Special Rules of Court on ADR

Special Rules of Court on Alternative Dispute Resolution

A.M. No. 07-11-08-SC

Supreme Court En Banc approved Special Rules of Court on Alternative Dispute Resolution on
September 1, 2009 which took effect on October 30, 2009 following its publication in 3
newspapers of general circulation.

2021 Update on the Dispute Resolution and Arbitration System in the Philippines
What are the other modes of solving disputes?
A:
1. Alternative Dispute Resolution (ADR)
a. Arbitration
i. Domestic Arbitration
iii. International Commercial Arbitration
b. Mediation
c. Conciliation
d. Early Neutral Evaluation
e. Mini-trial
2. Court-Annexed Mediation
3. Appellate Court Mediation
4. Judicial Dispute Resolution
5. Katarungang Pambarangay Law
6. Small Claims Cases
7. Rules on Summary Procedure

Purpose of ADR:

1. To actively promote party autonomy in the resolution of disputes or the freedom of the parties to make their own arrangements to
resolve their disputes.
2. To achieve speedy and impartial justice and unclog court dockets.

Arbitration Mediation Conciliation Early Neutral Mini-Trial

Evaluation
Definition
It is a voluntary It is a voluntary A process whereby It is a process It is a structured
dispute resolution process in which an the parties request a wherein parties and dispute resolution
process in which impartial and third person or their lawyers are method in which the
one or more neutral third party persons to assist brought together merits of a case are
arbitrators, (mediator), selected them in their early in a pre-trial argued before a
appointed in by the disputing attempt to reach an phase to present panel comprising of
accordance with the parties, facilitates amicable settlement summaries of their senior decision
agreement of the communication and of their dispute cases and receive a makers with or
parties, or rules negotiation, and arising out of or non-binding without the
promulgated assists the parties in relating to a assessment by an presence of a
pursuant to R.A. reaching a voluntary contractual or other experienced, neutral neutral third person
9285, resolve a agreement legal relationship person, with after which the
dispute by rendering regarding a dispute. (Art. 1 [3], expertise in the parties seek a
an award. It results UNCITRAL Model subject or the negotiated
in the adjudication Law on Conciliation) substance of the settlement.
of a dispute. dispute.
Functions
Arbitrator acts as Mediator does not A conciliator Early neutral Panel renders a
out-of-court judge render an award but participates only in Evaluator assesses decision based on
and settles the only arranges the the preliminary or reviews the the merits of the
dispute facts to be steps of facilitating issues submitted by arguments of the
extrajudicially. negotiated so that discussion between the parties and parties.
He makes a parties can come to the parties and tenders its
determination of a compromise helps them frame evaluation which is
the facts and applies agreement. the issues for non-binding.
the law to those He assists the discussion.
facts to resolve a parties in reaching a
dispute mutually agreeable
independently of settlement of their
the actual result dispute through
desired by the direct negotiations.
parties. He actively
participates in
resolving the
dispute, and then
gives an opinion.
Effect of decision
The award may be The decision or He does not render The assessment is It need not be
final and binding if opinion is not a decision. The not binding upon confirmed by the
so agreed by the binding on the dispute is left to be the parties. courts.
parties. To be parties. It is settled by the
executory, it must recommendatory in parties themselves.
first be confirmed by nature. The
the RTC mediator merely
suggests a solution
Exception: CIAC to the dispute
Arbitral award need
not to be confirmed
by the RTC to be
executory.

Rule 1.1. Subject matter and governing rules.-The Special Rules of Court on Alternative Dispute
Resolution (the "Special ADR Rules") shall apply to and govern the following cases:

a. Relief on the issue of Existence, Validity, or Enforceability of the Arbitration Agreement;

b. Referral to Alternative Dispute Resolution ("ADR"); (Sec. 24)
Q: When should the court refer the parties to arbitration?
A: A court before which an action is brought in a matter which is the subject matter of an arbitration agreement
shall:
a. If at least one party so requests not later that the pre-trial conference; or
b. Upon the request of both parties thereafter,

refer the parties to arbitration unless it finds that the arbitration agreement is:
a. null and void;
b. inoperative; or
c. incapable of being performed
Q: May the courts dismiss the action for arbitration motu
proprio?
A: Yes, as a general rule, a court before which an action is brought in a matter which si the subject of an arbitration
agreement shall, if a party so requests, refer the parties to arbitration. However, courts may dismiss an action for
arbitration motu proprio if it finds that the arbitration agreement is null and voud, inoperative or incapable of being
performed.

c. Interim Measures of Protection; (Section 28 – 29 ADR)

Interim Measure of Protection

The parties may make a request for an interim measure of protection with the Philippine courts or arbitral
tribunal before or simultaneously with filing an application for arbitral proceedings (Articles 28 and 29 of the
ADR Act).

