Enforcement of Judgments 2021

Last Updated August 03, 2021

Philippines

Law and Practice

Authors



Cruz Marcelo & Tenefrancia (CMT) is a top-tier full-service law firm in the Philippines. It provides excellent legal assistance to companies at all levels of development involving complex and multifaceted cases. CMT has been consistently cited in various international publications for offering concise, relevant and insightful advice honed from a keen understanding of the needs of local and foreign companies doing business in the Philippines. The firm’s lawyers are highly respected by their peers for providing sought-after legal guidance to leaders of the nation, captains of industry, and even to indigent clients. All 23 partners, together with the firm’s associates, are bound by a commitment to deliver the highest quality of service to help the firm’s clients attain success and contribute to nation building. Together, practising law as one firm, CMT provides unparalleled legal representation in various fields of law.

Identifying and Disclosure of the Asset Position of Parties

The Philippine jurisdiction provides for various modes of identifying the asset position of another party, primarily by requesting such information for cause from the different government agencies that act as repositories of assets information. These include:

  • the Land Transportation Office for identifying vehicle ownership;
  • the Registry of Deeds for identifying land ownership;
  • the Intellectual Property Office for ownership of intellectual property rights;
  • the Securities and Exchange Commission for assets of corporations and publicly listed companies; and
  • the Maritime Industry Authority Board for vessel ownership.

A party’s assets in a bank may also be the subject of inquiry under limited instances. While Philippine Republic Act No (RA) 1405 provides that all deposits of whatever kind or nature, including trusts, in banks in the Philippines generally may not be examined or looked into, the limited instances where an inquiry may be made include:

  • upon written permission of the depositor;
  • in cases of impeachment;
  • upon order of a competent court in cases of bribery or dereliction of duty of public officials, violation of the Anti-Money Laundering Act (RA 9160, Section 11);
  • in cases where the money deposited or invested is the subject matter of the litigation (RA 1405, Section 2); or
  • upon inquiry of the Ombudsman (RA 6770, Section 15).

Freezing of Assets

Assets of a litigant may be frozen or attached as a mode of provisional remedy pending the judgment on the merits of the case in the following instances/actions:

  • for recovery of a specified amount;
  • involving embezzled property;
  • for recovery of property fraudulently taken;
  • involving fraud in contracting or performing obligation;
  • against a party who has removed or disposed of property to defraud creditors; or
  • against a non-resident defendant.

The request for a writ of preliminary attachment may be made at the commencement of the action or at any time before entry of judgment and only upon posting of a bond (Rules of Civil Procedure, Rule 57).

Freezing of assets on the ground that any monetary instrument or property is in any way related to unlawful activities punishable under the Anti-Money Laundering Act is also allowed (RA 9160).

Interlocutory Order

An order is interlocutory when it does not finally dispose of the case, or “the ordinary proceeding in the nature of judicial action therein”, on account of the fact that the court still has to undergo hearing and receiving the evidence to be presented by the other party in support of their claim or counterclaim (Sitchon v Provincial Sheriff of Occidental Negros, G.R. No L-1853 [27 February 1948]). These types of orders are not appealable (Rules of Civil Procedure, Rule 41, Section 1 [c]).

Final Order

A final order or judgment is issued when there had already been an adjudication on the merits of the case that, on the basis of the evidence presented at the trial, declares categorically the respective rights and obligations of the parties and which party is legally in the right, and nothing more remains for the courts to be done except to cause the execution of the judgment once it becomes “final and executory” (Pahila-Garrido v Tortogo, G.R. No 156358 [17 August 2011]).

Default Judgment

Default judgment is obtained when the defendant fails to file an answer within the time allowed by the Rules of Civil Procedure. The court shall render judgment granting the claimant such relief as their pleading may warrant. A party in default shall be entitled to notices of subsequent proceedings but shall not take part in the trial (Rules of Civil Procedure, Rule 9, Section 3).

Judgment on the Pleadings

A judgment on the pleadings is proper when an answer is filed but there are no ostensible issues at all on account of such answer’s failure to tender an issue, or otherwise admits the material allegations of the adverse party’s pleadings. However, in actions for declaration of nullity or annulment of marriage or for legal separation, the material facts alleged in the complaint shall always be proved (Rules of Civil Procedure, Rule 34). It is a judgment on the facts as pleaded (Wood Technology Corporation v Equitable Banking Corporation, G.R. No 153867 [17 February 2005]).

Summary Judgment

Summary judgment is rendered upon showing that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law (Rules of Civil Procedure, Rule 35). It is a judgment on the facts summarily proved by affidavits, depositions, admissions and other documents filed by the parties (Wood Technology Corporation v Equitable Banking Corporation, supra).

Partial summary judgment is rendered when there are certain facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in controversy. The facts so specified shall be deemed established, and the court trial shall direct the conduct of further proceedings on the controverted facts (Rules of Civil Procedure, Rule 35, Section 4).

Separate Judgment

This is a judgment disposing of one claim for relief as soon as there has been a determination of the issues material to such particular claim and all counterclaims arising therefrom. The judgment shall terminate the action with respect to such claim so disposed of and the action shall proceed as to the remaining claims (Rule 36, Section 5).

Judgments are enforceable and may be executed when they become final and executory. If no appeal or motion for new trial or reconsideration is filed within the time provided, the judgment or final order shall be entered by the clerk in the book of entries of judgments. The date of finality of the judgment or final order shall be deemed to be the date of its entry. The record shall contain the dispositive part of the judgment or final order and shall be signed by the clerk, within a certificate that such judgment or final order has become final and executory (Rules of Civil Procedure, Rule 51, Section 10).

