PPP proponents told to ready dispute resolution modes

All contracts involving projects with the private sector are now required to include provisions to use alternative dispute resolution (ADR) mechanisms, the Public-Private Partnership (PPP) Center said.

Executive Order 78 signed by President Aquino last July 4 mandated all implementing agencies from both local and national governments to include ADR provisions in the contracts of projects under the PPP program, build-operate-transfer projects and joint-venture agreements.

The new EO seeks to provide a friendlier environment for the private investors, the PPP Center explained in a statement.

“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,” the EO stated.

When the parties agree to submit a case for ADR, they will be given a choice whether to use domestic or international ADR mechanisms, according to the EO.

This will give the parties the “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,” the EO said.

The National Economic and Development Authority, in coordination with other government agencies, was directed to issue the implementing rules and regulations of the EO.

The EO also instructed the Department of Justice through the Office of the Alternative Dispute Resolution, and the Neda through the PPP Center, to conduct an information campaign on the new policy.

Previous laws have encouraged the use of ADR mechanisms, which include conciliation and negotiation, and mediation and arbitration, to achieve a speedy and efficient resolution of disputes.

The use of ADR mechanisms has been promoted 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 issued the Special Rules of Court on ADRs in 2009, which encouraged the use of ADR particularly arbitration and mediation as an effective resolution to disputes.