approaches to dispute resolution

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Philippine Institute of Arbitrators

COMPREHENDING THE APPROACHES TO

DISPUTE RESOLUTION by

MARIO E. VALDERRAMA AB, LLB, FCIARb, FHKIArb, FPIArb

CIArb Approved Tutor CIAC Accredited Arbitrator

Member (co-opted) of the Branch Main Committee of The Chartered Institute of Arbitrators

East Asia Branch Contact Details

Tel No 367 4001; Telefax 362 1867 Mobile 0917 4114 594

E-mail

APPROACHES TO DISPUTE RESOLUTION n The Negotiated Model n The Adversary Models, namely:

q The Adversarial Model; and

q The Inquisitorial Model

APPROACHES TO DISPUTE RESOLUTION: NOTE

This presentation is specially focused on the Inquisitorial Model because we are more or less familiar with the Negotiated Model and the Adversarial Model.

PART I

THE NEGOTIATED MODEL

NEGOTIATED MODEL

n This provides the means for settling disputes amicably with the full and unqualified consent of the parties.

n This is prevalent in civil disputes.

n This is also possible in criminal cases, in those instances when plea bargaining is allowed.

THE NEGOTIATED MODEL

n On the upside, this may be the best way to settle disputes.

n On the downside: q This in the end is entirely dependent on the

parties. q This mode may also violate or dilute justice

more so in those cases where the bargaining strengths of the parties are lopsided.

PART II

THE ADVERSARY MODELS

THE ADVERSARY MODELS

n In the adversary models, the winner wins what the loser loses in an all or nothing outcome.

n The parties are compelled to comply with the deciding authoritys decision where appeals are exhausted (or not allowed) even if they were dissatisfied with it.

ADVERSARIAL & INQUISITORIAL MODELS n In the adversarial approach, the deciding

authority is passive and relies on the presentation of the parties.

n In the inquisitorial approach, the deciding authority is proactive and generates his own evidence.

(Based on CIArb & PIArb Teaching Materials)

PART II-A

THE ADVERSARIAL MODEL

THE ADVERSARIAL MODEL: FEATURES n It is self-initiated by a party who is either a

claimant, petitioner or litigant in a civil dispute or by the state in a criminal case.

n The parties have the burden of coming forward with the evidence.

n The tribunal is passive and relies on the presentations of the parties.

NOTE: Some say that this model is also a battle of resources.

ADVERSARIAL PROCEEDINGS: HEARING n Party calls his witness (in arb., normally

witnesses of fact first before experts); n Witness takes his oath of affirmation; n Party ask the witness to confirm his name,

address and involvement in the subject matter;

n Direct examination or examination in chief follows; no leading questions except on non-controversial matters

ADVERSARIAL PROCEEDINGS: HEARING (CONT) n Cross examination by adverse party; leading

questions allowed; n Redirect examination (sometimes called re-

examination) by proponent; n Recross examination; n Third party neutral makes his own examination,

normally restricted to clarificatories. Depending, however, on the nature of questions asked by the neutral, the parties may be allowed to ask supplementary questions on the issues raised by the neutrals questions.

n Witness thereafter excused.

ADVERSARIAL PROCEEDINGS: HEARING NOTE: The opening of the proceedings, intros (in

arb.), explanation of the procedure (also in arb), opening and closing statements (sometimes called pre-hearing and post hearing memorials in arb) etc. are omitted in the discussion.

Comment re Adversarial Model

n On the upside, it is said to have the advantage in that it entails a much more comprehensive and thorough examination of the truth. This is, of course, conditioned on the assumption that the contending lawyers are well matched (more so in cross examination skills).

n Rightly or wrongly, the adversarial model became synonymous with delay and technicalities.

PART II-B

THE INQUISITORIAL MODEL

INQUISITORIAL MODEL: FEATURES n Third party neutral plays an active role

instead of just being a mere referee; n Process directed by third party neutral; does

not depend on parties action; and n Lawyers role is restricted. In short, the third party neutral generates his

own evidence. He uses his subpoena powers to compel production of evidence and to conduct his own investigation.