When the judgment becomes final and executory, the winning party may file a motion for the issuance of the writ of execution as a matter of right (Rules of Civil Procedure, Rule 39, Section 1). Alternatively, the party may file a motion for the issuance of the writ of execution, as a matter of the court’s discretion, when:

  • the judgment is pending appeal (where enforcement of judgment is generally stayed upon appeal); and
  • several, separate or partial judgments are issued (where enforcement of judgment is automatically stayed until the rendition of the final judgment) (Rules of Civil Procedure, Rule 39, Section 2).

Upon issuance by the court of the writ of execution, various modes of enforcement may be undertaken depending upon the nature of the property subject of the execution or enforcement of the judgment.

Enforcement of Money Judgments

For money judgments, the following modes are available for the enforcement of the judgment.

Immediate payment on demand

The executing officer shall demand from the judgment obligor for the immediate payment of the full amount as stated in the writ of execution. Payment must be made in cash or by certified bank cheque payable to the judgment obligee or other mode of payment acceptable to the judgment obligee. The lawful fees for the execution of the judgment shall be for the account of the judgment obligor (Rules of Civil Procedure, Rule 39, Section 9 [a]).

Satisfaction by levy

The executing officer shall levy upon the properties of the judgment obligor that are not exempt from execution should the judgment obligor not have sufficient funds to pay the amount due. These include real property, stocks, shares, debts, credits and other personal property, or any interest in real or personal property (Rules of Civil Procedure, Rule 39, Section 9 [b]).

Garnishment of debts and credits

The officer may levy on debts due the judgment obligor and other credits, including bank deposits, financial interests, royalties, commissions and other personal property not capable of manual delivery in the possession or control of third parties. Levy shall be made by serving notice upon the person owing such debts or having in their possession or control such credits to which the judgment obligor is entitled (Rules of Civil Procedure, Rule 39, Section 9 [c]).

Enforcement of Judgments for Specific Acts

For judgments for specific acts, the following modes are available for the enforcement of the judgment.

Conveyance of deeds or other specific acts

The court may direct another person to perform the act at the cost of the non-compliant party in cases when the judgment directs a party to execute a conveyance of land or personal property or the delivery of deeds, or to perform any other specific acts. In the case of conveyance of real or personal properties situated in the Philippines, the court may issue an order directing the divestment of title of the losing party and vesting of the title to the other party (Rules of Civil Procedure, Rule 39, Section 10 [a]).

Sale of real or personal property

The executing officer shall cause the sale of the property and apply the proceeds thereof in accordance with the judgment (Rules of Civil Procedure, Rule 39, Section 10 [b]).

Delivery or restitution of real property

The executing officer shall demand that the losing party and any other persons claiming any right under them vacate the property within three days and deliver the property to the winning party. Otherwise, the executing officer, with the assistance of peace officers using means that are reasonably necessary, shall place the winning party in possession of the property. The costs, damages, rents or profits awarded in the judgment shall be satisfied in the same manner as a judgment for money (Rules of Civil Procedure, Rule 39, Section 10[c]).

Removal of improvements on property subject of execution

The executing officer may not immediately destroy, remove or demolish any structure or improvement built by the judgment obligor or its agent. Instead, the judgment obligee, upon failure by the judgment obligor to remove the same, must request the court to issue a special order to remove or demolish the structures (Rules of Civil Procedure, Rule 39, Section 10[d]).

Delivery of personal property

The executing officer shall take possession of the property and deliver it to the judgment obligee (Rules of Civil Procedure, Rule 39, Section 10[e]).

The fees to be paid by the party for the enforcement of a judgment depend on different factors, such as:

  • the nature of the judgment (eg, money judgment or judgment for the conveyance of property);
  • the personal circumstances of the judgment obligor (eg, whether the judgment obligor has sufficient funds or whether the executing officer will resort to levying and causing the sale of properties or the location of the judgment obligor); and
  • the logistical difficulties involved.

Costs in the enforcement of judgments include the lawful fees imposed by the courts and the attendant costs brought about by the exigencies of enforcement in the form of sheriff’s expenses in executing the process or safeguarding the property levied upon, which include kilometrage for each kilometre of travel, guard’s fees, warehousing and similar charges, in an amount estimated by the sheriff, subject to the approval of the court and liquidation by the sheriff (Rules of Civil Procedure, Rule 141, Section 9).

The time for the enforcement of domestic judgments is likewise dependent on different factors. Based on practice, it takes more than a year for a domestic judgment to be fully executed.

A party, after having obtained a favourable judgment before the courts that remains unsatisfied, may request for a court order to require the judgment obligor or the latter’s obligor under the pain of contempt to appear before the court and be examined concerning their property, income and debt due to them. Proceedings will then be conducted for the application of the property, income and debt due to the judgment obligor towards the satisfaction of the judgment (Rules of Civil Procedure, Rule 39, Sections 36–38).

Before a judgment becomes final and executory, the following remedies may be availed by the parties.

Remedies at the Same Court that Issued the Judgment

Motion for new trial

This remedy is available when there is:

  • fraud, accident, mistake or excusable negligence; or
  • newly discovered evidence (Rules of Civil Procedure, Rule 37).

Motion for reconsideration

This remedy is available when:

  • the damages awarded are excessive;
  • the evidence is insufficient to justify the decision or final order; or
  • the decision or final order is contrary to law (Rules of Civil Procedure, Rule 37).

