Philippines

Screenshot 2019-11-27 at 6.58.30 PMBy Reynold L OrsuaACCRA Law

 

In a world where cross-border transactions are commonplace, disputes inevitably arise. Thus, the recognition and enforcement of foreign court decisions is a key issue.

On this score, the Hague Conference on Private International Law (HCCH) adopted last July 2, 2019, the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters seeks “to promote effective access to justice for all and to facilitate rule-based multilateral trade and investment, and mobility, through judicial co-operation”. This is intended to fill in the gap in cross-border litigation, particularly the uncertainty of recognition and enforcement of court decisions in another jurisdiction and seeks to serve as a mechanism similar to the New York Convention on the recognition and enforcement of foreign arbitral awards, which has been widely ratified by a number of states.

Uruguay was the first country to accede to the Convention. The Philippines, which participated in the discussions, has yet to accede to the Convention.

The Convention applies to the recognition and enforcement of foreign judgments in civil or commercial matters in one contracting state of a judgment given by a court of another contracting state. It shall, however, not extend to revenue, customs or administrative matters. It further excludes within its scope foreign judgments on status and legal capacity of natural persons, family law matters, wills and succession, insolvency, carriage of passengers and goods, defamation, privacy, intellectual property or anti-trust matters, among others.

The Convention mainly provides that there shall be no review on the merits of the foreign judgments in the requested state. This is consistent with Philippine jurisprudence, which already recognises that “a Philippine court will not substitute its own interpretation of any provision of the law or rules of procedure of another country, nor review and pronounce its own judgment on the sufficiency of evidence presented before a competent court of another jurisdiction”. (Bank of the Philippine Islands Securities Corporation v. Guevara, G.R. No. 167052, March 11, 2015) This is also in accordance with the “policy of preclusion” or the policy in all legal systems to limit repetitive litigation on claims and issues. (Mijares v. Ranada, G.R. No. 139325, April 12, 2005)

The Convention also provides limited grounds for the refusal of recognition and enforcement of a foreign judgment:

  1. lack of notification to the parties sufficient to enable them to prepare their defence, or was made in a manner incompatible with the fundamental rules of the requested state concerning service of documents;
  2. the judgment was obtained by fraud;
  3. the recognition or enforcement of the judgment would be manifestly incompatible with the public policy of the requested state;
  4. the proceedings in the court of origin were contrary to an agreement; or a designation in a trust instrument, under which the dispute was to be determined in court of a state other that the state of origin;
  5. the judgment is inconsistent with a judgment given by a court of the requested state in a dispute between the same parties; or
  6. the judgment is inconsistent with an earlier judgment given by a court of another state between the same parties on the same subject matter, provided that the earlier judgment fulfils the conditions necessary for its recognition in the requested state.

The foregoing grounds are similar to those provided under Section 48, Rule 39 of the Rules of Court with the exception of the ground that there is a clear mistake of fact and law in the foreign judgment sought to be enforced in the Philippines. This may be due to the fact that this ground has been used (or misused) to re-litigate the case in the Philippine courts, which is inconsistent with the “no merit review” provision under the Convention.

However, in Soorajmull Nagarmull v. Binalbagan-Isabela Sugar Company, Inc., (G.R. No. L-22470, May 28, 1970), our Supreme Court refused recognition and enforcement of the foreign decisions as they were found to have been rendered upon a clear mistake of law. The Supreme Court did so on the basis that the foreign decisions make an innocent party suffer the consequences of the default or breach of contract committed by another party. This then begs the question as to whether this case would have been decided differently under the Convention, or is it possible to frame this under the public policy exception?

At any rate, as the Convention operates under the framework of mutual trust between and among states, it also provides an “objection mechanism” for a contracting state to notify the depositary of the Convention, which is the Ministry of Foreign Affairs of the Kingdom of the Netherlands, that its accession shall not have the effect of establishing a relationship with another contracting state. In other words, this allows a contracting state to choose which state’s judgments it does not want to be bound to recognise and enforce.

In the end, any matter raised for or against the accession to the Judgments Convention should be gauged in the light of its promise for greater recognition and enforcement of Philippine court decisions involving cross-border transactions in other jurisdictions. For now, we shall see what will happen next.

______________________________

This first appeared in Business World, a newspaper of general circulation in the Philippines. The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes and not offered as, nor does not constitute, legal advice or legal opinion.

