Chapter 6: Domestic Arbitration

Domestic Arbitration – an arbitration is considered as domestic when it is conducted in the Philippines

and if the components of parties’ places of business, place of arbitration, place of performance of a
substantial part of the obligation, and place where the subject matter of the dispute is most closely
connected, are all located in the Philippines

Domestic arbitration is governed by:

1. The Arbitration Law (R.A. No. 876);

2. The Model Law (Article 8, 10, 11, 12, 13, 14, 18, and 19);
3. The following provisions of the ADR Act on international commercial arbitration:
a. Section 22 (Legal Representation in International Commercial Arbitration);
b. Section 23 (Confidentiality of Arbitration Proceedings);
c. Section 24 (Referral to Arbitration);
d. Section 25 (Interpretation of the Act);
e. Section 26 (Meaning of “Appointing Authority”);
f. Section 27 (What Functions May be Performed by Appointing Authority);
g. Section 28 (Grant of Interim Measures);
h. Section 29 (Further Authority for Arbitrator to Grant Measures of Protection);
i. Section 30 (Place of Arbitration);
j. Section 31 (Language of Arbitration);
k. Section 32 (Laws Governing Domestic Arbitration);
l. Section 33 (Applicability of Domestic Arbitration);
4. Implementing Rules and Regulations of the ADR Act; and
5. All other rules applicable to international commercial arbitration which may be given suppletory
application in the absence of specific applicable provisions

Disputes Covered by Rules on Domestic Arbitration (Article 5.1, IRR; Section 3, Arbitration Law)

The provisions and rules on domestic arbitration cover both commercial and non-commercial disputes
provided they are susceptible arbitration and do not fall within the exclusive original arbitral jurisdiction
of quasi-judicial agencies.

Due Process in Domestic Arbitration (Article 5.17, IRR)

The parties are entitled to be treated equally and with due process.

Place or Venue of Arbitration (Article 5.19, IRR)

The place or venue of a domestic arbitration is to be determined by the parties. If there is no such
agreement, then the arbitration shall be conducted in Metro Manila, unless the arbitral tribunal shall
decide on a different place taking into account the circumstances of the case and the convenience of the
parties.
Language (Article 5.21, IRR)

The rule in the determination of the language that will be used in the arbitration proceedings is the
same for domestic and international commercial arbitration, including the prerogative of the arbitral
tribunal to require a translation of documentary evidence if not in the official language, except that
Filipino is added to English as a default language in domestic arbitration.

The inclusion of Filipino as a default language is understandable considering that it is an official language
in the Philippines.

Confidentiality (Article 5.42, IRR)

The arbitration proceedings, records, evidence, arbitral award and other confidential information are
privileged and shall not be published except:

a. With the consent of the parties; or

b. For the limited purpose of disclosing to the court relevant documents where resort to the
court is allowed

The court may issue protective orders to prevent or prohibit the disclosure of documents of information
containing secret processes, developments, research and other information.

Rules on Receipt of Written Communication (Article 5.2, IRR)

In line with the policy of party autonomy, the general rule on receipt of communications is that provided
for by the parties in their arbitration agreement. In the absence of such an agreement, written
communication among the parties and the arbitrators shall be delivered personally, by registered mail
or courier service, and shall be deemed to be received on the date it is delivered at the addressee’s
address of record, place of business, residence or last known address.

The use of electronic mail, facsimile transmission or other electronic means is permitted as long as there
is a record of the sending and receipt of communication at the recipient’s mail box, and such electronic
communication shall be deemed to have been received on the same date of its transmittal

Waiver of Objections (Article 5.3, IRR)

A party may be stopped from questioning non-compliance or is deemed to have waived his objection
thereto if he fails to raise the objection without delay or within the time prescribed therefor provided he
knows of such non-compliance. The act, omission or silence giving rise to waiver or estoppels must be
unequivocal and intentional.

Extent of Court Intervention (Articles 5.4 and 5.5, IRR)

No court shall intervene except in the instances allowed by the Arbitration Law, ADR Act, and Special
ADR Rules.
 a. When the appointing authority fails to perform functions imposed to him after thirty (30)
days having elapsed from receipt of the request for arbitration
b. The Rules of the ICC, allows the application of a party to a judicial authority for interim or
conservatory measure
c. Section 24 of R.A. No. 876 – to vacate the arbitral award
d. A petition for review under Rule 43 of the 1997 Rules of Civil Procedure
e. A petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure

Representation (Article 5.41[a], IRR)

A party may appear by himself or be represented or assisted by any person of his choice, provided that
such representative, unless admitted to the practice of law in the Philippines, shall not be authorized to
appear as counsel in any Philippine court or quasi-judicial body. A party desiring to be represented by
counsel shall notify the other party or parties of such intention at least five (5) days prior to the hearing.

Arbitration Agreement (Articles 5.6 and 5.7, IRR; Sections 2 and 4, Arbitration Law)

The consent to arbitrate can either be:

a. Pre-causal consent – agreement to submit to arbitration; when the parties agree in a

contract to settle by arbitration a controversy that will arise between them
b. Present causal consent – when the controversy already exists between the parties at the
time of the submission to arbitration

An arbitration agreement must be in writing and subscribed by the party sought to be charged, or by his
lawful agent.

Determination of Applicable Rules of Procedure (Article 5.18, IRR)

The parties are free to agree on the applicable rules of procedure, in the absence of which, the arbitral
tribunal may conduct the arbitration in the manner it considers appropriate.

Commencement of Arbitral Proceedings (Section 5[a], Arbitration Law; Article 5.20, IRR)

In general, the commencement of arbitral proceedings is determined by the prior arbitration agreement
between the parties.

The following are the specific rules for the commencement of domestic arbitration:

1. In an institutional arbitration where there is no prior arbitration agreement, it is commenced in

accordance with the arbitration rules of the institutional arbitrator.
2. In an ad hoc arbitration where there is prior arbitration agreement, it is commenced upon the
delivery by the claimant to the respondent of a demand of arbitration. Where there is no prior
arbitration agreement, it is initiated by one party through a demand upon the other to submit
their dispute to arbitration, and arbitration is deemed commenced upon the agreement by the
other party to submit the dispute to arbitration. The demand shall also require the respondent
 to name his arbitrator within a period which shall not be less than fifteen (15) days from receipt
of the demand.
- The demand for arbitration shall be in any form and shall state the name, address
and description of each of the parties; the description of the nature and
circumstances of the dispute giving rise to the claim; the relief sought including the
amount of the claim; the relevant agreements including the arbitration agreement,
a copy of which shall be attached; and the appointment of the arbitrators and/or
demand to appoint.

Arbitrators and Arbitral Tribunals (Articles 5.9 to 5.14, IRR; Sections 8, 9, 10, 11 and 13, Arbitration Law)

Number of Arbitrators: Unless the parties have agreed otherwise, there shall be three (3) arbitrators for
domestic arbitration.

An arbitrator must:

1. Be of legal age;
2. Be in full enjoyment of his civil rights; and
3. Knows how to read and write

No person shall serve as an arbitrator in any proceeding if:

4. He is related by blood or marriage within the sixth degree to either party to the controversy;
5. He has or has had financial, fiduciary or other interest in the controversy or cause t