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From Eumir, Faye and Jez:

What is domestic Arbitration?


ADR Act:
SEC. 32. Law Governing Domestic Arbitration. - Domestic arbitration
shall continue to be governed by Republic Act No. 876, otherwise
known as "The Arbitration Law" as amended by this Chapter. The term
"domestic arbitration" as used herein shall mean an arbitration that is
not international as defined in Article (3) of the Model Law.
Model law:
Article 1(3)
(3)Anarbitrationisinternationalif:
(a)thepartiestoanarbitrationagreementhave,atthetimeoftheconclusionofthatagreement,
theirplacesofbusinessindifferentStates;or
(b)oneofthefollowingplacesissituatedoutsidetheStateinwhichthepartieshavetheirplaces
ofbusiness:
1. (i)theplaceofarbitrationifdeterminedin,orpursuantto,thearbitrationagreement;
2. (ii)anyplacewhereasubstantialpartoftheobligationsofthecommercialrelationshipis
tobeperformedortheplacewithwhichthesubjectmatterofthedisputeismostclosely
connected;or
(c)thepartieshaveexpresslyagreedthatthesubjectmatterofthearbitrationagreementrelatesto
morethanonecountry.

Nationality principle
Nationality Law Theory
The Philippines adheres to the nationality law theory. Article 15 of the
Civil Code provides that Laws relating to family rights and duties, or to
the status, condition, and legal capacity of persons are binding upon
Filipino citizens, even though living abroad.
It is for each State to determine who are its nationals (Hague
Convention). Thus, the Philippine Constitution enumerates those who
are citizens of the Philippines.

What are questions to be answered in choice of law problems?

1.

For better understanding of choice of law two questions


must be answered.

1.

1) What legal system should govern the case?

2.

2) To what extend should it govern?

Succession
Kiobel
KIOBEL v. ROYAL DUTCH
Petitioners, Nigerian nationals residing in the United States, filed suit in
federal court under the Alien Tort Statute, alleging that
respondentscertain Dutch, British, and Nigerian corporationsaided
and abetted the Nigerian Government in committing violations of the
law of nations in Nigeria. The ATS provides that [t]he district courts
shall have original jurisdiction of any civil action by an alien for a tort
only, committed in violation of the law of nations or a treaty of the
United States. 28 U. S. C. 1350. The District Court dismissed several
of petitioners claims, but on interlocutory appeal, the Second Circuit
dismissed the entire complaint, reasoning that the law of nations does
not recognize corporate liability. This Court granted certiorari, and
ordered supplemental briefing on whether and under what
circumstances courts may recognize a cause of action under the ATS,
for violations of the law of nations occurring within the territory of a
sovereign other than the United States.
Held: The presumption against extraterritoriality applies to claims
under the ATS, and nothing in the statute rebuts that presumption. Pp.
314.
(a) Passed as part of the Judiciary Act of 1789, the ATS is a
jurisdictional statute that creates no causes of action. It permits federal
courts to recognize private claims [for a modest number of
international law violations] under federal common law. Sosa v.
Alvarez-Machain, 542 U. S. 692 . In contending that a claim under the
ATS does not reach conduct occurring in a foreign sovereigns
territory, respondents rely on the presumption against extraterritorial
application, which provides that [w]hen a statute gives no clear
indication of an extraterritorial application, it has none, Morrison v.
National Australia Bank Ltd., 561 U. S. ___, ___. The presumption
serves to protect against unintended clashes between our laws and
those of other nations which could result in international discord.

EEOC v. Arabian American Oil Co., 499 U. S. 244 . It is typically applied


to discern whether an Act of Congress regulating conduct applies
abroad, see, e.g., id., at 246, but its underlying principles similarly
constrain courts when considering causes of action that may be
brought under the ATS. Indeed, the danger of unwarranted judicial
interference in the conduct of foreign policy is magnified in this
context, where the question is not what Congress has done but what
courts may do. These foreign policy concerns are not diminished by the
fact that Sosa limited federal courts to recognizing causes of action
only for alleged violations of international law norms that are
specific, universal, and obligatory, 542 U. S., at 732. Pp. 36.
(b) The presumption is not rebutted by the text, history, or purposes of
the ATS. Nothing in the ATSs text evinces a clear indication of
extraterritorial reach. Violations of the law of nations affecting aliens
can occur either within or outside the United States. And generic
terms, like any in the phrase any civil action, do not rebut the
presumption against extraterritoriality. See, e.g., Morrison, supra, at
___. Petitioners also rely on the common-law transitory torts
doctrine, but that doctrine is inapposite here; as the Court has
explained, the only justification for allowing a party to recover when
the cause of action arose in another civilized jurisdiction is a wellfounded belief that it was a cause of action in that place, Cuba R. Co.
v. Crosby, 222 U. S. 473 . The question under Sosa is not whether a
federal court has jurisdiction to entertain a cause of action provided by
foreign or even international law. The question is instead whether the
court has authority to recognize a cause of action under U. S. law to
enforce a norm of international law. That question is not answered by
the mere fact that the ATS mentions torts.
The historical background against which the ATS was enacted also
does not overcome the presumption. When the ATS was passed, three
principal offenses against the law of nations had been identified by
Blackstone: violation of safe conducts, infringement of the rights of
ambassadors, and piracy. Sosa, supra, at 723, 724. Prominent
contemporary examples of the first two offensesimmediately before
and after passage of the ATSprovide no support for the proposition
that Congress expected causes of action to be brought under the
statute for violations of the law of nations occurring abroad. And
although the offense of piracy normally occurs on the high seas,
beyond the territorial jurisdiction of the United States or any other
country, applying U. S. law to pirates does not typically impose the
sovereign will of the United States onto conduct occurring within the
territorial jurisdiction of another sovereign, and therefore carries less
direct foreign policy consequences. A 1795 opinion of Attorney General
William Bradford regarding the conduct of U. S. citizens on both the

high seas and a foreign shore is at best ambiguous about the ATSs
extraterritorial application; it does not suffice to counter the weighty
concerns underlying the presumption against extraterritoriality. Finally,
there is no indication that the ATS was passed to make the United
States a uniquely hospitable forum for the enforcement of international
norms.

Chromalloy
CHROMALLOY AEROSERVICES, A DIVISION OF CHROMALLOY GAS
TURBINE CORPORATION, Petitioner,
And The ARAB REPUBLIC OF EGYPT, Respondent.
Egypt argues that this Court should deny CAS' Petition to Recognize
and Enforce the Arbitral Award out of deference to its court. (Response
to Petitioner's Post-Hearing Brief at 2.) CAS argues that this Court
should confirm the award because Egypt "does not present any serious
argument that its court's nullification decision is consistent with the
New York Convention or United States arbitration law."
Issue/s & Held
Jurisdiction
This Court has original jurisdiction under the Foreign Sovereign
Immunities Act, 28 U.S.C. 1330, et. seq. (1976), which provides in
relevant part that:
The district courts shall have original jurisdiction without regard to amount in
controversy of any non-jury civil action against a foreign state as defined in section
1603(a) of this title as to any claim for relief in personam with respect to

which the foreign state is not entitled to immunity ... under sections
1605-1607 of this title.
CAS brings this action to confirm an arbitral award made pursuant to
an agreement to arbitrate any and all disputes arising under a contract
between itself and Egypt, a foreign state, concerning a subject matter
capable of settlement by arbitration under U.S. law. See 9 U.S.C. 114. Enforcement of the award falls under the Convention on
Recognition and Enforcement of Foreign Arbitral Awards,
("Convention"), 9 U.S.C. 202, which grants "[t]he district courts of the
United States ... original jurisdiction over such an action or proceeding,
regardless of the amount in controversy." 9 U.S.C. 203.[1]

Chromalloy's Petition for Enforcement


A party seeking enforcement of a foreign arbitral award must apply for
an order confirming the award within three years after the award is
made. 9 U.S.C. 207. The award in question was made on August 14,
1994. CAS filed a Petition to confirm the award with this Court on
October 28, 1994, less than three months after the arbitral panel made
the award. CAS's Petition includes a "duly certified copy" of the original
award as required by Article IV(1)(a) of the Convention, translated by a
duly sworn translator, as required by Article IV(2) of the Convention, as
well as a duly certified copy of the original contract and arbitration
clause, as required by Article IV(1)(b) of the Convention. 9 U.S.C. 201
note. CAS's Petition is properly before this Court.
The Standard under the Convention
This Court must grant CAS's Petition to Recognize and Enforce the
arbitral "award unless it finds one of the grounds for refusal ... of
recognition or enforcement of the award specified in the ...
Convention." 9 U.S.C. 207. Under the Convention, "Recognition and
enforcement of the award may be refused" if Egypt furnishes to this
Court "proof that ... [t]he award has ... been set aside ... by a
competent authority of the country in which, or under the law of which,
that award was made." Convention, Article V(1) & V(1)(e) (emphasis
added), 9 U.S.C. 201 note. In the present case, the award was made
in Egypt, under the laws of Egypt, and has been nullified by the court
designated by Egypt to review arbitral awards. Thus, the Court may, at
its discretion, decline to enforce the award.[2]
While Article V provides a discretionary standard, Article VII of the Convention
requires that, "The provisions of the present Convention shall not ... deprive any
interested party of any right he may have to avail himself of an arbitral award in the
manner and to the extent allowed by the law ... of the count[r]y where such

award is sought to be relied upon." 9 U.S.C. 201 note (emphasis *910


added). In other words, under the Convention, CAS maintains all rights
to the enforcement of this Arbitral Award that it would have in the
absence of the Convention. Accordingly, the Court finds that, if the
Convention did not exist, the Federal Arbitration Act ("FAA") would
provide CAS with a legitimate claim to enforcement of this arbitral
award. See 9 U.S.C. 1-14. Jurisdiction over Egypt in such a suit would
be available under 28 U.S.C. 1330 (granting jurisdiction over foreign
states "as to any claim for relief in personam with respect to which the
foreign state is not entitled to immunity ... under sections 1605-1607
of this title") and 1605(a)(2) (withholding immunity of foreign states for
"an act outside ... the United States in connection with a commercial
activity of the foreign state elsewhere and that act causes a direct

effect in the United States"). See Weltover, 504 U.S. at 607, 112 S.Ct.
at 2160. Venue for the action would lie with this Court under 28 U.S.C.
1391(f) & (f)(4) (granting venue in civil cases against foreign
governments to the United States District Court for the District of
Columbia).
Examination of the Award under 9 U.S.C. 10
Under the laws of the United States, arbitration awards are presumed
to be binding, and may only be vacated by a court under very limited
circumstances:
(a) In any of the following cases the United States court in and for the
district wherein the award was made may make an order vacating the
award upon the application of any party to the arbitration
(1) Where the award was procured by corruption, fraud, or undue
means.
(2) Where there was evident partiality or corruption in the arbitrators,
or either of them.
(3) Where the arbitrators were guilty of misconduct in refusing to
postpone the hearing, upon sufficient cause shown, or in refusing to
hear evidence pertinent and material to the controversy; or of any
other misbehavior by which the rights of any party have been
prejudiced.
(4) Where the arbitrators exceeded their powers, or so imperfectly
executed them that a mutual, final, and definite award upon the
subject matter submitted was not made.
9 U.S.C. 10.[3]
An arbitral award will also be set aside if the award was made in "`manifest
disregard' of the law." First Options of Chicago v. Kaplan, ___ U.S. ___, ___, 115 S.Ct.
1920, 1923, 131 L.Ed.2d 985 (1995). "Manifest disregard of the law may be found if
[the] arbitrator[s] understood and 949 F.2d 1175, 1179 (D.C.Cir.1991).

