisions of courts of law.
ABUYO, ARCILLA, BAYABAO, LAGUNA, VERDAN
Atty. David Ballesteros
Recognition and Enforcement of ICA and Foreign
Arbitral Awards (Article 4.35,IRR)
➔ Kinds of foreign arbitral awards based on the nature
of its proceedings:
1. Convention Award
- An award made in a state which is a party to the
New York Convention (NYC) and its recognition
and enforcement shall be governed by the NYC as
implemented by IRR
2. Non-Convention Award
- An Award made in a state not a party of NYC and
therefore cannot be recognized nor enforced , but it
may be deemed as a presumptive evidence of a
right between the parties in accordance with the
1997 Rules of Civil Procedure
3. As-in Convention Award
- An award made in a state not a party of NYC but
by reason of comity and reciprocity , may be
recognized and enforced as if it is a convention
award.
Jurisdiction, Venue, and Nature of proceedings
➔ The venue of setting aside proceedings, as well as for
the recognition and enforcement of ICA and foreign
arbitral awards, and any application for assistance and
supervision, except appeal, shall be with the Regional
Trial Court:
1. Where the Arbitration proceedings took place
2. Asset to be attached or levied upon or the act to be
enjoined is located
3. Where any of the parties to the dispute resides or
has his place of business
4. National Capital Judicial Region
➔ At the option of the applicant.
➔ Note: It is considered as a special proceeding and can
also be summary in nature.
Grounds for refusing recognition for and enforcement to
convention and as-in convention:
1. Proof of the foreign judgment;
2. The judgment must be on a civil or commercial
matter;
3. There must be no lack of jurisdiction, no want of
notice, no collusion, no fraud, no clear mistake of
law or fact;
4. The judgment must not contravene a sound and
established public policy of the forum; and
5. The judgment must be res judicata in the state that
rendered it.
Grounds for refusing recognition (Article 4.35[A], IRR)
1. Defect in the Arbitration agreement
2. Violation of due process
3. Lack or excess of jurisdiction on the part of the
tribunal
4. Violation of the arbitration agreement
OR, if there is a finding from the court that:
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 Chapter 5: International Commercial Arbitration under the ADR Act of 2004 and its Implementing
Rules and Regulations
Source: Alternative Dispute Resolution by Justice Gabriel Robeniol

1. The subject of the dispute is not capable of as between the parties and their successors in interest by
settlement under the laws subsequent title”, provided there is no want of
2. The award is in conflict with public policy of the jurisdiction, no want of notice, no collusion, no fraud
Philippines and no clear mistake of law.
➔ Note: In the case of as-in convention, the applicant
must present proof of comity and reciprocity between
the Philippines and the non-convention state.

Procedure for Recognition of convention and as-in

convention awards
1. Filing of application
- The party relying upon an award or applying for its
enforcement shall file with the RTC the original or
duly authenticated copy of the award and the original
arbitration agreement. If the award or agreement is
not made in an official language of the Philippines,
the party shall supply a duly certified translation
thereof into such language
2. Recognition
- Once confirmed by the court, the foreign Arbitral
award shall be enforced in the same manner as final
and executory decisions of the courts of law of the
Philippines.
3. Consolidation/concurrent hearings
- The Parties and the Arbitral tribunal may agree on:
- Consolidation of proceedings, or
- The conduct of concurrent hearing with
other related Arbitration proceedings
4. Rejection/Suspension
- The RTC, upon a subsequent application for rejection
or suspension of the enforcement of the award, may
vacate or suspend the enforcement of the court
decisions to recognize the arbitral award and may
also, on the application of the party claiming
recognition or enforcement, order the party seeking
rejection or suspension to provide appropriate
security. In the case of as-in convention award, the
court may also remit the award to the arbitral tribunal
if the objections raised may be cured or rectified.
5. Appeals
- The decision of the RTC on an Arbitral Award may be
appealed to the Court of Appeals in accordance with
the Special Rules on ADR, which shall require the
appealing party to post a counter bond in favor of the
prevailing party in the amount of the award. The right
to appeal may be validly waived by the agreement or
stipulation of the parties without prejudice to judicial
review by certiorari under Rule 65 of the Rules of
Court.

Legal Effects of Non-convention Awards

➔ Non-convention awards, unless they qualify to be as-in
convention awards, are not entitled to recognition or
enforcement under the ADR Act, however, it may be
considered as either a “conclusive upon the title to a
thing” or, at best, is a “presumptive evidence of a right

ABUYO, ARCILLA, BAYABAO, LAGUNA, VERDAN Alternative Dispute Resolution

Atty. David Ballesteros 6