Guide to Arbitration Rules and Procedures in the Philippines
Our Country Chapters set out key aspects of the arbitration framework of each jurisdiction highlighted in our website, covering basics like judicial hierarchy and domestic arbitral institutions to substantive issues such as conflicts of laws and the extent of adoption of the UNCITRAL Model Law. New topics will be added periodically, with recent additions such as responding to court proceedings in breach of the arbitration agreement, tribunal powers and jurisdictions, and more.
1. Legal System and Framework
The Philippine legal system represents a mix of the civil law and common law systems. The primary sources of Philippine law are the 1987 Philippine Constitution and statutes enacted by Congress. That said, decisions of the Philippine Supreme Court applying or interpreting the laws or the Constitution also form part of the legal system of the Philippines.
Local government units also have the authority to enact ordinances which are effective within their respective territories. Regulatory or administrative agencies may also issue rules and regulations that have the force and effect of law. The Constitution likewise vests in the Supreme Court the authority to promulgate rules governing pleadings and court practice and procedure.
The Philippine Judiciary mainly consists of the Supreme Court, the Court of Appeals, and the trial courts (particularly the Regional Trial Courts (“RTCs“) and the Municipal Trial Courts). Other specialised courts have been created by law for the resolution of specific disputes (such as the Court of Tax Appeals for tax disputes).
Actions for the recognition and enforcement of international and foreign arbitral awards fall within the original jurisdiction of RTCs. Decisions of RTCs on these matters may be appealed to the Court of Appeals, and thereafter, to the Supreme Court. An appeal to the Court of Appeals will generally not stay the RTC’s decision or ruling. Moreover, a review by the Supreme Court is not a matter of right but of sound judicial discretion, and will be granted only for serious and compelling reasons.
The main sources of law on international arbitration in the Philippines are (a) Republic Act No. 9285, or the Alternative Dispute Resolution Act of 2004 (“ADR Act“); (b) the ADR Act’s implementing rules and regulations issued by the Philippine Department of Justice (“ADR Act IRR“); and (c) A.M. No. 07-11-08-SC, or the Special Rules of Court on Alternative Dispute Resolution issued by the Supreme Court (“ADR Rules“).
Section 19 of the ADR Act provides that international commercial arbitration shall be governed by the UNCITRAL Model Law. In Mabuhay Holdings Corp. v. Sembcorp Logistics Limited, G.R. No. 212734, 5 December 2018, the Supreme Court affirmed that the UNCITRAL Model Law has been incorporated in its entirety in the ADR Act.
Philippine laws distinguish between domestic, international, and foreign arbitration. Among others, Philippine laws provide different procedures for confirmation, recognition, and/or enforcement, and different grounds for opposing the confirmation, recognition, and/or enforcement of these awards, depending on whether these are domestic, international, or foreign arbitral awards.
Matters concerning domestic arbitration are governed by the Arbitration Law (Republic Act No. 876), as amended by the ADR Act. In turn, matters concerning international arbitration are governed by the ADR Act, the ADR Act IRR, and the ADR Rules. The ADR Act and the ADR Act IRR have adopted the definition of international arbitration in the UNCITRAL Model Law. Accordingly, an international arbitration is one where:
- The parties to an arbitration agreement, at the time of the conclusion of that agreement, have their places of business in different countries; or
- One of the following places is situated outside the country in which the parties have their places of business: (i) the place of arbitration if determined in, or pursuant to, the arbitration agreement; or (ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject matter of the dispute is most closely connected; or
- The parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.
Matters concerning foreign arbitration are also governed by the ADR Act and the ADR Rules. In particular, the ADR Rules define a foreign arbitral award (and implicitly, a foreign arbitration) as one that is made or conducted in a country other than the Philippines.
The Supreme Court has declared that the Philippines has adopted a policy in favour of arbitration. This is manifest in the ADR Rules’ adoption of the “competence-competence” principle, and its allowance of measures aimed at supporting the arbitration process. These measures include the provision of assistance by courts in taking evidence (e.g. under ADR Rule 9, these measures include courts directing persons to comply with a subpoena, appear before an officer for the taking of depositions, or allow the examination or photocopying of documents), and in the enforcement of interim measures of protection that may be issued by arbitral tribunals (ADR Rule 5.16).