 

ACCRALAW LOGO

 

 

 

 

W: www.accralaw.com

E: rlorsua@accralaw.com

T: (63) 2 830 8000

Related Articles by Firm
Compulsory investment of branch offices in the Philippines
The Revised Corporation Code introduced amendments to the otherwise outdated Corporation Code.
Philippines: The POGO problem – Harmonising immigration, gaming and gambling
It is highly illegal to gamble in China save for a few state-run lotteries. To avoid this prohibition, gambling companies operate offshore so that they may continue catering to Chinese nationals who play casino and e-games online ...
Developments in the Philippine Competition Commission’s enforcement activities
Early this year, the Philippine Competition Commission (PCC) Enforcement Office launched a leniency/whistleblower programme offering immunity from suit and reduction of fines to cartel members who will provide information that will help the PCC investigate and prosecute cartels ...
Revisiting the AMLA in light of transnational money laundering
For several decades, money laundering has extended the reach of transnational organised crime throughout various nations ...
Revisiting important concepts in arbitration
Philippine courts are keen on making arbitration and other modes of ADR the staple in settling disputes domestically.
Keeping your mobile number for a lifetime
A new law facilitates the easy movement of subscribers from one service provider to another.
The right to know: Freedom of information in the Supreme Court
Like all other rights, the “right to know” is not an absolute right.
The Philippines 11th Foreign Investment Negative List and its impact on online businesses
A more liberalised foreign participation may change the internet-based business landscape in the Philippines ...
The Philippine Competition Commission bares its teeth
For the first time since its inception in 2015, the Commission has blocked a merger after conducting its review.
A peek into the revised Corporation Code of the Philippines
On February 20, 2019, President Rodrigo Duterte signed into law Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines (the New Code) ...
Philippines: Protecting indigenous knowledge systems and practices in intellectual property rights registration
Indigenous peoples (IPs) and indigenous cultural communities (ICCs), though explicitly protected under the constitution itself, sadly remain one of the most marginalised and forgotten sectors in Philippine society ...
Philippines: The right to know – Freedom of information in the Supreme Court
Freedom of Information is a right enshrined in our fundamental law ...
Investments for the environment
In a recent report released by the leading international body for assessment of climate change, the UN Intergovernmental Panel on Climate Change (UN IPCC), established a target global warming limit of 1.5°C ...
The PCC’s Joint Venture Guidelines
The Philippine Competition Commission must strive to strike a balance ...
How the Mental Health Act affects employees
Mental health conditions, which include anxiety and panic disorders, depression, eating disorders, substance abuse and addictions, have become a pervasive issue which permeates our present society ...
The Ease of Doing Business Act tapers red tape
RA 11032 is a welcome step towards achieving the quality government services that Filipinos deserve.
Much EndO about nothing
President Duterte says he has put an end to the “Endo” or the practice of engaging employees on a contractual basis. But has he?
Philippines: Proposed rules and regulations on crowdfunding
Crowdfunding (CF) platforms have proven to be a popular way to solicit charitable donations and to raise funds for projects or business ventures ...
Virtual currency in the Philippines: Recognition and regulation
Bitcoin is essentially a virtual currency (VC), which is any type of digital unit that is used as a medium of exchange — a veritable currency that exists in the digital world. Since it is electronic currency, VC is easily transferable ...
Protection of women employees in the Philippines
According to the World Economic Forum’s Global Gender Gap (GGG) Report conducted in 2016, the Philippines is the most gender-equal country in the Asia-Pacific region, having closed nearly 79 percent of its gender gap ...
Anti-Trust & Competition: Philippines - Towards robust yet balanced competition in the Philippines
The state of Philippine competition regulation has been slowly taking shape barely over two years after the passage of the Philippine Competition Act (RA 10667) ...
PHILIPPINES: The internet and doing business in the Philippines
Earlier this year, the Philippines Securities and Exchange Commission (SEC) issued an opinion stating that an online gaming system with absolutely no physical presence in the Philippines shall be considered as “doing business” in the Philippines and was thus required ...
Philippines: Psychological disorders in the workplace
The problem of mental health presents a particular conundrum under labour relations and standards ...
Clarifying the role of contractors and subcontractors
Recent changes to labour laws in the Philippines attempt to clarify the status of contractors and subcontractors in certain industries ...
