Identifying Asset Position

The asset position of another party may be determined through publicly available information stored with, or published by, government agencies. Although a request for asset information may be limited by data privacy law, it is possible to obtain information on:

• the assets of corporations and listed companies from the Securities and Exchange Commission;
• land vehicle, marine vessel and aircraft registration from the Land Transportation Office, the Maritime Industry Authority and the Civil Aviation Authority of the Philippines, respectively;
• land registration from the Registry of Deeds;
• tangible and intangible personal property used as security from the Philippine Personal Property Security Registry;
• registered intellectual property rights from the Intellectual Property Office;
• mining agreements and grants from the Mines and Geosciences Bureau; and
• government contracts from the Government Procurement Policy Board's portal.

Generally, a party’s bank deposits may not be examined, or inquired or looked into because of Philippine bank secrecy laws (RA 1405 and RA 6426). As such, peso and foreign currency bank deposits may be disclosed only upon the written consent of the depositor. Other instances where peso deposits may be disclosed include:

• in cases of impeachment, or upon the order of a competent court in cases of bribery or dereliction of duty of public officials;
• where the deposit is the subject matter of litigation (RA 1405, Section 2);
• for a violation of the Anti-Money Laundering Law; and
• upon an inquiry of the ombudsman where a case is pending in court.

A party may also engage the services of a private investigator to determine the asset position of a counterparty through legal means. Evidence obtained in violation of a right, or those that are privileged, may be excluded.

Asset Freeze

In the course of litigation, a party’s assets may be frozen or attached to stand as security for the satisfaction of a judgment that a court may render. This is done by applying for a writ of preliminary attachment in the court where the case is pending at the commencement of the action or at any time before entry of judgment (Rules of Court, Rule 51, Section 1). A writ of preliminary attachment may be obtained in cases:

• for the recovery of a specified amount;
• involving embezzled money or property;
• for the recovery of property unjustly or fraudulently taken, detained, converted or concealed;
• involving fraud in contracting or performing an obligation;
• against a party who has removed or disposed of property, or is about to do so, to defraud creditors; or
• against a non-resident defendant.

Interlocutory Order

An order is interlocutory when it does not finally dispose of the case and does not end the court’s task of adjudicating the parties’ contentions and determining their rights and liabilities as regards each other (PNB v Urieta, GR No 180264, 25 September 2019). It may not be questioned on appeal, only as part of an appeal that may eventually be taken from the final judgment rendered in the case (Denso Phils., Inc., v IAC, GR No 75000, 27 February 1987).

Order Granting Provisional Relief

A court may issue an order granting an application for provisional relief pending litigation to preserve and protect certain rights and interests (Buyco v Baraquia, GR No 177486, 21 December 2009). Provisional remedies include:

• preliminary attachment;
• preliminary injunction;
• receivership;
• replevin; and
• support (Rules of Court, Rules 57 to 61).

Final Order or Judgment

A final judgment or order finally disposes of a case, leaving nothing more to be done by the court. This type of judgment is an adjudication on the merits that, on the basis of the evidence presented at the trial, declares categorically what the rights and obligations of the parties are and which party is in the right. Once rendered, the task of the court ends, as far as deciding the controversy or determining the rights and liabilities of the litigants is concerned. Nothing more remains to be done by the court except to await the parties’ next move (which, among others, may consist of the filing of a motion for a new trial or reconsideration, or the taking of an appeal) and, ultimately, to cause the execution of the judgment once it becomes “final” (Denso Phils., Inc., v IAC, GR No 75000, 27 February 1987).

A judgment in a civil action successfully pursued enforces or protects a right, or prevents or redresses a wrong. Meanwhile, a judgment in a special proceeding successfully pursued establishes a status, a right, or a particular fact (Rules of Court, Rule 1, Section 3(a)(c)).

A final order or judgment may be in the form of the following.

• A default judgment: when the defendant fails to file an answer within the time allowed, the court shall proceed to render judgment granting the claimant such relief as their pleading may warrant, unless the court requires the claimant to submit evidence (Rules of Court, Rule 9, Section 3). Failure of the defendant to attend the preliminary conference may likewise allow the claimant to present their claim ex parte (Rules of Court, Rule 18, Section 5).
• A judgment on the pleadings: when the defendant’s answer to the complaint fails to tender an issue or admits the material allegations of complaint, the court, upon motion, may render judgment on the parties’ pleadings (Rules of Court, Rule 34).
• A summary judgment: when based on pleadings, supporting affidavits, depositions and admissions, there is no genuine issue as to any material fact and given that the moving party is entitled to a judgment as a matter of law, the court may render a summary judgment (Rules of Court, Rule 35).

• A separate judgment: when there are multiple claims for relief and the issues material to a particular claim and counterclaim have been determined, the court may render a separate judgment disposing of such claim. The separate judgment terminates the action with respect to the particular claim disposed and the case proceeds as to the remaining claims (Rules of Court, Rule 36, Section 5).
• A declaratory relief judgment: prior to a breach, a party may seek from the court a determination of the validity or the construction of, and a declaration of their rights and duties under, a deed, will, contract, other written instruments, statute, executive order or regulation, ordinance, or any other government regulation (Rules of Court, Rule 63).
• A judgment based on compromise: parties to a case may submit a compromise agreement for the court’s approval. The judgment on a compromise agreement is a judgment on the merits, has the effect of res judicata, and is immediately final and executory (Gadrinab v Salamanca, GR No 194560, 11 June 2014).

