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LEGAL FORMS AND WRITING

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Articles of Partnership Articles 1767, 1770 to 1774 of theCivil Code

TITLE IX

PARTNERSHIP

CHAPTER 1General Provisions

Article 1767.By the contract of partnership two or more persons bind themselves tocontribute money, property, or industry to a common fund, with the intention ofdividing the profits among themselves.

Article 1770.A partnership must have a lawful object or purpose, and must beestablished for the common benefit or interest of the partners.

When an unlawful partnership is dissolved by a judicial decree, the profits shall beconfiscated in favor of the State, without prejudice to the provisions of the Penal Codegoverning the confiscation of the instruments and effects of a crime. (1666a)

Article 1771.A partnership may be constituted in any form, except where immovableproperty or real rights are contributed thereto, in which case a public instrument shall benecessary. (1667a)

Article 1772.Every contract of partnership having a capital of three thousand pesos or

more, in money or property, shall appear in a public instrument, which must be recordedin the Office of the Securities and Exchange Commission.

Failure to comply with the requirements of the preceding paragraph shall not affect theliability of the partnership and the members thereof to third persons. (n)

Article 1773.A contract of partnership is void, whenever immovable property iscontributed thereto, if an inventory of said property is not made, signed by the parties,and attached to the public instrument. (1668a)

Article 1774.Any immovable property or an interest therein may be acquired in the

partnership name. Title so acquired can be conveyed only in the partnership name. (n)

Articles of Incorporation Sec. 10 to 15 of theCorporation Code


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THE CORPORATION CODE OF THE PHILIPPINES Batas Pambansa Bilang68

TITLE IIINCORPORATION AND ORGANIZATION OF PRIVATE CORPORATIONS

Section 10.Number and qualifications of incorporators. Any number of naturalpersons not less than five (5) but not more than fifteen (15), all of legal age and amajority of whom are residents of the Philippines, may form a private corporation forany lawful purpose or purposes. Each of the incorporators of s stock corporation mustown or be a subscriber to at least one (1) share of the capital stock of the corporation.(6a)

Section 11.Corporate term.A corporation shall exist for a period not exceeding fifty(50) years from the date of incorporation unless sooner dissolved or unless said period is

extended. The corporate term as originally stated in the articles of incorporation may beextended for periods not exceeding fifty (50) years in any single instance by anamendment of the articles of incorporation, in accordance with this Code; Provided, Thatno extension can be made earlier than five (5) years prior to the original or subsequentexpiry date(s) unless there are justifiable reasons for an earlier extension as may bedetermined by the Securities and Exchange Commission. (6)

Section 12.Minimum capital stock required of stock corporations. Stockcorporations incorporated under this Code shall not be required to have any minimumauthorized capital stock except as otherwise specifically provided for by special law, andsubject to the provisions of the following section.

Section 13.Amount of capital stock to be subscribed and paid for the purposes ofincorporation. At least twenty-five percent (25%) of the authorized capital stock asstated in the articles of incorporation must be subscribed at the time of incorporation,and at least twenty-five (25%) per cent of the total subscription must be paid uponsubscription, the balance to be payable on a date or dates fixed in the contract ofsubscription without need of call, or in the absence of a fixed date or dates, upon call forpayment by the board of directors: Provided, however, That in no case shall the paid-upcapital be less than five Thousand (P5,000.00) pesos. (n)

Section 14.Contents of the articles of incorporation. All corporations organizedunder this code shall file with the Securities and Exchange Commission articles ofincorporation in any of the official languages duly signed and acknowledged by all of theincorporators, containing substantially the following matters, except as otherwiseprescribed by this Code or by special law:

1. The name of the corporation;


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2. The specific purpose or purposes for which the corporation is beingincorporated. Where a corporation has more than one stated purpose, the articlesof incorporation shall state which is the primary purpose and which is/are thesecondary purpose or purposes: Provided, That a non-stock corporation may notinclude a purpose which would change or contradict its nature as such;

3. The place where the principal office of the corporation is to be located, whichmust be within the Philippines;

4. The term for which the corporation is to exist;

5. The names, nationalities and residences of the incorporators;

6. The number of directors or trustees, which shall not be less than five (5) normore than fifteen (15);

7. The names, nationalities and residences of persons who shall act as directors ortrustees until the first regular directors or trustees are duly elected and qualifiedin accordance with this Code;

8. If it be a stock corporation, the amount of its authorized capital stock in lawfulmoney of the Philippines, the number of shares into which it is divided, and incase the share are par value shares, the par value of each, the names, nationalitiesand residences of the original subscribers, and the amount subscribed and paid

by each on his subscription, and if some or all of the shares are without par value,such fact must be stated;

9. If it be a non-stock corporation, the amount of its capital, the names,nationalities and residences of the contributors and the amount contributed byeach; and

10. Such other matters as are not inconsistent with law and which theincorporators may deem necessary and convenient.

The Securities and Exchange Commission shall not accept the articles of incorporation ofany stock corporation unless accompanied by a sworn statement of the Treasurer elected

by the subscribers showing that at least twenty-five (25%) percent of the authorizedcapital stock of the corporation has been subscribed, and at least twenty-five (25%) of thetotal subscription has been fully paid to him in actual cash and/or in property the fair

valuation of which is equal to at least twenty-five (25%) percent of the said subscription,such paid-up capital being not less than five thousand (P5,000.00) pesos.


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Section 15.Forms of Articles of Incorporation. Unless otherwise prescribed byspecial law, articles of incorporation of all domestic corporations shall complysubstantially with the following form:

ARTICLES OF INCORPORATIONOF

__________________________(Name of Corporation)

KNOW ALL MEN BY THESE PRESENTS:

The undersigned incorporators, all of legal age and a majority of whom are residents ofthe Philippines, have this day voluntarily agreed to form a (stock) (non-stock)corporation under the laws of the Republic of the Philippines;

AND WE HEREBY CERTIFY:

FIRST: That the name of said corporation shall be "_____________________, INC.or CORPORATION";

SECOND: That the purpose or purposes for which such corporation is incorporated are:(If there is more than one purpose, indicate primary and secondary purposes);

THIRD: That the principal office of the corporation is located in the City/Municipality of________________________, Province of _______________________,

Philippines;

FOURTH: That the term for which said corporation is to exist is _____________ yearsfrom and after the date of issuance of the certificate of incorporation;

FIFTH: That the names, nationalities and residences of the incorporators of thecorporation are as follows:

NAME NATIONALITY RESIDENCE

___________________ ___________________ ___________________

___________________ ___________________ ___________________

___________________ ___________________ ___________________

___________________ ___________________ ___________________

___________________ ___________________ ___________________


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SIXTH: That the number of directors or trustees of the corporation shall be _______;and the names, nationalities and residences of the first directors or trustees of thecorporation are as follows:

NAME NATIONALITY RESIDENCE___________________ ___________________ ___________________

___________________ ___________________ ___________________

___________________ ___________________ ___________________

___________________ ___________________ ___________________

___________________ ___________________ ___________________

SEVENTH: That the authorized capital stock of the corporation is

______________________ (P___________) PESOS in lawful money of thePhilippines, divided into __________ shares with the par value of

____________________ (P_____________) Pesos per share.

(In case all the share are without par value):

That the capital stock of the corporation is ______________ shares without par value.(In case some shares have par value and some are without par value): That the capitalstock of said corporation consists of _____________ shares of which

______________ shares are of the par value of _________________(P____________) PESOS each, and of which _________________ shares are

without par value.

EIGHTH: That at least twenty five (25%) per cent of the authorized capital stock abovestated has been subscribed as follows:

Name ofSubscriber

Nationality No. of SharesSubscribed

AmountSubscribed

___________________

___________________

___________________

___________________

___________________

___________________

___________________

___________________

___________________

___________________

___________________

___________________

___________________

___________________

___________________

___________________


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___________________

___________________

___________________

___________________

___________________

___________________

___________________

___________________

NINTH: That the above-named subscribers have paid at least twenty-five (25%) percentof the total subscription as follows:

Name ofSubscriber

Amount Subscribed TotalPaid-In

___________________ ___________________ ___________________

___________________ ___________________ ___________________

___________________ ___________________ ______________________________________ ___________________ ___________________

___________________ ___________________ ___________________

(Modify Nos. 8 and 9 if shares are with no par value. In case the corporation is non-stock, Nos. 7, 8 and 9 of the above articles may be modified accordingly, and it issufficient if the articles state the amount of capital or money contributed or donated byspecified persons, stating the names, nationalities and residences of the contributors ordonors and the respective amount given by each.)

