Arbitration

Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

An agreement to arbitrate a controversy arising between parties, as well as a submission to arbitrate an existing controversy, must be in writing and subscribed by the party sought to be charged or by their lawful agent.

Arbitral procedure

Does the domestic law contain substantive requirements for the procedure to be followed?

Yes, there are specific provisions on how to initiate arbitration, appoint arbitrators and conduct arbitration hearings under Republic Act 876 (the Arbitration Law) and Republic Act 9285 (the Alternative Dispute Resolution Act 2004) and its implementing rules and regulations.

Arbitration is allowed when:

  • Two or more persons agree to submit to arbitration any controversy existing between them at the time of the submission, which controversy may be the subject of an action.
  • The parties to a contract agreed in said contract to settle by arbitration a controversy thereafter arising between them.

In order to initiate arbitration, the provisions of the submission or contract must be complied with. For instance, where a prior demand is required under the arbitration contract, the claimant must serve on the responding party a demand for arbitration containing the nature of the controversy, the amount involved and the relief sought.

On the other hand, where a party to a submission to arbitration refuses to arbitrate, the other party must also serve a demand for arbitration as stated above.

However, the submission or contract may be revoked on such grounds that exist under Philippine law for revocation of any contract.

Further, the following matters cannot be the subject of arbitration by virtue of certain public policies that may be affected or violated:

  • labour disputes covered by the Labour Code;
  • a person’s civil status;
  • marriage validity;
  • grounds for legal separation;
  • courts’ jurisdiction;
  • future legitime (ie, a succession issue);
  • criminal liability; and
  • future support (ie, a family law issue).
Award

When and in what form must the award be delivered?

The parties may agree on the period within which the award must be rendered. Such agreement must be in writing. In the absence of an agreement, arbitrators must render an award within 30 days after the closing of the hearings or, if the oral hearings have been waived, within 30 days after the arbitrators have officially closed the proceedings in lieu of oral hearings. The parties may likewise agree to extend this period.

The award must be written and signed and acknowledged by the sole arbitrator or by a majority of the arbitrators, if more than one. Each party will be provided with a copy of the award.

Appeal

On what grounds can an award be appealed to the court?

The agreement by the parties to refer a dispute to arbitration means that the arbitral award is final and binding. A party to an arbitration is therefore precluded from filing an appeal or a petition for certiorari questioning the merits of an arbitral award.

Unless a public policy is violated or the substance and format of the arbitration proceedings are infirm, as provided for under the UNCITRAL Model Law, the arbitral award may not be vacated by filing an appeal or set aside by filing an action with the appellate courts.

Enforcement

What procedures exist for enforcement of foreign and domestic awards?

Domestic arbitral awards are executed in the same manner as final and executory decisions of first-level courts.

The recognition and enforcement of international arbitral awards are governed by the rules set out in the New York Convention, to which the Philippines is a signatory.