Section 5. Preliminary procedure.

- An arbitration
shall be instituted by:
REPUBLIC ACT NO. 876
(a) In the case of a contract to arbitrate
future controversies by the service by either
AN ACT TO AUTHORIZE THE MAKING OF
party upon the other of a demand for
ARBITRATION AND SUBMISSION AGREEMENTS,
arbitration in accordance with the contract.
TO PROVIDE FOR THE APPOINTMENT OF
Such demand shall be set forth the nature of
ARBITRATORS AND THE PROCEDURE FOR
the controversy, the amount involved, if any,
ARBITRATION IN CIVIL CONTROVERSIES, AND
and the relief sought, together with a true
FOR OTHER PURPOSES
copy of the contract providing for arbitration.
The demand shall be served upon any party
Section 1. Short Title. - This Act shall be known as either in person or by registered mail. In the
"The Arbitration Law." event that the contract between the parties
provides for the appointment of a single
Section 2. Persons and matters subject to arbitrator, the demand shall be set forth a
arbitration. - Two or more persons or parties may specific time within which the parties shall
submit to the arbitration of one or more arbitrators agree upon such arbitrator. If the contract
any controversy existing between them at the time of between the parties provides for the
the submission and which may be the subject of an appointment of three arbitrators, one to be
action, or the parties to any contract may in such selected by each party, the demand shall
contract agree to settle by arbitration a controversy name the arbitrator appointed by the party
thereafter arising between them. Such submission or making the demand; and shall require that
contract shall be valid, enforceable and irrevocable, the party upon whom the demand is made
save upon such grounds as exist at law for the shall within fifteen days after receipt thereof
revocation of any contract. advise in writing the party making such
demand of the name of the person appointed
by the second party; such notice shall require
Such submission or contract may include question
that the two arbitrators so appointed must
arising out of valuations, appraisals or other
agree upon the third arbitrator within ten
controversies which may be collateral, incidental,
days from the date of such notice.
precedent or subsequent to any issue between the
parties.
(b) In the event that one party defaults in
answering the demand, the aggrieved party
A controversy cannot be arbitrated where one of the
may file with the Clerk of the Court of First
parties to the controversy is an infant, or a person
Instance having jurisdiction over the parties,
judicially declared to be incompetent, unless the
a copy of the demand for arbitration under
appropriate court having jurisdiction approve a
the contract to arbitrate, with a notice that
petition for permission to submit such controversy to
the original demand was sent by registered
arbitration made by the general guardian or guardian
mail or delivered in person to the party
ad litem of the infant or of the incompetent.
against whom the claim is asserted. Such
demand shall set forth the nature of the
But where a person capable of entering into a controversy, the amount involved, if any, and
submission or contract has knowingly entered into the relief sought, and shall be accompanied
the same with a person incapable of so doing, the by a true copy of the contract providing for
objection on the ground of incapacity can be taken arbitration.
only in behalf of the person so incapacitated.
(c) In the case of the submission of an
Section 3. Controversies or cases not subject to the existing controversy by the filing with the
provisions of this Act. - This Act shall not apply to Clerk of the Court of First Instance having
controversies and to cases which are subject to the jurisdiction, of the submission agreement,
jurisdiction of the Court of Industrial Relations or setting forth the nature of the controversy,
which have been submitted to it as provided by and the amount involved, if any. Such
Commonwealth Act Numbered One hundred and submission may be filed by any party and
three, as amended. shall be duly executed by both parties.

Section 4. Form of arbitration agreement. - A (d) In the event that one party neglects, fails
contract to arbitrate a controversy thereafter arising or refuses to arbitrate under a submission
between the parties, as well as a submission to agreement, the aggrieved party shall follow
arbitrate an existing controversy shall be in writing the procedure prescribed in subparagraphs
and subscribed by the party sought to be charged, or (a) and (b) of this section.
by his lawful agent.
