ENFORCEMENT OF FOREIGN ARBITRAL AWARDS tayo. Bakit?
The 1920’s circa Civil Code has not been
IN THE PHILIPPINES
By: Atty. Enrique V. dela Cruz Jr.
Comment:
The focus of Conflict of Laws in arbitration is the
Enforcement. Paano ipapatupad ang decision na galing
sa ibang bansa especially if it uses a different law – a
foreign law. So there is conflict between our laws and
the foreign law. How do we enforce this arbitral
awards?
There is a big difference between Arbitral Awards and
Foreign Judgments.
* Focus on questions on the exam and quiz will only be
on the Conflict of Laws - What are the grounds para
hindi maipatupad ang decision?
Example: You, a Filipino were sued in Singapore.
You were not able to attend the arbitration in
Singapore (thus there is default judgment). The
prevailing party goes to the Philippines to enforce
the decision. Question: Can the Filipino still
question the decision on the ground that he was
not able to attend in Singapore?
Early History
 Convention of the Recognition and Enforcement of
Foreign Arbitral Awards dates 10 June 1958 (New
York Convention)
 This was ratified by the Philippines on December 27,
1965.
 Civil Code – Article 2035 to 2040
 [Republic Act No. 386 on 18 June 1949 and which
took effect on 30 August 1950)
 RA 876 – Arbitration Law (1953)
Comment:
We begin in 1958, the New York Convention. Ang title
niya is “Convention on the Recognition and
Enforcement of Foreign Arbitral Awards” dated 1958.
The Philippines government ratified this treaty or
convention on December 27, 1965. So as early as 1965,
Philippine government already recognizes Foreign
Arbitral Awards. But as you can imagine, medyo huli
amended since the 1960’s.
Under the Civil Code, Articles 2035 to 2040 these are
the legal provisions on Arbitration. This was
implemented and complemented by R.A. No. 386 – the
Arbitration Law. The Arbitration Law was further
amended by R.A. No. 876 (these are the old laws).
But I would like to call your attention to the fact that all
of the laws from the Civil Code, R.A. 386 and R.A. 876
when you read them, it talks about arbitration IN THE
PHILIPPINES. There is NO provision under these laws
with regard to arbitration with tribunals abroad. Our
legislators signed said treaty in 1965 but they NEVER
MADE A LAW concerning said treaty.
So what is the effect? In the 1926 case of Robinson,
Fleming & Co. vs. Cruz Tan Chong Say
Robinson, Fleming & Co. vs. Cruz Tan Chong Say,
G.R. No. 24904, March 25, 1926.
• In 1926, the Supreme Court was confronted for the
first time with the question of whether or not to
enforce a foreign arbitral award in the Philippines.
Comment: Take note that this was in 1926, prior to
the signing (1957) and ratification (1965) of the
New York Convention
• In that old case, the SC ruled that a foreign arbitral
award is a final adjudication by a foreign court of the
parties' own choice and until such time that it is
impeached, such award is presumed regular and
conclusive on the merits of the controversy and
submitted.
Comment: Is there anything wrong with this decision?
Malaki ang mali. Bakit? Ang sabi ng Supreme Court “a
foreign arbitral award is a final adjudication by a
FOREIGN COURT”. Ibig sabihin, foreign judgment ang
iniisip ng Supreme Court noong sinulat niya ang
decision. Hindi pa naiitindihan ng SC yung concept ng
Arbitral Award. Although ginamit niya ang salitang
“Arbitral Award” and in the same sentence sinabi
niyang ito ang mga decision ng mga korte sa ibang
bansa.
Now, in that decision the SC said that
Robinson, Fleming & Co. vs. Cruz Tan Chong Say,
G.R. No. 24904, March 25, 1926.
• A foreign arbitral award may be recognized and
enforced in the Philippines upon presentation of proof
of the following facts:
(i) notice to defendant of plaintiff's election to
arbitration;
(ii) the arbitrators were elected pursuant to the
manner and form provided in the contract;
(iii)the arbitrators met and performed their duties,
and made factual findings, based upon which they
signed their award; and
(iv) the defendant was either legally a party to the
arbitration or that it ratified or approved it after it
was made.
Comment: What can you infer from this checklist of the
Supreme Court?