INQUISITORIAL MODEL: NOTE

n The clause the tribunal generates it own evidence is descriptive of what the tribunal can do. On its own, it may decide to look into the books of the parties, conduct ocular inspections, require the presence of witnesses, require the production of documents, etc.

INQUISITORIAL MODEL: USUAL PROCEDURE DURING HEARING

n Preliminaries

q Witnesses have filed their written statements.

q Agreement on when witnesses are available is already in place.

INQUISITORIAL MODEL: USUAL PROCEDURE DURING HEARING n Initial Examination by Third Party Neutral

q Neutral calls the witness to be examined. q Witness takes usual oath or affirmation. q Neutral confirms name and address of

witness; also that the content of his witnesss statement is true and is the evidence witness wishes to give.


n Initial Examination by Third Party Neutral (cont) q Neutral ask the witness such questions as

the former considers appropriate.

NEUTRAL MAY ASK LEADING QUESTIONS.


n Examination by Parties q Witness turned over to the parties for examination

for the usual direct (if necessary), cross, re-direct and recross.

q As a rule, proponent of the witness may not ask

leading questions. The other party may ask leading questions.

q Parties may ask witness to clarify his answers to the questions of the third party neutral.


n Further Questions by Third Party Neutral q After the parties were finished with their

examination, the neutral may then ask further questions arising from the questions asked by either party.


n NOTE: q The discussion omitted matters pertaining

to the opening of the proceedings, introductions, explanation of the procedure (in arb.) the opening and closing statements (sometimes called pre-hearing memorials and post hearing memorials), etc.

QUESTIONS FROM THE TRIBUNAL

n It is said that, normally, the tribunal may end up asking about 70% of the total number of questions directed to a witness.

In other words, the tribunal under normal circumstances may end-up asking more questions than the total number of questions asked by the party representatives.

COMBINING INQUISITORIAL PROCEDURE WITH OTHERS n Note that the procedure described in the

previous slides may be combined with other types of arbitration proceedings such as in the so-called witness conferencing.

n If Mr. Justice Roberto A. Abad were to have his way, the first and second level courts will go inquisitorial in the so-called run of the mill cases excluding small claims.

INQUISITORIAL MODEL: COMMENT

n It is said that the advantage of the model is that the evidence is generally confined to a search for the truth.

n The downside is that there is the tendency that the quality of the evidence may not be subjected to the test provided by cross examination.

PART II B1

INQUISITORIAL MODEL IN AGREEMENT BASED ARBITRATION

TRIBUNAL DISCRETION TO GO INQUISITORIAL AND ITS LIMITATION

Model Law Art. 19 (1) Subject to the provisions of this Law, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings. (2) Failing such agreement, the arbitral tribunal may, subject to the provisions of this law, CONDUCT THE ARBITRATION IN SUCH MANNER AS IT CONSIDERS APPROPRIATE (Capitals mine).

TRIBUNAL DISCRETION TO GO INQUISITORIAL AND ITS LIMITATION

Accordingly, in agreement based

arbitration, one of the matters that should be taken-up during the preliminary conference is whether or to what extent the tribunal should take the initiative in ascertaining the facts and the law.

[Not widely known in Phl.]

OTHER LIMITATIONS

n The tribunal in the exercise of its discretion cannot contravene mandatory provisions of law.

This is obvious as the provisions involved are matters of public policy and therefore needs no further explanation.

n Note that institutions may also have mandatory rules. UNCITRAL Rules 1976 has a mandatory provisions clause in Sec. 1 Article 1.2.

OTHER LIMITATIONS

n The tribunal cannot exercise its discretion in those cases where the law provides default procedures (usually with the words failing such agreement, subject to the agreement between the parties, or similar phrases).

n Note that institutions also have default rules. UNCITRAL Rules 1976 has a general default provisions clause in its Section 1 Article 1.1. ICC RULES has several default provisions.