Enforcement in General

As a general rule, domestic judgments may be executed only when they become final and executory (see 2.5 Challenging Enforcement of Domestic Judgments). Unless a judgment is immediately executory (such as judgments in actions for an injunction, receivership, accounting and support, and intra-corporate disputes), domestic judgments are generally stayed by an appeal (Rules of Court, Rule 39, Section 4).

Execution of a judgment is a matter of right upon the expiry of the period to appeal and if no appeal was perfected (Rules of Court, Rule 39, Section 1). The issuance of the writ of execution is a ministerial duty of the court, which cannot be unduly delayed (Vargas v Cajucom, GR No 171095, 22 June 2015).

As an exception, the court may, upon motion and at its discretion, order the execution of judgment before the expiry of the period to appeal or pending appeal (Rules of Court, Rule 39, Section 2). However, a discretionary execution may only be issued upon good reason.

Once issued, the writ of execution shall require the sheriff or court officer to enforce the writ according to its terms, and as follows:

• if against the property of the judgment obligor – satisfy the judgment, with interest, out of the real or personal property of such judgment obligor;
• if against real or personal property in the hands of representatives of the judgment obligor – satisfy the judgment, with interest, out of such property;
• if for the sale of real or personal property – sell such property and apply the proceeds in conformity with the judgment; and
• if for the delivery of the possession of real or personal property – deliver the possession of the same to the entitled party, and to satisfy any costs, damages, rents or profits covered by the judgment out of the personal property of the person against whom it was rendered, and if sufficient personal property cannot be found, then out of the real property (Rules of Court, Rule 39, Section 8).

Enforcement of Judgments for Money

A judgment for money may be executed by any of the following modes.

Immediate payment on demand

The sheriff or court officer will issue a demand on the judgment debtor to immediately pay the full amount stated in the writ of execution, including the applicable fees. The payment must be made in cash, by a certified bank cheque payable to the judgment creditor, or through any other acceptable form of payment.

Payment of the full amount of the judgment must be made to the judgment creditor or an authorised representative. In their absence, payment shall be delivered to the executing sheriff or court officer.

Lawful fees shall be handed to the executing sheriff or court officer (Rules of Court, Rule 39, Section 9(a)).

Satisfaction by levy

If the judgment debtor has insufficient funds to pay the judgment obligation, the sheriff or court officer shall levy upon the properties not exempt from execution, such as real property, stocks, shares, debts, credits and other personal property or interest in real or personal property.

The sheriff or court officer shall only sell a sufficient portion of the properties levied upon to satisfy the judgment and lawful fees. The judgment debtor may choose which properties may be levied upon or, if no choice is made, the sheriff or court officer shall first levy on personal properties (Rules of Court, Rule 39, Section 9(b)).

Garnishment of debts and credits

The sheriff or court officer may likewise levy on debts due the judgment debtor and other credits, such as 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 debtor is entitled. Garnishment shall only cover such amount sufficient to satisfy the judgment and lawful fees (Rules of Court, Rule 39, Section 9 (c)).

Enforcement of Judgments for Specific Acts

A judgment for a specific act may be executed in accordance with the following.

Conveyance, delivery of deeds, or other specific acts vesting title

The court may appoint another person to perform the required act(s) at the cost of the disobedient party if the latter fails to comply within a specified time with a judgment directing the execution of a conveyance of land or personal property, or delivery of deeds or other documents, or the performance of any other specific acts. If real or personal property is situated in the Philippines, the court may divest title from the losing party and vest it in others. This will have the same force and effect as a duly executed conveyance (Rules of Court, Rule 39, Section 10(a)).

Sale of real or personal property

The sheriff or court officer shall sell the real or personal property and apply the proceeds in conformity with the judgment (Rules of Court, Rule 39, Section 10(b)).

Delivery or restitution of real property

The sheriff or court officer shall issue a demand on the party ordered by the judgment to peacefully vacate the property within three working days and deliver its possession to the rightful party. Otherwise, the sheriff or court officer shall oust all such persons inside the property by reasonable means and, if needed, with assistance from peacekeeping forces. Any costs, damages, rents or profits awarded by the judgment shall be satisfied in the same manner as a judgment for money (Rules of Court, Rule 39, Section 10(c)).

Removal of improvements on property that is the subject of execution

Improvements on the property that is the subject of execution may be destroyed, demolished or removed only upon a special order issued by the court and after the judgment debtor fails to remove them within a reasonable time fixed by the court (Rules of Court, Rule 39, Section 10(d)).

Delivery of personal property

The sheriff or court officer shall take possession of the personal property and deliver it to the judgment creditor (Rules of Court, Rule 39, Section 10(e)).

The cost to enforce a domestic judgment varies depending on the nature of the case (ie, for a sum of money or specific performance), the judgment to be executed (ie, for payment of a sum of money, for performance of an act, for conveyance of property), the location of the parties and the properties (ie, transportation expense, warehousing and safeguarding, inventory cost), the amount claimed and the available assets for execution (ie, whether sufficient funds are available, levy or garnishment must be resorted to, or sale of personal and real properties), as well as lawyers’ fees and lawful fees due to the sheriff or court officer.

