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Republika ng PilipinasKAGAWARAN NG KATARUNGAN

DEPARTMENT OF JUSTICEM a n i l a

DEPARTMENT CIRCULAR NO. 98

IMPLEMENTING RULES AND REGULATIONS OF THEALTERNATIVEDISPUTE RESOLUTION ACT OF 2004.

Where!"pursuant to Section 52 of Republic Act No. 9285, otherwise knownas the Alternati!e "ispute Resolution Act of 2##$ %A"R Act&, the Secretar' of(ustice is )irecte) to con!ene a *o++ittee for the for+ulation of theappropriate rules an) regulations necessar' for the i+ple+entation of the A"RAct

Where!"the co++ittee was co+pose) of representati!es fro+ the"epart+ent of (ustice, the "epart+ent of -ra)e an) n)ustr', the "epart+entof the nterior an) /ocal 0o!ern+ent, the Presi)ent of the ntegrate) 1ar of thePhilippines, a representati!e fro+ the A"R organiations.

Where#$re"the following rules an) regulations are hereb' a)opte) as the+ple+enting Rules an) Regulations of Republic Act no.9285.

IMPLEMENTING RULES AND REGULATIONS OF THE ALTERNATIVEDISPUTE RESOLUTION ACT OF 2004 %R.A N$. 928&'

Pursuant to Section 52 of republic Act No. 9285, otherwise known as thealternati!e "ispute Resolution Act of 2##$ %A"R Act&, the following Rulesan) Regulations %these Rules& are hereb' pro+ulgate) to i+ple+ent thepro!isions of the A"R Act3

Ch()er *GENERAL PROVISIONS

RULE * + P$,-/ 1 A((,-)-$

Ar)-,e *.*Purpose.-hese Rules are pro+ulgate) to prescribe the proce)uresan) gui)elines for the i+ple+entation of the A"R Act.

Ar)-,e *.2Declaration of policy.t is the polic' of the State3

%a& -o pro+ote part' autono+' in the resolution of )isputes orthe free)o+ of the parties to +ake their own arrange+ents toresol!e their )isputes

%b& -o encourage an) acti!el' pro+ote the use of Alternati!e"ispute Resolution %A"R& as an i+portant +eans to achie!espee)' an) i+partial 4ustice an) )eclog court )ockets

%c& -o pro!i)e +eans for the use of A"R as an ecient tool anan alternati!e proce)ure for the resolution of appropriate casean)

%)& -o enlist acti!e pri!ate sector participation in the settle+eof )isputes through A"R

Ar)-,e *.Exception to the Application of the ADR Act.-he pro!isions of thA"R Act shall not appl' to the resolution or settle+ent of the following3

%a& labor )isputes co!ere) b' Presi)ential "ecree No. $$2,

otherwise known as the /abor *o)e of the Philippines, as aa+en)e), an) its +ple+enting Rules an) Regulations

%b& the ci!il status of persons

%c& the !ali)it' of +arriage

%)& an' groun) for legal separation

%e& the 4uris)iction of courts

%f& future legiti+ate

%g& cri+inal liabilit'

%h& those )isputes which b' law cannot be co+pro+ise) an)

%i& )isputes referre) to court6anne7e) +e)iation.

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Ar)-,e *.4.Electronic Signature and E-Commerce Act. -he pro!isions of thelectronic Signature an) 6*o++erce Act, an) its i+ple+enting Rules an)Regulations shall appl' to procee)ings conte+plate) in the A"R Act.

Ar)-,e *.&.Liability of ADR Proiders!Practitioners.-he A"R pro!i)espractitioners shall ha!e the sa+e ci!il liabilit' for acts )one in theperfor+ance of their ocial )uties as that of public ocers as pro!i)e) inSection :8 %;&, *hapter 9, 1ook ; of the A)+inistrati!e *o)e of ;98ne) legalrelationship, whether contractual or not. An arbitration

agree+ent +a' be in the for+ of an arbitration clause in acontract or in the for+ of a separate agree+ent.

&. A)he)-)e +eans to sign, e7ecute, a)opt a s'+bol orencr'pt a recor) or establish the authenticit' of a recor) orter+.

6. A;r1+eans an' partial or >nal )ecision b' an arbitrator resol!ing the issue or contro!ers'.

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)isputes in!ol!ing the go!ern+ent, its agencies an)instru+entalities or pri!ate persons.

**. M$1e, L;+eans the Mo)el on nternational *o++ercialArbitration a)opte) b' the @nite) Nations *o++ission onnternational -ra)e /aw on 2; (une ;985.

*2. Pr$ee1-:!+eans 4u)icial, a)+inistrati!e or othera)4u)icati!e process, inclu)ing relate) pre6hearing or post

hearing +otions, conferences an) )isco!er'.

*. Re$r1+eans infor+ation written on a tangible +e)iu+ orstore) in an electronic or other si+ilar +e)iu+, retrie!able in apercei!able for+.

*4. R$!)er+eans a list of persons ?uali>e) to pro!i)e A"Rser!ices as neutrals or to ser!e as arbitrators.

*&. S(e-, ADR R,e!+eans the Special Rules of *ourt onAlternati!e "ispute Resolution issue) b' the Supre+e *ourt onSepte+ber ;, 2##9.

=. Ter5! 1 A((,-7,e )$ )he Ch()er Me1-)-$

*.Ad hocMe1-)-$+eans an' +e)iation other thaninstitutional or court6anne7e).

2. I!)-))-$, Me1-)-$+eans an' +e)iation processcon)ucte) un)er the rules of a +e)iation institution.

. C$r)3Ae>e1 Me1-)-$+eans +e)iation processcon)ucte) un)er the auspices of the court an) in accor)ancewith Supre+e *ourt appro!e) gui)elines, after such court hasac?uire) 4uris)iction of the )ispute.

4. C$r)3Re#erre1 Me1-)-$+eans +e)iation or)ere) b' acourt to be con)ucte) in accor)ance with the agree+ent of theparties when an action is pre+aturel' co++ence) in !iolation ofsuch agree+ent.

&. Cer)-e1 Me1-)$r+eans a +e)iator certi>e) b' the for A"R as ha!ing successfull' co+plete) its regular professiotraining progra+.

6. Me1-)-$+eans a !oluntar' process in which a +e)iatorselecte) b' the )isputing part' !oluntar' agree+ent regar)in)ispute.

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. Ar7-)r)-$+eans an' arbitration whether or nota)+inistere) b' a per+anent arbitration institution.

4. C$55er-, Ar7-)r)-$+eans an arbitration that co!ers+atters arising fro+ all relationships of a co++ercial nature,whether contractual or not. Relationships of a co++ercial natureinclu)e, but are not li+ite) to, the following co++ercialtransactions3 an' tra)e transaction for the suppl' or e7change ofgoo)s or ser!ices )istribution agree+ents construction of

works co++ercial representation or agenc' factoring leasingconsulting engineering licensing in!est+ent >nancingbanking insurance 4oint !enture an) other for+s of in)ustrial orbusiness cooperation carriage of goo)s or passengers b' air,sea rail or roa).

&. C$e)-$ A;r1+eans a foreign arbitral awar) in a*on!ention State.

6. C$e)-$ S))e+eans a state that is a +e+ber of theNew Dork *on!ention.

e) b' the PhilippineSenate un)er Senate Resolution No.

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of a Re?uest for Appoint+ent, *hallenge, ter+ination of theMan)ate of Arbitrators an) for taking action thereon.

4. Ar7-)r)-$+eans a !oluntar' )ispute resolution process inwhich one or +ore arbitrators, Appointe) in accor)ance with theagree+ent of the parties or these Rules, resol!e a )ispute b'ren)ering an awar).

&. Ar7-)r, Tr-7,+eans a sole arbitrator or a panel, boar)

or co++ittee of arbitrators.

6. C,-5)+eans a persons with a clai+ against another an)who co++ences arbitration against the latter.

e) in these Rules, aRegional -rial *ourt.

8. D/+eans calen)ar )a'.

9. D$5e!)- Ar7-)r)-$+eans arbitration that is notinternational as )e>ne) in Article ;%:& of the Mo)e /aw.

*0. I!)-))-$, Ar7-)r)-$+eans arbitration a)+inistere)b' an entit', which is registere) as a )o+estic corporation withthe Securities an) 7change *o++ission %S*& an) engage) in.a+ong others, arbitration of )isputes in the Philippines on aregular an) per+anent basis.

**. Ree!) #$r A(($-)5e)+eans the letter6re?uest to theappointing authorit' of either or both parties for theappoint+ent of arbitrators or of the two arbitrators >rstappointe) b' the parties for the appoint+ent of the thir)+e+ber of an arbitral tribunal.

*2. Re(re!e))-eis a person )ul' authorie) in writing b' apart' to a )ispute, who coul) be a counsel, a person in hisher

e+plo' or an' other person of hisher choice, )ul' authorie) torepresent sai) part' in the arbitration procee)ings.

*. Re!($1e)+eans the persons against who+ theclai+ant co++ences arbitration.

*4. Wr-))e $55-)-$+eans the plea)ing, +otion,+anifestation, notice, or)er, awar) an) an' other )ocu+ent opaper sub+itte) or >le) with the arbitral tribunal or )eli!ere) a part'.

E. Ter5! A((,-7,e )$ )he Ch()er $ O)her ADR F$r5!

*. Er,/ Ne)r, E,)-$+eans an A"R process whereinparties an) their law'ers are brought together earl' in the pre

trial phase to present su++aries of their cases an) to recei!enon6bin)ing assess+ent b' an e7perience) neutral person, wie7pertise in the sub4ect +atter or substance of the )ispute.

2. Me1-)-$3Ar7-)r)-$ $r Me13Ar7is a two6step )isputeresolution process in!ol!ing +e)iation an) then followe) b'arbitration.

. M--3)r-,+eans a structure) )ispute resolution +etho) inwhich the +erits of a case are argue) before a panel co+prisiof senior )ecision6+akers, with or without the presence of aneutral thir) person, before which the parties seek a negotiatesettle+ent.

CHAPTER 2THE OFFICE FOR ALTERNATIVE DISPUTE RESOLUTION

RULE *3 OBe #$r A,)er)-e D-!()e Re!$,)-$ %OADR'

Ar)-,e 2.*.Establishment of the $%ce for Alternatie Dispute Resolution.-here is hereb' establishe) the A"R as an agenc' attache) to the"epart+ent of (ustice. t shall ha!e a Secretariat an) shall be hea)e) b' an7ecuti!e "irector, who shall be appointe) b' the Presi)ent of the Philippinetaking into consi)eration the reco++en)ation of the Secretar' of (ustice.

