COMPROMISES

CIVIL CODE PROVISIONS

Article 2028
WHAT IS A COMPROMISE?

 A compromise is a contract
whereby the parties, by making
reciprocal concessions, avoid a
litigation or put an end to one
already commenced.

2
The court shall
endeavor to persuade
the litigants in a civil
case to agree upon
some fair compromise Article 2029

3
Every civil action or proceeding shall be
suspended:
(1) If willingness to discuss a possible
compromise is expressed by one or both parties;
or
(2) If it appears that one of the parties,
before the commencement of the action or
proceeding, offered to discuss a possible
compromise but the other party refused the
offer.
The duration and terms of the suspension of the
civil action or proceeding and similar matters
shall be governed by such provisions of the rules Article 2030
of court as the Supreme Court shall promulgate.
Said rules of court shall likewise provide for the
appointment and duties of amicable
compounders. (n)
Article 2031, 2032, 2033
 Article 2031. The courts may mitigate
the damages to be paid by the losing
party who has shown a sincere desire
for a compromise.
 PALMARES vs CA GR 126490
Petitioner signed as co-maker in a loan. A promissory note was executed whereby she acknowledged her joint and
several (solidary) liability with the principal, that the creditor may demand payment in case of default, and that she fully
understood the contents thereof. Petitioner, when informed that the debtors defaulted, requested that creditor try to
collect from her principal first and offered to settle the obligation in case the creditor fails to collect. The balance was
13,700 but on compounded interest of 6% per annum for every 30 days as stipulated. She also offered a parcel of
land to settle the obligation which the creditor refused. Thereafter, a complaint was filed against petitioner to the
exclusion of the principal debtors. Again petitioner offered to pay P30,000.00 but the amount offered was way below
the amount computed. The trial court dismissed the complaint and ruled that the complaint against the petitioner
amounted to a discharge of a prior party, that the offer to pay made by petitioner who is secondarily liable to the
instrument discharged petitioner. The Court of Appeals, reversed the decision. Petioner argued that the Court of
Appeals gravely erred in awarding the amount of P2,745,483.39 in favor of private respondent when, the outstanding
balance of the loan is only P13,700.00. Where the interest charged on the loan is exorbitant, iniquitous or
unconscionable, and the obligation has been partially complied with, the court may equitable reduce the penalty on
grounds of substantial justice. More importantly, respondent corporation never refuted petitioner's allegation that
immediately after the loan matured, she informed said respondent of her desire to settle the obligation. The court
should, therefore, mitigate the damages to be paid since petitioner has shown a sincere desire for a
compromise.
 Issue: WON the court can reduce the damages to be paid?
 Ruling: Yes, the court can reduce the damages.
It must be remembered that from the principal loan of P30,000.00, the amount of P16,300.00 had
already been paid even before the filing of the present case. Article 1229 of the Civil Code provides
that the court shall equitably reduce the penalty when the principal obligation has been partly or
irregularly complied with by the debtor. And, even if there has been no performance, the penalty may
also be reduced if it is iniquitous or leonine.
In a case previously decided by this Court which likewise involved private respondent M.B. Lending
Corporation, and which is substantially on all fours with the one at bar, we decided to eliminate
altogether the penalty interest for being excessive and unwarranted. The penalty interest of 3% per
month being imposed on petitioner should similarly be eliminated.
Article 2031. The courts may mitigate the damages to be paid by the losing party who has shown a
sincere desire for a compromise.
 Article 2032. The court's approval is
necessary in compromises entered into
by guardians, parents, absentee's
representatives, and administrators or
executors of decedent's estates.
 People V. Verano GR L-15805
A truck under Mindanao Bus Company driven by Verano met an accident. 1 died and 23
were injured as passengers of said truck. On various dates after the accident, the
Mindanao Bus Company paid the victims certain sums of money and all of them including
the heirs of the deceased Dominador Paras who executed a “Deed of Waiver of
Renunciation of All Right to Ask Damages”, waived and/or renounced their rights to
recover damages. Verano was subsequently charged before the CFI of Lanao, for
Homicide with multiple physical injuries, thru reckless imprudence. Defendant contested
the propriety or legality of the indemnity; that the civil liability arising from the offense had
already been erased, the heirs of the deceased having waived and renounced such right
upon payment to them by the Mindanao Bus Company P3,000.00.
 Issue: Whether or not such waiver may be made in behalf of the minor heirs by their mother, who is
not their judicial guardian?
 Ruling: It should, however, be noted that the waiver in question was signed by the victim's widow on
her behalf and "in the name of my being their (the minor children's) mother and guardian" (par. 1).
While under Article 320 of the new Civil Code, the widow (Mrs. Paras) is the legal administratrix of the
property pertaining to the children under parental authority, said article gave her no authority, as
such legal administratrix, to compromise their claims for indemnity arising from their father's
death, "for a compromise has always been deemed equivalent to an alienation (transigere est
alienare) and is an act of strict ownership that goes beyond mere administration" (Visaya, et al. vs.
Suguitan, et al., G.R. No. L-8300, November 13, 1955). Moreover, the court's approval, necessary in
compromise entered into by guardians or parents (Article 2032, New Civil Code), is wanting in the
case at bar. In view hereof, and considering that of the P5,000.00 indemnity awarded by the trial
court, only the sum of P3,000.00 was paid pursuant to the compromise, it would seem that the heirs
of the deceased Dominador Paras were still entitled to the sum of P2,000.00.
 Article 2033. Juridical persons may
compromise only in the form and with
the requisites which may be necessary
to alienate their property.
 PARAISO INTERNATIONAL PROPERTIES, INC., vs. COURT OF
APPEALS and PEOPLE'S HOUSING LAND CORPORATION
Parties submitted to the appellate court a 6-page undated Compromise Agreement amicably settling all their pending cases.
The parties also submitted to the appellate court, as "Annex A" of the Compromise Agreement, a 2-page undated Deed of
Assignment executed by petitioner, represented by Saito, transferring to Nonoda and Belgica all the shares of stocks, paid-
up, subscription rights and interests therein, including the right to represent the corporation in the pending cases. Saito
signed the deed as the representative of the outgoing management of petitioner, while Nonoda and Belgica, affixed their
signatures as the assignees and as the representatives of petitioner's new management. Also was submitted to the CA as
"Annexes B and C" of the Compromise Agreement were, respectively, the Secretary's Certificate confirming that the
petitioner's board of directors authorized Saito to negotiate, sign, endorse and deliver the Compromise Agreement to the
respondent; and the Secretary's Certificate proving that respondent's board of directors authorized J. Leviste and Atty. Avila
to enter into and execute a compromise agreement with petitioner.
Perceptive of the apparent formal defects in the agreement and the deed, the CA resolved to direct respondent to inform the
court why the Compromise Agreement and the Deed of Assignment were undated; why there was no signature of the
authorized representative of the new management; whether the signature/initial of the one representing respondent was that
of J. Leviste; and why the acknowledgement in the Deed of Assignment was crossed out.
As two years passed without any compliance with the said directive, the CA, reiterated the directive for respondent’s counsel
to comply with the said resolution. Thereafter, CA disapproved the compromise agreement for failure of respondent to
comply.
 Issue: WON the CA gravely abused its discretion when it disapproved the compromise
agreement?
 Ruling: Yes, the CA gravely abused its discretion in disapproving the compromise
agreement for the simple reason that respondent did not comply with the CA's resolutions
requiring it to explain the apparent formal defects in the agreement. The Court notes that
the appellate court unnecessarily focused its attention on the defects in the form of the
compromise agreement when these flaws in formality do not go into the validity of the
parties' contract, and, more importantly, when none of the parties assails its due execution.
To elucidate, the absence of a specific date does not adversely affect the agreement considering
that the date of execution is not an essential element of a contract. A compromise agreement is
essentially a contract perfected by mere consent, the latter being manifested by the meeting of the
offer and the acceptance upon the thing and the cause which are to constitute the contract. The CA
should have allowed greater laxity in scrutinizing the compromise agreement, not only
 because the absence of a specific date is a mere formal defect, but also because the
signatories to the compromise indicated the date when they signed the agreement
beside their signatures. These signatories are also sufficiently authorized to enter into a
compromise by the respective board of directors of the petitioner and the respondent. It
is not amiss to state at this point that in National Commercial Bank of Saudi Arabia v.
Court of Appeals, we approved an undated compromise agreement.
 Article 2033. Juridical persons may compromise only in the form and with the requisites
which may be necessary to alienate their property.
Art. 2034. There may be a compromise upon the civil liability arising from an offense, but such
compromise shall not extinguish the public action for the imposition of the legal penalty.