Remedies at a Higher Court

Appeal

Upon an unfavourable judgment, or when a motion for reconsideration is denied, an appeal to a higher court is a remedy, with the long-standing doctrine of hierarchy of courts being observed. Subject to the jurisdiction of certain special courts, courts are organised based on a hierarchy, with the entry-level court as the Municipal Trial Court, followed by the Regional Trial Court, the Court of Appeals and, finally, the Supreme Court. In lodging an appeal, the progression of the courts as organised must be observed and no direct resort to the Supreme Court will be permitted save for certain exceptions. In Diocese of Bacolod v Commission on Elections, G.R. No 205728 (21 January 2015), the Supreme Court explained the importance of adhering to the hierarchy of courts in order “to ensure that every level of the judiciary performs its designated roles in an effective and efficient manner”.

In all cases where only questions of law are raised or involved, the appeal shall be to the Supreme Court (Rules of Civil Procedure, Rule 41, Section 2).

When a judgment becomes final and executory, the following are the remedies.

Petition for relief from judgment

This is a special remedy of equitable character, allowed only in exceptional cases, such as when there is no other available or adequate remedy (Philippine Amanah Bank v Contreras, G.R. No 173168 [29 September 2014]):

  • after the judgment had become final and executory; and
  • the right to appeal is lost, as a result of fraud, accident, mistake or excusable negligence (Rules of Civil Procedure, Rule 38).

Annulment of judgment

Annulment of judgment may be availed of when ordinary remedies of new trial, appeal, petition for relief, or other appropriate remedies are no longer available through no fault of the petitioner and may be based only on:

  • extrinsic fraud that could not have been availed of in a motion for new trial or petition for relief;
  • lack of jurisdiction; or
  • lack of due process (Rules of Civil Procedure, Rule 47; National Housing Authority v Evangelista, G.R. No 140945 [16 May 2005]).

Judgments that are already barred by the statute of limitations may no longer be enforced or executed. An obligation arising out of a judgment is barred after ten years from when the right accrued (Civil Code, Article 1144).

The judgment obligee has a period of five years from the entry of judgment to file a motion for execution. After the lapse of five years but before being barred by the statute of limitations or before the lapse of ten years, the judgment obligee may enforce the judgment by filing a separate action for the court to render a revived judgment. This revived judgment may be enforced anew in accordance with the foregoing period for execution of judgments (Rules of Civil Procedure, Rule 39, Section 6).

The clerk of court of all courts keeps a book of entries of judgments where final and executory judgments are recorded. The record shall contain the dispositive portion of the judgment signed by the clerk of court and a certificate that such judgment or final order has become final and executory (Rules of Civil Procedure, Rule 51, Section 10 and see Internal Rules of the Supreme Court, Rule 16, Section 2, Internal Rules of the Court of Appeals, Rule 15, Section 7).

The judgment obligor may not remove the judgment from the register. Upon satisfaction by the judgment obligor of the judgment, the satisfaction thereof is entered by the clerk of court in the court docket and in the execution book (Rules of Civil Procedure, Rule 39, Section 44).

Philippine courts do not take judicial notice of foreign judgments and laws (Corpuz v Sto. Tomas, G.R. No 186571 [11 August 2010]). The Philippines is not a signatory to any international treaty or convention relevant to enforcement of foreign judgments (Mijares v Ranada, G.R. No 139325 [12 April 2005]). Thus, a foreign judgment cannot be enforced simply by execution, as it merely creates a right of action, and its non-satisfaction is the cause of action by which a suit can be brought upon for its enforcement (Bank of the Philippine Islands Securities Corporation v Guevara, G.R. No 167052 [11 March 2015]).

Nonetheless, foreign judgments are reciprocally respected and rendered efficacious under certain conditions due to the rules of comity, utility and convenience of nations (Philippine Aluminum Wheels, Inc. v FASGI Enterprises, Inc., G.R. No 137378 [12 October 2000]).

For a foreign judgment involving a specific thing, or an action in rem, the judgment is conclusive upon the title to the thing. For a foreign judgment involving a person, or an action in personam, it is merely presumptive evidence of a right as between the parties and their successors in interest by a subsequent title (Rules of Civil Procedure, Rule 39, Section 48).

A foreign judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact (Rules of Civil Procedure, Rule 39, Section 48).

Philippine courts are not allowed to tackle the merits of a foreign judgment, save for a limited review thereof (Fujiki v Marinay, G.R. No 196049 [26 June 2013]), under limited grounds as discussed in 3.6 Challenging Enforcement of Foreign Judgments. Further, the foreign judgment or order that may be enforced in the Philippines should already be final and unappealable (Chuidian v Sandiganbayan, G.R. No 139941 [19 January 2001]).

When the foreign judgment or final order sought to be recognised and enforced is contrary to a sound and established public policy of the forum, the foreign judgment or final order shall not be applied (Bank of America v American Realty Corporation, G.R. No 133876 [29 December 1999]). Article 17 of the Civil Code also provides that foreign judgments cannot render ineffective laws that have as their object public order, public policy and good customs.

Jurisdiction, Venue and Prescription of Action to Enforce Foreign Judgment

A petition for enforcement of foreign judgment must be filed with the appropriate Regional Trial Court (Batas Pambansa Blg. 29, Section 19[6]). If it is a personal action, the petition may be filed in the Regional Trial Court where the petitioner or defendant resides, or in the case of a non-resident defendant, where the latter may be found, at the election of the plaintiff. If it is a real action, the petition must be filed with the Regional Trial Court with jurisdiction over the area wherein the real property involved, or a portion thereof, is situated (Rules of Civil Procedure, Rule 4). The petition must be filed within ten years from the time the cause of action accrues (Civil Code, Article 1144).

