PHILIPPINES Law and Practice Contributed by: Ricardo Ma P. G. Ongkiko, John Christian Joy A. Regalado and Ma Patricia B. Paz-Jacoba, SyCip Salazar Hernandez & Gatmaitan
4. The Arbitral Tribunal 4.1 Limits on Selection
its Implementing Rules and Regulations (IRR) provide that the ADR Act does not apply to: • labour disputes covered by the Labor Code of the Philippines; • criminal liability; • disputes referred to court-annexed mediation; and • other disputes that by law cannot be compro - mised. Labour disputes fall within the exclusive dispute-res - olution machinery of the Labor Code, criminal liability is reserved to the criminal courts, and court-annexed mediation is governed by separate issuances of the Philippine Supreme Court. 3.3 National Courts’ Approach The Supreme Court has ruled that the law agreed upon by the parties in the arbitration agreement will gov - ern, considering that party autonomy is the essence of arbitration. In the absence of such designation, the law determined by the applicable conflict of law rules will govern. Courts are mandated to favour arbitration. The Supreme Court has ruled that arbitration agreements are to be liberally construed in favour of proceeding to arbitration and that courts should generally adopt the interpretation that renders an arbitration clause effective if the terms of an agreement allow for such interpretation. As such, courts must refer matters to arbitration if the case was improperly or prematurely referred to them, despite an arbitration agreement. 3.4 Validity The Supreme Court has upheld the validity of an arbitration clause despite the invalidity of the main contract, consistent with the rule of separability. It is settled that an arbitration agreement is independent of the main contract, and it does not automatically ter - minate when the contract of which it is a part comes to an end.
It is a recognised state policy to respect party auton - omy in the resolution of disputes. Thus, there are no limitations on the parties’ freedom to select arbitrators in international commercial arbitration or to agree on the qualifications of the arbitrators. In a similar vein, the ADR Act’s IRR provides that no person will be precluded from acting as an arbitrator because of their nationality, unless otherwise agreed by the parties. 4.2 Default Procedures The parties are free to determine the number of arbi - trators but, in the absence of such an agreement, there will be three arbitrators. The parties are also free to agree on a procedure for appointing the arbitrator or arbitrators. In the absence of such an agreement, if the parties had agreed to have a sole arbitrator but are unable to agree on the arbitrator, one party may request that the arbitrator be appointed by the appointing authority. If the parties agree to have three arbitrators, each party will appoint an arbitrator, and then the two appointed arbitrators will appoint the third arbitrator. If a party fails to appoint an arbitrator within 30 days of receiving a request to do so from the other party – or if the two arbitrators fail to agree on the third arbitrator within 30 days of their appointment – the appointing authority will make the appointment upon request of the other party. The appointing authority is the person or institution named as such in the arbitration agreement, or else the regular arbitration institution under the rules of which the arbitration is being conducted. Where the parties have agreed to submit their dispute to insti - tutional arbitration rules, they are deemed to have agreed for arbitrators to be selected and appointed under those rules – unless they have agreed to a dif - ferent procedure. In ad hoc arbitration, the default appointment of an arbitrator will be made by the national president of the IBP or their duly authorised representative.
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