PHILIPPINES Law and Practice Contributed by: Valeriano Del Rosario, Daphne Ruby Grasparil, Patrick Sarmiento and Maria Francesca Bautista, VeraLaw
Insolvency Act of 2010 (FRIA). FRIA provides proce - dures for the different types of rehabilitation and liq - uidation proceedings. Under FRIA, when a petition is filed and commenced by or against a distressed debtor, a stay or suspension order is issued and has the following effects: • it suspends all actions or proceedings, in court or otherwise, for the enforcement of claims against the debtor; • it suspends all actions to enforce any judgment, attachment or other provisional remedies against the debtor; • it prohibits the debtor from selling, encumbering, transferring or disposing of, in any manner, any of its properties except in the ordinary course of busi - ness; and • it prohibits the debtor from making any payment of its liabilities outstanding as of the commencement date, except as may be provided therein. The suspension order under FRIA takes precedence over admiralty proceedings filed against the dis - tressed owner. As such, the admiralty proceedings will be suspended and cannot continue without an order from the insolvency court. 5.12 Damages in the Event of Wrongful Arrest of a Vessel To apply for a Warrant of Arrest, the applicant is required to give a bond or security executed in favour of the Admiralty Court in the amount of 30% of the claim (but in no case less than PHP5 million). This bond is conditioned on the arresting party paying all the costs which may be adjudged to the adverse party and all damages which the adverse party may sustain by reason of the arrest, if the court finally adjudges that the applicant was not entitled thereto. 6. Passenger Claims 6.1 Laws and Conventions Applicable to the Resolution of Passenger Claims The Philippines is not a signatory to any international conventions relating to maritime passenger claims. For claims such as these, the Philippines relies on
the New Civil Code provisions as well as the Code of Commerce. Under the New Civil Code, for contractual breaches, the prescriptive period is ten years from the date the cause of action arose. For actions based on tort, the time bar is four years. The personal injury of a passenger is considered a maritime claim. Article 587 of the Code of Commerce, as elaborated by Supreme Court jurisprudence, pro - vides that ship-owners may be held liable for the indemnities in favour of third persons arising from the conduct of the captain in relation to transported goods, as well as for the safety of passengers. How - ever, the same provision provides that the owner may exempt itself and limit liability by abandoning the ves - sel (including its equipment and freight it may have earned). Furthermore, for cases of cancelled, delayed or uncompleted voyages, MARINA has issued Memo - randum Circular No 7, series of 2018, which lists the rights of passengers and obligations of domestic operators. 7. Enforcement of Law and Jurisdiction and Arbitration Clauses 7.1 Enforcement of Law and Jurisdiction Clauses Stated in Bills of Lading The choice of law and jurisdiction in the Philippines is subject to the doctrine of forum non conveniens; ie, a court, in conflict-of-laws cases, may refuse jurisdic - tion where it is not the most convenient or available forum, and the parties are not precluded from seeking remedies elsewhere. In determining the applicability of said doctrine, the court considers the “connecting factors” such as the situs of the res, the place where the deal was executed, the place of performance or the place of wrongdoing. 7.2 Enforcement of Law and Arbitration Clauses Incorporated Into a Bill of Lading As a rule, the Philippines recognises arbitration as a means of resolving civil disputes. Parties may agree to enter arbitration either through an arbitration agree - ment contained in a contract between the parties or through a submission agreement. As such, an arbitra -
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