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CONFLICTS OF LAW
Transcribed from the arbitration lectures of Atty.
Dela Cruz
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Early History
-Convention on the Recognition and Enforcement of
Foreign Arbitral Awards dated 10 -June 1958 (New
York Convention)
This was ratified by the Philippines on December 27,
1965.
-Civil Code - Articles 2035 to 2040
-R.A. No 386 enacted on 18 June 1949 and which
took effect on 30 August 1950.
-R.A. 876 - Arbitration Law (1953)
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.
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
submitted.
A foreign arbitral award may be recognized and
enforced in the Philippines upon presentation and
proof of the following facts:
(1) Notice to defendant of plaintiff’s election to
arbitration;
(2) The arbitrators were elected pursuant to
the manner and form provided in the contract;
(3) The arbitrators met and performed their
duties, and made factual findings, based upon
which they signed their award; and
(4) The defendant was either legally a party to
the arbitration or that it ratified or approved it
after it was made.
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.
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In practical terms this means that an arbitration
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.
The New York Convention, to which the Philippines
is a signatory, governs the recognition of foreign
arbitral awards.
The applicability of the New York Convention in the
Philippines was confirmed in Section 42 of R.A. No.
9285. Said law also provides that the application of
the recognition and enforcement of such awards
shall be filed with the proper RTC.
The Philippines was one of the original signatories.
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 Philippinnes,
on 4 October 1967.
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 implications and consequences that are in direct
contravention of the New York Convention.
RA 9285 - ADR Law
In 2004, the Philippines enacted RA 9285, the
Alternative Dispute Resolution Act of 2004,
which, among others, tasked the Secretary of
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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
and enforcement of foreign arbitral award.
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 RA 9285, the New York Convention,
and the Special ADR Rules.
How do we distinguish the following terms?
1. International commercial arbitral award
2. Foreign judgment
3. Foreign arbitral award
What is an International 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.
The recognition and enforcement or setting aside of
an international commercial arbitration award is
largely governed by Rule 12 of the Special ADR
Rules.
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.
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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 mistakes 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.
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 that
the requirement for the arbitral award to be
recognized by a competent court for enforcement
(Korea Technologies v. Lerma, Jan. 7, 2008).
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.
RA 9285 - ADR LAW
Sec. 42. Application of the New York Convention -
The New York Convention shall govern the
recognition and enforcement of arbitral awards
covered by said Convention.
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The recognition and enforcement of such arbitral
awards shall be filed with the Regional Trial
Court in accordance with the rules of procedure to
be promulgated by the Supreme Court.
Section 43. Recognition and Enforcement of Foreign
Arbitral 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 and enforce a non-
convention award as a convention award.
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
awards rendered in the Philippines, Rule 13.12 of
the Special ADR Rules provide that the RTC may
treat such award as a foreign judgment under
Section 48, Rule 39 of the Rules of Court.
Foreign Arbitral Award is not deemed a foreign
judgment
Section 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.
How to enforce a foreign arbitral award?
Rule 13.1 of the Special Rules of Court on
Alternative Dispute Resolution (A.M. No. 07-11-08-
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.
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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.
Apart from other submissions, the petition
shall have attached it to 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 petitioner shall also attach to the petition a
transition 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.
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 vs. Hon. Santiago Javier
Ranada, April 12, 2005).
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What is essential is that the service of the copy of
Rule 20.2 of the Special ADR Rules followed the the petition and notice of initial hearing was made in
ruling in Mijares insofar as it applies to the such a manner as to "reasonably ensure receipt
recognition and enforcement of foreign arbitral thereof by the respondent to satisfy the
awards under the New York Convention. requirement of due process."

