Comm Arb: August 28

August 28, 2009 Lecture Notes for CommArb

APT vs. CA

Nosebleed si Rean!!!!

F: MMIC incurred loans from DBP and PNB. It entered a mortgage contract over almost all its assets in favor of DBP and PNB. DBP and PNB

Would it matter if RTC did not dismiss the case but merely suspended it?

YES. Court said that if it was merely suspended, then the mere filing of a motion with the same court having jurisdiction over the civil case would be upheld. But since it was dismissed, the confirmation of the award needs to be filed separately.

Do you agree with dissenting opinion that the dismissal should be deemed merely as "suspension" and not literally "dismissal"?

If Section 7 (Stay of Civil Proceedings) - there should be a MOTION TO STAY the civil action first.

If there's none (no MOTION TO STAY), then would you still consider the action stayed when the parties proceeded with arbitration and the TC expressly DISMISSED THE CASE?

What is the proper remedy under the law when the arbitrators resolved disputes not included in the arbitration award?

Vacate the award

Chung Fu vs. CA

F: the parties entered a contract with an arbitration agreement which provided that the award rendered would be final and nonappealable, without any further judicial recourse available.

Award rendered for Roblecorp. When the latter wanted the award to be confirmed, ChungFu filed a petition for vacation of award but the TC and CA both confirmed the award and ruled that the since the award was agreed to be final and unappealable, it cannot be questioned anymore

H: Arb award providing that the award be final and unappealable are valid BUT when there's GADALEJ on the part of the arbitrators, the aggrieved party may file a petition for certiorari under R65 or may ask for the vacation of the award if the grounds enumerated under the Arbitration law are proven and sufficiently showed.

Under RA 9285, if the loosing party wants to contest a RTC Order confirming an arbitral award, what is the proper recourse?

Under Section 46, appeal to CA after posting a bond equivalent to the amount of the award

What if the loosing party who wants to contest fails to post a bond?

The appeal is not perfected

So it's expensive to appeal the confirmation of an arbitral award…What if in NAIA 3 Case, The German investors won. If it wants to have the award to be enforced against the RP?

Di ba file for recognition and enforcement?

If RP wants to appeal if the recognition, the bond is equivalent of the arbitral award!!!

Vs. in ejectment cases, just supersedeas bond long equivalent to the amount of rents!

GREY AREA: "The losing party who appeals from the judgment of the court confirming an arbitral award shall required by the appealant court to post counterbond executed in favor of the prevailing party equal to the amount of the award in accordance with the rules to be promulgated by the Supreme Court" - but these rules have not been promulgated by the SC!

-pero if no rules yet, how can you file a bond???

Adamson vs. CA

F: Adamson and APAC entered a contract wherein Adamson would sell its shares of stocks to APAC at a cost plus NAV. The parties did not agree on the amount of NAV so they entered into an arbitration proceeding. Arbitration award was for APAC so Adamson wanted the award to be vacated based on "evident partiality" which TC agreed to. CA reversed.

H: SC found no evident partiality

In the event of a vacated award, can the trial court substitute its own interpretation?

NO. Just rule on WON the grounds asserted exist!

National Steel Corp vs. RTC

F: NSC entered a contract with EWEI and Ramiro Construction. Differences arose, EWEI demands from NSC payment. Parties agreed to enter an arbitration proceeding. Arb award rendered in favor of EWEI. When EWEI wanted to confirm the award, NSC petitioned for vacation, arguing "evident partiality". RTC confirmed the award.

Note that after the hearing in the arbitration proceedings, both parties agreed that there was no partiality

H: Reiterate Adamson vs. CA

-needs proof

ON FINDINGS OF FACT:

"It should be stressed that voluntary arbitrators, by the nature of their functions, act in a quasi-judicial capacity. As a rule, findings of facts by quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are accorded not only respect but even finality if they are supported by substantial evidence, even if not overwhelming or preponderant."

…therefore, arbitrator's findings are accorded with respect but even finality if supported by substantial evidence (as it was deemed equivalent to a QJ agency)

Sabi ni Ms. Sta. Maria: Similar to ruling of trial courts

ON RA 9285

(table from reviewer)

