Philippines

The Philippines is not a signatory to any treaty governing the enforcement of foreign judgments. Nonetheless, Philippine jurisprudence and procedural rules recognize their enforceability under the principles of comity, utility and convenience of nations (BPI Securities Corporation v. Guevara, G.R. No. 167052, 11 March 2015; Philippine Aluminum Wheels, Inc., v. FASGI Enterprises, Inc. G.R. No. 1373378, 12 October 2000).

A foreign judgment, however, merely creates a right of action and is not enforceable by execution unless first recognized and enforced by a Philippine court (BPI Securities Corporation v. Guevara, G.R. No. 167052, 11 March 2015; Republic v. Mupas, G.R. No. 181892, 8 September 2015).

An action for recognition of a foreign judgment does not require relitigation of the case on the merits, and once admitted and proven, the judgment may be repelled only by grounds external to its merits, such as lack of jurisdiction, lack of notice, collusion, fraud, or clear mistake of law or fact (Encarnaction v. Johnson, G.R. No. 192285, 11 July 2018). Accordingly, Philippine law recognizes both the right to seek enforcement of foreign judgments and the right to oppose such enforcement on limited grounds (Mijares v. Ranada, G.R. No, 139325, 12 April 2005).

What are the main international treaties or conventions that apply?

The Philippines is currently not a party to any convention or treaty specific to the enforcement of foreign court judgments.

What legal principles apply if there is no applicable international treaty or convention?

Section 48, rule 39 of the Rules of Court and Philippine jurisprudence authorize the enforcement of foreign judgments in the Philippines. While no treaty or international convention obliges the Philippines to recognize foreign judgments, generally accepted principles of international law — incorporated into domestic law by the Constitution’s incorporation clause — require states to recognize foreign judgments, which practice has attained the status of opinio juris in international practice (Mijares v. Ranada, G.R. No. 139325, 12 April 2005).

Recognition and enforcement

A foreign judgment cannot be enforced by a mere writ of execution; the prevailing party must file an action for enforcement in the Philippines.

Allegations required:

• The foreign judgment is final.
• For enforceability:
  • the foreign court had jurisdiction;
  • the parties were properly notified; and
  • there was no collusion, fraud, or clear mistake of law or fact (Republic v. Mupas, G.R. No. 181892, 8 September 2015).
• The judgment is not barred by the statute of limitations.
• The enforcement is not contrary to Philippine public policy (Mijares v. Ranada, G.R. No, 139325, 12 April 2005).

Other procedural requirements:

• Judicial affidavits of witnesses, if any, must be attached.
• Statement of documentary evidence.
• Verification.
• Certification against forum shopping.

Proving the foreign judgment

A foreign judgment must be proven as a fact, either by official publication or by a copy attested by the officer having legal custody of the document (Arreza v. Toyo, G.R. No. 213198, 1 July 2019). If the record is kept abroad, the copy must be certified by the proper diplomatic or consular officer and authenticated by an official seal, unless an authentication treaty (i.e., the Apostille Convention) applies.

The same rules apply to proof of foreign law. In exceptional cases, courts have accepted expert testimony to establish a foreign law, provided the expert testifies in court and quotes the specific foreign law relied upon (Willamete v. Muzzal, G.R. No. L-42538, 21 May 1935; CIR v. Fisher, G.R. No. L-11622, 28 January 1961).

Key defenses

A foreign judgment may be repelled only by evidence of:

• want of jurisdiction;
• want of notice;
• collusion;
• fraud; and
• clear mistake of law or fact (Rules of Court, rule 39, section 48).

Additionally, enforcement may be denied if the foreign judgment is contrary to Philippine public policy (Mijares v. Ranada, G.R. No. 139325, 12 April 2005).

These defenses are external to the merits, as Philippine courts exercise only limited review and may not re-examine the substance of the foreign judgment (BPI Securities Corporation v. Guevara, G.R. No. 167052, 11 March 2015; Minoru Fujiki v. Marinay, G.R. No. 196049, 26 June 2013).

