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Sec. 46 of RA 9285. A decision of the RTC confirming, vacating, setting aside, modifying or correcting an arbitral award may be appealed to the CA in accordance with the rules and procedure to be promulgated by the SC.

The losing party who appeals from the judgment of the court confirming an arbitral award shall be required by the appellate court to post a counterbond executed in favour of the prevailing party equal to the amount of the award in accordance with the rules to be promulgated by the SC.

Distinctions between foreign arbitral award from foreign judgment:

1. Foreign arbitral award is a better alternative because the same is readily enforceable whereas foreign judgment is not readily enforceable for it requires proof and allegations of a foreign law.

2. Foreign arbitral award, when confirmed by the RTC shall be recognized and enforced as foreign arbitral award and not as judgment of a foreign court, whereas foreign judgment when confirmed by the RTC shall be enforced as a judgment of the foreign court.

3. Foreign arbitral award when validly stipulated upon by the parties shall be final and binding whereas in foreign judgment there is no stipulation involved executed by the parties.

4. Foreign arbitral award is done thru alternative dispute resolution whereas foreign judgment does not involved alternative dispute resolution because the same should be done in regular courts proceedings.

Grounds for the rejection of a foreign arbitral award under Art. V of New York Convention:

a. Recognition & enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought proof that:

1. parties to the agreement referred to in Art. II were, under the law applicable to them under some incapacity or said agreement is not valid under the law to which the parties have subjected it or under the law of the country where the award was made.

2. Party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or otherwise unable to present his case.

3. Award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration

4. Composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties.

5. Award has not yet become binding on the parties or has been set aside or suspended by a competent authority in which the award was made.

b. Recognition or enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:

1. Subject matter of the difference is not capable of settlement by arbitration under the law of that country

2. Recognition or enforcement of the award would be contrary to the public policy of that country.

KOGIES v. LERMA & PGSMC GR 143581, January 7, 2008

FACTS : Petitoner Korea Technologies Co. Ltd. (KOGIES), A Koren Corp. engaged in the supply and installation of LPG Cylinder manufacturing plants and private

respondent Pacific General Steel Mfg. Corp. (PGSMC), a domestic corp., executed a contract in the Philippines whereby KOGIES would set up an LPG cylinder mfg. plant in Carmona, Cavite. For allegedly altering the quantity and lowering the quality of the machineries & equipment delivered by KOGIES, PGSMC cancelled the contract and would dismantle & transfer the machineries in Carmona plant. KOGIES asserted that PGSMC could not unilaterally rescind the contract and that their dispute should be settled by arbitration as agreed upon in Art. 15, the arbitration clause of their contract. KOGIES then instituted an Application for Arbitration before KCAB in Seoul, Korea pursuant to said Art. 15 as amended and resolved said dispute in their favor. Meanwhile, KOGIES, filed a complaint for specific performance against PGSMC before RTC of Muntinlupa alleging among others that PGSMC violated Art. 15 of the contract by unilaterally rescinding the same without resorting to arbitration and thus praying that PGSMC be restrained from dismantling & transferring the machinery. PGSMC opposed to the TRO since Art. 15 was null and void for being against public policy as it ousts the local courts of jurisdiction. The RTC denied said application of TRO and held that Art. 15 was invalid which later affirmed by the CA.

ISSUE : Whether or not arbitration clause Is valid

HELD : Yes. Established is the rule that the law of the place where the contract is made governs. The contract was perfected in the Philippines. Therefore our laws ought to govern. Nonetheless Art. 2044 of the Civil Code sanctions the validity of mutually agreed arbitral clause or finality of an arbitral award. The arbitration clause was mutually agreed upon by the parties. It has not been shown to be contrary to any law or against public policy.

OIL & NATURAL GAS COMMISSION v. CA 293 SCRA 26

FACTS : Petitoner Oil & Natural Gas Commission, a foreign corporation controlled by the gov’t of India entered into a contract with private respondent PACEMCO whereby the latter undertook to supply petitioner 4,300 metric tons of oil well cement. The oil well cement was loaded on board by the ship MV Surutana Nava at the port of Surigao City. Due to a dispute between the shipowner & private respondent, the cargo did not reach its destination in India and instead it was withheld in Bangkok.

