A new Act in town – the Alternative Dispute Resolution Act of 2004

On Feb. 4, 2004, Congress enacted into law Republic Act No. 9285 entitled "An Act to Institutionalize the Use of an Alternative Dispute Resolution System in the Philippines and to Establish the Office for Alternative Dispute Resolution and for other Purposes". RA 9285 is known as the "Alternative Dispute Resolution Act of 2004" (or the ADR law of 2004).

The declared policy of the ADR Law of 2004 is "to actively promote party autonomy in the resolution of disputes or the freedom of the parties to make their own arrangements to resolve their disputes. Towards this end, the State shall encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an important means to achieve speedy and impartial justice and declog court dockets."

The salient features of the ADR Law of 2004 are, among others, the following:

1. Mediation, as a significant ADR mode, was given a concrete legal framework, and more importantly, solid legal support and encouragement. In addition, the ADR law of 2004 established the principle of "Confidentiality of Information" in mediation such that information obtained or generated through mediation proceedings is deemed "privileged and confidential".

2. The UNCITRAL Model Law on International Commercial Arbitration was adopted to govern international commercial arbitration in the Philippines. With this, the ADR law of 2004 has brought Philippine law on international commercial arbitration up to par with the world’s best and it superceded the outmoded 1952 RA 876, the Philippine Arbitration Law.

3. The National President of the Integrated Bar of the Philippines (IBP) or his duly authorized representative was designated the default "Appointing Authority." Under the old law, in the absence of an agreement among the parties, it was the Regional Trial Court (RTC) which will appoint the sole arbitrator or the third arbitrator of a panel if and when the parties do not or can not agree. As the "Appointing Authority", the National President of the IBP or his duly authorized representative will decide challenges to the arbitrator as well as the termination of his mandate.

4. The grant of interim or provisional relief by the courts and the arbitrator/s has been expanded and clarified. Any party may request either the court or arbitral tribunal that an interim or provisional relief be granted against the adverse party on the following grounds: (i) to prevent irreparable loss or injury; (ii) to provide security for the performance of any obligations; (iii) to produce or preserve any evidence; or (iv) to compel any other appropriate act or omission.

Such interim measures may include but are not limited to a preliminary injunction directed against a party, appointment of a receiver or the detention, preservation, and inspection of property subject of the arbitration.

5. Although RA 876, the old Arbitration Law, continues to govern domestic arbitration, the ADR law of 2004 adopted several provisions of the UNCITRAL Model Law as well as RA 9285 for domestic arbitration. Thus, to a large extent, even the rules on domestic arbitration were updated by RA 9285 – specifically on the appointment and number of arbitrators, grounds/procedure to challenge arbitrators, termination of the mandate of arbitrators, equality and full opportunity of each party to present their case, decision-making by a panel of arbitrators, form and contents of the award, confidentiality of arbitration proceedings, and interim measures of protection.

6. With respect to the Construction Industry Arbitration Commission (CIAC) under E.O. 1008, the ADR law of 2004 now allows (i) for the appointment of a foreign arbitrator as co-arbitrator or chairman of a tribunal who has not been previously accredited by the CIAC, and (ii) upon written agreement of the parties, for an arbitrator to act as mediator and vice versa.

The ADR Law of 2004 also codified into law the CIAC Rule that a Regional Trial Court before which a construction dispute is filed and is aware that the parties involved have entered into an arbitration agreement must dismiss the case and refer the parties to arbitration to be conducted by the CIAC.

7. The ADR Law of 2004 likewise clarified the judicial review and enforcement of arbitral awards. For Foreign Arbitral Awards, RA 9285 refers to the provisions of the New York Convention of 1958.

8. The Office for Alternative Dispute Resolution (OADR) created by the law will be established an attached agency of the Department of Justice (DOJ). The objectives of the OADR are to promote, develop and expand the use of ADR in the private and public sectors; to assist the government to monitor, study and evaluate the use by the public and the private sector of ADR; and to recommend to Congress needful statutory changes to develop, strengthen and improve ADR practice in accordance with world standards.

The Secretary of Justice is obliged to convene a Committee composed of representatives from: (a) the Department of Justice, (b) the Department of Trade and Industry; (c) the Department of Interior and Local Government; (d) the President of the Integrated Bar of the Philippines; (e) a representative from the arbitration professions; (f) a representative from the mediation profession; and (g) a representative from the ADR organizations, to formulate the Implementing Rules and Regulations (IRR) which shall be submitted to a Joint Congressional Oversight Committee for review and approval.

The New ADR Law of 2004, which shall take effect 15 days after its publication in at least two national papers of general circulation, has yet to be published. The legal and allied professions in ADR are eagerly awaiting the effectivity of this new act.