That said, the ADR Rules contain provisions allowing parties to question the existence, validity, and enforceability of arbitration agreements prior to the commencement of arbitration (ADR Rule 3.2). Parties are also allowed to seek judicial relief from the ruling of an arbitral tribunal on a preliminary question upholding or declining its jurisdiction (ADR Rule 3.12).
2. Arbitral Institutions
The Construction Industry Arbitration Commission (“CIAC“) is a specialised arbitral institution created by Executive Order No. 1008. CIAC exercises jurisdiction over construction disputes, or those which arise from, or are connected with, contracts entered into by parties involved in construction in the Philippines, where the parties agree that disputes between them shall be resolved through arbitration.
Apart from CIAC, the other significant arbitral institutions in the Philippines are the Philippine Dispute Resolution Centre, and the Philippine International Centre for Conflict Resolution.
Section 23 of the ADR Act provides that arbitral proceedings, including the records, evidence, and the arbitral award, are considered confidential and may not be published except (a) with the consent of the parties, or (b) for the limited purpose of disclosing relevant documents to the courts in cases where resort to the courts is allowed. Courts may also issue confidentiality or protective orders to prevent or prohibit the disclosure of documents or information containing secret processes, developments, research, and other information where it is shown that the applicant shall be materially prejudiced by the disclosure thereof.
4. The Law of the Arbitration and Conflicts of Law
The parties are free to agree on the system of laws applicable to the arbitral proceedings. Absent an agreement in this respect, the basic position under Philippine law is that the law of the place (or seat) of arbitration shall govern its procedural aspects.
Philippine law recognises the freedom of contracting parties to establish such stipulations, clauses, terms and conditions as they may deem convenient, provided that these are not contrary to law, morals, good customs, public order or public policy (article 1306, Civil Code). This freedom includes the ability of parties to choose the law that shall apply to their contracts or in the resolution of contractual disputes, by inserting “choice-of-law” provisions in their agreements. Article 4.28 of the ADR Act IRR also provides that tribunals in international arbitrations shall decide disputes in accordance with the parties’ chosen law. In the absence of an agreement on the applicable law, the tribunal shall apply the law which it considers applicable, as determined by the conflict of laws rules.
Yes. As mentioned above in question 4.2, article 4.28 of the ADR Act IRR provides that tribunals in international arbitrations in the Philippines shall decide disputes in accordance with the parties’ chosen law. In the absence of an agreement on the applicable law, the tribunal shall apply the law determined by the conflict of laws rules, which it considers applicable.
The ADR Act does not provide for mandatory rules of substantive law that would apply to the parties’ rights and obligations solely by virtue of the fact that the arbitration is seated in the Philippines.
In Saudi Arabian Airlines v. Court of Appeals,  G.R. No. 122191, the Supreme Court applied the “State of the most significant relationship” rule in determining the law that applies to tort claims. The Supreme Court identified the following factors which may be considered in determining the State which has the most significant relationship to a tort case: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centred.
The Philippines recognises a distinction between the laws applicable to international arbitral proceedings, which are set out in the ADR Act, the ADR Act IRR, and the ADR Rules, and the law applicable to the arbitration agreement (or the substance of the dispute), which may be stipulated by the parties.
Provisions of Philippine law on limitation periods have been characterised by the Supreme Court as forming part of substantive law. Article 1139 of the Philippine Civil Code also provides that actions prescribed by the mere lapse of time is fixed by law. Thus, if the parties select Philippine law as the law applicable to the contract or dispute, then Philippine laws on limitation periods may apply.
5. Arbitration Agreements
Article 4.7 of the ADR Act IRR requires that arbitration agreements be in writing. This requirement is satisfied if the agreement is contained:
- in a document signed by the parties; or
- in an exchange of letters, telex, telegrams, or other means of communication which provide a record of the agreement; or
- in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other.