Section 6. Hearing by court. - A party aggrieved by
The making of a contract or submission for the failure, neglect or refusal of another to perform
arbitration described in section two hereof, providing under an agreement in writing providing for
for arbitration of any controversy, shall be deemed a arbitration may petition the court for an order
consent of the parties to the jurisdiction of the Court directing that such arbitration proceed in the manner
of First Instance of the province or city where any of provided for in such agreement. Five days notice in
the parties resides, to enforce such contract or writing of the hearing of such application shall be
submission. served either personally or by registered mail upon
the party in default. The court shall hear the parties,
and upon being satisfied that the making of the (f) Arbitrators appointed under this section
agreement or such failure to comply therewith is not shall either accept or decline their
in issue, shall make an order directing the parties to appointments within seven days of the
proceed to arbitration in accordance with the terms receipt of their appointments. In case of
of the agreement. If the making of the agreement or declination or the failure of an arbitrator or
default be in issue the court shall proceed to arbitrators to duly accept their appointments
summarily hear such issue. If the finding be that no the parties or the court, as the case may be,
agreement in writing providing for arbitration was shall proceed to appoint a substitute or
made, or that there is no default in the proceeding substitutes for the arbitrator or arbitrators
thereunder, the proceeding shall be dismissed. If the who decline or failed to accept his or their
finding be that a written provision for arbitration was appointments.
made and there is a default in proceeding
thereunder, an order shall be made summarily Section 9. Appointment of additional arbitrators. -
directing the parties to proceed with the arbitration in Where a submission or contract provides that two or
accordance with the terms thereof. more arbitrators therein designated or to be
thereafter appointed by the parties, may select or
The court shall decide all motions, petitions or appoint a person as an additional arbitrator, the
applications filed under the provisions of this Act, selection or appointment must be in writing. Such
within ten days after such motions, petitions, or additional arbitrator must sit with the original
applications have been heard by it. arbitrators upon the hearing.

Section 7. Stay of civil action. - If any suit or Section 10. Qualifications of arbitrators. - Any
proceeding be brought upon an issue arising out of person appointed to serve as an arbitrator must be of
an agreement providing for the arbitration thereof, legal age, in full-enjoyment of his civil rights and
the court in which such suit or proceeding is pending, know how to read and write. No person appointed to
upon being satisfied that the issue involved in such served as an arbitrator shall be related by blood or
suit or proceeding is referable to arbitration, shall marriage within the sixth degree to either party to
stay the action or proceeding until an arbitration has the controversy. No person shall serve as an
been had in accordance with the terms of the arbitrator in any proceeding if he has or has had
agreement: Provided, That the applicant, for the stay financial, fiduciary or other interest in the
is not in default in proceeding with such arbitration. controversy or cause to be decided or in the result of
the proceeding, or has any personal bias, which
Section 8. Appointment of arbitrators. - If, in the might prejudice the right of any party to a fair and
contract for arbitration or in the submission impartial award.
described in section two, provision is made for a
method of naming or appointing an arbitrator or No party shall select as an arbitrator any person to
arbitrators, such method shall be followed; but if no act as his champion or to advocate his cause.
method be provided therein the Court of First
Instance shall designate an arbitrator or arbitrators. If, after appointment but before or during hearing, a
person appointed to serve as an arbitrator shall
The Court of First Instance shall appoint an arbitrator discover any circumstances likely to create a
or arbitrators, as the case may be, in the following presumption of bias, or which he believes might
instances: disqualify him as an impartial arbitrator, the
arbitrator shall immediately disclose such information
(a) If the parties to the contract or to the parties. Thereafter the parties may agree in
submission are unable to agree upon a single writing:
arbitrator; or
(a) to waive the presumptive disqualifying
(b) If an arbitrator appointed by the parties is circumstances; or
unwilling or unable to serve, and his
successor has not been appointed in the (b) to declare the office of such arbitrator
manner in which he was appointed; or vacant. Any such vacancy shall be filled in
the same manner as the original
(c) If either party to the contract fails or appointment was made.
refuses to name his arbitrator within fifteen
days after receipt of the demand for Section 11. Challenge of arbitrators. - The
arbitration; or arbitrators may be challenged only for the reasons
mentioned in the preceding section which may have
(d) If the arbitrators appointed by each party arisen after the arbitration agreement or were
to the contract, or appointed by one party to unknown at the time of arbitration.
the contract and by the proper Court, shall
fail to agree upon or to select the third The challenge shall be made before them.
arbitrator.
