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5/28/2018 ADR Intro to Law Report
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Alternative Modes of DisputeResolution:
The Philippine Practice
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Litigation
Definition:
a legal contest by judicial process
(Merriam-Webster, 2012)
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Alternative Dispute Resolution
Definition:
any process or procedure used to resolve a dispute or controversy, other than by adjudication ofa presiding judge of a court or an officer of a government agency, xxx in which a neutralthird party participates to assist in the resolution of issues, which includes arbitration,mediation, conciliation, early neutral evaluation, mini-trial, or any combination thereof;
(Sec. 3, Chapter 1, Rep. Act. No. 9295)
It offers to the parties a method of adjudication that is speedy, assures confidentiality of theproceedings, less costly in terms of total time, finances, opportunities compared tolitigation, and a fair and just resolution of cases
(Parlade, 1997)
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Essential Differences
Litgation
Rigid Process
InvolvesTechnichalities
Costly
Produces Delay
AlternativeDispute Resolution
Expeditious
Non-Costly
Flexible
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Alternative Dispute Resolution:History in the Philippines
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History
The earliest legally recognized and accepted mode of
dispute resolution alternative to litigation is arbitration.
In 1921, the Philippine Supreme Court recognizedarbitration.
(Chan Linte vs. Law Union and Rock Insureance Co., et al., 42
Phil. 548) [1921]
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History
However, arbitration as an alternative mode of dispute
resolution had not been given unregulated recognition inits incipiency.
Courts tended to nullify arbitral clauses that absolutelyoust the judiciary of its jurisdiction.
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History
In 1950, the Civil Code was enacted containing general
provisions relating to compromise and arbitration.
In 1953, the Philippine Legislature passed Rep. Act. No. 876
or other known as the Arbitration Law.
In 1965, the Philippine Senate adhered to the UnitedNations Convention on the Recognition and Enforcementof Foreign Arbitral Awards of 1958.
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LEGAL BASIS OF ADR IN THE
PHILIPPINES The 1987 Constitution mandates the Supreme Court to
promulgate rules that shall provide a simplified and
inexpensive procedure for the speedy disposition of cases.
Pursuant to the constitutional provision, the Supreme Court
issued S.C. Circulars, Memoranda and Administrative Ordersof 2001 making mediation as mandatory in certain types of
civil cases. The 1997 Rules of Civil Procedure requires thecourts to consider the possibility of an amicable settlement or
of a submission to alternative modes of resolution.
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LEGAL BASIS OF ADR IN THE
PHILIPPINESA. Republic Act 9285 (RA 9285) The ADR Act of 2004 which is
UNCITRAL based. For international arbitration, the UNCITRALMODEL LAW was adopted as an Annex to the law and thetravaux preparatories were expressly referred to ininterpreting the same.
B. Republic Act 876 (RA 876 - The Philippine Arbitration Law whichis based on the U.S. Federal Arbitration Law. It continues togovern domestic arbitrations as modified by RA 9285
C. Executive Order 1008 (EO 1008) The Construction IndustryArbitration Law which created the Construction Industry
Arbitration Commission (CIAC). EO 1008 governs constructionarbitration and its rules are ICC-based.
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LEGAL BASIS OF ADR IN THE
PHILIPPINESOther Sources of Law:
1. Local Government Code of 1991 on Katarungang
Pambarangay (Republic Act No. 7160)