Want of jurisdiction

Jurisdiction is determined by the lex fori of the foreign court that rendered the judgment (Asiavest Merchant Bankers (M) Berhad v. Court of Appeals, G.R. No. 110263, 20 July 2001). Compliance with the foreign jurisdiction’s rules on service suffices even if inconsistent with Philippine rules (St Aviation Services Co v. Grand International Airways Inc, G.R. No. 140288, 23 October 2006). Absent proof, foreign law is presumed identical to Philippine law.

Want of notice

So long as notice and default proceedings are valid under the rules of the foreign jurisdiction, a default judgment may be recognized and enforced in the Philippines (Bankruptcy Estate of Mitich v. Mercantile Insurance Co., Inc., G.R. Nos. 238041 and 238502, 15 February 2022).

Fraud

Fraud must be extrinsic; that is, fraud based on facts not controverted or resolved in the case where judgment is rendered, or that which would go to the jurisdiction of the court or would deprive the party against whom judgment is rendered a chance to defend the action to which they have a meritorious case or defense (Philippine Aluminum Wheels v. Fasgi Enterprises, Inc., G.R. No. 137378, 12 October 2000).

Public policy

Public policy allows Philippine courts to apply local standards to prevent the enforcement of a judgment that is clearly contrary to Philippine constitutional values (Mijares v. Ranada, G.R. No. 139325, 12 April 2005).

Clear mistake of law

This defense was applied in instances when a foreign court failed to apply to the facts of the case fundamental principles of contract (Nagarmull v. Binalbagan-Isabela Sugar Company, Inc., G.R. No. L-22470, 28 May 1970).

Recognition and enforcement

The recognition and enforcement of a foreign arbitral award is governed by the New York Convention and the Special Rules of Court on Alternative Dispute Resolution (SADR). Even a non-convention award may be recognized and enforced on the basis of comity and reciprocity, in the same manner as a convention award.

In recognition proceedings, the Philippine courts are limited to either: (1) recognizing and/or enforcing; or (2) refusing recognition and enforcement of the foreign arbitral award, strictly on the grounds allowed by the SADR. Courts are prohibited from reviewing the arbitral tribunal’s factual findings or interpretation of law (SADR, rule 13.11). Foreign arbitral awards are presumed to have been made and released in due course and are subject to recognition or enforcement by the court (SADR, rule 13.11).

Defenses

A Philippine court may not set aside a foreign award but may refuse its recognition and enforcement on limited grounds, including:

• incapacity of a party to the arbitration agreement;
• arbitration agreement is not valid under the applicable law;
• lack of notice to a party of appointment of arbitrator or of the arbitral proceedings;
• party was unable to present case;
• the award deals with dispute outside or contains decisions on matter outside the scope of the arbitration;
• the composition of arbitral tribunal or the arbitral procedure violated arbitration agreement or contrary to law of seat of arbitration;
• award not yet binding on the parties or has been set aside or suspended by a court in the seat of arbitration; and
• subject matter of the dispute is not capable of settlement by arbitration.

Recognition or enforcement of the award would be contrary to public policy (Special ADR Rules, rule 13.4).

Foreign judgments

Venue. Regional trial court where the plaintiff or defendant resides, or in case of a non-resident defendant, where they may be found, at the election of the plaintiff.

Period to file. An action upon a judgment must be brought within 10 years from the time the right of action accrues (Civil Code, Article 1144). The right of action from a foreign judgment accrues from the date of finality. Note that only foreign judgments that have attained finality may be enforced in the Philippines (Rules of Court, rule 39, section 48).

Filing fee. PHP 2,000 for “all other actions not involving property” (Mijares v. Ranada, G.R. No, 139325, 12 April 2005).

Parties. The claimant must implead the party against whom the foreign judgment is sought to be enforced. A licensed foreign corporation doing business in the Philippines and an unlicensed foreign corporation not doing business in the Philippines may sue before Philippine courts (B. Van Zuiden Bros., Ltd., v. GTVL Manufacturing Industries, Inc. G.R. No. 147905, 28 May 2007).