Plainly, this non-statutory theory of vacatur cannot empower a District


Court to conduct the same de novo review of questions of law that an
appellate court exercises over lower court decisions. Indeed, we have
in the past held that it is clear that [manifest disregard] means more
than error or misunderstanding with respect to the law.

Al-Harbi v. Citibank, 85 F.3d 680, 683 (D.C.Cir.1996) (internal citations


omitted).
In Al-Harbi, "The submission agreement under which the arbitrator
decided the controversy mandated that the arbitrator apply `the
procedural and substantive laws of the Southern District of New York,
U.S.A.'" Id. at 684. The arbitrator in Al-Harbi ruled that a court applying
the laws of New York would dismiss the case on forum non conveniens
grounds. Id. Appellant argued on appeal that the arbitrator had
manifestly disregarded the substantive laws of New York by disposing
of the case on procedural grounds. Id. The D.C. Circuit emphatically
rejected this argument, stating that:
Appellant's argument then depends upon the proposition that where a
tribunal is to render [a] decision based on procedural and substantive
law that tribunal has not only erred, but acted in manifest disregard of
the law if it finds that procedural factors are dispositive of the case
without then *911 going on to consider substantive law rendered
apparently moot by that procedural decision. To state that proposition
is to reject it. We find no basis for vacatur.
Id.
In the present case, the language of the arbitral award that Egypt
complains of reads:
The Arbitral tribunal considers that it does not need to decide the legal
nature of the contract. It appears that the Parties rely principally for
their claims and defences, on the interpretation of the contract itself
and on the facts presented. Furthermore, the Arbitral tribunal holds
that the legal issues in dispute are not affected by the characterization
of the contract.
(Award at 30.)
Like the arbitrator in Al-Harbi, the arbitrators in the present case made
a procedural decision that allegedly led to a misapplication of
substantive law. After considering Egypt's arguments that Egyptian
administrative law should govern the contract, the majority of the
arbitral panel held that it did not matter which substantive law they
applied civil or administrative. Id. At worst, this decision constitutes a
mistake of law, and thus is not subject to review by this Court.See AlHarbi, 85 F.3d at 684.
In the United States, "[W]e are well past the time when judicial
suspicion of the desirability of arbitration and of the competence of

arbitral tribunals inhibited the development of arbitration as an


alternative means of dispute resolution."Mitsubishi Motors Corp. v.
Soler Chrysler- Plymouth, Inc., 473 U.S. 614, 626-27, 105 S.Ct. 3346,
3354, 87 L.Ed.2d 444 (1985). In Egypt, however, "[I]t is established
that arbitration is an exceptional means for resolving disputes,
requiring departure from the normal means of litigation before the
courts, and the guarantees they afford." (Nullification Decision at 8.)
Egypt's complaint that, "[T]he Arbitral Award is null under Arbitration
Law, ... because it is not properly `grounded' under Egyptian law,"
reflects this suspicious view of arbitration, and is precisely the type of
technical argument that U.S. courts are not to entertain when
reviewing an arbitral award. See Montana Power Company v. Federal
Power Commission, 445 F.2d 739, 755 (D.C.Cir.1970) (cert. den. 400
U.S. 1013, 91 S.Ct. 566, 27 L.Ed.2d 627 (1971)) (holding that,
"Arbitrators do not have to give reasons") (citing United Steelworkers v.
Enterprise Wheel & Car Corp., 363 U.S. 593, 598, 80 S.Ct. 1358, 136162, 4 L.Ed.2d 1424 (1960)).
The Court's analysis thus far has addressed the arbitral award, and, as
a matter of U.S. law, the award is proper. SeeSanders v. Washington
Metro. Area Transit Auth., 819 F.2d 1151, 1157 (D.C.Cir.1987) (holding
that, "When the parties have had a full and fair opportunity to present
their evidence, the decisions of the arbitrator should be viewed as
conclusive as to subsequent proceedings, absent some abuse of
discretion by the arbitrator") (citing the Restatement (Second) of
Judgments 84(3) (1982), Greenblatt v. Drexel Burnham Lambert, Inc.,
763 F.2d 1352 (11th Cir.1985)). The Court now considers the question
of whether the decision of the Egyptian court should be recognized as
a valid foreign judgment.
As the Court stated earlier, this is a case of first impression. There are
no reported cases in which a court of the United States has faced a
situation, under the Convention, in which the court of a foreign nation
has nullified an otherwise valid arbitral award. This does not mean,
however, that the Court is without guidance in this case. To the
contrary, more than twenty years ago, in a case involving the
enforcement of an arbitration clause under the FAA, the Supreme Court
held that:
An agreement to arbitrate before a specified tribunal is, in effect, a
specialized kind of forum- selection clause.... The invalidation of such
an agreement ... would not only allow the respondent to repudiate its
solemn promise but would, as well, reflect a parochial concept that all
disputes must be resolved under our laws and in our courts.

Scherk v. Alberto-Culver Co., 417 U.S. 506, 519, 94 S.Ct. 2449, 2457,
41 L.Ed.2d 270 (1974) (reh. den., 419 U.S. 885, 95 S.Ct. 157, 42
L.Ed.2d 129 (1974)) (citations omitted).
*912 In Scherk, the Court forced a U.S. corporation to arbitrate a
dispute arising under an international contract containing an
arbitration clause. Id. 417 U.S. at 518, 94 S.Ct. at 2456-57. In so doing,
the Court relied upon the FAA, but took the opportunity to comment
upon the purposes of the newly acceded-to Convention:
The delegates to the Convention voiced frequent concern that courts of
signatory countries in which an agreement to arbitrate is sought to be
enforced should not be permitted to decline enforcement of such
agreements on the basis of parochial views of their desirability or in a
manner that would diminish the mutually binding nature of the
agreements.... [W]e think that this country's adoption and ratification
of the Convention and the passage of Chapter 2 of the United States
Arbitration Act provide strongly persuasive evidence of congressional
policy consistent with the decision we reach today.
Id. at n. 15. The Court finds this argument equally persuasive in the
present case, where Egypt seeks to repudiate its solemn promise to
abide by the results of the arbitration.[4]
The Decision of Egypt's Court of Appeal
The Contract
"The arbitration agreement is a contract and the court will not rewrite
it for the parties." Williams v. E.F. Hutton & Co., Inc., 753 F.2d 117, 119
(D.C.Cir.1985) (citing Davis v. Chevy Chase Financial Ltd., 667 F.2d 160,
167 (D.C.Cir.1981)). The Court "begin[s] with the `cardinal principle of
contract construction: that a document should be read to give effect to
all its provisions and to render them consistent with each other.'"
United States v. Insurance Co. of North America, 83 F.3d 1507, 1511
(D.C.Cir.1996) (quoting Mastrobuono v. Shearson Lehman Hutton, Inc.,
___ U.S. ___, ___, 115 S.Ct. 1212, 1219, 131 L.Ed.2d 76 (1995)). Article
XII of the contract requires that the parties arbitrate all disputes that
arise between them under the contract. Appendix E, which defines the
terms of any arbitration, forms an integral part of the contract. The
contract is unitary. Appendix E to the contract defines the "Applicable
Law Court of Arbitration." The clause reads, in relevant part:
It is ... understood that both parties have irrevocably agreed to apply
Egypt (sic) Laws and to choose Cairo as seat of the court of arbitration.

******
The decision of the said court shall be final and binding and cannot be
made subject to any appeal or other recourse.
(Appendix E ("Appendix") to the Contract.)
This Court may not assume that the parties intended these two
sentences to contradict one another, and must preserve the meaning
of both if possible. Insurance Co., 83 F.3d 1507, 1511 (D.C.Cir.1996).
Egypt argues that the first quoted sentence supersedes the second,
and allows an appeal to an Egyptian court. Such an interpretation,
however, would vitiate the second sentence, and would ignore the
plain language on the face of the contract. The Court concludes that
the first sentence defines choice of law and choice of forum for the
hearings of the arbitral panel. The Court further concludes that the
second quoted sentence indicates the clear intent of the parties that
any arbitration of a dispute arising under the contract is not to be
appealed to any court. This interpretation, unlike that offered by Egypt,
preserves the meaning of both sentences in a manner that is
consistent with the plain language of the contract. The position of the
latter sentence as the seventh and final paragraph, just before the
signatures, lends credence to the view that this sentence is the final
word on the arbitration question. In other words, the parties agreed to
apply Egyptian Law to the arbitration, but, more important, they
agreed that the arbitration ends with the decision of the arbitral panel.
The Decision of the Egyptian Court of Appeal
The Court has already found that the arbitral award is proper as a
matter of U.S. law, and that the arbitration agreement between Egypt
and CAS precluded an appeal in Egyptian courts. The Egyptian court
has acted, however, and Egypt asks this Court to grant res judicata
effect to that action.
The "requirements for enforcement of a foreign judgment ... are that
there be `due citation' [i.e., proper service of process] and that the
original claim not violate U.S. public policy." Tahan v. Hodgson, 662 F.2d
862, 864 (D.C.Cir.1981) (citing Hilton v. Guyot, 159 U.S. 113, 202, 16
S.Ct. 139, 158, 40 L.Ed. 95 (1895)). The Court uses the term `public
policy' advisedly, with a full understanding that, "[J]udges have no
license to impose their own brand of justice in determining applicable
public policy." Northwest Airlines Inc. v. Air Line Pilots Association, Int'l,
808 F.2d 76, 78 (D.C.Cir.1987). Correctly understood, "[P]ublic policy
emanates [only] from clear statutory or case law, `not from general
considerations of supposed public interest.'" Id. (quoting American

Postal Workers Union v. United States Postal Service, 789 F.2d 1


(D.C.Cir.1986)).
The U.S. public policy in favor of final and binding arbitration of commercial disputes
is unmistakable, and supported by treaty, by statute, and by case law. The Federal
Arbitration Act "and the implementation of the Convention in the same year by
amendment of the Federal Arbitration Act," demonstrate that there is an

"emphatic federal policy in favor of arbitral dispute resolution,"


particularly "in the field of international commerce." Mitsubishi v. Soler
Chrysler-Plymouth, 473 U.S. 614, 631, 105 S.Ct. 3346, 3356, 87
L.Ed.2d 444 (1985) (internal citation omitted); cf. Revere Copper &
Brass Inc., v. Overseas Private Investment Corporation, 628 F.2d 81, 82
(D.C.Cir.1980) (holding that, "There is a strong public policy behind
judicial enforcement of binding arbitration clauses"). A decision by this
Court to recognize the decision of the Egyptian court would violate this
clear U.S. public policy.

