KEY WORK NO. 1: Nullified the trial court’s recognition and enforcement of a foreign arbitral award for having been issued without jurisdiction

Completion date: TRO issued on March 10, 2021, Final Resolution on Aug. 26, 2021

A foreign corporation instituted arbitration proceedings abroad against a domestic mining corporation. Due to lack of proper notice, the domestic corporation was unable to participate in the arbitration proceedings. Relying only on the evidence of the foreign corporation, the sole arbitrator issued the arbitral award in its favor.

The foreign corporation thereafter filed a petition for the recognition and enforcement of the foreign arbitral award in the Philippines. Despite noncompliance with the Special ADR Rules and lack of proper notice to the domestic corporation, the trial court gave due course to the petition. The domestic corporation was unable to participate in the proceedings until a Decision recognizing the foreign arbitral award had already been issued. The domestic corporation was only able to raise its arguments for the first time in a Motion for Reconsideration, which was denied.

At this point, the Firm was engaged by the domestic corporation for the protection of its rights against the immediate execution of the void arbitral award. In a Petition for Certiorari assailing the jurisdiction of the trial court, the Firm argued that the trial court did not acquire jurisdiction over the case due to the foreign corporation’s failure to submit authentic copies of the arbitration agreement and arbitral award. This jurisdictional defect prevented the trial court from acquiring jurisdiction over the petition and determining whether the arbitral award should be recognized. Further, the Firm cited several instances whereby its client was deprived of due process in the trial court’s conduct of the proceedings.

The Firm successfully secured a temporary restraining order against the immediate execution of the foreign arbitral award in the amount of around Php400 Million, and later obtained a favorable resolution whereby the appellate court declared the recognition and enforcement of the foreign arbitral award void for having been issued without jurisdiction.

KEY WORK NO. 2: Assisted an offshore drilling corporation in enforcing and executing a foreign arbitral award in the Philippines

Completion date: 28 June 2021

An offshore drilling corporation entered into a contract with a domestic corporation to provide drilling services for the latter’s operations in the Philippines. However, the drilling corporation was constrained to terminate the contract due to the other party’s failure to comply with its obligations. On the strength of an arbitration clause, the drilling corporation secured a favorable arbitral award from the Singapore International Arbitration Centre.

The offshore drilling corporation then engaged the Firm for the recognition and enforcement of the foreign arbitral award in the Philippines. In the midst of the challenges presented by the pandemic in presenting evidence and witnesses from abroad, the Firm successfully obtained a Decision recognizing and enforcing the foreign arbitral award in this jurisdiction.

The Firm is currently assisting its client in the execution and implementation of the foreign arbitral award against the domestic corporation, and potentially, exploring the possibility of executing the said arbitral award against the corporation’s directors and officers in a novel and unprecedented application of established legal principles.

KEY WORK NO. 3: Leading trainings and seminars on arbitration in the Philippines

The Firm regularly leads and conducts trainings and webinars on legal matters, including the Enforcement of Foreign Arbitral Awards in the Philippines. Senior Partner Enrique Dela Cruz, Jr. was a lecturer in the Mandatory Continuing Legal Education (MCLE) program of the University of Sto. Tomas (UST) and the MCLE webinar organized by the Integrated Bar of the Philippines Cebu City Chapter on the Enforcement of Foreign Commercial Arbitration. He was also among the panel of experts featured in the first virtual discussion of the Philippine Construction Arbitration Conference organized by the Philippine Institute of Construction Arbitrators and Mediators held on 26 November 2020. He was also one of the speakers in the In-House Community e-Congress Philippines held on November 18, 25, and 25 2020, to share his expertise on The Pitfalls of Enforcing and Rejecting a Foreign Arbitral Award in the Philippines.