Timeline. A foreign judgment may be fully enforced within two years. However, possible delays may occur when the Regional Trial Court’s decision is elevated to the Court of Appeals and the Supreme Court. It may take an additional one to three years per appellate level.

A summary judgment may be possible when, based on pleadings, supporting affidavits, depositions, and admissions, there is no genuine issue as to any material fact, and the moving party is entitled to a judgment as a matter of law, the court may render a summary judgment (Rules of Court, rule 35).

Foreign award

Venue. At the option of the petitioner, it may be filed in the Regional Trial court:

• where the assets are located;
• where the act will be performed;
• where any party resides or the principal place of business is located; or
• in the National Capital Region (SADR, rule 13.3).

Period to file. Any party to a foreign arbitration may petition the court to recognize and enforce the foreign award anytime from receipt of the award (SADR, rule 13.1 and 13.2).

Filing fees. The minimal filing fee in “all actions not involving property” apply to a petition for enforcement of a foreign award under the New York Convention (SADR, rule 20.1).

Contents of the petition. Must include:

• Addresses of the parties to the arbitration.
• The seat of arbitration and whether it is party to the New York Convention.
• The relief sought.
• The following shall be attached:
  • authentic copy of the arbitration agreement;
  • authentic copy of the foreign award; and
  • certified translation of the foreign award and arbitration agreement or submission if not made in English (SADR, rule 13.5).

Notice. The court will cause the delivery of a notice and a copy of the petition to the respondent, allowing them to file an opposition within 30 days (SADR, rule 13.6).

General procedure:

• If the issues are mainly legal, the court may require the parties to submit legal briefs discussing the legal issues and the legal basis for the relief prayed for.
• If there are issues of fact, parties will simultaneously submit affidavits and supporting document of all their witnesses.
• Hearing is not mandatory and will be required only if necessary, based on the petition, opposition, and affidavits. Affidavits shall take the place of direct testimonies and witnesses will be immediately subject to cross-examination (SADR, rules 13.8 and 13.9).
• Unless a ground to refuse recognition is fully established, the court shall recognize and enforce the foreign award (SADR, rule 13.11).
• The prevailing party in a petition for recognition, enforcement, or confirmation is entitled to an award of costs, which includes reasonable attorney’s fees against the unreasonable unsuccessful party (SADR, rules 21.3 and 21.4).

Timeline. A final award may be recognized and enforced within two years. However, possible delays may occur when the Regional Trial Court’s decision is elevated to the Court of Appeals and the Supreme Court. It may take an additional one to three years per appellate level.

As a general rule, domestic judgments recognizing a foreign judgment may be executed only upon finality. Unless immediately executory (e.g., judgments in injunction, receivership, accounting, support), execution is stayed by appeal (Rules of Court, rule 39, section 4).

The judgment recognizing or enforcing a foreign judgment is a domestic judgment subject to available remedies, as detailed below.

Before finality

Motion for new trial. An aggrieved party may move the trial court to set aside the judgment and grant a new trial for the following causes materially affecting substantial rights:

• fraud, accident, mistake, or excusable negligence which impaired the rights of the aggrieved party; or
• newly discovered evidence that would probably alter the result (Rules of Court, rule 37, section 1(a)).

Motion for reconsideration. An aggrieved party may also move for reconsideration on the following grounds:

• damages awarded are excessive;
• the evidence is insufficient to justify the domestic judgment; or
• the domestic judgment is contrary to law (Rules of Court, rule 37, section 1 (b)).

Appeal. An appeal is a remedy obtained from a next-level higher court seeking reversal or modification of a domestic judgment rendered by an inferior court. Only judgments that completely dispose of the case or a matter therein may be the subject of an appeal (Rules of Court, rule 41, section 1).

Ordinary appeal is made to the Court of Appeals, while an appeal by certiorari may be elevated to the Supreme Court only on questions of law (Rules of Court, rule 41, section 2).