Naturalization as a judicial adversarial proceeding


Can there be a judicial declaration of Philippine Citzenship
through an action for declaratory relief? NO
Can there be a declaration if the action is for correction of
entry in the Civil Registry? As a rule, no.
*exceptions: it is allowed provided that all parties who may be affected
by the entries are notified and represented and there is a full blown
adversary proceeding. NOTE: follow the general rule, correction of
entry in the Civil Registry is not adversarial.

Chevron case
Chevron v. Dozinger

SUMMARY OF ARGUMENT
This case involves important international legal issues associated with
the exercise of adjudicatory jurisdiction by the District Court in this
case. The District Courts failure to consider and apply international
legal obligation binding on the United States has resulted in reversible
error. The preliminary injunction should be dissolved and the case
dismissed.
First, the preliminary injunction granted in this case is framed in such a
way so as to violate the ancient customary international law principle
of nonintervention. It does this by illegally intruding into Ecuadors
external domestic affairs by, in essence, prohibiting any other state
from independently ruling on the issue of recognition and enforcement
of the Ecuadorian judgment against Chevron.
Second, the assertion of jurisdiction by the District Court is prohibited
by the customary international law limitation of reasonableness
because the defendants in this case lack any internationally legally
significant contact with the United States.
Third, the District Courts preliminary injunction cannot stop
Ecuadorian defendants from seeking to enforce the judgment outside
the United States. It cannot compel any other state from assuming
jurisdiction and deciding for itself the issues of recognition and
enforcement. It is accordingly a futile order and should be dissolved as
improvidently granted.
Fourth, the District Courts injunctive relief offends basic standards of
international comity because the preliminary injunction high handedly
purports to stake out exclusive world-wide jurisdiction.
Fifth, the exhaustion of local remedies by Chevron in Ecuador is
required by international law. Because the judgment in Ecuador is not
final, the District Court should not have accepted jurisdiction.
ARGUMENTS
I. THE DISTRICT COURT ERRED IN GRANTING PRELIMINARY INJUNCTIVE
RELIEF THAT ENJOINS ALL ACTION, IN ALL COURTS ANYWHERE IN THE
WORLD OUTSIDE ECUADOR, BY THE ECUADORIAN DEFENDANTS IN
RELATION TO AN ECUADORIAN JUDGMENT IN THEIR FAVOR
The District Court framed the injunction in these terms:

defendants . . . be and they hereby are enjoined and restrained,


pending the final determination of this action, from directly or
indirectly funding, commencing, prosecuting, advancing in any way, or
receiving benefit from any action or proceeding, outside the Republic
of Ecuador, for recognition or enforcement of the judgment . . .
rendered in Maria Aguinda y Otros v. Chevron Corporation . . . .
Several features of this formulation of the preliminary injunction
warrant careful attention.
First, the injunction is directed at Ecuadorian nationals who largely
comprise indigenous peoples and remote, simple farmers. The
defendants have had no legally meaningful contacts with or presence
in the United States.
Second, the injunction attempts to arrogate to the District Court worldwide exclusive jurisdiction to determine for the entire world, the issues
of recognition and enforceability of an Ecuadorian judgment.
Third, the Ecuadorian judgment relates, ultimately, to an Ecuadorian
action for breaches of Ecuadorian law relating to damages to persons
and property in Ecuador.
Neither the District Court nor any other party to this proceeding of
which we are aware has cited any statute, rule, case or treaty to
support the District Courts authority to grant an injunction that, in
essence, purports to preclude all courts, in any nation of the world
outside of Ecuador from independently determining the issues of
recognition and enforceability. A diligent search by amici failed to
uncover any such authority. Instead, as this brief demonstrates,
applicable international law requires that the District Courts
preliminary injunction be dissolved and the case dismissed.
A. The District Courts Order for Injunctive Relief Breaches the
Fundamental International Legal Obligation of the United States not to
intervene in the Domestic Affairs of Other States
The international legal pillars of independence, autonomy, and equality
of states are among the oldest legal norms of international law.
In support of these important norms, customary international law has
for centuries prohibited a state from intervening in the domestic affairs
of another state. This principle of non- intervention has also long
precluded interference by one state in the relations between two or
more other states without consent. Article 8 of the Convention on
Rights and Duties of States (the Montevideo Convention), to which

both the United States and Ecuador are party, specifically provides that
[n]o state has the right to intervene in the internal or external affairs
of another.
As regards the customary law of non-intervention, which governs the
instant case along with Article 8 of the Montevideo Convention in which
the United States expressly committed itself to non-intervention as a
principle of positive law, the International Court of Justice (ICJ) stated in
Case Concerning Military and Paramilitary Activities in and Against
Nicaragua (the Nicaragua case) that:
[t]he principle of non-intervention involves the right of every sovereign
State to conduct its affairs without outside interference; though
examples of trespass against this principle are not infrequent, the
Court considers that it is part and parcel of customary international
law. . . . The existence in the opinio juris of States of the principle of
nonintervention is backed by established and substantial state
practices
In considering the relationships entailed in recognition and
enforcement of foreign judgments, it is certain that each state has
exclusive jurisdiction over the decision. In other words, the decision to
recognize a foreign judgment is a matter of domestic jurisdiction
that international law protects from unwanted intrusion from outside .
. . .
Turning to the preliminary injunction granted by the District Court inthe
instant case, it is clear that it constitutes an internationally unlawful
attempt to intervene in the domestic legal affairs of Ecuador.
First, it is important to remember the posture of this case. This is not
an action by successful foreign litigants for the recognition and
enforcement of a foreign judgment in the United States. Rather, the
unsuccessful foreign defendant, Chevron, has commenced a preemptive action against foreign nationals, over their objection, in a U.S.
Court. It is in this context that the District Court has interposed itself
and asserted what is in essence worldwide exclusive jurisdiction to
determine for the whole world the issues of recognition and
enforcement an undoubted unwanted intrusion into the internal
administration of Ecuadorian justice.
Second, in practical effect, the preliminary injunction directly intrudes
into the external administration of Ecuadorian justice because
recognition and enforcement of Ecuadorian judgments are issues each
state is permitted to decide freely. Here, the District Courts
preliminary injunction purports to interfere with Ecuadors relationship

with every state in the world in which the judgment might be


recognized and enforced, except the United States. It does this by
seeking to prohibit every state in the world except the United States
from determining the issues of recognition and enforcement.
This sort of intrusion into the international relationship between
Ecuador and other states puts the United States in violation of a key
international obligation because each state is permitted
to decide freely whether a foreign judgment should be recognized and
enforced. For this reason this Court should reverse the District Court
and dissolve the preliminary injunction.
A failure to reverse and dissolve the preliminary injunction will place
the United States in violation of the principle of non-intervention
embodied in customary international law and Article 8 of the
Montevideo Convention.
B. The District Court Does Not Have Jurisdiction Over Ecuadorian
Defendants Under International Law
It is clear that under international law, the District Court has no
jurisdiction over the Ecuadorian defendants in this case. These
defendants lack any legally significant contacts at international law
with the United States.
It is recognized today that:
[t]he exercise of jurisdiction by courts of one state that affects interests
of other states is now generally considered as coming within the
domain of customary international law and international agreement
the exercise of adjudicatory jurisdiction must be reasonable in order
to be lawful under both the United States law of foreign relations and,
more importantly for present purposes, general international law.
The mere presence of a link between a person and a forum does not in
itself justify the exercise of adjudicatory power by a state. Instead, the
requirement of reasonableness requires a process of analysis and
assessment that considers:
the relative importance of the link(s) between the state asserting
jurisdiction and the individual; the legitimate expectations of those
affected; the likelihood of conflict with other states

The United States Supreme Court has expressly approved of this


balancing test for considering exercise of international adjudicatory
jurisdiction.
Applying the Restatements reasonableness balancing test by weighing and
evaluating all the relevant facts of the instant case clearly establishes the want of
jurisdiction in this action. The Ecuadorian defendants are indigenous peoples and
remote farmers living in the Amazonian rainforest and have absolutely no real or
meaningful link with the United States on which jurisdiction could be established
under international law. Most, if not all, of the Ecuadorian defendants have never
been to the United States. There is no indication that the Ecuadorian defendants
have property or other assets in the United States. The Ecuadorian defendants do no
business in the United States in any real sense of the meaning of doing business. It
is true that the Ecuadorian defendants initially sought the protection of

law in the courts of the United States and retained a lawyer for that
purpose, but that protection was denied in the Southern District of New
York and the Ecuadorian defendants case was ultimately dismissed on
forum non conveniens grounds.
It may also be true that the Ecuadorian defendants have been involved
in other litigation related to this matter in the U.S. because they have
been unlucky enough to have such a dogged adversary as Chevron (as
is its right). However, asserting, protecting or trying to determine valid
legal rights in other litigation is a manifestly insufficient link by which
to bootstrap international adjudicatory jurisdiction as the District Court
has attempted to do in this case.
C. The District Courts Order for Injunctive Relief Constitutes a Futile
Act because the Injunction Cannot Preclude Other States From
Exercising Jurisdiction
Given that the District Courts preliminary injunction violates the
principle of non-intervention and assumes adjudicatory jurisdiction
when international law does not allow so, it is not surprising that the
District Court anticipated that its injunction would not effectively
constrain the defendants conduct. In contemplation of an ultimate
declaration on Chevrons complaint that the Ecuadorian judgment is
unenforceable, the District Court wrote that:
Even if enforcement actions were to be filed abroad in violation of an
injunction, a decision by this Court with respect to enforceability of the
Ecuadorian judgment likely would be recognized as sufficiently
persuasive authority if not binding on the parties to dispose of the
question of enforceability in the foreign fora
clear it is that no injunction, including the outstanding preliminary
injunction, will preclude the courts of

any other state from making an independent determination on their


own willingness to recognize and enforce the Ecuadorian judgment. It
is hoary international legal doctrine indeed that teaches that no state
is bound to respect the judgments of the courts of another state absent
agreement, especially when made in regard to non-residents.
the decision of the District Court to grant an injunction as it has, worldwide in scope, is much more likely to antagonize the courts of other
states than to be treated as sufficiently persuasive authority as is
unrealistically hoped for by the District Court.
Be that as it may, the fact remains that injunctive relief ordered by the District Court
cannot prohibit non-resident Ecuadorians from seeking recognition and enforcement
of the Ecuadorian judgment in any state but the United States -- in which Chevron
may have assets. Likewise, the injunctive relief ordered by the District

