Arbitration It is a device whereby the settlement of a question, which is of interest for 2 or more persons, is entrusted to one or more other persons, who derive their powers from a private agreement, not form the authorities of a State, and who are to proceed and decide the case on the basis of such agreement.
y
y
2 classes of arbitration 1. Agreement based arbitration, which is contractual and is the traditional concept of the process. 2. Statute based based arbitration, arbitration, which are based on statutes rather than on conceptual precepts. 2 classes of Statute based arbitration 1. Consensual ± requires the presence of a stipulation to arbitrate. 2. Imposed ± does not require an arbitration arbitration agreement as the law itself provides that the disputants should go to arbitration.
y
Agreement of the parties generally prevails, with the exception of fees and terms of the tribunal. An arbitrator may exercise his discretion when parties failed to agree. If a party requests for a hearing, then o the request should be grant ed. If default provisions exist, arbitrators o cannot use their discretion.
Types of arbitration 1. Look sniff ± arbitrator uses his senses. 2. Documents only ± similar to small claims procedure. 3. Short procedure ± similar to summary procedures. 4. Full dress ± similar to procedure in RTC. Approaches to arbitration 1. Adversarial ± arbitrator is more or less passive 2. Inquisitorial ± arbitrator is active No need for interlocutory proceedings Parties make the rules during the preliminary conference, hence preliminary issues such as questions of jurisdiction needed to be resolved first before the preliminary conference is wrong. Except when preliminary conference is o dispensed with. y
Constituent elements of an arbitration 1. Judicial ± the arbitral tribunal decides the disputes like a judge. 2. Contractual ± the power power of an arbitral tribunal arises from contract. 3 stages of arbitration 1. Recognition of arbitration agreement. 2. Proceedings. 3. Recognition of enforcement of award. If there is no agreement, default provision nor mandatory provision Arbitral discretion is allowed as provided by the Uncitral Model Law.
Expert/Tribunal y
y y
appointed experts Tribunal may not use its expertise in deciding the dispute to avoid issues of bias and due process. Otherwise known as using ³secret evidence´. This is because arbitration is evidentiary. A ruling not based on the evidence presented by the parties is subject to vacation.
y
Award of arbitral tribunal It is a product of private dispute resolution practices, hence outside the legal/judicial system of any country. Hence the need for recognition and/or confirmation before the award could be integrated into the legal/judicial system of the recognizing/confirming country. y
y
Validity y y y
of an award Bad: Ignored or vacated. Good: Recognized and/or confirmed. Subject to the principle of separability.
Difference of agreement based arbitration to statute based arbitration In the former, the tribunal is the instrumentality of the parties, while in the latter the tribunal is the instrumentality of the government. In the former, the freedom of the parties to select their arbitrators is free, while in the latter, it is heavily curtailed. In the former, the award needs to be recognized/confirmed, while in the latter, the award is deemed to be automatically integrated into the legal system of the country. y
y
y
Preference y
of rules Mandatory provisions are mostly public policy standards, hence cannot be overridden by agreement.
Experts
conclave When the experts will set out their opinions where there was agreement; opinions where they disagree and the reasons for their disagreement. Disclosures An arbitrator may be removed not necessarily because the relationship is a ground for inhibition but because of the failure to disclose. The tribunal must appear to be impartial to the eyes of the parties. y
y
y
Terms and schedule of charges, deposits in respect of costs 1. ICC Rule: ICC has a schedule, hence it shall determine the arbitrator¶s fees. 2. PDRCI Rule: Parties and and arbitrators may agree as to the fees or the PDRCI schedule will apply if they fail to do so. 3. Ad hoc arrangements. Applicable law to the substance of the dispute Implied rule in domestic arbitration is equity. Rule in international arbitration is law. y y
Representation on behalf of parties y
A party may be represented by any person of his choice.
2 classes of witnesses in arbitration 1. Witness of fact. 2. Expert witness. Bundling of documents
y y
Restricted to those to be referred to at the hearing. Claimant prepares draft documents and forwards it to the respondent to interleave additional documents, which after numbered by the claimant, will be forwarded to the arbitrator.
o
Arbitration clauses amount to a waiver to the right to go to the courts, hence the waiver must be clear.
Concept of global claims If losses and expenses result from the delay and/or disruption caused by a number of different ways in such a way it is impossible to separate out the consequences of each of those events, the contractor does not need to establish causal links between individual events and particular loss if he can demonstrate that all of the vents relied upon are in law the responsibility of the employer. y
Exclusive y
jurisdiction of CIAC Although parties may stipulate as to their preferred forum, the law automatically gives them an alternative forum, which is the CIAC.
Responsibility of CIAC arbitrators y
Collegiate rather than individual.
CIAC Arbitration award Not subject to vacation, but may be reversed, amended or modified by the reviewing authority. y
Limitation on party autonomy y
y
Kompetenz Kompetenz principle This requires parties, in so far as preliminary issues are concerned, such as issues involving the jurisdiction of the tribunal, to go to the arbitral tribunal first before going to the courts. y
y
y y
Concept of autonomy of the arbitration agreement This will prevent indirect attacks against arbitration agreements by attacking the validity of the main contract to also invalidate the dispute resolution clause. y
Federal pre-emption doctrine y
In case of recalcitrance by a party, the courts have to rule first on the validity, workability and enforceability of arbitration agreements before an arbitration can proceed. The exception is issue on estoppel, that o is, a party proceeded to arbitration without raising the preliminary issue.
Rule on ³Non-convention´ awards y
Enforcement of foreign arbitral awards rendered in jurisdictions that extends comity and reciprocity to Philippine awards.
Enforcement y
y
y
Principle y y
of foreign arbitral awards It is not the Model law, but the New York convention, that applies to the enforcement of foreign arbitral award. Under the convention, the jurisdiction of the Court over foreign arbitral award is limited to rejecting or recognizing and enforcing the award, or suspending its enforcement. Our court has no jurisdiction to vacate or set aside the award.
of finality of award It is contractual. It is final and without appeal.
Incorporation clauses In Philippines, a general incorporation clause in a contract will suffice to incorporate an arbitration agreement contained in another instrument, In other countries, it requires a specific reference to an arbitration clause for an arbitration agreement to be validly incorporated by reference. This is because of autonomy of o arbitration agreements y
y
Default y
y
As a general rule, the limitation refers to matters which are not subject to contract. It may arise from the public policy to protect classes with ³weak´ bargaining position. The stipulation must also not be contrary to law, morals, good customs, public policy and public order. Public policy safeguards: Mandatory provisions. Default provisions: Directory. provisions Rules that will apply in case of deficiency of agreement between the parties. Default provision of arbitrators is 3.
Pathological y
clauses An agreement that will hamper or defeat the constitution of the tribunal or invite court intervention is pathological.
Qualifications of the tribunal
1. 2. 3. 4. 5.
Impartiality. Independence. Diligence. Must be of legal age, in full employment of his civil rights, and know how to read and write. Must not be related by blood or marriage within th the 6 degree to either of the party involved in the controversy.
