PHILIPPINES Law and Practice Contributed by: Elaine A. Atienza and Bianca Georgia T. Paloma, Villaraza & Angangco
signing of the terms of reference, a timeline that is consistently observed. Further, the Philippines is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). This facilitates the recognition and enforcement of Philippine arbitral awards in over 170 contracting states, making arbitration particularly attractive for cross-border commercial transactions. 3.4 Disadvantages of Arbitration Despite its advantages, arbitration in the Philippines has notable disadvantages that parties should careful- ly weigh. The costs associated with institutional arbi- tration can be significant. Filing fees at the PDRCI start at a minimum of PHP75,000, with additional deposits for arbitrator fees and miscellaneous expenses, and total costs can escalate substantially depending on the complexity and value of the dispute. Unlike court proceedings, the discovery process in arbitration is generally more limited. This can disadvantage a party that is depending on the production of documents or evidence from the opposing side to establish its case. Arbitral awards are also difficult to appeal. Under the ADR Act and the Special Rules of Court on Alternative Dispute Resolution (the “Special ADR Rules”), courts may only vacate an award on very narrow grounds, such as corruption, fraud, or clear excess of jurisdic- tion. This finality, while generally a strength, can be a disadvantage when an arbitral tribunal commits a material error. 3.5 Arbitral Institutions The CIAC, which has original and exclusive jurisdic- tion over disputes arising from construction contracts in the Philippines, is one of the most popular arbi- tration institutions in the country. Parties engaged in construction are automatically subject to CIAC juris- diction as long as their contract contains an arbitration clause, and the CIAC will assert jurisdiction even if another arbitration institution is named in the agree- ment. The PDRCI, which is the institutional body for non-construction commercial arbitration in the Philip- pines, is also popular. 3.6 Length of Proceedings The duration of arbitration proceedings in the Philip- pines varies depending on the institution, the com- plexity of the dispute, and the conduct of the par-
ties. CIAC proceedings are the most time-regulated: under its Rules of Procedure, the arbitral tribunal is required to render its award within six months from the signing of the terms of reference. Extensions may be granted with CIAC approval. For proceedings before the PDRCI, there is no fixed statutory deadline for rendering an award. In practice, straightforward com- mercial disputes are typically resolved within one to two years from the filing of the request for arbitration, while complex multi-party or high-value disputes may take longer depending on the number of hearings, the volume of evidence, and interim applications filed by the parties. Post-award proceedings in court for con- firmation, recognition or enforcement of the award, take additional time. If opposed, these proceedings before the RTC can take several months to a year or more, with the possibility of further appeals to the Court of Appeals and the Supreme Court. 3.7 Regulation of Arbitration Arbitration in the Philippines is governed by a lay- ered framework of statutes and procedural rules. The ADR Act is the principal legislation and provides the overarching framework for all forms of ADR, includ- ing arbitration. Construction arbitration is governed by Executive Order No 1008, as implemented by the CIAC Rules of Procedure. Under Section 35 of the ADR Act, the CIAC has original and exclusive juris- diction over construction disputes where the parties have agreed to arbitration. The Special ADR Rules, issued by the Supreme Court as AM No 07-11-08-SC on 1 September 2009, provide the procedural frame- work for court-related arbitration matters, including applications to question the existence or validity of an arbitration agreement, requests for interim measures of protection, and proceedings for the recognition and enforcement of arbitral awards. The Philippines has ratified the New York Convention, which governs the enforcement of foreign arbitral awards under the ADR Act. 3.8 Court Powers Philippine courts are empowered to support arbitra- tion in several important ways while adhering to a gen- eral policy of non-intervention in the arbitration pro- cess. Under the ADR Act and the Special ADR Rules, RTCs designated as Special Commercial Courts have jurisdiction over arbitration-related petitions. Courts
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