2. Consumer Act of the Philippines of 1992 (Republic Act No.7394),
3. Mining Act of 1995 (Republic Act No. 7942)
4. Intellectual Property Code of 1998 (Republic Act No. 8293).
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ADR Act of 2 4Declaration of PolicySEC. 2 It is hereby declared the policy of the State to actively promoteparty autonomy in the resolution of disputes or the freedom of theparty to make their own arrangements to resolve their disputes.Towards this end, the State shall encourage and actively promote theuse of Alternative Dispute Resolution (ADR) as an important means toachieve speedy and impartial justice and declog court dockets. As
such, the State shall provide means for the use of ADR as an efficienttool and an alternative procedure for the resolution of appropriatecases. Likewise, the State shall enlist active private sectorparticipation in the settlement of disputes through ADR. This Act shallbe without prejudice to the adoption by the Supreme Court of any ADRsystem, such as mediation, conciliation, arbitration, or anycombination thereof as a means of achieving speedy and efficientmeans of resolving cases pending before all courts in the Philippineswhich shall be governed by such rules as the Supreme Court mayapprove from time to time. (RA 9285)
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OTHER MODES OF ADR
Arbitration and Litigation
Consultation and Negotiation
Third Party
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Arbitration Institutions
Philippine Dispute Resolution Center, Inc.
Construction Industry Arbitration Commission
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Construction disputes which fall within the original andexclusive jurisdiction of the Construction Industry ArbitrationCommission (the "Commission") shall include those between oramong parties to, or who are otherwise bound by, an arbitration
agreement, directly or by reference whether such parties areproject owner, contractor, subcontractor, quantity surveyor,bondsman or issuer of an insurance policy in a constructionproject.
The Commission shall continue to exercise original and exclusive
jurisdiction over construction disputes although the arbitrationis "commercial" pursuant to Section 21 of this Act. (R.A. 9285,Sec. 35)
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PREVALENT ADR
PRACTICES IN THEPHILIPPINES
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proposals to enhance and promote
ADR
fact- finding
reference to an expert concerning the valuation or on
account of the specialized knowledge of the subject matter indispute;
reference by a court to a special master for determination ofthe dispute including the production of evidence and its
admissibility.
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Most common ADR
Arbitration
generally utilizes Rep. Act. No. 87
Mediation less known ADR technique
Local Government Code of 1991 on Katarungang
Pambarangay.
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Characterization of ADR Practice
Arbitration
Choice of process or method
Institutionalized arbitration
Mediation
informal technique aids primarily in preventing litigation or even arbitration
condition precedent for the filing of a case
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Restrictions and Limitations of ADR
Practice
By express statutory restriction
1. civil status of persons (Civil Code, Article 2043 in relation toArticle 2035)
2. validity of marriage or legal separation (Id.);3. any ground for legal separation (Id).
4. future support (Id);
5. the jurisdiction of courts (Id);
6. future legitime (Id).;7. criminal liability (Civil Code, Article 2043 in relation to
Article 2034).
i i d i i i f
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Restrictions and Limitations of
ADR Practice
vested in particular tribunals pursuant to express provisionsof law
1. Consumer Act of the Philippines (RA 7394)
2. The Mining Act of 1995 (RA 7942)
3. Intellectual Property Code of 1998
4. Executive Order Nos. 126 and 251
5. Local Government Code of 1991 (RA 7160)
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Arbitration Practice
Allow parties to arbitrate controversy existing betweenthem
Agreements are binding
When parties refuse to abide, the party seeking arbitrationmay either
file a petition before the RTC
and/or proceed ex-parte
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Arbitration Practice
The filing of petition to compel arbitration does not allow theparty who refused to raise defenses touching upon the merits of
the case since the proceeding is only a summary remedy to
enforce the agreement to arbitrate
Filing a court action w/o arbitration, the court shall suspend theaction until an arbitration has been had in accordance with its
terms
If defaulting party refuses to proceed, the party seeking
arbitration shall present evidence ex-parte, which shall be the
basis of the award later on
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Arbitration Practice
Arbitrator
Crucial element (ability, skills, expertise, fairness)
Will determine the credibility of the proceeding and acceptability of
arbitration as alternative mode of dispute resolution.
