PHILIPPINES Law and Practice Contributed by: Valeriano Del Rosario, Daphne Ruby Grasparil, Patrick Sarmiento and Maria Francesca Bautista, VeraLaw
the Recognition and Enforcement of Foreign Arbitral Awards states: “A party to an arbitra - tion agreement may petition the court for interim measures of protection.” Among other relief, the applicant may seek security for the claim by means of a writ of a preliminary attachment. 6.5 Domestic Arbitration Institutes There is no domestic arbitration institute in the Philippines that specialises in maritime claims. There are, however, several capable domestic arbitration institutes in the Philippines such as the Philippine Institute of Arbitrators, the Philip - pine International Center for Conflict Resolution, and the Philippine Dispute Resolution Center, Inc., with arbitrators who have experience han - dling maritime claims. 6.6 Remedies Where Proceedings Are Commenced in Breach of Foreign Jurisdiction or Arbitration Clauses Rule 5 of Administrative Matter No 07-11-08- SC mentioned in 6.3 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards states: “A party to an arbitra - tion agreement may petition the court for interim measures of protection.” Among other relief, the applicant may seek an injunction directed against the party to the arbitration. 7. Ship-Owners’ Income Tax Relief 7.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies Republic Act No 10378 provides that interna - tional carriers are now only liable for paying the 3% common carrier’s tax imposed on cargo, but not on passengers. 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 passenger 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. 8. Implications of Non- Performance, the IMO 2020, Trade Sanctions and the War in Ukraine 8.1 Force Majeure and Frustration There is no concept of “frustration” under Phil - ippine 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 pandemic, the courts addressed issues such as these by referring to the con - tract’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 fore - seen” or, even if foreseen, were inevitable. Juris - prudence 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 obligation in a normal manner. Lastly, the party responsible for fulfilling the obligation should not have done anything to aggravate the injury or damage to the other party. Articles 1266 and 1267 of the Civil Code also provide that a person responsible for fulfilling an obligation is released from it if, without that person’s fault, the obligation becomes legally or physically impossible or if the difficulty of fulfill -
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