TENTH: That _____________________ has been elected by the subscribers asTreasurer of the Corporation to act as such until his successor is duly elected andqualified in accordance with the by-laws, and that as such Treasurer, he has beenauthorized to receive for and in the name and for the benefit of the corporation, allsubscription (or fees) or contributions or donations paid or given by the subscribers ormembers.

ELEVENTH: (Corporations which will engage in any business or activity reserved forFilipino citizens shall provide the following):

"No transfer of stock or interest which shall reduce the ownership of Filipino citizens toless than the required percentage of the capital stock as provided by existing laws shallbe allowed or permitted to be recorded in the proper books of the corporation and thisrestriction shall be indicated in all stock certificates issued by the corporation."

IN WITNESS WHEREOF, we have hereunto signed these Articles of Incorporation, this__________ day of ________________, 19 ______ in the City/Municipality of


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____________________, Province of ________________________, Republicof the Philippines.

___________________ ___________________

___________________ ___________________

________________________________

(Names and signatures of the incorporators)

SIGNED IN THE PRESENCE OF:

___________________ ___________________

(Notarial Acknowledgment)

TREASURERS AFFIDAVIT

REPUBLIC OF THE PHILIPPINES)

CITY/MUNICIPALITY OF ) S.S.

PROVINCE OF )

I, ____________________, being duly sworn, depose and say:

That I have been elected by the subscribers of the corporation as Treasurer thereof, to actas such until my successor has been duly elected and qualified in accordance with the by-laws of the corporation, and that as such Treasurer, I hereby certify under oath that atleast 25% of the authorized capital stock of the corporation has been subscribed and atleast 25% of the total subscription has been paid, and received by me, in cash orproperty, in the amount of not less than P5,000.00, in accordance with the CorporationCode.

____________________

(Signature of Treasurer)

SUBSCRIBED AND SWORN to before me, a Notary Public, for and in theCity/Municipality of___________________Province of

_____________________, this _______ day of ___________, 19 _____; by__________________ with Res. Cert. No. ___________ issued at_______________________ on ____________, 19 ______


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NOTARY PUBLIC

My commission expires on _________, 19 _____

Doc. No. _________;

Page No. _________;

Book No. ________;

Series of 19____ (7a)

TITLE VBY LAWS

Section 46.Adoption of by-laws.Every corporation formed under this Code must,within one (1) month after receipt of official notice of the issuance of its certificate ofincorporation by the Securities and Exchange Commission, adopt a code of by-laws forits government not inconsistent with this Code. For the adoption of by-laws by thecorporation the affirmative vote of the stockholders representing at least a majority ofthe outstanding capital stock, or of at least a majority of the members in case of non-stock corporations, shall be necessary. The by-laws shall be signed by the stockholders ormembers voting for them and shall be kept in the principal office of the corporation,subject to the inspection of the stockholders or members during office hours. A copythereof, duly certified to by a majority of the directors or trustees countersigned by thesecretary of the corporation, shall be filed with the Securities and Exchange Commission

which shall be attached to the original articles of incorporation.

Notwithstanding the provisions of the preceding paragraph, by-laws may be adopted andfiled prior to incorporation; in such case, such by-laws shall be approved and signed byall the incorporators and submitted to the Securities and Exchange Commission,together with the articles of incorporation.

In all cases, by-laws shall be effective only upon the issuance by the Securities andExchange Commission of a certification that the by-laws are not inconsistent with thisCode.

The Securities and Exchange Commission shall not accept for filing the by-laws or anyamendment thereto of any bank, banking institution, building and loan association, trustcompany, insurance company, public utility, educational institution or other specialcorporations governed by special laws, unless accompanied by a certificate of theappropriate government agency to the effect that such by-laws or amendments are inaccordance with law. (20a)


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Section 47.Contents of by-laws.Subject to the provisions of the Constitution, thisCode, other special laws, and the articles of incorporation, a private corporation mayprovide in its by-laws for:

1. The time, place and manner of calling and conducting regular or specialmeetings of the directors or trustees;

2. The time and manner of calling and conducting regular or special meetings ofthe stockholders or members;

3. The required quorum in meetings of stockholders or members and the mannerof voting therein;

4. The form for proxies of stockholders and members and the manner of votingthem;

5. The qualifications, duties and compensation of directors or trustees, officersand employees;

6. The time for holding the annual election of directors of trustees and the modeor manner of giving notice thereof;

7. The manner of election or appointment and the term of office of all officersother than directors or trustees;

8. The penalties for violation of the by-laws;

9. In the case of stock corporations, the manner of issuing stock certificates; and

10. Such other matters as may be necessary for the proper or convenienttransaction of its corporate business and affairs. (21a)

Board Resolution authorizing corporate officer to obtain abank loan

BOARD RESOLUTION AUTHORIZING CORPORATE OFFICER

REPUBLIC OF THE PHILIPPINES }MAKATI CITY } S.S.

SECRETARYS CERTIFICATE


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I, Mary Joy Baybay, Filipino, of legal age, with office address at 1434 Ayala Avenue,Makati City, after being sworn in accordance with law, do hereby depose and state asfollows:

1. That I am the incumbent Corporate Secretary of Disk Drives Unlimited, a corporationduly organized and existing under Philippine laws, with principal office at1434 Ayala

Avenue, Makati City,;

2. That during the special meeting of the Board of Directors held on 5 January2007,wherein a quorum was present and acted throughout, after being informed of thenecessity of obtaining loans and/or credit accommodation with any banking/ lendinginstitution, to generate funds for the purpose of expanding the business of exportinghard disk drives, the Board approved the following resolution, to wit:

RESOLUTION NO. BD-028-2007

RESOLVED, as it is hereby resolved, that the corporation be empowered and authorizedto apply for, negotiate, obtain loans from HOWARD BANKING INC., including therenewal, extension and/or increase, roll over or restructuring thereof, and/or of itsexisting credit facilities in such amount(s) and under such terms and conditions as may

be mutually agreed upon, and to secure and guarantee the payment of the aforesaid loanor credit facilities by means of mortgage, pledge, assignment or any other form ofencumbrance upon any and all properties or assets of the corporation of whatever kindor nature, real or personal, as may be sufficient or required for the purpose.

RESOLVED FURTHER, as it is hereby resolved, that ISIDRO BARRIOS, the President,be authorized to sign, execute, and deliver any and all documents including but not

limited to loan application, disclosure statement, purpose sheet, application for letters ofcredit, promissory note, draft, surety agreement, trust receipt, mortgages, pledge,assignment, and the like, including therenewals/extensions/increase/amendments/restructuring thereof, in order to effectuatethe foregoing matters.NAME POSITION SIGNATUREIsidro Barrios PresidentRESOLVED FINALLY that HOWARD BANKING INC. be furnished a copy of the

foregoing resolutions for its guidance and may continue to rely on the authorityconferred thereon, including the renewal, increase, roll-over and/or restructuringthereof, unless and except to the extent that the foregoing resolutions shall be revoked ormodified by the receipt of any subsequent resolution/s of the Board of Directors of theCorporation.3. That the foregoing Resolution remains valid and has not in any manner been novated,revoked, nor repealed to date.


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AFFIANT FURTHER SAYETH NAUGHT.

Issued this 20th day of March 2007 at Makati City.

SECRETARYSCERTIFICATE

CORPORATE SECRETARYSCERTIFICATEREPUBLIC OF THE PHILIPPINES ) _ ) SS.

I, _, Filipino, of legal age, single/married to _/widow/widower, and a resident of _, afterhaving been duly sworn in accordance with law, hereby depose and say:

1. That I am the Corporate Secretary of _ with office address at _;

2. That at a duly convened meeting of the Board of Directors held last _, where a quorumwas present, the following resolutions were unanimously approved, to wit:

RESOLVED, that the President, Mr./Mrs./Dr./Atty. _, be authorized, as he is hereby

duly authorized, to negotiate for a loan from _ in the amount of _ to be secured by thecorporations _ property and authorizing him further to sign for and in behalf of the

corporation any and all papers and documents relative thereto.

3. That the foregoing resolutions are true and correct and that it has not been amendedor superseded up to this date.

IN WITNESS WHEREOF, I have hereunto affixed my signature this day of 20_ at ,Philippines.