Contracts may provide
Sole arbitrator
Panel arbitrators
If silent, courts discretion to appoint
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Arbitration Practice
Appointment
In accordance with arbitration clause
Through nominations
Providing for specific procedure
Referring to institutional arbitration rules or laws
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Arbitration Practice
If no appointment, RTC shall appoint
when the parties are unable to agree upon a single arbitrator
when the arbitrator appointed is unwilling or unable to serve and
his successor has not been appointed
if either party fails or refuses to name his arbitrator
if the arbitrators appointed fail to agree/select upon the third
arbitrator
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Arbitration Practice
Time for the constitution of the arbitrator/s
As provided by arbitral agreement
If absent, RTC shall appoint arbitrator in case of failure of
either party to name the same within 15 days after receipt of
the demand for arbitration and that the arbitrators appointedshall decline or accept their appointments within 7 days from
receipt of such appointment
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Arbitration Practice
Qualifications of arbitrator
1. General Impartiality
Neutrality
Integrity
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Arbitration Practice
2. Phil. Arbitration law qualifications
1. of legal age
2. have full enjoyment of civil rights
3. know how to read and write
4. not related by blood or by marriage within the sixth degree
to either party
5. have, or had, no financial, fiduciary, or other interest in the
controversy or cause to be decided or in the result of theproceeding
6. have no personal bias
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Arbitration Practice
Arbitrator/s
prohibited from functioning as a mediator in, and even
attending, the negotiations for the settlement of the dispute
act in a quasi-judicial capacity
must demonstrate unquestioned fairness and impartiality in
their decision.
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Arbitration Practice
Disqualifications
Must be related to those recognized by law (Section 11, RA
876)
Must be made before the arbitrators
If the arbitrator does not give way to the challenge,
it may be made before the RTC; arbitration proceeding shall be
momentarily suspended pending the resolution of the incident
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Arbitration Practice
Arbitrator/s resolve only those submitted to them
Fees:
P50.00 or approximately $1.00 per day, unless the parties
stipulate otherwise
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Arbitration Practice
Disputes arising from the contract of the parties
With arbitration clause
Theres a demand for arbitration by one party
Without arbitration clause
Submission agreement is made by both
When there is no specific form
It must be in writing
subscribed by the party sought to be charged or by his lawfulagent
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Arbitration Practice
Contents of the demand for arbitration
1. names and addresses of the parties
2. nature of the controversy
3. the amount involved, if any
4. the relief sought
5. the true copy of the agreement providing for arbitration
6. the specific time
7. In case of panel arbitration, nominations shall come fromboth parties
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Arbitration Practice
Contents of submission agreement:
1. the names of the parties
2. nature of the controversy
3. the amount involved, if any
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Arbitration Practice
Presentation of evidence Orally
May be waived by executing a written agreement submitting theirdispute to arbitration other than oral hearing
the parties may be directed to
submit an agreed statement of facts
submit their respective written contentions to the duly appointedarbitrators together with all documentary proof supporting thestatement of facts
submit a written argument
reply in writing to any of the other partys statement and proofs withinseven days after receipt of such statement and proofs (Id. at Section18). After submission of the foregoing, the arbitrator then declares thehearing closed
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Arbitration Practice
Final resolution
Embodied in the Arbitral Award
To be valid
It must comply with both the scope stated in thearbitration/submission agreement and with the formalitiesdirected by law
It must be rendered within the period prescribed in the contract ofthe parties or submission agreement.
In its absence, in writing, it must be rendered within thirty-(30)
days after closing of the hearings, or if the oral hearings shall havebeen waived, within thirty-(30) days after the arbitrators shall havedeclared such proceedings in lieu of hearings closed
bi i i
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Arbitration Practice
Form and contents of arbitral award
1. Must be in writing
2. Signed
3. Acknowledged by majority of arbitrators, if more than one
Voting procedure for the validity of an award
May opt to provide in the arbitration or submissionagreement
Majority or concurrence of all depending on whats required
bi i i
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Arbitration Practice
Arbitral award
Generally, not self-executory
Must be confirmed and executed by court order
Exception: award granted by Construction Industry ArbitrationCommission that can be enforced by said tribunal having beenauthorized to issue writs of execution involving its arbitral award
award granted under the Local Government Code of 1991 whereinthe award may be enforced by execution by the lupon within six (6)months from the date of the settlement. After the lapse of suchtime, the settlement may be enforced by action in the appropriatecity or municipal court
A bi i P i
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Arbitration Practice
Any party to the controversy may, within one-(1) monthafter the award is made, file with the Regional Trial Court
having jurisdiction a motion to confirm the award (Section
23, Rep. Act No. 876).
