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Dispute Resolution in the Philippines does not provide for any special rule, regulation, treatment and/or circumstance to European corporations. The general laws and rules on litigation, arbitration and other modes of alternative dispute resolution apply to European corporations, as to other domestic or foreign corporation.



Type of Legal System

The Philippine Legal System is a blend of the Roman civil law and the Anglo-American common law systems. The civil law system operates in the areas of family relations, property, succession, contracts and criminal law, while statutes and principles of common law origin are evident in fields such as constitutional law, procedure, corporation law, negotiable instruments, taxation, insurance, labor relations, and banking laws. Islamic personal law is recognized and is operative in some parts of Mindanao with the establishment of Shari’ah courts and the Shari’ah Bar.

Main Sources of Law

The main sources of Philippine law are the Constitution, statutes, treaties and conventions, and judicial decisions. The Constitution is the fundamental law of the land and as such, it is authority of the highest order against which no law can prevail. Every official action, to be valid, must conform to it. On the other hand, statutes are enactments passed by the Philippine Legislature. Statutes also include presidential decrees issued during the martial law period, and executive orders issued by the President under the 1986 Provisional “Freedom” Constitution.


Treaties entered into by the Philippines with other states have the same force of authority as legislative enactments. Philippine law is also derived from case decisions because the Civil Code provides that “judicial decisions applying or interpreting the laws or the Constitution shall form part of the legal system of the Philippines.” Only decisions of the Supreme Court, however, establish jurisprudence and are binding on all other courts.


To read more on:

  • Trial Courts

  • Appellate Courts

  • Language of the Courts

Click here to download the full Doing Business in the Philippines Book here, and refer to page 74 »

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An action is generally commenced by the filing of a complaint containing a statement of the plaintiff’s cause or causes of action. The complaint is required to contain a certification against forum shopping to the effect that the plaintiff has not commenced any action or filed any claim involving the same issue(s) in any court, tribunal or quasi-judicial agency and to the best of his knowledge, no such other action or claim is pending therein. Failure to comply with this requirement is a ground for dismissal of the case. The filing of the complaint must also be accompanied by the payment of the prescribed docket fee; otherwise, the trial court will not acquire jurisdiction over the case.


Upon the filing of the complaint and the payment of the requisite legal fees, the clerk of court will issue the corresponding summons to the defendant, together with a copy of the complaint.


When the defendant is a foreign private juridical entity which has transacted business in the Philippines, service of summons may be made on its resident agent designated in accordance with law for that purpose, or, if there is no such agent, on the government official designated by law to that effect, or on any of its officers or agents within the Philippines. If the foreign private juridical entity is not registered in the Philippines or has no resident agent, service may, with leave of court, be effected out of the Philippines through any of the following means:

  1. By personal service through the appropriate court in the foreign country with the assistance of the Department of Foreign Affairs;

  2. By publication in a newspaper of general circulation in the country where the defendant may be found and by serving a copy of the summons and the court order by-registered mail at the last known address of the defendant;

  3. By facsimile or any recognized electronic means that can generate proof of service; or

  4. By such other means as the court may, in its discretion, direct.

To read more on:

  • Piloting a New System for Speedy Court Trial

  • Default Judgment

  • Summary Judgment

  • Provisional Remedies

  • Discovery/Disclosure

  • Remedies

  • Costs

  • Appeals

  • Enforcement of Judgments

  • Recognition and Enforcement of Foreign Judgments

Click here to download the full Doing Business in the Philippines Book here, and refer to page 75 »

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Parties have the option to resort to arbitration in resolving their disputes in the Philippines. 


All types of commercial disputes may be referred to arbitration. The word “commercial” is broadly defined as “matters arising from all relationships of a commercial nature, whether contractual or not.”


Moreover, Executive Order No. 78, series of 2012 and its Implementing rules and Regulations mandate the inclusion of provisions on the use of alternative dispute resolution mechanisms in all government contracts involving Public-Private Partnership (PPP) projects, Build-Operate and Transfer (BOT) projects, Joint Venture Agreements (JVA) between the Philippine Government and private entities, and contracts entered into by Local Government Units (LGU). 