Q: In what instances may an interim measure of protection be allowed?

A: An interim measure of protection may be granted if necessary:
i. to prevent irreparable loss or injury:
ii. to provide security for the performance of any obligation;
iii. to produce or preserve any evidence; or
iv. to compel any other appropriate act or omission.

d. Appointment of Arbitrator;
Q: How should the appointment of arbitrators be made?
A:
1. in accordance with the method of naming or appointing the arbitrators/s described in the contract for
arbitration or in the submission contract;
2. but if no method be provided therein the Court (RTC) shall designate an arbitrator or arbitrators under the
following circumstances:

a) If the parties to the contract or submission are unable to agree upon a single arbitrator; or
b) If an arbitrator appointed by the parties is unwilling or unable to serve, and his successor has not been
appointed in the manner in which he was appointed; or
c) If either party to the contract fails or refuses to name his arbitrator within fifteen days after receipt of the
demand for arbitration; or
d) If the arbitrators appointed by each party to the contract, or appointed by one party to the contract and by
the proper Court, shall fail to agree upon or to select the third arbitrator.

e. Challenge to Appointment of Arbitrator;

A: An arbitrator maybe be challenged only if circumstances exist that give rise to justifiable doubts as to his
impartiality or independence or if he does not possess qualifications agreed to by the parties. A party may challenge
an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes
aware after the appointment has been made.

The arbitrators may be challenged only for the reasons mentioned above which may have arisen after the arbitration
agreement or were unknown at the time of arbitration.

Q: Where should the challenge be made? Should it be with the arbitral tribunal or with the RTC?
A: The challenge shall be made before them. If they do not yield to the challenge, the challenging party may renew
the challenge before the Court of First Instance of the province or city in which the challenged arbitrator, or, any of
them, if there be more than one, resides.

Q: What is the effect of the challenging incident to the arbitral proceedings?

A: While the challenging incident is discussed before the court, the hearing or arbitration shall be suspended, and it
shall be continued immediately after the court has delivered an order on the challenging incident.

Q: What is the consequence of the arbitrator’s nonperformance of his functions?

A: His mandate terminates. The parties may request for his termination.

f. Termination of Mandate of Arbitrator;

g. Assistance in Taking Evidence; (Article 27)
The arbitral tribunal or a party with the approval of the arbitral tribunal may request from a competent court of this
State assistance in taking evidence. The court may execute the request within its competence and according to its
rules on taking evidence.

h. Confirmation (40), Correction or Vacation of Award(41) in Domestic Arbitration; Sec 40

Q: What is the effect of a confirmed domestic arbitral award?
A: A domestic arbitral award when confirmed shall be enforced in the same manner as final and executory decisions
of the Regional Trial Court.
Q: What court has jurisdiction to confirm the award?
A: The confirmation of a domestic award shall be made by the regional trial court in accordance with the Rules of
Procedure to be promulgated by the Supreme Court.

Q: Should the CIAC arbitral award be confirmed to be executory?

A: A CIAC arbitral award need not be confirmed by the regional trial court to be executory as provided under E.O.
No. 1008.
//vacation of award may be questioned with the appropriate RTC on any grounds enumerated under Sec. 25 RA 876.

Q: Under Sec. 25 of RA 876, what are the grounds for the modification of the award?
A: In any one of the following cases, the court must make an order modifying or correcting the award, upon the
application of any party to the controversy which was arbitrated:
1. Where there was an evident miscalculation of figures, or an evident mistake in the description of any
person, thing or property referred to in the award; or

2. Where the arbitrators have awarded upon a matter not submitted to them, not affecting the merits of the
decision upon the matter submitted; or

3. Where the award is imperfect in a matter of form not affecting the merits of the controversy, and if it had
been a commissioner's report, the defect could have been amended or disregarded by the court.

4. The order may modify and correct the award so as to effect the intent thereof and promote justice between
the parties.

i. Recognition and Enforcement or Setting Aside of an Award in International

Commercial Arbitration;
Q: When may a foreign award be refused recognition and enforcement in our jurisdiction?
A:
1. At the request of the party against whom it is invoked, if that party furnishes to the competent court where
recognition or enforcement is sought proof that:
a. a party to the arbitration agreement was under some incapacity; or the said agreement is not valid under the law to
which the parties have subjected it or, failing any indication thereon, under the law of the country where the award
was made; or

b. the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of
the arbitral proceedings or was otherwise unable to present his case; or

c. the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration,
or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions
on matters submitted to arbitration can be separated from those not so submitted, that part of the award which
contains decisions on matters submitted to arbitration may be recognized and enforced; or

d. the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the
parties or, failing such agreement, was not in accordance with the law of the country where the arbitration took
place; or the award has not yet become binding on the parties or has been set aside or suspended by a court of the
country in which, or under the law of which, that award was made; or

2. If the court finds that:

a. the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State; or

b. the recognition or enforcement of the award would be contrary to the public policy of this State (Article
36 of UNCITRAL Law).

j. Recognition and Enforcement of a Foreign Arbitral Award;

Q: What will govern the recognition and enforcement of arbitral awards?
A: The New York Convention shall govern the recognition and enforcement of arbitral awards covered by the said
Convention (Sec. 42, Application of the New York Convention).