The SC essentially is saying that before we recognize
any foreign arbitral award – “judgment” there must be
due process compliance: notice must be made, the
tribunal must have decided it, the other party must
have defended it, etc.
Therefore, what was the SC contemplating was that if
the Foreign Arbitral Award did not comply with our due
process requirement, we will not recognize. So the rule
since 1926 is that a Foreign Arbitral Award is not
conclusive in the Philippines, it can be reject subject to
certain qualifications.
Kamukhang kamukha siya class ng policy natin on
Foreign Judgment. Foreign Judgment under our rules is
also NOT conclusive; it can be rejected on certain
grounds which includes lack of notice to party, etc.
So you can see that as early as 1926, the Supreme Court
is confused. Foreign Arbitral award was the same as
Foreign Judgment.
Then came the New York Convention. It finally
distinguished Foreign Arbitral Awards and Foreign
Judgment which essentially sets the requirements on
how the Foreign Arbitral Award can be effected in the
Philippines.
The New York Convention of 1958
• The New York Convention fundamentally provides for
the reciprocal recognition and enforcement of foreign
arbitral awards in signatory states.
• In practical terms this means that an arbitral award
rendered in Contracting State A may be recognized as a
final and executory decision in either of the state of the
parties to arbitration, as if the foreign arbitral award
were actually rendered by the domestic court of that
country.
Comment:
This is the distinction:
A Foreign Judgment can never be considered a
final and executory decision - it must be proven under
the Rules of Court.
But a Foreign Arbitral Award under the New
York Convention is a final and executory decision, as if
the foreign arbitral award was actually rendered by the
domestic court.
Transfield Phil's., v. Luzon Hydro Corp
May 19, 2006
• The New York Convention, to which the Philippines is
a signatory, governs the recognition and enforcement
of foreign arbitral awards.
• The applicability of the New York Convention in the
Philippines was confirmed in Section 42 of R.A. 9285.
Said law also provides that the application for the
recognition and enforcement of such awards shall be
filed with the proper RTC.
Comment:
This Supreme Court decision highlights our country’s
accession and adherence to the New York Convention.
This was in compliance with the provisions of the new
law (R.A. 9285). This specific law (R.A. 9285) particularly
discusses and implements the New York Convention on
Foreign Arbitral Awards.
 The New York Convention of 1958
• The Philippines was one of the original signatory
• On 10 May 1965, through Senate Resolution No. 71,
the Philippines ratified it.
• Upon deposit of the ratification document, the New
York Convention came into force in the Philippines on 4
October 1967.
Comment:
For history’s sake, it is worth noting that the Philippines
was one of the original signatories to the New York
Convention of 1958.
However, even though the Philippines signed it in 1958,
there was no local enabling law from 1958 to 2009.
There was no local enabling law
• From 1958 to 2004, no substantive law on arbitration
consistent with the New York Convention was passed
and, worse, from 1958 to 2009, no procedural rules on
the recognition and enforcement of foreign arbitral
awards were promulgated.
The result was chaotic
• Because of the absence of a specific procedural rule,
parties were constrained to seek recognition and
enforcement of foreign arbitral awards through a
petition for recognition and enforcement of a foreign
judgment (i.e., the foreign arbitral award as confirmed
by the foreign local court) under the Rules of Court
[Rule 39 , section 48].
• This indirect process for recognition and enforcement
of foreign arbitral awards is fraught with complications
and consequences that are in direct contravention of
the New York Convention.
Comment:
Because of the absence, procedural rules for foreign
judgment were used for the enforcement of foreign
arbitral awards. This is the consequence of the SC
decision in 1956 holding that foreign arbitral award is
the same as foreign judgment (which should not be).
Dahil hindi nga naintindihan ng ating mga mahistrado
at lalong lalo na ang ating mga kongresista at senador
ang kaibahan foreign arbitral award at foreign
judgment.
It was only in 2004 that the Philippine government
enacted R.A. 9285. Finally there was a distinction
between foreign arbitral award and foreign judgment.
However, the law says the Supreme Court will
promulgate rules. Yung Supreme Court naman, since
hindi din naintindihan yan, it took them 5 years.