Court cannot, by the fiat of a judicial injunction by one country,


preclude the courts in other states from making their own independent
determinations about recognition and enforceability.
All of this is not to say that states cannot agree, as they often have, to
harmonize their legal systems and cooperate in the realm of
adjudicatory jurisdiction. In this case, however, no treaty or agreement
between the United States and other states requires or permits the
result hoped for by the District Court. Indeed, as shown, the District
Courts action directly violates the United States own obligations
under the Montevideo Convention and under customary international
law. Accordingly, the preliminary injunction ought to be dissolved.
D. The Preliminary Injunction, to the Extent it Presumes to Arrogate an
Exclusive World- wide Jurisdiction to Itself, Offends Basic Standards of
International Comity
In the instant case the District Court improperly disregarded these
fundamental precepts. As discussed supra, Part I.C, the preliminary
injunction issued by the District Court is breathtaking in its attempt to
arrogate a world-wide and exclusive jurisdiction in this case. The action
of a single American trial judge, essentially ordering the preclusion, in
pre-emptive fashion, of all courts in the world outside of Ecuador from
independently deciding the issues of recognition and enforcement is an
extraordinary breach of comity.
II. THE DISTRICT COURT ERRED IN GRANTING INJUNCTIVE RELIEF
BECAUSE PLAINTIFF IS BARRED FROM SEEKING RELIEF AGAINST THE
ECUADORIAN JUDGMENT OUTSIDE ECUADOR UNTIL ALL ECUADORIAN
REMEDIES ARE EXHAUSTED

Under well-established customary international law, where a wrong is


allegedly done to an alien that is imputable to a state, the alien must
give the State the opportunity of redressing that wrong by seeking a
remedy from the offending States own legal system. Until all local
remedies have been exhausted by the injured alien, the aliens state
of nationality is precluded from exercising diplomatic protection of its
national or making international claims on the nationals behalf.
The rule of exhaustion is a general principle of law recognized by
civilized nations and has compulsory application in this case as such.
General principles of law, as a source of international law, apply to the
administration of justice in domestic settings.
In transnational civil litigation involving the operation of transnational
corporations and direct foreign investment it also ensures respect for
the sovereignty of the host state.
This aspect of the principle is reflected in Article 36 of the Charter of the Organization
of American States: Transnational enterprises and foreign private

investment shall be subject to the legislation of . . . host countries and


to the jurisdiction of their competent courts and to the international
treaties and agreements to which said countries are parties, and
should conform to the development policies of the recipient countries.
Under Article 36, it is clear that Chevron, as a transnational enterprise,
was and is subject to the jurisdiction of the courts of Ecuador for the
acts and/or omissions that gave rise to the underlying action and
resulted in the Ecuadorian judgment against Chevron. Indeed, in
arguing forum non conveniens, Chevron itself indicated that Ecuador
was the appropriate forum for resolving this dispute.
Until the Ecuadorian appellate process is at an end and Ecuadorian
remedies are exhausted, it is clear that Chevrons complaint should be
dismissed under the applicable general principle of law as premature.
The application of this general principle of international law in support
of dismissal accords with recent treatment by the Supreme Court. In
Sosa v. Alvarez-Machain, the Supreme Court highlighted that in Alien
Tort Statute suits there is need to apply an element of judgment
about the practical consequences of making federal courts readily
available. In particular, the Court noted that basic principles of
international law require that before asserting a claim in a foreign
forum, the claimant must have exhausted any remedies available in
the domestic legal system and that it would certainly consider this
requirement in an appropriate case. Accordingly, the preliminary
injunction should be dissolved and the case dismissed. However,

should the Ecuadorian appellate process end unfavorably for Chevron,


the District Court will still lack adjudicatory jurisdiction over the
Ecuadorian defendants under international law.
CONCLUSION
The District Court failed to consider three applicable and binding norms
of international law to this case. In particular, the District Court failed
to consider and apply the fundamental rules pertaining to: i) the
principle of nonintervention, ii) the international legal limits of the
courts own jurisdiction, and iii) the requirement that Chevron exhaust
local remedies in Ecuador. Proper consideration and application of
these binding rules of international law requires that the preliminary
injunction be dissolved and the plaintiffs complaint dismissed.

Yauguaje Case
010 (Lifted from the net)
Yaiguaje v. Chevron Corporation: enforcing an Ecuadorian judgment against a U.S.
company in Ontario
In Yaiguaje v. Chevron Corp, 2013 ONCA 758, the Ontario Court of Appeal affirmed that an
Ontario court has the power to recognize and enforce a judgment for approximately US $9.51
billion rendered by Ecuadors National Court of Justice against Chevron Corporation (Chevron),
and its Canadian subsidiary, Chevron Canada Limited (Chevron Canada), which was not a party
to the Ecuadorian action. In doing so, the Ontario Court of Appeal also lifted the stay on the
proceeding which had been granted by the motions judge, rendering the enforcement win
theoretical only. Soon after this decision, however, Chevron and Chevron Canada in Yaiguaje v.
Chevron Corp, 2014 ONCA 40 successfully brought a motion to stay the order pending its appeal
to the Supreme Court of Canada.
Factual History
Between 1972 and 1990, the lands, waterways, livelihoods and way of life of over 30,000
residents of the Sucumbos province were allegedly harmed by environmental pollution. On behalf
of the 30,000 residents, 47 indigenous Ecuadorian villagers sued Chevron in the United States
District Court for the Southern District of New York, and alleged that Texaco, which subsequently
merged with Chevron, polluted the Lago Ario region of Ecuador for 18 years.
The action was dismissed at the United States Court of Appeals for the Second Circuit on the
condition that Texaco submit to the jurisdiction of the Ecuadorian court. A final judgment now
exists in Ecuador against Chevron for US$9.51 billion and the plaintiffs seek to have the
Ecuadorian order recognized and enforced in Ontario against Chevron and Chevron Canada.
Chevron disputes the Ecuadorian judgment and contends that it was the result of fabricated

evidence, judicial coercion and bribery. The U.S. civil suit in that respect, where it appears that
evidence of fraud has been filed, is ongoing, and recently went to trial.
On December 17, 2013, the Ontario Superior Court of Justice found that an Ontario court has the
jurisdiction to enforce the Ecuadorian judgment but stayed the action since Chevron has no
assets in Ontario and therefore, no prospect for recovery by the plaintiffs in Ontario. Both
decisions were appealed to the Ontario Court of Appeal.
The Decisions
With respect to the jurisdictional issue, the Ontario Court of Appeal affirmed the lower courts
decision and reiterated the Supreme Court of Canadas decision in Beals v. Saldanha, 2003 SCC
72, which stated that in recognition and enforcement actions relating to foreign judgments in
Canadian jurisdictions, the exclusive focus is whether there is a real and substantial connection
between the subject matter of the litigation and the foreign court that rendered the judgment. An
inquiry into the relationship between the legal dispute in the foreign country and the Canadian
court being asked to recognize and enforce the judgment is unnecessary and irrelevant. The
Ontario Court of Appeal further noted that there is no comity concern in an action to enforce the
judgment because the Ontario court is not intruding into matters within the jurisdiction of the
foreign court as would be the case in an action of first instance. Accordingly, the test was satisfied
in this case. However, this reasoning applied only to Chevron since Chevron Canada was not a
party to the original action in Ecuador. To assume jurisdiction over Chevron Canada, the Ontario
Court of Appeal agreed with the lower court that Chevron and Chevron Canada maintain an
economically significant relationship and that Chevron Canada has a non-transitory place of
business in Ontario.
With respect to the stay, the Ontario Court of Appeal disagreed with the lower courts decision
mainly because no party had actually requested a stay. Although a court may grant a stay on its
own motion, it can do so only in very rare circumstances and would at least require evidence that
continuance of the action would work an injustice. No such evidence was submitted. Chevron
argued that it was precluded from requesting a discretionary stay on any basis other than
jurisdiction; however, the Ontario Court of Appeal found that it was Chevron and Chevron
Canadas decision not to attorn to Ontario and defend the action using Ontario procedural and
substantive law. By choosing not to attorn, both companies understood that they could rely only
on a jurisdictional objection.
Not surprisingly, Chevron and Chevron Canada requested a stay of the Ontario Court of Appeals
decision pending its appeal to the Supreme Court of Canada. On January 16, 2014, MacPherson
J.A. of the Ontario Court of Appeal held that a stay was justified in the interests of justice. To
arrive at this decision, she applied the three-part test for obtaining a stay of a judgment pending
appeal: (1) is there a serious question to be tried; (2) will the moving party suffer irreparable harm
if the stay is not granted; and (3) does the balance of convenience favor granting the stay?
Justice MacPherson found that the proposed appeal raised at least three serious questions: (i)
the proper test to determine the jurisdiction of a provincial superior court to hear and determine
such an action; (ii) the proper test in such an action when faced with a non-party to the foreign
judgment; and (iii) the role of a corporate veil piercing analysis with respect to a related
corporation in such an action. Given that the appeal was to the Supreme Court of Canada,
MacPherson J.A. also concluded that these three questions are legal issues of public importance.

Chevron and Chevron Canada, however, had difficulty proving irreparable harm. They contended
that without a stay, they would risk either attornment to Ontario by filing a defense, which was
ordered by the Ontario Court of Appeal to be completed by January 16, 2014, or being noted in
default. This submission was rejected because Ontario appellate case law states that compliance
with a court order that requires a party to file a defense does not constitute attornment in an
ongoing jurisdictional challenge. They also argued that without a stay, the $100,000 in costs
ordered by the Ontario Court of Appeal to be paid to the plaintiffs may not be returned if the
appeal succeeds. Although an unlikely scenario given the magnitude of the litigation, MacPherson
J.A. found that permanently losing the costs awarded by the Ontario Court of Appeal after
succeeding on appeal may reflect an irreparable harm.
As Chevron and Chevron Canada were quick to file their leave application to the Supreme Court
of Canada, they were able to tilt the balance of convenience scale in their favor. Justice
MacPherson noted that the leave application would likely be disposed of in approximately 3 to 4
months, resulting in little prejudice to the plaintiffs. Given this timeline, it was in the interests of
justice to grant a stay.
It remains to be seen whether the litigation will continue in Ontario. In the event that leave is
granted, however, this long running legal battle will no doubt contribute to the development of
Canadian law with respect to comity and the enforcement of foreign judgments against foreign
defendants.

