Barangay Arbitration: When the Lupon Decides Your Dispute

In mediation or conciliation, the parties themselves agree on the terms, and that agreement is the amicable settlement (see Barangay hearing process). In arbitration, the parties let someone else decide. Section 413(a) says the parties "may, at any stage of the proceedings, agree in writing that they shall abide by the arbitration award of the lupon chairman or the pangkat".

The lupon chairman is the punong barangay. The pangkat is the three-member conciliation panel chosen for the dispute.

No. In Pang-et v. Manacnes-Dao-as (2007), the Supreme Court said:

• what is compulsory under the barangay justice system is only "that there be a confrontation between the parties before the Lupon Chairman or the Pangkat", and a certification that no settlement was reached, before a case may be filed in court;
• "in order that a party may be bound by an arbitration award, said party must have agreed in writing that they shall abide by the arbitration award of the Lupon or the Pangkat";
• "Like in any other contract, parties who have not signed an agreement to arbitrate will not be bound by said agreement".

In that case, the lawyers had agreed in court to send the case back to the barangay. The Court said that agreement was only for conciliation. The parties "may only be compelled to appear before the Lupon ng Tagapamayapa for the necessary confrontation", not to sign an agreement to arbitrate. Because the parties themselves had refused to sign, the award issued anyway did not bind them, and the Court ordered the trial court to go on with the original case.

Yes, but only within five days. Section 413(a) says the agreement "may be repudiated within five (5) days from the date thereof for the same grounds and in accordance with the procedure hereinafter prescribed". Those grounds and that procedure are in Section 418: a sworn statement filed with the lupon chairman, on the ground that consent was vitiated by fraud, violence or intimidation. See Can you withdraw from a barangay settlement?

Section 413 sets the timing and form:

• the award is made "after the lapse of the period for repudiation and within ten (10) days thereafter";
• it must be "in writing in a language or dialect known to the parties"; when the parties do not use the same language or dialect, it is written in the language or dialect known to them.

Under Section 415, the parties appear in person, without lawyers or representatives. Within five days from the date of the award, the lupon secretary sends the award to the appropriate city or municipal court and gives copies to the parties and the lupon chairman (Section 419).

Not by repudiation. Repudiation is for settlements and for the agreement to arbitrate. The award itself is challenged in court. Section 416 says an arbitration award has "the force and effect of a final judgment of a court upon the expiration of ten (10) days from the date thereof, unless... a petition to nullify the award has been filed before the proper city or municipal court".

The Local Government Code does not list the grounds for a petition to nullify, and no Supreme Court ruling read for this page sets them out.

The same way as a settlement. Section 417 says "The amicable settlement or arbitration award may be enforced by execution by the lupon within six (6) months from the date of the settlement. After the lapse of such time, the settlement may be enforced by action in the appropriate city or municipal court." The barangay rules quoted by the Supreme Court in Vidal v. Escueta (2003) count the six months for an award from the date of receipt of the award, or from the date the obligation in it becomes due. The steps are explained in The other party ignored the barangay settlement.

These are made-up examples to show how the rules work. They are not advice for any real case.

Nena and Paolo cannot agree on who should pay for a damaged fence. Both sign a written agreement to let the pangkat decide. Neither repudiates it within five days, so the pangkat issues a written award within the next ten days (Section 413(a)). If neither files a petition to nullify within ten days from the award, it has the effect of a final judgment (Section 416).

Rico's lawyer agreed in court to send his case back to the barangay, but Rico refuses to sign an agreement to arbitrate. Following Pang-et v. Manacnes-Dao-as, an award made without his signed agreement does not bind him, and the case continues in court.

Not at the barangay, where lawyers cannot appear for the parties. Talk to a lawyer before you sign an agreement to arbitrate if the dispute is large or complicated, and right away after an award if you think it should be challenged, because the award becomes final after ten days from its date unless a petition to nullify has been filed in court. For whether your dispute must go to the barangay at all, see Do I need to go to the barangay first?

If you cannot afford a lawyer, see Free legal help in the Philippines.