Arbitration Agreements in the Philippines Featured Image" width="1080" height="675" /> Arbitration Agreements in the Philippines Featured Image" width="1080" height="675" />
Arbitration Agreements in the Philippines Featured Image" width="1080" height="675" />
We discuss Arbitration Agreements in the Philippines in this article and the considerations that go into in drafting one.
Arbitration has become popular in recent years as it allows parties to settle disagreements without court.
Arbitration allows parties to settle more quickly than it would otherwise take – however it can be an expensive process and that the primary reason is to avoid the length of a court case.
Let’s dive into what an Arbitration Agreement in the Philippines is and what should go into drafting one.
An Arbitration Agreement in the Philippines is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. [1]
An Arbitration Agreement is very important since it is the foundation of almost every arbitration.
An Arbitration Agreement is a contract defining the parameters for the arbitration.
It must properly reflect the intention of the parties to arbitrate because a party cannot be required to submit to arbitration any dispute which he has not agreed to submit and so is crucial to any attempt to arbitrate.
[1] Article 7, UNCITRAL Model Law
RA 876, Section 4 or the Arbitration Law of the Philippines states that an Arbitration Agreement in the Philippines must be in writing and subscribed by the party sought to be charged, or by his lawful agent.
A Philippine Arbitration Agreement may be separate from a main contract or be part of the contract itself – it is basically up to the parties involved.
If it is part of a contract, it could be placed in:
What do we mean when we say in “a clause in an incorporated instrument”?
This means that a general incorporation clause in a contract will suffice to incorporate an arbitration agreement contained in another instrument.
In fact, there is already a ruling by the Supreme Court in National Union Fire Insurance vs. Stolt-Nielsen. [1]
In this case, the Supreme Court ruled that the parties should have referred the dispute to arbitration pursuant to the arbitration clause even if such clause was only incorporated by reference.
This is in line with the Philippines’ policy in favor of arbitration.
This was expressly provided for under RA 9285 which is the Alternative Dispute Resolution Act of 2004.
Arbitration agreements in the Philippines are liberally construed in favor of proceeding to arbitration.
The interpretation that would render effective an arbitration clause if the terms of the agreement allow for such interpretation will be adopted. [2]
[2] Luzon Iron Development Group Corporation vs. Bridestone Mining and Development Corporation, G.R. No. 220546, December 7, 2016
