Resolve Disputes Faster - Why Arbitration Makes Sense

The Philippines remains among the fastest growing Southeast Asian economies in 2017, with upgrades to sovereign investment ratings confirming improvements in the country’s macroeconomic fundamentals. The Philippines ranked 56th in the 2017-2018 Global Competitiveness Index, with an expected 6.7% GDP growth in 2018.

As a result of high economic growth and more international business activities, commercial transactions in the Philippines have become increasingly complex, necessitating careful management of business risks. When deals go sour, business partners often look to the judicial system to resolve their disputes. However, for various reasons, resort to courts may not be the most cost-effective mode of dispute resolution.

The government has been promoting the use of alternative modes of dispute resolution ("ADR"), including arbitration. The government itself has mandated its agencies to include ADR clauses in certain government contracts. The Supreme Court has also issued procedural rules clarifying and limiting court intervention in disputes covered by arbitration agreements.

Commercial arbitration has become more popular over the past decade and is considered a viable alternative to court litigation. Unlike court litigation, commercial arbitration is confidential and generally speedier. Also, parties are generally free to appoint arbitrators who are usually industry experts or experienced industry practitioners.

In appropriate cases, an investor may seek remedies against the government under an investment treaty between the investor's home state and the Philippines. Such remedies usually include investment treaty arbitration. The Philippines is currently a signatory to over 30 investment treaties.

For these reasons, companies need to understand better how arbitration works. This Business Forum will:
1. Provide an overview of commercial arbitration and investment treaty arbitration as modes of
dispute resolution;
2. Offer guidelines on when best to use arbitration as a mode of dispute resolution;
3. Provide tips on drafting effective arbitration clauses for commercial contracts; and
4. Showcase arbitration cases highlighting successes and challenges in the use of arbitration.