- Background and objectives. The Licensor, co-owner of U.S.Patent No. 5,484,619, Philippine Patent No. 31138, and Indonesian Patent No. ID0003911 xxx wishes to form an alliance with Sponsors for purposes of enforcing his three aforementioned patents, granting licenses under those patents, and collecting royalties.
The Sponsors wish to be licensed under the aforementioned patents in order to practice the processes claimed in those patents in the United States, the Philippines, and Indonesia, enforce those patents and collect royalties in conjunction with Licensor.xxx
- Establishment of Tuna Processors, Inc. The parties hereto agree to the establishment of Tuna Processors, Inc. (“TPI”), a corporation established in the State of California, in order to implement the objectives of this Agreement.
- Bank account. TPI shall open and maintain bank accounts in the United States, which will be used exclusively to deposit funds that it will collect and to disburse cash it will be obligated to spend in connection with the implementation of this Agreement.
- Ownership of TPI. TPI shall be owned by the Sponsors and Licensor. Licensor shall be assigned one share of TPI for the purpose of being elected as member of the board of directors. The remaining shares of TPI shall be held by the Sponsors according to their respective equity shares. 9
xxx
13.1 Within thirty (30) days from the date of transmittal of this Award to the Parties, pursuant to the terms of this award, the total sum to be paid by RESPONDENT KINGFORD to CLAIMANT TPI, is the sum of ONE MILLION SEVEN HUNDRED FIFTY THOUSAND EIGHT HUNDRED FORTY SIX DOLLARS AND TEN CENTS ($1,750,846.10).
(A) For breach of the MOA by not paying past due assessments, RESPONDENT KINGFORD shall pay CLAIMANT the total sum of TWO HUNDRED TWENTY NINE THOUSAND THREE HUNDRED AND FIFTY FIVE DOLLARS AND NINETY CENTS ($229,355.90) which is 20% of MOA assessments since September 1, 2005[;]
(B) For breach of the MOA in failing to cooperate with CLAIMANT TPI in fulfilling the objectives of the MOA, RESPONDENT KINGFORD shall pay CLAIMANT the total sum of TWO HUNDRED SEVENTY ONE THOUSAND FOUR HUNDRED NINETY DOLLARS AND TWENTY CENTS ($271,490.20)[;]14 and
(C) For violation of THE LANHAM ACT and infringement of the YAMAOKA 619 PATENT, RESPONDENT KINGFORD shall pay CLAIMANT the total sum of ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS AND NO CENTS ($1,250,000.00). xxx
xxx15
Sec. 133. Doing business without a license. - No foreign corporation transacting business in the Philippines without a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines; but such corporation may be sued or proceeded against before Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws.
Herein plaintiff TPIs “Petition, etc.” acknowledges that it “is a foreign corporation established in the State of California” and “was given the exclusive right to license or sublicense the Yamaoka Patent” and “was assigned the exclusive right to enforce the said patent and collect corresponding royalties” in the Philippines. TPI likewise admits that it does not have a license to do business in the Philippines.
There is no doubt, therefore, in the mind of this Court that TPI has been doing business in the Philippines, but sans a license to do so issued by the concerned government agency of the Republic of the Philippines, when it collected royalties from “five (5) Philippine tuna processors[,] namely[,] Angel Seafood Corporation, East Asia Fish Co., Inc., Mommy Gina Tuna Resources, Santa Cruz Seafoods, Inc. and respondent Philippine Kingford, Inc.” This being the real situation, TPI cannot be permitted to maintain or intervene in any action, suit or proceedings in any court or administrative agency of the Philippines.” A priori, the “Petition, etc.” extant of the plaintiff TPI should be dismissed for it does not have the legal personality to sue in the Philippines.21
In the present case, enforcement has been effectively refused on a ground not found in the [Alternative Dispute Resolution Act of 2004], New York Convention, or Model Law. It is for this reason that TPI has brought this matter before this most Honorable Court, as it [i]s imperative to clarify whether the Philippines international obligations and State policy to strengthen arbitration as a means of dispute resolution may be defeated by misplaced technical considerations not found in the relevant laws.24
Simply put, how do we reconcile the provisions of the Corporation Code of the Philippines on one hand, and the Alternative Dispute Resolution Act of 2004, the New York Convention and the Model Law on the other?
Korugas invocation of the provisions of the Corporation Code is misplaced. In an earlier case with similar antecedents, we ruled that:“The Corporation Code, however, is a general law applying to all types of corporations, while the New Central Bank Act regulates specifically banks and other financial institutions, including the dissolution and liquidation thereof. As between a general and special law, the latter shall prevail - generalia specialibus non derogant.” (Emphasis supplied)26
Without doubt, the Corporation Code is the general law providing for the formation, organization and regulation of private corporations. On the other hand, RA 6657 is the special law on agrarian reform. As between a general and special law, the latter shall prevail—generalia specialibus non derogant.28
SEC. 42. Application of the New York Convention. - The New York Convention shall govern the recognition and enforcement of arbitral awards covered by the said Convention.
xxx
SEC. 45. Rejection of a Foreign Arbitral Award. - A party to a foreign arbitration proceeding may oppose an application for recognition and enforcement of the arbitral award in accordance with the procedural rules to be promulgated by the Supreme Court only on those grounds enumerated under Article V of the New York Convention. Any other ground raised shall be disregarded by the regional trial court.
Sec. 19. Adoption of the Model Law on International Commercial Arbitration. International commercial arbitration shall be governed by the Model Law on International Commercial Arbitration (the “Model Law”) adopted by the United Nations Commission on International Trade Law on June 21, 1985 xxx.”
