Notes on arbitration law

REPUBLIC ACT NO. 876: AN ACT TO AUTHORIZE THE MAKING OF ARBITRATION AND SUBMISSION AGREEMENTS, TO PROVIDE FOR THE APPOINTMENT OF ARBITRATORS AND THE PROCEDURE FOR ARBITRATION IN CIVIL CONTROVERSIES, AND FOR OTHER PURPOSES.

This law was approved a long time ago: June 19, 1953. The Alternative Dispute Resolution [ADR] law [Republic Act No. 9285 otherwise known as the Alternative Dispute Resolution Act of 2004] merely amended certain parts of this Act. In fact, most of its provisions still possess legal force and effect.

The truth is that the ADR law even refers to various provisions of the Arbitration Law. For example, Section 32 of the ADR law points out that domestic arbitration shall continue to be governed by the provisions of the Arbitration Law.

Controversies and cases NOT subject to the provisions of the Arbitration Law:

[1] Cases subject to the jurisdiction of the Court of Industrial Relations (CIR) are not arbitrable under this law.
[2] Other labor-related disputes are likewise excluded from the ambit of this law.
[3] The Labor Code provides for a different system of grievance and arbitration resolution.

Form of arbitration agreement

[1] A contract reflecting the intent to arbitrate disputes shall be written and subscribed by the party sought to be charged or his lawful or authorized agent.
[2] A submission to arbitrate shall be written and subscribed by the party sought to be charged or his lawful or authorized agent.
[3] The making of the contract or submission expressing the parties' intent to submit their disputes to arbitration shall be deemed a consent of the same parties to the jurisdiction of the Regional Trial Court where any of the parties resides for the enforcement of the contract or submission.
[4] Item [3] can be put in another way. It means that the making of the contract or the submission automatically confers the Regional Trial Court where any of the parties resides jurisdiction to enforce said contract or submission.
[5] It would be null and void for the parties to stipulate that their disputes are to be considered immune from the jurisdiction of courts.
[6] Amicable arrangements are looked upon with favor by courts.
[7] Courts must be reluctant to interfere with the arbitration or cause the nullity thereof. The reason for this is that the law prefers the autonomy of the disputants.Preliminary procedure

[1] If there is an arbitration clause, service by either party upon the other of demand for arbitration shall institute the arbitration proceedings.
[2] Attached with the demand for arbitration shall be: [a] the nature of the controversy; [b] the amount involved; [c] the relief sought, and; [d] the true copy of the contract.
[3] Demand may be served in person or through registered mail.
[4] If stipulation to appoint only one arbitrator exists, the service shall also include a specific time within which the same shall be made.
[5] If stipulation to appoint three arbitrators exists and one is to be selected by each party, the demand shall set forth the name of the arbitrator selected by the demanding party.
[6] The demand shall also mention that the demanded party shall advise in writing the demanding party of the name of the person appointed as the second arbitrator within 15 days.
[7] The notice of demand shall also set forth that the two chosen arbitrators shall make a selection of the third arbitrator within 10 days from said notice.
[8] Arbitration proceedings shall likewise be instituted by filing with the Clerk of Court of the Regional Trial Court having jurisdiction over the parties in the event that one party failed to answer the demand. Filing with the COC shall be made with a copy of the demand for arbitration and a notice that the original demand was sent by registered mail or in person. Such filing with the COC shall be accompanied by: [a] the nature of the controversy; [b] the amount involved; [c] the relief sought, and; [d] the true copy of the contract.
[9] Submission of an existing controversy may be done by any party and shall be duly executed by both of the parties.
[10] When one party neglects, fails or refuses to arbitrated as stipulated in the contract, Items [1] to [7] shall be followed.

Hearing by court

[1] In cases of failure, neglect or refusal to arbitrate by one party, the other party aggrieved may petition the court for an order directing the such arbitration be proceeded with.
[2] A five-day notice shall be served to the demanded party.
[3] The court is required to hear the parties before rendering decision to proceed.
[4] If the making of the contract or submission to arbitrate is in issue, the court shall proceed with such issue summarily.
[5] Proceeding shall be dismissed if it is found out that there is no agreement for arbitration or that there is no default in the proceeding.
[6] If an agreement to arbitrate actually exists but there is default in proceeding thereunder, the court shall summarily proceed and direct the parties to proceed with the arbitration.
[7] 10 days are given the court to rule upon motions, petitions or applications by the parties.

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