- To recognize and enforce foreign arbitral awards
- Not to enforce more onerous conditions than those imposed on domestic awards
- To recognize the arbitration agreements in contracts
- One of the parties is a foreigner
- Foreign arbitrator agrees to abide by the rules of CIAC
- Foreign arbitrator is merely a coarbitrator (not chairman) unless selected by 2 coarbitrator
- Not same nationality with the international party
Sa new rules: AM no. 07-11-08-SC
Guidelines for the resolution of issues related to arbitration of loans secured by collateral (with the new rules of the Supreme Court on ADR)
*the arbitration clause in the main contract extends to the accessory contract
e.g. You have a loan with a bank, you execute a promissory note as proof of payment for the loan (example, for a housing loan). As a security, the bank would require you to execute a mortgage. This means that the Torrens title is annotated with the mortgage. When you default on the payment of your loan, the bank is entitled to foreclose.
If the promissory note would contain an arbitration clause, and the mortgage agreement does not, ACCORDING TO THE SPECIAL RULES, the arbitration clause in the promissory note extends to the mortgage contract which is an accessory contract.
What if it's a 3p mortgage (where the security does not belong to the borrower-mortgagor)?
It would also become part of the arbitration clause in the main loan contract/PN.
Ff up. Paano na appointment of arbitrators nito? 2 debtor and 1 creditor?
Special rules provide that 1 each for the creditors and the debtors.
Ff up 2: isn't this legislation on the part of the supreme court?
Mejo. Not just procedure but substantial law. But just wait for a case to assail this.
*Special Rules pa ulit:
e.g. Arbitral Award in $10M. For enforcement, the filing fees should not be based on the $10M! In the special rules, there's an express provision providing the filing fee corresponding to the award, the highest that could be assess is P50k ONLY.
*there are now some orders of the court which are not subject to MR, appeal, and certiorari (makes it summary proceeding)
*you can go on certiorari because of GADALEJ, ONLY have INEXTENDIBLE 15 day period (vs. 60d in ROC!)
*no injunction in arbitration proceedings
Attendance: who's absent
Ms. Corije
Ms. Gabriel
Ms. Santamaria
Ms. Latosa
EPCIB v. RCBC
-ICC is not the arbitral tribunal but an ADR Provider, the Arbitration Institution
*there's a case, Feliciano ang ponente, where the CIAC is not a nominal party but the arbitrators!
*on special rules ulit: if there's an arbitrable dispute between the lender, borrower, and third-party mortgagor…borrower and third-party mortgagor are only entitled to 1 arbitrator (based on Magellan Case)
*there's another provision based on the High Precision Steel Center v. Lim Kim Steel Builder (CIAC CASE): Questions of fact cannot be raised in the SC unless the findings of fact of the arbitral tribunal committed an error so aggrievous (?) that it amounted to grave abuse of discretion.
National Union vs. Stoltson…
-similar to Puromines case
NY Convention: What are the obligations of the Contracting State under it?
Transfield vs. Luzon Hydro
-Standby Letter of credit executed by TPI in favor of LHC. There's a pending arbitration proceedings between TPI and LHC. LHC was to claim the standby l/c in its favor so TPI wanted to enjoin them. TPI claimed that the court action filed by LHC is premature because there's no arbitration award yet.
H: Difference between arbitration and the current action
NY Convention
-redress: petition to set aside an arbitral award or petition to refuse recognition
Grounds to set aside an arbitral award:
-similar to UNCITRAL MODEL LAW (which are stated in Section 24(2) - here contained in Article V
(grounds for petition to refuse recognition)
(a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity #, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, undep the law of the country where the award was made; or
(b) The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or
(c) The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognised and enforced; or
(d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or
(e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.
2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:
(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
(b) The recognition or enforcement of the award would be contrary to the public policy of that country.
Sir handled a case where the venue of arbitration is in Singapore. A partial award was rendered in favor of the other party. Normally, to enforce the partial award, you should come in the Philippines and file the petition of enforcement of the partial award. However, the adverse party filed instead in Singapore! (It entertained the thought that if they file a petition for enforcement of the arbitral award here, they would lose)
| Petition to enforce | PETITION TO REFUSE RECOGNITION |
| Stated in Section 24 (2) | NY Convention - Article V (which is similar to the grounds in Section 24(2) |
*in UNCITRAL , Article 1(2), UNCITRAL Model Law would only apply if the place of the arbitration is in the territory of the State EXCEPT IN ARTICLES…
-Articles 36: Provides that a petition to set aside the FAA is allowed
EO 1008: Construction Arbitration
What is Construction Arbitration?
-Under Jurisdiction (Section 4): EOJ
disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines,
whether the disputes arises before or after the completion of the contract, or after the abandonment or
breach thereof. These disputes may involve government or private contracts.