From Dann
-For MCQ & True or false re-read the midterm MCQ/T&F questions
- What makes an Arbitration domestic?
- Explain the Nationality Principle, How it is applied and interpreted in
the Philippine context.
- Explain how the court ruled on renvoi in Aznar v. Garcia.
Philippine law should be applied. The State of California prescribes two
sets of laws for its citizens residing therein and a conflict of law rules
for its citizens domiciled in other jurisdictions. Art. 946 of the California
Civil Code states that If there is no law to the contrary in the place
where personal property is situated, it is deemed to follow the person
of its owner and is governed by the law of his domicile. Edward, a
citizen of the State of California, is considered to have his domicile in
the Philippines. The court of domicile cannot and should not refer the
case back to the California, as such action would leave the issue
incapable of determination, because the case would then be tossed
back and forth between the states(doctrine of renvoi). The validity of

the provisions of Edwards will depriving his acknowledged natural


child of latters legacy, should be governed by the Philippine law.
- Read Roehr, Bayot, Fujiki, Sto. Tomas Cases.
Roehr v. Rodriguez
Petitioner(German) filed for divorce in germany granting him custody
of his children with respondent(Filipina). The court recognized the
divorce decree but took cognizance of the issue on who has custody.
Was the trial court correct?
Ruling: Yes.
As a general rule, divorce decrees obtained by foreigners in other
countries are recognizable in our jurisdiction. But the legal effects
thereof, e.g. on 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 to Wolfgang 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 allowed under Rule
39, Section 50 of the Rules of Court (now Rule 39, Section 48, 1997
Rules of Civil Procedure).
In the present case, it cannot be said that private respondent was
given the opportunity to challenge the judgment of the German court
so that there is basis for declaring that judgment as res judicata with
regard to the rights of Wolfgang to have parental custody of their two
children. The proceedings in the German court were summary. As to
what was the extent of Carmens participation in the proceedings in
the German court, the records remain unclear.
Absent any finding that private respondent is unfit to obtain custody of
the children, the trial court was correct in setting the issue for hearing
to determine the issue of parental custody, care, support and
education mindful of the best interests of the children.

Bayot v. CA
Vicente and Rebecca were married on April 20, 1979 in Sanctuario de
San Jose, Greenhills, Mandaluyong City. On its face, the Marriage
Certificate identified Rebecca, then 26 years old, to be an American
citizen born in Agaa, Guam, USA. On November 27, 1982 in San
Francisco, California, Rebecca gave birth to Marie Josephine Alexandra
or Alix. From then on, Vicente and Rebecca's marital relationship

seemed to have soured as the latter, sometime in 1996, initiated


divorce proceedings in the Dominican Republic. Before the Court of the
First Instance of the Judicial District of Santo Domingo, Rebecca
personally appeared, while Vicente was duly represented by counsel.

DECISION OF COURTS:
(1) Judicial District of Santo Domingo, Dominican Republic - ordering
the dissolution of the couple's marriage and "leaving them to remarry
after completing the legal requirements," but giving them joint custody
and guardianship over Alix. On March 21, 2001, Rebecca filed another
petition, this time before the Muntinlupa City RTC, for declaration of
absolute nullity of marriage on the ground of Vicente's alleged
psychological incapacity. On June 8, 2001, Vicente filed a Motion to
Dismiss on, inter alia, the grounds of lack of cause of action and that
the petition is barred by the prior judgment of divorce.
(2) RTC: denying Vicente's motion to dismiss Civil Case No. 01-094 and
granting Rebecca's application for support pendente lite
Following the denial of his motion for reconsideration of the above
August 8, 2001 RTC order, Vicente went to the CA on a petition for
certiorari, with a prayer for the issuance of a temporary restraining
order (TRO) and/or writ of preliminary injunction.
(3) CA: issued the desired TRO.

ISSUES:
(1) Whether petitioner Rebecca was a Filipino citizen at the time the
divorce judgment was rendered in the Dominican Republic on February
22, 1996; and
(2) Whether the judgment of divorce is valid and, if so, what are its
consequent legal effects?

RULING:
(1) Rebecca an American Citizen in the Purview of This Case. When
Divorce Was Granted Rebecca, She Was not a Filipino Citizen and Was
not Yet Recognized as One. From the foregoing disquisition, it is
indubitable that Rebecca did not have that status of, or at least was
not yet recognized as, a Filipino citizen when she secured the February
22, 1996 judgment of divorce from the Dominican Republic.

(2) The Divorce is valid. In plain language, Vicente and Rebecca are no
longer husband and wife to each other.
As the divorce court formally pronounced: "[T]hat the marriage
between MARIA REBECCA M. BAYOT and VICENTE MADRIGAL BAYOT is
hereby dissolved x x x leaving them free to remarry after completing
the legal requirements."
The Court has taken stock of the holding in Garcia v. Recio that a
foreign divorce can be recognized here, provided the divorce decree is
proven as a fact and as valid under the national law of the alien
spouse. Be this as it may, the fact that Rebecca was clearly an
American citizen when she secured the divorce and that divorce is
recognized and allowed in any of the States of the Union, the
presentation of a copy of foreign divorce decree duly authenticated by
the foreign court issuing said decree is, as here, sufficient.
The fact that Rebecca may have been duly recognized as a Filipino
citizen by force of the June 8, 2000 affirmation by Secretary of Justice
Tuquero of the October 6, 1995 Bureau Order of Recognition will not,
standing alone, work to nullify or invalidate the foreign divorce secured
by Rebecca as an American citizen on February 22, 1996.
In determining whether or not a divorce secured abroad would come
within the pale of the country's policy against absolute divorce, the
reckoning point is the citizenship of the parties at the time a valid
divorce is obtained.
One thing is clear from a perusal of Rebecca's underlying petition
before the RTC, Vicente's motion to dismiss and Rebecca's opposition
thereof, with the documentary evidence attached therein: The
petitioner lacks a cause of action for declaration of nullity of marriage,
a suit which presupposes the existence of a marriage.

Fujiki v. Marinay
(2) Whether a husband or wife of a prior marriage can file a petition to
recognize a foreign judgment nullifying the subsequent marriage
between his or her spouse and a foreign citizen on the ground of
bigamy.
Ruling: YES
Recognition of a foreign judgment only requires proof of fact of the
judgment, it may be made in a special proceeding for cancellation or
correction of entries in the civil registry under Rule 108 of the Rules of
Court.

Any person interested in any act, event, order or decree concerning the
civil status of persons which has been recorded in the civil register,
may file a verified petition for the cancellation or correction of any
entry relating thereto, with the Regional Trial Court of the province
where the corresponding civil registry is located.
Fujiki has the personality to file a petition to recognize the Japanese
Family Court judgment nullifying the marriage between Marinay and
Maekara on the ground of bigamy because the judgment concerns his
civil status as married to Marinay. For the same reason he has the
personality to file a petition under Rule 108 to cancel the entry of
marriage between Marinay and Maekara in the civil registry on the
basis of the decree of the Japanese Family Court.
There is no doubt that the prior spouse has a personal and material
interest in maintaining the integrity of the marriage he contracted and
the property relations arising from it. There is also no doubt that he is
interested in the cancellation of an entry of a bigamous marriage in the
civil registry, which compromises the public record of his marriage. The
interest derives from the substantive right of the spouse not only to
preserve (or dissolve, in limited instances68) his most intimate human
relation, but also to protect his property interests that arise by
operation of law the moment he contracts marriage.
Section 2(a) of A.M. No. 02-11-10-SC does not preclude a spouse of a
subsisting marriage to question the validity of a subsequent marriage
on the ground of bigamy. On the contrary, when Section 2(a) states
that "[a] petition for declaration of absolute nullity of void marriage
may be filed solely by the husband or the wife"75it refers to the
husband or the wife of the subsisting marriage. Under Article 35(4) of
the Family Code, bigamous marriages are void from the beginning.
Thus, the parties in a bigamous marriage are neither the husband nor
the wife under the law. The husband or the wife of the prior subsisting
marriage is the one who has the personality to file a petition for
declaration of absolute nullity of void marriage under Section 2(a) of
A.M. No. 02-11-10-SC.

Corpuz v. Sto. Tomas


Whether or not the second paragraph of Article 26 of the Family Code
grants aliens like Corpuz the right to institute a petition for judicial
recognition of a foreign divorce decree.
Ruling: The alien spouse cannot claim under the second paragraph of
Art 26 of the Family Code because the substantive right it establishes

is in favour of the Filipino spouse. Only the Filipino spouse can invoke
the second par of Art 26 of the Family Code.
The unavailability of the second paragraph of Art 26 of the Family Code
to aliens does not necessarily strip the petitioner of legal interest to
petition the RTC for the recognition of his foreign divorce decree. The
petitioner, being a naturalized Canadian citizen now, is clothed by the
presumptive evidence of the authenticity of foreign divorce decree with
conformity to aliens national law.
The Pasig City Civil Registry acted out of line when it registered the
foreign decree of divorce on the petitioner and respondents marriage
certificate without judicial order recognizing the said decree. The
registration of the foreign divorce decree without the requisite judicial
recognition is void.
Remedy Available to Alien Spouse
The availability under Art 26(2) of the Family Code to aliens does not
necessarily strip the alien spouse of legal interest to petition the RTC
for the recognition of his foreign divorce decree
The foreign divorce decree itself, after its authenticity and conformity
with the alien's national law have been duly proven according to our
rules of evidence, serves as a presumptive evidence in favor of the
alien spouse, pursuant to Sec. 48, Rule 39 of the Rules of Court which
provides for the effect of foreign judgment (Please see pertinent
provisions of the Rules of Court, particularly Sec. 48, Rule 39 and Sec.
24 Rule 132)