Ar)-,e 2.2.Po&ers of the $ADR.-he A"R shall ha!e the following powers

%a& -o act as appointing authorit' of +e)iators an) arbitratorswhen the parties agree in writing that it shall be e+powere) t)o so

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%b& -o con)uct se+inars, s'+posia, conferences an) other publicfora an) publish procee)ings of sai) acti!ities an) rele!ant+aterialsinfor+ation that woul) pro+ote, )e!elop an) e7pan)the use of A"R

%c& -o establish an A"R librar' or resource center where A"Rlaws, rules an) regulation, 4urispru)ence, books, articles an)other infor+ation about A"R in the Philippines an) elsewhere+a' be store) an) accesse)

%)& -o establish training progra+s for A"Rpro!i)erspractitioners, both in the public an) pri!ate sectorsan) to un)ertake perio)ic an) continuing training progra+s forarbitration an) +e)iation an) charge fees on participants. t+a' )o so in con4unction with or in cooperation with the 1P,pri!ate A"R organiations, an) local an) foreign go!ern+entoces an) agencies an) international organiations

%e& -o certif' those who ha!e successfull' co+plete) the regularprofessional training progra+s pro!i)e) b' the A"R

%f& -o charge for ser!ices ren)ere) such as, a+ong others, fortraining an) certi>cations of A"R pro!i)ers

%g& -o accept )onations, grants an) other assistance fro+ localan) foreign sources an)

%h& -o e7ercise such other powers as +a' be necessar' an)proper to carr' into eCect the pro!isions of the A"R Act.

Ar)-,e 2..'unctions of the $ADR.-he A"R shall ha!e the followingfunctions

%a& -o pro+ote, )e!elop an) e7pan) the use of A"R in thepri!ate an) public sectors through infor+ation, e)ucation an)co++unication

%b& -o +onitor, stu)' an) e!aluate the use of A"R b' the pri!atean) public sectors for purposes of, a+ong others, polic'for+ulation

%c& -o reco++en) to *ongress nee)ful statutor' changes to)e!elop, strengthen an) i+pro!e A"R practices in accor)ancewith international professional stan)ar)s

%)& -o +ake stu)ies on an) pro!i)e linkages for the)e!elop+ent, i+ple+entation, +onitoring an) e!aluation ofgo!ern+ent an) pri!ate A"R progra+s an) secure infor+atioabout their respecti!e a)+inistrati!e rulesproce)ures, probleencountere) an) how the' were resol!e)

%e& -o co+pile an) publish a list or roster of A"Rpro!i)erspractitioners, who ha!e un)ergone training b' theA"R, or b' such training pro!i)ersinstitutions recognie) orcerti>e) b' the A"R as perfor+ing functions in an' A"Rs'ste+. -he list or roster shall inclu)e the a))resses, contactnu+bers, e6+ail a))resses, A"R ser!ices ren)ere) %e.g.arbitration, +e)iation& an) e7perience in A"R of the A"Rpro!i)erspractitioners

%f& -o co+pile a list or roster of foreign or international A"Rpro!i)erspractitioners. -he list or roster shall inclu)e thea))resses, contact nu+bers, e6+ail a))resses, A"R ser!icesren)ere) %e.g. arbitration, +e)iation& an) e7perience in A"R o

the A"R pro!i)erspractitioners an)

%g& -o perfor+ such other functions as +a' be assigne) to it.

Ar)-,e 2.4.Diisions of the $ADR. -he A"R shall ha!e the following staCan) ser!ice )i!isions, a+ong others3

%a& Sere)r-)E shall pro!i)e necessar' support an) )ischarsuch other functions an) )uties as +a' be )irecte) b' the7ecuti!e "irector.

%b& P7,- -#$r5)-$ 1 Pr$5$)-$ D--!-$E shall becharge) with the )isse+ination of infor+ation, the pro+otion

the i+portance an) public acceptance of +e)iation, conciliatiarbitration or an' co+bination thereof an) other A"R for+s as+eans of achie!ing spee)' an) ecient +eans of resol!ing a)isputes an) to help in the pro+otion, )e!elop+ent an)e7pansion of the use of A"R.

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%c& Tr--: D--!-$E shall be charge) with the for+ulation ofeCecti!e stan)ar)s for the training of A"R practitioners con)uctof training in accor)ance with such stan)ar)s issuance ofcerti>cations of training to A"R practitioners an) A"R ser!icepro!i)ers who ha!e un)ergone the professional trainingpro!i)e) b' the A"R an) the coor)ination of the )e!elop+ent,i+ple+entation, +onitoring an) e!aluation of go!ern+ent an)pri!ate sector A"R progra+s.

%)& Re$r1! 1 L-7rr/ D--!-$E shall be charge) with theestablish+ent an) +aintenance of a central repositor' of A"Rlaws, rules an) regulations, 4urispru)ence, books, articles, an)other infor+ation about A"R in the Philippines an) elsewhere.

RULE 2 + The A1-!$r/ C$-,

Ar)-,e 2.&.Composition of the Adisory Council.-here is also create) anA)!isor' *ouncil co+pose) of a representati!e fro+ each of the following3

%a& Me)iation profession

%b& Arbitration profession

%c& A"R organiations

%)& 1P an)

%e& Aca)e+e.

-he +e+bers of the *ouncil, who shall be appointe) b' the Secretar' of (usticeupon the reco++en)ation of the A"R 7ecuti!e "irector, shall choose a*hair+an fro+ a+ong the+sel!es.

Ar)-,e 2.6.Role of the Adisory Council.-he A)!isor' *ouncil shall a)!ise the7ecuti!e "irector on polic', operational an) other rele!ant +atters. -he*ouncil shall +eet regularl', at least once e!er' two %2& +onths, or upon callb' the 7ecuti!e "irector.

CHAPTER MEDIATION

RULE * + Geer, Pr$-!-$!

Ar)-,e .*.Scope of Application.-hese Rules appl' to !oluntar' +e)iationwhether ad hocor institutional, other than court6anne7e) +e)iation an) onl'

in )efault of an agree+ent of the parties on the applicable rules.

-hese Rules shall also appl' to all cases pen)ing before an a)+inistrati!e or?uasi64u)icial agenc' that are subse?uentl' agree) upon b' the parties to bereferre) to +e)iation.

Ar)-,e .2.Statement of Policy.n appl'ing an) construing the pro!isions othese Rules, consi)eration +ust be gi!en to the nee) to pro+ote can)or ofparties an) +e)iators through con>)entialit' of the +e)iation process, thepolic' of fostering pro+pt, econo+ical an) a+icable resolution of )isputes inaccor)ance with principles of integrit' of )eter+ination b' the parties an) thpolic' that the )ecision6+aking authorit' in the +e)iation process rests withthe parties.

A part' +a' petition a court before which an action is pre+aturel' brought i+atter which is the sub4ect of a +e)iation agree+ent, if at least one part' sre?uests, not later than the pre6trial conference or upon the re?uest of bothparties thereafter, to refer the parties to +e)iation in accor)ance with theagree+ent of the parties.

RULE 23 Se,e)-$ $# Me1-)$r

Ar)-,e ..'reedom to Select mediator.-he parties ha!e the free)o+ toselect +e)iator. -he parties +a' re?uest the A"R to pro!i)e the+ with a lior roster or the resu+es of its certi>e) +e)iators. -he A"R +a' be re?uesto infor+ the +e)iator of hisher selection.

Ar)-,e .4.Replacement of (ediator.f the +e)iator selecte) is unable to aas such for an' reason, the parties +a', upon being infor+e) of such fact,select another +e)iator.

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Ar)-,e .&.Refusal or )ithdra&al of (ediator.A +e)iator +a' refuse fro+acting as such, with)raw or +a' be co+pelle) to with)raw fro+ +e)iatorprocee)ings un)er the following circu+stances3

%a& f an' of the parties so re?uests the +e)iator to with)raw

%b& -he +e)iator )oes not ha!e the ?uali>cations, training an)e7perience to enable hi+her to +eet the reasonablee7pectations of the parties

%c& Bhere the +e)iatorFs i+partiall' is in ?uestion

%)& f continuation of the process woul) !iolate an' ethicalstan)ar)s

%e& f the safet' of an' of the parties woul) be 4eopar)ie)

%f& f the +e)iator is unable to pro!i)e eCecti!e ser!ices

%g& n case of conGict of interest an)

%h& n an' of the following instances, if the +e)iator is satis>e)

that3

%i& one or +ore of the parties isare not acting in goo)faith

%ii& the partiesF agree+ent woul) be illegal or in!ol!e theco++ission of a cri+e

%iii& continuing the )ispute resolution woul) gi!e rise toan appearance of i+propriet'

%i!& continuing with the process woul) cause signi>canthar+ to a non6participating person or to the public or

%!& continuing )iscussion woul) not be in the best interestof the parties, their +inor chil)ren or the )isputeresolution process.

RULE + E)h-, C$1) $# Me1-)$r

Ar)-,e .6 Competence. t is not re?uire) that a +e)iator shall ha!e specia?uali>cations b' backgroun) or profession unless the special ?uali>cations o+e)iator shall 3

%a& +aintain the continuall' upgra)e hisher professionalco+petence in +e)iation skills

%b& ensure that hisher ?uali>cations, training an) e7perience known to an) accepte) b' the parties an)

%c& ser!e onl' when hisher ?uali>cations, training an)e7perience enable hi+her to +eet the reasonable e7pectatioof the parties an) shall not hol) hi+selfherself out or gi!e thei+pression that heshe )oes not ha!e.

@pon the re?uest of a +e)iation part', an in)i!i)ual who is re?ueste) to seras +e)iator shall )isclose hisher ?uali>cations to +e)iate a )ispute.

Ar)-,e .nancial or personal interest in the outco+e of the+e)iation an) an' e7isting or past relationship with apart' of foreseeable participant in the +e)iation an)

%ii& )isclose to the +e)iation parties an' such fact knowor learne) as soon as practical before accepting a+e)iation.

%b& f a +e)iator learns an' fact )escribe) in paragraph %a& ofthis Article after accepting a +e)iation, the +e)iator shall)isclose it as soon as practicable to the +e)iation parties.

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Ar)-,e .8.Con"dentiality. A +e)iator shall keep in ut+ost con>)ence allcon>)ential infor+ation obtaine) in the course of the +e)iation process.

A +e)iator shall )iscuss issues of con>)entialit' an) the e7tent ofcon>)entialit' pro!i)e) in an' pri!ate sessions or caucuses that the +e)iatorhol)s with a part'.

Ar)-,e .9.Consent and Self-Determination.%a& A +e)iator shall +akereasonable eCorts to ensure that each part' un)erstan)s the nature an)

character of the +e)iation procee)ing inclu)ing pri!ate caucuses, the issues,the a!ailable options, the alternati!es to non6settle+ent, an) that each part'is free an) able to +ake whate!er choices heshe )esires regar)ingparticipation in +e)iation generall' an) regar)ing speci>c settle+ent options.

f a +e)iator belie!es that a part', who is not represente) b'counsel, is unable to un)erstan), or full' participate, the+e)iation procee)ings for an' reason, a +e)iator +a' either3

%i& li+it the scope of the +e)iation procee)ings in a+anner consistent with the part'Fs abilit' to participate,an)or reco++en) that the part' obtain appropriateassistance in or)er to continue with the process or

%ii& ter+inate the +e)iation procee)ings.

%b& A +e)iator shall recognie an) put in +in) that the pri+ar'responsibilit' of resol!ing a )ispute an) the shaping of a!oluntar' an) uncoerce) settle+ent rests with the parties.

Ar)-,e .*0.Separation of (ediation from Counseling and Legal Adice. %a&7cept in e!aluati!e +e)iation or when the parties so re?uest, a +e)iatorshall3

%i& refrain fro+ gi!ing legal or technical a)!ice an)otherwise engaging in counseling or a)!ocac' an)

%ii& abstain fro+ e7pressing hisher personal opinion onthe rights an) )uties of the parties an) the +erits of an'proposal +a)e.