	Mediation			arbitration
	Institutional	Ad hoc	Domestic		International
			regular	Construction
Rules governing	Rules of the institution	Agreement of parties	Domestic Arb law – RA 876 (parties can agree as to the procedure, but not to the law)	CIAC law – EO 1008	UNCITRAL model law (parties may agree as to procedure that would be followed)
Scope	Mediation subject to international rules	Mediation subject to the agreement of the parties	Domestic Arbitration	Construction Disputes, even if commercial and international in nature	Parties are international:
			X:	Same exceptions	-place of business outside RP
			1. Labor disputes under Labor Code		-does not include domestic subsidiary of international party or a coventurer in a joint venture
			2. Civil Status of persons		Commercial in nature
			3. Validity of marriage		Same exceptions
			4. Any ground for Legal Separation
			5. Jurisdiction of courts
			6. Future Legitime
			7. Criminal liability
			8. Accdg to Law, cannot be compromised (NCC: future support)
Venue	Place where institution located?	1. agreement of parties	1. agreement of the parties	1. agreement of the parties	1. agreement of the parties
		2. place convenient and appropriate	2. place convenient and appropriate in the	2. place convenient and appropriate in the	2. MM or place convenient
			Philippines	Philippines
Who appoints mediators/arbs	Institution has panel of mediators	Agreement of parties	1. Parties then the arbitrators (if 3 arbitrators)	CIAC and parties	1. agreement (person, institution)
			2. Courts when:		2. National President of IBP
			a. parties unable to agree		3. the court, if 2 appointed arbitrators unable to appoint 3rd arbitrator
			b. appointed arbitrator unwilling/unable to serve, no successor named
			c. party fails/refuses to name arbitrator
			d. arbitrators fail to appoint 3rd arbitrator
			e. agreement silent as to # of arbitrator
			f. arbitrator initially appointed by RTC declines/fails to duly accept the appointment
Language	Law is silent		English and Filipino		1. Agreement
					2. English
Confidential?	Yes		Maybe. Law is silent but ADR law sabi oo	Maybe. Law is silent but ADR law sabi oo	Yup
	Unless:
	1. parties agree in authenticate record
	2. available to public
	3. threats
	4. plan crimes
	5. abuse, neglect, abandonment, exploitation
	6. malpractice of med/party/nonparty
	7. Need for evidence heavier, esp:
	a. hearing in camera
	b. crime or felony
	c. reform or ability to avoid liability
Challenge for med/arbs	Conflict of interest?		1. Justifiable doubts on impartiality or independence	Impartiality?	Before arbiters first then to the court appointed
			2. No qualifications as agreed upon by parties
Enforcement	Petition before RTC		File Motion to confirm Arbitral Award then Enforced as a Final and executor judgment: so needs motion for WOE before RTC	No need to be confirmed by RTC – so just execute?	Recognition and Enforcement filed w/RTC
	-may be deposited to RTC COC				-covered by NY convention
					Motion for recognition and enforcement
					-not covered by NY convention
					Follow ROC so motion for writ of execution?
					-if foreign arbitral award: confirmed by foreign court:
					Recognized NOT AS A FOREIGN JUDGMENT (THEREFORE NOT APPEALABLE) but a FOREIGN ARBITRAL AWARD
					-if foreign arbitral award: confirmed by RP courts
					Enforced as final and executor award in RP (appealable)
Vacation	Law silent		*Award procured through corruption, fraud	Insufficient info	(note: sabi ADR law grounds for modifying or correcting award under Domestic Arb law)
			*evident partiality on the part of the arbs		*evident miscalculation of figures
			*corruption of arbitrator		*award not among reliefs prayed for
			*arbs guilty of misconduct		*award imperfect in form
			*disqualification of arb not made known
			*Arbs exceeded powers
What parties can agree on	Since ADR law silent, could probably agree on anything as long as not contrary to law…		1. agreement to subject dispute to other forms of ADR	Agreement that mediator act as arbitrator and vice versa	1. agreement to publish proceedings (for confidentiality)
	1. agreement to publish mediation proceedings		2. number of arbs		2. procedure to subject parties to institutional rules
	2. agreement to subject parties to institutional rules		3. method for naming arbitrators		3. venue
	3. appointment of mediators		4. procedure		4. language to be used
	4. number of mediators		5. time w/n w/c arbitral award should be made		5. appoint court that would be competent to
			6. venue for arbitration		a. appoint 3rd arbiter
			7. language to be used		b. decide on challenges on arbitrator
					c. decide on termination of mandate of arbitrator for impossibility to act
					d. decide on jurisdiction of arbitral tribunal
					e. vacate/set aside arbitral award
					6. # of arbitrators
					7. Procedure for appointing arbitrators
					8. Qualification of arbitrator
					9. Procedure for challenging an arbitrator
					10. How arbitration proceedings conducted (how initiate, rules of procedure, how to decide)
					11. Law to be applied by the arbitral tribunal
					12. Period w/n which arbitral tribunal would decide
					13. Assessment of expenses

What is RA 9285?

