FOREIGN ARBITRAL AWARDS

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 filed 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.

NEW YORK CONVENTION

 It is the United Nations Convention on the recognition and Enforcement of

Foreign Arbitral Awards approved in 1958 and ratified by the Philippine

Senate under resolution No. 72. It provides for the recognition and

enforcement of foreign and non-domestic arbitral awards and obliges courts of

Convention States to recognize arbitration agreements and arbitral awards

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 as binding, under conditions no more onerous than those under domestic

arbitration.

APPLICATION OF THE NEW YORK CONVENTION

 It shall govern the recognition and enforcement of awards by said convention.

The recognition and enforcement of such arbitral awards shall be filed with

the Regional Trial Court in accordance with 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 or agreement is not made in any of the official languages,

the party shall apply a duly certified translation thereof in any of such

languages.

 The applicant shall establish that the country in which the foreign

arbitration award was made a party to the New York convention.

 If the applicant for rejection or suspension of the 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.

VACATE

 Vacate means “to render void; to “set aside. It is a fundamental percept that a

final decision cannot be amended or corrected except for clerical errors,

mistakes or misprisions. Because the court loses jurisdiction upon the finality

of its decision, except to order its decision within its lifetime. An award, being

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 merely a partial or final decision of an arbitrator in resolving the issue in

controversy is not a final decision of a court.

SEC. 43. Recognition and Enforcement of Foreign Arbitral Awards Not Covered by

the New York Convention. - The recognition and enforcement of foreign arbitral

awards not covered by the New York Convention shall be done in accordance with

procedural rules to be promulgated by the Supreme Court. The Court may, grounds

of comity and reciprocity, recognize and enforce a nonconvention award as a

convention award.

RECOGNITION

 It is a confirmation that an act done for another person was authorized. It is

the formal admission that a person, entity or thing has a particular status.

ENFORCEMENT

 The act or process of compelling compliance with a law, mandate or

command. Enforcement can be done extrajudicially or by means of legitimate

law enforcement agencies.

RECOGNITION AND ENFORCEMENT OF NON-NEW YORK CONVENTION

AWARDS

 The recognition and enforcement of foreign arbitral awards not covered by

the New York Convention shall be done in accordance with procedural rules

to be promulgated by the Supreme court. The Court may, on grounds of

comity and reciprocity, recognize and enforce a non-convention award as a

convention award.

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COMITY VS JUDICIAL COMITY

 Comity is a rule of courtesy by which one court defers to the concomitant

jurisdiction of another, whereas judicial comity is not a rule of law, but one of

practical convenience and expediency based on the theory that a court which

first asserts jurisdiction will not be interfered with in continuance of its

assertion of another court unless it is undesirable that give way to the other.

RECIPROCITY

 Generally, a relationship between persons, states or countries whereby favors

or privileges granted by one are returned by the other. Thus, If State A

certifies engineers already certified by State B to work in State A, reciprocity

exists when State B similarly certifies engineers cerftified by State A.

Reciprocity does not involve a vested right but would exist without it.

SEC. 44. Foreign Arbitral Award Not Foreign Judgment. - A foreign arbitral award

when confirmed by a court of a foreign country, shall be recognized and enforced as

a foreign arbitral award and not a judgment of a foreign court.

A foreign arbitral award, when confirmed by the regional trial court, shall be

enforced as a foreign arbitral award and not as a judgment of a foreign court.

A foreign arbitral award, when confirmed by the regional trial court, shall be

enforced in the same manner as final and executory decisions of courts of law of the

Philippines.

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EFFECT OF A FOREIGN ARBITRAL AWARD

 A foreign arbitral award when confirmed by a court of a foreign country shall

be enforced as a foreign arbitral award and not as a judgment of a foreign

court. As such foreign arbitral award, it can be vacated by a regional trial

court in the Philippines. However, when a foreign arbitral award has been

confirmed by the regional trial court, the same shall be enforced as a final

and executor decisions of courts of law in the Philippines. The effect of

confirmation by a regional trial court of a foreign arbitral award is to clothe

them with the force and effect of a final and executor court decision in the

Philippines.