%b& Bhere appropriate an) where either or both parties are norepresente) b' counsel, a +e)iator shall

%i& reco++en) that the parties seek outsi)e professiona)!ice to help the+ +ake infor+e) )ecision an) toun)erstan) the i+plication of an' proposal an)

%ii& suggest that the parties seek in)epen)ent legalan)or technical a)!ice before a settle+ent agree+ent

signe).

%c& without the consent of al parties, an) for a reasonable ti+eun)er the particular circu+stance, a +e)iator who also practianother profession shall not establish a professional relationshin that other profession with one of the parties, or an' person entit', in a substantiall' an) factuall' relate) +atter.

Ar)-,e .**.Charging of 'ees.%a& A +e)iator shall full' )isclose an) e7plato the parties the basis of cost, fees an) charges.

%b& -he +e)iator who with)raws fro+ the +e)iation shall retuto the parties an' unearne) fee an) unuse) )eposit.

%c& A +e)iator shall not enter into a fee agree+ent, which iscontingent upon the results of the +e)iation or the a+ount ofthe settle+ent.

Ar)-,e .*2Promotion of Respect and Control of Abuse of Process. -he+e)iatorcle :.;2 Pro+otion of Respect an) *ontrol of Abuse of Process. of thsettle +entcost ablish a professional relationship shall encourage +utualrespect between the parties, an) shall take reasonable steps, sub4ect to theprinciple of self6)eter+ination, to li+it abuses of the +e)iation process.

Ar)-,e .*.Solicitation or Acceptance of any +ift.No +e)iator or an'+e+ber of a +e)iatorHs i++e)iate fa+il' or hisher agent shall re?uest,solicit, recei!e or accept an' gift or an' t'pe of co+pensation other than the

agree) fee an) e7penses in connection with an' +atter co+ing before the+e)iator.

RULE 4 + R$,e $# Pr)-e! 1 )he-r C$!e,!

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Ar)-,e .*4.Designation of Counsel or Any Person to Assist (ediation. 7ceptas otherwise pro!i)e) b' the A"R Act or b' these Rules, a part' +a' )esignatea law'er or an' other person to pro!i)e assistance in the +e)iation. A wai!erof this right shall be +a)e in writing b' the part' wai!ing it. A wai!er ofparticipation or legal representation +a' be rescin)e) at an' ti+e.

Ar)-,e .*&.Role of Counsel.%a& -he law'er shall !iew hisher role in the+e)iation as a collaborator with the other law'er in working together towar)the co++on goal of helping their clients resol!e their )iCerences to their

+utual a)!antage.

%b& -he law'er shall encourage an) assist hisher client toacti!el' participate in positi!e )iscussions an) cooperate incrafting an agree+ent to resol!e their )ispute.

%c& -he law'er +ust assist hisher client to co+prehen) an)appreciate the +e)iation process an) its bene>ts, as well as theclientHs greater personal responsibilit' for the success of+e)iation in resol!ing the )ispute.

%)& n preparing for participation in +e)iation, the law'er shallconfer an) )iscuss with hisher client the following3

%i& -he +e)iation process as essentiall' a negotiationbetween the parties assiste) b' their respecti!e law'ers,an) facilitate) b' a +e)iator, stressing it its )iCerencefro+ litigation, its a)!antages an) bene>ts, the clientsheightene) role in +e)iation an) responsibilit' for itssuccess an) e7plaining the role of the law'er in+e)iation procee)ings,

%ii& -he substance of the upco+ing +e)iation such as

%aa& -he substanti!e issues in!ol!e) in the )isputean) their prioritiation in ter+s of i+portance tohisher clientHs real interests an) nee)s.

%bb& -he stu)' of other part'Hs position in relationto the issues with a !iew to un)erstan)ing theun)erl'ing interests, fears, concerns an) nee)s

%cc& -he infor+ation or facts to be gathere) orsought fro+ the other si)e or to be e7change)that are necessar' for infor+e) )ecision6+akin

%))& -he possible options for settle+ent butstressing the nee) to be open6+in)e) about othpossibilities an)

%ee& -he best, worst an) +ost likel' alternati!e

a non6negotiate) settle+ent.

Ar)-,e .*6.$ther (atters &hich the Counsel shall do to Assist (ediation.-he law'er

%a& shall gi!e support to the +e)iator so that hisher client wilfull' un)erstan) the rules an) processes of +e)iation

%b& shall i+press upon hisher client the i+portance of speakinfor hi+selfherself an) taking responsibilit' for +aking )ecisio)uring the negotiations within the +e)iation process.

%c& +a' ask for a recess in or)er to gi!e a)!ice or suggestionshisher client in pri!ate, if heshe percei!es that hisher client unable to bargain eCecti!el'

%)& shall assist hisher client an) the +e)iator put in writing thter+s of the settle+ent agree+ent that the parties ha!e enteinto. -hat law'ers shall see to it that the ter+s of the settle+eagree+ent are not contrar' to law, +orals, goo) custo+s, pubor)er or public polic'.

RULE & + C$1) $# Me1-)-$

Ar)-,e .*ts, its outco+e or the +e)iatorHs

?uali>cations an) abilities )uring the entire +e)iation process.

%b& -he +e)iator shall hel) the parties reach a satisfactor'resolution to their )ispute but has no authorit' to i+pose asettle+ent on the parties.

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%c& -he parties shall personall' appear for +e)iation an) +a' beassiste) b' a law'er. A part' +a'be represente) b' an agentwho +ust ha!e full authorit' to negotiate an) settle the )ispute.

%)& -he +e)iation process shall, in general, consists of thefollowing stages3

%i& opening state+ent of the +e)iator

%ii& in)i!i)ual narration b' the parties

%iii& e7change b' the parties

%i!& su++ar' of issues

%!& generation an) e!aluation of options an)

%!i& closure

%e& -he +e)iation procee)ing shall be hel) in pri!ate. Person,other than the parties, their representati!es an) +e)iator, +a'atten) onl' with the consent of all the parties,

%f& the +e)iation shall be close)3

%i& b' the e7ecution of a settle+ent agree+ent b' theparties

%ii& b' the with)rawal of an' part' fro+ +e)iation an)

%iii& b' the written )eclaration of the +e)iator that an'further eCort at +e)iation woul) not be helpful

RULE 6 + P,e $# Me1-)-$

Ar)-,e .*8.Agreement of Parties on the Place of (ediation.-he parties arefree to agree on the place of +e)iation. =ailing such agree+ent, the place of+e)iation shall be an' place con!enient an) appropriate to all parties.

RULE < + Ee) $# A:ree5e) )$ S75-) D-!()e )$ Me1-)-$ U1eI!)-))-$, R,e!

Ar)-,e .*9Agreement to Submit a Dispute to (ediation by an *nstitution. agree+ent to sub+it a )ispute to +e)iation b' an institution shall inclu)e aagree+ent to be boun) b' the internal +e)iation an) a)+inistrati!e policiessuch institution. =urther, an agree+ent to sub+it a )ispute to +e)iation un)institutional +e)iation rules shall be )ee+e) to inclu)e an agree+ent to ha!such rules go!ern the +e)iation of the )ispute an) for the +e)iator, the

parties, their respecti!e counsels an) non6part' participants to abi)e b' sucrules.

RULE 8 + E#$re5e) $# Me1-)e1 Se)),e5e) A:ree5e)

Ar)-,e .20.$peratie Principles to +uide (ediation.-he +e)iation shall bgui)e) b' the following operati!e principles3

%a& A settle+ent agree+ent following successful +e)iation shbe prepare) b' the parties with the assistance of theirrespecti!e counsels. f an', an) b' the +e)iator. -he parties atheir respecti!e counsels shall en)ea!or to +ake the ter+s ancon)ition of the settle+ent agree+ent co+plete an) to +akea)e?uate pro!ision for the contingenc' of breach to a!oi)

conGicting interpretations of the agree+ent.

%b& -he parties an) their respecti!e counsels, if an', shall signthe settle+ent agree+ent. -he +e)iator shall certif' that hese7plaine) the contents of the settle+ent agree+ent to theparties in a language known to the+.

%c& f the parties agree, the settle+ent agree+ent +a' be 4oin)eposite) b' the parties or )eposite) b' one part' with priornotice to the other part'ties with the *lerk of *ourt of theRegional -rial *ourt %a& where the principal place of business inthe Philippines of an' of the parties is locate) %b& if an' of theparties is an in)i!i)ual, where an' of those in)i!i)uals resi)esor %c& in the National *apital (u)icial Region. Bhere there is anee) to enforce the settle+ent agree+ent, a petition +a' be>le) b' an' of the parties with the sa+e court in which case, tcourt shall procee) su++aril' to hear the petition, inaccor)ance with the Special A"R Rules.

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%)& -he parties +a' agree in the settle+ent agree+ent that the+e)iator shall beco+e a sole arbitrator for the )ispute an) shalltreat the settle+ent agree+ent as an arbitral awar) which shallbe sub4ect to enforce+ent un)er Republic Act No. 8)eninfor+ation gathere) in +e)iation. A +e)iator who is wrongfusubpoenae) shall be rei+burse) the full cost of hisherattorne'Hs fees an) relate) e7penses.

Ar)-,e .22.)aier of Con"dentiality.%a& A pri!ilege arising fro+ thecon>)entialit' of infor+ation +a' be wai!e) in a recor) or orall' )uring aprocee)ing b' the +e)iator an) the +e)iation parties.

%b& Bith the consent of the +e)iation parties, a pri!ilege arisinfro+ the con>)entialit' of infor+ation +a' likewise be wai!e)b' a non6part' participant if the infor+ation is pro!i)e) b' sucnon6part' participant.

%c& A person who )iscloses con>)ential infor+ation shall bepreclu)e) fro+ asserting the pri!ilege un)er Article :.2;%*on>)entialit' of nfor+ation& to bar )isclosure of the rest ofthe infor+ation necessar' to a co+plete un)erstan)ing of thepre!iousl' )isclose) infor+ation. f a person suCers loss or)a+age as a result of the )isclosure of the con>)entialinfor+ation, heshe shall be entitle) to )a+ages in a 4u)icialprocee)ing against the person who +a)e the )isclosure.

%)& A person who )iscloses or +akes a representation about a+e)iation is preclu)e) fro+ asserting the pri!ilege +entione)Article :.2; to the e7tent that the co++unication pre4u)ices

another person in the procee)ing an) it is necessar' for theperson pre4u)ice) to respon) to the representation or )isclosu

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Ar)-,e .2.Exceptions to the Priilege of Con"dentiality of information.%a&-here is no pri!ilege against )isclosure un)er Article :.2; in the followinginstances3

%i& in an agree+ent e!i)ence) b' a recor) authenticate)b' all parties to the agree+ent

%ii& a!ailable to the public or +a)e )uring a session of a+e)iation which is open, or is re?uire) b' law to be open,

to the public

%iii& a threat or state+ent of a plan to inGict bo)il' in4ur'or co++it a cri+e of !iolence

%i!& intentionall' use) to plan a cri+e, atte+pt toco++it, or co++it a cri+e, or conceal an ongoing cri+eor cri+inal acti!it'.

%!& sought or oCere) to pro!e or )ispro!e abuse, neglect,aban)on+ent or e7ploitation in a procee)ing in which apublic agenc' is protecting the interest of an in)i!i)ualprotecte) b' law but this e7ception )oes not appl'where a chil) protection +atter is referre) to +e)iation

b' a court or where a public agenc' participates in thechil) protection +e)iation

%!i& sought or oCere) to pro!e or )isappro!e a clai+ orco+plaint of professional +iscon)uct or +alpractice >le)against a part', non6part' participant, or representati!eof a part' base) on con)uct occurring )uring a+e)iation.