Alternative Dispute Resolution Act of 2004

Distinguish from RA 876

RA 876	RA 9285
Arbitration lang	Other methods of Dispute Resolution: Arbitration: voluntary dispute resolution process wherein, in accordance w/ agreement of parties, the dispute is resolved by rendering an AWARD Mediation: voluntary process in which a mediator, selected by the disputing parties, facilitates communication…and assist the parties in reaching a voluntary agreement re: dispute Conciliation Early neutral evaluation: parties and lawyers are brought together early in pretrial phase to present summaries of their cases and receive a nonbinding assessment by an experienced neutral person w/ expertise in the subject matter of dispute *status of agreement to submit to ENE: contractual and consensual ?is it mandatory? NO What if parties agree to a ENE b4 adjudication? Valid, forms part of contract Can it be different from initial contract? Yes Who chooses the evaluator? Law is silent *Sir wants to apply the rules on arbitration on the other forms of ADR Mini trial: the merits of the case are argued before a panel comprising of SENIOR DECISION MAKERS, parties seek negotiated settlement MED-ARB: involves both mediation and arbitration…
No definition of terms	Has a section devoted for definition of terms!
Domestic arb	Domestic Arb International Commercial Arbitration CIAC

IN MINI TRIAL:

(u) "Mini-Trial" means a structured dispute resolution method in which the merits of a case are argued before a panel comprising senior decision makers with or without the presence of a neutral third person after which the parties seek a negotiated settlement;

How do you undergo mini-trial?

Make a panel comprising of SENIOR DECISION MAKERS.

Where do you pick those people who sit in the panel? The "senior decision makers"?

The senior decision makers of the parties! Note: the law does not clearly define who these persons are.

Suggested procedure for Mini trial for resolution of the GSIS dispute:

Call upon the heads of GSIS and MERALCO. Then the lawyers of both GSIS and MERALCO would present the merits of the case. Afterwards, the parties would negotiate a settlement between them.

Benefit:

Once you see the case of the other party, you can discover your own strengths and weaknesses. If you see your weaknesses, you'll be more reasonable with your demands! You would be more amenable to settling the case.

EARLY NEUTRAL EVALUATION (ENE)

(n) "Early Neutral Evaluation" means an ADR process

...wherein parties and their lawyers are brought together early in a pre-trial phase

...to present summaries of their cases

...and receive a nonbinding assessment

...by an experienced, neutral person,

...with expertise in the subject in the substance of the dispute;

Experienced, neutral person: Sino to?

Dapat:

Experienced

Neutral

MEDIATION:

(q) "Mediation" means a voluntary process in which a mediator, selected by the disputing parties, facilitates communication and negotiation, and assist the parties in reaching a voluntary agreement regarding a dispute.

(r) "Mediator" means a person who conducts mediation;

(s) "Mediation Party" means a person who participates in a mediation and whose consent is necessary to resolve the dispute;

(t) "Mediation-Arbitration" or Med-Arb is a step dispute resolution process involving both mediation and arbitration;

What is the defining characteristic of Arbitration vs. other modes of ADR?

Arbitration: BINDING AND ENFORCEABLE AWARD

Did RA 9285 repeal RA 876?

No. Domestic Arb governed by RA 876 after RA 9285

Court annexed mediation vs. court referred mediation

Court-Annexed Mediation	Court-Referred Mediation
(l) "Court-Annexed Mediation" means any mediation process conducted under the auspices of the court, ...after such court has acquired jurisdiction of the dispute;	(m) "Court-Referred Mediation" means mediation ...ordered by a court to be conducted in accordance with the Agreement of the Parties ...when as action is prematurely commenced in violation of such agreement;
Court acquired jurisdiction but mediation takes place	ordered by court when action is prematurely commenced
No mediation agreement, but mediation is referred	There is a pre-existing mediation agreement!

Mediation done by courts: Court-annexed mediation

-refer to mediation by order of the court

-actually a deviation from the original concept of mediation where there's party autonomy: mediation is IMPOSED ON THE PARTIES and there's a fixed set of mediators

-if you refuse to comply: CONTEMPT!

What is the liability of ADR Practitioners in general?

Same as puboff: cannot be civilly liable unless

Malice

Gross negligence

Bad faith

MEDIATION: PRIVILEGE AND CONFIDENTIALITY

What is the extent of confidentiality in mediation?

GR: can't disclose (SECTION 9)

-participant may refuse to disclose

-can prevent any person from disclosing the mediation communication

-can't be subject to modes of discovery: but the mere use of the information in the mediation is not automatically made inadmissible!

-cannot disclose confidential information acquired during mediation

-protection still apply even if mediator found to have failed to act impartially

-mediator may not be called to testify to provide information gathered in mediation, or else reimburse mediator full cost...

X:

1. Parties agree to authenticate record
2. Available in public (public has access to the proceedings)
3. Threats
4. Plan crimes
5. Abuse, neglect, abandonment, exploitation
6. Malpractice of med/party/nonparty
7. Need for evidence heavier, esp:
1. Hearing in camera
2. Crime or felony
3. Reform or ability to avoid liability

Who are the people bound?

Section 9

(1) the parties to the dispute;

(2) the mediator or mediators;

(3) the counsel for the parties;

(4) the nonparty participants;

-who is a nonparty participant? Witnesses

(5) any persons hired or engaged in connection with the mediation as secretary, stenographer, clerk or assistant; and

(6) any other person who obtains or possesses confidential information by reason of his/her profession.

Who recited:

Rean

Patch

Ms. Aglibot

Eva

Anton

Don Villanueva?

Tito Romy