Q: Where should the recognition and enforcement of such arbitral award be made?
A: The recognition and enforcement of such arbitral awards shall be filled with regional trial court in accordance
with the rules of procedure to be promulgated by the Supreme Court.

Q: What is the rule regarding the recognition and enforcement of foreign arbitral awards not covered by the New
York Convention?
A: Recognition and Enforcement of Foreign Arbitral Awards Not Covered by the New York Convention. – The
recognition and enforcement of foreign arbitral awards not covered by the New York Convention shall be done in
accordance with procedural rules to be promulgated by the Supreme Court. The Court may, grounds of comity and
reciprocity, recognize and enforce a nonconvention award as a convention award.

Q:What is the effect when a foreign arbitral award is confirmed by a court of foreign country?
A: A foreign arbitral award when confirmed by a court of a foreign country, shall be recognized and enforced as a
foreign arbitral award and not a judgment of a foreign court.
Q: How can a foreign arbitral award confirmed by the regional trial court be enforced?
A: It shall be enforced in the same manner as final and executory decisions of courts of law of the Philippines.

k. Confidentiality/Protective Orders; and

Information obtained through mediation proceedings shall be subject to the following principles and guidelines:
(a) Information obtained through mediation shall be privileged and confidential.
(b) A party, a mediator, or a nonparty participant may refuse to disclose and may prevent any other person from
disclosing a mediation communication.

Q: Who are the parties covered by the confidentiality rule?

A:
(d) In such an adversarial proceeding, the following persons involved or previously involved in a mediation may not
be compelled to disclose confidential information obtained during mediation:
(1) the parties to the dispute;
(2) the mediator or mediators;
(3) the counsel for the parties;
(4) the nonparty participants;
(5) any persons hired or engaged in connection with the mediation as secretary, stenographer, clerk or assistant; and
(6) any other person who obtains or possesses confidential information by reason of his/her profession.

l. Deposit and Enforcement of Mediated Settlement Agreements.

Mediation - Does not render an award but only arranges the facts to be negotiated so that the parties can come to
a compromise agreement. He assists the parties in reaching a mutually agreeable settlement of their dispute through
direct negotiations.

Q: Where should the settlement be deposited?

A: If the parties so desire, they may deposit such settlement agreement with the appropriate Clerk of a Regional
Trial Court of the place where one of the parties resides.

Q: How should the agreement be enforced?

A: Where there is a need to enforce the settlement agreement, a petition may be filed by any of the parties with the
same court, in which case, the court shall proceed summarily to hear the petition, in accordance with such rules of
procedure as may be promulgated by the Supreme Court.

Q: Can the settlement agreement be treated as an arbitral award? How?

A: The parties may agree in the settlement agreement that the mediator shall become a sole arbitrator for the dispute
and shall treat the settlement agreement as an arbitral award which shall be subject to enforcement under Republic
Act No. 876, otherwise known as the Arbitration Law.

Rule 1.2. Nature of the proceedings. - All proceedings under the Special ADR Rules are special
proceedings. A special proceeding is a remedy by which a party seeks to establish a
status, a right, or a particular fact.

Rule 1.3. Summary proceedings in certain cases. -The proceedings in the following instances are
summary in nature and shall be governed by this provision:

a. Judicial Relief Involving the Issue of Existence, Validity or Enforceability of the Arbitration
Agreement;
b. Referral to ADR; (Section 24)
c. Interim Measures of Protection; (Section 28)
d. Appointment of Arbitrator;
e. Challenge to Appointment of Arbitrator; (Section 26)
f. Termination of Mandate of Arbitrator;
g. Assistance in Taking Evidence; (Section 11)
h. Confidentiality/Protective Orders; and (Section 23)
i. Deposit and Enforcement of Mediated Settlement Agreements. (Section17)

///Petition – filed in a court which has no jurisdiction over the dispute; original; after dismissal
Motion – filed in a court which has jurisdiction over the dispute; continuation of proceedings; eg:
Proceeding in the court was suspended/referred to arbitration.
**Motion or petition to vacate is not governed by summary procedure.

