PPP Center
11 July 2012
Implementing agencies both from the national and local governments are mandated now 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 Executive Order No. 78 last July 4 which requires all contracts involving public-private partnerships, build-operate and transfer projects, joint venture agreements entered by the government, including those by local government with private entities must include provisions to use ADR mechanisms upon agreement of the parties to these contracts.
The parties are given the choice to use all available ADR mechanisms, whether domestic or international, to 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.
The EO specifically states the need to provide a more inviting climate for private investors by ensuring that the resolution of disputes arising out of a contract is less expensive, less tedious, complex and time-consuming exercise especially for large-scale, capital-intensive infrastructure development contracts.
“We see this Executive Order as a major development in our continuing efforts to improve the PPP policy framework and ultimately send a positive signal to our investors that we are initiating moves to make business in the Philippines easier, ” explained 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.