The following disputes may not be submitted to commercial arbitration: (a) labor disputes covered by Presidential Decree No. 442 (PD 442), otherwise known as the Labor Code of the Philippines, as amended, and its Implementing Rules and Regulations; (b) the civil status of persons; (c) the validity of a marriage; (d) any ground for legal separation (of married persons); (e) the jurisdiction of courts; (f) future legitime; (g) criminal liability; and (h) those disputes which by law cannot be compromised.

To read more on:

  • Advantages of Arbitration Compared with Court Litigation

  • Arbitration as a Contract

  • Arbitration Law

  • Role of the Courts in Arbitration

  • Arbitral Institutions

  • Ad Hoc Arbitration

  • Enforcement of Awards

  • Challenging Awards

  • Other Modes of Alternative Dispute Resolution


Click here to download the full Doing Business in the Philippines Book here, and refer to page 79 »

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There have been increased efforts in recent years to institutionalize ADR in the Philippine legal system to aid in the speedy administration of justice.


Court-Annexed ADR

Court-Annexed Mediation


Beginning in 2001, the Supreme Court, in the exercise of its supervisory and regulatory powers over the Philippine judicial system, implemented, initially on a trial basis, the requirement for the conduct of mediation for certain cases commenced before the courts. In 2011, the Supreme Court expanded the cases covered by the Court-Annexed Mediation scheme (CAM). The following cases are currently covered by the rule on CAM:

  • all civil cases and the civil liability of criminal cases covered by the Rules on Summary Procedure, including civil liability for violation of the Bouncing Checks Law;

  • special proceedings for the settlement of estates;

  • all civil and criminal cases requiring a certificate to file action under the Revised Katarungang Pambarangay Law; 

  • the civil aspect of quasi-offenses under the Revised Penal Code;

  • the civil aspect of less grave felonies not exceeding 6 years of imprisonment where the offended party is a private person;

  • civil aspects of estafa (swindling), theft and libel;

  • all civil cases and probate proceedings brought on appeal from the first-level courts;

  • all cases of forcible entry and unlawful detainer brought on appeal from the first-level courts;

  • all civil cases involving title or possession of real property or interest therein brought on appeal from first-level courts; and

  • habeas corpus cases brought up on appeal from the first-level courts. 

  • The following cases are not proper subject of CAM: 

  • civil cases which by law cannot be compromised, 

  • other criminal cases not covered by numbers 3 to 6 above, 

  • habeas corpus petitions, 

  • all cases under the Violence Against Women and Children Act, and

  • cases with pending applications for restraining orders or preliminary injunctions.


The court before which a case was filed involving any of the aforementioned disputes calls the parties to a conference before a mediator appointed by the trial court from the list provided by the Supreme Court. During the mediation period, the court orders the suspension of the proceedings before it for 30 days. Individual parties are required to personally appear for mediation unless they send a representative who is fully authorized to appear, negotiate and enter into a compromise, through a Special Power of Attorney. Corporations, partnerships or other juridical entities shall be represented by a ranking corporate officer fully authorized by a Board Resolution to offer, negotiate, accept, decide and enter into a compromise agreement, without need of further approval by or notification to the authorizing party.


If a settlement is reached, the compromise agreement entered into between the parties is submitted to the court and serves as basis for the rendition of a judgment by compromise that may be enforced by execution. Otherwise, the case is returned to the court. 


Any and all matters discussed or communications made and documents presented during the mediation proceedings are privileged and confidential and inadmissible as evidence for any purpose in any other proceedings.


The period during which the case is undergoing mediation or conciliation are excluded from the regular and mandatory periods for trial and rendition of judgment in ordinary cases as well as in cases under summary procedure.


Judicial Dispute Resolution


Judicial Dispute Resolution (JDR) is governed by A.M. No. 11-1-6-SC-PHILJA and is promulgated pursuant to the ADR Act. Together with Court-Annexed Mediation, JDR is intended to put an end to pending litigation through a compromise agreement and help unclog court dockets in the country. Cases covered by CAM are also subject to JDR.