Electronic arbitration agreements may be recognised in the Philippines. Republic Act No. 8792, or the Electronic Commerce Act, provides that electronic documents shall have the same legal effect and validity as any other document or legal writing as long as the integrity and reliability of the document can be authenticated so as to be useable for subsequent reference.
Article 4.7 of the ADR Act IRR provides that a reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement, provided that the contract referred to is in writing and the reference is such as to make the arbitration clause a part of the referring document.
Any dispute that may be compromised may be the subject of an arbitration agreement. The following disputes or matters, however, have been expressly excluded from the scope or coverage of the ADR Act, and may thus not be the subject of an arbitration agreement: (a) labour disputes; (b) the civil status of persons; (c) the validity of a marriage; (d) any ground for legal separation; (e) the jurisdiction of courts; (f) future legitime; and (g) criminal liability (section 6, ADR Act).
Philippine law recognises the separability of arbitration agreements. In Koppel, Inc. v. Makati Rotary Club Foundation, Inc.,  G.R. No. 198075, the Supreme Court ruled that an arbitration agreement is independent of the main contract, and may be invoked regardless of the possible nullity or invalidity of the main contract. The Supreme Court also affirmed its earlier pronouncement that even the party who repudiates the main contract may still invoke the arbitration clause in that agreement.
6. Proceedings in Breach of the Arbitration Agreement
A party to an arbitration agreement may initiate action before domestic courts even if the dispute falls within the scope of an arbitration agreement. In such cases, however, the court may refer the parties to arbitration upon request. Please see Question 6.2 below for further details.
Pursuant to section 24 of Republic Act No. 9285 or the Alternative Dispute Resolution Act of 2004 (“ADR Act“), the party against whom court action is brought in breach of an arbitration agreement may file a motion asking the court to refer the matter to arbitration in accordance with the arbitration agreement. This request must be made no later than the pre-trial conference. Otherwise, the request may be made even after the pre-trial conference provided that the request is made by both parties.
The ADR Act mandates courts to thereafter refer the parties to arbitration unless they find that the arbitration agreement is null and void, inoperative or incapable of being performed.
This remedy would also be available for foreign-seated arbitrations.
Yes. The domestic equivalent of an anti-suit injunction is a preliminary injunction, which is one of the interim measures of protection that a Philippine court may grant pursuant to the ADR Act and A.M. No 07-11-08-SC, or the Special Rules of Court on Alternative Dispute Resolution (“ADR Rules“).
A party may petition for the issuance of an interim measure of protection in the form of a preliminary injunction in order to prohibit the other party from initiating domestic court proceedings in breach of an arbitration agreement. The petition may be filed:
- before arbitration is commenced;
- after arbitration is commenced, but before the constitution of the arbitral tribunal; or
- after the constitution of the tribunal and at any time during the arbitration proceedings, but only to the extent that the tribunal has no power to act or is unable to act effectively.
This remedy would also be available for foreign-seated arbitrations.
Pursuant to section 28 of the ADR Act, the party who fails to comply with a preliminary injunction may be held liable for all damages resulting from noncompliance, including all expenses and reasonable attorney’s fees paid in obtaining the order’s judicial enforcement.
7. Jurisdiction and Powers of the Arbitral Tribunal
Yes. Section 6 of the ADR Act provides that disputes involving the following subject matters cannot be resolved or settled through arbitration (or other alternative modes of dispute resolution):
- labour disputes covered by Presidential Decree No. 442, otherwise known as the Labor Code of the Philippines, and its implementing rules and regulations;
- the civil status of persons;
- the validity of a marriage or any ground for legal separation;
- the jurisdiction of courts;
- future legitime;
- criminal liability; and
- those which by law cannot be compromised.
Section 20 of Republic Act No. 876, or The Arbitration Law (“RA 876“), provides that the arbitrators may grant any remedy or relief which they deem just and equitable and within the scope of the arbitration agreement, which shall include, but not be limited to, the specific performance of a contract.
