Philippines litigation guide
Ricardo Ma PG Ongkiko
SyCip Salazar Hernandez & Gatmaitan
Tel: +63 2 817 9811 to 20; Fax: +63 2 817 2001 to 09 Website: www.syciplaw.com
One great difficulty faced by foreign investors in Philippine court litigation has been the extremely long time it takes to resolve a dispute, with trials ordinarily taking several years to complete.
The reason for this included hearings for the presentation of evidence being scheduled several weeks apart, witness testimony often requiring several hearings, trial courts being lenient in granting postponements, and trial court decisions being frequently appealed (with appeals themselves lasting one or two years).
In recent years, there have been efforts to speed up the resolution of disputes.
Mediation
The Supreme Court has issued rules encouraging parties to undergo alternative dispute resolution processes prior to trial.
In 2001 the Supreme Court established the Philippine Mediation Center, with units in the trial courthouses manned by accredited mediators to render court-annexed mediation services to parties. In various specified court actions, the trial court would refer parties to the Center for mediation. Parties select a mutually acceptable mediator from a list of duly-accredited mediators. If no settlement is reached after the 30-day period allowed by the trial court, the case is returned to the trial court for further proceedings.
Mediation proceedings and all incidents thereto are kept strictly confidential, and all admissions or statements made therein are declared inadmissible for any purpose in any proceeding. In 2002, a Center unit was also established in the Court of Appeals, which provided mediation services to parties on appeal but who still wished to explore the possibility of amicable settlement through mediation.
In 2006, the Supreme Court launched the Justice Reform Initiative Support (JURIS) Project, where several model trial courts are mandated to refer specified cases to judicial dispute resolution (JDR) after an unsuccessful court-annexed mediation by the Center. Under the JDR, parties are referred to further mediation by JDR judges. The JDR judge acts as mediator, conciliator, early neutral evaluator, or a combination.
Arbitration
In recent years, arbitration has also been promoted as an ADR process. In 2004, Republic Act No. 9285, or the Alternative Dispute Resolution Act of 2004, was passed declaring it the policy of the State to actively promote party autonomy in the resolution of disputes.
The Philippines finally adopted the 1985 UNCITRAL Model Law to govern international commercial arbitration in the Philippines, to be supplemented by the ADR Act. The Act provides that a party to an international arbitration may be represented by any person of his choice, who need not be a duly-licensed Philippine counsel. It also mandates that arbitration proceedings, including records, evidence, and the award, shall be considered confidential.
Under the ADR Act, domestic arbitration continues to be governed primarily by Republic Act No. 876, the original Philippine Arbitration Law enacted in 1953 and patterned from the 1925 US Federal Arbitration Law. However, the ADR Act has modernised the original Philippine Arbitration Law by applying to domestic arbitration various provisions of the ADR Act and the 1985 UNCITRAL Model Law.
The ADR Act provisions that were made applicable include: those on referral to arbitration by Philippine courts where the dispute is the subject of an arbitration agreement; the grant of interim measures of protection by Philippine courts; and, the confidentiality of proceedings. The ADR Act also expressly provides that a domestic arbitral award, when confirmed by Philippine court, shall be enforced in the same manner as final and executory decisions of a trial court.
The 1985 UNCITRAL Model Law provisions that were made applicable to domestic arbitration include: that parties shall be treated with equality and each party shall be given a full opportunity of presenting his case; and that parties are free to agree on the procedure to be followed by the arbitral tribunal, failing which the tribunal may conduct the arbitration in such manner as it considers appropriate.
The ADR Act expressly declared that the 1958 New York Convention (which the Philippines ratified as early as July 6 1967) shall govern the recognition and enforcement of foreign arbitral awards covered by the Convention. For those not so covered, the Act provides that the Supreme Court will promulgate procedural rules for their recognition and enforcement.
ADR promotion
To date, the Supreme Court has not promulgated the rules of procedure on arbitration referred to in the ADR Act. It appears however that the draft rules are in its final stages of review and, thus, should be issued within a couple of months.
Educational efforts to promote the advantages of ADR processes vis-à-vis court litigation have also substantially increased through the years. This is not only by law schools and mandatory continuing legal education providers, but also by various government and private legal organisations.
It is hoped that, soon, disputes will be resolved in the Philippines through ADR and court litigation as quickly as in any other jurisdiction.