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Assignment May 17 - Valdevieso

This document summarizes a case between Tuna Processing, Inc. (TPI) and Philippine Kingford, Inc. TPI won an arbitration case against Kingford in California to enforce a contract. TPI then filed to confirm the arbitral award in Philippine courts. The court initially dismissed the case claiming TPI lacked legal capacity to sue as a foreign corporation not licensed to do business in the Philippines. However, the ruling found that as a special law, the ADR Act of 2004 allows foreign corporations to enforce foreign arbitral awards in Philippine courts, overriding the general Corporation Code. The New York Convention grounds for opposing enforcement do not include lack of capacity to sue. By agreeing to arbitration, Kingford conceded TPI's

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54 views1 page

Assignment May 17 - Valdevieso

This document summarizes a case between Tuna Processing, Inc. (TPI) and Philippine Kingford, Inc. TPI won an arbitration case against Kingford in California to enforce a contract. TPI then filed to confirm the arbitral award in Philippine courts. The court initially dismissed the case claiming TPI lacked legal capacity to sue as a foreign corporation not licensed to do business in the Philippines. However, the ruling found that as a special law, the ADR Act of 2004 allows foreign corporations to enforce foreign arbitral awards in Philippine courts, overriding the general Corporation Code. The New York Convention grounds for opposing enforcement do not include lack of capacity to sue. By agreeing to arbitration, Kingford conceded TPI's

Uploaded by

Mark Jerome Valdevieso
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1.

There is one important rule that you will encounter three


times verbatim as you read through Rule 11, Rule 12 and Rule 13 of
the Special ADR Rules. What is that one-sentence rule? – It is common
under Rules 11, 12 and 13 of the Special ADR Rules that there is a Presumption
that an arbitral award was made and released in due course of
arbitration and is subject to confirmation by the court.

Tuna Processing, Inc. vs. Philippine Kingford, Inc.

Facts: Philippine Kingford, a corporation duly organized and existing under the
laws of the Philippines, entered into a Memorandum of Agreement with Yamaoka,
a foreign corporation not licensed to do business in the Philippines. The former
undertook to enforce the latter’s patent, grant licenses under the same, collect
royalties, and to establish Tuna Processors, Inc (TPI).

By reason of events not mentioned in this case, Kingford withdrew from


TPI and correspondingly reneged on its obligations. TPI submitted the dispute for
arbitration before the International Centre for Dispute Resolution in California
and won the case against Kingford.

To enforce the award, TPI filed a Petition for Confirmation, Recognition,


and Enforcement of Foreign Arbitral Award before the RTC. However, the RTC
dismissed the Petition on the ground that TPI lacked legal capacity to sue in the
Philippines following the provisions of Sec. 133 of the Corporation Code.

Issue: w/n a foreign corporation not licensed to do business in the Philippines,


but which collects royalties from entities in the Philippines, can sue before the
Philippine courts to enforce a foreign arbitral award – Yes

Ruling: ADR Act of 2004 is a law especially enacted to actively promote party
autonomy in the resolution of disputes or the freedom of the party to make their
own arrangements to resolve their disputes. It specifically provides exclusive
grounds available to the party opposing an application for recognition and
enforcement of the arbitral award. The Corporation Code is the general law
providing for the formation, organization and regulation of private corporations.
As between a general and special law, the latter shall prevail.

Sec. 45 of the ADR Act of 2004 provides that the opposing party in an
application for recognition and enforcement of the tribunal award may raise only
enumerated under the New York Convention. However, not one of the
enumerated exclusive grounds under the New York Convention touched on the
capacity to sue of the party seeking the recognition and enforcement of the
award.

The Special Rules of Court on Alternative Dispute Resolution provides that


any party to a foreign arbitration may petition the court to recognize and enforce
a foreign arbitral award. Indeed, it is in the best interest of justice that in the
enforcement of a foreign arbitral award, the losing party can not avail of the rule
that bars foreign corporations not licensed to do business in the Philippines from
maintaining a suit in our courts. When a party enters into a contract containing
a foreign arbitration clause and, as in this case, in fact submits itself to
arbitration, it becomes bound by the contract, by the arbitration and by the result
of arbitration, conceding thereby the capacity of the other party to enter into the
contract, participate in the arbitration and cause the implementation of the result.

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