General rule: No compromise on Criminal Aspect

Exception: crimes involving chastity and violations of the Internal Revenue Code.
Important thing to remember:

In a compromise or a waiver of the civil aspect of the case, the restriction imposed by law
is that it must be entered into before or during litigation, never after final judgment.

In criminal case, the compromise entered into between the parties must be made PRIOR to
the filing of the information in court. Before the complaint reaches the office of the Fiscal,
the Fiscal’s consent to the compromise is not required. If compromise is entered into after
the complaint reaches the office of the Fiscal, but PRIOR to the filing of the information in
court, the consent of Fiscal is required. AFTER the filing of the information in court, there
can be no COMPROMISE, with or without the consent of the Fiscal. (People v.
Magdaluyo, L-16236, Apr. 20, 1961).
Art. 2035. No compromise upon the following
questions:

● (1) The civil status of persons;

● (2) The validity of a marriage or a legal
separation;
● (3) Any ground for legal separation;
● (4) Future support;
● (5) The jurisdiction of courts;
● (6) Future legitime.
 Art. 2036. A compromise comprises only those objects which are
definitely stated therein, or which by necessary implication from its
terms should be deemed to have been included in the same.

A general renunciation of rights is understood to refer only to those

that are connected with the dispute which was the subject of the
compromise.
What a Compromise Can Deal With

(a) those objects definitely stated therein

(b) those included implicitly — according to the terms stated.
Compromises & Arbitrations

Article 2037-2039
 A compromise has upon the parties the
effect and authority of res judicata; but
Article 2037 there shall be no execution except in
compliance with a judicial compromise.
Article 2037
Sajona vs Sheriff, L-5603, August 24, 1954

 a compromise, being a contract, has the effect of res judicata only if there has been
no vitiated consent
 a judgment of compromise has the effect of res judicata on the parties and should
not be disturbed except for vices of consent or forgery

Marquez vs Marquez 73 Phil 74

 if a compromise is approved by the court, a stipulation therein is considered a court

order, and if not complied with, the non-performance may be considered contempt of
court
 the court, although, had power to enforce its judgment founded on the compromise, it
can so enforce it only in the very terms of such compromise w/o in the least altering or
modifying them, otherwise the proper procedure would be an independent action
Article 2037

Tria vs Lirag, L-13994, April 29, 1961

 A compromise agreement is not merely a contract which may be enforced by ordinary

action for specific performance but is a part and parcel of the judgment and may
therefore be enforced as such, by writ of execution

Master Tours & Travel Corp vs Court of Appeals, 210 SCRA 321, 1993

 Judgment on compromise is not generally appealable and may therefore be

immediately executory, unless a motion is filed to set aside the error on the ground of
vitiated consent, in which case an appeal may be taken from a court order denying the
motion to set aside the compromise
Article 2037

Jacinto vs Montesa, L-23098, Feb 28, 1967

 A judgment on compromise is void when it is entered into by an attorney without

specific authority from the client. Such judgment may be impugned and its execution
restrained in any proceeding by the party against whom it is sought to be enforced.