Proving Foreign Judgment and Its Authenticity

The foreign judgment and its authenticity must be proven as a fact under the rules on evidence of the Philippines (Republic of the Philippines v Cote, G.R. No 212860 [14 March 2018]).

It may be proven by:

  • an official publication thereof; or
  • a copy attested by the officer having the legal custody of the record, or by their deputy, and accompanied with a certificate that such officer has the custody (Rules of Evidence, Rule 132, Sections 24–25).

If the office in which the record is kept is in a foreign country that is a contracting party to a treaty or convention to which the Philippines is also a party, or considered a public document under such treaty or convention, the certificate or its equivalent shall be in the form prescribed by such treaty or convention subject to reciprocity granted to public documents originating from the Philippines. Relevantly, under the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (the "Apostille Convention"), documents emanating from an authority or an official connected with the courts or tribunals of a foreign country need not be presented before Philippine embassies or consulates for authentication before these are recognised as official records in the Philippines. A foreign judgment that is apostilled – ie, with a certificate issued by the competent authority of the originating state, certifying the authenticity of the signature, the capacity in which the person signing the document has acted and, where appropriate, the identity of the seal or stamp that it bears – is already proof of the existence of the foreign judgment (Apostille Convention, Articles 1–4).

For documents originating from a foreign country that is not a contracting party to a treaty or convention, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice-consul, or consular agent, or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of their office (Rules on Evidence, Rule 132, Sections 24).

The testimony under oath of a lawyer of a foreign state, who quoted verbatim the applicable law and who stated that the same was in force at the time the obligations were contracted, is considered sufficient evidence to establish the existence of said foreign law (Mercantile Insurance Co, Inc. v Yi, G.R. No 234501 [18 March 2019]).

Judicial Review of Decisions Relating to Foreign Judgments

After the Regional Trial Court renders its decision, an aggrieved party may file a motion for reconsideration in the same court, or appeal the adverse decision with the Court of Appeals, and, eventually, the Supreme Court.

Foreign judgments are considered to fall under the category of “all other actions not involving property”. A party desiring to enforce a foreign judgment must pay the minimal filing fee for “all other actions not involving property”, which is currently PHP2,000 (Mijares v Ranada, G.R. No 139325 [12 April 2005]; Supreme Court Administrative Circular No 35-04).

Considering the availability of a review process – ie, that an aggrieved party may elevate an adverse decision of the Regional Trial Court to the Court of Appeals and eventually to the Supreme Court, which is the final arbiter of cases – and the fact that the dockets of Philippine courts are clogged, it may take around three to seven years before a foreign judgment may be ultimately enforced.

A judgment rendered by a foreign court is presumed to be valid and binding in said foreign country, until the contrary is shown (Asiavest Merchant Bankers (M) Berhad v Court of Appeals, G.R. No 110263 [20 July 2001]).

Under the policy of efficiency, protection of party expectations, and to respect the jurisdiction of other states, a foreign judgment may only be repelled by clear and convincing evidence of the following limited grounds (Rules of Civil Procedure, Rule 39, Section 48; Fujiki v Marinay, G.R. No 196049 [26 June 2013]):

  • lack of jurisdiction;
  • lack of notice to the party;
  • collusion;
  • external fraud;
  • clear mistake of law;
  • clear mistake of fact;
  • contrary to overriding public policy (Republic v Gingoyon, G.R. No 166429 ([01 February 2006]);
  • contrary to mandatory laws (Republic v Gingoyon, G.R. No 166429 [01 February 2006]); and
  • lack of finality (Chuidian v Sandiganbayan, G.R. No 139941 [19 January 2001]).

Specifically for foreign decisions or judgment on support, the court may refuse recognition and enforcement thereof on the following additional grounds:

  • proceedings between the same parties for the same purpose were first instituted and still pending before another court;
  • the decision is incompatible with a decision rendered by another court between the same parties and having the same purpose; and
  • the respondent adduces competent evidence showing the fulfilment of their obligation to the extent that the recognition and enforcement relates to payments that fell due in the past (A.M. No 21-03-02-SC or the Rules on Action for Support and Petition for Recognition and Enforcement of Foreign Decisions or Judgments on Support).

Philippine courts cannot substitute their judgment on how a case was decided under foreign law; instead, Philippine courts limit the issue to whether the effect of foreign judgment must be extended in the Philippines (Suzuki v Office of the Solicitor General, G.R. No 212302 [02 September 2020]).

It is Philippine state policy to actively promote party autonomy in the resolution of disputes, particularly in favour of arbitration and enforcement of arbitral awards (Republic Act 9285 or the Alternative Dispute Resolution Act of 2004). Arbitration has been increasingly preferred as a speedy and more efficient recourse for dispute resolution. However, despite the steady growth and development in Philippine arbitration, the arbitration practice in the Philippines continue to pose challenges and issues that must be addressed.

Cases on the confirmation, correction or vacation of award in domestic arbitration, the recognition and enforcement or setting aside of an award in international commercial arbitration rendered in the Philippines, and the recognition and enforcement of a foreign arbitral award are governed by Supreme Court A.M. No 07-11-08-SC dated 1 September 2009, or the Special Rules of Court on Alternative Dispute Resolution (the "Special ADR Rules"). For these cases, which are lodged with the appropriate Regional Trial Court, Rule 19 of the Special ADR Rules provides for the remedies of motion for reconsideration (with the Regional Trial Court), appeal and certiorari (to the Court of Appeals and up until the Supreme Court).