After finality

Petition for relief from judgment, orders, or other proceedings. An aggrieved party is allowed to file a petition in the same court and in the same case seeking to set aside the proceeding due to fraud, accident, mistake, or excusable negligence, and filed within 60 days from knowledge and not more than six months from entry (Mercury Drug Corporation v. CA, G.R. No. 138571, 13 July 2000).

Annulment of judgment. Availed on the grounds of extrinsic fraud and lack of jurisdiction or denial of due process when the ordinary remedies of new trial, appeal, petition for relief, or other appropriate remedies are no longer available through no fault of the aggrieved party (Rules of Court, rule 47, section 1).

Challenging the writ of execution. Although execution of final judgment is a matter of right, it may be stayed by the happening of a supervening event that alters or modifies the situation of the parties under the decision as to render the execution inequitable, impossible, or unfair (Heirs of Maravilla v. Tupas, G.R. No. 192132, 14 September 2016). Moreover, a writ of execution must substantially conform to the judgment and any expansion thereof is invalid (Titan Dragon Properties Corporation v. Galenzoga, G.R. No. 246088, 28 April 2021).

During the pendency of the recognition proceedings

While recognition proceedings are pending, a party’s asset position may be determined through publicly available records, subject to data privacy law. Information may be obtained from:

• The Securities and Exchange Commission (corporate assets);
• Land Transportation Office, Maritime Industry Authority, and Civil Aviation Authority of the Philippines (vehicles, vessels, aircraft);
• Registry of Deeds (real property);
• Philippine Personal Property Security Registry (personal property used as security);
• Intellectual Property Office (IP rights);
• Mines and Geosciences Bureau (mining agreements and rights); and
• Government Procurement Policy Boards portal (government contracts).

Bank deposits are generally protected by bank secrecy laws (R.A. 1405 and R.A. 6426) and may be disclosed only with the depositor’s written consent. For peso accounts, disclosure may additionally be made in limited cases, such as impeachment, bribery, or dereliction cases, litigation involving the deposit, money laundering law violations, or ombudsman inquiries.

A party may also engage a private investigator to determine the asset position of a counterparty through legal means. Evidence obtained in violation of a right or those that are privileged may be excluded.

Upon execution of a final judgment

Once judgment becomes final and executory, asset discovery may be done through an examination conducted in court or before a commissioner. Non-compliance may be punished for contempt (Rules of Court, rule 39, section 38).

Examination of judgment debtor

When the writ of execution is not fully satisfied, the judgment creditor may seek the examination of the judgment debtor regarding their property and income, subject to venue limitations (Rules of Court, rule 39, section 36).

Examination of debtor of judgment debtor

When the writ of execution is not fully satisfied, a person or entity holding the debtor’s property or owing debts may likewise be examined in court or before a commissioner. The service of the court’s order of examination shall bind the property and credits in the debtor’s possession from the time said order is served (Rules of Court, rule 39, section 37).

Garnishment order and notice of levy

The sheriff or court officer may serve garnishment orders to banks and notices of levy at the Register of Deeds.

During litigation, a party’s assets may be provisionally frozen or attached as security for the satisfaction of a possible judgment through a writ of preliminary attachment, which may be applied for at the commencement of the action or before entry of judgment (Rules of Court, rule 51, section 1).

A writ of preliminary attachment may be issued in cases involving:

• recovery of a specified amount;
• embezzled money or property;
• fraudulently taken, detained, converted, or concealed property;
• fraud in contracting or performing obligations;
• disposition of property to defraud creditors; or
• non-resident defendant.

Such a writ is enforceable nationwide and authorizes the attachment of non-exempt properties of the adverse party sufficient to satisfy the claim. Multiple writs may be issued simultaneously to sheriffs in different judicial regions (Rules of Court, rule 51, section 2).

Once issued, a writ of execution directs the sheriff or court officer to enforce the writ according to its terms, and as follows:

• if against the property of the judgment obligor – satisfy the judgment, with interest, out of the real or personal property of such judgment obligor;
• if against real or personal property in the hands of representatives of the judgment obligor – satisfy the judgment, with interest, out of such property;
• if for the sale of real or personal property – sell such property and apply the proceeds in conformity with the judgment; and
• if for the delivery of the possession of real or personal property – deliver the possession of the same to the entitled party, and to satisfy any costs, damages, rents, or profits covered by the judgment out of the personal property of the person against whom it was rendered, and if sufficient personal property cannot be found, then out of the real property (Rules of Court, rule 39, section 8).

