Foreign Arbitral

Award
Concept of Foreign Arbitration
under Philippine Law
Rule 1.11(d) of the SADR defined foreign arbitral
award as ”one made in a country other than the
Philippines.”
Adoption of the New York Convention
in the Philippines
 Convention on the Recognition The agreement was concurred
and Enforcement Foreign in by the Philippine Senate,
Arbitral Awards, also known as Series No. 71, May 10, 1965.
New York Convention, was The Philippine instrument of
adopted in NYC by United ratification was signed by the

Adoption of Nations on June 10, 1958. President Macapagal on

October 11, 1965.

the New York

Convention in
the Philippines The New York Convention
governs the recognition and
enforcement of foreign arbitral
award in the Philippines.
 Article I
New York Convention

1. This Convention shall apply to 3. When signing, ratifying or

the recognition and enforcement 2. The term "arbitral acceding to this Convention, or
of arbitral awards made in the awards" shall include notifying extension under article X
territory of a State other than the hereof, any State may on the basis
not only awards made of reciprocity declare that it will
State where the recognition and
enforcement of such awards are
by arbitrators apply the Convention to the
appointed for each recognition and enforcement of
sought, and arising out of
awards made only in the territory of
differences between persons, case but also those another Contracting State. It may
whether physical or legal. It shall
made by permanent also declare that it will apply the
also apply to arbitral awards not
arbitral bodies to which Convention only to differences
considered as domestic awards
arising out of legal relationships,
in the State where their the parties have whether contractual or not, which
recognition and enforcement are
submitted. are considered as commercial
sought. under the national law of the State
making such declaration.
 Arbitration Agreement
Article II of the New York Convention

3. The court of a Contracting

1. Each Contracting State shall
State, when seized of an
recognize an agreement in
2. The term "agreement action in a matter in respect
writing under which the parties
undertake to submit to
in writing" shall include of which the parties have
an arbitral clause in a made an agreement within
arbitration all or any
the meaning of this article,
differences which have arisen contract or an arbitration
shall, at the request of one of
or which may arise between agreement, signed by the parties, refer the parties
them in respect of a defined the parties or contained to arbitration, unless it finds
legal relationship, whether
in an exchange of letters that the said agreement is null
contractual or not, concerning
or telegrams. and void, inoperative or
a subject matter capable of
incapable of being performed.
settlement by arbitration.
 Article II(3) of the New York Convention
as similar to R.A. 9285 Section 24

SEC. 24. Referral to Arbitration. - A court before which an

action is brought in a matter which is the subject matter of
an arbitration agreement shall, if at least one party so
requests not later that the pre-trial conference, or upon the
request of both parties thereafter, refer the parties to
arbitration unless it finds that the arbitration agreement is
null and void, inoperative or incapable of being performed.
 Foreign Arbitral Awards
Article III of the New York Convention

Each Contracting State shall recognize arbitral awards as binding

and enforce them in accordance with the rules of procedure of the
territory where the award is relied upon, under the conditions laid
down in the following articles. There shall not be imposed
substantially more onerous conditions or higher fees or charges on
the recognition or enforcement of arbitral awards to which this
Convention applies than are imposed on the recognition or
enforcement of domestic arbitral awards.
 Foreign Arbitral Awards
RA 9285 Chapter 7(B), Section 42

SEC. 42. Application of the New York Convention. - The New York
Convention shall govern the recognition and enforcement of arbitral awards
covered by the said Convention.

The recognition and enforcement of such arbitral awards shall be filled with
regional trial court in accordance with the rules of procedure to be
promulgated by the Supreme Court. Said procedural rules shall provide that
the party relying on the award or applying for its enforcement shall file with
the court the original or authenticated copy of the award and the arbitration
agreement. If the award or agreement is not made in any of the official
languages, the party shall supply a duly certified translation thereof into any
of such languages.
 Foreign Arbitral Awards
RA 9285 Chapter 7(B), Section 42(Cont.)