%b& f a court or a)+inistrati!e agenc' >n)s, after a hearing inca+era, that the part' seeking )isco!er' of the proponent of thee!i)ence has shown that the e!i)ence is not otherwise a!ailable,that there is a nee) for the e!i)ence that substantiall'outweighs the interest in protecting con>)entiall', an) the+e)iation co++unication is sought or oCere) in3

%i& a court procee)ing in!ol!ing a cri+e or felon' or

%ii& a procee)ing to pro!e a clai+ or )efense that un)ethe law is sucient to refor+ or a!oi) a liabilit' on acontract arising out of the +e)iation.

%c& A +e)iator +a' not be co+pelle) to pro!i)e e!i)ence of a+e)iation co++unication or testif' in such procee)ing.

%)& f a +e)iation co++unication is not pri!ilege) un)er ane7ception in sub6section %a& or %b& hereof, onl' the portion of t

co++unication necessar' for the application of the e7ceptionnon6)isclosure +a' be a)+itte). -he a)+ission of a particulae!i)ence for the li+ite) purpose of an e7ception )oes not renthat e!i)ence, or an' other +e)iation co++unication,a)+issible for an' other purpose.

Ar)-,e .24.,on-Reporting or Communication by (ediator.A +e)iator +anot +ake a report, assess+ent, e!aluation, reco++en)ation, >n)ing or otheco++unication regar)ing a +e)iation to a court or agenc' or other authorit'that +a' +ake a ruling on a )ispute that is the sub4ect of a +e)iation, e7ce

%a& to state that the +e)iation occurre) or has ter+inate), orwhere a settle+ent was reache) or

%b& as per+itte) to be )isclose) un)er Article :.2: %7ception the Pri!ilege of *on>)entialit' of nfor+ation&.

-he parties +a', b' an agree+ent in writing, stipulate that the settle+entagree+ent shall be seale) an) not )isclose) to an' thir) part' inclu)ing thecourt. Such stipulation, howe!er, shall not appl' to a procee)ing to enforce oset asi)e the settle+ent agree+ent.

RULE *0 + Fee! 1 C$!) $# Me1-)-$

Ar)-,e .2&.'ees and Cost of Ad hoc (ediation. n a) hoc +e)iation, theparties are free to +ake their own arrange+ent as to +e)iation cost an) feen )efault thereof, the sche)ule of cost an) fees to be appro!e) b' the A"R

shall be followe).

Ar)-,e .26.'ees and Cost of *nstitutional (ediation. %a& n institutional+e)iation, +e)iation cost shall inclu)e the a)+inistrati!e charges of the+e)iation institution un)er which the parties ha!e agree) to be boun),

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+e)iatorHs fees an) associate) e7penses, if an'. n )efault of agree+ent of theparties as to the a+ount an) +anner of pa'+ent of +e)iationHs cost an) fees,the sa+e shall be )eter+ine) in accor)ance with the applicable internal rulesof the +e)iation ser!ice pro!i)ers un)er whose rules the +e)iation iscon)ucte).

%b& A +e)iation ser!ice pro!i)er +a' )eter+ine such +e)iationfee as is reasonable taking into consi)eration the followingfactors, a+ong others3

%i& the co+ple7it' of the case

%ii& the nu+ber of hours spent in +e)iation an)

%iii& the training, e7perience an) stature of +e)iators.

CHAPTER 4INTERNATIONAL COMMERCIAL AR=ITRATION

RULE * + Geer, Pr$-!-$!

Ar)-,e 4.*.Scope of Application.%a& -his *hapter applies to internationalco++ercial arbitration, sub4ect to an' agree+ent in force between thePhilippines an) other state or states.

%b& -his *hapter applies onl' if the place or seat of arbitration isthe Philippines an) in )efault of an' agree+ent of the parties onthe applicable rules.

%c& -his *hapter shall not aCect an' other law of the Philippinesb' !irtue of which certain )isputes +a' not be sub+itte) toarbitration or +a' be sub+itte) to arbitration onl' accor)ing topro!isions other than those of the A"R Act.

Ar)-,e 4.2.Rules of *nterpretation.%a& nternational co++ercial arbitrationshall be go!erne) b' the Mo)el /aw on nternational *o++ercial Arbitration.

%b& n interpreting this *hapter, regar) shall be ha) to theinternational origin of the Mo)el /aw an) to the nee) for

unifor+it' in its interpretation. Resort +a' be +a)e to thetraaux preparatoiresan) the Report of the Secretar'60enerathe @nite) Nations *o++ission on nternational -ra)e /aw )atMarch ;985 entitle), nternational *o++ercial Arbitration3Anal'tical *o++entar' on "raft -e7t i)enti>e) b' referencenu+ber A*N. 92I$.

%c& Moreo!er, in interpreting this *hapter, the court shall ha!e)ue regar) to the polic' of the law in fa!or of arbitration an) tpolic' of the Philippines to acti!el' pro+ote part' autono+' ithe resolution of )isputes or the free)o+ of the parties to +aktheir own arrange+ent to resol!e their )ispute.

%)& Bhere a pro!ision of this *hapter, e7cept the Rulesapplicable to the substance of the )ispute, lea!es the partiesfree to )eter+ine a certain issue, such free)o+ inclu)es theright of the parties to authorie a thir) part', inclu)ing aninstitution, to +ake that )eter+ination.

%e& Bhere a pro!ision of this *hapter refers to the fact that theparties ha!e agree) or that the' +a' agree or in an' other warefers to an agree+ent of the parties, such agree+ent inclu)ean' arbitration rules referre) to in that agree+ent.

%f& Bhere a pro!ision of this *hapter, other than in paragraph of Article $.25 %"efault of a Part'& an) paragraphs %b& %i& ofArticle $.:2 %-er+ination of Procee)ings&, refers to a clai+, italso applies to a counter6clai+, an) where it refers to a )efensit also applies to a )efense to such counter6clai+.

Ar)-,e 4..Receipt of )ritten Communications.%a& @nless otherwise agreeb' the parties3

%i& an' written co++unication is )ee+e) to ha!e beenrecei!e) if it is )eli!ere) to the a))ressee personall' oat hisher place of business, habitual resi)ence or +aila))ress if none of these can be foun) after +aking a

reasonable in?uir', a written co++unication is )ee+e)to ha!e been recei!e) if it is sent to the a))resseeHs laknown place of business, habitual resi)ence or +ailinga))ress b' registere) letter or an' other +eans whichpro!i)es a recor) of the atte+pt to )eli!er i t

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%ii& the co++unication is )ee+e) to ha!e been recei!e)on the )a' it is so )eli!ere).

%b& -he pro!isions of this Article )o not appl' to co++unicationsin court procee)ings, which shall be go!erne) b' the Rules of*ourt.

Ar)-,e 4.4.)aier of Right to $bect.An' part' who knows that an' pro!isionof this *hapter fro+ which the parties +a' )erogate or an' re?uire+ent un)er

the arbitration agree+ent has not been co+plie) with an) 'et procee)s withthe arbitration without stating the ob4ections for such non6co+pliance withoutun)ue )ela' or if a ti+e li+it is pro!i)e) therefor, within such perio) of ti+e,shall be )ee+e) to ha!e wai!e) the right to ob4ect.

Ar)-,e 4.&.Extent of Court *nterention.n +atters go!erne) b' this *hapter,no court shall inter!ene e7cept where so pro!i)e) in the A"R Act. Resort toPhilippine courts for +atters within the scope of the A"R Act shall be go!erne)b' the Special A"R Rules.

Ar)-,e 4.6.Court or $ther Authority for Certain 'unctions of ArbitrationAssistance and Superision.

%a& -he functions referre) to in paragraphs %c& an) %)& of Article

$.;; %Appoint+ent of Arbitrators& an) paragraph %c& of Article$.;: %*hallenge Proce)ure& an) paragraph %a& of Article $.;$%=ailure or +possibilit' to Act& shall be perfor+e) b' theappointing authorit' as )e>ne) in Article ;.I *;, unless thelatter shall fail or refuse to act within thirt' %:#& )a's fro+receipt of the re?uest in which case the applicant +a' renew theapplication with the court. -he appoint+ent of an arbitrator isnot sub4ect to appeal or +otion for reconsi)eration.

%b& -he functions referre) to in paragraph %c& of Article $.;I %c&%*o+petence of Arbitral -ribunal to Rule on its (uris)iction&,secon) paragraph of Article $.:$ %Application for Setting Asi)ean 7clusi!e Recourse Against Arbitral Awar)&, Article $.:5%Recognition an) nforce+ent&, Article $.:8 %Kenue an)

(uris)iction&, shall be perfor+e) b' the appropriate Regional -rial*ourt.

%c& A *ourt +a' not refuse to grant, i+ple+ent or enforce apetition for an interi+ +easure, inclu)ing those pro!i)e) for in

Article $.9 %Arbitration Agree+ent an) nteri+ Measures b'*ourt&, Article $. ;; %Appoint+ent of Arbitrators&, Article $.;:%*hallenge Proce)ure&, Article $,2< %*ourt Assistance in -aking!i)ence&, on the sole groun) that the Petition is +erel' anancillar' relief an) the principal action is pen)ing with thearbitral tribunal.

RULE 23 Ar7-)r)-$ A:ree5e)

Ar)-,e 4.

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before the constitution of the arbitral tribunal or )uring arbitral procee)ings, aninteri+ +easure of protection an) for a court to grant such +easure.

%b& -o the e7tent that the arbitral tribunal has no power to act oris unable to act eCecti!el', a re?uest for interi+ +easure ofprotection, or +o)i>cation thereof as pro!i)e) for, an) in the+anner in)icate) in , Article $.;< %Power of -ribunal to r)ernteri+ Measures &, +a' be +a)e with the court.

-he rules of interi+ or pro!isional relief pro!i)e) for in paragraph % c & ofArticle $.;< of these Rules shall be obser!e).

A part' +a' bring a petition un)er this Article before the court in accor)ancewith the Rules of *ourt or the Special A"R Rules.

RULE + C$5($!-)-$ $# Ar7-)r, Tr-7,

Ar)-,e 4.*0,umber of Arbitrators. -he parties are free to )eter+ine thenu+ber of arbitrators =ailing such )eter+ination, the nu+ber of arbitratorsshall be three %:&.

Ar)-,e 4.**.Appointment of Arbitrators.%a& No person shall be pro)uce) b'reason of hisher nationalit' fro+ acting as an arbitrator, unless otherwise

agree) b' the parties.

%b& -he parties are free to agree on a proce)ure of appointingthe arbitrator or arbitrators, sub4ect to pro!isions of paragraphs%)& an) %e& of this Article.

%c& =ailing such agree+ent3

%i& in an arbitration with three %: & arbitrators, each part'shall appoint one arbitrator, an) the two %2& arbitratorsthus appointe) shall appoint the thir) arbitrator if an'part' fails to appoint the arbitrator within thirt' %:#& )a'sof receipt of a re?uest to )o so fro+ the other part', or if

the two %2& arbitrators fail to agree on the thir) arbitratorwithin thirt' )a's %:#& )a's of their appoint+ent shall be+a)e, upon re?uest of a part', b' the appointingauthorit'

%ii& in an arbitration with a sole arbitrator, if the partiesare unable to agree on the arbitrator, heshe shall beappointe), upon re?uest of a part', b' the appointingauthorit'.