If they do not yield to the challenge, the challenging
(e) The court shall, in its discretion appoint party may renew the challenge before the Court of
one or three arbitrators, according to the First Instance of the province or city in which the
importance of the controversy involved in challenged arbitrator, or, any of them, if there be
any of the preceding cases in which the more than one, resides. While the challenging
agreement is silent as to the number of incident is discussed before the court, the hearing or
arbitrators. arbitration shall be suspended, and it shall be
continued immediately after the court has delivered person to attend a hearing as a witness. They shall
an order on the challenging incident. have the power to subpoena witnesses and
documents when the relevancy of the testimony and
Section 12. Procedure by arbitrators. - Subject to the materiality thereof has been demonstrated to the
the terms of the submission or contract, if any are arbitrators. Arbitrators may also require the
specified therein, are arbitrators selected as retirement of any witness during the testimony of
prescribed herein must, within five days after any other witness. All of the arbitrators appointed in
appointment if the parties to the controversy reside any controversy must attend all the hearings in that
within the same city or province, or within fifteen matter and hear all the allegations and proofs of the
days after appointment if the parties reside in parties; but an award by the majority of them is valid
different provinces, set a time and place for the unless the concurrence of all of them is expressly
hearing of the matters submitted to them, and must required in the submission or contract to arbitrate.
cause notice thereof to be given to each of the The arbitrator or arbitrators shall have the power at
parties. The hearing can be postponed or adjourned any time, before rendering the award, without
by the arbitrators only by agreement of the parties; prejudice to the rights of any party to petition the
otherwise, adjournment may be ordered by the court to take measures to safeguard and/or conserve
arbitrators upon their own motion only at the hearing any matter which is the subject of the dispute in
and for good and sufficient cause. No adjournment arbitration.
shall extend the hearing beyond the day fixed in the
submission or contract for rendering the award, Section 15. Hearing by arbitrators. - Arbitrators
unless the time so fixed is extended by the written may, at the commencement of the hearing, ask both
agreement of the parties to the submission or parties for brief statements of the issues in
contract or their attorneys, or unless the parties have controversy and/or an agreed statement of facts.
continued with the arbitration without objection to Thereafter the parties may offer such evidence as
such adjournment. they desire, and shall produce such additional
evidence as the arbitrators shall require or deem
The hearing may proceed in the absence of any party necessary to an understanding and determination of
who, after due notice, fails to be present at such the dispute. The arbitrators shall be the sole judge of
hearing or fails to obtain an adjournment thereof. An the relevancy and materiality of the evidence offered
award shall not be made solely on the default of a or produced, and shall not be bound to conform to
party. The arbitrators shall require the other party to the Rules of Court pertaining to evidence. Arbitrators
submit such evidence as they may require for making shall receive as exhibits in evidence any document
an award. which the parties may wish to submit and the
exhibits shall be properly identified at the time of
submission. All exhibits shall remain in the custody of
No one other than a party to said arbitration, or a the Clerk of Court during the course of the arbitration
person in the regular employ of such party duly and shall be returned to the parties at the time the
authorized in writing by said party, or a practicing award is made. The arbitrators may make an ocular
attorney-at-law, shall be permitted by the arbitrators inspection of any matter or premises which are in
to represent before him or them any party to the dispute, but such inspection shall be made only in
arbitration. Any party desiring to be represented by the presence of all parties to the arbitration, unless
counsel shall notify the other party or parties of such any party who shall have received notice thereof fails
intention at least five days prior to the hearing. to appear, in which event such inspection shall be
made in the absence of such party.
The arbitrators shall arrange for the taking of a
stenographic record of the testimony when such a Section 16. Briefs. - At the close of the hearings, the
record is requested by one or more parties, and when arbitrators shall specifically inquire of all parties
payment of the cost thereof is assumed by such whether they have any further proof or witnesses to
party or parties. present; upon the receipt of a negative reply from all
parties, the arbitrators shall declare the hearing
Persons having a direct interest in the controversy closed unless the parties have signified an intention
which is the subject of arbitration shall have the right to file briefs. Then the hearing shall be closed by the
to attend any hearing; but the attendance of any arbitrations after the receipt of briefs and/or reply
other person shall be at the discretion of the briefs. Definite time limit for the filing of such briefs
arbitrators. must be fixed by the arbitrators at the close of the
hearing. Briefs may filed by the parties within fifteen
Section 13. Oath of arbitrators. - Before hearing any days after the close of the oral hearings; the reply
testimony, arbitrators must be sworn, by any officer briefs, if any, shall be filed within five days following
authorized by law to administer an oath, faithfully such fifteen-day period.