The applicant shall establish that the country in which foreign arbitration
award was made is a party to the New York Convention.

If the application for rejection or suspension of enforcement of an award has

been made, the regional trial court may, if it considers it proper, vacate its
decision and may also, on the application of the party claiming recognition or
enforcement of the award, order the party to provide appropriate security.
 Foreign Arbitral Awards
RA 9285 Chapter 7(B), Section 43 Special ADR Rules, Rule 13.4 par.1

SEC. 43. Recognition and Enforcement Rule 13.4. par.1 Governing law - The
of Foreign Arbitral Awards Not Covered recognition and enforcement of a foreign
by the New York Convention. - The arbitral award shall be governed by the
recognition and enforcement of foreign 1958 New York Convention on the
arbitral awards not covered by the New Recognition and Enforcement of Foreign
Arbitral Awards (the "New York
York Convention shall be done in
Convention") and this Rule. The court may,
accordance with procedural rules to be
upon grounds of comity and reciprocity,
promulgated by the Supreme Court. The
recognize and enforce a foreign arbitral
Court may, on grounds of comity and
award made in a country that is not a
reciprocity, recognize and enforce a signatory to the New York Convention as
non-convention award as a convention if it were a Convention Award.
award.
Recognition and enforcement of non-convention award
Special ADR Rules, Rule 13.12

Rule 13.12. Recognition and enforcement of non-convention award. - The court

shall, only upon grounds provided by these Special ADR Rules, recognize and
enforce a foreign arbitral award made in a country not a signatory to the New York
Convention when such country extends comity and reciprocity to awards made in
the Philippines. If that country does not extend comity and reciprocity to awards
made in the Philippines, the court may nevertheless treat such award as a foreign
judgment enforceable as such under Rule 39, Section 48, of the Rules of Court.
Procedure for Recognition and Enforcement of
Foreign Arbitral Awards
 RECOGNITION AND ENFORCEMENT OF A
FOREIGN ARBITRAL AWARD
Special ADR Rules, Rule 13

Rule 13.2. When to Rule 13.3. Venue. - The petition to

Rule 13.1. Who may
petition. - At any recognize and enforce a foreign arbitral
request recognition
time after receipt of award shall be filed, at the option of the
and enforcement. -
a foreign arbitral petitioner, with the Regional Trial Court
Any party to a
(a) where the assets to be attached or
foreign arbitration award, any party to
levied upon is located, (b) where the act
may petition the arbitration may
to be enjoined is being performed, (c) in
court to recognize petition the proper
the principal place of business in the
and enforce a Regional Trial Court Philippines of any of the parties, (d) if
foreign arbitral to recognize and any of the parties is an individual, where
award. enforce such award. any of those individuals resides, or (e) in
the National Capital Judicial Region.
 RECOGNITION AND ENFORCEMENT OF A
FOREIGN ARBITRAL AWARD
Special ADR Rules, Rule 13

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 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
petitioner 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.
 RECOGNITION AND ENFORCEMENT OF A
FOREIGN ARBITRAL AWARD
Special ADR Rules, Rule 13

Rule 13.6. Notice and opposition. - Upon finding that the petition filed under this Rule is sufficient
both in form and in substance, the court shall cause notice and a copy of the petition to be
delivered to the respondent allowing him to file an opposition thereto within thirty (30) days from
receipt of the notice and petition.

Rule 13.7. Opposition. - The opposition shall be verified by a person who has personal
knowledge of the facts stated therein.