The time taken to enforce domestic judgments will likewise vary depending on factors such as the complexity of the execution, possible opposition from the judgment debtor and intervening parties, and delays beyond the control of the sheriff or the court. On average, the execution of a domestic judgment may take six months to one year for simple cases and one year to three years for complex cases.

A defendant’s assets may be determined upon an examination conducted in court or before a commissioner. Failure by the party or any person required to testify to attend the examination, to be sworn, to answer as witness, or to subscribe the deposition may be punished for contempt (Rules of Court, Rule 39, Section 38).

Examination of the Judgment Debtor

When the writ of execution is not fully satisfied, the judgment creditor is entitled to a court order requiring the judgment debtor to be examined in court or before a commissioner concerning their property and income. However, the judgment debtor cannot be compelled to appear in a court or before a commissioner outside the province or city of residence (Rules of Court, Rule 39, Section 36).

Examination of a Debtor of the Judgment Debtor

When the writ of execution is not fully satisfied, a person or entity having possession of property belonging to the judgment debtor or that is indebted to them may likewise be examined in court or before a commissioner. The service of the court’s order of examination shall bind the property and credits in the debtor’s possession from the time said order is served (Rules of Court, Rule 39, Section 37).

Garnishment Order and Notice of Levy

Another option is for the sheriff or court officer to serve garnishment orders in banks and a notice of levy at the Register of Deeds. Bank accounts and properties belonging to the judgment debtor, if any, will be disclosed to the sheriff or court officer.

A domestic judgment that has not become final and executory may be challenged by the following.

Motion for New Trial

An aggrieved party may move the trial court to set aside the domestic judgment and grant a new trial for the following causes materially affecting substantial rights:

• fraud, accident, mistake or excusable negligence that impaired the rights of the aggrieved party; or
• newly discovered evidence that would probably alter the result (Rules of Court, Rule 37, Section 1 (a)).

Motion for Reconsideration

An aggrieved party may also move for reconsideration on the following grounds:

• the damages awarded are excessive;
• the evidence is insufficient to justify the domestic judgment; or
• the domestic judgment is contrary to law (Rules of Court, Rule 37, Section 1(b)).

Appeal

An appeal is a remedy obtained from a next-level higher court seeking reversal or modification of a domestic judgment rendered by an inferior court. Only judgments that completely dispose of the case or a matter therein may be the subject of an appeal (Rules of Court, Rule 41, Section 1).

In general, a judgment rendered by the Municipal Trial Court may be appealed to the Regional Trial Court exercising jurisdiction over it. A judgment rendered by the Regional Trial Court, in turn, may be appealed to the Court of Appeals by ordinary appeal or by petition for review, depending on the jurisdiction exercised. Finally, an appeal by certiorari may be elevated to the Supreme Court only on questions of law (Rules of Court, Rule 41, Section 2).

In instances provided by the Rules of Court where a domestic judgment is not appealable, the remedy of the aggrieved party is a special civil action for certiorari (Rules of Court, Rule 41, Section 1).

Stay of Immediately Executory Judgment on Appeal and Upon Posting of Bond

Generally, an immediately executory judgment may be stayed on appeal when restrained by an appellate court through a temporary restraining order or preliminary injunction.

Judgments in actions for an injunction, receivership, accounting and support, which are immediately executory, may be stayed by the trial court. The appellate court may, in its discretion, likewise suspend or modify, among others, the injunction, receivership, accounting or award of support. In any case, the stay of execution shall be upon such terms as to bond or as may be considered proper (Rules of Court, Rule 39, Section 4).

A judgment in an ejectment case under Rule 70 is likewise immediately executory. It may be stayed on appeal only upon posting of sufficient supersedeas in favour of the judgment creditor to pay accrued rents, damages and costs, and depositing rent subsequently due pending appeal (Rules of Court, Rule 70, Section 19).

A domestic judgment that has become final and executory may be challenged by the following.

Petition for Relief From Judgment, Orders or Other Proceedings

After a domestic judgment becomes final and executory, an aggrieved party is allowed to file a petition in the same court and in the same case seeking to set aside the proceeding due to fraud, accident, mistake or excusable negligence.

A petition for relief from judgment is an equitable remedy that is allowed only in exceptional cases. The aggrieved party must file the petition within 60 days after learning the judgment, and not more than six months after such judgment was entered (Mercury Drug Corporation v CA, GR No 138571, 13 July 2000).

Annulment of Judgment

Domestic judgments rendered by the Regional Trial Courts may be annulled by the Court of Appeals when the ordinary remedies of a new trial, an appeal, a petition for relief or other appropriate remedies are no longer available through no fault of the aggrieved party (Rules of Court, Rule 47, Section 1). The grounds for an annulment of judgment are extrinsic fraud and lack of jurisdiction or denial of due process.

Challenging the Writ of Execution

While a final judgment is immutable and unalterable, and, as such, execution follows as a matter of right, a recognised exception that would stay or stop execution is the happening of a supervening event that alters or modifies the situation of the parties under the decision as to render the execution inequitable, impossible or unfair. A supervening event consists of facts transpiring and circumstances developing only after the finality of judgment. The interested party may seek the stay of the writ of execution or move to modify or alter the judgment to harmonise it with justice and the supervening event (Heirs of Maravilla v Tupas, GR No 192132, 14 September 2016).

