Shipping 2026

PHILIPPINES Law and Practice Contributed by: Valeriano Del Rosario, Daphne Ruby Grasparil, Patrick Sarmiento and Maria Francesca Bautista, VeraLaw

tion clause appearing on the face of a bill of lading is legally binding and enforceable in the Philippines. For purposes of arbitration, the parties’ stipulation as to the choice of law in their agreement shall govern the substance of the dispute. 7.3 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards The recognition and enforcement of a foreign arbitral award in the Philippines is governed by the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and Administrative Matter No 07-11-08-SC promulgated by the Supreme Court of the Philippines (otherwise known as the “Special ADR Rules”) and its implementing Rules and Regula - tions. 7.4 Arrest of Vessels Subject to Foreign Arbitration or Jurisdiction Rule 5 of Administrative Matter No 07-11-08-SC men - tioned in 7.3 New York Convention on the Recog- nition and Enforcement of Foreign Arbitral Awards states: “a party to an arbitration agreement may peti - tion the court for interim measures of protection”. Among other relief, the applicant may seek security for the claim by means of a writ of preliminary attach - ment. 7.5 Domestic Arbitration Institutes There is no domestic arbitration institute in the Philip - pines that specialises in maritime claims. There are, however, several capable domestic arbitration insti - tutes in the Philippines such as the Philippine Institute of Arbitrators, the Philippine International Center for Conflict Resolution, and the Philippine Dispute Reso - lution Center, Inc, with arbitrators who have experi - ence in handling maritime claims. 7.6 Remedies Where Proceedings Are Commenced in Breach of Foreign Jurisdiction or Arbitration Clauses Rule 5 of Administrative Matter No 07-11-08-SC men - tioned in 7.3 New York Convention on the Recog- nition and Enforcement of Foreign Arbitral Awards states: “a party to an arbitration agreement may peti - tion the court for interim measures of protection”.

Among other relief, the applicant may seek an injunc - tion directed against the party to the arbitration.

8. Ship-Owners’ Income Tax Relief 8.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies Republic Act No 10378 provides that international car - riers are now only liable for paying the 3% common carrier’s tax imposed on cargo, but not on passen - gers. The Bureau of Internal Revenue has also issued Revenue Regulation No 15-2015, which exempts from value-added tax (VAT) the transport of passengers and cargo by international carriers doing business in the Philippines. The sale, importation or lease of passen - ger or cargo vessels including engines, equipment and spare parts thereof for domestic or international transport operations is also VAT-exempt, subject to the requirements of MARINA. 9. Implications of Non-Performance, IMO 2020, Trade Sanctions and International Conflict 9.1 Force Majeure and Frustration There is no concept of “frustration” under Philippine law, and therefore the New Civil Code would provide the guiding principles in the event of late delivery, non- arrival, or slow loading or unloading. During the COVID-19 pandemic, the courts addressed issues such as these by referring to the contract’s provisions on force majeure and the wording of the exempting circumstances. If the term “force majeure” was not contractually defined, the New Civil Code would be referred to. Article 1174 thereof provides that there must be extraordinary events that “could not be foreseen” or, even if foreseen, were inevita - ble. Jurisprudence further elaborates that, to invoke force majeure, it is necessary that the occurrence was independent of human will and that the event made it impossible for the party responsible to fulfil the obliga - tion in a normal manner. Lastly, the party responsible for fulfilling the obligation should not have done any - thing to aggravate the injury or damage to the other party.

503 CHAMBERS.COM