Rule 13.8. Submissions. - If the court finds that the issue between the parties is mainly one of
law, the parties may be required to submit briefs of legal arguments, not more than thirty (30)
days from receipt of the order, sufficiently discussing the legal issues and the legal bases for the
relief prayed for by each other.
 RECOGNITION AND ENFORCEMENT OF A
FOREIGN ARBITRAL AWARD
Special ADR Rules, Rule 13

If, from a review of the petition or opposition, there are issues of fact relating to the ground/s relied
upon for the court to refuse enforcement, the court shall, motu proprio or upon request of any party,
require the parties to simultaneously submit the affidavits of all of their witnesses within a period of
not less than fifteen (15) days nor more than thirty (30) days from receipt of the order. The court may,
upon the request of any party, allow the submission of reply affidavits within a period of not less than
fifteen (15) days nor more than thirty (30) days from receipt of the order granting said request. There
shall be attached to the affidavits or reply affidavits all documents relied upon in support of the
statements of fact in such affidavits or reply affidavits.

Rule 13.9. Hearing. - The court shall set the case for hearing if on the basis of the foregoing
submissions there is a need to do so. The court shall give due priority to hearings on petitions under
this Rule. During the hearing, the affidavits of witnesses shall take the place of their direct testimonies
and they shall immediately be subject to cross-examination. The court shall have full control over the
proceedings in order to ensure that the case is heard without undue delay.
Court Action
 Foreign Arbitral Awards
RA 9285 Chapter 7(B), Section 44 Special ADR Rules, Section 13.11

SEC. 44. Foreign Arbitral Award Not Rule 13.11. Court action. - It is presumed that a
Foreign Judgment. - A foreign arbitral foreign arbitral award was made and released in
award, when confirmed by a court of due course of arbitration and is subject to
a foreign country, shall be recognized enforcement by the court.
and enforced as a foreign arbitral
award and not a judgment of a foreign The court shall recognize and enforce a foreign
court. arbitral award unless a ground to refuse
recognition or enforcement of the foreign arbitral
A foreign arbitral award, when award under this rule is fully established.
confirmed by the Regional Trial Court,
shall be enforced in the same manner The decision of the court recognizing and
as final and executory decisions of enforcing a foreign arbitral award is immediately
courts of law of the Philippines. executory.
 PETITION FOR RECOGNITION AND
ENFORCEMENT OF A FOREIGN ARBITRAL AWARD
Special ADR Rules, Rule 13

Rule 13.11. par.4

In resolving the petition for recognition and enforcement of a foreign arbitral
award in accordance with these Special ADR Rules, the court shall either [a]
recognize and/or enforce or [b] refuse to recognize and enforce the arbitral
award. The court shall not disturb the arbitral tribunal’s determination of facts
and/or interpretation of law.
 GROUNDS TO REFUSE
RECOGNITION AND ENFORCEMENT
New York Convention, Article V Special ADR Rules, Rule 13.4 par.2
1. Recognition and enforcement of the award A Philippine court shall not set aside a foreign
may be refused, at the request of the party arbitral award but may refuse it recognition and
against whom it is invoked, only if that party enforcement on any or all of the following
furnishes to the competent authority where grounds:
the recognition and enforcement is sought,
a. The party making the application to refuse
proof that:
recognition and enforcement of the award
furnishes proof that:
(a) The parties to the agreement referred to in
article II were, under the law applicable to (i). A party to the arbitration agreement was
them, under some incapacity, or the said under some incapacity; or the said agreement is
agreement is not valid under the law to which not valid under the law to which the parties have
the parties have subjected it or, failing any subjected it or, failing any indication thereof,
indication thereon, under the law of the under the law of the country where the award
country where the award was made; or was made; or
 GROUNDS TO REFUSE
RECOGNITION AND ENFORCEMENT
New York Convention, Article V Special ADR Rules, Rule 13.4 par.2
(b) The party against whom the award is invoked (ii). The party making the application was not given
was not given proper notice of the appointment proper notice of the appointment of an arbitrator
of the arbitrator or of the arbitration proceedings or of the arbitral proceedings or was otherwise
or was otherwise unable to present his case; or unable to present his case; or