Additionally, a writ of execution must substantially conform to the judgment sought to be enforced. Courts may not go beyond the terms of the judgment and a writ of execution that expands the scope of the judgment sought to be executed is invalid (Titan Dragon Properties Corporation v Galenzoga, GR No 246088, 28 April 2021).

A final and executory domestic judgment is enforceable. However, a party must seek enforcement of the judgment within ten years from finality. Otherwise, the enforcement of the domestic judgment becomes barred by the statute of limitations.

Accordingly, a final and executory domestic judgment may be executed by motion within five years from the date of its entry. Beyond that and before it is barred by the statute of limitations, a domestic judgment may be enforced by filing a separate action to revive the judgment (Rules of Court, Rule 39, Section 6).

Philippine courts do not have a centralised repository or register of domestic judgments. A book of entries of judgment is kept by the clerks of all courts where a domestic judgment is entered. It contains the dispositive part of the domestic judgment and a certificate that such judgment has become final and executory. Upon satisfaction of judgment, the same is entered into the execution book by the clerk of court (Rules of Court, Rule 39, Section 44).

The Philippines is not a signatory to any international treaty or convention for the enforcement of foreign judgments. Even so, Philippine law accepts into its jurisprudence and procedural rules the viability of enforcing a foreign judgment (BPI Securities Corporation v Guevara, GR No 167052, 11 March 2015). The Philippines subscribes to the rules of comity, utility and convenience of nations by which foreign judgments are reciprocally respected and rendered efficacious under certain conditions (Philippine Aluminum Wheels, Inc., v FASGI Enterprises, Inc., GR No 1373378, 12 October 2000).

A foreign judgment, however, merely creates a right of action and, as such, is not enforceable simply by execution (BPI Securities Corporation v Guevara, GR No 167052, 11 March 2015). A foreign judgment does not bind Philippine courts unless it is recognised and enforced in the Philippines (Republic v Mupas, GR No 181892, 8 September 2015). The action for recognition of a foreign judgment does not require the re-litigation of the case before a Philippine court (Encarnacion v Johnson, GR No 192285, 11 July 2018).

Once admitted and proven in a Philippine court, a foreign judgment can only be repelled by evidence of grounds external to its merits, such as want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact (Encarnacion v Johnson, GR No 192285, 11 July 2018).

Thus, relative to the enforcement of foreign judgments in the Philippines, there is a general right to seek such recognition and enforcement, as well as a right to defend against such enforcement on the grounds of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact (Mijares v Ranada, GR No 139325, 12 April 2005).

Rule 39 of the Rules of Court creates a distinction between a foreign judgment involving an action in personam (an action against a person on the basis of their personal liability, instituted against a definite defendant) and an action in rem (an action against the thing itself, instituted and enforced against everyone).

For an action in rem, the foreign judgment is deemed conclusive upon the title to the thing, while in an action in personam, the foreign judgment is merely presumptive of a right as between the parties and their successors-in-interest (Mijares v Ranada, GR No 139325, 12 April 2005; Rules of Court, Rule 39, Section 48).

Foreign judgments are disputably presumed valid (BPI Securities Corporation v Guevara, GR No 167052, 11 March 2015). Philippine courts will only exercise a limited review of foreign judgments and are not allowed to delve into their merits (Minoru Fujiki v Marinay, GR No 196049, 26 June 2013).

A foreign judgment, however, may be repelled upon limited grounds (see further discussions in 3.6 Challenging Enforcement of Foreign Judgments). In general, a foreign judgment contrary to Philippine public policy or good morals will not be enforced in the Philippines (Mijares v Ranada, GR No 139325, 12 April 2005).

Since a foreign judgment cannot be enforced by writ of execution, the party seeking enforcement must file a case for enforcement in the Philippines. The general process is outlined below.

Court With Jurisdiction: Regional Trial Court

Venue

The venue is the Regional Trial Court where the plaintiff or defendant resides, or in the case of a non-resident defendant, where they may be found, at the election of the plaintiff.

Period to file

An action upon a judgment must be brought within ten years from the time the right of action accrues (Civil Code, Article 1144). The right of action from a foreign judgment accrues from the date of finality. Note that only foreign judgments that have attained finality may be enforced in the Philippines (Rules of Court, Rule 39, Section 48).

Filing fee

There is a fee of PHP2,000 for “all other actions not involving property” (Mijares v Ranada, GR No 139325, 12 April 2005).

Parties

The claimant must implead the party against whom the foreign judgment is sought to be enforced. A licensed foreign corporation doing business in the Philippines and unlicensed foreign corporations not doing business in the Philippines may sue before Philippine courts (B. Van Zuiden Bros., Ltd., v GTVL Manufacturing Industries, Inc., GR No 147905, 28 May 2007).