- Insular Govt v. Frank


Insular Government vs. Frank 13 Phil 236, G.R.No.2935. March 23,
1909.
FACTS: In 1903 in the state of Illinois, Mr. Frank, a US citizen and a
representative of the Insular Government of the Philippines entered
into a contract whereby the former shall serve as stenographer in the
Philippines for a period of 2 years. The contract contained a provision
that in case of violation of its terms, Mr. Frank shall be liable for the
amount incurred by the Philippine Government for his travel from
Chicago to Manila and one-half salary paid during such period. After
serving for 6 months, defendant left the service and refused to make
further compliance with the terms of the contract, therefore the
Government sued him to recover the amount of $269.23 plus
damages. The lower court ruled in favor of the plaintiff, hence the

defendant appealed presenting minority as his special defense. By


reason of the fact that under the laws of the Philippines, contracts
made by person who did not reach majority age of 23 are
unenforceable. Defendant claim that he is an adult when he left
Chicago but was a minor when he arrived in Manila and at the time the
plaintiff attempted to enforce the contract.
ISSUE: Whether or not the contract is valid.
RULING: Mr. Frank being fully qualified to enter into a contract at the
place and time the contract was made, he cannot therefore plead
infancy as a defense at the place where the contract is being enforced.
Although Mr. Frank was still a minor under Philippine laws, he was
nevertheless considered an adult under the laws of the state of
Illinois,the place where the contract was made. No rule is better settled
in law than that matters bearing upon the execution, interpretation and
validity of a contract are determined by the law of the place where the
contract is made. Matters connected to its performance are regulated
by the law prevailing at the place of its performance. Matters
respecting a remedy, such as bringing of a suit, admissibility of
evidence, and statutes of limitations, depend upon the law of the place
where the suit is brought.
Although generally, capacity of the parties to enter into a contract is
governed by national law. This is one case not involving real property
which was decided by our Supreme Court, where instead of national
law, what should determine capacity to enter into a contract is the lex
loci celebrationis. According to Conflict of Laws writer Edgardo Paras,
Franks capacity should be judged by his national law and not by the
law of the place where the contract was entered into. In the instant
case whether it is the place where the contract was made or Franks
nationality, the result would be the same. However,as suggested by
the mentioned author, for the conflicts rule in capacity in general,
national law of the parties is controlling.

- Judicial Notice of foreign laws, PCIB v. Escolin.


Notice and proof of foreign laws
1. By pleading and proof
a. Written law
i. By official publication
ii. Copy attested by officer having legal custody plus a certificate with
seal from secretary of embassy, legation, consul general, consul, vice

consul, consular agent or any officer in the foreign service of the


Philippines stationed in the foreign country to the effect that said
officer has custody (Section 24 Rule 132 of the Revised Rules of Court)
b. Unwritten law by testimony of experts or writings of jurists
2. Judicial Notice (when the laws are already within the actual
knowledge of the court, such as when they are well and generally
known or they have been actually ruled upon in other cases before it
and none of the parties concerned claim otherwise PCIB vs. Escolin
56SCRA266)
3. To conclude that the parties who fail to introduce proof as to the
content of a foreign law acquiesce to the application of the forum law.
*proceeds from the theory that the basic law is the law of the forum
and when the claimed applicable foreign law is not proved, then the
court has no reason to displace the basic law
4. Presumption that the foreign law is the same as the law of the forum
(Doctrine of Processual Presumption)

PCIB v. Escolin
The parties were in disagreement as to how Article 16 of the Civil Code
should be applied. On the one hand, PCIB claimed that inasmuch as
Linnie was a resident of the Philippines at the time of her death, under
said Article 16, construed in relation to the pertinent laws of Texas and
the principle of renvoi, what should be applied here should be the rules
of succession under the Civil Code, and, therefore, her estate could
consist of no more than one-fourth of the said conjugal properties, the
other fourth being, as already explained, the legitime of her husband
(Art. 900) which she could not have disposed of nor burdened with any
condition (Art. 872). On the other hand, Avelina denied that Linnie died
a resident of the Philippines, since allegedly she never changed nor
intended to change her original residence of birth in Texas, United
States of America, and contends that, anyway, regardless of the
question of her residence, she being indisputably a citizen of Texas,
under said Article 16 of the Civil Code, the distribution of her estate is
subject to the laws of said State which, according to her, do not
provide for any legitime, hence, Linnies brothers and sisters are
entitled to the remainder of the whole of her share of the conjugal
partnership properties consisting of one-half thereof. Avelina further
maintained that, in any event, Charles had renounced his rights under
the will in favor of his co-heirs, as allegedly proven by the documents

touching on the point already mentioned earlier, the genuineness and


legal significance of which PCIB questioned.
The Court cannot decide on the claims, though, for neither the
evidence submitted by the parties appeared to be adequate enough
for it to render an intelligent comprehensive and just resolution. No
clear and reliable proof of what in fact the possibly applicable laws of
Texas are, was presented (Remember judicial notice in case of foreign
laws?). Then also, the genuineness of documents relied upon by
Avelina is disputed. In Justice, therefore, to all the parties concerned,
these and all other relevant matters should first be threshed out fully in
the trial court in the proceedings thereafter to be held for the purpose
of ascertaining and adjudicating and/or distributing the estate of Mrs.
Hodges to her heirs in accordance with her duly probated will.
It is necessary that the Texas law be ascertained. Here it must be
proven whether a renvoi will happen or whether Texas law makes the
testamentary provisions valid. In line with Texas law, that which should
be proven is the law enforced during the death of Hodges and not in
any other time.
The Supreme Court held that the estate of Mrs. Hodges inherited by
her brothers and sisters could be more than just stated, but this would
depend on (1) whether upon the proper application of the principle of
renvoi in relation to Article 16 of the Civil Code and the pertinent laws
of Texas, it will appear that Hodges had no legitime as contended by
Magno, and (2) whether or not it can be held that Hodges had legally
and effectively renounced his inheritance from his wife. The Court is
not in a position to make a final ruling, whether of fact or of law, on
any of these two issues
Linnies estate is the remainder of 1/4 of the conjugal partnership
properties, considering that even PCIB did not maintain that the
application of the laws of Texas would result in the other heirs of Mrs.
Hodges not inheriting anything under her will. And since PCIB's
representations in regard to the laws of Texas virtually constitute
admissions of fact which the other parties and the Court are being
made to rely and act upon, PCIB is not permitted to contradict them or
subsequently take a position contradictory to or inconsistent with
them.
The only question that remains to be settled in the remand to the court
below are: (A) whether or not the applicable laws of Texas do provide in
effect for more, such as, when there is no legitime provided therein
and (B) whether or not Hodges has validly waived his whole
inheritance from Mrs. Hodges.

- Questions asked in choice of law problems.


- Essay, Hypothetical questions.
- Study Art 15,16,17
- NY Convention
Article V
1. Recognition and 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:
(a) The parties to the agreement referred to in article II were, under the
law applicable to them, under some incapacity, or the said agreement
is not valid under the law to which the parties have subjected it or,
failing any indication thereon, under the law of the country where the
award was made; or
(b) The party against whom the award is invoked was not given proper
notice of the appointment of the arbitrator or of the arbitration
proceedings or was otherwise unable to present his case; or
(c) The award deals with a difference not contemplated by or not
falling within the terms of the submission to arbitration, or it contains
decisions on matters beyond the scope of the submission to
arbitration, provided that, if the decisions on matters submitted to
arbitration can be separated from those not so submitted, that part of
the award which contains decisions on matters submitted to arbitration
may be recognized and enforced; or
(d) The composition of the arbitral authority or the arbitral procedure
was not in accordance with the agreement of the parties, or, failing
such agreement, was not in accordance with the law of the country
where the arbitration took place; or
(e) The award has not yet become binding, on the parties, or has been
set aside or suspended by a competent authority of the country in
which, or under the law of which, that award was made.
2. Recognition and enforcement of an arbitral award may also be
refused if the competent authority in the country where recognition
and enforcement is sought finds that:
(a) The subject matter of the difference is not capable of settlement by
arbitration under the law of that country; or

(b) The recognition or enforcement of the award would be contrary to


the public policy of that country.

- Succession Cases
- Venue on Arbitration
ADR Law
SEC. 42. Application of the New York Convention. - The New York Convention shall govern the
recognition and enforcement of arbitral awards covered by the said Convention.
The recognition and enforcement of such arbitral awards shall be filled with regional trial court in
accordance with the rules of procedure to be promulgated by the Supreme Court. Said procedural
rules shall provide that the party relying on the award or applying for its enforcement shall file with the
court the original or authenticated copy of the award and the arbitration agreement. If the award or
agreement is not made in any of the official languages, the party shall supply a duly certified
translation thereof into any of such languages.
The applicant shall establish that the country in which foreign arbitration award was made is a party to
the New York Convention.
If the application for rejection or suspension of enforcement of an award has been made, the regional
trial court may, if it considers it proper, vacate its decision and may also, on the application of the party
claiming recognition or enforcement of the award, order the party to provide appropriate security.
Special ADR Rules
Rule 13.3. Venue. - The petition to recognize and enforce a foreign arbitral award shall be filed, at the
option of the petitioner, with the Regional Trial Court (a) where the assets to be attached or levied upon
is located, (b) where the act to be enjoined is being performed, (c) in the principal place of business in
the Philippines of any of the parties, (d) if any of the parties is an individual, where any of those
individuals resides, or (e) in the National Capital Judicial Region.

- Cases on Divorce decree


- Tuna processing v. CA
G.R.No.185582February29,2012
TUNAPROCESSING,INC.,vs.PHILIPPINEKINGFORD,INC.,
Facts
January14,2003:KanemitsuYamaoka("licensor"),copatenteeofU.S.Patent,PhilippineLettersPatent,
andIndonesianPatent("YamaokaPatent"),andfivePhilippinetunaprocessors,namely,AngelSeafood
Corporation,EastAsiaFishCo.,Inc.,MommyGinaTunaResources,SantaCruzSeafoods,Inc.,and
respondentKingford("sponsors"/"licensees")enteredintoaMemorandumofAgreement
January15,2003ThepartieslikewiseexecutedaSupplementalMemorandumofAgreement.
July14,2003:AgreementtoAmendMemorandumofAgreement.
Duetoaseriesofeventsnotmentionedinthepetition,thelicensees,includingrespondentKingford,
withdrewfrompetitionerTPIandcorrespondinglyrenegedontheirobligations.
PetitionersubmittedthedisputeforarbitrationbeforetheInternationalCentreforDispute
ResolutionintheStateofCalifornia,UnitedStatesWON!