(c) The award deals with a difference not (iii). The award deals with a dispute not
contemplated by or not falling within the terms contemplated by or not falling within the terms of
of the submission to arbitration, or it contains the submission to arbitration, or contains decisions
decisions on matters beyond the scope of the on matters beyond the scope of the submission to
submission to arbitration, provided that, if the arbitration; provided that, if the decisions on
decisions on matters submitted to arbitration matters submitted to arbitration can be separated
can be separated from those not so submitted, from those not so submitted, only that part of the
that part of the award which contains decisions award which contains decisions on matters not
on matters submitted to arbitration may be submitted to arbitration may be set aside; or
recognized and enforced; or
 GROUNDS TO REFUSE
RECOGNITION AND ENFORCEMENT
New York Convention, Article V Special ADR Rules, Rule 13.4 par.2
(d) The composition of the arbitral (iv). The composition of the arbitral tribunal
authority or the arbitral procedure was not or the arbitral procedure was not in
in accordance with the agreement of the accordance with the agreement of the
parties, or, failing such agreement, was parties or, failing such agreement, was not
not in accordance with the law of the in accordance with the law of the country
country where the arbitration took place; where arbitration took place; or
or
(v). The award has not yet become binding
(e) The award has not yet become binding on the parties or has been set aside or
on the parties, or has been set aside or suspended by a court of the country in
suspended by a competent authority of which that award was made; or
the country in which, or under the law of
which, that award was made.
 GROUNDS TO REFUSE
RECOGNITION AND ENFORCEMENT
New York Convention, Article V Special ADR Rules, Rule 13.4 par.2
2. Recognition and enforcement of an
arbitral award may also be refused if the b. The court finds that:
competent authority in the country where
recognition and enforcement is sought (i). The subject-matter of the
finds that: dispute is not capable of
settlement or resolution by
(a) The subject matter of the difference is
not capable of settlement by arbitration arbitration under Philippine law; or
under the law of that country; or
(ii). The recognition or enforcement
(b) The recognition or enforcement of the of the award would be contrary to
award would be contrary to the public
public policy.
policy of that country.
 REJECTION OF A FOREIGN ARBITRAL AWARD
R.A. 9285, Section 45 Special ADR Rules, Rule 13.4 par.3

SEC. 45. Rejection of a Foreign Arbitral

The court shall disregard any
Award. - A party to a foreign arbitration
proceeding may oppose an application ground for opposing the
for recognition and enforcement of the recognition and enforcement of a
arbitral award in accordance with the foreign arbitral award other than
procedural rules to be promulgated by those enumerated above.
the Supreme Court only on those
grounds enumerated under Article V of
the New York Convention. Any other
ground raised shall be disregarded by
the regional trial court.
JUDICIAL REVIEW OF FOREIGN ARBITRAL AWARD
Special ADR Rules, Rule 19.11

Rule 19.11. Rule on judicial review of foreign arbitral award. - The court
can deny recognition and enforcement of a foreign arbitral award only
upon the grounds provided in Article V of the New York Convention, but
shall have no power to vacate or set aside a foreign arbitral award.
 ADJOURNMENT OF DECISION ON
ENFORCMENT OF AWARD
New York Convention, Article VI Special ADR Rules, Rule 13.10