What information must be alleged (among others)

• The foreign judgment is final.
• For enforceability, (i) the foreign court or tribunal has jurisdiction over the case, (ii) the parties were properly notified, and (iii) there was no collusion, fraud, or clear mistake of law or fact (Republic v Mupas, GR No 181892, 8 September 2015). Nonetheless, the burden to prove (iii) rests on the party opposing recognition because foreign judgments are disputably presumed to have been validly rendered (BPI Securities Corporation v Guevara, GR No 167052, 11 March 2015).
• The foreign judgment is not barred by the statute of limitations.
• The enforcement of the foreign judgment is not contrary to Philippine public policy (Mijares v Ranada, GR No, 139325, 12 April 2005).

Other procedural requirements:

• judicial affidavits of witness(es) to be presented, if any, must be attached;
• a statement of documentary evidence in support of the allegations;
• verification; and
• certification against forum shopping.

Proving the foreign judgment

In an action for enforcement, the foreign judgment itself must be proven as a fact.

• A foreign judgment can be established by (i) an official publication, or (ii) a copy attested by the officer having legal custody of the document (Arreza v Toyo, GR No 213198, 1 July 2019).
• If the record is not kept in the Philippines, such copy must be (i) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country where the record is kept, and (ii) authenticated by the seal of the office.
• If the foreign country where the record is kept 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.

The same rule above applies to establish foreign law. However, the testimony of expert witnesses alone has been accepted by courts to establish a foreign law in instances when the official record or attested copies were not offered in evidence. Based on these cases, the expert witness must (i) testify in court and (ii) quote the particular foreign laws sought to be established (Willamete v Muzzal, GR No L-42538, 21 May 1935; CIR v Fisher, GR No L-11622, 28 January 1961).

Execution

The domestic judgment of the Philippine court enforcing the foreign judgment may be executed. See 2.2 Enforcement of Domestic Judgments.

Remedies of the aggrieved party

The judgment debtor may avail of remedies discussed in 2.5 Challenging Enforcement of Domestic Judgments.

Although the filing fee is minimal, the overall cost and time will vary depending on the level of opposition, resorting to post-judgment remedies, and the difficulty of execution. Given these factors, on average, a foreign judgment may be fully enforced within two years.

A foreign judgment is presumed to be valid and binding until the contrary is shown (Asiavest Merchant Bankers (M) Berhard v CA, GR No 110263, 20 July 2011). The party opposing enforcement must overcome the presumption (Mijares v Ranada, GR No 139325, 12 April 2005).

To repel a foreign judgment, a defendant may raise the following by evidence:

• want of jurisdiction;
• want of notice to the party;
• collusion;
• fraud; or
• clear mistake of law or fact (Rules of Court, Rule 39, Section 48).

Additionally, a defendant may contest the enforceability of a foreign judgment for being contrary to Philippine public policy (Mijares v Ranada, GR No 139325, 12 April 2005).

These grounds are “external” to the merits of a foreign judgment because Philippine courts exercise a limited review of foreign judgments and are not allowed to delve into their merits (BPI Securities Corporation v Guevara, GR No 167052, 11 March 2015; Minoru Fujiki v Marinay, GR No 196049, 26 June 2013). This limitation is consistent with the policy to limit repetitive litigation on claims and issues.

Fraud

Fraud must be extrinsic; ie, fraud based on facts not controverted or resolved in the case where judgment is rendered, or that would go to the jurisdiction of the court or would deprive the party against whom judgment is rendered a chance to defend the action to which they have a meritorious case or defence (Philippine Aluminum Wheels v Fasgi Enterprises, Inc., GR No 137378, 12 October 2000).

Public Policy

This defence allows for the application of local standards in reviewing the foreign judgment, which can safeguard against possible abuses to resorting to offshore litigation easily if it can be demonstrated that the original claim is clearly contrary to Philippine constitutional values (Mijares v Ranada, GR No 139325, 12 April 2005).

Clear Mistake of Law

This defence was applied when a foreign court failed to apply to the facts of the case fundamental principles of contract (Nagarmull v Binalbagan-Isabela Sugar Company, Inc., GR No L-22470, 28 May 1970).

As a state that favours party autonomy in dispute resolution, the enforcement of arbitral awards in the Philippines is governed principally by the Alternative Dispute Resolution Act of 2004 (the "ADR Act"). Depending on the type of arbitral award, the UNCITRAL Model Law on International Commercial Arbitration (the “UNCITRAL Model Law”), Republic Act No 876 or the Arbitration Law (the “Domestic Arbitration Law”), the Construction Industry Arbitration Law (the “Construction Arbitration Law”) and the New York Convention may be applied separately or in conjunction.

The Supreme Court likewise promulgated the Special Rules of Court on Alternative Dispute Resolution (the “Special ADR Rules”), which governs procedure for cases concerning:

• confirmation, correction or vacation of an award in domestic arbitration;
• recognition and enforcement or setting aside of an award in international commercial arbitration seated in the Philippines; and
• recognition and enforcement of a foreign arbitral award.

The approach to the enforcement of arbitral awards in the Philippines varies depending on the seat of arbitration and the type of arbitration.

Award Rendered Outside the Philippines

• Foreign arbitral award: the enforcement of a foreign arbitral award is governed by the New York Convention and the Special ADR Rules. A non-convention award may be recognised in the Philippines on the grounds of comity and reciprocity, and, as such, may be enforced as a convention award.