Bobis vs Provincial Sheriff of Camarines Norte, GR No. 29838, March 18, 1983

 When the writ of execution is issued to enforce as judgment based on a compromise

agreement, the writ cannot be enforced against the person although a party to a case,
was not a party to the agreement.
 A compromise in which there is mistake,

Article 2038 fraud, violence, intimidation, undue

influence or falsity of documents is subject
to the provisions of Article of this Code.
Article 2038
Article 1330

“A contract where consent is Velayo vs Court of Appeals, et al, 107 Phil 587
given through mistake, violence
or intimidation, undue influence  In case where there exist an invalid stipulation
or fraud is voidable.” in the compromise agreement entered into by
the parties, such invalid stipulations does not
render void the whole agreement if it is
Saminiada vs Mata, 92 Phil 426 independent of the rest of the terms and can
be separated therefrom without doing violence
 When consent is vitiated through any of the vices to the manifest intention of the parties.
of consent mentioned in the article, the
agreement may be annulled upon proof of the
alleged vitiated consent.
 If a party consents to a compromise because of
an erroneous report submitted to the court, the
agreement may be set aside even if the
compromised was approved by the court.
 When the parties compromise generally on all
differences which they might have with each other, the
discovery of documents referring to one or more but not to
all of the questions settled shall not itself be a cause for
annulment or rescission of the compromise, unless said
documents have been concealed by one of the parties.

Article 2039 But the compromise may be annulled or rescinded if it

refers only to one thing to which one of the parties has no
right, as shown by the newly discovered documents.
 CIVIL CODE
PROVISIONS
ARTICLES 2040-2042
ARTICLE 2040
If after a litigation has been decided by a final judgment, a
compromise should be agreed upon, either or both parties
being unaware of the existence of the final judgment, the
compromise may be rescinded.
 
Ignorance of a judgment which may be revoked or set aside
is not a valid ground for attacking a compromise.
 
ARTICLE 2040
(1) Compromise Entered Into in Ignorance of
a Final Judgment
A compromise in a case like this may be
RESCINDED. The ignorance of the judgment
may have been on the part of one party or on
the part of both parties.
ARTICLE 2040
(2) Reason for Allowing a Rescission
Here, there was no more need for the compromise in view
of the existence of the final judgments. (Rovero v. Amparo).

(3) Effect of Appeal

If a judgment is rendered but appealed, there can in the
meantime be a compromise. (Artayo v. Azaña)  
ARTICLE 2041
If one of the parties fails or refuses to abide by the
compromise, the other party may either enforce the
compromise or regard it as rescinded and insist upon his
original demand.
 ARTICLE 2041
(1) Effect if Compromise Agreement Is Not Fulfilled
A and B had a controversy, settled eventually by a compromise. If B fails to carry out the
terms thereof, A can have a choice:
(a) Enforce the compromise; or
City of Zamboanga v. Mandi
Ignorance of a judgment which may be revoked or set aside is not a valid ground for
attacking a compromise. Julian was well within his right in seeking the enforcement of
the compromise through a petition for mandamus on the strength of Art. 2041 of the
Civil Code.
 ARTICLE 2041
(b) Rescind it and insist on his original demand.
In either case, damages may be recovered if there should be additional injury caused by
failure to abide by the terms of the compromise.
Barreras, et al. v. Hon. Garcia, et al.
While the approval of the compromise agreement by the court dismisses the case, or
considers it closed, the law, however, anticipates situations wherein the parties refuse to
comply with the terms of a compromise agreement.
Clearly, therefore, when a party fails or refuses to abide by the compromise, the other party
may either enforce the compromise by a writ of execution, or regard it as rescinded and insist
upon his original demand. Non-fulfillment of the terms of the compromise justifies execution.
ARTICLE 2041
(2) No Necessity for Judicial Rescission
Under this Article, there is no necessity for a judicial declaration of
rescission, for the party aggrieved may “regard” the compromise
agreement as already “rescinded.” (Leonor v. Sycip)
(3) No Rescission After Benefits are Enjoyed
The Court has consistently ruled that a party to a compromise cannot
ask for a rescission after it has enjoyed its benefits. (Republic v.
Sandiganbayan)
 ARTICLE 2042
The same persons who may enter
into a compromise may submit their
controversies to one or more
arbitrators for decision.
 ARTICLE 2042
(1)‘Arbitration’ Defined
Arbitration is the process whereby by
mutual agreement a third party decides a
dispute between two persons. (Mindanao
Portland Cement Corp. v. McDonough)
 ARTICLE 2042
Mindanao Portland Cement Corp. v. McDonough
The court cannot decide on the dispute on the merits. What it can only do that in this
summary proceeding to enforce the arbitration proviso, is to determine whether or not
the parties should really go to the arbitrators. Arguments on the merits must not be
addressed to the court, but to the arbitrators.
Bengson v. Chan
The case will not be dismissed although there was no prior resort to arbitration. This is
so because under the arbitration law, in a case like this, what the court should do is to
refer the matter to the arbitrators who are supposed to be selected by the parties.
 ARTICLE 2042
Allied Banking Corp. v. CA & BPI
PCHC cannot invoke the jurisdiction of the trial courts without a prior recourse to the
PCHC Arbitration Committee.
Reason:
Having given its free and voluntary consent to the arbitration clause, petitioner cannot
unilaterally take it back according to its whim. In the world of commerce, especially in the
fi eld of banking, the promised word is crucial. Once given, it may no longer be broken.
Arbitration as an alternative method of dispute resolution is encouraged by the Supreme
Court. Aside from unclogging judicial dockets, it also hastens solutions especially of
commercial disputes.
 ARTICLE 2042
LM Power Engineering Corp. v. Capitol Industrial Construction Groups, Inc.