SEC. 45. Rejection of a Foreign Arbitral Award. - A party to a foreign arbitration

proceeding may oppose an application for recognition and enforcement of the

arbitral award in accordance with the procedural rules to be promulgated by the

Supreme Court only on those grounds enumerated under Article V of the New York

Convention. Any other ground raised shall be disregarded by the regional trial

court.

HOW FOREIGN ARBITRAL AWARD REJECTED

 A party to a foreign arbitral proceeding may oppose an application for

recognition and enforcement of the arbitral award in accordance with the

procedural rules to be promulgated by the Supreme Court only on those

grounds enumerated under Article V of the New York Convention. Any of the

ground raised shall be disregarded by the regional trial court.

SEC. 46. Appeal from Court Decisions on Arbitral Awards. - A decision of the

regional trial court confirming, vacating, setting aside, modifying or correcting an

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arbitral award may be appealed to the Court of Appeals in accordance with the

rules of procedure to be promulgated by the Supreme Court.

The losing party who appeals from the judgment of the court confirming an arbitral

award shall be required by the appellant court to post counter bond executed in

favor of the prevailing party equal to the amount of the award in accordance with

the rules to be promulgated by the Supreme Court.

APPEAL

 A resort to a higher court for the purpose of obtaining a review of a lower

court decision and a reversal of the lower courts judgment or the granting of

new trial.

APPEAL FROM DECISIONS ON ARBITRAL AWARDS

 A decision of the Regional trial Court, confirming, vacating, setting aside or

modifying or correcting an arbitral award may be appealed to the Court of

Appelas in accordance with the rules of procedure to be promulgated by the

Supreme Court. However, the losing party who appeals from the judgment of

the court confirming an arbitral award shall be required by the appellate

court to post a counterbond executed in favor of the prevailing party equal to

the amount of the award in accordance with the rules to be promulgated by

the Supme Court.

SEC. 47. Venue and Jurisdiction. - Proceedings for recognition and enforcement of

an arbitration agreement or for vacation, setting aside, correction or modification of

an arbitral award, and any application with a court for arbitration assistance and

supervision shall be deemed as special proceedings and shall be filled with the

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regional trial court (i) where arbitration proceedings are conducted; (ii) where the

asset to be attached or levied upon, or the act to be enjoined is located; (iii) where

any of the parties to the dispute resides or has his place of business; or (iv) in the

National Judicial Capital Region, at the option of the applicant.

JURISDICTION VS VENUE

 Jurisdiction implies the power of a court to decide a case, while venue is the

place of action. Venue is procedural, not jurisdictional, hence may be waived.

Thus, the court may dismiss an action motu propio in case of lack of

jurisdiction over the subject, litis pendentia, res judicata, and prescription

but not for improper venue. Jurisdiction is conferred by law and not be mere

policy of any court or tribunal.

SEC. 48. Notice of Proceeding to Parties. - In a special proceeding for recognition

and enforcement of an arbitral award, the Court shall send notice to the parties at

their address of record in the arbitration, or if any party cannot be served notice at

such address, at such party's last known address. The notice shall be sent at least

fifteen (15) days before the date set for the initial hearing of the application.

NOTICE

 It means information actually received by the person to whom it is intended

to be imparted. Procedural process simply means that a person must be

heard before he is condemned. The requirement of due process is satisfied as

long as a party is given a reasonable opportunity to explain his side, even if

he chooses not to participate in the proceedings when his request for

postponement is denied.

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NOTICE OF PROCEEDINGS TO PARTIES

 In special proceedings for recognition and enforcement of an arbitral award,

the Court shall send notice to the parties at their address of record in the

arbitration or if any party cannot be served notice at such address, at such

party’s last known address. The notice shall be sent at least fifteen (15) days

before the date set for initial hearing of the application.

Alternative Dispute Resolution Act of 2004, Reynaldo b. Aralar, 2005 Edition

LAW AND JURISPRUDENCE ON ALTERNATIVE DISPUTE RESOLUTION by Gerardo Lara,

GRACE GAUDELYN BRILLO LARA and PATRICIA LAUREN D. ZUNIGA.