Philippine Supreme Court Refuses Confirmation of Domestic Arbitral Award on Public Policy Grounds

Philippine courts are generally allowed to vacate or set aside an arbitral award issued in a domestic arbitration or an international commercial arbitration seated in the Philippines if it has been clearly shown that the award suffers from any of the infirmities or grounds for vacating an award under:

1. for arbitral awards issued in a domestic arbitration: Section 24 of Republic Act No. 876 or the Domestic Arbitration Law ("Domestic Arbitration Law"), Rule 34 of the UNCITRAL Model Law on International Commercial Arbitration ("Model Law"), or Rules 11.4 and 19.10 of A.M. No 07-11-08-SC or the Special Rules of Court on Alternative Dispute Resolution ("ADR Rules"); or
2. for arbitral awards issued in international arbitrations seated in the Philippines: Rule 34 of the Model Law or Rules 12.4 and 19.10 of the ADR Rules.

 These grounds include if the recognition or enforcement of the arbitral award would be contrary to Philippine public policy. This rule is similar to Article V(2)(b) of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention"), which allows a court to refuse the recognition or enforcement of a foreign arbitral award if doing so would be contrary to the public policy of the country where enforcement is sought.

 In a Decision published on 22 May 2023 in Maynilad Water Services Inc. v. National Water and Resources Board et al. (G.R. Nos. 181764, 187380, 207444, 208207, 210147, 213227, 219362, and 239938, December 7, 2021), the Philippine Supreme Court ("SC"), sitting en banc, refused to confirm a domestic arbitral award as its confirmation or recognition would violate Philippine public policy. The SC also confirmed that the ADR Rules superseded the provisions of the Domestic Arbitration Law on the reglementary period for filing petitions for confirmation of domestic arbitral awards.

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