As a rule, Philippine courts can only vacate or set aside the award of an arbitral tribunal upon a clear showing that it suffers from any of the infirmities or grounds for vacating an arbitral award under Section 24 of Republic Act No 876 (Arbitration Law of 1953) or under Rule 34 of the UNCITRAL Model Law on International Commercial Arbitration (1985), in a domestic arbitration, or for setting aside an award in an international arbitration in the Philippines under Article 34 of the 1985 Model Law, or for such other grounds provided under the Special ADR Rules (Special ADR Rules, Rule 19.10), as discussed under 4.3 Categories of Arbitral Awards Not Enforced.

If the Regional Trial Court is asked to set aside an arbitral award in a domestic or international arbitration conducted in the Philippines or in a foreign arbitral award on any ground other than those provided in the Special ADR Rules, the court shall entertain such ground for the setting aside or non-recognition thereof only if the same amounts to a violation of public policy. Not being defined by law or any rule, the Philippine Supreme Court has nonetheless described that to constitute a violation of “public policy” with respect to a foreign arbitral award, “[t]he illegality or immorality of the award must reach a certain threshold such that enforcement of the same would be against [the Philippines’] fundamental tenets of justice and morality, or it would blatantly be injurious to the public or the interests of the society” (Mabuhay Holdings Corporation v Sembcorp Logistics Limited, G.R. No 212734 [05 December 2018]).

Different laws govern the recognition and enforcement of arbitral awards depending on their classification; ie, domestic arbitral award, international commercial arbitration award rendered in the Philippines, or foreign arbitral award.

A domestic arbitral award rendered in the Philippines is one that is not international, as defined in Article 1 of the 1985 UNCITRAL Model Law, and is primarily governed by the Arbitration Law of 1952, the Alternative Dispute Resolution Act of 2004 (the “ADR Act”) and the Special ADR Rules.

An arbitral award issued in the Philippines in an international commercial arbitration is governed by the ADR Act (Sections 22–31) and the 1985 UNCITRAL Model Law, which was adopted by the Philippine ADR Act.

The enforcement and recognition of foreign arbitral awards or one made in a country other than the Philippines (Special ADR Rules, Rule 1.11[d]) is governed by the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention"). Nonetheless, the court may, upon grounds of comity and reciprocity, recognise and enforce a foreign arbitral award made in a country that is not a signatory to the New York Convention (Special ADR Rules, Rule 13.4).

For awards issued in domestic arbitration in the Philippines, courts may vacate the same; and for awards in an international commercial arbitration rendered in the Philippines, Philippine courts have the authority to set aside the award. However, they have no power to vacate or set aside a foreign arbitral award but may only refuse recognition and enforcement thereof pursuant to the New York Convention (Special ADR Rules, Rules 13.4 and 19.11).

Unenforceable Awards; in General

A Philippine court may refuse confirmation, recognition and enforcement of arbitral awards where the subject matter of the dispute is not capable of settlement or resolution by arbitration under Philippine law, including:

  • labour disputes covered by the Philippine Labor Code;
  • criminal liability (ADR Act, Section 6);
  • civil status of persons;
  • validity of marriage;
  • validity and grounds for legal separation;
  • jurisdiction of courts;
  • future legitime;
  • future support (Civil Code, Article 2035); and
  • awards that are contrary to public policy.

The recognition or enforcement of awards that would be contrary to public policy and those that by law cannot be compromised may likewise be refused by Philippine courts (Special ADR Rules, Rule 13.4 [b] [ii]).

Unenforceable International Commercial Arbitration Award

The court may set aside or refuse the enforcement of the arbitral award if the party making the application furnishes proof that (Special ADR Rules, Rule 12.4):

  • a party to the arbitration agreement was under some incapacity, or the agreement is not valid under the law to which the parties have subjected it or, failing any indication thereof, under Philippine law; or
  • the party making the application to set aside or resist enforcement was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present their case; or
  • the award deals with a dispute not contemplated by, or not falling within, the terms of the submission to arbitration, or 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, only that part of the award that contains decisions on matters not submitted to arbitration may be set aside or only that part of the award that contains decisions on matters submitted to arbitration may be enforced; or
  • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of Philippine law from which the parties cannot derogate, or, failing such agreement, was not in accordance with Philippine law (Special ADR Rules, Rule 12.4).

Unenforceable Foreign Arbitral Award

A Philippine court may refuse recognition and enforcement of a foreign arbitral award if the party making the application to refuse recognition and enforcement of the award furnishes proof that:

  • a party to the arbitration agreement was under some incapacity; or the agreement is not valid under the law to which the parties have subjected it or, failing any indication thereof, under the law of the country where the award was made; or
  • the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present their case; or
  • the award deals with a dispute not contemplated by, or not falling within, the terms of the submission to arbitration, or 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, only that part of the award that contains decisions on matters not submitted to arbitration may be set aside; or
  • 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 arbitration took place; or
  • 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 that award was made (Special ADR Rules, Rule 13.4).

Both an international commercial arbitration award and a foreign arbitral award may be refused enforcement if the court finds that:

  • the subject matter of the dispute is not capable of settlement or resolution by arbitration under Philippine law; or
  • the recognition or enforcement of the award would be contrary to public policy (Special ADR Rules, Rules 12.4 and 13.4).

Enforcement of an Emergency Award

There is no specific provision yet under Philippine laws and rules on the appointment of an emergency arbitrator. Likewise, there is no existing Supreme Court ruling on the appointment of an emergency arbitrator.