In any event, the inclusion of an arbitration clause in a contract does not ipso facto divest the
courts of jurisdiction to pass upon the fi ndings of arbitral bodies, because awards are still
judicially reviewable under certain conditions. And because there was no prior referral to
arbitration, the Supreme Court affirmed the decision of the Court of Appeals directing the
parties to refer their dispute for arbitration in accordance with their contract. Be that as it
may, alternative dispute resolution (ADR) methods — like arbitration, mediation, negotiation,
and conciliation — are encouraged by the Supreme Court. By enabling parties to resolve
their disputes amicably, they provide solutions that are less consuming, less tedious, less
confrontational, and more productive of goodwill and lasting relationship.
 ARTICLE 2042
(2) Distinguished from ‘Compromise’
In arbitration, a third party gives the solution; in
compromise, the decision is arrived at by the parties
concerned.
(3) Special Law on Arbitration
Rep. Act 876 or "The Arbitration Law” provides for
arbitration.
THANK YOU AND GOD BLESS!
PHILIPPINE MINING
ARBITRATION
WHAT IS THE NATURE AND IMPORTANCE OF THE MINING INDUSTRY IN YOUR COUNTRY?

The Philippines is rich in mineral resources and the mining industry plays a significant role in the country’s
economy. According to the Philippine Department of Environment and Natural Resources (DENR):
 the large reserves of various kinds of minerals in the country puts the Philippines in the top five most
mineral-rich countries in the world, third in gold reserves, fourth in copper, and fifth in nickel;
 around 9 million hectares, or 30 per cent of the country’s total land area of 30 million hectares, are
believed to contain important metallic mineral deposits and around 5 million hectares are also known to
be potential sites for non-metallic mineral reserves; and
 •the country’s offshore areas, which cover around 2.2 million km2, also contain placer minerals,
including gold, magnetite and chromite-bearing sands as well as aggregate resources like sandand
gravel, decorative stones, and polymetallic sulphide deposits
(seewww.denr.gov.ph/index.php/component/content/article/16.html).
HOW IS THE MINING INDUSTRY REGULATED?

The mining industry is regulated through laws and

regulations issued by the national government. Local
government units also issue ordinances that may affect
mining activities within their respective jurisdictions.
Mining companies listed on the Philippine Stock
Exchange must also comply with the rules of the
exchange.
WHAT ARE THE PRINCIPAL LAWS THAT REGULATE THE
MINING INDUSTRY?

RA 7076 - Small Scale Mining Act 1991

RA 7942 - Philippine Mining Act 1995
DENR AO No. 2010-21 - Mining Act IRR
OTHER SOURCES OF LAW AFFECTING THE MINING INDUSTRY

 RA. No. 6969 - Toxoc Substance and hazardous and Nuclear Waste Control
Act
 RA No. 8749 - The Clean Air Act
 RA No. 9003- The Ecological Solid Waste Management Act
 RA No. 8371- Indigenous People’s Rights Act
 RA No. 7076- People’s Small-Scale Mining Act of 1991
 Executive Order No. 79- Institutionalizing and Implementing Reforms in
the Philippine Mining Sector, Providing Policies and Guidelines to Ensure
Environmental Protection and Responsible Mining in the Utilization of
Mineral Resources
WHAT ARE THE PRINCIPAL REGULATORY BODIES THAT ADMINISTER
THOSE LAWS?
 The DENR is the primary government agency responsible for the regulation of
the mining industry. The Mines and Geosciences Bureau (MGB), a line bureau of
the DENR, has direct charge of the administration and disposition of mineral lands
and mineral resources. The MGB also recommends to the DENR Secretary the
granting of exploration permits and/or mineral agreements to duly qualified persons.
Local government units may also issue quarry permits to duly qualified persons. The
MGB and the Environmental Management Bureau (EMB), another line bureau of the
DENR, monitor the compliance of mining companies with their respective
obligations under applicable environmental laws.
SMALL SCALE MINING ACT 1991

Common Characteristics:
Extraction of minerals that
relies heavily on Manual labor
using simple implements and
methods and does not use
explosives nor heavy mining
equipment
 EVOLUTION OF SMALL-SCALE MINING LAWS

PD No. 581 PD No. 1150 PD No. 1899 RA No. 7076

Prescribing Amending PD No. 581 Establishing Small-Scale The Small-Scale Mining
heavier penalty and Regulating Planning Mining as a New Act
for high grading or Sluicing for Gold
Dimension in Mineral Creating a People’s
from a mining Inside Mining Claims or
claim in Public or Private Land
Development Small-Scale Mining
(Nov. 13, 1974) (June 6, 1977) (January 20, 1984) Program
(June 27, 1991)
 SMALL SCALE MINING ACT 1991
SECTION 24. Provincial/City Mining Regulatory Board. — There is hereby created under the direct supervision and
control of the Secretary a provincial/city mining regulatory board, herein called the Board, which shall be the
implementing agency of the Department, and shall exercise the following powers and functions, subject to review by
the Secretary:

(a) Declare and segregate existing gold-rush areas for small- scale mining;
(b) Reserve future gold and other mining areas for small-scale mining;
(c) Award contracts to small-scale miners;
(d) Formulate and implement rules and regulations related to
small-scale mining;
(e) Settle disputes, conflicts or litigations over conflicting claims
within a people's small-scale mining area, an area that is declared a small-mining; and
(f) Perform such other functions as may be necessary to achieve
the goals and objectives of this Act.
 Section 25. Composition of the Provincial/City Mining Regulatory Board. – The Board shall be
composed of:
 the Department of Environment and Natural Resources representative as Chairman;
 and the representative of the governor or city mayor, as the representative of the governor or city
mayor, as the case may be,
 one (1) small scale mining representative,
 one (1) big-scale mining representative, and
 the representative from a nongovernment organization who shall come from an environmental group,
as members.
 The representatives from the private sector shall be nominated by their respective organizations and
appointed by the Department regional director. The Department shall provide the staff support to the
Board.
 RA 7942 - PHILIPPINE MINING ACT 1995
In March 1995, President Fidel Ramos signed into law the Philippine
Mining Act (Republic Act No. 7942) which was designed to revive the
mining industry and attract more foreign investment by defining the
agreements for mineral exploitation, and provide the requirements for
acquiring mining rights.
It governs the exploration, development, processing and utilization of
mineral resources in the Philippines. It is expected to protect the national
interest by ensuring that the benefits from mining are shared with the
government through the Mineral Production Sharing Agreement (MPSA).
“SECTION 77 Panel of Arbitrators.