RA 9285 — ADR Law
• In 2004, the Philippines enacted Republic Act 9285,
the "Alternative Dispute Resolution Act of 2004," which,
among others, tasked the Secretary of Justice to
convene a committee to formulate the appropriate
rules and regulations for its implementation, and the
Supreme Court to promulgate rules of procedure for
the recognition enforcement of foreign arbitral award.
It was only in 2009 that the Philippine Supreme Court
promulgated the Rules.
Supreme Court Special ADR Rules
• In 2009, the Philippine Supreme Court promulgated
A.M. No. 07-11.-08-SC, the Special Rules of Court on
Alternative Dispute Resolution ("Special ADR Rules").
• Insofar as it applies to a foreign arbitral award, the
Rules is basically a consolidation of the salient
provisions of R.A. 9285, the New York Convention, and
the Special ADR Rules.
Comment: The funny thing is, it is a lucrative practice
but there is no subject in law school that teaches you
arbitration. It is not even part of the bar.
How do we distinguish the following terms?
1. International commercial arbitral award
2. Foreign Judgment
3. Foreign Arbitral Award
Comment:
The definition is found in the Model Law.
What is the Model Law?
The United Nations has been trying and quite
successfully to unify and consolidate all trade laws
because international trading is global, and it is hard to
trade with one country if it follows a different law.
So the United Nations put up the United Nations
Convention on International Trade Law (UNCITRAL). The
goal is to standardize laws on international trade and
came up with what they call “the Model Law on
arbitration”.
The Model Law on Arbitration published by the
UNCITRAL must be adopted by the contracting states
(those who signed the UNCITRAL). The Philippines is a
signatory and Republic Act 9285 is our compliance of
the UNCITRAL Model Law.
What is an Intl Commercial Arbitral Award?
• An international commercial arbitral award is
rendered, by an arbitrator or panel of arbitrators in the
Philippines, the mechanics of which is largely governed
by the Model Law on International Commercial
Arbitration (the "Model Law”)
• The award is rendered pursuant to an international
commercial arbitration conducted in the Philippines.
Comment:
Arbitral tribunals in the Philippines
 Construction Industry Arbitration Commission (CIAC)
 Philippine Dispute Resolution Center (PDRC)
 Ad hoc – yung magkabilang panig ang
magdedesisyon kung sino gusto nilang arbitrator,
outside of any institution depending on the
agreement of the disputing parties.
Now, if it involves an international contract and the
arbitration happened in the Philippines, the award is
considered an international commercial arbitral award.
How do you enforce an international commercial
arbitral award?
• The recognition and enforcement or setting aside of
an international commercial arbitration award is largely
governed by Rule 12 of the Special ADR Rules.
For our purposes now, to distinguish it from an
international commercial arbitral award, take note that
the foreign judgment is rendered by a court outside the
Philippines. An international commercial arbitral award
is rendered by an arbitrator or panel of arbitrators or a
tribunal in the Philippines.
In foreign judgment, it is not covered by ADR Law and
the Special ADR rules, it is covered by the Rules of
Court.
Enforcing a foreign judgment?
• The recognition and enforcement of a foreign
judgment is governed by Section 48, Rule 39 of the
1997 Rules of Civil Procedure.
• It clearly provides that a foreign judgment merely
constitutes prima facie evidence of the justness of the
claim of a party and, as such, is subject to proof to the
contrary.
• It is merely a presumptive evidence of a right as
between the parties and may be repelled by evidence of
a want of jurisdiction of the issuing authority, want of
notice to the party against whom it is enforced,
collusion, fraud, or clear mistake of law or fact .
• The Regional Trial Court has authority to determine
whether the foreign court committed mistakes of fact
and law.
What is a foreign arbitral award?
• A foreign arbitral award is rendered by an arbitrator
or panel of arbitrators in a foreign country.
• The grounds for its recognition and enforcement in
the Philippines are those exclusively found in Article V
of the New York Convention and the procedural details
are set out in Rule 13 of the Special ADR Rules.
Comment:
How do we distinguish Foreign Arbitral Award from
the first two?
First, it is an AWARD from a FOREIGN TRIBUNAL (thus if
the tribunal is in the Philippines, it is not foreign)
Second, the grounds for recognition are EXCLUSIVE from
the New York Convention and we have adopted that in
the Special ADR Law and the Special ADR Rules
specifically Rule 13 of the Special ADR Rules
promulgated by the Supreme Court in 2009.
