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
• the 2024 IBA Guidelines on Conflicts of Interest in International Arbitration; and • the IBA Guidelines on Party Representation in International Arbitration. Similarly, the PICCR has expressly adopted the origi - nal IBA Rules of Ethics for International Arbitrators (1987) and the 2014 IBA Guidelines on Conflicts of Interests in International Arbitration as a Code of Eth - ics in its guidelines for complaints against arbitrators. On the other hand, the Philippine Institute of Arbitra - tors issued its own Code of Professional Responsibil - ity for Members, which provides a uniform benchmark for the application of professional and ethical stand - ards that should govern its members’ conduct at all times. Further, if the counsel or arbitrator is a Philippine lawyer, they are also bound to observe and comply with the Code of Professional Responsibility and Accountability promulgated by the Supreme Court in April 2023. Lawyers are subject to discipline when they violate or attempt to violate these rules, with the most severe penalty being disbarment. Lastly, ADR providers and practitioners are not deemed public officers. Rather, for acts done in the performance of their official duties, they have the same civil liability as public officers under Section 38 (1), Chapter 9, Book I of the Administrative Code of 1987, upon a clear showing of bad faith, malice or gross negligence. 13.3 Third-Party Funding There is no Philippine law expressly regulating third- party funding of arbitration. In RODCO Consultancy and Maritime Services Corporation v Ross (GR No 259832, 6 November 2023), which involved financ - ing a seafarer’s labour claim rather than arbitration funding, the Supreme Court explained that earlier champerty cases were not invalidated solely because a stranger financed litigation, and that the grossly disadvantageous terms and fiduciary concerns were material to its holding. The court voided the particu - lar arrangement before it because the compensation was uncertain, the financier had a superior bargain -
ing position, and the financially pressed litigant was exposed to overreaching. 13.4 Consolidation Article 4.45 of the ADR Act’s IRR expressly provides that there can be consolidation of arbitration proceed - ings only if the parties agree to the consolidation. The parties’ agreement is the operative fact that forms the basis for consolidation. Philippine arbitration institutions provide the proce - dures for consolidation. For instance, at the request of a party, and after consulting with the parties and any confirmed arbitrators, the PDRCI has the power to consolidate two or more arbitration proceedings provided that: • all parties agree to consolidate; • all claims are made under the same arbitration agreement; and • if claims are made under more than one arbitra - tion agreement, there is nevertheless a common question of law or fact, the rights claimed arise out of the same transaction and the PDRCI finds the An arbitration agreement generally can only bind and be invoked by those who are parties to the agreement. However, there are certain circumstances in which third parties, who are not parties to the arbitration agreement, may be bound by it. Similarly, only parties are generally bound by an arbitral award, yet there are certain exceptional instances where the arbitral award may be enforced against third parties. In this regard, Rule A.6 of the Special ADR Rules pro - vides that third-party security providers will be bound by the arbitration agreement only if the third party that secures the loan has agreed in the accessory contract (either directly or by reference) to be bound by such arbitration agreement. arbitration agreements compatible. 13.5 Binding of Third Parties Furthermore, heirs and assigns are generally bound by contracts (including arbitration agreements) entered into by their predecessors-in-interest, except when the rights and obligations arising therefrom are not
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