There shall be a panel of arbitrators in the regional office of the

Department composed of three (3) members, two (2) of whom
must be members of the Philippine Bar in good standing and
one a licensed mining engineer or a professional in a related
field, and duly designated by the Secretary as recommended by
the Mines and Geosciences Bureau Director.
 Within 30 working days, after the submission of the case by the parties for decision,
the panel shall have exclusive and original jurisdiction to hear and decide on the
following:
 (a) Disputes involving rights to mining areas;
 (b) Disputes involving mineral agreements or permits;
 (c) Disputes involving surface owners, occupants and claimholders/concessionaires;
and
 (d) Disputes pending before the Bureau and the Department at the date of the
effectivity of this Act
IS THERE A SYSTEM OF APPEALS AGAINST ADMINISTRATIVE DECISIONS
IN TERMS OF RELEVANT MINING LEGISLATIONS?

Under the Philippine Mining Act, a Panel of Arbitrators in the

regional Office of the DENR has excusive and original jurisdiction over
disputes involving rights to mining areas, mineral agreements or
permits and disputes between and among surface owners, occupants
and claimholders or concessionaries. The Panel’s decision or order is
appealable to the MAB.
SECTION 78. Appellate Jurisdiction.
The decision or order of the panel of arbitrators may be
appealed by the party not satisfied thereto to the Mines
Adjudication Board within fifteen (15) days from receipt thereof
which must decide the case within thirty (30) days from
submission thereof for decision.
SECTION 79. MINES ADJUDICATION BOARD

The Mines Adjudication Board shall be composed

of three (3) members. The Secretary shall be the
chairman with the Director of the Mines and
Geosciences Bureau and the Undersecretary for
Operations of the Department as members thereof.
THE BOARD SHALL HAVE THE FOLLOWING POWERS AND FUNCTIONS:

(a) To promulgate rules and regulations governing the hearing and disposition of
cases before it, as well as those pertaining to its internal functions, and such rules
and regulations as may be necessary to carry out its functions;

(b) To administer oaths, summon the parties to a controversy, issue subpoenas

requiring the attendance and testimony of witnesses or the production of such
books, papers, contracts, records, statement of accounts, agreements, and other
documents as may be material to a just determination of the matter under
investigation, and to testify in any investigation or hearing conducted in pursuance
of this Act;
c) To conduct hearings on all matters within its jurisdiction, proceed to hear and determine the
disputes in the absence of any party thereto who has been summoned or served with notice to
appear, conduct its proceedings or any part thereof in public or in private, adjourn its hearing at
any time and place, refer technical matters or accounts to an expert and to accept his report as
evidence after hearing of the parties upon due notice, direct parties to be joined in or excluded
from the proceedings, correct, amend, or waive any error, defect or irregularity, whether in
substance or in form, give all such directions as it may deem necessary or expedient in the
determination of the dispute before it, and dismiss the mining dispute as part thereof, where it is
trivial or where further proceedings by the Board are not necessary or desirable;

1. To hold any person in contempt, directly or indirectly, and impose appropriate penalties
therefor; and
2. To enjoin any or all acts involving or arising from any case pending before it which, if not
restrained forthwith, may cause grave or irreparable damage to any of the parties to the case or
seriously affect social and economic stability.
In any proceeding before the Board, the rules of evidence
prevailing in courts of law or equity shall not be controlling and it
is the spirit and intention of this Act that shall govern. The Board
shall use every and all reasonable means to ascertain the facts in
each case speedily and objectively and without regard to
technicalities of law or procedure, all in the interest of due process.
In any proceeding before the Board, the parties may be represented
by legal counsel. The findings of fact of the Board shall be
conclusive and binding on the parties and its decision or order shall
be final and executory.
SOME DECIDED CASES:
Republic vs. Marcopper Mining Corporation

“The power of the mines regional director does not foreclose PAB’s (pollution
adjudication board) authority to determine and act on complaints filed before it—
while the mines regional director has express administrative and regulatory powers
over mining operations and installations, it has no adjudicative powers over
complaints for violation of pollution control statutes and regulations.”

“The scope of authority of the Panel of Arbitrators and the Mines Adjudication
Board conferred by RA 7942 clearly exclude adjudicative responsibility over
pollution cases. Nowhere is there vested any authority to adjudicate cases
involving violations of pollution laws and regulations in general.
Bernal also cites the case of Subanen farmers and women organizations who opposed
the application of mining permits in Zamboanga del Sur. The opposition was based on
the fact that the application covered a watershed and old growth forests. They also
pointed out that the application was written in English, and not generally understood
by the local communities. The Panel dismissed the opposition, claiming simply that
these matters were not under their jurisdiction. The Panel’s decision was mailed to the
oppositors six months after it was rendered. A Motion for Reconsideration of the
decision was filed, but which the Panel claimed they never received—despite contrary
evidence in their own records (Id., at 47-48).

In both cases the local communities did not resort to legal assistance until after their
own initiatives at participating in the application processes ran aground
DENR AO NO. 2010-21 - MINING ACT IRR

“Consolidated Department of Environment and Natural Resources

Administrative Order for the Implementing Rules and Regulations
of Republic Act No. 7942, Otherwise known as the Philippine
Mining Act of 1995”
SECTION 20 1. CREATION OF PANEL OF ARBITRATORS
There shall be a Panel of Arbitrators in the Legal Staff of the Regional Office
composed of three (3) members, two (2) of whom must be members of the
Philippine Bar in good standing and one (1) a licensed Mining Engineer, Geologist
or a professional in a related field all duly designated by the Secretary as
recommended by the Director. Those designated as members of the Panel shall
serve as such in addition to their work in the Department without additional
compensation. The Regional Office shall provide administrative support and
structure to the Panel of Arbitrators.
As much as practicable, the members of the Panel shall come from the different
bureaus of the Department in the region. The presiding officer thereof shall be
selected by the drawing of lots. His/her tenure as presiding officer shall be on a
yearly basis. The members of the Panel shall perform their duties and obligations
in hearing and deciding cases until their designation is withdrawn or revoked by
the Secretary.
SECTION 20
2. JURISDICTION OF PANEL OF ARBITRATORS

