Philippine national and local implementing agencies are required to include the provision on the use of alternative dispute resolution (ADR) mechanisms in all contracts involving projects with the private sector.
President Benigno S. Aquino III signed recently Executive Order (EO) 78 which requires all contracts involving public-private partnerships (PPP), build-operate and transfer projects, joint venture agreements entered by the national and local government units with private firms to include provisions of ADR mechanisms.
The parties are given the choice to use all available ADR mechanisms, allow them complete freedom to choose the venue and forum to govern disagreements that might crop up, as well as the rules and procedures to be followed to resolve dispute cases.
EO 78 stressed the need to provide a more inviting climate for private investors by ensuring that the resolution of disputes arising out of a contract is inexpensive, less tedious, and simple exercise especially for large-scale, capital-intensive infrastructure development contracts.
“We see EO 78 as a major development in our continuing efforts to improve the PPP policy framework and ultimately send a positive signal to investors that we are initiating moves to make business in the Philippines easier, ” said PPP Center Director for Policy Formulation, Evaluation and Monitoring Atty. Sherry Ann Austria.
The use of ADRs has been previously promulgated under Republic Act No. 876 known as the Arbitration Law and Republic Act No. 9285 or the ADR Act of 2004.
The Supreme Court also circulated the Special Rules of Court on ADR in 2009, which encourages the use of ADR, particularly arbitration and mediation as an effective resolution to disputes.