See - BusinessWorld | Arbitration and the ADR Act of 2004: An alternative method of settling disputes

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WITH the ASEAN Integration, the Philippines can expect an influx of international transactions, with concomitant obligations and contracts, and potential disputes and litigations. With our already clogged judicial dockets, and the expectations of foreign parties who might be used to different, perhaps even non-adversarial methods of settling disputes, this will present a profound challenge to parties and counsels, to which we must all rise.


Amicus Curiae -- Jo Blanca P.B. Labay: "The increasing need for lawyers without borders"

Amicus Curiae -- Danielle Sigfreid R. Corpuz: "Is pregnancy out of wedlock ground for firing a worker?"

Amicus Curiae -- Kurt T. Yeung: "Branding a name"

Amicus Curiae -- Candice Christine O. Tongco:"Grandfather rule still useful in nationality test"

Amicus Curiae -- Catherine Anne L. Diño: "PPPs crucial to our being globally competitive"

Actually, we are not all that behind in terms of procedures and systems for settling disputes. Recognizing that dispute resolution is not confined to the judiciary, Congress passed Republic Act No. 9285 or the Alternative Dispute Resolution Act of 2004, pursuant to the “declared policy of the State to actively promote party autonomy in the resolution of disputes or the freedom of the party to make their own arrangements to resolve their disputes.” The law creates, among others, an alternative avenue for settling disputes, particularly those of an international character.

The ADR Act of 2004 aims to provide a more speedy and efficient resolution of disputes, and it bolsters and supports older laws on alternative dispute resolution (ADR) which needed updating and reinforcement.

Among the recognized ADR methods is arbitration, which is a voluntary dispute resolution process in which one or more arbitrators, appointed in accordance with the agreement of the parties, or rules...resolve a dispute by rendering an award. In this sense, by availing themselves of arbitration, parties actually agree to have their dispute resolved by a tribunal other than the regular courts.

Arbitration is generally based on consent of the parties which may be given prior to a dispute or even after the dispute has arisen. Where consent to submit to arbitration is made part of a contract, the same may be invoked by a party to compel the other to arbitrate. Further, it has been ruled that “an arbitration agreement which forms part of the main contract shall not be regarded as invalid or non-existent just because the main contract is invalid or did not come into existence, since the arbitration agreement shall be treated as a separate agreement independent of the main contract.” Otherwise, it would be very easy to avoid arbitration by repudiating the main contract.

In international relations, the use of arbitration is seen as the “wave of the future.” In the conduct of international commercial arbitration the ADR Act of 2004 has adopted the Model Law on International Trade Law of the United Nations Commission on International Trade Law (UNCITRAL). Cognizant of the varying legal systems in different jurisdictions, the adoption of the UNCITRAL Model Law aims to strengthen parties’ confidence to submit their disputes to arbitration by providing “an international standard based on solutions acceptable to parties from different legal systems.”Aside from granting the parties the power to choose their arbitrators, the UNCITRAL Model Law also allows them greater freedom to determine the rules of procedure, place of arbitration, language, and rules of law applicable to the substance of the dispute.

By allowing parties greater autonomy to determine for themselves how to best resolve their conflicts, through the use of ADR methods such as arbitration, it is hoped that parties are able to obtain a more acceptable, speedier, and satisfactory resolution of their dispute. Our country’s ability to deliver these kinds of results, or to at least provide the avenue to attain them, will certainly go a long way in ensuring a smooth transition from a municipal economy to one that includes all the regions in ASEAN. ADR is the wave of the future whose time has come.


• Republic Act No. 9285 Sec. 2

• Republic Act No. 9285 Sec. 3 (d)

• Cargill Philippines Inc. vs. San Fernando Regala Trading, Inc. G.R. No. 175404 January 31, 2011

• http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf.

Genie Celini D. Nuevo is an Associate of the Angara Abello Concepcion Regala & Cruz Law Offices, Davao Branch.


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