MANDATING THE INCLUSION OF PROVISIONS ON THE USE OF ALTERNATIVE DISPUTE RESOLUTION MECHANISMS IN ALL CONTRACTS INVOLVING PUBLIC-PRIVATE PARTNERSHIP PROJECTS, BUILD-OPERATE AND T…

WHEREAS, as early as 1953,
Republic Act (RA) No. 876 otherwise known as “The Arbitration Law,”
already allowed persons or parties to submit to arbitration, “any
controversy existing between them at the time of the submission and
which may be the subject of an action, or the parties to any contract
may in such contract agree to settle by arbitration a controversy
thereafter arising between them;”

WHEREAS, the
Supreme Court (SC) in 2001, has authorized the use of court-annexed
mediation as a form of Alternative Dispute Resolution (ADR) in specific
cases. Furthermore, other forms of ADR have been incorporated into the
Philippine judicial system, such as: the use of pre-trial; discovery
modes of procedure; the barangay certification prerequisite to filing
actions in court; and, the procedure in small claims cases;

WHEREAS, RA
No. 9285, otherwise known as “The ADR Act of 2004,” declares that it is
the, policy of the State to actively promote party autonomy in
resolving disputes and to respect the freedom of the parties to make
their own arrangements to resolve their disputes;

WHEREAS, the
SC promulgated the Special Rules of Court on ADR in 2009 (A.M. No.
07-11-08-SC), with the objective of encouraging and promoting the use of
ADR, particularly arbitration and mediation, as an important means to
achieve speedy and efficient resolution of disputes with the greatest
cooperation of the courts and at the same time the least intervention
from the same;

WHEREAS, towards this end, the
State shall encourage and actively promote the use of ADR mechanisms
through conciliation and negotiation, mediation and arbitration, in the
order of application, as an efficient tool and an alternative procedure
in achieving speedy and impartial justice and de-clogging court dockets;
and

WHEREAS, there is a need to provide a more
inviting climate for private investments by making the resolution of
disputes arising out of a contract less expensive, tedious, complex and
time-consuming, especially for large-scale, capital-intensive
infrastructure and development contracts.

NOW, THEREFORE, I, BENIGNO S. AQUINO III, President of the Philippines , by virtue of the powers vested in me by the Constitution and existing laws do hereby order:

SECTION 1. Use of ADR mechanisms. All
contracts involving Public-Private Partnership (PPP) projects and/or
those entered into under RA No. 6957 entitled, “The Act Authorizing the
Financing, Construction, Operation and Maintenance of Infrastructure
Projects by the Private Sector, and for Other Purposes,” as amended by
RA No. 7718, otherwise known as the “Build-Operate and Transfer (BOT)
Law,” as well as Joint Venture Agreements (JVAs) between government and
private entities issued by the National Economic and Development
Authority (NEDA) pursuant to Executive Order (EO) No. 423 (s. 2005),
shall include provisions on the use of ADR mechanisms, at the option and
upon agreement of the parties to said contracts..

All parties
who enter into similar contracts with Local Government Units (LGUs) are
encouraged to stipulate on the use of ADR mechanisms, in accordance with
their own JV rules, guidelines or procedures.

When parties to
the abovementioned contracts agree to submit the case for ADR, the use
of either domestic or international ADR mechanisms shall be highly
encouraged, giving the parties complete freedom to choose which venue
and forum shall govern their dispute, as well as the rules or procedures
to be followed in resolving the same.

SECTION 2. Implementing Agency. NEDA,
in consultation with the appropriate agencies of the government, is
hereby directed to issue the Implementing Rules and Regulations (IRR) to
implement this EO, which shall be binding on all government agencies
and shall guide LGUs that shall enter into PPP or BOT contracts and
JVAs.

SECTION 3. Information Campaign. The
Department of Justice (DOJ) through the Office of the Alternative
Dispute Resolution (OADR), NEDA through the PPP Center , and the
government media instrumentalities shall conduct a massive information
campaign on this policy directive and the different ADR mechanisms to
all national and local government agencies/entities, the private sector
and the general public.

The initial funding requirements for the
information campaign shall be shared by and charged against the current
appropriations of the PPP Center , NEDA, OADR, and other concerned
agencies. Funding for the succeeding years shall be incorporated in
their respective regular appropriations thereafter.

SECTION 4. Repealing Clause. All
issuances, orders, rules, and regulations or parts thereof which are
inconsistent with the provisions of this EO are hereby revoked and/or
modified accordingly.

SECTION 5. Separability Clause. If
any provision of this EO is declared invalid or unconstitutional, the
other provisions unaffected shall remain valid and subsisting.

SECTION 6. Effectivity Clause. This EO shall take effect immediately upon its publication in a newspaper of general circulation.

DONE, in the City of Manila , this 4th day of July, in the year of our Lord, Two Thousand and Twelve.

	(Sgd.) BENIGNO S. AQUINO III
	President of the Philippines
By the President:
(Sgd.) PAQUITO N. OCHOA, JR.
Executive Secretary