There appears no judicial precedent or decision issued by the Philippine Supreme Court recognising an emergency award issued by a foreign tribunal or by a foreign court in connection with a foreign-seated arbitration.

Confirmation/Enforcement as the General Rule; No Judicial Review on the Merits

The court shall not set aside or vacate the award of the arbitral tribunal merely on the ground that the arbitral tribunal committed errors of fact, or of law, or of fact and law, as the court cannot substitute its judgment for that of the arbitral tribunal (Special ADR Rules, Rule 19.10).

The Philippine Supreme Court has defended the autonomy of arbitral awards pursuant to its policy of non-intervention on the substantive merits thereof: “As a rule, the award of an arbitrator cannot be set aside for mere errors of judgment either as to the law or as to the facts. Courts are without power to amend or overrule merely because of disagreement with matters of law or facts determined by the arbitrators. They will not review the findings of law and fact contained in an award, and will not undertake to substitute their judgment for that of the arbitrators, since any other rule would make an award the commencement, not the end, of litigation. Errors of law and fact, or an erroneous decision of matters submitted to the judgment of the arbitrators, are insufficient to invalidate an award fairly and honestly made. Judicial review of an arbitration is, thus, more limited than judicial review of a trial” (Asset Privatization Trust v Court of Appeals, G.R. No 121171 [29 December 1998]).

As regards a domestic arbitral award, the court shall confirm the same unless a ground to vacate is fully established. The court shall confirm or vacate the arbitral award and shall not disturb the arbitral tribunal’s determination of facts and/or interpretation of law (Special ADR Rules, Rule 11.9).

An international commercial arbitration award rendered in the Philippines is presumed to have been made and released in due course and is subject to enforcement by the court, unless the adverse party is able to establish a ground for setting aside or not enforcing the same (Special ADR Rules, Rule 12.12). In resolving the petition for recognition/enforcement or petition to set aside/refuse recognition, the court shall set aside or recognise the arbitral award but shall not disturb the arbitral tribunal’s determination of facts and/or interpretation of law (Special ADR Rules, Rule 12.13).

As regards a foreign arbitral award, the court shall recognise and enforce the same unless a ground for refusal under Rule 13.4 of the Special ADR Rules is fully established. The decision of the court recognising and enforcing a foreign arbitral award is immediately executory (Special ADR Rules, Rule 13.11).

Process for Confirmation and Enforcement of a Domestic Arbitral Award

  • When to file – a party may file a verified petition to confirm a domestic arbitral award at any time after the lapse of 30 days from receipt by the petitioner of the arbitral award (Special ADR Rules, Rule 11.2).
  • A petition to confirm the arbitral award may also be filed in opposition to a petition to vacate an arbitral award (Special ADR Rules, Rule 11.2; Rule 11.5).
  • Where to file – the petition may be filed with the Regional Trial Court having jurisdiction over the place where one of the parties is doing business, where any of the parties reside, or where the arbitration proceedings were conducted (Special ADR Rules, Rule 11.3).
  • Notice – upon finding that the petition 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 them to file a comment or opposition thereto within 15 days from receipt of the petition. In lieu of an opposition, the respondent may file a petition in opposition to the petition. The petitioner may, within 15 days from receipt of the petition in opposition thereto, file a reply (Special ADR Rules, Rule 11.7).
  • Affidavits and supporting documents – if the court finds from the petition or the opposition thereto that there are issues of fact, it shall require the parties, within 15 days from receipt of the order, to simultaneously submit the affidavits of their witnesses and reply affidavits with attached supporting documents (Special ADR Rules, Rule 11.8).
  • Hearing – if the court finds that there is a need to conduct an oral hearing, the court shall set the case for hearing. During the hearing, the affidavits of the witnesses shall take the place of their direct testimonies and they shall immediately be subject to cross-examination thereon (Special ADR Rules, Rule 11.8).

Process for Recognition and Enforcement of an International Commercial Arbitration Award

  • When to file – the petition for enforcement and recognition of an international commercial arbitration award rendered in the Philippines may be filed any time from receipt of the award (Special ADR Rules, Rules 12.1–12.2). If a timely petition to set aside an arbitral award is filed, the opposing party must file by way of opposition thereto the petition for recognition and enforcement of the same award within the period for filing an opposition (Special ADR Rules, Rule 12.2).
  • Where to file – the petition may be filed with the Regional Trial Court where arbitration proceedings were conducted; where any of the assets to be attached or levied upon are located; where the act to be enjoined will be, or is being, performed; where any of the parties to arbitration resides or has its place of business; or in the National Capital Region of the Philippines (Special ADR Rules, Rule 12.3).
  • Once the court is satisfied that the petition filed is sufficient both in form and in substance, it shall serve a copy thereof to the respondent and directing the latter to file an opposition within 15 days from receipt. In lieu of an opposition, the respondent may file a petition to set aside the arbitral award (Special ADR Rules, Rule 12.8).
  • Legal briefs – if the court finds that the issue between the parties is mainly one of law, it may order the parties to submit briefs of legal arguments, within 15 days from receipt of the order (Special ADR Rules, Rule 12.9).
  • Hearing – if the court finds that there is a need to conduct an oral hearing, it shall set a hearing. The affidavits of the witness(es) shall take the place of their direct testimonies and such witness(es) shall be subjected to cross-examination (Special ADR Rules, Rule 12.10).