Despite the fact the private respondent had already received payment and despite several demands, it failed to deliver the oil well cement. Petitioner then informed private respondent that they referred the claim to an arbitrator pursuant to clause 16 of their contract. The chosen arbitrator, one Shri Malhotra resolved the dispute in petitioner’s favor. To enable to execute the arbitral award, petitioner filed before the Court of Civil Judge in Dehra Dun, India, praying that the decision of arbitrator be made “The Rule of Court” in India. The foreign court issued an order in favor of the petitioner, in which the said arbitral award shall be a part of the decree. Accordingly, petitioner filed a complaint with RTC of Surigao City for

the enforcement of the foreign judgment. The RTC dismissed the complaint for lack of valid cause of action and held that the referral of the dispute to the arbitrator is erroneous. The CA affirmed the trial court’s decision declaring that arbitrator did not have jurisdiction, thus the foreign court could not validly adopt the arbitrator’s award. Hence, this petition.

ISSUE : Whether or not the foreign judgment is valid and enforceable in the Philippines.

HELD : Yes. The recognition to be accorded a foreign judgment is not necessarily affected by the fact that the procedure in the court’s of country in which the judgment was rendered differs from that of the court’s of the country in which the judgment is relied on. Matters of remedy & procedure are governed by the lex fori. Thus, if under the procedural rules of the Civil Court of India, a valid judgment may be rendered by adopting the arbitrator’s findings, the same must be respected.

MARIA REBECCA MAKAPUGAY BAYOT v. CA GR 155635, November 7, 2008

FACTS : Vicente Bayot, A Filipino citizen and Rebecca Makapugay, identified as an American citizen were married in Mandaluyong City on April 20, 1979, & were later blessed with a child named Alix. Sometime in 1996, Rebecca initiated divorce proceedings in the Dominican Republic. The Dominican Court issued Civil Decree on February 22, 1996 ordering the dissolution of their marriage and leaving them to remarry after completing the legal requirements but giving them the joint custody and guardianship over Alix. One year later, the same Court issued another civil decree settling the couple’s property relations pursuant to an agreement they executed which states that the conjugal property, which they acquired during their marriage consists only of real and personal properties at Muntinlupa. On March 14, 1996, Rebecca filed a petition before the RTC of Makati City for declaration of nullity of marriage pursuant to said civil decree issued by the Dominican Court. On May 29, 1996, Rebecca executed an Affidavit of Acknowledgment stating under oath that she is an American citizen and that since 1993 she and Vicente have been living separately. In 2001, Rebecca filed another petition before RTC of Muntinlupa for declaration of absolute nullity of marriage. Vicente then moved to dismiss the case on grounds of lack of cause of action and that petition is barred by the prior judgment of divorce which motion was denied. Rebecca on the other hand interposed an opposition insisting her Filipino citizenship as affirmed by the DOJ and that there is no valid divorce to speak of. On appeal, the CA effectively dismissed the petition of Rebecca.

ISSUE : Whether or not divorce decree is valid as to constitute res judicata.

HELD : Yes. At the time of the divorce, Rebecca was still to be recognized as an American citizen. At the very least, she chose before, during & shortly after her divorce, her American citizenship to govern her marital relationship. Being an American citizen she was bound by the national laws of the US, a country which allows divorce. Given the validity of divorce secured by Rebecca, the same shall be given a res judicata effect in this jurisdiction. As an obvious result of divorce decree, the marital vinculum between Rebecca and Vicente is considered severed.

ROEHR v. RODRIGUEZ 404 SCRA 495

FACTS : Petitioner Wolfgang Roehr, A German citizen and resident of Germany married private respondent Carmen Rodriguez, a Filipina in Harmburg, Germany in 1980.