Judicial proceedings covered by JDR are divided into two stages: (1) from the filing of the complaint to the conduct of Court-Annexed Mediation and JDR, and (2) pre-trial proper to trial and judgment. The judge to whom the case had been originally assigned is referred as the JDR judge, who presides over the first stage. Another judge, called the trial judge, presides over the second stage. At the initial stage of the preliminary conference, the JDR judge briefs the parties on Court-Annexed Mediation and JDR. Upon failing to secure a settlement of the dispute during Court-Annexed Mediation, a second attempt to arrive at a compromise agreement is made through JDR. The JDR judge facilitates the settlement discussions between the parties and tries to reconcile their differences, assesses the relative strengths and weaknesses of each party’s case, and makes a non-binding and impartial evaluation of the chances of each party’s success in the case. On the basis of this neutral evaluation, the judge seeks to persuade the parties to a fair and mutually acceptable settlement of their dispute. The JDR judge may not preside over the trial of the case if the parties do not settle their dispute at JDR.


To complete the JDR process, judges of the first level courts shall have a period of not exceeding thirty (30) days, while judges of the second level courts shall have a period of not exceeding sixty (60) days. A longer period, however, may be granted upon the discretion of the JDR judge if there is a high probability of settlement and upon joint written motion of the parties. Both periods shall be computed from the date when the parties first appeared for JDR proceedings as directed in the respective Orders issued by the judge.


If full settlement of the dispute is reached within 30 days (in the first level court) or 60 days (in the second level court), the parties, assisted by their respective counsels, shall draft a compromise agreement which shall be submitted to the court for a judgment upon compromise, enforceable by execution. Only upon failure of the JDR will parties proceed to trial proper, when the case is turned over to the trial judge.


Any and all matters discussed or communications made, including requests for mediation, and documents presented during the JDR proceedings before the trial judge, are privileged and confidential and inadmissible as evidence for any purpose in any other proceedings. Further, the JDR judge may not pass any information obtained in the course of conciliation and early neutral evaluation to the trial judge or to any other person.


Philippine Mediation Center - Appeals Court Mediation


At the Court of Appeals level, cases covered by Court-Annexed Mediation and JDR, which have not been settled and went to trial, must be referred to the Philippine Mediation Center - Appeals Court Mediation unit for mediation.


Commercial ADR

The ADR Act, without limiting the modes of ADR that the parties can avail of, provide for, in addition to arbitration, the following modes of ADR:




Mediation is a voluntary process in which a mediator, selected by the disputing parties, facilitates communication and negotiation, and assists the parties in reaching a voluntary agreement regarding a dispute. Information obtained through mediation is privileged and confidential. A party, a mediator, or a non-party participant may refuse to disclose and may prevent any other person from disclosing a mediation communication.


A mediated settlement agreement may be deposited with the appropriate clerk of a Regional Trial Court of the place where one of the parties resides. Where there is a need to enforce the settlement agreement, a petition may be filed by any of the parties with the same court. Pursuant to the Special ADR Rules, after a summary hearing, if the court finds that the agreement is a valid mediated settlement agreement, that there is no merit in any of the affirmative or negative defenses raised, and the respondent has breached that agreement, in whole or in part, the court shall order the enforcement thereof; otherwise, it shall dismiss the petition.


The parties may agree in the settlement agreement that the mediator shall become a sole arbitrator for the dispute and shall treat the settlement agreement as an arbitral award which shall be subject to enforcement.


Early Neutral Evaluation


Early neutral evaluation is an ADR process wherein parties and their lawyers are brought together early in the pre-trial phase to present summaries of their cases and to receive a non-binding assessment by an experienced neutral person, with expertise in the subject matter or substance of the dispute.


All papers and written presentations communicated to the neutral third person, including any paper prepared by a party to be communicated to the neutral third person or to the other party as part of the dispute resolution process, and the neutral third person’s written non-binding assessment or evaluation, shall be treated as confidential.


The proceedings are governed by the rules and procedure agreed upon by the parties. By default, the ADR Act IRR shall govern. 


Mediation-Arbitration or Med-Arb


Med-Arb is a two-step dispute resolution process involving mediation and then followed by arbitration. It is governed by the rules and procedure agreed upon by the parties. Otherwise, the ADR Act IRR shall govern. As a general rule, a mediator may not act as an arbitrator in respect of the same dispute, or vice-versa.




Mini-trial is a structured dispute resolution method in which the merits of a case are argued before a panel comprising of senior decision-makers, with or without the assistance of a neutral third person, before which the parties seek a negotiated settlement. It shall be governed by the rules and procedure agreed upon by the parties. Otherwise, the ADR Act IRR shall govern.

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Other Modes of ADR
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