%)& Bhere, un)er an appoint+ent proce)ure agree) upon theparties,

%i& a part' fails to act as re?uire) un)er such proce)ure

or

%ii& the parties , or two arbitrators, are unable to reach agree+ent e7pecte) of the+ un)er such proce)ure, or

%iii& a thir) part', inclu)ing an institution, fails to perforan' function entruste) to it un)er such proce)ure,

An' part' +a' re?uest the appointing authorit' to take thenecessar' +easure to appoint an arbitrator, unless theagree+ent on the appoint+ent proce)ure pro!i)es other +eafor securing the appoint+ent.

%e& A )ecision on a +atter entruste) b' paragraphs %c& an) %)&

this to the appointing authorit' shall be i++e)iate e7ecutor'an) not be sub4ect to a +otion for reconsi)eration or appeal. -appointing authorit' shall ha!e in appointing an arbitrator, )uregar) to an' ?uali>cations re?uire) of the arbitrator b' theagree+ent of the parties an) to such consi)erations as are likto secure the appoint+ent of an in)epen)ent an) i+partialarbitrator an), in the case of a sole or thir) arbitrator , shall tainto account as well the a)!isabilit' of appointing an arbitratoof a nationalit' other than the Rules of *ourt of the Special A"Rules.

Ar)-,e 4.*2+rounds for Challenge.%a& Bhen a person is approache) inconnection with hisher possible appoint+ent as an arbitrator, heshei+partialit' or in)epen)ence. An arbitrator, fro+ the ti+e of hisherappoint+ent an) throughout the arbitral procee)ings shall, without )ela',)isclose an' such circu+stance to the parties unless the' ha!e alrea)' beeninfor+e) of the+ hi+her.

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%b& An arbitrator +a' be challenge) onl' if circu+stances e7istthat gi!e rise to 4usti>able )oubts as to hisher i+partialit' orin)epen)ence, or if heshe )oes not possess ?uali>cationsagree) to b' the parties. A part' +a' challenge an arbitratorappointe) b' hi+her, or in whose appoint+ent heshe hasparticipate), onl' for reasons of which heshe beco+es awareafter the appoint+ent has been +a)e.

Ar)-,e 4.*.Challenge Procedure.%a& -he parties are free to agree on aproce)ure for challenging an arbitrator, sub4ect to the pro!isions of this Article.

%b& =ailing such agree+ent, a part' who inten)s to challenge anarbitrator shall, within >fteen %;5& )a's after beco+ing aware ofthe constitution of the arbitral tribunal or after beco+ing awareof an' circu+stances referre) to in paragraph %b& of Article $.;2%0roun)s for *hallenge,& sen) a written state+ent of the reasonsfor the challenge to the arbitral tribunal. @nless the challenge)arbitrator with)raws fro+ hisher oce or the other part' agreesto the challenge) arbitrator with)raws fro+ hisher oce or thepart' agrees to the challenge, the arbitral tribunal shall )eci)eon the challenge.

%c& f a challenge un)er an' proce)ure agree) upon b' the

parties or un)er the proce)ure of paragraph %b& of this Article isnot successful, the challenging part' +a' re?uest the appointingauthorit', within thirt' %:#& )a's after ha!ing recei!e) notice ofthe )ecision re4ecting the challenge, to )eci)e on the challenge,which )ecision shall be i++e)iatel' e7ecutor' an) not sub4ectto +otion for reconsi)eration or appeal. Bhile such a re?uest ispen)ing, the arbitral tribunal, inclu)ing the challenge)arbitrator, +a' continue the arbitral procee)ings an) +ake anawar).

A part' +a' bring a petition un)er this Article before the court in accor)ancewith the Rules of *ourt or the Special A"R Rules.

Ar)-,e 4.*4. F-,re $r I5($!!-7-,-)/ )$ A). %a& f an arbitrator beco+es

de ure orde facto unable to perfor+ hisher functions or for other reasons failsto act without un)ue )ela', hisher +an)ate ter+inates if heshe with)rawsfro+ hisher oce or if the parties agree on the ter+ination. therwise, if thecontro!ers' re+ains concerning an' of these groun)s, an' part' +a' re?uestthe appointing authorit' to )eci)e on the ter+ination of the +an)ate, which

)ecision shall be i++e)iatel' e7ecutor' an) not sub4ect for +otion forreconsi)eration or appeal.

%b& f, un)er this Article or paragraph %b& of Article $.;:%*hallenge Proce)ure&, an arbitrator with)raws fro+ hisheroce or a part' agrees for ter+ination of the +an)ate of anarbitrator, this )oes not i+pl' acceptance of the !ali)it' of angroun) referre) to in this Article or in paragraph %b& of Article$.;2 %+rounds for Challenge&.

Ar)-,e 4.*&. A(($-)5e) $# S7!)-))e Ar7-)r)$r.Bhere the +an)atof an arbitrator ter+inates un)er Articles $.;: %*hallenge Proce)ure& an) $.;%=ailure or +possibilit' to Act& or because of hisher with)rawal fro+ oce fan' other reason or because of the re!ocation of hisher +an)ate, a substituarbitrator shall be appointe) accor)ing to the rules that were applicable to tappoint+ent of the arbitrator being replace).

RULE 4 + Jr-!1-)-$ $# Ar7-)r, Tr-7,

Ar)-,e 4.*6. C$5(e)ee $# Ar7-)r, Tr-7, )$ R,e $ -)!Jr-!1-)-$. %a& -he arbitral tribunal +a' rule on its own 4uris)iction,inclu)ing an' ob4ections with respect to the e7istence or !ali)it' of thearbitration agree+ent or an' con)ition prece)ent to the >ling of the re?uest

for arbitration. =or that purpose, an arbitration clause, which for+s part of acontract shall be treate) as an agree+ent in)epen)ent of the other ter+s ofthe contract. A )ecision b' the arbitral tribunal that the contract is null an)!oi) shall not entail ipso ure the in!ali)it' of the arbitration clause.

%b& A plea that the arbitral tribunal )oes not ha!e 4uris)ictionshall be raise) not later than the sub+ission of the state+ent)efense %.e., in an Answer or Motion to "is+iss&. A part' is nopreclu)e) fro+ raising such plea b' the fact that heshe hasappointe), or participate) in the appoint+ent of, an arbitratorplea that the arbitral tribunal is e7cee)ing the scope of itsauthorit' shall be raise) as soon as the +atter allege) to bebe'on) the scope of its authorit' is raise) )uring the arbitralprocee)ings. -he arbitral tribunal +a', in either case, a)+it a

later plea if it consi)ers the )ela' 4usti>e).

%c& -he arbitral tribunal +a' rule on a plea referre) to inparagraph %b& of this Article either as a preli+inar' ?uestion oan awar) on the +erits. f the arbitral tribunal rules as a

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preli+inar' ?uestion that it has 4uris)iction, an' part' +a're?uest, within thirt' %:#& )a's after ha!ing recei!e) notice ofthat ruling, the Regional -rial *ourt to )eci)e the +atter, which)ecision shall be i++e)iatel' e7ecutor' an) not sub4ect to+otion for reconsi)eration or appeal. Bhile such a re?uest ispen)ing, the arbitral tribunal +a' contribute the arbitralprocee)ings an) +ake an awar).

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"ece+ber ;9e) therein, shall appl' to an' written state+ent b' a part', an' hearingan) an' awar), )ecision or other co++unication b' the arbitral tribunal.

%b& -he arbitral tribunal +a' or)er that an' )ocu+entar'e!i)ence shall be acco+panie) b' a translation into thelanguage or languages agree) upon b' the parties or)eter+ine) b' the arbitral tribunal in accor)ance with paragraph

%a& of this Article.

Ar)-,e 4.2 S))e5e)! $# C,-5 1 De#e!e.%a& Bithin the perio) ofti+e agree) b' the parties or )eter+ine) b' the arbitral tribunal, the clai+antshall state the facts supporting hisherits clai+, the points at issue an) the

relief or re+e)' sought, an) the respon)ent shall state hisherits )efense inrespect of these particulars, unless the parties ha!e otherwise agree) as to tre?uire) ele+ents of such state+ents. -he parties +a' sub+it with theirstate+ents, all )ocu+ents the' consi)er to be rele!ant or +a' a)) a referento the )ocu+ents or other e!i)ence the' will sub+it.

%b& @nless otherwise agree) b' the parties, either part' +a'a+en) or supple+ent hisher clai+ or )efense )uring the couof the arbitral procee)ings, unless the arbitral tribunal consi)eit inappropriate to allow such a+en)+ent ha!ing regar) to the

)ela' in +aking it.

Ar)-,e 4.24 Her-: 1 Wr-))e Pr$ee1-:!.%a& Sub4ect to an' contragree+ent b' the parties, the arbitral tribunal shall )eci)e whether to hol) ohearings for the presentation of e!i)ence or for oral argu+ent, or whether thprocee)ings shall be con)ucte) on the basis of )ocu+ents an) other+aterials. Jowe!er, unless the parties ha!e agree) that no hearings at anappropriate stage of the procee)ings, if so re?ueste) b' a part'.

%b& -he parties shall be gi!en sucient a)!ance notice of an'hearing an) of an' +eeting of the arbitral tribunal for thepurposes of inspection goo)s, other propert' or )ocu+ents.

%c& All state+ents, )ocu+ents or other infor+ation supplie) tothe arbitral b' one part' shall be co++unicate) to the otherpart'. Also, an e7pert report or e!i)entiar' )ocu+ent on whichthe arbitral tribunal +a' rel' in +aking its )ecision shall beco++unicate) to the parties.

Ar)-,e 4.2& De#,) $# Pr)/.@nless otherwise agree) b' the parties, ifwithout, showing sucient cause,

%a& the clai+ant fails to co++unicate his state+ent of clai+ inaccor)ance with paragraph %a& Article $.2: %Statement of Claimand Defense&, the arbitral tribunal shall ter+inate theprocee)ings

%b& the respon)ent fails to co++unicate hisherits state+ent )efense in accor)ance with paragraph %a& Article $.2:%Statement of Claim and Defense&, the arbitral tribunal shallcontinue the procee)ings without treating such failure in itselfan a)+ission of the clai+antHs allegations.

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%c& an' part'Hs fails to appear at a hearing or to pro)uce)ocu+entar' e!i)ence, the arbitral tribunal +a' continue theprocee)ings an) +ake the awar) on the e!i)ence before it.

Ar)-,e 4.26. E>(er) A(($-)e1 7/ )he Ar7-)r, Tr-7,.@nless otherwiseagree) b' the parties, the arbitral tribunal,

%a& +a' appoint one or +ore e7perts to report to it on speci>cissues to be )eter+ine) b' the arbitral tribunal or

%b& +a' re?uire a part' to gi!e the e7pert an' rele!antinfor+ation or to pro)uce, or to pro!i)e access to, an' rele!ant)ocu+ents, goo)s or other propert' for hisher inspection.

@nless otherwise agree) b' the parties, if a part' so re?uests or if the arbitraltribunal consi)ers it necessar', the e7pert shall, after )eli!er' of hisherwritten or oral report, participate in a hearing where the parties ha!e theopportunit' to put ?uestions to hi+ an) to present e7pert witnesses in or)er totestif' on the points at issue.

