PHILIPPINES Law and Practice Contributed by: Elaine A. Atienza and Bianca Georgia T. Paloma, Villaraza & Angangco
4. Other ADR Methods 4.1 ADR Procedures
may grant interim measures of protection in support of arbitration proceedings, including before the arbi- tral tribunal has been constituted. Available interim measures include preliminary injunctions, temporary restraining orders, and orders for the preservation of property or assets, which may be sought from the court at any time; before, during or even after arbitra- tion proceedings. The courts are also empowered to compel parties to submit to arbitration where a valid arbitration agreement exists and a party refuses to arbitrate. When an action subject to a valid arbitration clause is filed before a court, the court must refer the dispute to arbitration upon application by a party, and suspend or dismiss the court case as appropriate. 3.9 Court Intervention In keeping with the state policy of promoting arbi- tration, Philippine courts adopt a non-interventionist posture and will only interfere in arbitration proceed- ings in strictly defined circumstances. The courts may intervene before or during arbitration to grant interim measures of protection, such as preliminary injunc- tions or attachment orders, upon proper application. Courts may also act where there is a genuine dispute regarding the existence, validity, or enforceability of the arbitration agreement. Post-award, a court may vacate or set aside a domestic arbitral award only on the narrow grounds enumerated in the Special ADR Rules: that the award was procured through corrup- tion, fraud, or undue means; that there was evident partiality or corruption in the arbitrators; that the arbi- trators committed misconduct; that the arbitrators exceeded their powers; or that there was a failure to follow the agreed arbitration procedure. The courts will not re-examine the merits of the dispute or correct alleged legal or factual errors by the tribunal. 3.10 Relief Arbitral tribunals seated in the Philippines are empow- ered to grant a wide range of final relief, including mon- etary awards, specific performance, declaratory relief and injunctions as part of the final award. They may also award costs and, in appropriate cases, interest on the principal award. With respect to interim relief, tribunals constituted under the ADR Act may issue interim measures of protection to preserve the sub- ject matter of the dispute, prevent irreparable harm, or provide security for the performance of obligations.
Beyond litigation and arbitration, the ADR Act pro- vides for several other formal dispute resolution mechanisms applicable to commercial disputes in the Philippines. Mediation is the most widely used non-adjudicatory ADR mechanism. Under the ADR Act, mediation is a voluntary process by which a neutral mediator assists parties in identifying issues and exploring options to reach a mutually acceptable agreement. Agreements reached through mediation can be reduced to a compromise agreement, which, if judicially approved, has the effect and enforceability of a final court judgment. 4.2 Requirements to Engage in ADR There must be a clear agreement between the par- ties that disputes will be resolved through arbitration and the referral of the case to arbitration cannot be invoked by a single party. 4.3 Impact of ADR Engaging in ADR generally does not extinguish a party’s right to litigate or arbitrate, although it may affect the timing and conditions under which litigation may be commenced. Where a valid arbitration agree- ment exists and arbitration is commenced, a pend- ing court action on the same subject matter must be stayed or dismissed in favour of arbitration. A party that participates in mediation or conciliation without prejudice retains all rights to proceed to litigation or arbitration if no settlement is reached. However, if the parties reach a settlement agreement and it is judicial- ly approved as a compromise, it becomes a final and executory judgment on the merits. This extinguishes the right to litigate on the same subject matter and is enforceable through a writ of execution. Further, once an arbitral award has been rendered, confirmed and made executory, further litigation challenging the merits of the award is extremely limited. Courts may not relitigate the factual and legal issues passed upon by the arbitral tribunal, except on the narrow grounds for vacating an award under the Special ADR Rules. 4.4 Timing of ADR ADR may be initiated at any stage of a dispute: before or after the commencement of litigation. The com-
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