Are foreign arbitral awards immediately executory?
Comment:
Diba sabi ng New York Convention dapat immediately
executory just like the final and executory decision of the
domestic court. Noong ginawa nating yung batas natin,
binago natin. We were not truthful to our manifestation
to the whole world that we are adopting the New York
Convention and the Model Law.
Under our law (ADR Law and the Rules) a foreign
arbitral award is NOT immediately executory.
Are foreign arbitral awards immediately
executory?
• NO. Foreign arbitral awards while mutually stipulated
by the parties in the arbitration clause to be final and
binding are not immediately enforceable or cannot be
implemented immediately.
• Sec. 35 of the UNCITRAL Model Law stipulates the
requirement for the arbitral award to be recognized by
a competent court for enforcement.
[Korea Technologies v. Lerma, Jan. 7, 2008]
Comment:
Therefore sabi ng Supreme Court, kung may
requirement bago i-enforce ibig sabihin hindi automatic.
Kailangan muna naming aralin kung nagcocomply yung
foreign arbitral award.
So what are those requirements?
UNCITRAL Model Law
• Article 35. Recognition and Enforcement
• (1) An arbitral award, irrespective of the country in
which it was made, shall be recognized as binding and,
upon application in writing to the competent court,
shall be enforced subject to the provisions of this Article
and of Article 36.
Comment:
In our ADR Law (Section 42) sabi natin na ang mag-
aapply ay New York Convention, and yet Section 43
says…
RA 9285 – ADR Law
• SEC. 43. Recognition and Enforcement of Foreign
ArbitraI Awards Not Covered by the New York
Convention. — The recognition and enforcement of
foreign arbitral awards not covered by the New York
Convention shall be done in accordance with procedural
rules to be promulgated by the Supreme Court.
• The Court may, on grounds of comity and reciprocity,
recognize force a non-convention award as a
convention award.
Comment: So kahit daw hindi nanggaling sa isang bansa
na signatory sa New York Convention, pwede nating
ipatupad sa Pilipinas subject to the rules on comity and
reciprocity – ibig sabihan, those countries must also
recognize and enforce decisions coming from tribunals
in the Philippines.
What is the rule if the foreign arbitral award came
from a non-convention state?
In respect of non-convention awards rendered by a
country that does not extend comity and reciprocity to
awards rendered in the Philippines, Rule 13.12 of the
Special ADR Rules provides that the RTC may treat such
award as a foreign judgment under Section 48, Rule 39
of the Rules Court.
Comment: So we have to check whether that non-
convention state also recognizes tribunals from the
Philippines because if they are rendered by a country
that does not extend comity and reciprocity to awards
rendered in the Philippines, under the Special ADR
Rules, the RTC may treat such award as a foreign
judgment and therefore it is not final and executory, it
is merely a prima facie evidence of a right as between
the parties and what will be applied is Section 48, Rule
39 of the Rules of Court.
Foreign Arbitral Award is not deemed a Foreign
Judgment
• SEC. 44 (RA 9285). Foreign Arbitral Award Not
Foreign Judgment. — A foreign arbitral award when
confirmed by a court of a foreign country shall be
recognized and enforced as a foreign arbitral award and
not as a judgment of a foreign court.
• A foreign arbitral award, when confirmed by the
Regional Trial Court, shall be enforced in the same
manner as final and executory decisions of courts of
law of the Philippines.
Comment:
The second paragraph was again added by our
Philippine legislators which rendered a foreign arbitral
award as NOT immediately executory.
Kailangan ka paring dumaan sa isang RTC, at kapag
confirmed by RTC saka palang siya magiging
immediately executory. Sa makatuwid hindi talaga tayo
naging totoo sa Model Law at sa New York Convention
dahil nilagyan natin ng second step, hindi immediately
executory. So technically para na rin siyang foreign
judgment magkaiba lang ng ground to set aside or
repel.
How to enforce a foreign arbitral award?
• Rule 13.1 of the Special Rules of Court on Alternative
Dispute Resolution [A.M. No. 07-11-0S-SC dated 1
September 2009], provides that "any party to a foreign
arbitration may petition the court to recognize and
enforce a foreign arbitral award."