Article VI Rule 13.10. Adjournment/deferment of

If an application for the setting aside or decision on enforcement of award. - The
suspension of the award has been made court before which a petition to recognize
to a competent authority referred to in and enforce a foreign arbitral award is
pending, may adjourn or defer rendering a
article V (1) (e), the authority before
decision thereon if, in the meantime, an
which the award is sought to be relied
application for the setting aside or
upon may, if it considers it proper,
suspension of the award has been made
adjourn the decision on the enforcement with a competent authority in the country
of the award and may also, on the where the award was made. Upon
application of the party claiming application of the petitioner, the court may
enforcement of the award, order the also require the other party to give suitable
other party to give suitable security. security.
Cases
 Tuna Processing, Inc. v. Philippine Kingford, Inc.
667 SCRA 287 (2012)
Facts:
Kanemitsu Yamaoka, co-patentee of a US Patent, a Philippine Letters Patent and
an Indonesian Patent (collectively, "Yamaoka Patent"), and five Philippine tuna
processors, which include respondent Philippine Kingford, Inc. (Kingford)entered
into a Memorandum of Agreement (MOA). The MOA established the Tuna
Processors Inc (TPI), a corporation organized in California and co-owned by
licensor and sponsors, to enforce the Yamaoka Patent, and under which the
sponsors sought to be licensed to practice the patented processes in the US,
the Philippines and Indonesia, to enforce the patents and to collect royalties in
conjunction with licensor. TPI was also established to maintain bank accounts
for the deposit of funds and disbursement of expenses.
 Tuna Processing, Inc. v. Philippine Kingford, Inc.
667 SCRA 287 (2012)
Eventually sponsors/licensees withdrew from TPI and reneged on their
obligations, prompting TPI to submit the dispute for arbitration before the
International Centre for Dispute Resolution in California. An arbitral award in the
total amount of US$ 1,750.846.10 was rendered in favor of TPI. To enforce the
award, TPI filed on 10 October 2007 a Petition for Confirmation, Recognition,
andEnforcement of Foreign Arbitral Award before the Regional Trial Court.
Respondent Kingford, a domestic Philippine corporation, filed a motion to
dismiss which was, at first, denied, but subsequently reconsidered leading to
the dismissal of the petitionon the ground that the petitioner lacked legal
capacity to sue in the Philippines. The dismissal was appealed directly to the
Supreme Court.
 Tuna Processing, Inc. v. Philippine Kingford, Inc.
667 SCRA 287 (2012)
Issue:
Can a foreign corporation not licensed to do business in the Philippines, but which collects
royalties from entities in the Philippines, sue here toenforce a foreign arbitral award?

Held:
Yes. On the matter of capacity to sue, a foreign arbitral award should be respected not because
it is favored over domestic laws and procedures, but because Republic Act No. 9285 has
certainly erased any conflict of law question. Even assuming, that the court a quo correctly
observed that the Model Law, not the New York Convention, governs the subject arbitral award,
petitioner may still seek recognition and enforcement of the award in Philippine court, since the
Model Law prescribes substantially identical exclusive grounds for refusing recognition or
enforcement. Premises considered, petitioner TPI, although not licensed to do business in the
Philippines, may seek recognition and enforcement of the foreign arbitral award in accordance
with the provisions of the Alternative Dispute Resolution Act of 2004.
MABUHAY HOLDINGS CORPORATION v. SEMBCORP LOGISTICS LIMITED
GR No. 212734, 2018-12-05
Facts:
Mabuhay and IDHI incorporated Water Jet Shipping Corporation (WJSC) in the Philippines to
engage in the venture of carrying passengers on a common carriage by inter-island fast ferry.
Mabuhay, IDHI, and Sembcorp entered into a Shareholders' Agreement governing their
relationship in connection with a planned business expansion. Sembcorp decided to invest in the
said corporations

Pursuant to the agreement, Mabuhay and IDHI voluntarily agreed to jointly guarantee that
Sembcorp would receive a minimum accounting return of US$929,875.50 (Guaranteed Return)
following the full disbursement of the Sembcorp's equity investment. Any dispute, controversy or
claim arising out of or relating to this Agreement, or a breach thereof, other than intra-corporate
controversies, shall be finally settled by arbitration in accordance with the rules of conciliation
and arbitration of the International Chamber of Commerce by one arbitrator with expertise in the
matter at issue appointed in accordance with said rules. The arbitration proceeding including the
rendering of the award shall take place in Singapore.
MABUHAY HOLDINGS CORPORATION v. SEMBCORP LOGISTICS LIMITED
GR No. 212734, 2018-12-05
Sembcorp effected full payment of its equity investment.