October10,2007:Toenforcetheaward,petitionerTPIfiledonaPetitionforConfirmation,Recognition,
andEnforcementofForeignArbitralAwardbeforetheRTCofMakatiCity.
RespondentKingfordfiledaMotiontoDismiss.DISMISSED.JudgeAlamedainhibitedhimself.Re
Raffled.JudgeRuiz,inturn,GRANTEDtheMOTanddismissedthepetition.GROUND:Petitionerslack
oflegalcapacitytosueinthePH.
Issue
CanaforeigncorporationnotlicensedtodobusinessinthePhilippines,butwhichcollectsroyaltiesfrom
entitiesinthePhilippines,sueheretoenforceaforeignarbitralaward?
Ruling
Sec.133.Doingbusinesswithoutalicense.Noforeigncorporationtransactingbusinessinthe
Philippineswithoutalicense,oritssuccessorsorassigns,shallbepermittedtomaintainorinterveneinany
action,suitorproceedinginanycourtoradministrativeagencyofthePhilippines;butsuchcorporation
maybesuedorproceededagainstbeforePhilippinecourtsoradministrativetribunalsonanyvalidcauseof
actionrecognizedunderPhilippinelaws.(CORPOCODE)
Thereisnodoubt,therefore,thatTPIhasbeendoingbusinessinthePhilippines,butsansalicensetodoso
issuedbytheconcernedgovernmentagencyofthePhilippines,whenitcollectedroyaltiesfromfive
Philippinetunaprocessors.Thisbeingtherealsituation,TPIcannotbepermittedtomaintainorintervene
inanyaction,suitorproceedingsinanycourtoradministrativeagencyofthePhilippines."Apriori,the
"Petition,etc."extantoftheplaintiffTPIshouldbedismissedforitdoesnothavethelegalpersonalityto
sueinthePhilippines.
HOWEVER,petitionercounters,thatitisentitledtoseekfortherecognitionandenforcementofthe
subjectforeignarbitralawardinaccordancewithRepublicActNo.9285(AlternativeDisputeResolution
Actof2004),theConventionontheRecognitionandEnforcementofForeignArbitralAwardsdrafted
duringtheUnitedNationsConferenceonInternationalCommercialArbitrationin1958(NewYork
Convention),andtheUNCITRALModelLawonInternationalCommercialArbitration(ModelLaw),as
noneofthesespecificallyrequiresthatthepartyseekingfortheenforcementshouldhavelegalcapacityto
sue.Itanchorsitsargumentonthefollowing:
HaciendaLuisita,Incorporatedv.PresidentialAgrarianReformCouncil,thisCourtheld:
Withoutdoubt,theCorporationCodeisthegenerallawprovidingfortheformation,organizationand
regulationofprivatecorporations.Ontheotherhand,RA6657isthespeciallawonagrarianreform.As
betweenageneralandspeciallaw,thelattershallprevailgeneraliaspecialibusnonderogant.
Followingthesameprinciple,theAlternativeDisputeResolutionActof2004shallapplyinthiscaseasthe
Act,asitstitleAnActtoInstitutionalizetheUseofanAlternativeDisputeResolutionSysteminthe
PhilippinesandtoEstablishtheOfficeforAlternativeDisputeResolution,andforOtherPurposeswould
suggest,isalawespeciallyenacted"toactivelypromotepartyautonomyintheresolutionofdisputesorthe
freedomofthepartytomaketheirownarrangementstoresolvetheirdisputes."Itspecificallyprovides
exclusivegroundsavailabletothepartyopposinganapplicationforrecognitionandenforcementof
thearbitralaward.
InasmuchastheAlternativeDisputeResolutionActof2004,amunicipallaw,appliesintheinstantpetition,
wedonotseetheneedtodiscusscompliancewithinternationalobligationsundertheNewYork
ConventionandtheModelLaw.Afterall,bothalreadyformpartofthelaw.
Notoneoftheseexclusivegrounds(ArticleVoftheNewYorkConvention)touchedonthecapacitytosue
ofthepartyseekingtherecognitionandenforcementoftheaward.
PertinentprovisionsoftheSpecialRulesofCourtonAlternativeDisputeResolution,whichwas
promulgatedbytheSupremeCourt,likewisesupportthisposition.
Rule13.1oftheSpecialRulesprovidesthat"anypartytoaforeignarbitrationmaypetitionthecourtto
recognizeandenforceaforeignarbitralaward."
Capacitytosueisnotincluded.
Oppositely,intheRuleonlocalarbitralawardsorarbitrationsininstanceswhere"theplaceofarbitrationis
inthePhilippines,"itisspecificallyrequiredthatapetition"todetermineanyquestionconcerningthe
existence,validityandenforceabilityofsucharbitrationagreement"availabletothepartiesbeforethe
commencementofarbitrationand/orapetitionfor"judicialrelieffromtherulingofthearbitraltribunalon

apreliminaryquestionupholdingordecliningitsjurisdiction"afterarbitrationhasalreadycommenced
shouldstate"[t]hefactsshowingthatthepersonsnamedaspetitionerorrespondenthavelegalcapacityto
sueorbesued."
Indeed,itisinthebestinterestofjusticethatintheenforcementofaforeignarbitralaward,wedeny
availmentbythelosingpartyoftherulethatbarsforeigncorporationsnotlicensedtodobusinessinthe
Philippinesfrommaintainingasuitinourcourts.Whenapartyentersintoacontractcontainingaforeign
arbitrationclauseand,asinthiscase,infactsubmitsitselftoarbitration,itbecomesboundbythecontract,
bythearbitrationandbytheresultofarbitration,concedingtherebythecapacityoftheotherpartytoenter
intothecontract,participateinthearbitrationandcausetheimplementationoftheresult.
AssetPrivatizationTrustv.CourtofAppeals,
xxxArbitration,asanalternativemodeofsettlement,isgainingadherentsinlegalandjudicialcircleshere
andabroad.Ifitstestedmechanismcansimplybeignoredbyanaggrievedparty,onewho,itmustbe
stressed,voluntarilyandactivelyparticipatedinthearbitrationproceedingsfromtheverybeginning,it
willdestroytheveryessenceofmutualityinherentinconsensualcontracts.
Clearly,onthematterofcapacitytosue,aforeignarbitralawardshouldberespectednotbecauseitis
favoredoverdomesticlawsandprocedures,butbecauseRepublicActNo.9285hascertainlyerasedany
conflictoflawquestion.
Finally,evenassuming,onlyforthesakeofargument,thatthecourtaquocorrectlyobservedthatthe
ModelLaw,nottheNewYorkConvention,governsthesubjectarbitralaward,petitionermaystillseek
recognitionandenforcementoftheawardinPhilippinecourt,sincetheModelLawprescribessubstantially
identicalexclusivegroundsforrefusingrecognitionorenforcement.
Premisesconsidered,petitionerTPI,althoughnotlicensedtodobusinessinthePhilippines,mayseek
recognitionandenforcementoftheforeignarbitralawardinaccordancewiththeprovisionsofthe
AlternativeDisputeResolutionActof2004.
DISPOSITIVEPORTIOIN:WHEREFORE,theResolutiondated21November2008oftheRegional
TrialCourt,Branch61,MakatiCityinSpecialProceedingsNo.M6533isherebyREVERSEDandSET
ASIDE.ThecaseisREMANDEDtoBranch61forfurtherproceedings.

- Kogies v. PSMC
DIGEST + ANALYSIS FROM THE ATENEO LAW JOURNAL ARTICLE: Moving
Forward: Developments in Arbitration Jurisprudence by Bernard Joseph Mabiliran
A. The Facts
Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation engaged in the
supply and installation of Liquefied Petroleum Gasoline (LPG) Cylinder
manufacturing plants.9 It entered into a contract with the private respondent
Pacific General Steel Manufacturing Corp. (PGSMC), a domestic corporation
desiring to establish a LPG Cylinder manufacturing plant in Carmona at the
province of Cavite.10 The parties executed the contract on 5 March 1997 in the
Philippines, and an amendment on 7 April 1997 in Korea.
The contract and its amendment provided that KOGIES is to ship machineries and
other facilities necessary for manufacturing LPG Cylinders in exchange for U.S.
$1,224,000. In addition, for the installation and initiation of the plant and upon the
production of 11-kilogram LPG cylinder samples, PGSMC is to pay U.S.
$306,000. Thus, the total contract price stood at U.S.$1,530,000.11
All went well initially, and the machineries, equipment, and facilities promised by
KOGIES were delivered and installed in Carmona. Thus, PGSMC paid the initial
U.S.$1,224,000.12 However, after the installation of the plant, the initial
operation thereof could not be conducted as PGSMC encountered financial

difficulties, affecting the supply of materials. This forced the parties to agree that
KOGIES would be deemed to have completely complied with the terms and
conditions of the 5 March 1997 contract.13
Two postdated checks were issued by PGSMC to cover the remaining U.S.
$306,000. These were dishonored, however, for the reason that payment has been
stopped. While KOGIES sent a demand letter to PGSMC, PGSMC replied with a
letter complaining that KOGIES delivered a different brand of hydraulic press
from that agreed upon and that it had failed to deliver several equipment parts
already paid for.
PGSMC further informed KOGIES on 1 June 1998 that it was cancelling their
contract because of the altered quantity and lowered quality of the machineries,
and that it would dismantle and transfer the machineries already installed from the
Carmona plant. Finally, PGSMC filed before the Office of the Prosecutor a
Complaint-Affidavit for estafa against Mr. Dae Hyun Kang, President of
KOGIES.14
On 15 June 1998, KOGIES informed PGSMC that it could not unilaterally
rescind the contract. Of greater importance to the present article, KOGIES also
insisted that their dispute be settled by arbitration as provided by Article 15
of their contract the arbitration clause.15
Thus, on 1 July 1998, KOGIES instituted an Application for Arbitration before the
Korean Commercial Arbitration Board in Seoul, Korea.16 At almost the same
time, it filed a complaint for Specific Performance on 3 July 1998 against
PGSMC before the Muntinlupa Regional Trial Court (RTC), with a prayer for a
Temporary Restraining Order (TRO).
It averred, among others, that PGSMC violated Article 15 of their contract by
unilaterally rescinding it without resorting to arbitration. PGSMC opposed the
TRO, arguing that the arbitration clause, was null and void for being against
public policy as it ousts the local courts of jurisdiction over the instant
controversy.17
The RTC held that Article 15 of the contract was invalid as it tended to oust the
trial court or any other court jurisdiction over any dispute that may arise between
the parties18 a ruling long abandoned by the Supreme Court in various
decisions.19 KOGIES filed a Motion for Reconsideration of the order of the
court. In the meantime, however, PGSMC filed a Motion for the Inspection of
Things to determine whether there was indeed alteration of the quantity and
lowering of the quality of the machineries and equipment. KOGIES opposed the
motion, stating that the matters in the Motion for Inspection should fall under the
coverage of the arbitration clause. The RTC, nevertheless, granted the Motion for
Inspection of Things.20
KOGIES filed an urgent Motion for Reconsideration, and without waiting for the
resolution of the said Motion, filed a Petition for Certiorari with the Court of
Appeals, claiming that the Sheriff was ill-trained to determine matters as to
whether there was indeed an alteration or lowering of quantity or quality, and that
such issues would better be determined by an arbitration panel knowledgeable
with the machineries and equipment at hand.21

This Petition for Certiorari, however, was denied by the Court of Appeals.22 The
said appellate court agreed with the RTC that an arbitration clause providing for
a final determination of the legal rights of the parties to the contract by arbitration
was against public policy.23 It was then that KOGIES filed a Petition for Review
on Certiorari to the Supreme Court via Rule 45.