_________________________________(Signature of Affiant over Printed Name)

Proxy to attend a stockholders meeting Sec. 58 of the

Corporation Code

Section 58.Proxies.Stockholders and members may vote in person or by proxy in allmeetings of stockholders or members. Proxies shall in writing, signed by the stockholderor member and filed before the scheduled meeting with the corporate secretary. Unlessotherwise provided in the proxy, it shall be valid only for the meeting for which it is


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intended. No proxy shall be valid and effective for a period longer than five (5) years atany one time. (n)

Notice of Stockholders meeting Sec. 50 to 51 of the

Corporation Code

Section 50.Regular and special meetings of stockholders or members. - Regularmeetings of stockholders or members shall be held annually on a date fixed in the by-laws, or if not so fixed, on any date in April of every year as determined by the board ofdirectors or trustees: Provided, That written notice of regular meetings shall be sent toall stockholders or members of record at least two (2) weeks prior to the meeting, unlessa different period is required by the by-laws.

Special meetings of stockholders or members shall be held at any time deemed necessary

or as provided in the by-laws: Provided, however, That at least one (1) week writtennotice shall be sent to all stockholders or members, unless otherwise provided in the by-laws.

Notice of any meeting may be waived, expressly or impliedly, by any stockholder ormember.

Whenever, for any cause, there is no person authorized to call a meeting, the Securitiesand Exchange Commission, upon petition of a stockholder or member on a showing ofgood cause therefor, may issue an order to the petitioning stockholder or memberdirecting him to call a meeting of the corporation by giving proper notice required by thisCode or by the by-laws. The petitioning stockholder or member shall preside thereatuntil at least a majority of the stockholders or members present have chosen one of theirnumber as presiding officer. (24, 26)

Section 51.Place and time of meetings of stockholders of members.Stockholders ormembers meetings, whether regular or special, shall be held in the city or municipality

where the principal office of the corporation is located, and if practicable in the principaloffice of the corporation: Provided, That Metro Manila shall, for purposes of this section,

be considered a city or municipality.

Notice of meetings shall be in writing, and the time and place thereof stated therein.

All proceedings had and any business transacted at any meeting of the stockholders ormembers, if within the powers or authority of the corporation, shall be valid even if themeeting be improperly held or called, provided all the stockholders or members of thecorporation are present or duly represented at the meeting. (24 and 25)

MINUTES OF A CORPORATE MEETING (SAMPLE)


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[Insert Name of Company]MINUTES OF A MEETING OFTHE BOARD OF DIRECTORS[Insert Date of Board Meeting]

A meeting of the Board of Directors (the Board) of [Insert name of company], a

[Insert state of incorporation] corporation (the Company), was held on [Insert dateof board meeting] ([Insert time zonei.e. Mountain Daylight Time]) at the offices of theCompany.Directors Present:[Insert names of directors present]

Also Present Were:[Insert names of other people (mgmt., etc.) present]

Directors Absent:[Insert names of directors absent]

Counsel Present:[Insert names of legal counsel present]

NOTE: Its generally good to note next to the above listing if the attendee(s)

participated via telephone (otherwise its assumed they participated in person at the

above referenced location]Call to Order[Insert name of CEO or board chair] called the meeting to order at [Insert start time ofmeeting] ([Insert time zonei.e. Mountain Daylight Time]) and [Insert name ofsecretary] recorded the minutes. A quorum of directors was present, and the meeting,having been duly convened, was ready to proceed with business.

CEO Report[Insert name of CEO] reviewed the agenda and welcomed everyone to the meeting. Next,[Insert name of CEO] discussed the current status of the company and its progress. Anumber of questions were asked and extensive discussion ensued.

Sales & Business Development Update[Insert name] next provided an update on the overall sales progress and sales pipeline ofthe Company. He also presented the status of business development discussions.

* [Insert name] joined the meeting*


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Financial Review[Insert name] provided a comprehensive update on the Companys financial plan and

forecast. [Insert name] also reviewed the Companys principal financial operatingmetrics. Discussion ensued.

Financial PlanningThe Board next discussed the timing and creation of the 2007 Operating Plan.

Approval of Option Grants[Insert name] presented to the Board a list of proposed options to be granted toCompany employees [and advisors], for approval, whereupon motion duly made,seconded and unanimously adopted, the option grants were approved as presented inExhibit A.

Approval of Minutes[Insert name] presented to the Board the minutes of the [insert date of previous boardmeeting] meeting of the Board for approval, whereupon motion duly made, secondedand unanimously adopted, the minutes were approved as presented.

*Management was excused from the meeting *

Closed SessionThe Board next discussed a number of strategic topics. Questions were asked andanswered.

AdjournmentThere being no further business to come before the meeting, the meeting was adjournedat [Insert time of adjournment] ([Insert time zonei.e. Mountain Daylight Time]).

Respectfully submitted,

____________________________

[Insert name of secretary], Recording Secretary

NOTE: Create (and delete) additional headings and sections above as necessary to

capture the major agenda items of the board meeting.NOTE: If attendees join after the meeting start time or leave before the meeting

adjournment, itspreferable to note when they join and leave the meeting as indicated

above by the asterisked notations.


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ARBITRATION CLAUSE

Republic Act No. 9285 April 2, 2004

AN ACT TO INSTITUTIONALIZE THE USE OF AN ALTERNATIVE DISPUTERESOLUTION SYSTEM IN THE PHILIPPINES AND TO ESTABLISH THEOFFICE FOR ALTERNATIVE DISPUTE RESOLUTION, AND FOR OTHER

PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled:

CHAPTER 1 - GENERAL PROVISIONS

SECTION 1.Title.- This act shall be known as the "Alternative Dispute Resolution Actof 2004."

SEC. 2.Declaration of Policy. - it is hereby declared the policy of the State toactively promote party autonomy in the resolution of disputes or the freedom of theparty to make their own arrangements to resolve their disputes. Towards this end, theState shall encourage and actively promote the use of Alternative Dispute Resolution(ADR) as an important means to achieve speedy and impartial justice and declog courtdockets. As such, the State shall provide means for the use of ADR as an efficient tooland an alternative procedure for the resolution of appropriate cases. Likewise, the State

shall enlist active private sector participation in the settlement of disputes through ADR.This Act shall be without prejudice to the adoption by the Supreme Court of any ADRsystem, such as mediation, conciliation, arbitration, or any combination thereof as ameans of achieving speedy and efficient means of resolving cases pending before allcourts in the Philippines which shall be governed by such rules as the Supreme Courtmay approve from time to time.

SEC. 3.Definition of Terms.- For purposes of this Act, the term:

(a) "Alternative Dispute Resolution System" means any process or procedureused to resolve a dispute or controversy, other than by adjudication of a presiding

judge of a court or an officer of a government agency, as defined in this Act, inwhich a neutral third party participates to assist in the resolution of issues, whichincludes arbitration, mediation, conciliation, early neutral evaluation, mini-trial,or any combination thereof;

(b) "ADR Provider" means institutions or persons accredited as mediator,conciliator, arbitrator, neutral evaluator, or any person exercising similar


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functions in any Alternative Dispute Resolution system. This is without prejudiceto the rights of the parties to choose nonaccredited individuals to act as mediator,conciliator, arbitrator, or neutral evaluator of their dispute.

Whenever reffered to in this Act, the term "ADR practitioners" shall refer toindividuals acting as mediator, conciliator, arbitrator or neutral evaluator;

(c) "Authenticate" means to sign, execute or adopt a symbol, or encrypt a recordin whole or in part, intended to identity the authenticating party and to adopt,accept or establish the authenticity of a record or term;

(d) "Arbitration" means a voluntary dispute resolution process in which one ormore arbitrators, appointed in accordance with the agreement of the parties, orrules promulgated pursuant to this Act, resolve a dispute by rendering an award;

(e) "Arbitrator" means the person appointed to render an award, alone or withothers, in a dispute that is the subject of an arbitration agreement;

(f) "Award" means any partial or final decision by an arbitrator in resolving theissue in a controversy;

(g) "Commercial Arbitration" An arbitration is "commercial if it covers matterarising from all relationships of a commercial nature, whether contractual or not;

(h) "Confidential information" means any information, relative to the subject ofmediation or arbitration, expressly intended by the source not to be disclosed, or

obtained under circumstances that would create a reasonable expectation onbehalf of the source that the information shall not be disclosed. It shall include (1)communication, oral or written, made in a dispute resolution proceedings,including any memoranda, notes or work product of the neutral party or non-party participant, as defined in this Act; (2) an oral or written statement made or

which occurs during mediation or for purposes of considering, conducting,participating, initiating, continuing of reconvening mediation or retaining amediator; and (3) pleadings, motions manifestations, witness statements, reportsfiled or submitted in an arbitration or for expert evaluation;