Process for Recognition and Enforcement of a Foreign Arbitral Award

  • When to file – any party to a foreign arbitration can file a petition with the proper regional trial court to recognise and enforce a foreign arbitral award at any time after receipt of a foreign arbitral award (Special ADR Rules, Rule 13.1 and 13.2).
  • Where to file – the petition to recognise and enforce a foreign arbitral award can be filed with the Regional Trial Court where the assets to be attached or levied on are located, where the act to be enjoined is being performed, where any of the parties to the arbitration resides or has its principal place of business, or in the National Capital Judicial Region of the Philippines (Special ADR Rules, Rule 13.3).
  • Once the court finds that the petition is sufficient both in form and in substance, it shall serve a copy of the petition to the respondent, who may file a verified opposition within 30 days from receipt (Special ADR Rules, Rules 13.6-13.7).
  • Legal briefs – if the court finds that the issue between the parties is mainly one of law, it may order the parties to submit briefs of legal arguments within 30 days from receipt of the order (Special ADR Rules, Rule 13.8).
  • Affidavits – if 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 their witnesses (Special ADR Rules, Rule 13.8).
  • Hearing – the court shall set the case for hearing, if, on the basis of the foregoing submissions, there is a need to do so. During the hearing, the affidavits of witnesses take the place of their direct testimonies and they will immediately be subject to cross-examination (Special ADR Rules, Rule 13.9).

The court may adjourn or defer rendering a decision if, in the meantime, an application for the setting aside or suspension of the award has been made with a competent authority in the country where the award was made. Upon application of the petitioner, the court may require the other party to give suitable security (Special ADR Rules, Rule 13.10).

The filing fee for filing a petition to confirm or enforce, vacate or set aside an arbitral award shall be as follows (Special ADR Rules, Rule 20.1):

  • PHP10,000 – if the award does not exceed PHP1 million;
  • PHP20,000 – if the award does not exceed PHP20 million;
  • PHP30,000 – if the award does not exceed PHP50 million;
  • PHP40,000 – if the award does not exceed PHP100 million; and
  • PHP50,000 – if the award exceeds PHP100 million.

At the time the case is submitted to the court for decision, the party asking for recognition and enforcement of a foreign arbitral award, or for the confirmation, recognition and enforcement, vacation, or setting aside of an arbitral award, shall submit a statement under oath confirming the costs, including attorney’s fees incurred in said proceedings. The prevailing party shall be entitled to an award of costs against the unsuccessful party (Special ADR Rules, Rules 21.3–21.5).

Enforcement proceedings in the Philippine courts normally take six months to one year.

An agreement to refer a dispute to arbitration shall mean that the arbitral award shall be final and binding. Consequently, a party to an arbitration is precluded from filing an appeal or a petition for certiorari questioning the merits of an arbitral award (Special ADR Rules, Rule 19.7). Under Philippine law, the right to an appeal is neither a natural right nor an indispensable component of due process; it is a mere statutory privilege that cannot be invoked in the absence of an enabling statute. Neither the Arbitration Law nor the ADR Law allows a losing party to appeal against the arbitral award. The statutory absence of an appeal mechanism reflects the state’s policy of upholding the autonomy of arbitration proceedings and their corresponding arbitral awards (Fruehauf Electronics Philippines Corporation v Technology Electronics Assembly and Management Pacific Corporation, G.R. No 204197 [23 November 2016]). Courts shall intervene only in the cases allowed by law or by the Special ADR Rules (Special ADR Rules, Rule 2.1).

However, an arbitral award may be vacated, set aside, modified, corrected or refused recognition and enforcement by a court under limited grounds.

As a rule, the court can only vacate or set aside an arbitral award upon a clear showing that the award suffers from any of the infirmities or grounds for vacating an arbitral award. The court shall not set aside or vacate an arbitral award merely on the ground that the arbitral tribunal committed errors of fact, or of law, or of fact and law, as the court cannot substitute its judgment for that of the arbitral tribunal (Special ADR Rules, Rule 19.10).

Vacating a Domestic Arbitral Award

A domestic arbitral award may be vacated on any of the following grounds:

  • the arbitral award was procured through corruption, fraud or other undue means;
  • there was evident partiality or corruption in the arbitral tribunal or any of its members;
  • the arbitral tribunal was guilty of misconduct or any form of misbehaviour that has materially prejudiced the rights of any party;
  • one or more of the arbitrators was disqualified from acting as such under the law and deliberately refrained from disclosing this disqualification;
  • the arbitral tribunal exceeded its powers, or imperfectly executed them, so that a complete, final and definite award on the subject matter submitted to it was not made;
  • the arbitration agreement did not exist, is invalid, or is otherwise unenforceable;
  • a party to arbitration is a minor or a person judicially declared to be incompetent (Special ADR Rules, Rule 11.4); or
  • the recognition or enforcement of the award would be contrary to public policy.

Unless a ground to vacate an arbitral award is fully established, the court shall confirm the award (Special ADR Rules, Rule 11.9).

Setting Aside an International Commercial Arbitration Award

A Philippine court may set aside or refuse enforcement of an international arbitration award rendered in the Philippines on any of the following grounds:

  • a party to the arbitration agreement was under some incapacity, or the agreement is not valid under the law to which the parties have subjected it or, failing any indication thereof, under Philippine law;
  • the party making the application was not given proper notice of the appointment of an arbitrator or the arbitral proceedings, or was otherwise unable to present their case;
  • the award deals with a dispute not contemplated by, or not falling within, the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration;
  • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or Philippine law;
  • 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 said award was made;
  • the subject matter of the dispute is not capable of settlement or resolution by arbitration under Philippine law; or
  • the recognition or enforcement of the award would be contrary to public policy (Special ADR Rules, Rule 12.4).