The court must grant the motion for confirmation unlessthe award is vacated, corrected or modified
A bi i P i
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Arbitration Practice
Upon confirmation, judgment is entered in conformity therewith in the courtwhere the application is filed.
To obtain an entry for such confirmation, the party applying shall, at the timeof filing of such motion, also file with the Clerk of Court the following:
1. the submission, or contract to arbitrate; the appointment of the arbitrator;and each written extension of time, if any, within which to make the award
2. a verified copy of the award
3. each notice, affidavit, or other paper used upon the application to confirm,
modify, correct or vacate such award, and a copy of each order of the courtupon such application
A bit ti P ti
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Arbitration Practice
Grounds for annulling arbitral award
Mistake
Fraud
Violence
Intimidation
Undue influence
Falsity of documents
A bit ti P ti
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Arbitration Practice
Grounds to vacate the arbitral award
corruption, fraud or other means in procuring the award
evident partiality or corruption in the arbitrators or any of them
misconduct of the arbitrators in refusing to postpone the hearing uponsufficient cause shown or misconduct in refusing to hear pertinent andmaterial evidence
deliberate failure of one or more arbitrators from disclosingdisqualification
any other misbehavior of the arbitrators materially prejudicing the right of
the parties arbitrators exceeded their powers or imperfectly executed them resulting
in the absence of a mutual, final and definite award
A bit ti P ti
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Arbitration Practice
Grounds to modify or correct the award:
evident, miscalculation of figures or evident mistake in thedescription of any person, thing, or property in the award
award upon a matter not submitted to the arbitrator whichdoes not affect the merit of the decision upon the matterssubmitted
the award is imperfect in form not affecting the merits ofthe controversy, and if it had been a commissioners report
the defect could have been amended or disregarded by thecourt
A bit ti P ti
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Arbitration Practice
Under the Local Government Code of 1991
any party may repudiate the arbitral award within ten (10)
days from the date of settlement by filing with the Punong
Barangay or Pangkat Chairman a sworn statement statinggrounds of fraud, violence and intimidation (Rep. Act No.
7160, Section 418).
Mediation
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Mediation
Mediation and conciliation interchangeably used
Parties submitting their dispute to mediation must agree on the following:
1. the selection of the mediator or of the process by which the mediator may be selected
2. the role of the mediator and the type of mediation contemplated, whether a rights mediation orinterest mediation
3. the submission by the representatives of the parties full settlement authority and the form inwhich such authority may be embodied
4. the participation or non-participation of counsel in the mediation proceedings
5. the time and place of the mediation sessions; (6) whether the mediator may meet both parties injoint sessions or separately in what are known as ex-parte
Mediation
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Mediation
6. whether the mediator may meet both parties in joint sessions or separately in whatare known as ex-parte caucuses
7. whether the evaluation to be made by the mediator of the dispute shall befacilitative or evaluative
8. whether the statements, both oral and written, made by a party is admissible inevidence in a subsequent litigation
9. whether a mediation is terminated at will by either party
10. the pre-mediation submission of basic, non-controversial documents, includingclaim documents, and such statements which either party may submit to give as
much information as possible to the mediator about the facts of the dispute, andwhether such submissions and documents shall be kept confidential or shall beprovided by one party to the other
Mediation
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Mediation
11. the scheduling of the mediation sessions and thesubmission of documents or information to the mediator
12. in complex cases, the possibility of co-mediation13. any agreement as to the sharing of the costs of mediation
and the payment of the mediators fees.