Sections 28 and 29 of the ADR Act provide that arbitral tribunals have the power to grant interim measures of protection after their constitution and at any time during the arbitral proceedings, to prevent irreparable loss or injury, provide security for the performance of any obligation, produce or preserve any evidence, or compel any other appropriate act or omission. These interim reliefs include, but are not limited to:
- preliminary injunction directed against a party;
- preliminary attachment;
- appointment of a receiver; and
- detention, preservation, delivery, or inspection of property.
There is no difference under the ADR Act for foreign-seated arbitrations.
ADR Rule 5.16 provides that parties may seek the assistance of Philippine courts to enforce interim relief that the arbitral tribunals cannot enforce effectively. This applies to both domestic and foreign-seated arbitrations.
Pursuant to ADR Rule 5.3, a petition seeking assistance in the enforcement of an interim measure of protection granted by an arbitral tribunal may be filed with the Philippine Regional Trial Court which has jurisdiction over the place where (a) the principal place of business of any of the parties is located; (b) any of the parties who are individuals resides; (c) any of the acts sought to be enjoined are being performed, threatened to be performed, or not being performed; or (d) real property that is the subject of the arbitration, or any portion thereof, is situated.
ADR Rule 5.11 further provides that a court shall not deny an application for such assistance on any (or all) of the following grounds:
- the arbitral tribunal granted the interim relief ex parte;
- the party opposing the application found new material evidence, which the arbitral tribunal had not considered in granting the application, and which, if considered, may produce a different result; or
- the relief ordered by the arbitral tribunal amends, revokes, modifies, or is inconsistent with an earlier measure of protection issued by the court.
Pursuant to ADR Rule 5.2, petitions for the issuance of interim relief may be filed with Philippine courts:
- before arbitration is commenced;
- after arbitration is commenced, but before the constitution of the arbitral tribunal; or
- after the constitution of the arbitral tribunal and at any time during arbitral proceedings, but only to the extent that the arbitral tribunal has no power to act or is unable to act effectively.
The authority of Philippine courts to issue interim relief is significantly curtailed upon the constitution of the arbitral tribunal. In this regard, ADR Rule 5.15 provides that a court shall defer action on any pending petition for interim relief upon being informed that an arbitral tribunal has been constituted, and further provides that a court may act upon such petition only if it is established that the tribunal has no power to act on such interim measure of protection or is unable to act thereon effectively.
ADR Rule 5.13 also provides that any court order granting or denying interim measure/s of protection is:
- without prejudice to the subsequent grant, modification, or revocation by an arbitral tribunal; and
- deemed to have been ipso jure modified or revoked by a subsequent interim measure of protection issued by an arbitral tribunal to the extent of any inconsistency.
ADR Rule 5.14 further provides that any question involving a conflict or inconsistency between an interim measure of protection issued by a court and by an arbitral tribunal shall be immediately referred by the court to the tribunal which shall have the authority to decide the question.
The foregoing rules apply whether the arbitration is seated in the Philippines or in a foreign jurisdiction.
Yes. Arbitral institutions in the Philippines, such as the Philippine Dispute Resolution Center, Inc., and the Philippine International Center for Conflict Resolution, provide mechanisms for parties to apply for the appointment of emergency arbitrators in limited circumstances. However, there is no Philippine law that expressly recognises the concept of an emergency arbitrator, or provides an explicit basis for the enforceability of emergency relief issued by emergency arbitrators.
Yes. ADR Rule 2.4 provides that an arbitral tribunal shall be accorded the first opportunity to rule on the issue of whether it has the competence or jurisdiction to decide a dispute submitted to it for decision, including any objection with respect to the existence or validity of the arbitration agreement. When a court is asked to rule upon issues affecting the competence or jurisdiction of a tribunal, either before or after the tribunal is constituted, the court must allow the tribunal the first opportunity to rule upon these issues.
Where the court is asked to determine whether the arbitration agreement is null and void, inoperative, or incapable of being performed, the court must make no more than a prima facie determination of this issue. Unless the court, pursuant to such prima facie determination, concludes that the arbitration agreement is null and void, inoperative, or incapable of being performed, the court must suspend the action before it and refer the parties to arbitration pursuant to the arbitration agreement.