The Panel of Arbitrators shall have exclusive and original jurisdiction to hear and decide on the
following:
a. Disputes involving rights to mining areas;
b. Disputes involving Mineral Agreements, FTAAs or Permits;
c. Disputes involving surface owners, occupants and claimholders/concessionaires; and
d. Disputes pending before the Regional Office and the Department at the date of the effectivity of
the Act: Provided, That appealed cases before the Department shall be under the jurisdiction of the
Mines Adjudication Board.
The rules and regulations governing the litigation and disposition of cases before the Panel of
Arbitrators shall be promulgated by the Mines Adjudication Board as provided for in Section 207
hereof: Provided, That cases presently pending before the different Panels may proceed in accordance
with the rules promulgated thereby.
Section 203. Filing of Adverse Claims/ Conflicts/Oppositions
-any adverse claims, protest or opposition specified in said Sections may
also be filed directly with the Panel of Arbitrators within the prescribed periods
for filing such claim, protest or opposition as specified in said Sections.

Section 204. Substantial Requirements for Adverse Claims, Protests and

Oppositions
-No adverse claim, protest or opposition involving mining rights shall be
accepted for filing unless verified and accompanied by the prescribed docket fee
and proof of services to the respondent(s), either personally or by registered
mail: Provided, That the requirement for the payment of docket fees shall not be
imposed on pauper litigants.
Section 205. Period to Decide the Case
-The Panel shall render its decision within thirty (30) days, after the submission
of the case by the parties for decision.

Section 206. Execution and Finality of Decision

-The decision of the Panel of Arbitrators shall become final and executory after
the lapse of fifteen (15) days from receipt of the notice of decision by the aggrieved
party, unless the latter appeals to the Mines Adjudication Board within the same
period. Where an appeal is filed, the Panel of Arbitrators concerned shall transmit the
notice thereof together with the records of the case within five (5) days to the Mines
Adjudication Board.
Upon the finality of the decision of the Panel of
Arbitrators, no appeal having taken therefrom, the
Chairman of the Panel of Arbitrators shall issue a writ of
execution directing the Sheriff of the Regional Trial
Courts, with jurisdiction over the area, to implement and
execute the writ.
Section 207. Mines Adjudication Board
There shall be a Mines Adjudication Board composed of three (3)
members. The Secretary shall be the Chairman with the Director and
Undersecretary for Field Operations of the Department as members thereof.
The Board shall promulgate its own internal rules and regulations
governing its administration and disposition of appealed cases.
The Board shall promulgate the rules and regulations governing the
following:
 a. Litigation and disposition of mining cases before the Panel; and
 b. Administration and disposition of appealed cases before the Board.
SECTION 211. PETITION FOR REVIEW BY
CERTIORARI

The decision of the Board may be reviewed by filing a petition for review
with the Supreme Court within thirty (30) days from receipt of the order or
decision of the Board.

However, the SC has already invalidated such provision in Carpio v. Sulu

Resources Development Corp., 387 SCRA 128 (2002) ruling that a decision
of the MAB must first be appealed to the Court of Appeals (CA) under
Rule 43 of the Rules of Court, before recourse to this Court may be had.
 Celestial Nickel Mining Exploration Corporation vs. Macroasia Corporation (2007)
“These provisions lead us to conclude that the power of the POA to resolve any adverse
claim, opposition, or protest relative to mining rights under Sec. 77(a) of RA 7942 is
confined only to adverse claims, conflicts and oppositions relating to applications for the
grant of mineral rights. POA’s jurisdiction is confined only to resolutions of such adverse
claims, conflicts and oppositions and it has no authority to approve or reject said
applications. Such power is vested in the DENR Secretary upon recommendation of the
MGB Director. Clearly, POA’s jurisdiction over “disputes involving rights to mining areas”
has nothing to do with the cancellation of existing mineral agreements.

It is the Department of Environment and Natural Resources (DENR) Secretary, not the
Panel of Arbitrators (POA) of the Mines and Geo-Sciences Bureau (MGB) of the DENR,
who has jurisdiction to cancel existing mineral leases contracts or mineral agreements.”
MGB TO ADOPT ADR RULES FOR MINING CASES

The Mines and Geosciences Bureau (“MGB”) will adopt a two-step Alternative Dispute
Resolution (“ADR”) process, which will include mediation and arbitration, pursuant to
Executive Order No. 97 (Series of 2012) and Department of Environment and Natural
Resources (“DENR”) Administrative Order (“DAO”) No. 2005-18 in re: Adoption of
Alternative Dispute Resolution (“ADR”) Principles and Procedures in the Resolution of
Appropriate Environment and Natural Resources Conflicts.
Section 7 of DAO No. 2005-18 specifically mandates the Panel of Arbitrators (“POA”)
and the Mines Adjudication Board (“MAB”) to “create or modify their respective rules
of procedures, where appropriate, to incorporate ADR principles or steps in
addressing conflicts or hearing cases under their jurisdictions.”
POSSIBLE COVERAGE OF THE ADR

The Legal Division of the MGB has stated that the

ADR will possibly cover:
(1) disputes under the jurisdiction of POA;
(2) compromise settlements during the appellate
stage at the MAB; and
(3) administrative matters handled by MGB.
1. DISPUTES UNDER THE JURISDICTION OF POA 

