PHILIPPINES Trends and Developments Contributed by: Rowena L Garcia-Flores, Patricia Kay L. Tysmans-Clemente, Joseph Anthony I. Malaya and Roslyn Bianca R. Mangaser, Angara Abello Concepcion Regala & Cruz (ACCRALAW)
In contrast, while it is presumed that a foreign arbitral award is made and released in due course of arbi- tration and is subject to enforcement by the court, there are limited instances when a court can refuse its enforcement. Similarly, the Special ADR Rules provide that the Phil- ippine court may refuse the recognition and enforce- ment of a foreign arbitral award when it finds that its recognition and enforcement would be contrary to public policy. However, the Supreme Court has previ- ously emphasised that not all violations of law may be deemed contrary to public policy. In the case of Mabuhay Holdings Corporation v Sembcorp Logistics Limited , GR No 212734, 5 December 2018 ( Mabuhay ), the Supreme Court adopted the majority and narrow approach that a foreign arbitral award may only be refused when its enforcement would be against “the fundamental tenets of justice and morality, or would blatantly be injurious to the public, or the interests of the society”. Thus, mere errors in the interpretation of the law or factual findings would not suffice to warrant refusal of enforcement under the public policy ground. In Mabuhay , the Supreme Court similarly emphasised that the restrictive approach to public policy neces- sarily implies that not all violations of the law may be deemed contrary to public policy. This principle finds further application in GS Yuasa Corporation v Ramcar, Inc , GR No 252787, 7 May 2025 ( GS Yuasa ), where the Supreme Court held that the determination of whether one is a real party-in-interest of the matter in a dis- pute is a question of fact and/or law that falls outside the scope of judicial review under the rules. While the Supreme Court did set aside the arbitral tribunal’s findings on a certain issue that was not included in the
Amended Terms of Reference, it nonetheless upheld the remainder of the arbitral award. This decision reaf- firms the Court’s consistent adherence to the principle of limited judicial intervention in arbitral proceedings and its recognition of the autonomy and finality inher- ent in arbitration. This is consistent with the case of Pioneer Insurance & Surety Corporation v the Insurance Company, Suc- cessor by Merger to Clearwater Insurance Company , GR No 256177, 27 June 2022 ( Pioneer ), where the Supreme Court expounded on the requirement for raising such ground. A party asserting the violation of public policy is now required to: • identify the State’s fundamental tenets of justice and morality; • prove the illegality or immorality of the award; and • show the possible injury to the public or the inter- ests of society. In Pioneer , the Supreme Court denied the petition to vacate the arbitral award as Pioneer failed to prove the illegality or immorality of the award. The Supreme Court further found that, while the final award would significantly affect Pioneer, it would not injure the pub- lic or compromise society’s interests. While there is still no ruling by the Supreme Court refusing the enforcement or recognition of a foreign arbitral award due to public policy considerations, the authors would not be surprised if this changed in light of the Supreme Court’s rulings in the Maynilad and District of Benguet .
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