8. Appointment of Arbitrators, Challenge, and Liability
Parties are free to agree on the number of arbitrators and the procedure for the appointment of arbitrators. Parties may craft their own procedure for the constitution of an arbitral tribunal in their arbitration agreement, or adopt the procedural rules of their chosen arbitral institution. In this regard, section 26 of the ADR Act provides that where the parties have agreed to submit their dispute to institutional arbitration rules, and unless they agree on a different procedure, they shall be deemed to have agreed to the procedure under such arbitration rules for the selection and appointment of arbitrators.
The ADR Act’s implementing rules and regulations (“ADR Act IRR“) and the ADR Rules provide that if the parties do not determine the number of arbitrators, there shall be three arbitrators.
- Each party shall appoint one arbitrator within 30 days of receipt of a request to do so from the other party.
- The two arbitrators thus appointed shall appoint the third arbitrator within 30 days of their appointments.
- If any appointment is not made within the relevant timeframe, the appointment shall be made, upon request of a party, by the National President of the Integrated Bar of the Philippines (“IBP“) or his/her duly authorised representative, pursuant to Section 26 of the ADR Act.
- In instances where the National President of the IBP or his/her duly authorised representative fails or refuses to appoint arbitrators, the appointment may be made by a Philippine court upon the request of the parties.
Parties are generally free to agree on the qualifications of potential arbitrators. However, section 10 of RA 876 provides that arbitrators must be impartial and independent, and must not:
- be related by blood or marriage within the sixth degree to either party to the controversy;
- have or had any financial, fiduciary, or other interest in the controversy or cause to be decided or in the result of the proceeding; or
- have any personal bias which might prejudice the right of any party to a fair and impartial award.
Yes. Pursuant to Article 12 of the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law on 21 June 1985 (“UNCITRAL Model Law“), which has been expressly adopted and incorporated into Philippine law by the ADR Act, an arbitrator may be challenged if s/he does not possess the qualifications agreed to by the parties.
Pursuant to Article 13(1) of the UNCITRAL Model Law, the parties are free to agree on a procedure for challenging an arbitrator. Absent such agreement, the procedure provided for in Article 13(2) of the UNCITRAL Model Law applies.
If the challenge to an arbitrator’s appointment is unsuccessful:
- The aggrieved party may request the appointing authority to rule on the challenge.
- If the appointing authority fails or refuses to act on the challenge within 30 days from receipt of the request, then the aggrieved party may renew the challenge before the courts.
- The challenge shall be filed with the relevant Regional Trial Court.
- The challenged arbitrator or other parties may file a comment or opposition within 15 days from service of the petition challenging his/her appointment.
- After hearing, the court shall remove the challenged arbitrator if it finds merit in the petition; otherwise, it shall dismiss the petition.
While the challenge is pending, Article 13(3) of the UNCITRAL Model Law allows the arbitral tribunal, including the challenged arbitrator, to continue proceedings and issue an award.
Section 5 of the ADR Act provides that arbitrators have the same civil liability for acts done in the performance of their duties as that of public officers as provided in the Philippines’ Administrative Code of 1987. This means that arbitrators shall not be liable for acts done in the performance of their duties, unless there is a clear showing of bad faith, malice, or gross negligence.
9. Party Representation
There are none. Pursuant to Section 22 of the ADR Act, a party to domestic or international arbitration proceedings may be represented by any person of his/her choice, provided that such representative, unless admitted to the practice of law in the Philippines, shall not be authorised to appear as counsel in any Philippine court, or any other quasi-judicial body, whether or not such appearance is in relation to the arbitration in which s/he appears.
There are no applicable arbitration laws or rules that regulate the etiquette or conduct of foreign representatives of parties in Philippine-seated arbitrations.
Parties are free to agree on the applicability of the IBA Guidelines on Party Representation in International Arbitration with respect to the conduct of their representatives in their arbitration proceedings. The Philippine Dispute Resolution Center, Inc. has adopted the IBA Guidelines on Party Representation in its arbitration rules.