Under Section 77 of R.A. No. 7942, POA has jurisdiction over the following:
(a) disputes involving rights to mining areas;
(b) disputes involving mineral agreements or permits;
(c) disputes involving surface owners, occupants and claimholders/ concessionaires; and
(d) disputes pending before the MGB and the DENR at the date of the effectivity of R.A.
7942.
In Gonzales vs. Climax Mining Ltd., 452 SCRA 607 (2005), the Supreme Court ruled
that the jurisdiction of POA is limited only to those mining disputes which raise questions of
fact or matters requiring the application of technological knowledge and experience.
A. DISPUTES INVOLVING RIGHTS TO MINING AREAS 
In Celestial Nickel Mining Exploration Corporation v.
Macroasia Corp., 565 PHIL 466 (2007), the Supreme
Court stated that “disputes involving rights to mining areas
refers to any adverse claim, protest, or opposition to an
application for mineral agreement.”
InNarra Nickel vs. Redmont, 722 SCRA 382 (2014), the
Supreme Court said that “one such dispute is an MPSA
(Mineral Production Sharing Agreement) application to
which an adverse claim, protest or opposition is filed by
another interested applicant.
B. DISPUTES INVOLVING MINERAL AGREEMENTS OR PERMITS 
Section 3(ab) of R.A. 7942 defines a mineral agreement as “a contract between the
government and a contractor, involving mineral production-sharing agreement, co-
production agreement, or joint-venture agreement.”

In Olympic Mines and Development Corp. vs. Platinum Group Metals

Corporation, 587 SCRA 624 (2009), the Supreme Court defined “permit” referred to in
Section 77(b) of the Mining Act as pertaining to exploration permit, quarry permit, and
other mining permits recognized in Chapters IV, VIII, and IX of said Act. In this case, the
Supreme Court said that Citinickel Mines and Development Corporation’s complaint
seeking to invalidate the Operating Agreement based on Platinum Group Metals
Corporation’s alleged violation of its terms is a “dispute involving mineral agreements or
permits” under Section 77(b) of R.A. 7942.
C. DISPUTES INVOLVING SURFACE OWNERS, OCCUPANTS AND
CLAIMHOLDERS/ CONCESSIONAIRES 

In Olympic Mines and Development Corp. vs.

Platinum Group Metals Corporation, supra, the
Supreme Court stated that, “Surface-owners,
occupants, and concessionaires refer to owners or
occupants of the real property affected by the
mining activities conducted by the
claim-holders/concessionaires (entities which are
holding mining rights granted by the government).”
2. COMPROMISE SETTLEMENTS DURING THE APPELLATE
STAGE AT THE MAB 
The MAB exercises appellate jurisdiction over the
decisions and orders of the POA in accordance with
Section 78 of R.A. 7942 and appealed cases before the
DENR in accordance with Section 2(d) of Rule III of the
Rules on Pleading, Practice and Procedure before the POA
and MAB. Even at the appellate level, there are instances
when compromises are made between the parties
involved. These compromise settlements may be subject
to ADR.
3. ADMINISTRATIVE MATTERS HANDLED BY MGB 

Administrative matters handled by the MGB

usually involve regulation, compensation and
human rights issues. If these matters are not
settled at the administrative level with MGB,
they may also be subject to ADR.
THE INDIGENOUS PEOPLES’
RIGHTS ACT OF 1997
Republic Act No. 8371
IPRA LAW IN GENERAL
The IPRA recognizes the existence of the indigenous cultural communities or indigenous
peoples (ICCs/IPs) as a distinct sector in Philippine society. It grants these people the
ownership and possession of their ancestral domains and ancestral lands, and defines the
extent of these lands and domains.

Four Bundles of Rights Defined under IPRA:

▰ Right to Ancestral Domains and Lands

▰ Right to Self-Governance and Empowerment
▰ Right to Social Justice and Human Rights
▰ Right to Cultural Integrity
CONFLICT RESOLUTION: WHO
DECIDES?
Many indigenous communities are still governed
by customary laws. Often, a collective of elders
exercises the executive, legislative, judicial
and religious powers within a community,
based on a set of rules founded on reason,
consent, necessity and confirmed by common
usage and dictates of society.
It is the established way of doing things, in a
prescribed form, rite, ritual, routine procedure,
social usage, or unwritten law observed by
indigenous peoples, so that things that are done
contrary to custom and manner of their ancestors
are neither in order nor appear right.
IPRA Law contains several provisions that define how
Customary Law may be applied in settling disputes
involving Indigenous Peoples Rights, as follows:
SECTION 7. Rights to Ancestral Domains. — The rights of ownership
and possession of ICCs/IPs to their ancestral domains shall be
recognized and protected. Such rights shall include:
 
(h) Right to Resolve Conflict — Right to resolve land conflicts in
accordance with customary laws of the area where the land is located,
and only in default thereof shall the complaints be submitted to amicable
settlement and to the Courts of Justice whenever necessary.
 
This provision is supported by Section 1, Rule IX of the Implementing
Rules which states:
 
Section 1. Primacy of Customary Law. All conflicts related to ancestral
domains and lands, involving ICCs/IPs, such as but not limited to
conflicting claims and boundary disputes, shall be resolved by the
concerned parties through the application of customary laws in the area
where the disputed ancestral domain or lands is located.
All conflicts related to the ancestral domains or lands where one of the
parties is a non-ICC/IP or where the dispute could not be resolved
through customary law shall be heard and adjudicated in accordance
with the Rules on Pleadings, Practice and Procedures Before the NCIP
to be adopted hereafter.
SECTION 15. Justice System, Conflict Resolution Institutions, and
Peace Building Processes. — The ICCs/IPs shall have the right to use
their own commonly accepted justice systems, conflict resolution
institutions, peace building processes or mechanisms and other
customary laws and practices within their respective communities and as
may be compatible with the national legal system and with internationally
recognized human rights.
INDIGENOUS Indigenous Peoples may utilize their own justice system
subject to proof of traditional practice within their
community. To the extent compatible with the national
JUSTICE legal system and international human rights
agreements, the methods customarily practiced by the