(i) "Convention Award" means a foreign arbitral award made in a ConventionState;

(j) "Convention State" means a State that is a member of the New YorkConvention;

(k) "Court" as referred to in Article 6 of the Model Law shall mean a RegionalTrial Court;


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(l) "Court-Annexed Mediation" means any mediation process conducted underthe auspices of the court, after such court has acquired jurisdiction of the dispute;

(m) "Court-Referred Mediation" means mediation ordered by a court to beconducted in accordance with the Agreement of the Parties when as action isprematurely commenced in violation of such agreement;

(n) "Early Neutral Evaluation" means an ADR process wherein parties and theirlawyers are brought together early in a pre-trial phase to present summaries oftheir cases and receive a nonbinding assessment by an experienced, neutralperson, with expertise in the subject in the substance of the dispute;

(o) "Government Agency" means any government entity, office or officer, otherthan a court, that is vested by law with quasi-judicial power to resolve oradjudicate dispute involving the government, its agencies and instrumentalities,

or private persons;

(p) "International Party" shall mean an entity whose place of business is outsidethe Philippines. It shall not include a domestic subsidiary of such internationalparty or a coventurer in a joint venture with a party which has its place of

business in the Philippines.

The term foreigner arbitrator shall mean a person who is not a national of thePhilippines.

(q) "Mediation" means a voluntary process in which a mediator, selected by the

disputing parties, facilitates communication and negotiation, and assist theparties 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 whoseconsent is necessary to resolve the dispute;

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

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


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(v) "Model Law" means the Model Law on International Commercial Arbitrationadopted by the United Nations Commission on International Trade Law on 21June 1985;

(w) "New York Convention" means the United Nations Convention on theRecognition and Enforcement of Foreign Arbitral Awards approved in 1958 andratified by the Philippine Senate under Senate Resolution No. 71;

(x) "Non-Convention Award" means a foreign arbitral award made in a Statewhich is not a Convention State;

(y) "Non-Convention State" means a State that is not a member of the New YorkConvention.

(z) "Non-Party Participant" means a person, other than a party or mediator, who

participates in a mediation proceeding as a witness, resource person or expert;

(aa) "Proceeding" means a judicial, administrative, or other adjudicative process,including related pre-hearing motions, conferences and discovery;

(bb) "Record" means an information written on a tangible medium or stored inan electronic or other similar medium, retrievable form; and

(cc) "Roster" means a list of persons qualified to provide ADR services as neutralsor to serve as arbitrators.

SEC. 4.Electronic Signatures in Global and E-Commerce Act.- The provisionsof the Electronic Signatures in Global and E-Commerce Act, and its implementing Rulesand Regulations shall apply to proceeding contemplated in this Act.

SEC. 5.Liability of ADR Provider and Practitioner. - The ADR providers andpractitioners shall have the same civil liability for the Acts done in the performance ofthen duties as that of public officers as provided in Section 38 (1), Chapter 9, Book of the

Administrative Code of 1987.

SEC. 6.Exception to the Application of this Act.- The provisions of this Act shallnot apply to resolution or settlement of the following: (a) labor disputes covered byPresidential Decree No. 442, otherwise known as the Labor Code of the Philippines, asamended and its Implementing Rules and Regulations; (b) the civil status of persons; (c)the validity of a marriage; (d) any ground for legal separation; (e) the jurisdiction ofcourts; (f) future legitime; (g) criminal liability; and (h) those which by law cannot becompromised.

CHAPTER 2 - MEDIATION


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SEC. 7.Scope.- The provisions of this Chapter shall cover voluntary mediation,whether ad hoc or institutional, other than court-annexed. The term "mediation' shallinclude conciliation.

SEC. 8.Application and Interpretation.- In applying construing the provisions ofthis Chapter, consideration must be given to the need to promote candor or parties andmediators through confidentiality of the mediation process, the policy of fosteringprompt, economical, and amicable resolution of disputes in accordance with theprinciples of integrity of determination by the parties, and the policy that the decision-making authority in the mediation process rests with the parties.

SEC. 9.Confidentiality of Information.- Information obtained through mediationproceedings shall be subject to the following principles and guidelines:

(a) Information obtained through mediation shall be privileged and confidential.

(b) A party, a mediator, or a nonparty participant may refuse to disclose and mayprevent any other person from disclosing a mediation communication.

(c) Confidential Information shall not be subject to discovery and shall beinadmissible if any adversarial proceeding, whether judicial or quasi-judicial,However, evidence or information that is otherwise admissible or subject todiscovery does not become inadmissible or protected from discovery solely byreason of its use in a mediation.

(d) In such an adversarial proceeding, the following persons involved or

previously involved in a mediation may not be compelled to disclose confidentialinformation obtained during mediation: (1) the parties to the dispute; (2) themediator or mediators; (3) the counsel for the parties; (4) the nonpartyparticipants; (5) any persons hired or engaged in connection with the mediationas secretary, stenographer, clerk or assistant; and (6) any other person whoobtains or possesses confidential information by reason of his/her profession.

(e) The protections of this Act shall continue to apply even of a mediator is foundto have failed to act impartially.

(f) a mediator may not be called to testify to provide information gathered inmediation. A mediator who is wrongfully subpoenaed shall be reimbursed the fullcost of his attorney's fees and related expenses.

SEC. 10.Waiver of Confidentiality.- A privilege arising from the confidentiality ofinformation may be waived in a record, or orally during a proceeding by the mediatorand the mediation parties.


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A privilege arising from the confidentiality of information may likewise be waived by anonparty participant if the information is provided by such nonparty participant.

A person who discloses confidential information shall be precluded from asserting theprivilege under Section 9 of this Chapter to bar disclosure of the rest of the informationnecessary to a complete understanding of the previously disclosed information. If aperson suffers loss or damages in a judicial proceeding against the person who made thedisclosure.

A person who discloses or makes a representation about a mediation is preclude fromasserting the privilege under Section 9, to the extent that the communication prejudicesanother person in the proceeding and it is necessary for the person prejudiced torespond to the representation of disclosure.

SEC. 11.Exceptions to Privilege.-

(a) There is no privilege against disclosure under Section 9 if mediationcommunication is:

(1) in an agreement evidenced by a record authenticated by all parties tothe agreement;

(2) available to the public or that is made during a session of a mediationwhich is open, or is required by law to be open, to the public;

(3) a threat or statement of a plan to inflict bodily injury or commit a

crime of violence;

(4) internationally used to plan a crime, attempt to commit, or commit acrime, or conceal an ongoing crime or criminal activity;

(5) sought or offered to prove or disprove abuse, neglect, abandonment,or exploitation in a proceeding in which a public agency is protecting theinterest of an individual protected by law; but this exception does notapply where a child protection matter is referred to mediation by a courtor a public agency participates in the child protection mediation;

(6) sought or offered to prove or disprove a claim or complaint ofprofessional misconduct or malpractice filed against mediator in aproceeding; or

(7) sought or offered to prove or disprove a claim of complaint ofprofessional misconduct of malpractice filed against a party, nonparty


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participant, or representative of a party based on conduct occurringduring a mediation.

(b) There is no privilege under Section 9 if a court or administrative agency,finds, after a hearing in camera, that the party seeking discovery of the proponentof the evidence has shown that the evidence is not otherwise available, that thereis a need for the evidence that substantially outweighs the interest in protectingconfidentiality, and the mediation communication is sought or offered in:

(1) a court proceeding involving a crime or felony; or

(2) a proceeding to prove a claim or defense that under the law issufficient to reform or avoid a liability on a contract arising out of themediation.

(c) A mediator may not be compelled to provide evidence of a mediationcommunication or testify in such proceeding.

(d) If a mediation communication is not privileged under an exception insubsection (a) or (b), only the portion of the communication necessary for theapplication of the exception for nondisclosure may be admitted. The admission ofparticular evidence for the limited purpose of an exception does not render thatevidence, or any other mediation communication, admissible for any otherpurpose.

SEC. 12.Prohibited Mediator Reports.- A mediator may not make a report,

assessment, evaluation, recommendation, finding, or other communication regarding amediation to a court or agency or other authority that make a ruling on a dispute that isthe subject of a mediation, except:

(a) Where the mediation occurred or has terminated, or where a settlement wasreached.

(b) As permitted to be disclosed under Section 13 of this Chapter.