-The jurisdiction of the CIAC may include but is not limited to:
*violation of specifications for materials and workmanship;
*violation of the terms of agreement;
*interpretation and/or application of contractual provisions;
*amount of damages and penalties; commencement time and delays;
*maintenance and defects;
*payment default of employer or contractor and changes in contract cost
X: EER dispute
***NOTE: there must be an arbitration clause in the construction agreement for CIAC to exercise EO Jurisdiciton
China Chiang … Case
H: even if the venue for arbitration is outside the Philippines, if the agreement provided that there be an arbitration agreement and the agreement involves construction, CIAC still could exercise jurisdiction over the dispute
--parties not precluded from agreeing to submit disputes in another arbitral body, but even if merong ganun, CIAC does not lose jurisdiction over the dispute
Commercial dispute vs. Construction dispute:
F: parties have a contract which contains an arbitration clause. There's a dispute that arose. The dispute is arbitrable. However, one of the parties went to court right away for the resolution of the dispute...
| Commercial Arbitration | Construction dispute |
| Court would order the STAY of the action | Court shall DISMISS the action. Dapat CIAC. (Section 39) |
[revised] SEC. 39. Court to Dismiss Case Involving a Construction Dispute. - A regional trial court [before] which a construction dispute is filed shall, upon becoming aware, not later than the pretrial conference, that the parties had entered into an arbitration [agreement, dismiss the case and refer the parties to arbitration] to be conducted by the CIAC, unless both parties, assisted by their respective counsel, shall submit to the regional trial court a written agreement exclusive for the Court, rather than the CIAC, to resolve the dispute.
***
Another correction: on the special rules: On Online Dispute Resolution
-here, communications are all through e-mail and web. Payment of filing fees all through paypal, etc.
Section 25.1: Applicability of the Special ADR Rules to Online Dispute Resolution - Whenever applicable and appropriate, the Special ADR Rules shall govern the procedure for matters brought before the court involving Online Dispute Resolution.
Section 25.2: Scope of Online Dispute Resolution - Online Dispute Resolution shall refer to all electronic forms of ADR including the use of the internet and other web or compute[r] based technologies for facilitating ADR.
***
As to foreign arbitrator in CIAC under RA 9285:
SIR: CIAC has a list of accredited arbitrator wherein the parties could choose an arbitrator.
But under RA 9285, a foreign arbitrator WHO IS NOT ACCREDITED BY CIAC could become an arbitrator [Section 37]:
WHY Important to agree with Rules of CIAC?
-a foreign arbitrator charge high! Dapat same charge as those received by the other arbitrators…
*RICKY: pano if the other party is a Filipino and the other a foreigner? The Filipino, if the arbitration would undergo CIAC proceedings, a Filipino would be appointed. However, the foreigner would not be allowed to appoint another foreign arbitrator of the same nationality
Can a Philippine Party have a foreign counsel as a representative?
Yes. But can't appear before domestic courts
PHILROCK vs. CIAC
F: Cid spouses filed complaint for damages vs. Philrock. They agreed to submit the dispute to CIAC so RTC dismissed the proceedings.
-however, the arbitration proceedings became magulo…the parties were not able to agree so the parties wanted RTC to acquire jurisdiction
-RTC refused to exercise jurisdiction as it was already divested with such. Remand to CIAC
-MR by the parties… CIAC denied the MR.
H: CIAC has jurisdiction over the dispute
(1) the spouses did not include the officers of Philrock anymore
(2)
(3) CIAC's monetary award may still be appealed provided there's GADALEJ
-When parties agree to settle their disputes arising from or connected with construction contracts, the Construction Industry Arbitration Commission (CIAC) acquires primary jurisdiction. It may resolve not only the merits of such controversies; when appropriate, it may also award damages, interests, attorney’s fees and expenses of litigation.
METRO CONSTRUCTION
WON under existing law and rules the Court of Appeals can also review findings of facts of the Construction Industry Arbitration Commission (CIAC)?
Yes. Questions of law and mixed questions of facts and law can be reviewed, including money claims…
based on the record, no dispute on the liquidated damages due to MCI…?
GAMMON vs. MRT
*special rules ulit: Verification required from the lawyers, not the parties. In regular civil actions, lawyers need SPA to be able to sign the verification
TESCO vs. VERA
F: TESCO and LAROSA entered into a sub-contract agreement w/ TESCO as contractor and LAROSA as sub-contractor, for the execution of the Civil Works under PLDT…
-however, TESCO alleged that LAROSA delayed in the performance of the terms of the contract so TESCO wanted an early termination of the case. LAROSA alleged that the delay, if any, is due to TESCO's fault
-TESCO sent letter-request for early termination, which LAROSA opposed.
-LAROSA filed a petition for injunction w/ prayer for issuance of writ of preliminary injunction and TRO w/ RTC
RTC: TRO granted
-TESCO filed w/ SC petition for Certiorari: RTC had no jurisdiction because CIAC has jurisdiction
-RTC proceeded with hearing the writ of preliminary injunction filed by LAROSA
H: CIAC did not acquire jurisdiction
-the Arbitration proceeding does not provide that CIAC has jurisdiction, and that the RTC was divested with jurisdiction
-EO 1008 requires:
(1) the parties agree to submit the dispute to voluntary arbitration (Section 4)
(2) the parties submit to CIAC Secretariat its request for Arbitration (Section 1)
-though the parties agreed to have arbitration (in the contract), nowhere was it stated that the parties submitted a copy of their request to CIAC
-the dispute being incapable of pecuniary estimation, RTC correctly had jurisdiciton
*TESCO was mentioned in China Chang Case
NIA vs. CA
F: Hydro resources entered with NIA contract for the construction of MAGAT DAM. The contract provided terms for payment, 1st part in PESO, 2nd part in DOLLAR.
-Hydro claimed from NIA in DOLLARS…NIA did not pay so they underwent arbitration
-NIA filed MTD: CIAC was not yet constituted when the contract was entered by the parties
H: The date when the contract was entered into or completed is not the date of reckoning for CIAC to acquire jurisdiction.
-CIAC has jurisdiction regardless of the date when the contract was entered. What is important is that the case is submitted to CIAC's jurisdiction and that the dispute concerns a construction dispute.
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