SYSTEM
indigenous peoples concerned for dealing with offenses
committed by their members shall be respected.
However, there are established limitations, standards or
conditions for the legitimate application of indigenous
justice systems. These include compatibility with the
national justice system, and with internationally
recognized human rights.
 CIVIL CASES
On the same note, customary
laws of the community shall be
applicable to civil cases involving
disputes of IPs belonging to the
CRIMINAL CASES same Ip community.
Under the national law, criminal
penalty is based mainly on the
classical theory that its purpose is
retribution. But among indigenous
peoples, the purpose of customary
law is rectification.
Penalties may be in the form of
cash, animals, ancestral land or
combination of any of these
SECTION 62. Resolution of Conflicts. — In cases of conflicting
interest, where there are adverse claims within the ancestral domains as
delineated in the survey plan, and which can not be resolved, the NCIP
shall hear and decide, after notice to the proper parties, the disputes
arising from the delineation of such ancestral domains: Provided, That if
the dispute is between and/or among ICCs/IPs regarding the traditional
boundaries of their respective ancestral domains, customary process
shall be followed.
The NCIP shall promulgate the necessary rules and regulations to carry
out its adjudicatory functions: Provided, further, That any decision, order,
award or ruling of the NCIP on any ancestral domain dispute or on any
matter pertaining to the application, implementation, enforcement and
interpretation of this Act may be brought for Petition for Review to the
Court of Appeals within fifteen (15) days from receipt of a copy thereof.
CONFLICTS ARISING FROM ADVERSE CLAIMS
WITHIN ANCESTRAL DOMAIN
This action is clearly within the jurisdiction of the NCIP, as expressly provided in IPRA.
It may be availed of whether the adverse claimant is a member of the indigenous
community or not. The qualification that the parties come from the same indigenous
community is material only on the question of applicability of the customary law in
resolving the conflicts.
If the dispute regarding traditional boundaries of ancestral domains is between and
among ICCs, customary laws in the land where the conflict arises shall be observed.
Hence, like any other action under the NCIP, there is a prerequisite that the parties
have exhausted all legal remedies under their customary law
SECTION 63.         Applicable Laws. — Customary laws, traditions and
practices of the ICCs/IPs of the land where the conflict arises shall be
applied first with respect to property rights, claims and ownerships,
hereditary succession and settlement of land disputes. Any doubt or
ambiguity in the application and interpretation of laws shall be resolved
in favor of the ICCs/IPs.
The application of customary law is limited to
disputes concerning property rights or relations
in determining the ownership and extent of the
ancestral domains, where all the parties
involved are members of indigenous peoples,
specifically, of the same indigenous group.
Under the Civil Code, customary laws are
accepted as fact. The Local Government Code
also requires the use of indigenous processes
in order to facilitate an amicable settlement as a
condition precedent for filing actions in court,
similar to the Katarungang Pambarangay
(village level) justice system.
Republic Act No.
8371
AN ACT TO RECOGNIZE, PROTECT AND
PROMOTE THE RIGHTS OF INDIGENOUS
CULTURAL COMMUNITIES/INDIGENOUS
PEOPLES, CREATING A NATIONAL
COMMISSION ON INDIGENOUS PEOPLES,
ESTABLISHING IMPLEMENTING
MECHANISMS, APPROPRIATING FUNDS
THEREFOR, AND FOR OTHER PURPOSES
 Jurisdiction and Procedures for Enforcement of Rights

SECTION 65.   

Primacy of Customary Laws and Practices. — When disputes involve ICCs/IPs,

customary laws and practices shall be used to resolve the dispute.
SECTION 66.    

Jurisdiction of the NCIP. — The NCIP, through its regional offices, shall have
jurisdiction over all claims and disputes involving rights of ICCs/IPs: Provided,
however, That no such dispute shall be brought to the NCIP unless the parties
have exhausted all remedies provided under their customary laws. For this
purpose, a certification shall be issued by the Council of Elders/Leaders who
participated in the attempt to settle the dispute that the same has not been
resolved, which certification shall be a condition precedent to the filing of a
petition with the NCIP.
 Jurisdiction and Procedures for Enforcement of Rights

SECTION 67.        

Appeals to the Court of Appeals. — Decisions of the NCIP shall be

appealable to the Court of Appeals by way of a petition for review.
SECTION 68.      

   Executionof Decisions, Awards, Orders. — Upon expiration of the period

herein provided and no appeal is perfected by any of the contending
parties, the Hearing Officer of the NCIP, on its own initiative or upon
motion by the prevailing party, shall issue a writ of execution requiring
the sheriff or the proper officer to execute final decisions, orders or
awards of the Regional Hearing Officer of the NCIP.
 Quasi-Judicial Powers of the NCIP
SECTION 69.         Quasi-Judicial Powers of the NCIP. — The NCIP shall have the
power and authority:

a) To promulgate rules and regulations governing the

hearing and disposition of cases filed before it as well
as those pertaining to its internal functions and such
rules and regulations as may be necessary to carry
out the purposes of this Act;
 Quasi-Judicial Powers of the NCIP
SECTION 69.         Quasi-Judicial Powers of the NCIP. — The NCIP shall have the power and authority:

b) To administer oaths, summon the parties to a

controversy, issue subpoenas requiring the
attendance and testimony of witnesses or the
production of such books, papers, contracts, records,
agreements and other document of similar nature as
may be material to a just determination of the matter
under investigation or hearing conducted in
pursuance of this Act;
.         Quasi-Judicial Powers of the NCIP

c) To hold any person in contempt, directly or

indirectly, and impose appropriate penalties therefor;
and
d)  To enjoin any or all acts involving or arising from
any case pending before it which, if not restrained
forthwith, may cause grave or irreparable damage to
any of the parties to the case or seriously affect
social or economic activity.
.         Quasi-Judicial Powers of the NCIP
SECTION 70.      

  No Restraining Order or Preliminary Injunction. — No

inferior court of the Philippines shall have jurisdiction
to issue any restraining order or writ of preliminary
injunction against the NCIP or any of its duly
authorized or designated offices in any case, dispute
or controversy arising from, necessary to, or
interpretation of this Act and other pertinent laws
relating to ICCs/IPs and ancestral domains.
THANK
YOU!
for listening!