• The contents of such petition are enumerated in Rule
13.5.
Comment:
Alam niyo ba na ang foreign decree of divorce is a
foreign judgment, iba ang paraan para ipatupad. Hindi
under Rule 39 but Rule 108 na ipapadyaryo mo nalang.
Pero ito na foreign award na dapat immediately final
and executory, under our laws you still need to file a
petition.
Now why am I(Att. Buko) making a big fuss about it?
Because when you file a petition in the RTC you need to
serve summons to implead a defendant. Eh nasa ibang
bansa nga iyong kalaban mo eh kasi foregin arbitral
award. So it delays the execution.
Special Rules of Court on ADR
• RULE 13.5. Contents of petition. — The petition shall
state the following:
a. The addresses of the parties to arbitration;
b. In the absence of any indication in the award,
the country where the arbitral award was made and
whether such country is a signatory to the New York
Convention; and
c. The relief sought.
Special Rules of Court on ADR
RULE 13.5. Apart from other submissions, the petition
shall have attached to it the following:
a. An authentic copy of the arbitration
agreement; and
b. An authentic copy of the arbitral award.
• if the foreign arbitral award or agreement to arbitrate
or submission is not made in English, the petition shall
also attach to the petition a translation of these
documents into English.
• The translation shall be certified by an official or
sworn translator or by a diplomatic or consular agent.
[A.M. No. 07-11-08-SC dated 1 September 2009]
 Where should the Petition be Filed?
• SEC. 47 (RA 9285). Venue and Jurisdiction —
Proceedings for recognition and enforcement of an
arbitration agreement or for vacations, setting aside,
correction or modification of an arbitral award, and any
application with a court for arbitration assistance and
supervision shall be deemed as special proceedings and
shall be filed with the Regional Trial Court:
• (i) where arbitration proceedings are conducted;
• (ii) where the asset to be attached or levied upon, or
the act to be enjoined is located;
• (iii) where any of the parties to the dispute resides or
has his place of business; or
• (iv) in the National Judicial Capital Region, at the
option of the applicant.
Comment:
Item (i) is wrong because the arbitration is outside the
Philippines.
Item (iii) is problematic because arbitration may be
either in rem or in person. If the action is in personam,
action shall be filed at the residence of the plaintiff or
defendant at the option of the plaintiff; if it is in rem,
where the property is located regardless of the
residence of the parties. But our not so bright
legislators, pinagsama in rem and in personam. So ang
venue dalawa (kung nasaan ang property at saan
nakatira) Now the question is paano kung magkaiba
kung nasaan ang property at saan nakatira? Either at
the option of the plaintiff.
How much are the filing fees?
• It is incapable of pecuniary estimation since the
subject matter of the action is the foreign judgment
itself, and for purposes of the computation of the filing
fees, the foreign judgment falls within the class of “all
other actions not involving property.”
• Priscilla C. Mijares v. Hon. Santiago Javier Ranada,
April 12, 2005.
Comment: Class ang arbitration, malalaki ang amount
involved kaya gusting gusto ng mga abogado yan kasi
percentage ang sakanila. Ang standard practice under
the UNCITRAL Model Law is 5% of the amount involved
for lawyers’ fees to be divided equally between the two
counsel, and the 5% to the arbitral tribunal or
arbitrators. Usually the amounts involved are very large.
But in the Philippines filing fees is incapable of
pecuniary estimation. Ibig sabihin Php500 lang ang
filing fees sa Pilipinas.
Mali kasi ito dapat yung singilin mo ng malalaki kasi
malalaki ang mga perang involved sa arbitration. Kasi
ang pinag-aawayan niyo lang naman is less than 1
million di na kayo mag-aarbitration.
Usually ang pumupunta sa arbitration daang daang
milyon ang pinag-uusapan at ayaw mong matali yung
pera sa mahabang litigation kaya gusto mo arbitration
nalang kasi ang arbitration less than 6 months, tapos. In
fact ang hearing dito 3-4 araw tapos na, and within 30
days may decision na. Ganoon kabilis ang arbitration.
How much are the filing fees?
• Rule 20.2 of the Special ADR Rules followed the ruling
in Mijares insofar as it applies to the recognition and
enforcement of foreign arbitral awards under the New
York Convention.