SEC. 13.Mediator's Disclosure and Conflict of Interest.- The mediation shallbe guided by the following operative principles:

(a) Before accepting a mediation, an individual who is requested to serve as amediator shall:

(1) make an inquiry that is reasonable under the circumstances todeterminate whether there are any known facts that a reasonableindividual would consider likely to affect the impartiality of the mediator,


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including a financial or personal interest in the outcome of the mediationand any existing or past relationship with a party or foreseeableparticipant in the mediation; and

(2) disclosure to the mediation parties any such fact known or learned assoon as is practical before accepting a mediation.

(b) If a mediation learns any fact described in paragraph (a) (1) of this sectionafter accepting a mediation, the mediator shall disclose it as soon as practicable.

At the request of a mediation party, an individual who is requested to serve as mediatorshall disclose his/her qualifications to mediate a dispute.

This Act does not require that a mediator shall have special qualifications by backgroundor profession unless the special qualifications of a mediator are required in the

mediation agreement or by the mediation parties.

SEC. 14.Participation in Mediation.- Except as otherwise provided in this Act, aparty may designate a lawyer or any other person to provide assistance in the mediation.

A lawyer of this right shall be made in writing by the party waiving it. A waiver ofparticipation or legal representation may be rescinded at any time.

SEC. 15.Place of Mediation.- The parties are free to agree on the place of mediation.Failing such agreement, the place of mediation shall be any place convenient andappropriate to all parties.

SEC. 16.Effect of Agreement to Submit Dispute to Mediation UnderInstitutional Rules.- An agreement to submit a dispute to mediation by anyinstitution shall include an agreement to be bound by the internal mediation andadministrative policies of such institution. Further, an agreement to submit a dispute tomediation under international mediation rule shall be deemed to include an agreementto have such rules govern the mediation of the dispute and for the mediator, the parties,their respective counsel, and nonparty participants to abide by such rules.

In case of conflict between the institutional mediation rules and the provisions of thisAct, the latter shall prevail.

SEC. 17.Enforcement of Mediated Settlement Agreement.- The mediation shallbe guided by the following operative principles:

(a) A settlement agreement following successful mediation shall be prepared bythe parties with the assistance of their respective counsel, if any, and by themediator.


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The parties and their respective counsels shall endeavor to make the terms andcondition thereof complete and make adequate provisions for the contingency of

breach to avoid conflicting interpretations of the agreement.

(b) The parties and their respective counsels, if any, shall sign the settlementagreement. The mediator shall certify that he/she explained the contents of thesettlement agreement to the parties in a language known to them.

(c) If the parties so desire, they may deposit such settlement agreement with theappropriate Clerk of a Regional Trial Court of the place where one of the partiesresides. Where there is a need to enforce the settlement agreement, a petitionmay be filed by any of the parties with the same court, in which case, the courtshall proceed summarily to hear the petition, in accordance with such rules ofprocedure as may be promulgated by the Supreme Court.

(d) The parties may agree in the settlement agreement that the mediator shallbecome a sole arbitrator for the dispute and shall treat the settlement agreementas an arbitral award which shall be subject to enforcement under Republic ActNo. 876, otherwise known as the Arbitration Law, notwithstanding the provisionsof Executive Order No. 1008 for mediated dispute outside of the CIAC.

CHAPTER 3 - OTHER ADR FORMS

SEC. 18.Referral of Dispute to other ADR Forms. - The parties may agree torefer one or more or all issues arising in a dispute or during its pendency to other formsof ADR such as but not limited to (a) the evaluation of a third person or (b) a mini-trial,

(c) mediation-arbitration, or a combination thereof.

For purposes of this Act, the use of other ADR forms shall be governed by Chapter 2 ofthis Act except where it is combined with arbitration in which case it shall likewise begoverned by Chapter 5 of this Act.

CHAPTER 4 - INTERNATIONAL COMMERCIAL ARBITRATION

SEC. 19.Adoption of the Model Law on International CommercialArbitration. - International commercial arbitration shall be governed by the ModelLaw on International Commercial Arbitration (the "Model Law") adopted by the UnitedNations Commission on International Trade Law on June 21, 1985 (United NationsDocument A/40/17) and recommended approved on December 11, 1985, copy of which ishereto attached as Appendix "A".

SEC. 20.Interpretation of Model Law. - In interpreting the Model Law, regardshall be had to its international origin and to the need for uniformity in its interpretationand resort may be made to the travaux preparatories and the report of the Secretary


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General of the United Nations Commission on International Trade Law dated March 25,1985 entitled, "International Commercial Arbitration: Analytical Commentary on DraftTrade identified by reference number A/CN. 9/264."

SEC. 21.Commercial Arbitration.- An arbitration is "commercial" if it coversmatters arising from all relationships of a commercial nature, whether contractual ornot. Relationships of a transactions: any trade transaction for the supply or exchange ofgoods or services; distribution agreements; construction of works; commercialrepresentation or agency; factoring; leasing, consulting; engineering; licensing;investment; financing; banking; insurance; joint venture and other forms of industrial or

business cooperation; carriage of goods or passengers by air, sea, rail or road.

SEC. 22.Legal Representation in International Arbitration.- In internationalarbitration conducted in the Philippines, a party may be presented by any person of hischoice.Provided, that such representative, unless admitted to the practice of law in the

Philippines, shall not be authorized to appear as counsel in any Philippine court, or anyother quasi-judicial body whether or not such appearance is in relation to the arbitrationin which he appears.

SEC. 23.Confidential of Arbitration Proceedings.- The arbitration proceedings,including the records, evidence and the arbitral award, shall be considered confidentialand shall not be published except (1) with the consent of the parties, or (2) for the limitedpurpose of disclosing to the court of relevant documents in cases where resort to thecourt is allowed herein. Provided, however, that the court in which the action or theappeal is pending may issue a protective order to prevent or prohibit disclosure ofdocuments or information containing secret processes, developments, research and

other information where it is shown that the applicant shall be materially prejudiced byan authorized disclosure thereof.

SEC. 24.Referral to Arbitration.- A court before which an action is brought in amatter which is the subject matter of an arbitration agreement shall, if at least one partyso requests not later that the pre-trial conference, or upon the request of both partiesthereafter, refer the parties to arbitration unless it finds that the arbitration agreement isnull and void, inoperative or incapable of being performed.

SEC. 25.Interpretation of the Act. - In interpreting the Act, the court shall havedue regard to the policy of the law in favor of arbitration. Where action is commenced byor against multiple parties, one or more of whom are parties who are bound by thearbitration agreement although the civil action may continue as to those who are not

bound by such arbitration agreement.

SEC. 26.Meaning of "Appointing Authority.".- "Appointing Authority" as usedin the Model Law shall mean the person or institution named in the arbitrationagreement as the appointing authority; or the regular arbitration arbitration institution


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under whose rules the arbitration is agreed to be conducted. Where the parties haveagreed to submit their dispute to institutional arbitration rules, and unless they haveagreed to a different procedure, they shall be deemed to have agreed to procedure undersuch arbitration rules for the selection and appointment of arbitrators. In ad hocarbitration, the default appointment of an arbitrator shall be made by the NationalPresident of the Integrated Bar of the Philippines (IBP) or his duly authorizedrepresentative.

SEC. 27.What Functions May be Performed by Appointing Authority.- Thefunctions referred to in Articles 11(3), 11(4), 13(3) and 14(1) of the Model Law shall beperformed by the Appointing Authority, unless the latter shall fail or refuse to act withinthirty (30) days from receipt of the request in which case the applicant may renew theapplication with the Court.

SEC. 28.Grant of Interim Measure of Protection.-

(a) It is not incompatible with an arbitration agreement for a party to request,before constitution of the tribunal, from a Court an interim measure of protectionand for the Court to grant such measure. After constitution of the arbitraltribunal and during arbitral proceedings, a request for an interim measure ofprotection or modification thereof, may be made with the arbitral tribunal or tothe extent that the arbitral tribunal has no power to act or is unable to acteffectively, the request may be made with the Court. The arbitral tribunal isdeemed constituted when the sole arbitrator or the third arbitrator who has beennominated, has accepted the nomination and written communication of saidnomination and acceptance has been received by the party making request.

(b) The following rules on interim or provisional relief shall be observed:

(1) Any party may request that provision relief be granted against theadverse party:

(2) Such relief may be granted:

(i) to prevent irreparable loss or injury:

(ii) to provide security for the performance of any obligation;

(iii) to produce or preserve any evidence; or

(iv) to compel any other appropriate act or omission.