and fairly to hear and examine the matters in
controversy and to make a just award according to Section 17. Reopening of hearing. - The hearing
the best of their ability and understanding. may be reopened by the arbitrators on their own
Arbitrators shall have the power to administer the motion or upon the request of any party, upon good
oaths to all witnesses requiring them to tell the whole cause, shown at any time before the award is
truth and nothing but the truth in any testimony rendered. When hearings are thus reopened the
which they may give in any arbitration hearing. This effective date for the closing of the hearings shall be
oath shall be required of every witness before any of the date of the closing of the reopened hearing.
his testimony is heard.
Section 18. Proceeding in lieu of hearing. - The
Section 14. Subpoena and subpoena duces tecum. - parties to a submission or contract to arbitrate may,
Arbitrators shall have the power to require any by written agreement, submit their dispute to
arbitration by other than oral hearing. The parties Instance for the province or city in which one of the
may submit an agreed statement of facts. They may parties resides or is doing business, or in which the
also submit their respective contentions to the duly arbitration was held, shall have jurisdiction. Any
appointed arbitrators in writing; this shall include a application to the court, or a judge thereof,
statement of facts, together with all documentary hereunder shall be made in manner provided for the
proof. Parties may also submit a written argument. making and hearing of motions, except as otherwise
Each party shall provide all other parties to the herein expressly provided.
dispute with a copy of all statements and documents
submitted to the arbitrators. Each party shall have an Section 23. Confirmation of award. - At any time
opportunity to reply in writing to any other party's within one month after the award is made, any party
statements and proofs; but if such party fails to do so to the controversy which was arbitrated may apply to
within seven days after receipt of such statements the court having jurisdiction, as provided in section
and proofs, he shall be deemed to have waived his twenty-eight, for an order confirming the award; and
right to reply. Upon the delivery to the arbitrators of thereupon the court must grant such order unless the
all statements and documents, together with any award is vacated, modified or corrected, as
reply statements, the arbitrators shall declare the prescribed herein. Notice of such motion must be
proceedings in lieu of hearing closed. served upon the adverse party or his attorney as
prescribed by law for the service of such notice upon
Section 19. Time for rendering award. - Unless the an attorney in action in the same court.
parties shall have stipulated by written agreement
the time within which the arbitrators must render Section 24. Grounds for vacating award. - In any
their award, the written award of the arbitrators shall one of the following cases, the court must make an
be rendered within thirty days after the closing of the order vacating the award upon the petition of any
hearings or if the oral hearings shall have been party to the controversy when such party proves
waived, within thirty days after the arbitrators shall affirmatively that in the arbitration proceedings:
have declared such proceedings in lieu of hearing
closed. This period may be extended by mutual
consent of the parties.alf-itc (a) The award was procured by corruption,
fraud, or other undue means; or
Section 20. Form and contents of award. - The
award must be made in writing and signed and (b) That there was evident partiality or
acknowledged by a majority of the arbitrators, if corruption in the arbitrators or any of them;
more than one; and by the sole arbitrator, if there is or
only one. Each party shall be furnished with a copy of
the award. The arbitrators in their award may grant (c) That the arbitrators were guilty of
any remedy or relief which they deem just and misconduct in refusing to postpone the
equitable and within the scope of the agreement of hearing upon sufficient cause shown, or in
the parties, which shall include, but not be limited to, refusing to hear evidence pertinent and
the specific performance of a contract. material to the controversy; that one or more
of the arbitrators was disqualified to act as
In the event that the parties to an arbitration have, such under section nine hereof, and wilfully
during the course of such arbitration, settled their refrained from disclosing such
dispute, they may request of the arbitrators that such disqualifications or of any other misbehavior
settlement be embodied in an award which shall be by which the rights of any party have been
signed by the arbitrators. No arbitrator shall act as a materially prejudiced; or
mediator in any proceeding in which he is acting as
arbitrator; and all negotiations towards settlement of (d) That the arbitrators exceeded their
the dispute must take place without the presence of powers, or so imperfectly executed them,
the arbitrators. that a mutual, final and definite award upon
the subject matter submitted to them was
The arbitrators shall have the power to decide only not made.
those matters which have been submitted to them.