• It provides that: "The minimal filing fee payable in
"all other actions not involving property" shall be paid
by the petitioner seeking to enforce foreign arbitral
awards under the New York Convention in the
Philippines.
Can a foreign corporation, not licensed to do business
in the Philippines, file a petition to enforce a foreign
arbitral award?
• YES. The foreign corporation's capacity to sue in the
Philippines is not material insofar as the recognition
and enforcement of a foreign arbitral award is
concerned.
• Sec. 45 of RA 9285 provides that the opposing party in
an application for recognition and enforcement of the
arbitral award may raise only those grounds that were
enumerated under Article V of the New York
Convention.
• Capacity to sue is not one of those grounds.
[Tuna Processing Inc. v. Philippine Kingford, Inc.,
February 29, 2012]
Comment:
Ordinarily, under the Corporation Code, a corporation
not licensed to do business in the Philippines cannot file
an action. Said corporation cannot seek relief if the
latter is doing business without a license.
Now, for arbitration, the rule is different. We allow
foreign corporations to file a petition to enforce a
foreign arbitral award
How would the parties be notified?
• Under Rule 13.6 of the Special ADR Rules, upon
receipt of the petition, the court shall initially determine
whether it is sufficient in form and in substance.
• Once that has been made, the court shall cause the
service of a copy of the petition upon the respondent.
• The service upon the respondent shall be made, under
Rule 1.8 either by personal service or courier.
• Resort to registered mail is allowed only when courier
services are not available.
Comment:
Primary means to serve summons is through courier
service. Registered mail may be resorted to if courier
service is not available.
Alam niyo ban a under the Rules of Court, yung mga LBC
hindi kinikilala as courier. Kapag nagpaLBC ka, kahit na
mas mabilis siya, the date of receipt will be considered
the date of filing. Pero kapag nagregistered mail ka,
kahit na napakatagal niya, the date of mailing is the
date of filing. Kaya kahit na mas okay ang LBC, hindi mo
gagawin.
How about service of summons?
• The Special ADR Rules does away with the service of
summons upon the respondent.
• The technical rules of summons do not apply.
• What is essential is that the service of the copy of the
petition and notice of initial hearing was made in such a
manner as to "reasonably ensure receipt the thereof by
the respondent to satisfy the requirement of due
process."
Comment:
The technical rules of summons do not apply. Thus you
can serve summons by e-mail or by Facebook. Because
the Rules say that it can be made in ANY MANNER as
long as you can reasonable ensure the other party
receives the copy of the summons.
What is the period to file answer?
• Under Rules 13.6 and 13.7 of the Special ADR Rules,
the court sends a notice to the respondent in the
proceeding for the recognition and enforcement of
foreign arbitral award to file a verified opposition within
30 da y from receipt of the notice and petition.
• This thirty (30) day period is non-extendible since a
motion for extension is a prohibited pleading under
Rule 1.6
Comment:
The period to file an answer is
 Within 30 days (vs. 15 days in Rules of Court)
 Non-extendible (motion for extension is a prohibited
pleading)
 Must be verified (not notary)
Can respondent be declared in default?
•NO. Under the Special ADR Rules, Respondent's failure
to submit the opposition shall not be cause for a
declaration of default, as this is again, a prohibited
pleading under Rule 1.6 (g).
• Once the respondent has filed its opposition, or the
period to file lapses, the court determines whether the
issue between the parties is one of law or fact.
Comment:
Since Respondent’s failure to submit an opposition shall
NOT be a cause to declare him in default, what will
happen?
Kapag nagfile ka, hindi siya sumagot, the court after the
lapse of the 30-day period for the Respondent to file an
opposition will now study the contents of the petition –
aalamin niya whether ito ba questions of law or
questions of fact. This is what you call EXPEDITED
PROCEDURE (EP).
 Questions of Fact
• If there are issues of fact on grounds relied upon for
the court to refuse recognition and enforcement, the
court, in accordance with Rule 13.8, shall, motu proprio,
or upon the request of a party, require the parties to
simultaneously submit the affidavits of their
respective witnesses within a period of not less than
fifteen (15) days nor more than thirty (30) days from
receipt of the order.