(3) The order granting provisional relief may be conditioned upon theprovision of security or any act or omission specified in the order.


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(4) Interim or provisional relief is requested by written applicationtransmitted by reasonable means to the Court or arbitral tribunal as thecase may be and the party against whom the relief is sought, describing inappropriate detail the precise relief, the party against whom the relief isrequested, the grounds for the relief, and evidence supporting the request.

(5) The order shall be binding upon the parties.

(6) Either party may apply with the Court for assistance in Implementingor enforcing an interim measure ordered by an arbitral tribunal.

(7) A party who does not comply with the order shall be liable for alldamages resulting from noncompliance, including all expenses, andreasonable attorney's fees, paid in obtaining the order's judicialenforcement.

SEC. 29.Further Authority for Arbitrator to Grant Interim Measure ofProtection.- Unless otherwise agreed by the parties, the arbitral tribunal may, at therequest of a party, order any party to take such interim measures of protection as thearbitral tribunal may consider necessary in respect of the subject matter of the disputefollowing the rules in Section 28, paragraph 2. Such interim measures may include butshall not be limited to preliminary injuction directed against a party, appointment ofreceivers or detention, preservation, inspection of property that is the subject of thedispute in arbitration. Either party may apply with the Court for assistance inimplementing or enforcing an interim measures ordered by an arbitral tribunal.

SEC. 30.Place of Arbitration.- The parties are free to agree on the place ofarbitration. Failing such agreement, the place of arbitration shall be in Metro Manila,unless the arbitral tribunal, having regard to the circumstances of the case, including theconvenience of the parties shall decide on a different place of arbitration.

The arbitral tribunal may, unless otherwise agreed by the parties, meet at any place itconsiders appropriate for consultation among its members, for hearing witnesses,experts, or the parties, or for inspection of goods, other property or documents.

SEC. 31.Language of the Arbitration.- The parties are free to agree on thelanguage or languages to be used in the arbitral proceedings. Failing such agreement, thelanguage to be used shall be English in international arbitration, and English or Filipinofor domestic arbitration, unless the arbitral tribunal shall determine a different oranother language or languages to be used in the proceedings. This agreement ordetermination, unless otherwise specified therein, shall apply to any written statement

by a party, any hearing and any award, decision or other communication by the arbitraltribunal.


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The arbitral tribunal may order that any documentary evidence shall be accompanied bya translation into the language or languages agreed upon by the parties or determined inaccordance with paragraph 1 of this section.

CHAPTER 5 - DOMESTIC ARBITRATION

SEC. 32.Law Governing Domestic Arbitration.- Domestic arbitration shallcontinue to be governed by Republic Act No. 876, otherwise known as "The ArbitrationLaw" as amended by this Chapter. The term "domestic arbitration" as used herein shallmean an arbitration that is not international as defined in Article (3) of the Model Law.

SEC. 33.Applicability to Domestic Arbitration.- Article 8, 10, 11, 12, 13, 14, 18and 19 and 29 to 32 of the Model Law and Section 22 to 31 of the preceding Chapter 4shall apply to domestic arbitration.

CHAPTER 6 - ARBITRATION OF CONSTRUCTION DISPUTES

SEC. 34.Arbitration of Construction Disputes: Governing Law.- Thearbitration of construction disputes shall be governed by Executive Order No. 1008,otherwise known as the Constitution Industry Arbitration Law.

SEC. 35.Coverage of the Law.- Construction disputes which fall within the originaland exclusive jurisdiction of the Construction Industry Arbitration Commission (the"Commission") shall include those between or among parties to, or who are otherwise

bound by, an arbitration agreement, directly or by reference whether such parties areproject owner, contractor, subcontractor, quantity surveyor, bondsman or issuer of an

insurance policy in a construction project.

The Commission shall continue to exercise original and exclusive jurisdiction overconstruction disputes although the arbitration is "commercial" pursuant to Section 21 ofthis Act.

SEC. 36.Authority to Act as Mediator or Arbitrator.- By written agreement ofthe parties to a dispute, an arbitrator may act as mediator and a mediator may act asarbitrator. The parties may also agree in writing that, following a successful mediation,the mediator shall issue the settlement agreement in the form of an arbitral award.

SEC. 37.Appointment of Foreign Arbitrator.- The Construction IndustryArbitration Commission (CIAC) shall promulgate rules to allow for the appointment of aforeign arbitrator or coarbitrator or chairman of a tribunal a person who has not beenpreviously accredited by CIAC: Provided, That:

(a) the dispute is a construction dispute in which one party is an internationalparty


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(b) the person to be appointed agreed to abide by the arbitration rules andpolicies of CIAC;

(c) he/she is either coarbitrator upon the nomination of the international party;or he/she is the common choice of the two CIAC-accredited arbitrators firstappointed one of whom was nominated by the international party; and

(d) the foreign arbitrator shall be of different nationality from the internationalparty.

SEC. 38.Applicability to Construction Arbitration.- The provisions of Sections17 (d) of Chapter 2, and Section 28 and 29 of this Act shall apply to arbitration ofconstruction disputes covered by this Chapter.

SEC. 39.Court to Dismiss Case Involving a Construction Dispute.- A regional

trial court which a construction dispute is filed shall, upon becoming aware, not laterthan the pretrial conference, that the parties had entered into an arbitration to beconducted by the CIAC, unless both parties, assisted by their respective counsel, shallsubmit to the regional trial court a written agreement exclusive for the Court, rather thanthe CIAC, to resolve the dispute.

CHAPTER 7 - JUDICIAL REVIEW OF ARBITRAL AWARDS

A. DOMESTIC AWARDS

SEC. 40.Confirmation of Award.- The confirmation of a domestic arbitral award

shall be governed by Section 23 of R.A. 876.

A domestic arbitral award when confirmed shall be enforced in the same manner as finaland executory decisions of the Regional Trial Court.

The confirmation of a domestic award shall be made by the regional trial court inaccordance with the Rules of Procedure to be promulgated by the Supreme Court.

A CIAC arbitral award need not be confirmed by the regional trial court to be executoryas provided under E.O. No. 1008.

SEC. 41.Vacation Award.- A party to a domestic arbitration may question thearbitral award with the appropriate regional trial court in accordance with the rules ofprocedure to be promulgated by the Supreme Court only on those grounds enumeratedin Section 25 of Republic Act No. 876. Any other ground raised against a domesticarbitral award shall be disregarded by the regional trial court.

B. FOREIGN ARBITRAL AWARDS


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SEC. 42.Application of the New York Convention. - The New York Conventionshall govern the recognition and enforcement of arbitral awards covered by the saidConvention.

The recognition and enforcement of such arbitral awards shall be filled with regionaltrial court in accordance with the rules of procedure to be promulgated by the SupremeCourt. Said procedural rules shall provide that the party relying on the award or applyingfor its enforcement shall file with the court the original or authenticated copy of theaward and the arbitration agreement. If the award or agreement is not made in any ofthe official languages, the party shall supply a duly certified translation thereof into anyof such languages.

The applicant shall establish that the country in which foreign arbitration award wasmade is a party to the New York Convention.

If the application for rejection or suspension of enforcement of an award has been made,the regional trial court may, if it considers it proper, vacate its decision and may also, onthe application of the party claiming recognition or enforcement of the award, order theparty to provide appropriate security.

SEC. 43.Recognition and Enforcement of Foreign Arbitral Awards NotCovered by the New York Convention.- The recognition and enforcement offoreign arbitral awards not covered by the New York Convention shall be done inaccordance with procedural rules to be promulgated by the Supreme Court. The Courtmay, grounds of comity and reciprocity, recognize and enforce a nonconvention award asa convention award.

SEC. 44.Foreign Arbitral Award Not Foreign Judgment. - A foreign arbitralaward when confirmed by a court of a foreign country, shall be recognized and enforcedas a foreign arbitral award and not a judgment of a foreign court.

A foreign arbitral award, when confirmed by the regional trial court, shall be enforced asa foreign arbitral award and not as a judgment of a foreign court.

A foreign arbitral award, when confirmed by the regional trial court, shall be enforced inthe same manner as final and executory decisions of courts of law of the Philippines.

SEC. 45.Rejection of a Foreign Arbitral Award.- A party to a foreign arbitrationproceeding may oppose an application for recognition and enforcement of the arbitralaward in accordance with the procedural rules to be promulgated by the Supreme Courtonly on those grounds enumerated under Article V of the New York Convention. Anyother ground raised shall be disregarded by the regional trial court.