Mediation
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Mediation
Mediation, kinds
1. Rights mediation
Evaluative examine, clarify, evaluate
2. Interest mediation
Facilitative helps the parties clarify concerns, interest,
values, priorities
Mediation,
ADR in the barangay level
Local Government Code of 1991
Mediation
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Mediation
Structure
Lupong Tagapamayapa (Lupon), composed of the punong
barangay as chairperson and ten (10) to (20) members, is
constituted in every barangay A conciliation panel consisting of three (3) members shall be
chosen by the parties to the dispute from the list of members
of the Lupon.
This panel is known as Pangkat Tagapagkasundo.
Mediation
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Mediation
Procedure
1. An individual with cause of action complains to Lupon, orally or
in writing
2. Upon receipt of complaint, the lupon chairman shall, within thenext working day, summon the respondent(s), with notice to the
complainant(s) for them and their witnesses to appear beforehim for a mediation of their conflicting interests
3. If he fails in his mediation effort within fifteen (15) days from the
first meeting of the parties before him, he shall forthwith set adate for the constitution of the pangkat.
Mediation
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Mediation
In proceedings
Parties must appear in person, except for minors or
incompetents
mediation before the lupon or the pangkat becomes acondition precedent for the filing of a petition, complaint,action or proceeding in court covering any matter within the
jurisdiction or authority of the lupon.
A certification to the effect that no conciliation or settlement
has been reached will be needed to a valid filing of such actionbefore the court
Mediation
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Mediation
Settlement shall be in
Writing, in a language known to all parties
Signed by all parties
Attested to by the lupon chairman of the pangkat chairman
Under the same law, customs and traditions of indigenouscultural communities are recognized in resolvingcontroversies and disputes between and among membersof the cultural communities
Mediation
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Mediation
With respect to the effect of any amicable settlement, thesame shall have the force and effect of a final judgment of acourt upon the expiration of ten (10) days from the datethereof, unless repudiated or a petition for nullification hasbeen filed with the proper municipal or city court
Repudiation of settlement may be made by any partywithin ten (10) days from the date of settlement by filingwith the lupon chairman a statement to that effect sworn
to before him, on the ground of fraud, violence, orintimidation
Mediation
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Mediation
Execution of the amicable settlement enforced by the lupon within six-(6) months from the date of
settlement, after which it may be enforced by action in anappropriate municipal or city court
There is a potential for mediation to aid in preventing furtherclogging of court dockets. The informal process serves thepurpose of the parties in making the discussion free-flowing andwithout the anticipated legal technicalities and maneuverings.Indeed, not only will mediation be inexpensive but it offersavenue for conflict resolution accessible to ordinary people.
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RELATEDARTICLE:
All public contracts for projectswith the private sector must include
ADR mechanism, PhilippinesPresident rules
Reference: Out-Law. http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/. Retrieved on 11 August 2012
President Benigno Aquino issued E.O. 78, series of
http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector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2012
Title of E.O. 78, s. 2012
Mandating the Inclusion of Provisions on the Use of Alternative Dispute
Resolution Mechanism in All Contracts Involving Public-Private
Partnership Projects, Build-Operate and Transfer Projects, Joint Venture
Agreements Between the Government and Private Entities and ThoseEntered Into By Local Government Units
Issued on:
4 July 2012
Reference: Out-Law. http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-rules/. Retrieved on 11 August 2012
Usefulness of E O 78
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Usefulness of E.O. 78
It develops a more inviting
climate for private investors by
insuring less expensive, time-
consuming resolution
procedures in the event of adispute.
Aligned with international
practice in dispute resolution(Watson, Carl Lawyer of Pinsent Masons)
Major development in our
continuing efforts to improvethe PPP policy framework
(Austria, SherryDirector of the PhilippinesPPP Center)
Reference: Out-Law. http://www.out-law.com/en/articles/2012/july/all-public-contracts-for-projects-with-the-private-sector-must-include-adr-mechanism-philippines-president-
rules/. Retrieved on 11 August 2012
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