PHILIPPINES Trends and Developments Contributed by: Ricardo Ma P. G. Ongkiko, John Christian Joy A. Regalado and Ma Patricia B. Paz-Jacoba, SyCip Salazar Hernandez & Gatmaitan
SyCip Salazar Hernandez & Gatmaitan SyCipLaw Center 105 Paseo de Roxas Makati City 1229 Metro Manila Philippines
Tel: +63 2 8982 3500 Fax: +63 2 8848 2030 Email: sshg@syciplaw.com Web: www.syciplaw.com
Judicial Deference to Arbitral Tribunals Introduction
• the award was procured by corruption, fraud, or other undue means; • there was evident partiality or corruption in all or any of the arbitrators; • the arbitrators committed misconduct by unjustifi - ably refusing to postpone the hearing, or to hear material and relevant evidence; • an arbitrator was disqualified and knowingly failed to disclose it, or committed misconduct that mate - rially prejudiced a party’s rights; or • the arbitrators exceeded their powers, or so imper - fectly executed them that no mutual, final and defi - nite award was made upon the matters submitted. Further, the Special ADR Rules empower courts, upon proper application of a party, to set aside an interna - tional commercial arbitral award for any of the grounds to vacate an award under Article 34 of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”). The same grounds can be found in Rule 12.4 of the Special ADR Rules, namely that: • a party lacked the capacity to enter into the arbitra - tion agreement, or that the agreement is invalid under the applicable law; • the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitration proceedings or was otherwise unable to present their case; • the award addressed matters outside the scope of the submission to arbitration, subject to the princi - ple of separability; • the tribunal’s composition or the arbitration proce - dure did not comply with the parties’ agreement,
Philippine jurisprudence on arbitration continues to trend in favour of arbitration, reflecting a judicial pol - icy of deference to arbitration proceedings and their outcomes. This policy is grounded in the Philippine Supreme Court’s recognition of several fundamen - tal principles: first, that arbitration is based on party autonomy; second, that the principal purpose of arbi - tration is to resolve, rather than to prolong, disputes; and third, that arbitral tribunals – particularly special - ised ones – are uniquely equipped to resolve techni - cal and complex issues. At the same time, Philippine jurisprudence has been firm that such deference is not absolute, and that the courts retain the power of judicial review in limited circumstances. The trajectory of arbitration jurisprudence mirrors the policy embodied in Philippine arbitration laws and reg - ulations to treat arbitral awards as final, unappealable, and binding upon the parties, subject to exceptional circumstances where judicial review is warranted. Under Rule 19.7 of the Philippine Supreme Court’s Special Rules of Court on Alternative Dispute Resolu - tion (the “Special ADR Rules”), an agreement to refer a dispute to arbitration binds the parties to the arbitral award and precludes either party from filing an appeal or certiorari petition questioning its merits. However, Rule 19.10 of the Special ADR Rules grants courts the authority to vacate a domestic arbitral award upon a clear showing that:
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