Award Rendered in the Philippines

• Award in an international commercial arbitration: enforcement is governed by the ADR Act and its Implementing Rules, the UNCITRAL Model Law, and the Special ADR Rules.
• Award in a domestic arbitration: enforcement is governed principally by the Domestic Arbitration Law, the ADR Act and the Special ADR Rules. A domestic arbitration is an arbitration that is not international as defined in the UNCITRAL Model Law (ADR Act, Section 32).
• Award in construction arbitration: enforcement is governed by the Construction Arbitration Law, the rules promulgated for construction arbitration and the Rules of Court.

Generally, the Philippines may refuse confirmation, recognition and enforcement of an arbitral award on various grounds, depending on the type of award and arbitration.

Award in an International Commercial Arbitration Seated in the Philippines

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

• the incapacity of a party to the arbitration agreement;
• the arbitration agreement is not valid under the applicable law;
• a lack of notice to a party of the appointment of an arbitrator or of the arbitral proceedings;
• a party was unable to present their case;
• the award deals with a dispute outside, or contains decisions on matters outside, the scope of the arbitration;
• the composition of the arbitral tribunal or the arbitral procedure violated an arbitration agreement or is contrary to Philippine law;
• the subject matter of the dispute is not capable of settlement by arbitration; and
• the recognition or enforcement of the award would be contrary to public policy (Special ADR Rules, Rule 12.4).

Award in a Domestic Arbitration

A Philippine court may vacate an award in a domestic arbitration, rendering the same unenforceable, on the following grounds:

• the award was procured through corruption, fraud or other undue means;
• there is evident partiality or corruption of the arbitral tribunal or its members;
• there was arbitral tribunal misconduct or misbehaviour resulting in prejudice to the rights of a party (eg, refusing to postpone a hearing despite cause or to hear pertinent and material evidence);
• an arbitrator wilfully withheld information regarding their disqualification;
• the arbitral tribunal exceeded its powers or imperfectly executed them such that no final and definite award was made;
• a non-existent, an invalid or an unenforceable arbitration agreement;
• a party to the arbitration is a minor or incompetent (Special ADR Rules, Rule 11.4; Domestic Arbitration Law, Section 24); and
• the award violates public policy (Special ADR Rules, Rule 19.10; Fruehauf Electronics Philippines Corporation v. Technology Electronics Assembly and Management Pacific Corporation, GR No. 204197, 23 November 2016)

Foreign Award

A Philippine court will not set aside but may refuse recognition and enforcement of a foreign award on any or all of the following grounds:

• the incapacity of a party to the arbitration agreement;
• the arbitration agreement is not valid under the applicable law;
• a lack of notice to a party of the appointment of an arbitrator or of the arbitral proceedings;
• a party was unable to present their case;
• the award deals with a dispute outside, or contains decisions on matters outside, the scope of the arbitration;
• the composition of the arbitral tribunal or the arbitral procedure violated an arbitration agreement or was contrary to the law of the seat of arbitration;
• the award is not yet binding on the parties or has been set aside or suspended by a court in the seat of arbitration;
• the subject matter of the dispute is not capable of settlement by arbitration; and
• recognition or enforcement of the award would be contrary to public policy (Special ADR Rules, Rule 13.4).

Award in Construction Arbitration

An award in construction arbitration is (i) appealed to the Supreme Court if the issue to be raised is a pure question of law or (ii) elevated to the Court of Appeals if the issues to be raised include questions of fact, but only on limited grounds:

• a challenge on the integrity of the arbitral tribunal (eg, allegations of corruption, fraud, misconduct, evident partiality, incapacity or excess of powers); and
• an allegation that the tribunal violated the Constitution or law in the conduct of the arbitral process (Global Medical Center of Laguna, Inc. v Ross Systems International, Inc., GR No 230112, 11 May 2021).

Award in an International Commercial Arbitration Seated in the Philippines

When filed

Any party to an international commercial arbitration in the Philippines may petition the court to recognise and enforce the award at any time from receipt of the award. If a petition to set aside has been previously filed, the petition for recognition must be filed in the same proceeding (Special ADR Rules, Rules 12.1 and 12.2).

Where filed

At the option of the petitioner, the petition may be filed in the Regional Trial Court:

• where the arbitration proceeding was conducted;
• where the assets are located;
• where the act will be performed;
• where any party resides; or
• in the National Capital Region (Special ADR Rules, Rule 12.3).

Contents of the petition

• The addresses of the parties to the arbitration.
• A statement that the arbitration agreement exists.
• The names of the arbitrators and proof of their appointment.
• A statement that an award was rendered and its date of receipt.
• The relief sought.
• The following shall be attached:
1. an authentic copy of the arbitration agreement;
2. an authentic copy of the award;
3. certification and certification against forum shopping; and
4. authentic copies of the appointment of the arbitral tribunal (Special ADR Rules, Rule 12.7).

Notice

The court will cause the delivery of a notice and a copy of the petition to the respondent, directing them to file an opposition within 15 days. The respondent may file a petition to set aside in lieu of an opposition (Special ADR Rules, Rule 12.8).