Sembcorp requested for the payment of its Guaranteed Return from Mabuhay and IDID.
Mabuhay admitted its liability but asserted that since the obligation is joint, it is only liable for fifty
percent (50%).

Sembcorp filed a Request for Arbitration before the International Court of Arbitration of the
International Chamber of Commerce (ICC) in accordance with the Agreement. A Final Award was
rendered by Dr. Chantara-Opakorn, the Sole Arbitrator appointed by the ICC and directed
Mabuhay to make the following payments to Sembcorp.

Sembcorp filed a Petition for Recognition and Enforcement of a Foreign Arbitral Award before the
RTC of Makati City. Mabuhay argued that the dispute is an intra-corporate controversy, hence,
excluded from the scope of the arbitration clause in the Agreement.
MABUHAY HOLDINGS CORPORATION v. SEMBCORP LOGISTICS LIMITED
GR No. 212734, 2018-12-05
Sembcorp became the controlling stockholder of IDHI by acquiring substantial shares of stocks
through its nominee, Mr. Pablo N. Sare. Mabuhay thus claimed that it has already been released
from the joint obligation with IDHI as Sembcorp assumed the risk of loss when it acquired
absolute ownership over the aforesaid shares. Moreover, Mabuhay argued that the appointment
of Dr. Chantara-Opakorn was not in accordance with the arbitral clause as he did not have the
expertise in the matter at issue, which involved application of Philippine law. The RTC refused the
enforcement of the final award and ruled that the matter is intra-corporate and the arbitral award
cannot be recognized because it was not the work of an expert as required under the agreement.
The CA reversed the decision.

Issue:
Whether or not the RTC correctly refused to enforce the final award.

Held:
No. The SC found that Mabuhay failed to establish any of the grounds for refusing enforcement
and recognition of a foreign arbitral award
MABUHAY HOLDINGS CORPORATION v. SEMBCORP LOGISTICS LIMITED
GR No. 212734, 2018-12-05
To recall, the Agreement provides that any dispute, controversy or claim arising out of or relating
to this Agreement, or breach thereof, other than intra-corporate controversies, shall be finally
settled by arbitration."

Among the issues settled in the Final Award is whether the dispute is an intra-corporate
controversy. Dr. Chantara-Opakom ruled in the negative. There was no transfer of shares from
IDHI to the Claimant. The Sole Arbitrator is of the opinion that the dispute in this arbitration is not
an intra-corporate controversy, and, hence, it is not excluded from arbitration. As to the issue of
the expertise of the sole arbitrator, the agreement provides that the arbitrator with expertise in
the matter at issue shall be appointed in accordance with the ICC Rules. The ICC, thus, is the
appointing authority agreed upon by the parties. Where the parties have agreed to submit their
dispute to institutional arbitration rules, and unless they have agreed to a different procedure,
they shall be deemed to have agreed to procedure under such arbitration rules for the selection
and appointment of arbitrators.
MABUHAY HOLDINGS CORPORATION v. SEMBCORP LOGISTICS LIMITED
GR No. 212734, 2018-12-05
Again, the Special ADR Rules specifically provides that in resolving the petition for recognition
and enforcement of a foreign arbitral award, the court shall not disturb the arbitral tribunal's
determination of facts and/or interpretation of law.

The RTC, in its decision dismissing the petition of Sembcorp, declared that "it is undisputed that
the shares of stocks of IDHI in WJNA and WJSC were actually owned by Sembcorp before the
filing of the request for arbitration" without providing any factual basis for such conclusion which
directly contradicts the arbitral tribunal's findings. In the absence of sufficient evidence that
Sembcorp acquired the shares of IDHI, the Court finds no cogent reason to disturb the arbitral
tribunal's ruling in favor of the latter's jurisdiction over the dispute.
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