Unless a ground to set aside an arbitral award is fully established, the court shall dismiss the petition to set aside (Special ADR Rules, Rule 12.13).

Refusal to Recognise and Enforce a Foreign Arbitral Award

A Philippine court shall not set aside a foreign arbitral award, but may refuse recognition and enforcement on any or all of the following grounds (Special ADR Rules, Rule 13.4):

  • a party to the arbitration agreement was under some incapacity, or the agreement is not valid under the law to which the parties have subjected it or, failing any indication thereof, under the law of the country where the award was made;
  • the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present their case;
  • the award deals with a dispute not contemplated by, or not falling within, the terms of the submission to arbitration, or contains decision on matters beyond the scope of the submission to arbitration;
  • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties and the law of the country where arbitration took place;
  • 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 the award was made;
  • the subject matter of the dispute is not capable of settlement or resolution by arbitration under Philippine law; and/or
  • the recognition or enforcement of the award would be contrary to public policy.

Deferment

The court before which a petition to recognise and enforce a foreign arbitral award is pending may adjourn or defer rendering a decision thereon if, in the meantime, an application for the setting aside or suspension of the award has been made with a competent authority in the country where the award was made. Upon application of the petitioner, the court may also require the other party to give suitable security (Special ADR Rules, Rule 13.10).

Unless a ground to refuse recognition or enforcement of the foreign arbitral award is fully established, the court shall recognise and enforce the award (Special ADR Rules, Rule 13.11).

Remedies from the Order of the Trial Court

An appeal to the Court of Appeals through a petition for review under this Special Rule shall only be allowed from the following final orders of the Regional Trial Court (Special ADR Rules, Rule 19.12):

  • granting or denying an interim measure of protection;
  • denying a petition for appointment of an arbitrator;
  • denying a petition for assistance in taking evidence;
  • enjoining or refusing to enjoin a person from divulging confidential information;
  • confirming, vacating or correcting/modifying a domestic arbitral award;
  • setting aside an international commercial arbitration award;
  • dismissing the petition to set aside an international commercial arbitration award even if the court does not decide to recognise or enforce such award;
  • recognising and/or enforcing an international commercial arbitration award;
  • dismissing a petition to enforce an international commercial arbitration award;
  • recognising and/or enforcing a foreign arbitral award;
  • refusing recognition and/or enforcement of a foreign arbitral award;
  • granting or dismissing a petition to enforce a deposited mediated settlement agreement; and
  • reversing the ruling of the arbitral tribunal upholding its jurisdiction.

The petition for review may 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 (Special ADR Rules, Rules 19.13 and 19.14). This shall not stay the award, judgment, final order or resolution sought to be reviewed unless the Court of Appeals directs otherwise (Special ADR Rules, Rule 19.22).

When the Regional Trial Court, in making a ruling under the Special ADR Rules, has acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law, a party may file a special civil action for certiorari to annul or set aside a ruling of the Regional Trial Court. A special civil action for certiorari may be filed against the following orders of the court (Special ADR Rules, Rule 19.26):

  • holding that the arbitration agreement is inexistent, invalid or unenforceable;
  • reversing the arbitral tribunal’s preliminary determination upholding its jurisdiction;
  • denying the request to refer the dispute to arbitration;
  • granting or refusing an interim relief;
  • denying a petition for the appointment of an arbitrator;
  • confirming, vacating or correcting a domestic arbitral award;
  • suspending the proceedings to set aside an international commercial arbitral award and referring the case back to the arbitral tribunal;
  • allowing a party to enforce an international commercial arbitral award pending appeal;
  • adjourning or deferring a ruling on whether to set aside, recognise and or enforce an international commercial arbitral award;
  • allowing a party to enforce a foreign arbitral award pending appeal; and
  • denying a petition for assistance in taking evidence.

The special civil action must be filed with the Court of Appeals within a non-extendible period of 15 days from notice of the judgment, order or resolution sought to be annulled (Special ADR Rules, Rule 19.28).

A party aggrieved by the decision of the Court of Appeals may appeal to the Supreme Court via a verified petition for review on certiorari within 15 days from notice of the judgment, order or resolution appealed from, or the denial of a motion for reconsideration (Special ADR Rules, Rules 19.37–19.38). Review by the Supreme Court is not a matter of right, but of sound judicial discretion, which will be granted only for serious and compelling reasons resulting in grave prejudice to the aggrieved party (Special ADR Rules, Rule 19.36).

Appeal from the Construction Industry Arbitration Commission (CIAC)

Arbitral awards issued by the CIAC can be appealed to the Court of Appeals via a petition for review on certiorari under Rule 43 of the Rules of Civil Procedure of the Philippines.

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Law and Practice

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Cruz Marcelo & Tenefrancia (CMT) is a top-tier full-service law firm in the Philippines. It provides excellent legal assistance to companies at all levels of development involving complex and multifaceted cases. CMT has been consistently cited in various international publications for offering concise, relevant and insightful advice honed from a keen understanding of the needs of local and foreign companies doing business in the Philippines. The firm’s lawyers are highly respected by their peers for providing sought-after legal guidance to leaders of the nation, captains of industry, and even to indigent clients. All 23 partners, together with the firm’s associates, are bound by a commitment to deliver the highest quality of service to help the firm’s clients attain success and contribute to nation building. Together, practising law as one firm, CMT provides unparalleled legal representation in various fields of law.

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