Enforcement of judgments for money

A money judgment may be executed by any of the following modes.

Immediate payment

The sheriff or court officer will issue a demand on the judgment debtor to immediately pay the full amount stated in the writ of execution in cash, certified bank check, or any other acceptable form, payable to the judgment creditor or, in their absence, to the sheriff, together with lawful fees (Rules of Court, rule 39, section 9(a)).

Bank accounts

If on-hand funds are insufficient, the sheriff may garnish bank accounts that are not exempt from execution. Foreign currency denominated deposits in Philippine banks are expressly exempt from attachment and garnishment under Republic Act No. 6426 and, thus, from effective execution. Garnishment shall cover only deposits sufficient to satisfy the judgment and lawful fees (Rules of Court, rule 39, section 9(b)).

Shares

The sheriff may levy on shares, debts, credits, and other personal or real property interests not exempt from execution, selling only what is necessary to satisfy the judgment. The judgment debtor may designate properties to be levied; otherwise, personal property is preferred (Rules of Court, rule 39, section 9(b)).

Debts due to the judgment debtor from third parties

Debts due to the judgment debtor and other credits in the possession or control of third parties, including financial interests, royalties, and commissions, may be garnished by serving notice, limited to such amount sufficient to satisfy the judgment (Rules of Court, rule 39, section 9(c)).

Real estate

Where personal property is insufficient, real property not exempt from execution may be levied and sold to satisfy judgment, subject to the same limits on the amount and preference (Rules of Court, rule 39, section 9(b)).

If the judgment requires the delivery or restitution of real property, the sheriff demand peaceful surrender within three working days. Otherwise, forced eviction may be resorted with assistance from peacekeeping forces, if necessary. Any costs, damages, rents or profits awarded by the judgment shall be satisfied in the same manner as a judgment for money (Rules of Court, rule 39, section 10(c)).

Movable property

In case the judgment debtor has insufficient funds to pay the judgment obligation, the sheriff or court officer may levy personal property or an interest in real or personal property.

The sheriff or court officer shall only sell a sufficient portion of the properties levied upon to satisfy the judgment and lawful fees. The judgment debtor may choose which properties may be levied upon or, if no choice is made, the sheriff or court officer shall first levy on personal properties (Rules of Court, Rule 39, section 9(b)).

If the judgment requires the delivery of personal property, the sheriff or court officer shall take possession of the personal property and deliver it to the judgment creditor (Rules of Court, rule 39, section 10(e)).

As a general rule, enforcement is limited to assets owned or registered in the judgment debtor’s name.

However, it may be possible, with prior judicial authorization, to attach the assets held by another person on the grounds of piercing the corporate veil or alter ego. The doctrine of piercing the corporate veil applies only in three basic areas, namely: (1) to defeat public convenience as when the corporate fiction is used as a vehicle for the evasion of an existing obligation; (2) fraud cases or when the corporate entity is used to justify a wrong, protect fraud, or defend a crime; or (3) alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation (ABS-CBN Broadcasting Corporation v. Hilario, G.R. No. 193136, 10 July 2019).

The judgment creditor may likewise seek rescission of contracts entered into in fraud of creditors to prevent collection of lawful claims (Civil Code, Article 1381(3)).

A court will allow enforcement against the assets jointly owned by the judgment debtor and a third party. However, the execution is limited to the extent of the judgment debtor’s share or interest in that joint property. The reason is that a co-owner’s ownership is limited to their part of the property, and any alienation of the property is limited to the portion allotted to them in the division upon the termination of co-ownership (Civil Code, Article 493). Additionally, if the property is jointly owned by spouses, execution against such property may be undertaken only, in some instances, to the extent that the debt redounded to the benefit of the family (Family Code, Articles 94, 121, 122).