Comment: Under Rule 13.8, if the court determines that
there are only questions of law, there will only be
expedited judgment based only on the questions of law.
Will there be presentation of witnesses?
• Under Rule 13.9 of the Special ADR Rules, if the court
determines that a hearing is called for, the affidavits of
witnesses take the place of their direct testimonies in
court and they shall be immediately subject to cross-
examination.
• For foreign witnesses -- a party may opt to avail of a
deposition upon oral examination in a foreign country
under Rule 23 of the 1997 Revised Rules of Procedure.
Comment: Ano iyong deposition? Ito ‘yong doon ka
pupunta doon mo kukunin ‘yong sagot through question
and answer. Pwede ding nakavideo ‘yong kanyabg
deposition.
Now, when you file a petition in the RTC and you ask
the RTC to enforce a foreign arbitral award, can the RTC
refuse to enforce a foreign arbitral award?
Can the RTC refuse to enforce?
• YES. A foreign arbitral award is subject to judicial
review by the RTC which can set aside, or reject it.
• Foreign arbitral awards, while final and binding, do
not oust our courts of jurisdiction since these arbitral
awards are not absolute and without exceptions as they
are still judicially reviewable.
• Chapter 7 of RA 9285 has made it clear that all
arbitral awards, whether domestic or foreign, are
subject to judicial review on specific grounds provided
for.
Comment: Again class, this is not being truthful and
compliant with the New York Convention.
Can the RTC vacate a foreign arbitral award?
• NO. The RTC is not allowed to substitute its own
judgment for that of the foreign arbitral tribunal.
• This is clear from Rule 19.11 which provides: "The
court can deny recognition and enforcement of a
foreign arbitral award but shall have no power to
vacate or set aside a foreign arbitral award."
Comment: What is the distinction between refusing to
enforce and vacating?
In vacating, you will modify the decision. When you
vacate, the court technically annuls the award and
substitute its own judgment.
So our courts cannot vacate but they can refuse to
recognize or enforce.
Can the RTC vacate a foreign arbitral award?
• NO. The RTC is not tasked to determine whether the
foreign arbitral award is valid or not.
• The foreign arbitral award remains VALID whether or
not the RTC denies or refuses its recognition and
enforcement in this jurisdiction.
• This is because the primary authority to declare that
the foreign arbitral award is invalid is vested in the
court of the State in which the arbitral award is
rendered.
• Thus, the RTC's inquiry is limited to the determination
of the existence of those grounds set out in Rule 13.4
which is subject to a caveat: "The court shall not disturb
the arbitral tribunals' determination of facts and/or
interpretation of the law." (Rule 13.11 of the Special
ADR Rules)
Grounds for Judicial Review of Arbitral /Award
• Rule 13.4 (b) further provides that the foreign arbitral
award may be refused recognition and enforcement by
the court if it finds that:
• (i) The subject-matter of the dispute is not capable of
settlement or resolution by arbitration in the
Philippines; or -
• (ii) The recognition or enforcement of the award
would be contrary to public policy.
What disputes are NOT subject to arbitration?
• Section 6 of RA 9285 sets out the disputes that cannot
be the subject of arbitration. These include:
(a) labor disputes covered by the Labor Code of the
Philippines;
(b) the civil status of persons;
(c) the validity of a marriage;
(d) any ground for legal separation;
(e) the jurisdiction of courts;
(f) future legitime;
(g) criminal liability; and
(h) those which by law cannot be compromised.
Comment: This is compliant with Article 36 of the
UNCITRAL Model Law
UNCITRAL Model Law
Article 36. Grounds for refusing recognition or
enforcement
(1) Recognition or enforcement of an arbitral
award, irrespective of the country in which it was made,
may be refused only:
(i) If a party to the arbitration agreement referred
to in article 7 was under some incapacity; or the
said agreement is not valid under the law to which
the parties have subjected it or, failing any
indication thereon, under the law of the country
where the award was made; or
(ii) the party against whom the award is invoked
was not given proper notice of the appointment of
an arbitrator or of the arbitral proceedings or was
otherwise unable to present his case; or
(iii) the award deals with a dispute not
contemplated by or not falling within the terms of
the submission to arbitration, or it contains
decisions on matters beyond the scope of the
submission to arbitration, provided that, if the
decisions on matters submitted to arbitration can
be separated from those not so submitted, that part
of the award which contains decisions on matters
submitted to arbitration may be recognized and
enforced; or
(iv) the award has not been become binding on the
parties or has been suspended or set aside.