Procedure

• If the issues are mainly legal, the court will require the parties to submit legal briefs discussing the legal issues and the legal basis for the relief prayed for.
• If there are issues of fact, the parties will simultaneously submit affidavits and supporting documentation of all their witnesses.
• A hearing is not mandatory and will be required only if necessary based on the petition, opposition and affidavits. Affidavits shall take the place of direct testimonies and witnesses will be immediately subject to cross-examination (Special ADR Rules, Rules 12.9 and 12.10).
• Unless a ground to set aside is fully established, the court shall recognise and enforce the award (Special ADR Rules, Rule 12.13).

Award in a Domestic Arbitration

When filed

Any party to domestic arbitration may petition the court to confirm the award at any time after the lapse of 30 days from receipt of the award. If a petition to vacate has been previously filed, the petition for confirmation may be filed in the same proceeding (Special ADR Rules, Rules 11.1 and 11.2).

Where filed

The petition is filed in the Regional Trial Court having jurisdiction over the place in which one of the parties is doing business or residing, or where arbitration proceedings were conducted (Special ADR Rules, Rule 11.3).

Contents of the petition

• The addresses of the parties to the arbitration.
• Jurisdictional issues raised during the arbitration proceedings.
• A statement of the date of receipt of the arbitral award and the circumstances in which it was received by the petitioner.
• The following shall be attached:
1. an authentic copy of the arbitration agreement;
2. an authentic copy of the award;
3. verification and certification against forum shopping; and
4. authentic copies of the appointment of the arbitral tribunal (Special ADR Rules, Rule 11.6).

Notice

The court will cause the delivery of a notice and a copy of the petition to the respondent, allowing them to file a comment or opposition within 15 days. The respondent may file a petition in opposition to the petition in lieu of an opposition (Special ADR Rules, Rule 11.7).

Procedure

• If there are issues of fact, the parties will simultaneously submit affidavits and supporting documentation of all their witnesses.
• If a petition in opposition to the petition is filed to vacate the award, the party interested in the arbitration may oppose it on the grounds that it does not affect the merits of the case and may be cured or remedied. The opposition must be supported by a brief of legal arguments.
• Hearing is not mandatory and will be required only if necessary based on the petition, opposition and affidavits. Affidavits shall take the place of direct testimonies and witnesses will be immediately subject to cross-examination (Special ADR Rules, Rules 11.7 and 11.8).
• Unless a ground to vacate is fully established, the court shall confirm the award (Special ADR Rules, Rule 11.19).

Foreign Award

When filed

Any party to a foreign arbitration may petition the court to recognise and enforce the foreign award at any time from receipt of the award (Special ADR Rules, Rules 13.1 and 13.2).

Where filed

At the option of the petitioner, it may be filed in the Regional Trial Court:

• where the assets are located;
• where the act will be performed;
• where any party resides or the principal place of business is located; or
• in the National Capital Region (Special ADR Rules, Rule 13.3).

Contents of the petition

• Addresses of the parties to the arbitration.
• The seat of arbitration and whether it is party to the New York Convention.
• The relief sought.
• The following shall be attached:
1. an authentic copy of the arbitration agreement;
2. an authentic copy of the foreign award; and
3. a certified translation of the foreign award and arbitration agreement or submission if not made in English (Special ADR Rules, Rule 13.5).

Notice

The court will cause the delivery of a notice and a copy of the petition to the respondent, allowing them to file an opposition within 30 days (Special ADR Rules, Rule 13.6).

Procedure

• If the issues are mainly legal, the court may require the parties to submit legal briefs discussing the legal issues and the legal basis for the relief prayed for.
• If there are issues of fact, the parties will simultaneously submit affidavits and supporting documentation of all their witnesses.
• A hearing is not mandatory and will be required only if necessary based on the petition, opposition and affidavits. Affidavits shall take the place of direct testimonies and witnesses will be immediately subject to cross-examination (Special ADR Rules, Rules 13.8 and 13.9).
• Unless a ground to refuse recognition is fully established, the court shall recognise and enforce the foreign award (Special ADR Rules, Rule 13.11).

Award in Construction Arbitration

An award in construction arbitration does not need court confirmation. The award becomes executory upon the lapse of 15 days from its receipt by the parties. A writ of execution may be issued by the tribunal or sole arbitrator, with the concurrence of the Construction Industry Arbitration Commission, upon motion or automatically.

The cost and time to enforce an award in the Philippines is generally dependent on factors affecting time (such as the level of opposition, review by higher courts, and complexity of the award). The average time to confirm or recognise an award is one year but will likely take longer on review.

The applicable filing fees in petitions to confirm or enforce an award are:

• 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.

The minimal filing fee in “all actions not involving property” applies to a petition for enforcement of a foreign award under the New York Convention (Special ADR Rules, Rule 20.1).

The prevailing party in a petition for recognition, enforcement or confirmation is entitled to an award of costs, which includes reasonable attorney’s fees against the unreasonable unsuccessful party (Special ADR Rules, Rules 21.3 and 21.4).

It is presumed that an award was 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 refusing recognition of an arbitral award.

The grounds to set aside, refuse recognition, or vacate an award are discussed in 4.3 Categories of Arbitral Awards Not Enforced. Unless a petition may be separately initiated, the grounds are raised in the same proceeding where the award is sought to be enforced, recognised or confirmed.

Setting Aside an Award in an International Commercial Arbitration in the Philippines

A petition to set aside must be filed within three months from receipt of the award. Failure to file a petition to set aside precludes a party from raising grounds to resist enforcement of the award (Special ADR Rules, Rule 12.2(B)).