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or the awar) is an awar) on agree) ter+s un)er paragraph %a&of Article $.2# %Place of Arbitration&.

%c& -he awar) shall state its )ate an) the place of arbitration as)eter+ine) in accor)ance with paragraph %a& of this Article. -heawar) shall be )ee+e) to ha!e been +a)e at that place.

%)& After the awar) is +a)e, a cop' signe) b' the arbitrators inaccor)ance with paragraph %a& of this Article shall be )eli!ere).to each part'.

Ar)-,e 4.2.#ermination of Proceedings.%a& -he arbitral procee)ings areter+inate) b' the >nal awar) or b' an or)er of the arbitral tribunal inaccor)ance with paragraph %b& of this Article. %b& -he arbitral tribunal shallissue an or)er for the ter+ination of the arbitral procee)ings when3

%i& -he clai+ant with)raws hisherits clai+, unless therespon)ent ob4ects thereto an) the arbitral tribunalrecognie) a legiti+ate interest on hisherits part inobtaining a >nal settle+ent of the )ispute

%ii& -he parties agree the ter+ination of the procee)ings

%iii& -he arbitral tribunal >n)s that the continuation of theprocee)ings has for an' other reason beco+eunnecessar' or i+possible.

%c& -he +an)ate of the arbitral tribunal en)s with ter+ination ofthe arbitral procee)ings sub4ect to the pro!isions of Articles $.::%*orrection an) nterpretation of Awar), A))itional Awar)& an)paragraph %)& of Articles $.:$ %Application for Setting Asi)e an7clusi!e Recourse against Arbitral Awar)&.

%)& Notwithstan)ing the foregoing, the arbitral tribunal +a', forspecial reasons, reser!e in the >nal awar) or or)er, a hearing to?uantit' costs an) )eter+ine which part' shall bear the costs orthe )i!ision thereof as +a' be )eter+ine) to be e?uitable.Pen)ing )eter+ination of this issue, the awar) shall not be)ee+e) >nal for purposes of appeal ,!acation, correction, or an'post6awar) procee)ings.

Ar)-,e 4..Correction and *nterpretation of A&ard0 Additional A&ard. %a&Bithin thirt' %:#& )a's fro+ receipt of the awar), unless another perio) of ti+has been agree) upon b' the parties3

%i& A part' +a', with notice to the other part', re?uestthe arbitral tribunal to correct in the awar) an' errors ico+putation, an' clerical or t'pographical errors or an'errors of si+ilar nature

%ii& A part' +a', it so agree) b' the parties an) withnotice to the other part', re?uest the arbitral tribunal tgi!e an interpretation of a speci>c point or part of theawar).

%b& f the arbitral tribunal consi)ers the re?uest to be 4usti>e),shall +ake the correction or gi!e the interpretation within thirt%:#& )a's fro+ receipt of the re?uest. -he interpretation shallfor+ part of the awar).

%c& -he arbitral tribunal +a' correct an' error of the t'pereferre) to in paragraph %a& of this Article on its own initiati!ewithin thirt' %:#& )a' fro+ the )ate of the awar)

%)& @nless otherwise agree) b' the parties, a part' +a', withnotice to the other part', re?uest, within thirt' %:#& )a's receof the awar), the arbitral tribunal to +ake an a))itional awar)as to clai+s presente) in the arbitral procee)ings but o+itte)fro+ the awar). f the arbitral tribunal consi)ers the re?uest tobe 4usti>e), it shall +ake the a))itional awar) within si7t' %I#)a's

%e& -he arbitral tribunal +a' e7ten), if necessar', the perio) oti+e within which it shall +ake a correction interpretation or aa))itional awar) un)er paragraphs %a& an) %b& of this Article.

%f& -he pro!isions of Article $.:; %=or+ an) *ontents of Awar)shall appl' to a correction or interpretation of the awar) or to

a))itional awar).

Ar)-,e 4.4.Aplication for Setting Aside an Exclusie Recourse againstArbitral A&ard.

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%a& Recourse to a court against an arbitral awar) +a' be +a)eonl' b' application for setting asi)e in accor)ance with secon)an) thir) paragraphs of this Article.

%b& An arbitral awar) +a' be set asi)e b' the Regional -rial*ourt onl' f3

%i& the part' +aking the application furnishes proof that3

%aa& a part' to the arbitration agree+ent wasun)er so+e incapacit' or the sai) agree+ent isnot !ali) un)er the law to which the parties ha!esub4ecte) it or, failing an' in)ication thereon,un)er the law of the Philippines or

%bb& the part' +aking the application was notgi!en proper notice of the appoint+ent of anarbitrator or of the arbitral procee)ings or wasotherwise unable to present his case or

%cc& the awar) )eals with a )ispute notconte+plate) b' or not failing within the ter+s ofthe sub+ission to arbitration, or contains,

)ecisions on +atters be'on) the scope of thesub+ission to arbitration, pro!i)e) that, if the)ecisions on +atters sub+itte) to arbitration canbe separate) fro+ those not so sub+itte), onl'the part of the awar) which contains )ecisions on+atters not sub+itte) to arbitration +a' be setasi)e or

%))& the co+position of the arbitral tribunal or thearbitral proce)ure was not in accor)ance with theagree+ent of the parties, unless such agree+entwas in conGict with a pro!ision of A"R Act fro+which the parties cannot )erogate, or, falling suchagree+ent, was not in accor)ance with A"R Act

or

%ii& the *ourt >n)s that3

%aa& the sub4ect6+atter of the )ispute is notcapable of settle+ent b' arbitration un)er the lof the Philippines or

%bb& the awar) is in conGict with the public policof the Philippines.

%c& An application for setting asi)e +a' not be +a)e after thre+onths ha!e elapse) fro+ the )ate on which the part' +akinthat application ha) recei!e) the awar) or, f a re?uest ha) be+a)e un)er Article $.:: %*orrection an) nterpretation of AwaA))itional Awar)& fro+ the )ate on which that re?uest has bee)ispose) of b' the Arbitral tribunal

%)& -he court, when aske) to set asi)e an awar), +a', whereappropriate an) so re?ueste) b' a part', suspen) the settingasi)e procee)ings for a perio) of ti+e )eter+ine) b' it in or)eto gi!e the arbitral tribunal an opportunit' resu+e the arbitraprocee)ings or take such other action as in the arbitral tribunaopinion will eli+inate the groun)s for setting asi)e.

%e& A part' +a' bring a petition un)er this Article before thecourt in accor)ance with the Special A"R Rules.

RULE 6 + Re$:-)-$ 1 E#$re5e) $# A;r1!

Ar)-,e 4.&.Recognition and Enforcement. %a& A foreign arbitral awar) shabe recognie) as bin)ing an), upon petition in writing to the regional trial*ourt, shall be enforce) sub4ect to the pro!isions of this Article an) of Article$.:I %0roun)s for Refusing Recognition or nforce+ent&.

%b& -he petition for recognition an) enforce+ent of such arbitrawar)s shall be >lle) with the Regional trial *ourt n accor)anwith Special A"R Rules.

%i& *on!ention Awar) 6 -he New Dork *on!ention shallgo!ern the recognition an) enforce+ent of arbitralawar)s co!ere) b' sai) *on!ention. -he petitioner shaestablish that the countr' in which the foreign arbitratiawar) was +a)e is a part' to the New Dork *on!ention

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%ii& Non6*on!ention Awar) E -he recognition an)enforce+ent of foreign arbitral awar)s not co!ere) b' theNew Dork *on!ention shall be )one in accor)ance withproce)ural rules to be pro+ulgate) b' the Supre+e*ourt. -he court +a', on groun)s of co+it' an)reciprocit', recognie an) enforce a non6con!entionawar) as a con!ention awar).

%c& -he part' rel'ing on an awar) or appl'ing for its enforce+entshall >le with the Regional -rial *ourt the original or )ul'

authenticate) cop' of the awar) an) the original arbitrationagree+ent or a )ul' authenticate) cop' thereof. f the awar) oragree+ent is not +a)e in an ocial language of the Philippines,the part' shall suppl' a )ul' certi>e) translation thereof intosuch language.

%)& A foreign arbitral awar) when con>r+e) b' a court of aforeign countr', shall be recognie) an) enforce) as a foreignarbitral awar) an) not as a 4u)g+ent of a foreign court.

%e& A foreign arbitral awar) when con>r+e) b' the Regional -rial*ourt, shall be enforce) in the sa+e +anner as >nal an)e7ecutor' )ecisions of courts of law of the Philippines.

%f& f the Regional -rial *ourt has recognie) the arbitral awar)but an application for re4ection an)or& suspension ofenforce+ent of that awar) is subse?uentl' +a)e, the Regional-rial *ourt +a', if it consi)ers the application to be proper,!acate or suspen) the )ecision to enforce that awar) an) +a'also, on the application of the part' clai+ing recognition orenforce+ent of that awar), or)er the other part' seekingre4ection or suspension to pro!i)e appropriate securit'.

Ar)-,e 4.6.+rounds for Refusing Recognition or Enforcement.

A CONVENTION AWARD.

Recognition or enforce+ent of an arbitral awar), +a)e in a state, which is apart' to the New Dork *on!ention, +a' be refuse), at the re?uest of the part'against who+ it is pro!oke), onl' if the part' furnishes to the Regional -rial*ourt proof that3

%a& -he parties to the arbitration agree+ent are, un)er the lawapplicable to the+, un)er so+e incapacit' or the sai)agree+ent is not !ali) un)er the law to which the parties ha!esub4ecte) it or failing an' in)ication thereon, un)er the law ofthe countr' where the awar) was +a)e or

%b& the part' against who+ the awar) is in!oke) was not gi!eproper notice of the appoint+ent of an arbitrator or of thearbitral procee)ings or was otherwise in able to present his caor

%c& the awar) )eals with )ispute not conte+plate) b' or notfailing within the ter+s of the sub+ission to arbitration, or itcontains )ecisions on +atters be'on) the scope of thesub+ission to arbitration pro!i)e) that, if the )ecisions on+atters sub+itte) to arbitration can be separate) fro+ thosenot so sub+itte), that part of the awar) which contains)ecisions on +atters sub+itte) to arbitration +a' be recognian) enforce) or

%)& the co+position of the arbitral tribunal or the arbitralproce)ure was not in accor)ance with the agree+ent of theparties or, failing such agree+ent, was not in accor)ance withthe law of the countr' where the arbitration too place or

%e& the awar) has not beco+e bin)ing on the parties or has beset asi)e or suspen)e) b' a court of the countr' in which, orun)er the law of which, that awar) was +a)e.

Recognition an) enforce+ent of an arbitral awar) +a' also be refuse) if theRegional -rial *ourt where recognition an) enforce+ent is sought >n)s that3

%a& the sub4ect6+atter of the )ispute is not capable of settle+b' arbitration un)er the law of Philippines or

%b& the recognition or enforce+ent of the awar) woul) becontrar' to the public polic' of the Philippines.

A part' to a foreign arbitration procee)ing +a' oppose an application forrecognition an) enforce+ent of the arbitral awar) in accor)ance with theSpecial A"R Rules onl' on the groun)s enu+erate) un)er paragraph %a& an)

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%c& of Article $.:5 %Recognition and Enforcement&. An' other groun) raise)shall be )isregar)e) b' the Regional -rial *ourt.