Their marriage was subsequently ratified in Negros Oriental in 1981. In 1996, private respondent filed a petition for declaration of nullity of marriage before RTC of Makati City. Petitioner moved to dismiss the case but the same was denied. On December 16, 1997, petitioner obtained a decree of divorce from the CFI of Hamburg-Blankenese, wherein the court awarded to him the custody of their two children. In view of said decree, petitioner filed a second motion to dismiss on action filed by private respondent on the ground that the trial court

had no jurisdiction over the subject matter of the action as a decree of divorce had already been promulgated dissolving the marriage of petitioner and private respondent. The trial court thru public respondent Judge Salonga granted the motion. Private respondent filed a motion for partial reconsideration praying that the case proceed for the purpose of determining the issues of custody of children and the distribution of properties. Public respondent reversed her previous order and allowed the case to proceed.

ISSUE : Whether or not the case be allowed to proceed despite the decree of divorce already obtained in Germany.

HELD : Yes. As a general rule, divorce decrees obtained by foreigners in other countries are cognizable in our jurisdiction, but the legal effects thereof e.g. custody, care and support of the children must still be determined by our courts. Before our courts can give the effect of res judicata to a foreign judgment, such as the award of custody of petitioner by the German court, it must be shown that the parties opposed to the judgment, had been given ample opportunity to do so on grounds under Rule 39, Sec 50(now Sec. 48) of the Rules of Court.

RULE 39, SEC. 48. Effect of foreign judgments. - The effect of a judgment of a tribunal of a foreign country, having jurisdiction to pronounce the judgment is as follows:

(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title to the thing;

(b) In case of a judgment against a person, the judgment is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title; but the judgment 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.

QUASHA LAW OFFICE & LEGEND INT’L RESORTS LTD., versus SPECIAL SIXTH DIVISION OF CA, KHOO BOO BOON & PICAZO LAW FIRM

GR 182013, December 4, 2009

FACTS : Petitioner LIRL, a Hongkong corp., licensed to operate a resort Casino hotel in Subic Bay Phils. filed a complaint for annulment of contract, specific performance with damages & application for TRO before RTC of Olongapo against PAGCOR

& SBMA on the basis of the agreement it entered into with the latter which was later amended which in effect suspend, limit, reduce, or modify petitioner’s license to operate the Subic Bay Casinos and from entering with any agreement from other entities for the operation of other Casinos in the Subic Free Port Zone.

The trial court annulled the amendment of the aforesaid agreement. Meanwhile, petitioner LIRL’s companies filed before the Hongkong Court for winding up, which ordered the appointment of Kelvin Flynn & Borrelli, as liquidators of petitioner LIRL and further granting to them the power to manage its business.

Pursuant to said orders, Flynn sent a letter to private respondent Boon, informing him that he had already been terminated as CEO of LIRL-Subic as well as private respondent Picazo law office notifying that its legal services had also been terminated. Petitioner LIRL later engaged the legal services of petitioner Quasha Law office as its new counsel to represent in all proceedings in the Phils.

Petitioner Quasha Law Office filed its Entry of Appearance as counsel of petitioner in a case pending before the appellate court. The appellate court refused to recognize their appearance because being a foreign judgment, our courts could not take judicial notice thereof and further concludes that untill the alleged order of the Hongkon Court had been recognized before our local courts, it was still the private respondent Picazo Law Office was recognized as the only counsel entitled to represent petitioner LIRL.

ISSUE : Whether or not the order of the Hongkong Court can be recognized and enforced in our Courts.

HELD : No. The act of terminating the legal services of private respondent Picazo law Office and engaging in its place petitioner Quasha law office was a mere exercise of petitioner LIRL’s prerogative, thru its appointed liquidators, which was an internal affair that requires no prior recognition in a separate action. Therefore, the court can no longer pass upon the issue.

PHILIPPINE ALUMINUM WHEELS INC. v. FASGI ENTERPRISES INC.

342 SCRA 722

FACTS : Based on their distributorship agreement executed in US, petitioner PAWI, a Phil.