Atty. Dela Cruz was nominated as Dispute Resolution Lawyer of the Year. He is a Data Protection Officer and Head of the Firm’s Arbitration Practice, Data Privacy, IP & FinTech Groups. He teaches law at the UST Faculty of Civil Law and the Bulacan State University – College of Law. He is also a lecturer at the University of the Philippines (UP) Center for Local and Regional Governance. He is a Bar Reviewer at UST Law Review, Magnificus Law Review, the Villasis Law Center, and the Bar Review Institute of the UP Law Center.

He is a member of the International Law & International Affairs Committee (ILIAC) of the Integrated Bar of the Philippines (IBP). He is also a regular lecturer of the IBP for its MCLE seminars all over the country, where he is invited to speak on International Commercial Arbitration, Enforcement of Foreign Arbitral Awards in the Philippines, and the Rules of the International Center for Settlement of Investment Disputes (ICSID). He is also an active member of the Asia Society of the Philippines and a member of the London Court of International Arbitration (LCIA) – Asia Users Council.

KEY WORK NO. 4: Represented a real estate developer in resisting a foreign arbitral award on public policy concerns

While the Firm recognizes arbitration as the “wave of the future” in international civil and commercial disputes, it likewise appreciates that not all foreign arbitral awards deserve enforcement and recognition in the Philippine jurisdiction. Under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which the Philippines is a signatory, the recognition and enforcement of an arbitral award may be refused if the competent authority in the country where recognition is sought finds that the recognition or enforcement of the award would be contrary to the public policy of that country.

Thus, the Firm not only assists clients in causing the enforcement of foreign arbitral awards, it also assists them in resisting such foreign arbitral awards, or even initiating steps for Philippine courts to refuse recognition of said awards.

For instance, one of the Firm’s clients is a real estate developer which entered into a service agreement with another company for the development of a hotel at a prime beach location. Later, the other company demanded a huge amount of money from the Firm’s client based on its mistaken impression that it earned such amount.

The other company invoked an arbitration clause in its contract with the Firm’s client and instituted arbitration proceedings in London under the Rules of the London Court of International Arbitration.

The Firm vigorously opposed the jurisdiction of the arbitral tribunal, considering that the arbitration clause is defective inasmuch as it does not exclude intervention of national courts. Nevertheless, the other company was able to secure a favorable foreign arbitral award.

Employing a novel approach, the Firm filed a petition to refuse the enforcement of the foreign arbitral award even before the winning party filed a petition for enforcement. Citing public policy considerations, the Firm argued, among others, that the arbitration agreement is void and unenforceable on the ground that the dispute should have been submitted to a Philippine regulatory body due to the mandatory allocation of jurisdiction in the Philippines, any impairment of which is an affront to public policy. The trial court gave due course to the petition which is now submitted for decision.

The Firm’s novel interpretation of the ADR Rules will potentially set precedent in arbitration practice in the country.

KEY WORK NO. 5: Asserting due process as a ground to resist the enforcement of a foreign arbitral award

Due process, a malleable concept anchored on fairness and equity (Saunar v. Ermita, 848 SCRA 351) is part and parcel of any litigation before any court or tribunal—local or foreign. When a foreign tribunal tolerates the violation of a party’s due process and renders a lopsided foreign arbitral award, the Philippine courts must step in.

The Firm assisted its client, an equipment rental company, in an arbitration case before the Singapore International Arbitration Center (SIAC). However, the foreign arbitral award was issued against the Firm’s client due to the tribunal’s uneven application of its procedural rules. While the arbitral tribunal granted several accommodations to the opposing party, the tribunal deprived the Firm’s client from availing of a simple procedural remedy which would have altered the results of the arbitration case. The Firm is currently assisting its client in a petition to set aside the arbitral award filed in the High Court of Singapore.

The Firm also filed a court action to refuse the enforcement of the foreign arbitral award in the Philippines due to violation of due process. While the petition was denied by the trial court, it is currently pending with the Court of Appeals. This may well be a future landmark case to serve as a reminder that due process is a non-negotiable in all types of proceedings in all venues, whether local or abroad.