=. NON3CONVENTION AWARD.

%a& A foreign arbitral awar) ren)ere) in a state which is not apart' to the New Dork *on!ention will be recognie) upon proofof the e7istence of co+it' an) reciprocit' an) +a' be treate) asa con!ention awar). f not so treate) an) if no co+it' orreciprocit' e7ists, the non6con!ention awar) cannot berecognie) an)or enforce) but +a' be )ee+e) as presu+pti!ee!i)ence of a right as between the parties in accor)ance withSection $8 of the Rules of *ourt.

%b& f the Regional -rial *ourt has recognie) the arbitral awar)but a petition for suspension of enforce+ent of that awar) issubse?uentl' +a)e, the Regional -rial *ourt +a', if it consi)ersthe petition to be proper, suspen) the procee)ings to enforcethe awar), an) +a' also, on the application of the part'clai+ing recognition or enforce+ent of that awar), or)er theother part' seeking suspension to pro!i)e appropriate securit'.

%c& f the petition for recognition or enforce+ent of the arbitral

awar) is >le) b' a part' an) a counter6petition for the re4ectionof the arbitral awar) is >le) b' the other part', the Regional -rial*ourt +a', if it consi)ers the counter6petition to be proper butthe ob4ections thereto +a' be recti>e) or cure), re+it the awar)to the arbitral tribunal for appropriate action an) in the+eanti+e suspen) the recognition an) enforce+entprocee)ings an) +a' also on the application of the petitioneror)er the counter6petitioner to pro!i)e appropriate securit'.

Ar)-,e 4.le) with the Regional -rial *ourt where3

%a& the arbitration procee)ings are con)ucte)

%b& where the asset to be attache) or le!ie) upon, or the act tbe en4oine) is locate)

%c& where an' of the parties to the )ispute resi)es or has itsplace of business or

%)& in the National *apital (u)icial Region at the option of theapplicant.

Ar)-,e 4.9.,otice of Proceedings to Parties.n a special procee)ing for

recognition an) enforce+ent of an arbitral awar), the court shall sen) noticeto the parties at their a))ress of recor) in the arbitration, or if an' part'cannot be ser!e) notice at such a))ress, at such part'Hs last known a))ress-he notice shall be sent at least >fteen %;5& )a's before the )ate set for theinitial hearing of the application.

Ar)-,e 4.40.Legal Representation in *nternational Commercial Arbitration.international co++ercial arbitration con)ucte) in the Philippines, a part' +abe represente) b' an' person of hisher choice3 Pro!i)e), that suchrepresentati!e, unless a)+itte) to the practice of law in the Philippines, shanot be authorie) to appear as counsel in an' Philippine court or an' other?uasi64u)icial bo)' whether or not such appearance is in relation to thearbitration in which heshe appears.

Ar)-,e 4.4*.Con"dentially of Arbitration Proceedings. -he arbitrationprocee)ings, inclu)ing the recor)s, e!i)ence an) the arbitral awar), shall beconsi)ere) con>)ential an) shall not be poolsi)e e7cept3

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%a& with the consent of the parties or

%b& for the li+ite) purpose of )isclosing to the court rele!ant)ocu+ents in cases where resort to the court is allowe) herein.

Pro!i)e), howe!er, that the court in which the action or the appeal is pen)ing+a' issue a protecti!e or)er to pre!ent or prohibit )isclosure of )ocu+ents orinfor+ation containing secret processes, )e!elop+ents, research an) otherinfor+ation where it is shown that the applicant shall be +ateriall' pre4u)ice)b' an authorie) )isclosure thereof.

Ar)-,e 4.42.Summary nature of proceedings before the court. A petition forrecognition an) enforce+ent of awar)s brought before the court shall be hear)an) )ealt with su++aril' in accor)ance with the Special A"R Rules.

Ar)-,e 4.4.Death of a Party. Bhere a part' )ies after +aking a sub+issionor a contract to arbitrate as prescribe) in these Rules, the procee)ings +a' bebegun or continue) upon the application of, or notice to, hisher e7ecutor ora)+inistrator, or te+porar' a)+inistrator of hisher estate. n an' such case,the court +a' issue an or)er e7ten)ing the ti+e within which notice of a+otion to recognie or !acate an awar) +ust be ser!e). @pon recogniing anawar), where a part' has )ie) since it was >le) or )eli!ere), the court +ustenter 4u)ge+ent in the na+e of the original part' an) the procee)ings

thereupon are the sa+e as where a part' )ies after a !er)ict.

Ar)-,e 4.44.(ulti-Party Arbitration. Bhen a single arbitration in!ol!es +orethan two parties, the foregoing rules, to the e7tent possible, shall be use),sub4ect to such +o)i>cations consistent with this *hapter as the arbitraltribunal shall )ee+ appropriate to a))ress possible co+ple7ities of a +ulti6part' arbitration.

Ar)-,e 4.4&.Consolidation of Proceedings and Concurrent 3earings. E -heparties an) the arbitral tribunal +a' agree E

%a& that the arbitration procee)ings shall be consoli)ate) withother arbitration procee)ings or

%b& that concurrent hearings shall be hel), on such ter+s as +a'be agree).

@nless the parties agree to confer such power on the arbitral tribunal, thetribunal has no power to or)er consoli)ation of arbitration procee)ings orconcurrent hearings.

Ar)-,e 4.46.Costs.%a& -he arbitral tribunal shall >7 the costs of arbitration its awar). -he ter+ costs inclu)e onl'3

%i& -he fees of the arbitral tribunal to be state) separatas to each arbitrator an) to be >7e) b' the tribunal itsein accor)ance with the paragraph %b& of this Article

%ii& -he tra!el an) other e7penses incurre) b' thearbitrators

%iii& -he costs of e7pert a)!ice an) of other assistancere?uire) b' the arbitral tribunal

%i!& -he tra!el an) other e7penses of witnesses to thee7tent such e7penses are appro!e) b' the arbitraltribunal

%!& -he costs for legal representation an) assistance ofthe successful part' if such costs were clai+e) )uring

arbitral procee)ings, an) onl' to the e7tent that thearbitral tribunal )eter+ines that the a+ount of such cois reasonable

%!;& An' fees an) e7penses of the appointing authorit'

%b& -he fees of the arbitral tribunal shall be reasonable ina+ount, taking into account the a+ount in )ispute, theco+ple7it' of the sub4ect +atter, the ti+e spent b' thearbitrators an) an' other rele!ant circu+stances of the case.

f an appointing authorit' has been agree) upon b' the parties an) if suchauthorit' has issue) a sche)ule of fees for arbitrators in international caseswhich it a)+inisters, the arbitral tribunal in >7ing its fees shall take thatsche)ule of fees into account to the e7tent that it consi)ers appropriate in thcircu+stances of the case.

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f such appointing authorit' has not issue) a sche)ule of fees for arbitrators ininternational cases, an' part' +a', at an' ti+e re?uest the appointingauthorit' to furnish a state+ent setting forth the basis for establishing feeswhich is custo+aril' followe) in international cases in which the authorit'appoints arbitrators. f the appointing authorit' consents to pro!i)e such astate+ent, the arbitral tribunal, in >7ing its fees, shall take such infor+ationinto account to the e7tent that it consi)ers appropriate in the circu+stances ofthe case.

%c& n cases referre) to in the secon) an) thir) sub6paragraphs of

paragraph %b& of this Article, when a part' so re?uests an) theappointing authorit' consents to perfor+ the function, thearbitral tribunal shall >7 its fees onl' after consultation with theappointing authorit' which +a' +ake an' co++ent it )ee+sappropriate to the arbitral tribunal concerning the fees.

%)& 7cept as pro!i)e) in the ne7t sub6paragraph of thisparagraph, the costs of arbitration shall, in principle, be borne b'the unsuccessful part'. Jowe!er, the arbitral tribunal +a'apportion each of such costs between the parties i f it )eter+inesthat apportion+ent is reasonable, taking into account thecircu+stances of the case.

Bith respect to the costs of legal representation an) assistance referre) to inparagraph %c& of paragraph %a& %iii& of this Article, the arbitral tribunal, takinginto account the circu+stances of the case, shall be free to )eter+ine whichpart' shall bear such costs or +a' apportion such costs between the parties ifit )eter+ines that appoint+ent is reasonable.

Bhen the arbitral tribunal issues an or)er for the ter+ination of the arbitralprocee)ings or +akes an awar) on agree) ter+s, it shall >7 the costs ofarbitration referre) to in paragraphs %b&, %c& an) %)& of this Article in theconte7t of that or)er or awar).

%e& -he arbitral tribunal, on i ts establish+ent, +a' re?uest eachpart' to )eposit an e?ual a+ount as an a)!ance for the costsreferre) to in paragraphs %i&, %ii& an) %ii i& of paragraph %a& of this

Article.

"uring the course of the arbitral procee)ings, the arbitral tribunal +a' re?uestsupple+entar' )eposits fro+ the parties.

f an appointing authorit' has been agree) upon b' the parties an) when apart' so re?uests an) the appointing authorit' consents to perfor+ thefunction, the arbitral tribunal shall >7 the a+ounts of an' )eposits orsupple+entar' )eposits onl' after consultation with the appointing authorit'which +a' +ake an' co++ents to the arbitral tribunal which it )ee+sappropriate concerning the a+ount of such )eposits an) supple+entar')eposits.

f the re?uire) )eposits are not pai) in full within thirt' %:#& )a's after receipof the re?uest, the arbitral tribunal shall so infor+ the parties in or)er that th

re?uire) pa'+ent +a' be +a)e. f such pa'+ent is not +a)e, the arbitraltribunal +a' or)er the suspension or ter+ination of the arbitral procee)ings

After the awar) has been +a)e, the arbitral tribunal shall ren)er an accountto the parties of the )eposits recei!e) an) return an' une7pen)e) balance tthe parties.

CHAPTER &DOMESTIC AR=ITRATION

RULE * + Geer, Pr$-!-$!

Ar)-,e &.*.Scope of Application. %a& "o+estic arbitration, which is notinternational as )e>ne) in paragraph *8 of Article ;.I shall continue to bego!erne) b' Republic Act No. 8c applicable pro!ision, all other rules applicable tointernational co++ercial arbitration +a' be applie) in a suppletor' +anner )o+estic arbitration.

%b& -his *hapter shall appl' to )o+estic arbitration whether th)ispute is co++ercial, as )e>ne) in Section 2; of the A"R Act

or non6co++ercial, b' an arbitrator who is a pri!ate in)i!i)uaappointe) b' the parties to hear an) resol!e their )ispute b'ren)ering an awar) Pro!i)e) that, although a construction)ispute +a' be co++ercial, it shall continue to be go!erne) b

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.. No. ;##8, s.;985 an) the rules pro+ulgate) b' the*onstruction n)ustr' Arbitration *o++ission.

%c& -wo or +ore persons or parties +a' sub+it to arbitration b'one or +ore arbitrators an' contro!ers' e7isting between the+at the ti+e of the sub+ission an) which +a' be the sub4ect ofan action or the parties to an' contract +a' in such contractagree to settle b' arbitration a contro!ers' thereafter arisingbetween the+. Such sub+ission or contract shall be !ali),enforceable an) irre!ocable, sa!e upon such groun)s as e7ist at

law for the re!ocation of an' contract.

