PHILIPPINES Law and Practice Contributed by: Kerwin Tan, Eugene Kaw and Veronica Balbin, Tan Hassani and Counsels
2.6.5 Domestic Courts’ Approach to Foreign Laws and Judgments As long as the choice of law of the parties is not contrary to law, morals, public policy or public order, domestic courts will uphold and recognise such for - eign laws as the governing law of an aircraft lease, as well as the submission to a foreign jurisdiction to try and resolve disputes and the waiver of immunity by the parties. 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards A party may commence an action for the recognition of a foreign judgment with a domestic court, and it can be recognised and enforced without re-examination of the matter as it enjoys a presumption of validity. For foreign arbitral awards made in a state that is a party to the New York Convention or that extends reciprocity and comity to awards made in the Phil - ippines, the lessor may apply for a Recognition and Enforcement of Foreign Arbitral Award at any time after receipt of the foreign arbitral award. Courts may hold hearings if deemed proper. If the foreign arbitral award was made in a state that is not a party to the New York Convention, the court may treat the award as a foreign judgment. 2.6.7 Judgments in Foreign Currencies Generally, monetary obligations shall be settled in the Philippine currency. However, parties may agree that the obligation will be settled in another currency at the time of payment, so a judgment may be based on the currency stipulated in the lease. 2.6.8 Limitations on Lessors’ Actions Following Termination Any limitations on a lessor’s ability to recover default interest (or the compounding thereof) or to charge additional rent following termination of the lease for default, including where the lessee fails to return the aircraft, should be expressly provided for in the lease agreement in order to be held as valid and enforce - able. The lease has the force of law between the parties, and the courts will respect and uphold a lease as valid
if it does not contain provisions that are contrary to law, morals, public policy or public order. However, Philippine courts may reduce interest and other pen - alty clauses if they find them unconscionable. 2.6.9 Lessor’s Requirement to Pay Taxes/Fees No taxes arise from actions to enforce aircraft leases. However, the lessor must pay filing fees to the court, with the amount depending on the relief sought or the value of the property involved in the case. Moreover, the Philippine High Court has held that only a minimal filing fee shall be paid for the recogni - tion of a foreign judgment, as the subject matter of the action is the foreign judgment itself and not the parties’ claims, which have been decided in another country and should not be relitigated anew. The same rule applies to actions for the recognition of foreign arbitral awards under the New York Convention. 2.6.10 Mandatory Notice Periods The parties must comply with the notice period for termination in the lease agreement, regardless of whether it is an aircraft operated domestically or if it is leased by a domestic operator. The agreement has the force of law between the parties and should be complied with by both parties in good faith. 2.6.11 Lessees’ Entitlement to Claim Immunity Generally, lessees are not entitled to claim immunity, which is available only for the Philippine and foreign governments. Nonetheless, immunity can be waived. 2.6.12 Enforcement of Foreign Arbitral Decisions Since the Philippines has adopted the New York Con - vention, any party to a foreign arbitral award may file an action to recognise and enforce such award sup - ported by: • an authentic copy of the arbitration agreement; • an authentic copy of the arbitral award; and • if applicable, a translation of these documents into English. 2.6.13 Other Relevant Issues An action for the recognition and enforcement of a for - eign arbitral award must be brought within ten years
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