What is the remedy from the RTC?
• A party may file a motion for reconsideration of a
Regional Trial Court's decision recognizing and/or
enforcing a foreign arbitral award, or refusing
recognition and/or enforcement of the same.
• The fifteen (15) day period to file the motion is non-
extendible and commences to run from receipt of the
decision.
What is the remedy from the RTC?
• The RTC is mandated to resolve the motion for
reconsideration within thirty (30) days from receipt of
the opposition or comment or upon the expiration of
the period to file opposition or comment.
• Although Rule 19.4 does not mention the filing of a
reply, a party may be allowed by the court to do as it is
not considered a prohibited pleading under Rule 1.6 of
the Special ADR Rules.
• However, a rejoinder to the reply is a prohibited
pleading under Rule 1.6 (f).
What is the remedy from the RTC?
• An order denying a party’s motion for reconsideration
is appealable to the Court of Appeals.
• The mode of appeal is by way of a petition for review
to be filed within fifteen (15) days from notice of the
decision of the Regional Trial Court or the denial of the
petitioner’s motion for reconsideration.
• Docket fees and costs in the amount of Php4,000.00
shall be paid at the time of the filing of the petition for
review.
Posting of Bond Pending Appeal
• Section 46 of Republic Act 9285 requires the losing
party to post a counter-bond during the pendency of
the appeal on the decision of the RTC confirming the
foreign arbitral award.
• Under Rule 19.25 of the Special ADR Rules, the Court
of Appeals shall, within fifteen (15) days from receipt of
the petition for review, require the party appealing the
decision to post a bond executed in favor of the
prevailing party equal to the amount of the award. The
failure of the petitioner to post a bond is ground for the
dismissal of the appeal.
Execution Pending Appeal
• Rule 19.22 of the Special ADR Rules categorically
states that: "The appeal shall not stay the award,
judgment, final order or resolution sought to be
reviewed unless the Court of Appeals directs
otherwise upon such terms as it may deem just."
Is Certiorari Available?
• Rule 19.26 (j) of the Special ADR Rules allows a
certiorari petition for only one instance — to assail the
RTC's decision allowing a party to enforce a foreign
arbitral award pending appeal.
• However, a party is not allowed to lodge an appeal
and at the same time resort to a petition for certiorari.
Under Rule 19.9. "recourse to one remedy shall
preclude recourse to the other."
• The petitioner shall file the verified petition for
certiorari within a non-extendible period of fifteen (15)
days from notice of the RTC’s decision.
• (Rule 19.36) When the Court of Appeals:
• “a. Failed to apply the applicable standard or test for
judicial review prescribed in these Special ADR Rules in
arriving at its decision resulting in substantial prejudice
to the aggrieved party;
• b. Erred in upholding a final order or decision despite
the lack of jurisdiction of the court that rendered such
final order or decision;
• c. Failed to apply any provision, principle, policy or
rule contained in these Special ADR Rules resulting in
substantial prejudice to the aggrieved party; and
• d. Committed an error so egregious and harmful to a
party as to amount to an undeniable excess of
jurisdiction".
Comment: These are the limited grounds to bring the
matter to the Supreme Court. If you don’t allege any of
these matters, the SC will not entertain.

Comment:

You know what certiorari is, hindi mo na hihintayin

‘yong appeal, every decision puwedeng mong i-akyat
kapag interlocutory order.

Under Rule 19.1, there is only one remedy – APPEAL. So

since there is a remedy for appeal, you can only use
certiorari for interlocutory orders but not final orders.

So the decision – you can appeal; any other order – you

can file a certiorari within fifteen (15) days.

What is the remedy from the CA?

• An adverse decision from the Court of Appeals may be

taken to the Supreme Court by way of a verified
petition for review within fifteen (15) days from notice
of the decision or judgment or denial of the motion for
reconsideration.

• Rule 19.36 of the Special ADR Rules provides the strict

parameters for the Supreme Court's review of the Court
of Appeals' decision.

Grounds for Petition for Review to the SC