Corp., shipped 8,594 wheels to respondent FASGI, a Californian corp.,and the latter paid the FOB value of said wheels. After finding that the shipment was defective and in non-compliance with the requirement, FASGI filed an action against PAWI and FPS, an Italian corp., for breach of contract with recovery of damages before the California District Court. Pending resolution of the case, the parties entered into a settlement agreement whereby petitioner had to execute several letters of credit (LC) in favor of FASGI. However, dispite its assurances and FASGI’s insistence, PAWI still failed to open the first LC allegedly due to

Supplemental Settlement of Agreeement and motion for entry of judgment, which was executed by FASGI’s president and PAWI’s counsel Mr. Thomas Ready. For failure again to comply with their agreement, respondent pursue the case with California Court, which obtained a favorable judgment. Unable to satisfy said foreign judgment, respondent filed a complaint for its enforcement before RTC of Makati City. The trial court dismissed the case on grounds that the decree was tainted with collusion, fraud and clear mistake of law. On appeal, the CA ordered the full enforcement of the California judgment. Hence this appeal. Petitioner contends that the foreign judgment cannot be enforced because Mr. Ready had already terminated his services from them and that the motion for entry of judgment is void.

ISSUE : Whether or not foreign judgment is enforceable before the Philippine courts.

HELD : Yes. From the time the stipulation for judgment was entered until the certificate of finality of judgment was issued by the California Court, no notification was issued by PAWI to FASGI regarding its termination of Mr. Ready’s services. If PAWI were indeed hoodwinked by Mr. Ready, who purportedly acted in collusion with FASGI, it should have aptly raised the issue before the forum which issued the judgment, in line with the principle of international comity.

Fraud to hinder the enforcement within this jurisdiction of a foreign judgment must be extrinsic, that is fraud based on facts not controverted or resolved in the case where judgment is rendered or would deprive the party against whom judgment is rendered a chance to defend an action to which he has a meritorious case or defense. The fraud involved in this case was intrinsic or that fraud which goes to the very existence of the cause of action – such as fraud in obtaining consent to a contract is deemed adjudged and therefore cannot militate against the recognition or enforcement of the foreign judgment.

MIJARES v. RANADA 455 SCRA 397

FACTS : Plaintiffs filed a class suit with the US District Court of Hawaii against the estate of Pres. Marcos alleging that they suffered tortious acts in the hands of military forces during the Marcos regime. The US District Court awarded to the plaintiff class an amount of $1.96B, as compensatory & exemplary damages. Meanwhile, present petitioners filed a complaint with Makati RTC for the enforcement of foreign judgment, claiming that they are members of the plaintiff class in whose favor said foreign court awarded damages and that the same should be recognized and enforced in our courts pursuant to Rule 39, Sec, 48 of the Rules of Court. Respondent Marcos estate moved to dismiss the case raising non-payment of correct filing fees. Petitioners however claimed that the required filing fees are exorbitant despite the fact that said action is not capable of pecuniary estimation. On the other hand, respondent Judge Ranada ruled against

petitioners. In its present petition for certiorari, petitioners assailed the twin orders of respondent Judge and asserted that said action belongs to the class where the Court has recognized as being incapable of pecuniary estimation.

CHR likewise intervened in this case asserting the immediate enforcement &

execution of the said foreign judgment because once the case has been decided between the same parties in one country on the same issue with finality; it can no longer be relitigated in another country invoking principle of comity and vested rights.

ISSUES : (1) Whether or not foreign judgment can be recognized in our courts as the same is

capable of pecuniary estimation.

(2) Whether or not foreign judgment should outrightly be enforced before our courts

even without filing a separate action.

HELD : (1) Yes. The Court ruled that the complaint to enforce foreign judgment is one capable of pecuniary estimation and that petitioners’ payment of docket fees of

HELD : (1) Yes. The Court ruled that the complaint to enforce foreign judgment is one capable of pecuniary estimation and that petitioners’ payment of docket fees of