PHILIPPINES Law and Practice Contributed by: Ricardo Ma P G Ongkiko, John Christian Joy A Regalado and Ma Patricia B Paz-Jacoba, SyCip Salazar Hernandez & Gatmaitan
to the arbitration is disregarded – and the corporate veil pierced – on grounds recognised by Philippine law and jurisprudence. In Playinn, Inc v Prudential Guarantee and Assurance, Inc (GR No 254764, 29 November 2023), the Supreme Court held that a third-party beneficiary of a contract may invoke the arbitration clause contained therein (citing Coquia v Fieldmen’s Insurance Company, Inc , GR No L-23276, 29 November 1968 and Bases Con- version Development Authority v DMCI Project Devel- opers, Inc , GR No 173137, 11 January 2016). In The Consortium of Hyundai Engineering Co, Ltd v National Grid Corporation of the Philippines (GR 214743 and 248753, 4 December 2023), the Supreme Court ruled that a non-party to a construction con - tract containing an arbitration clause can be bound by such clause, depending on the non-party’s ties to the subject contract. Thus, where there is a “substantial and significant connection” between the third-party sought to be impleaded and the construction con - tract subject of the arbitration, the third-party may be bound by the arbitration agreement contained therein. Jurisdiction of Philippine Courts Over Foreign Third Parties Philippine courts may bind foreign third parties only if they acquire jurisdiction over such third parties. In ordinary court actions, if the defendant is a foreign pri - vate juridical entity doing business in the Philippines, summons may be served on its resident agent. If the defendant has no such resident agent, summons may be served on any of its officers, directors or trustees within the Philippines or a government official desig - nated by law.
If the foreign private juridical entity is not registered in the Philippines and does not have a resident agent, but has transacted or is doing business in the Phil - ippines, Philippine courts may authorise the service of summons outside the Philippines in the following ways: • by personal service coursed through the appropri - ate foreign court, with the assistance of the Philip - pine Department of Foreign Affairs; • by publication in a newspaper in general circulation in the country where the defendant may be found and, at the same time, by serving a copy of the summons and the court order by registered mail at the defendant’s last known address; • by facsimile; • by electronic means with proof of service; or • by such other means as the court may direct at its discretion. Significantly, Rule 22.1 of the Special ADR Rules expressly provides that the provisions of the Philip - pine Rules of Court that apply to petitions under the Special ADR Rules have either been included and incorporated in the Special ADR Rules or specifically referred to therein. The above-mentioned rules on methods for the acquisition of jurisdiction by Philip - pine courts have not been included and incorporated in the Special ADR Rules, nor specifically referred to therein. Indeed, Rule 1.9 even provides that “in cases covered by the Special ADR Rules, a court acquires authority to act on the petition or motion upon proof of jurisdictional facts, ie, that the respondent was fur - nished a copy of the petition and the notice of hear - ing”. Consequently, since the technical rules on ser - vices of summons do not apply to these proceedings, “the method of service resorted to must be such as to reasonably ensure receipt thereof by the respondent to satisfy the requirement of due process”.
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