The petition shall have the same contents as a petition to recognise and enforce an award in international commercial arbitration. In addition, grounds to set aside must be stated (Special ADR Rules, Rule 12.7(B)).

The procedure before the court is similar to a petition for recognition and enforcement of an award in an international commercial arbitration. The court, however, may suspend the setting-aside petition to:

• allow the arbitral tribunal an opportunity to resume or take action that will eliminate the ground; or
• await a court’s ruling on appeal of the arbitral tribunal’s preliminary determination of its jurisdiction.

In the latter case, the court may consolidate the proceedings to set aside with the earlier appeal (Special ADR Rules, Rule 12.11).

Unless a ground is fully established, the petition to set aside will be dismissed (Special ADR Rules, Rules 12.12 and 12.13).

Vacating an Award in a Domestic Arbitration

A petition to vacate must be filed not later than 30 days from receipt of the award. It must be filed in opposition to a petition to confirm the arbitral award when the latter is pending before a court. A petition to vacate the award filed beyond the period will be dismissed (Special ADR Rules, Rule 11.2 (C) and (D), and Rule 11.5).

The petition shall have the same contents as a petition to confirm an award in a domestic arbitration. Additionally, it must state the grounds to vacate the award, supported by the required documents (Special ADR Rules, Rules 11.6 and 11.8).

Since the petition to vacate must be filed in the same proceeding for confirmation and vice versa, the procedure governing confirmation and vacation are the same (Special ADR Rules, Rules 11.7 and 11.8).

The court may, upon request, suspend the proceedings for vacation and direct the arbitral tribunal to reopen the hearing and take action to eliminate the grounds for vacation (Special ADR Rules, Rule 11.8).

Unless a ground to vacate the award is fully established, the court shall confirm the award. The case may be referred back to the same arbitral tribunal for the purpose of making a new or revised award or to direct a new hearing before the same or a new arbitral tribunal (Special ADR Rules, Rule 11.9).

Violation of public policy was applied to refuse confirmation of an arbitral award in favour of a water concessionaire whose enforcement would adversely affect the public and lead to unequal treatment of water consumers in different locales. (Maynilad Water Services, Inc. v Center for Popular Movements, GR No. 181764, 7 December 2021). Likewise, an award excusing a mining contractor from the requisite free, prior and informed consent and certification required by law was vacated for violating the state’s policy to protect the rights of indigenous cultural communities to their ancestral lands. (Lone Congressional District of Benguet v Lepanto Consolidated Mining Company, GR No. 244063, 21 June 2022).

Opposing a Petition for Recognition of a Foreign Award

A separate petition to refuse recognition is not sanctioned by the Special ADR Rules, consistent with the New York Convention. Instead, grounds to refuse the recognition and enforcement of a foreign award may be raised by way of opposition in the petition for enforcement and recognition (Special ADR Rules, Rule 13.7). A party may file an opposition within 30 days from receipt of the court’s notice and a copy of the petition for recognition and enforcement (Special ADR Rules, Rule 13.6).

The court may adjourn or defer rendering the decision if an application to set aside or suspend the foreign award is made in the seat of arbitration. The party seeking enforcement may require the other party to give suitable security (Special ADR Rules, Rule 13.10).

A petition to set aside must be filed within three months from receipt of the award. Failure to file a petition to set aside precludes a party from raising grounds to resist enforcement of the award (Special ADR Rules, Rule 12.2(B)).

The court shall recognise and enforce the foreign award unless a ground to refuse recognition or enforcement or the foreign award is fully established. In the case of a non-convention award from a country that does not extend comity and reciprocity to awards made in the Philippines, the court may treat the award as a foreign judgment enforceable in accordance with Rule 39, Section 48 of the Rules of Court (Special ADR Rules, Rule 13.12).

The Philippines follows a pro-enforcement policy and has adopted the "narrow and restrictive" approach in defining public policy. A foreign award is contrary to public policy if its enforcement would be against the fundamental tenets of justice and morality, or would blatantly be injurious to the public, or the interest of the society. (Mabuhay Holdings Corporation v. Sembcorp Logistics Limited, GR No. 212734, 5 December 2018).

Updated Rules on Review of Construction Arbitration Award

A construction arbitration award is final and unappealable except on questions of law, which shall be appealed to the Supreme Court (EO 1008, Section 19).

The Supreme Court recently set the following guidelines with respect to the modes of judicial review vis-à-vis construction arbitration awards.

• For appeals that have already been filed and are currently pending before the Court of Appeals under Rule 43, the prior availability of the appeal on matters of fact and law applies.
• For construction awards rendered after Global Medical Center of Laguna, Inc. v Ross Systems International, Inc. (GR No 230112, 11 May 2021):
1. if the issue to be raised is a pure question of law, the appeal should be filed directly and exclusively with the Supreme Court through a petition for review under Rule 45; and
2. if the parties will appeal factual issues, the appeal may be filed with the Court of Appeals, but only on the limited grounds that pertain to a challenge on the integrity of the arbitral tribunal or an allegation that the arbitral tribunal violated the Constitution or positive law, through a petition for certiorari under Rule 65.