Pitfalls of enforcing foreign arbitral awards in the Philippines

INTERNATIONAL COMMERCIAL arbitration is a relatively new area of practice in the Philippines. While the Philippines became a signatory to the UN Convention on the Recognition and the Enforcement of Foreign Arbitral Awards of 1958 (the New York Convention) as early as 10 June 1958, no laws were enacted prescribing the mechanics for the conduct of international arbitration, or for the enforcement of foreign arbitral awards in the Philippines, for almost 50 years. All we had back then was Republic Act 876 – a law for domestic arbitration.

Since there was no law enacted in the Philippines providing a specific procedure for the enforcement of foreign arbitral awards, Philippine courts treated these awards as foreign judgments. Thus, foreign arbitral awards have sometimes been deemed only presumptively valid, rather than conclusively valid, as required by the New York Convention. It was only in 2004 that the Philippine Congress enacted Republic Act (RA) 9285 (Alternative Dispute Resolution Act of 2004).

In 2008 the Philippine Supreme Court issued the Special Rules of Court on Alternative Dispute Resolution (Special ADR Rules) to provide guidance on the interpretation of some provisions of RA 9285.

Section 44 of RA 9285 states that a foreign arbitral award is not a foreign judgment. For the recognition and enforcement of a foreign judgment, the applicable rule is section 48, rule 39 of the Rules of Court, which requires only proof of fact of the said judgment, and that once proven, the said foreign judgment enjoys a disputable presumption of validity (BPI Securities Corp v Guevara, 2015).