Arbitration is an alternative dispute resolution mode that affords the disputants greater autonomy in the direction and speed of the process, in the choice of arbitrators, and in the cost of the proceedings. It provides a level of confidence in at least two areas: in the capacity of the arbitrators for fairness, integrity and intelligence, and in the assurance that there will be no public access to the identity of the parties, the record of proceedings, the evidence introduced, and the awards obtained (unless and until the parties elevate their causes to the regular courts or to the Court of Appeals).

​

In 1998, the Supreme Court expressed the belief that “Arbitration is the ‘wave of the future’ in dispute resolution”. But as early as 1982, the Philippine Clearing House Corporation had institutionalized arbitration as the dispute resolution mechanism of choice for its member banks.

On 23 June 1982, the Philippine Clearing House Corporation (PCHC) approved the Clearing House Rules and Regulations (CHRR) which included the creation of the Arbitration Committee (ARBICOM) and the Arbitration Rules of Procedure.

​

By express provisions in the CHRR (i.e. Section 3 in relation to Section 36.6), the PCHC effectively imposed on its member banks the duty to submit to arbitration any dispute between and among said member banks whenever a check or item sent through clearing is the subject of the dispute. The Supreme Court in 1988 appreciated this duty when they said “the participation of the two banks, petitioner and private respondent, in the clearing operations of PCHC is a manifestation of their submission of its jurisdiction”. And reinforced this position in 1994 when they said that “by its voluntary participation and its consent to the arbitration rules, [disputant banks] cannot go directly to the Regional Trial Court when it finds it convenient to do so”.

​

Hence, “any dispute or controversy between two or more clearing participants involving any check/item cleared thru PCHC shall be submitted to the Arbitration Committee (ARBICOM for short) upon written complaint of any involved participant serving the same upon the other party(ies) or defendants”. (Section 36.1 of CHRR_2012; Section 33.1 of CICS RR)

​

Over the years since its creation, the ARBICOM has passed upon disputes involving items falling under the purview of Regular Return Item Procedure (Section 20, CHRR_2012; Section 18, CICS RR), e.g. checks with forged or unauthorized signature of drawer(s), materially altered cashiers/manager’s check, counterfeit/spurious checks, and Special Return Items Beyond the Prescribed Period (Section 21, CHRR_2012; Section 19, CICS RR), i.e. materially altered, or items bearing forged endorsement and/or lacking endorsement.

​

The process has proved to date that submission to ARBICOM is most satisfactory in that check disputes are decided by active or retired bank officers familiar with the clearing process (assisted by law members who are active or retired bank lawyers), and reviewed by the PCHC Board of Directors, all observing strictly the mandated Arbitration Rules of Procedure (ARP) timelines. Its record of affirmations at the Court of Appeals and the Supreme Court confirm the acute foresight and the wisdom of the early advocates of arbitration at the Philippine Clearing House Corporation.

​

1. BF Corporation vs. Court of Appeals, 288 SCRA 267, 286 (1998).

2. Banco de Oro vs. Equitable Banking Corp., 157 SCRA 188, 196 (1988).

3. Associated Bank vs. Court of Appeals, 223 SCRA 137, 145.