(A) Service and filing of petition in summary proceedings. -The petitioner shall serve, either
by personal service or courier, a copy of the petition upon the respondent before the filing
thereof. Proof of service shall be attached to the petition filed in court.

For personal service, proof of service of the petition consists of the affidavit of the person who
effected service, stating the time, place and manner of the service on the respondent. For service
by courier, proof of service consists of the signed courier proof of delivery. If service is refused
or has failed, the affidavit or delivery receipt must state the circumstances of the attempted
service and refusal or failure thereof.

(B) Notice. -Except for cases involving Referral to ADR and Confidentiality/Protective
Orders made through motions, the court shall, if it finds the petition sufficient in form
and substance, send notice to the parties directing them to appear at a particular time and
date for the hearing thereof which shall be set no later than five (5) days from the lapse of
the period for filing the opposition or comment. The notice to the respondent shall
contain a statement allowing him to file a comment or opposition to the petition within
fifteen (15) days from receipt of the notice.

The motion filed pursuant to the rules on Referral to ADR or Confidentiality/Protective Orders
shall be set for hearing by the movant and contain a notice of hearing that complies with the
requirements under Rule 15 of the Rules of Court on motions.
• RULE 15 of RULES OF COURT
• // Motion – an application for relief other than by a pleading.
 • All motions shall be In writing except those made in open court or in the course of
hearing or trial.
• --Oral testimony or deposition
• Q: What is deposition?
• A: A deposition is the taking of the testimony of any person, whether he be a party or not, but at the instance of a
party to the action. This testimony is taken out of court. Deposition may be:
• a. An oral examination
• b. Written interrogatories (Sec 1, Rule 23)

(C) Summary hearing. - In all cases, as far as practicable, the summary hearing shall be
conducted in one (1) day and only for purposes of clarifying facts.

Except in cases involving Referral to ADR or Confidentiality/Protective Orders made through

motions, it shall be the court that sets the petition for hearing within five (5) days from the lapse
of the period for filing the opposition or comment.

(D) Resolution. - The court shall resolve the matter within a period of thirty (30) days from
the day of the hearing.

Rule 1.4. Verification and submissions. -Any pleading, motion, opposition, comment, defense or
claim filed under the Special ADR Rules by the proper party shall be supported by verified
statements that the affiant has read the same and that the factual allegations therein are true and
correct of his own personal knowledge or based on authentic records and shall contain as
annexes the supporting documents. //can be verified by lawyers
The annexes to the pleading, motion, opposition, comment, defense or claim filed by the proper
party may include a legal brief, duly verified by the lawyer submitting it, stating the pertinent
facts, the applicable law and jurisprudence to justify the necessity for the court to rule upon the
issue raised.

Rule 1.11 (f) verification shall mean a certification under oath by a party or a person who has
authority to act for a party that he has read the pleading/motion, and that he certifies to the truth
of the facts stated therein on the basis of his own personal knowledge or authentic documents in
his possession. When made by a lawyer, verification shall mean a statement under oath by a
lawyer signing a pleading/motion for delivery to the Court or to the parties that he personally
prepared the pleading/motion, that there is sufficient factual basis for the statements of fact stated
therein, that there is sufficient basis in the facts and the law to support the prayer for relief
therein, and that the pleading/motion is filed in good faith and is not interposed for delay.

Rule 1.5. Certification Against Forum Shopping. - A Certification Against Forum Shopping is
one made under oath made by the petitioner or movant: (a) that he has not theretofore
commenced any action or filed any claim involving the same issues in any court, tribunal or
quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending
therein; (b) if there is such other pending action or claim, a complete statement of the present
status thereof; and (c) if he should thereafter learn that the same or similar action or claim has
been filed or is pending, he shall report that fact within five (5) days therefrom to the court
wherein his aforementioned petition or motion has been filed.

A Certification Against Forum Shopping shall be appended to all initiatory pleadings except a
Motion to Refer the Dispute to Alternative Dispute Resolution.

Rule 1.6. Prohibited submissions. - The following pleadings, motions, or petitions shall not be
allowed in the cases governed by the Special ADR Rules and shall not be accepted for filing by
the Clerk of Court:
a. Motion to dismiss;
b. Motion for bill of particulars;
c. Motion for new trial or for reopening of trial;
d. Petition for relief from judgment;
e. Motion for extension, except in cases where an ex-parte temporary order of protection has
been issued;
f. Rejoinder to reply;
g. Motion to declare a party in default; and
h. Any other pleading specifically disallowed under any provision of the Special ADR Rules.
The court shall motu proprio order a pleading or motion determined to be dilatory in nature
expunged from the records.