It provides that "The minimal filing fee payable in What is the period to file an answer?
all other actions not involving property" shall be
paid by the petitioner seeking to reinforce foreign Under Rules 13.6 and 13.7 of the Special ADR
arbitral awards under the New York Convention in Rules, the court sends a notice to the respondent in
the Philippines. the enforcement of foreign arbitral award to file a
verified opposition within 30 days from receipt of
Can a foreign corporation, not licensed to do the notice and petition.
business in the Philippines, file a petition to
enforce a foreign arbitral award? This 30 day period is non-extendible since a motion
for extension is prohibited pleading under Rule
YES. The foreign corporation's capacity to sue in 1.6.
the Philippines is not material insofar as the
recognition and enforcement of a foreign arbitral Can respondent be declared in default?
award is concerned.
NO. Under the Special ADR Rules, Respondent's
Sec. 45 of RA 9285 provides that the opposing party
failure to submit an opposition shall not be cause for
in an application for recognition and enforcement of
the declaration of default, as this is again, a
the arbitral award may raise only those grounds that
prohibited pleading under Rule 1.6 (g).
were enumerated under Article V of the New York
Convention.
Once the respondent has filed its opposition, or
the period to file lapses, the court determines
Capacity to sue is not one of those grounds (Tuna
whether the issue between the parties is one of
Processing, Inc. vs. Philippine Kingford, Inc.,
law and fact.
February 29, 2012).
Questions of Law
How would the parties be notified?
Under Rule 13.8 of the Special ADR Rules, if the
Under Rule 13.6 of the Special ADR Rules, upon
issue is mainly one of law, the court will require the
receipt of the petition, the court shall initially
submission of a brief of legal arguments not more
determine whether it is sufficient in form and
than 30 days from receipt of the order.
substance.
Under Rule 1.4, the legal brief is required to be
Once that has been made, the court shall cause the
verified by the lawyer submitting it.
service a copy of the petition upon the respondent.
The verification shall contain the statement that "he
The service upon the respondent shall be made,
personally prepared the pleading/motion, that there
under Rule 1.8 either by personal service or courier.
is sufficient factual basis for the statements of fact
stated therein, that there is sufficient basis in the
Resort to registered mail is allowed only when
facts and the law to support the prayer for relief
courier services are not available.
stated therein, and the pleading/motion is filed in
good faith and is not interposed for delay."
How about service of summons?
Questions of Fact
The Special ADR Rules does away with the service
of summons upon the respondent.
If there as issues of fact on grounds relied upon for
the court to refuse recognition and enforcement, the
The technical rules of summons do not apply.
court in accordance with Rule 13.8, shall, motu

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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 15 days nor more than 30 days from receipt
of the order.
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 under oral examination in a
foreign country under Rule 23 of the 1997
Revised Rules of Procedure.
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 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.
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."
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.
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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).
What disputes are not subject to arbitration?
Section 6 of the 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.
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 or arbitration, or it
contains decisions on matters beyond the
scope of the submission to arbitration,
provided that, if the decision on matters
submitted to arbitration can be separated from
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those not so submitted, that part of the award
which contains decisions on matters submitted
to arbitration may be recognized or enforced;
or
(iv) the composition of the arbitral tribunal or
the arbitral procedure was not in
accordance with the agreement of the
parties or, failing such agreement, was not in
accordance with the law of the country where
the arbitration took place; or
(v) the award has not yet become binding
on the parties or has been set aside or
suspended by a court of the country in which,
or under the law of which, that award was
made.
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 15 day period to file the motion is non-extendible
and commences to run from receipt of the decision.
The RTC is mandated to resolve the motion for
reconsideration within 30 days from the receipt of the
opposition or comment or upon the expiration of the
period to file the 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).
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 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 Php 4,000.00
shall be paid at the time of the filing of the petition for
review.
Posting of Bond Pending Appeal
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Section 46 of RA 9285 requires the losing party to
post a counter-bond during the pendency of the
appeal on the decision of the ERTC confirming the
foreign arbitral award.
Under Rule 19.25 of the Special ADR Rules, the
Court of Appeals shall, within 15 days from receipt
of the decision 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 15 days
from notice of the RTC's decision.
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 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 Appeal's decision.
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Grounds for Petition for Review to the SC

(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."

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