Ruling:

The relevant ruling of the Supreme Court was on the issue of the declaration as
null and void of Article 15 the arbitration clause of the contract between the
parties for being contrary to public policy since they oust the courts of
jurisdiction. The High Court sided with KOGIES on this issue and reversed the
rulings both of the RTC and the Court of Appeals. Citing the cases of Gonzales v.
Climax Mining Ltd.25 and Del Monte Corporation-USA v. Court of Appeals,26
the High Court reiterated that an agreement to arbitrate any dispute is itself a
contract, and at the same time part of a contract the container contract.
Absent any showing that the contract was not mutually and voluntarily agreed
upon, the Court said that it should be respected and complied with by the
parties.27 More importantly, the High Court here categorically stated that an
arbitration clause even though it provides that an arbitral award made pursuant
thereto is final and binding is not contrary to public policy. This Court has
sanctioned the validity of arbitration clauses in a catena of cases.28 The Court
then cited cases since 1957, including Eastboard Navigation Ltd. v. Juan Ysmael
and Co., Inc.,29 BF Corporation v. Court of Appeals,30 and LM Power
Engineering Corporation v. Capitol Industrial Construction Groups, Inc.31
Being an inexpensive, speedy, and amicable method of settling disputes,
arbitration along with mediation, conciliation and negotiation is encouraged
by the Supreme Court. Aside from unclogging judicial dockets, arbitration also
hastens the resolution of disputes, especially of the commercial kind.32
The succeeding part of the decision of the Supreme Court is the more interesting,
and perhaps more controversial one. Having found that the arbitration clause is
not contrary to public policy, the High Court raised the question of what governs
an arbitration clause. It held:
In case a foreign arbitral body is chosen by the parties, the arbitration rules
of our domestic arbitration bodies would not be applied. As signatory to
the
Arbitration Rules of the UNCITRAL Model Law on International
Commercial
Arbitration of the United Nations Commission on International Trade Law
(UNCITRAL) in the New York Convention on June 21, 1985, the
Philippines
committed itself to be bound by the Model Law.33
The decision then highlights pertinent features of R.A. [No.] 9285 applying and
incorporating the UNCITRAL Model Law,34 including Sections 24,35 42,36
43,37 44,38 47, and 48. In the same breath, however, the decision also cited

Section 35 of the UNCITRAL Model Law, the Section dealing with the
recognition and enforcement of an arbitral award. It finally stated that the final
foreign arbitral awards are situated in that they need first to be confirmed by
the RTC.39 The Highest Court of the land seemed to have been confused on the
application of these various provisions. This will be explained further in the next
Section. Next, the Supreme Court proclaimed that the RTC has jurisdiction to
review foreign arbitral awards with specific authority and jurisdiction to set
aside, reject, or vacate a foreign arbitral award,40 citing Section 42 in relation to
Section 45 of the ADR Act of 2004. Subsequently, the High Court grouped
international and foreign arbitral awards into one, and provided that the grounds
for setting aside, rejecting, or vacating the award by the RTC are provided under
Article 34 (2) of the UNCITRAL Model Law. As for domestic arbitral awards, the
applicable law would be R.A. [No.] 876, the Arbitration Law.41
In fine, the Supreme Court stated that: PGSMC must submit to the foreign
arbitration as it bound itself through the subject contract. While it may have
misgivings on the foreign arbitration done in KOREA by the KCAB, it has
available remedies under R.A. [No.] 9285. Its interests are duly protected by the
law which require that the arbitral award that may be rendered by KCAB must be
confirmed here by the RTC before it can be enforced.
With our disquisition above, petitioner is correct in its contention that an arbitration
clause, stipulating that the arbitral award is final and binding, does not oust our courts of
jurisdiction as the international arbitral award, the award of which is not absolute and
without exceptions, is still judicially reviewable under certain conditions provided for by
the UNCITRAL Model Law on ICA as applied and incorporated in R.A. [No.] 9285.42
As to the unilateral rescission of the contract, the Supreme Court held that, there being a
valid and binding arbitration clause, PGSMC cannot unilaterally rescind a contract, but
must, therefore, resort and enter into arbitration.43 The Court further declared that the
lower court committed grave abuse of discretion in allowing the Motion for Inspection of
Things. Consequently, the findings and conclusions made by the Sheriff based on the
inspection were considered to be of no worth.

- Maximov
Maximov v. NLMK
Background
Article V(1)(e) of the New York Convention provides that the courts of a
contracting state may refuse to enforce a Convention award if the
defendant proves that it has not yet become binding on the parties, or
has been set aside or suspended by a competent authority of the
country in which, or under the law of which, that award was made.
Yukos Capital v Rosneft

On 28 April 2009, the Amsterdam Court of Appeals rendered its well


known judgment allowing Yukos Capital to enforce a number of ICAC
arbitral awards against Rosneft in the Netherlands, despite the awards
having been set aside in Russia. In short, the Amsterdam Court of
Appeals decided in Yukos that:
The New York Convention did not apply to the recognition of foreign
state court decisions, such as a setting aside judgment.
Recognition of a Russian decision setting aside an arbitral award is not
required under the New York Convention or any other treaty between
Russia and the Netherlands.
Without an applicable treaty, recognition of a foreign state court
judgment in the Netherlands is only possible under international
private law rules and, for that reason, it is not possible if it is likely that
the foreign judiciary is dependent or partial.
Direct evidence of partiality or dependency of individual judges is not
required.

Facts
By an arbitral award of 31 March 2011, an ICAC arbitral tribunal sitting
in Moscow ordered the Russian steel conglomerate, OJSC Novolipetsky
Metallurgichesky Kombinat (NLMK) to pay Nikolai Viktorovich Maximov
(Maximov) RUB 8.9 billion, as balance of the price for purchasing 50%
(plus one share) in Maxi-Group, and costs. Maximov secured payment
by effecting an attachment of NLMKs shares in the Dutch company,
NLMK International BV. In May 2011, Maximov applied to the
Amsterdam District Court for leave to enforce the arbitral award in the
Netherlands.
However, in June 2011, the Moscow Arbitrazh Court set aside the
arbitral award. It stated:
a) The composition of the arbitral tribunal was not in accordance with the
parties agreement because of their failure to inform the other party
that the arbitrators worked at the same institutions
b) Pursuant to Russian law, a dispute related to the validity of transfer of
shares cannot be resolved by means of arbitration proceedings
c) The method of computing the purchase price was contrary to the
mandatory provisions of Russian law

This decision prompted the Amsterdam District Court to refuse


enforcement of the arbitral award on 17 November 2011.
On 16 January 2012, Maximov filed an appeal at the Amsterdam Court
of Appeals on the grounds that:
NLMK had not requested, and would not be requesting, the recognition
of the Russian court's decision setting aside the award.
The Russian court's decision was still subject to appeal.
The setting aside proceedings did not qualify as a fair trial.
The Russian Federal Court and the Russian Supreme Court both upheld
the decision to set aside the arbitral award, on 10 October 2011 and 20
January 2012 respectively
Maximov requested the district court to enforce the award but it was
denied. Hence this present course.
ISSUE: WON the arbitral award may be enforced? NO
RATIO:
The Court of Appeals held that enforcement of a foreign arbitral
award can be refused on the basis of Article V(1)(e) of the New York
Convention, even if recognition of the foreign setting aside decision
has not, and will not, be requested.
As to the fact that the setting aside was subject to appeal when the
Amsterdam District Court decided to recognise it, the Court of Appeals
held that Article V(1)(e) of the New York Convention does not require
the setting aside to have res judicata effect.
The Court of Appeals went on to hold that enforcement of an annulled
arbitral award should be refused under Article V(1)(e) of the New York
Convention, unless the setting aside is the result of an unfair trial.
While the Court of Appeals expressed grave concern over the state of
the Russian judiciary, it held that this exception can only be
established by "sufficiently specific indications" that this particular
setting aside procedure was unfair. The Court of Appeals suggested,
with reference to the decision of the European Court of Human Rights
in Pellegrini v Italy, that even if the setting aside proceedings were
unfair, enforcement of the award should still be refused if it is plausible
that the arbitral award would have been set aside even if the
proceedings had been fair.

In order to ascertain whether the setting aside proceedings were fair,


the Court of Appeals ordered expert evidence on Russian arbitration
and procedural law.

DOCTRINE:
General rule: enforcement of an annulled arbitral award should be
refused
Exception: unless the setting aside is the result of an unfair trial.
Exception to the exception: had the trial been fair, it would still result
to the quashal of the arbitral award

Bonus
1. San courts nag file.ng kaso yung ecuadorians. Sabi ni den wala daw kasi global injunction. Di ko alam sagot.
2. Nakalimutan ko na
3. Mareva injunction

Sociedade-de-fomento Industrial Private Limited v. Pakistan Steel Mills


Corporation (Private) Limited
Sociedade-de-fomento Industrial Private Limited (SFI), appeals from a judgment of
a chambers judge. The judge held that SFI did not make full, fair and frank disclosure
to the court that granted the original Mareva injunction about the potential
enforcement of an arbitration award in Pakistan. The Mareva injunction secured an
arbitration award (the Final Award) made outside of British Columbia in the
approximate amount of US $9 million. The judge found that the Mareva

injunction was wrongly obtained and declared that SFI was liable in
damages to the respondent, Pakistan Steel Mills Corporation (Private)
Limited (PSM). The quantum of damages was to be assessed in a
further proceeding.
Held: Appeal allowed.
British Columbia has incorporated the United Nations Convention on
the Recognition and Enforcement of Foreign Arbitral Awards (commonly
known as the New York Convention) into its domestic law by way of
the Foreign Arbitral Awards Act. The New York Convention and the
adopting provincial legislation require the Supreme Court of British
Columbia to recognize and enforce an international arbitration award
on the same basis as a domestic award. The judge erred in setting

aside the Mareva injunction by overlooking this effect of the New York
Convention. The judge erred by conducting a type of forums
conveniens analysis in favour of enforcement in Pakistan and in her
conclusion that the appellant failed to disclose a material fact on its
application for a Mareva injunction. The amplified evidence supported
the representation made by the applicant to the granting judge, that
enforcement of the Final Award in Pakistan would be challenging.

4. Read chromaalloy case


5. Einhorn article.
Exception to art. 5 (e) of ny convention. Cite example.

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