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SEC. 46.Appeal from Court Decisions on Arbitral Awards.- A decision of theregional trial court confirming, vacating, setting aside, modifying or correcting anarbitral award may be appealed to the Court of Appeals in accordance with the rules ofprocedure to be promulgated by the Supreme Court.

The losing party who appeals from the judgment of the court confirming an arbitralaward shall required by the appealant court to post counterbond executed in favor of theprevailing party equal to the amount of the award in accordance with the rules to bepromulgated by the Supreme Court.

SEC. 47.Venue and Jurisdiction.- Proceedings for recognition and enforcement ofan arbitration agreement or for vacation, setting aside, correction or modification of anarbitral award, and any application with a court for arbitration assistance andsupervision shall be deemed as special proceedings and shall be filled with the regionaltrial court (i) where arbitration proceedings are conducted; (ii) where the asset to be

attached or levied upon, or the act to be enjoined is located; (iii) where any of the partiesto the dispute resides or has his place of business; or (iv) in the National Judicial CapitalRegion, at the option of the applicant.

SEC. 48.Notice of Proceeding to Parties.- In a special proceeding for recognitionand enforcement of an arbitral award, the Court shall send notice to the parties at theiraddress of record in the arbitration, or if any party cannot be served notice at suchaddress, at such party's last known address. The notice shall be sent at least fifteen (15)days before the date set for the initial hearing of the application.

CHAPTER 8 - MISCELLANEOUS PROVISIONS

SEC. 49.Office for Alternative Dispute Resolution.- There is hereby establishedthe Office for Alternative Dispute Resolution as an attached agency to the Department ofJustice (DOJ) which shall have a Secretariat to be headed by an executive director. Theexecutive director shall be appointed by the President of the Philippines.

The objective of the office are:

(a) to promote, develop and expand the use of ADR in the private and publicsectors; and

To assist the government to monitor, study and evaluate the use by the public and theprivate sector of ADR, and recommend to Congress needful statutory changes to develop.Strengthen and improve ADR practices in accordance with world standards.

SEC. 50.Powers and Functions of the Office for Alternative DisputeResolution. - The Office for Alternative Dispute Resolution shall have the followingpowers and functions:


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(a) To formulate standards for the training of the ADR practitioners and serviceproviders;

(b) To certify that such ADR practitioners and ADR service providers haveundergone the professional training provided by the office;

(c) To coordinate the development, implementation, monitoring, and evaluationof government ADR programs;

(d) To charge fees for their services; and

(e) To perform such acts as may be necessary to carry into effect the provisions ofthis Act.

SEC. 51.Appropriations.- The amount necessary to carry out the provisions of this

Act shall be included in the General Appropriations Act of the year following itsenactment into law and thereafter.

SEC. 52.Implementing Rules and Regulations (IRR). - Within one (1) monthafter the approval of this Act, the secretary of justice shall convene a committee that shallformulate the appropriate rules and regulations necessary for the implementation of this

Act. The committee, composed of representatives from:

(a) the Department of Justice;

(b) the Department of Trade and Industry;

(c) the Department of the Interior and Local Government;

(d) the president of the Integrated Bar of the Philippines;

(e) A representative from the arbitration profession; and

(f) A representative from the mediation profession; and

(g) A representative from the ADR organizations

shall within three (3) months after convening, submit the IRR to the Joint CongressionalOversight Committee for review and approval. The Oversight Committee shall becomposed of the chairman of the Senate Committee on Justice and Human Rights,chairman of the House Committee on Justice, and one (1) member each from themajority and minority of both Houses.

The Joint Oversight Committee shall become functus officio upon approval of the IRR.


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SEC. 53.Applicability of the Katarungan Pambarangay.- This Act shall not beinterpreted to repeal, amend or modify the jurisdiction of the Katarungan Pambarangayunder Republic Act No. 7160, otherwise known as the Local Government Code of 1991.

SEC. 54.Repealing Clause.- All laws, decrees, executive orders, rules andregulations which are inconsistent with the provisions of this Act are hereby repealed,amended or modified accordingly.

SEC. 55.Separability Clause.- If for any reason or reasons, any portion or provisionof this Act shall be held unconstitutional or invalid, all other parts or provisions notaffected shall thereby continue to remain in full force and effect.

SEC. 56.Effectivity.- This act shall take effect fifteen days (15) after its publication inat least two (2) national newspapers of general circulation.

C. Judicial FormsC.1 All Pleadings

Rule 7 to 9; Sec. 11, Rule 13 of the Rules of Court

RULE 7

Parts of a Pleading

Section 1. Caption. The caption sets forth the name of the court, the title of theaction, and the docket number if assigned.

The title of the action indicates the names of the parties. They shall all be named in theoriginal complaint or petition; but in subsequent pleadings, it shall be sufficient if thename of the first party on each side be stated with an appropriate indication when thereare other parties.

Their respective participation in the case shall be indicated. (1a, 2a)

Section 2. The body. The body of the pleading sets fourth its designation, theallegations of the party's claims or defenses, the relief prayed for, and the date of thepleading. (n)

(a)Paragraphs. The allegations in the body of a pleading shall be divided intoparagraphs so numbered to be readily identified, each of which shall contain astatement of a single set of circumstances so far as that can be done with


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convenience. A paragraph may be referred to by its number in all succeedingpleadings. (3a)

(b)Headings. When two or more causes of action are joined the statement ofthe first shall be prefaced by the words "first cause of action,'' of the second by"second cause of action", and so on for the others.

When one or more paragraphs in the answer are addressed to one of severalcauses of action in the complaint, they shall be prefaced by the words "answer tothe first cause of action" or "answer to the second cause of action" and so on; and

when one or more paragraphs of the answer are addressed to several causes ofaction, they shall be prefaced by words to that effect. (4)

(c)Relief.The pleading shall specify the relief sought, but it may add a generalprayer for such further or other relief as may be deemed just or equitable. (3a,

R6)

(d)Date. Every pleading shall be dated. (n)

Section 3.Signature and address. Every pleading must be signed by the party orcounsel representing him, stating in either case his address which should not be a postoffice box.

The signature of counsel constitutes a certificate by him that he has read the pleading;that to the best of his knowledge, information, and belief there is good ground to supportit; and that it is not interposed for delay.

An unsigned pleading produces no legal effect. However, the court may, in its discretion,allow such deficiency to be remedied if it shall appear that the same was due to mereinadvertence and not intended for delay. Counsel who deliberately files an unsignedpleading, or signs a pleading in violation of this Rule, or alleges scandalous or indecentmatter therein, or fails promptly report to the court a change of his address, shall besubject to appropriate disciplinary action. (5a)

Section 4.Verification. Except when otherwise specifically required by law or rule,pleadings need not be under oath, verified or accompanied by affidavit .(5a)

A pleading is verified by an affidavit that the affiant has read the pleading and that theallegations therein are true and correct of his knowledge and belief.

A pleading required to be verified which contains a verification based on "informationand belief", or upon "knowledge, information and belief", or lacks a proper verification,shall be treated as an unsigned pleading. (6a)


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Section 5. Certification against forum shopping. The plaintiff or principal partyshall certify under oath in the complaint or other initiatory pleading asserting a claim forrelief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a)that he has not theretofore commenced any action or filed any claim involving the sameissues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, nosuch other action or claim is pending therein; (b) if there is such other pending action orclaim, a complete statement of the present status thereof; and (c) if he should thereafterlearn that the same or similar action or claim has been filed or is pending, he shall reportthat fact within five (5) days therefrom to the court wherein his aforesaid complaint orinitiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mereamendment of the complaint or other initiatory pleading but shall be cause for thedismissal of the case without prejudice, unless otherwise provided, upon motion andafter hearing. The submission of a false certification or non-compliance with any of the

undertakings therein shall constitute indirect contempt of court, without prejudice to thecorresponding administrative and criminal actions. If the acts of the party or his counselclearly constitute willful and deliberate forum shopping, the same shall be ground forsummary dismissal with prejudice and shall constitute direct contempt, as well as acause for administrative sanctions. (n)

RULE 8

Manner of Making Allegations in Pleadings

Section 1.In general. Every pleading shall contain in a methodical and logical form,a plain, concise and direct statement of the ultimate facts on which the party pleadingrelies for his claim or defense, as the case may be, omitting the statement of mereevidentiary facts. (1)

If a defense relied on is based on law, the pertinent provisions thereof and theirapplicability to him shall be clearly and concisely stated. (n)