OTHER LIMITATIONS

n The tribunal in the exercise of its discretion must do so reasonably.

Again, another obvious limitation.

COMMENT RE ARBITRAL DISCRETION TO GO INQUISITORIAL

n Needs strength of character More so in Phl where there is prejudice

against the inquisitorial model. n Danger of apparent or perceived bias (so arb

must exercise caution) n Requires more preparation on part of tribunal NOTE: Most Phl lawyers/arbs would most likely

want to veer away from it

PART II-B-2

INQUISITORIAL CHARACTERISTICS OF CIAC ARBITRATION

CIAC RULES

In CIAC, the rule is arbitral discretion re procedure.

Sec. 13.5. The arbitral tribunal xxx shall have complete control over the proceedings.

(Parties have only such leeway that the tribunal would allow them.)

So, given the strict time lines, it is adviseable, almost mandatory given other CIAC rules, to go inquisitorial in CIAC Arbitration.

LIMITATIONS TO THE EXERCISE OF ARBITRAL DISCRETION

n The tribunal xxx shall at all times adopt the most expeditious procedures for the introduction and reception of evidence and xxx in any case shall afford full and equal opportunity to all parties to present relevant evidence (see Rule 13.4).

CIAC Arbitration Procedure: Hallmark

JUSTIFICATION: n The hallmark of CIAC arbitration is speedy

resolution of disputes without infringing due process requirements.

There is hereby declared to be the policy of the State to encourage the early and expeditious settlement of disputes in the Philippine Construction Industry (E.O. 1008 Sec. 2, Declaration of Policy).

CIAC RULES HAVE INQUISITORIAL CHARACTERISTICS

Sec. 13.3. Order of presentation. It shall be within the discretion of the Arbitral Tribunal to determine the order of presentation of evidence.

Sec. 13.5 Evidence. The parties shall xxx produce additional documents and witnesses as the Arbitral Tribunal may deem necessary to clear understanding of facts issues for a judicious determination of the dispute(s).


Sec. 13.5.1 Order to produce documentary evidence xxx on its own initiative, the Arbitral Tribunal may direct any person, board, body, tribunal, or government office, agency or instrumentality, or corporation to produce real or documentary evidences necessary for the proper adjudication of the issues.


Sec. 13.5.2. Order to give testimony. The Arbitral Tribunal may, likewise, direct any person to give testimony at any proceedings for arbitration.

Others e.g. Sec. 13.10 ocular inspections;

13.14 reopening of hearings; 13.15 summations.

INADVERTENT LIMITATION?

n CIAC Rules Sec. 13.7. Examination by the Arbitral Tribunal. The Arbitral Tribunal may ask clarificatory questions of the witnesses at any stage of the proceedings.

n Comment: In inquisitorial proceedings, the deciding authority generates its own evidence. Therefore, it is not limited to asking clarificatory questions only.

Note: See Sec. 9 of old Rules.

A BIT OF PARTY AUTONOMY?

n CIAC Rules Sec. 13.16. Submission of memoranda or draft decision. If any or both parties so desire, written memoranda or draft decisions may be submitted not later than ten (10) calendar days from termination of the hearing or from the date of the filing of additional documents as previously agreed upon, whichever is later. Sec. 13.16.1. If both parties agreed to submit memoranda or draft decisions, the filing shall be simultaneous.

BIBLIOGRAPHY

n CIArb Teaching Manual (culled from various sources)

n PIArb Teaching Manual (culled from various sources)

n CROWTER, Harold FCIArb: An Introduction to Arbitration, LLP Reference Publishing, London

n CIAC RULES; UNCITRAL MODEL LAW 1985; ICC Rules; UNCITRAL Rules 1976; UNCITRAL Guidelines

WANT TO KNOW MORE?

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Philippine Institute of Arbitrators c/o Atty. Mario E. Valderrama

Tel. No. (632) 367 4001

Telefax (632) 362 1867

E-mail: [email protected]

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