Such sub+ission or contract +a' inclu)e ?uestions arising out of !aluations,appraisals or other contro!ersies which +a' be collateral, inci)ental,prece)ent or subse?uent to an' )ispute between the parties.

A contro!ers' cannot be arbitrate) where one of the parties to the contro!ers'is an infant, or a person 4u)iciall' )eclare) to be inco+petent, unless theappropriate court ha!ing 4uris)iction appro!e) a petition for per+ission tosub+it such contro!ers' to arbitration +a)e b' the general guar)ian orguar)ian ad litemof the infant or of the inco+petent.

1ut where a person capable of entering into a sub+ission or contract hasknowingl' entere) into the sa+e with a person incapable of so )oing, theob4ection on the groun) of incapacit' can be taken onl' in behalf of the personso incapacitate).

Ar)-,e &.2.Deliery and Receipt of )ritten Communications. %a& 7cept asotherwise agree) b' the parties, a written co++unication fro+ one part' tothe other or to the arbitrator or to an arbitration institution or fro+ thearbitrator or arbitration institution to the parties shall be )eli!ere) to thea))ressee personall', b' registere) +ail or b' courier ser!ice. Suchco++unication shall be )ee+e) to ha!e been recei!e) on the )ate it is)eli!ere) at the a))resseeHs a))ress of recor), place of business, resi)ence orlast known a))ress. -he co++unication, as appropriate, shall be )eli!ere) toeach part' to the arbitration an) to each arbitrator, an), in institutionalarbitration, one cop' to the a)+inistering institution.

%b& "uring the arbitration procee)ings, the arbitrator +a' or)era +o)e of )eli!er' an) a rule for receipt of writtenco++unications )iCerent fro+ that pro!i)e) in paragraph %a& ofthis Article.

%c& f a part' is represente) b' counsel or a representati!e,written co++unications for that part' shall be )eli!ere) to thea))ress of recor) of such counsel or representati!e.

%)& 7cept as the parties +a' agree or the arbitrator +a' )ireotherwise, a written co++unication +a' be )eli!ere) b'electronic +ail or facsi+ile trans+ission or b' such other +eathat will pro!i)e a recor) of the sen)ing an) receipt thereof atthe recipientHs +ailbo7 %electronic inbo7&. Such co++unicatioshall be )ee+e) to ha!e been recei!e) on the sa+e )ate of i t

trans+ittal an) receipt in the +ailbo7 %electronic inbo7&.

Ar)-,e &..)aier of Right to $bect.%a& A part' shall be )ee+e) to ha!ewai!e) his right to ob4ect to non6co+pliance with an' non6+an)ator' pro!isof these Rules %fro+ which the parties +a' )erogate& or an' re?uire+entun)er the arbitration agree+ent when3

%i& hesheit knows of such non6co+pliance an)

%ii& procee)s with the arbitration without statinghisherits ob4ections to such non6co+pliance withoutun)ue )ela' or if a ti+e6li+it is pro!i)e) therefor, withsuch perio) of ti+e.

%b& f an act is re?uire) or allowe) to be )one un)er this *haptunless the applicable rule or the agree+ent of the partiespro!i)es a )iCerent perio) for the act to be )one, it shall be)one within a perio) of thirt' %:#& )a's fro+ the )ate when suact coul) ha!e been )one with legal eCect.

Ar)-,e &.4.Extent of Court *nterention. n +atters go!erne) b' this *haptno court shall inter!ene e7cept in accor)ance with the Special A"R Rules.

Ar)-,e &.&.Court or $ther Authority for Certain 'unctions of ArbitrationAssistance and Superision. -he functions referre) to in paragraphs %c& an) %of Article 5.;# %Appoint+ent of Arbitrators&, paragraph %a& of Article 5.;;%0roun)s for *hallenge&, an) paragraph %a& of Article 5.;: %=ailure or

+possibilit' to Act&, shall be perfor+e) b' the appointing authorit', unless tlatter shall fail or refuse to act within thirt' %:#& )a's fro+ receipt of there?uest in which case, the applicant +a' renew the application with the cou

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RULE 2 + Ar7-)r)-$ A:ree5e)

Ar)-,e &.6.'orm of Arbitration Agreement.An arbitration agree+ent shall bein writing. An agree+ent is in writing if it is containe) in a )ocu+ent signe) b'the parties or in an e7change of letters, tele7, telegra+s or other +eans ofteleco++unication which pro!i)e a recor) of the agree+ent, or in ane7change of state+ents of clai+ an) )efense in which the e7istence of anagree+ent is allege) b' one part' an) not )enie) b' the other. -he referencein a contract to a )ocu+ent containing an arbitration clause constitutes anarbitration agree+ent pro!i)e) that the contract is in writing an) the reference

is such as to +ake that clause part of the contract.

Ar)-,e &.n)s that the arbitration agree+ent is null an)!oi), inoperati!e or incapable of being perfor+e).

%b& Bhere an action referre) to in paragraph %a& of this Articlehas been brought, arbitral procee)ings +a' ne!ertheless beco++ence) or continue), an) an awar) +a' be +a)e, while theissue is pen)ing before the court.

%c& Bhere the action is co++ence) b' or against +ultipleparties, one or +ore of who+ are parties to an arbitrationagree+ent, the court shall refer to arbitration those parties whoare boun) b' the arbitration agree+ent although the ci!il action+a' continue as to those who are not boun) b' such arbitrationagree+ent.

Ar)-,e &.8.Arbitration Agreement and *nterim (easures by Court.%a& t is notinco+patible with an arbitration agree+ent for a part' to re?uest fro+ a court,before the constitution of the arbitral tribunal or )uring arbitral procee)ings, aninteri+ +easure of protection an) for a court to grant such +easure.

%b& After the constitution of the arbitral tribunal an) )uringarbitral procee)ings, a re?uest for an interi+ +easure ofprotection, or +o)i>cation thereof, +a' be +a)e with thearbitral tribunal or to the e7tent that the arbitral tribunal has no

power to act or is unable to act eCecti!el', the re?uest +a' be+a)e with the court.

%c& -he following rules on interi+ or pro!isional relief shall beobser!e)3

%i& An' part' +a' re?uest that interi+ or pro!isional rebe grante) against the a)!erse part'.

%ii& Such relief +a' be grante)3

%aa& -o pre!ent irreparable loss or in4ur'

%bb& -o pro!i)e securit' for the perfor+ance of aobligation

%cc& -o pro)uce or preser!e e!i)ence or

%))& -o co+pel an' other appropriate act oro+issions.

%iii& -he or)er granting pro!isional relief +a' becon)itione) upon the pro!ision of securit' or an' act o

o+ission speci>e) in the or)er.

%i!& nteri+ or pro!isional relief is re?ueste) b' writtenapplication trans+itte) b' reasonable +eans to thearbitral tribunal an) the part' against who+ relief issought, )escribing in appropriate )etail of the preciserelief, the part' against who+ the relief is re?ueste), tgroun) for the relief, an) the e!i)ence supporting there?uest.

%!& -he or)er either grating or )en'ing an application finteri+ relief shall be bin)ing upon the parties.

%!i& ither part' +a' appl' with the court for assistancin i+ple+enting or enforcing an interi+ +easure or)erb' an arbitral tribunal.

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%!ii& A part' who )oes not co+pl' with the or)er shall beliable for all )a+ages, resulting fro+ nonco+pliance,inclu)ing all e7penses, an) reasonable attorne'Hs fees,pai) in obtaining the or)erHs 4u)icial enforce+ent.

%)& @nless otherwise agree) b' the parties, the arbitral tribunal+a', at the re?uest of a part', or)er an' part' to take suchinteri+ +easures of protection as the arbitral tribunal +a'consi)er necessar' in respect of the sub4ect +atter of the)ispute following the Rules in this Article. Such interi+ +easures

+a' inclu)e but shall not be li+ite) to preli+inar' in4unction)irecte) against a part', appoint+ent of recei!ers or )etention,preser!ation, inspection of propert' that is the sub4ect of the)ispute in arbitration. ither part' +a' appl' with the court forassistance in i+ple+enting or enforcing an interi+ +easureor)ere) b' an arbitral tribunal.

RULE . C$5($!-)-$ $# Ar7-)r, Tr-7,

Ar)-,e &.9.,umber of Arbitrators. -he parties are free to )eter+ine thenu+ber of arbitrators. =ailing such )eter+ination, the nu+ber of arbitratorsshall be three %:&.

Ar)-,e &.*0.Appointment of Arbitrators. %a& An' person appointe) to ser!e asan arbitrator +ust be of legal age, in full en4o'+ent of hisher ci!il rights an)knows how to rea) an) write. No person appointe) to ser!e as an arbitratorshall be relate) b' bloo) or +arriage within the si7th )egree to either part' tothe contro!ers'. No person shall ser!e as an arbitrator in an' procee)ing ifheshe has or has ha) >nancial, >)uciar' or other interest in the contro!ers' orcause to be )eci)e) or in the result of the procee)ing, or has an' personalbias, which +ight pre4u)ice the right of an' part' to a fair an) i+partial awar).

No part' shall select as an arbitrator an' person to act as hisher cha+pion orto a)!ocate hisher cause.

%b& -he parties are free to agree on a proce)ure of appointingthe arbitrator or arbitrators. f, in the contract for arbitration or

in the sub+ission, a pro!ision is +a)e for a +etho) ofappointing an arbitrator or arbitrators, such +etho) shall befollowe).

%c& =ailing such agree+ent,

%i& in an arbitration with three %:& arbitrators, each partshall appoint one %;& arbitrator, an) the two %2&arbitrators thus appointe) shall appoint the thir)arbitrator if a part' fails to appoint the arbitrator withithirt' %:#& )a's of receipt of a re?uest to )o so fro+ thother part', or if the two arbitrators fail to agree on thethir) arbitrator within thirt' %:#& )a's of theirappoint+ent, the appoint+ent shall be +a)e, uponre?uest of a part', b' the appointing authorit'

%ii& in an arbitration with a sole arbitrator, if the partiesare unable to agree on the arbitrator, heshe shall beappointe), upon re?uest of a part', b' the appointingauthorit'.

%)& Bhere, un)er an appoint+ent proce)ure agree) upon b' tparties,

%i& a part' fails to act or appoint an arbitrator as re?uireun)er such proce)ure, or

%ii& the parties, or two %2& arbitrators, are unable toappoint an arbitrator or reach an agree+ent e7pecte) the+ un)er such proce)ure, or

%iii& a thir) part', inclu)ing an institution, fails to appoinan arbitrator or to perfor+ an' function entruste) to itun)er such proce)ure, or

%i!& -he +ultiple clai+ants or the +ultiple respon)entsisare unable to appoint itstheir respecti!e arbitrator,an' part' +a' re?uest the appointing authorit' toappoint an arbitrator.

n +aking the appoint+ent, the appointing authorit' shallsu++on the parties an) their respecti!e counsel to appearbefore sai) authorit' on the )ate, ti+e an) place set b' it, for

the purpose of selecting an) appointing a sole arbitrator. f asole arbitrator is not appointe) in such +eeting, or the +eetin)oes not take place because of the absence of either or bothparties )espite )ue notice, the appointing authorit' shall appothe sole arbitrator.

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%e& f the )efault appoint+ent of an arbitrator is ob4ecte) to b' apart' on whose behalf the )efault appoint+ent is to be +a)e,an) the )efaulting part' re?uests the appoin