Fake news and its web of legal issues in the post-truth era
Oxford Dictionaries’ Word of the Year for 2016 is “post-truth” — an adjective defined as “relating to or denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion and personal belief”. ...
Dollar-denominated securities in relation to Corporation Code’s provisions on capital
The Philippines Stock Exchange (PSE) issued rules on December 2, 2016 governing the listing, trading and settlement of US dollar-denominated securities (DDS)....
Cyber bullying in the Philippines
The pen is mightier than the sword or so the adage goes. When this was once said, it was to highlight the power of thoughts and ideas over brute force and violence as a way to effect change. Today, the ...
Uber/GrabCar drivers: Independent contractors or employees?
The buzz about the legality of Uber and GrabCar operating in the Philippines might have died down, but now there is another legal issue surrounding them: whether their drivers are employees or ...
Price fixing in the context of the Philippine Competition Act
In light of the enactment of the Philippine Competition Act (PCA) in 2015, competitors, manufacturers, retailers and sellers or suppliers, in general, should be ...
Implementation of the data privacy act in Philippines now in full swing
Since 2012, the Philippines has had a comprehensive law governing personal data privacy. However, full implementation ...
Taxability of service fees received by non-resident foreign companies from online advertising in the Philippines
The use of the internet for the promotion of goods and services, particularly social media (Facebook, Twitter and ...
Levelling the playing field in the Philippines
Before the enactment of the Philippine Competition Act in 2015, the Philippines was the only founding member of Asean that did not have a comprehensive competition law in place. Francisco Ed Lim, Patricia-Ann T Prodigalidad, Eric R Recalde of <...
Age discrimination in the workplace
Republic Act No. 10911 (also known as the ‘Anti-Age Discrimination in Employment Act’) lapsed into law on 21 July ...
Green jobs: greening the Philippine labour sector
With the threat of climate change, the international community created the Paris Agreement which aims to stop global warming and preserve ...
Interplay of domestic law on compulsory licensing and international agreements on medicine prices
The price of pharmaceutical products in the Philippines appears to be on the high side compared to that in other Asian ...
Restrictive covenants in employment contracts
One of the means of keeping afloat in today’s competitive market is to hire employees who are ‘fit’ for a particular job. However, before employers ...
Make our system work: litigation practice expedited
The perception that litigation is a slow and arduous process has drawn many of us closer to the idea of alternative modes of dispute resolution. ...
Department of Labor and Employment (DOLE) Department Order No. 18-A: The Rules and Regulations on Contracting
On December 4, 2011, Department of Labor and Employment (DOLE) Department Order No. 18-A (D.O. 18-A), the new Rules Implementing Articles 106 to 109 ...
An overview of Philippine Data Privacy Law
Republic Act No. 10173, or the Philippine Data Privacy Act of 2012 (RA10173), was signed into law on August 15, 2012. This is the ...
New competition law for the Philippines
The Philippine Competition Act (PCA) went into effect on August 5, 2015. The law applies not only to acts committed in the Philippines but ...
Related Articles
Latest amendment to the procedure for the resolution of small claims lawsuit
The new procedure provides more optimal and effective regulation than the previous regulation.
Thailand Plus incentives under BOI
The two new incentives encourage companies to move from overseas to Thailand.
Investing in uncertain times is not a paradox, it is a solution
Redesigning legal processes can deliver efficiency gains of between 15% and 50%.
Related Articles by Jurisdiction
Levelling the playing field in the Philippines
Before the enactment of the Philippine Competition Act in 2015, the Philippines was the only founding member of Asean that did not have a comprehensive competition law in place. Francisco Ed Lim, Patricia-Ann T Prodigalidad, Eric R Recalde of <...
Uber/GrabCar drivers: Independent contractors or employees?
The buzz about the legality of Uber and GrabCar operating in the Philippines might have died down, but now there is another legal issue surrounding them: whether their drivers are employees or ...
Philippines: Timing for Notification under the PCC Rules on Merger Procedure
The Philippine Competition Commission published its Rules on Merger Procedure ...
Latest Articles
Latest amendment to the procedure for the resolution of small claims lawsuit
The new procedure provides more optimal and effective regulation than the previous regulation.
Thailand Plus incentives under BOI
The two new incentives encourage companies to move from overseas to Thailand.
Investing in uncertain times is not a paradox, it is a solution
Redesigning legal processes can deliver efficiency gains of between 15% and 50%.