The terms of the award shall be confined to such Where an award is vacated, the court, in its
disputes. discretion, may direct a new hearing either before
the same arbitrators or before a new arbitrator or
The arbitrators shall have the power to assess in arbitrators to be chosen in the manner provided in
their award the expenses of any party against the submission or contract for the selection of the
another party, when such assessment shall be original arbitrator or arbitrators, and any provision
deemed necessary. limiting the time in which the arbitrators may make a
decision shall be deemed applicable to the new
arbitration and to commence from the date of the
Section 21. Fees of arbitration. - The fees of the court's order.
arbitrators shall be fifty pesos per day unless the
parties agree otherwise in writing prior to the
arbitration. Where the court vacates an award, costs, not
exceeding fifty pesos and disbursements may be
awarded to the prevailing party and the payment
Section 22. Arbitration deemed a special thereof may be enforced in like manner as the
proceeding. - Arbitration under a contract or payment of costs upon the motion in an action.
submission shall be deemed a special proceeding, of
which the court specified in the contract or
submission, or if none be specified, the Court of First Section 25. Grounds for modifying or correcting
award. - In any one of the following cases, the court
must make an order modifying or correcting the (b) A verified of the award.
award, upon the application of any party to the
controversy which was arbitrated: (c) Each notice, affidavit, or other paper used
upon the application to confirm, modify,
(a) Where there was an evident correct or vacate such award, and a copy of
miscalculation of figures, or an evident each of the court upon such application.
mistake in the description of any person,
thing or property referred to in the award; or The judgment shall be docketed as if it were
rendered in an action.
(b) Where the arbitrators have awarded upon
a matter not submitted to them, not affecting The judgment so entered shall have the same force
the merits of the decision upon the matter and effect in all respects, as, and be subject to all the
submitted; or provisions relating to, a judgment in an action; and it
may be enforced as if it had been rendered in the
(c) Where the award is imperfect in a matter court in which it is entered.
of form not affecting the merits of the
controversy, and if it had been a Section 29. Appeals. - An appeal may be taken from
commissioner's report, the defect could have an order made in a proceeding under this Act, or
been amended or disregarded by the court. from a judgment entered upon an award through
certiorari proceedings, but such appeals shall be
The order may modify and correct the award so as to limited to questions of law. The proceedings upon
effect the intent thereof and promote justice between such an appeal, including the judgment thereon shall
the parties. be governed by the Rules of Court in so far as they
are applicable.
Section 26. Motion to vacate, modify or correct
award: when made. - Notice of a motion to vacate, Section 30. Death of party. - Where a party dies
modify or correct the award must be served upon the after making a submission or a contract to arbitrate
adverse party or his counsel within thirty days after as prescribed in this Act, the proceedings may be
award is filed or delivered, as prescribed by law for begun or continued upon the application of, or notice
the service upon an attorney in an action. to, his executor or administrator, or temporary
administrator of his estate. In any such case, the
Section 27. Judgment. - Upon the granting of an court may issue an order extending the time within
order confirming, modifying or correcting an award, which notice of a motion to confirm, vacate, modify
judgment may be entered in conformity therewith in or correct an award must be served. Upon confirming
the court wherein said application was filed. Costs of an award, where a party has died since it was filed or
the application and the proceedings subsequent delivered, the court must enter judgment in the
thereto may be awarded by the court in its discretion. name of the original party; and the proceedings
If awarded, the amount thereof must be included in thereupon are the same as where a party dies after a
the judgment. verdict.

Section 28. Papers to accompany motion to Section 31. Repealing clause. - The provisions of
confirm, modify, correct, or vacate award. - The party chapters one and two, Title XIV, of the Civil Code
moving for an order confirming, modifying, shall remain in force. All other laws and parts of laws
correcting, or vacating an award, shall at the time inconsistent with this Act are hereby repealed. If any
that such motion is filed with the court for the entry provision of this Act shall be held invalid the
of judgment thereon also file the following papers remainder that shall not be affected thereby.
with the Clerk of Court;
Section 32. Effectivity. - This Act shall take effect six
(a) The submission, or contract to arbitrate; months after its approval.
the appointment of the arbitrator or
arbitrators; and each written extension of the Approved: June 19, 1953
time, if any, within which to make the award.