Section 2.Alternative causes of action or defenses. A party may set forth two ormore statements of a claim or defense alternatively or hypothetically, either in one causeof action or defense or in separate causes of action or defenses. When two or morestatements are made in the alternative and one of them if made independently would besufficient, the pleading is not made insufficient by the insufficiency of one or more of thealternative statements. (2)

Section 3. Conditions precedent. In any pleading a general averment of theperformance or occurrence of all conditions precedent shall be sufficient. (3)


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Section 4.Capacity. Facts showing the capacity of a party to sue or be sued or theauthority of a party to sue or be sued in a representative capacity or the legal existence ofan organized association of person that is made a party, must be averred. A partydesiring to raise an issue as to the legal existence of any party or the capacity of any partyto sue or be sued in a representative capacity, shall do so by specific denial, which shallinclude such supporting particulars as are peculiarly within the pleader's knowledge. (4)

Section 5.Fraud, mistake, condition of the mind. In all averments of fraud ormistake the circumstances constituting fraud or mistake must be stated withparticularity. Malice, intent, knowledge, or other condition of the mind of a person may

be averred generally.(5a)

Section 6.Judgment. In pleading a judgment or decision of a domestic or foreigncourt, judicial or quasi-judicial tribunal, or of a board or officer, it is sufficient to aver the

judgment or decision without setting forth matter showing jurisdiction to render it. (6)

Section 7.Action or defense based on document. Whenever an action or defense isbased upon a written instrument or document, the substance of such instrument ordocument shall be set forth in the pleading, and the original or a copy thereof shall beattached to the pleading as an exhibit, which shall be deemed to be a part of the pleading,or said copy may with like effect be set forth in the pleading. (7)

Section 8.How to contest such documents. When an action or defense is foundedupon a written instrument, copied in or attached to the corresponding pleading asprovided in the preceding section, the genuineness and due execution of the instrumentshall be deemed admitted unless the adverse party, under oath specifically denies them,

and sets forth what he claims to be the facts, but the requirement of an oath does notapply when the adverse party does not appear to be a party to the instrument or whencompliance with an order for an inspection of the original instrument is refused. (8a)

Section 9.Official document or act. In pleading an official document or official act, itis sufficient to aver that the document was issued or the act done in compliance with law.(9)

Section 10.Specific denial. A defendant must specify each material allegation of factthe truth of which he does not admit and, whenever practicable, shall set forth thesubstance of the matters upon which he relies to support his denial. Where a defendantdesires to deny only a part of an averment, he shall specify so much of it as is true andmaterial and shall deny only the remainder. Where a defendant is without knowledge orinformation sufficient to form a belief as to the truth of a material averment made to thecomplaint, he shall so state, and this shall have the effect of a denial. (10a)

Section 11.Allegations not specifically denied deemed admitted. Material avermentin the complaint, other than those as to the amount of unliquidated damages, shall be


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deemed admitted when not specifically denied. Allegations of usury in a complaint torecover usurious interest are deemed admitted if not denied under oath. (1a, R9)

Section 12.Striking out of pleading or matter contained therein. Upon motionmade by a party before responding to a pleading or, if no responsive pleading ispermitted by these Rules, upon motion made by a party within twenty (20) days after theservice of the pleading upon him, or upon the court's own initiative at any time, the courtmay order any pleading to be stricken out or that any sham or false, redundant,immaterial, impertinent, or scandalous matter be stricken out therefrom. (5, R9)

RULE 9

Effect of Failure to Plead

Section 1.Defenses and objections not pleaded. Defenses and objections not pleaded

either in a motion to dismiss or in the answer are deemed waived. However, when itappears from the pleadings or the evidence on record that the court has no jurisdictionover the subject matter, that there is another action pending between the same partiesfor the same cause, or that the action is barred by a prior judgment or by statute oflimitations, the court shall dismiss the claim. (2a)

Section 2. Compulsory counterclaim,or cross-claim,not set up barred. Acompulsory counterclaim, or a cross-claim, not set up shall be barred. (4a)

Section 3.Default;declaration of.If the defending party fails to answer within thetime allowed therefor, the court shall, upon motion of the claiming party with notice to

the defending party, and proof of such failure, declare the defending party in default.Thereupon, the court shall proceed to render judgment granting the claimant such reliefas his pleading may warrant, unless the court in its discretion requires the claimant tosubmit evidence. Such reception of evidence may be delegated to the clerk of court. (1a,R18)

(a) Effect of order of default. A party in default shall be entitled to notice ofsubsequent proceedings but not to take part in the trial. (2a, R18)

(b) Relief from order of default. A party declared in default may at any timeafter notice thereof and before judgment file a motion under oath to set aside theorder of default upon proper showing that his failure to answer was due to fraud,accident, mistake or excusable negligence and that he has a meritorious defense.In such case, the order of default may be set aside on such terms and conditionsas the judge may impose in the interest of justice. (3a, R18)

(c) Effect of partial default. When a pleading asserting a claim states acommon cause of action against several defending parties, some of whom answer


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and the others fail to do so, the court shall try the case against all upon theanswers thus filed and render judgment upon the evidence presented. (4a, R18).

(d) Extent of relief to be awarded. A judgment rendered against a party indefault shall not exceed the amount or be different in kind from that prayed fornor award unliquidated damages. (5a, R18).

(e) Where no defaults allowed. If the defending party in an action forannulment or declaration of nullity of marriage or for legal separation fails toanswer, the court shall order the prosecuting attorney to investigate whether ornot a collusion between the parties exists, and if there is no collusion, tointervene for the State in order to see to it that the evidence submitted is notfabricated. (6a, R18)

RULE 13

Filing and Service of Pleadings, Judgments and Other Papers

Section 11.Priorities in modes of service and filing. Whenever practicable, theservice and filing of pleadings and other papers shall be done personally. Except withrespect to papers emanating from the court, a resort to other modes must beaccompanied by a written explanation why the service or filing was not done personally.

A violation of this Rule may be cause to consider the paper as not filed. (n)

Sec. 139 of Republic Act No. 7160 or the, Local Government

Code of 1991

Section 139.Professional Tax.-

(a) The province may levy an annual professional tax on each person engaged inthe exercise or practice of his profession requiring government examination atsuch amount and reasonable classification as the sangguniang panlalawigan maydetermine but shall in no case exceed Three hundred pesos (P300.00).

(b) Every person legally authorized to practice his profession shall pay the

professional tax to the province where he practices his profession or where hemaintains his principal office in case he practices his profession in several places:Provided, however, That such person who has paid the correspondingprofessional tax shall be entitled to practice his profession in any part of thePhilippines without being subjected to any other national or local tax, license, orfee for the practice of such profession.


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(c) Any individual or corporation employing a person subject to professional taxshall require payment by that person of the tax on his profession beforeemployment and annually thereafter.

(d) The professional tax shall be payable annually, on or before the thirty-first(31st) day of January. Any person first beginning to practice a profession after themonth of January must, however, pay the full tax before engaging therein. A lineof profession does not become exempt even if conducted with some otherprofession for which the tax has been paid. Professionals exclusively employed inthe government shall be exempt from the payment of this tax.

(e) Any person subject to the professional tax shall write in deeds, receipts,prescriptions, reports, books of account, plans and designs, surveys and maps, asthe case may be, the number of the official receipt issued to him.

Bar Matter No. 287, SC En Banc Resolution dated July 9,1985, quoted in OCA Circular No. 10-85, July 24, 1985

CIRCULAR NO. 10[1985]

TO: INTERMEDIATE APPELLATE COURT, SANDIGANBAYAN, COURT OF TAXAPPEALS, REGIONAL TRIAL COURTS, METROPOLITAN TRIAL COURTS,MUNICIPAL TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS AND

MUNICIPAL CIRCUIT TRIAL COURTS

SUBJECT: INCLUSION OF NUMBER AND DATE OF OFFICIAL RECEIPT OFPAYMENT OF ANNUAL MEMBERSHIP DUES TO THE INTEGRATED BAR OF THEPHILIPPINES, IN ALL PLEADINGS, MOTIONS AND PAPERS TO BE FILED INCOURT.

For the information and guidance of all concerned, quoted hereunder is the ResolutionEn Banc of this Court dated July 9, 1985 in Bar Matter No. 287, to

wit:chanroblesvirtuallawlibrary

Effective August 1, 1985, all lawyers shall indicate in all pleadings, motions and paperssigned and filed by them in any ourt in the Philippines, the number and date of theirofficial receipt indicating payment of their annual membership dues to the IntegratedBar of th

lfw assign6

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