Article V
1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:
(a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or
(b) The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or
(c) The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or
(d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or
(e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.
2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:
(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
(b) The recognition or enforcement of the award would be contrary to the public policy of that country.
xxx Arbitration, as an alternative mode of settlement, is gaining adherents in legal and judicial circles here and abroad. If its tested mechanism can simply be ignored by an aggrieved party, one who, it must be stressed, voluntarily and actively participated in the arbitration proceedings from the very beginning, it will destroy the very essence of mutuality inherent in consensual contracts.38
[I]t must be remembered that [the principle of hierarchy of courts] generally applies to cases involving conflicting factual allegations. Cases which depend on disputed facts for decision cannot be brought immediately before us as we are not triers of facts.44 A strict application of this rule may be excused when the reason behind the rule is not present in a case, as in the present case, where the issues are not factual but purely legal. In these types of questions, this Court has the ultimate say so that we merely abbreviate the review process if we, because of the unique circumstances of a case, choose to hear and decide the legal issues outright.45
Sec. 2. Declaration of Policy. - It is hereby declared the policy of the State 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. Towards this end, the State shall encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an important means to achieve speedy and impartial justice and declog court dockets. xxx
26. Admittedly, reference to “Branch 67” in petitioner TPIs “Motion for Time to File a Petition for Review on Certiorari under Rule 45” is a typographical error. As correctly pointed out by respondent Kingford, the order sought to be assailed originated from Regional Trial Court, Makati City, Branch 61.
27. xxx Upon confirmation with the Regional Trial Court, Makati City, Branch 61, a copy of petitioner TPIs motion was received by the Metropolitan Trial Court, Makati City, Branch 67. On 8 January 2009, the motion was forwarded to the Regional Trial Court, Makati City, Branch 61.48
Endnotes:
1 Rollo, pp. 36-59.
2 Id. at 65-75. Penned by Judge Cedrick O. Ruiz, Regional Trial Court, Branch 61, Makati City.
3 Id. at 105-113.
4 Id. at 41. Petition for Review on Certiorari under Rule 45.
5 Id. at 72-75. Resolution dated 21 November 2008 of the RTC.
6 The Yamaoka Patent pertains to “the extra-low temperature smoking process using filtered smoke on fresh tuna which prevents the discoloration of the tuna and ensures its freshness during the frozen state.” Id. at 41. Petition for Review on Certiorari under Rule 45.
7 Id. at 40. Petition for Review on Certiorari under Rule 45.
8 Id. at 76-83.
9 Id. at 76-77.
10 Id. at 84-85.
11 Id. at 87-89.
12 Id. at 42. Petition for Review on Certiorari under Rule 45.
13 Id. at 93-99. Award of Arbitrator dated 26 July 2007. Id. at 103-104. Disposition of Application for Modification of Award of Arbitrators dated 13 September 2007.
14 Id. at 103. Pursuant to the Disposition of Application for Modification of Award of Arbitrators dated 13 September 2007, which modified the Award of Arbitrator dated 26 July 2007.
15 Id. at 97-98. Award of Arbitrator dated 26 July 2007.
16 Id. at 184-195.
17 Id. at 294-302. Order dated 20 May 2008.
18 Id. at 303-326. Motion for Inhibition with Motion for Reconsideration dated 30 May 2008.
19 Id. at 337-338. Order dated 11 June 2008.
20 Id. at 65-75. Resolution dated 21 November 2008.
21 Id. at 72-73. Resolution dated 21 November 2008.
22 Republic Act No. 9285 approved on 2 April 2004.
23 As adopted by the United Nations Commission on International Trade Law on 21 June 1985, and as amended by the United Nations Commission on International Trade Law on 7 July 2006.
24 Rollo, p. 38. Petition for Review on Certiorari under Rule 45.
25 G.R. No. 169053, 19 June 2009, 590 SCRA 49.
26 Id. at 68 citing In re: Petition for Assistance in the Liquidation of the Rural Bank of Bokod (Benguet), Inc., Philippine Deposit Insurance Corporation, v. Bureau of Internal Revenue, G.R. No. 158261, 18 December 2006, 511 SCRA 123, 141 further citing Laureano v. Court of Appeals, 381 Phil. 403, 411-412 (2000).
27 G.R. No. 171101, 5 July 2011, 653 SCRA 154.
28 Id. at 244 citing Koruga v. Arcenas, Jr., supra note 24.
29 Sec. 2, Republic Act No. 9285.
30 Secs. 42 and 45, Republic Act No. 9285, which adopted the New York Convention; and Sec. 19, Republic Act No. 9285, which adopted the entire provisions of the Model Law.
31 A.M. No. 07-11-08-SC dated 1 September 2009.
32 RULE 13.5. Contents of petition. - The petition shall state the following:
a. The addresses of the parties to arbitration;
b. In the absence of any indication in the award, the country where the arbitral award was made and whether such country is a signatory to the New York Convention; and
c. The relief sought.
Apart from other submissions, the petition shall have attached to it the following:
a. An authentic copy of the arbitration agreement; and
b. An authentic copy of the arbitral award.
If the foreign arbitral award or agreement to arbitrate or submission is not made in English, the petitioner shall also attach to the petition a translation of these documents into English. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent. A.M. No. 07-11-08-SC dated 1 September 2009.
33 Rule 3.1, A.M. No. 07-11-08-SC dated 1 September 2009.
34 Rule 3.2, A.M. No. 07-11-08-SC dated 1 September 2009.
35 Rule 3.12, A.M. No. 07-11-08-SC dated 1 September 2009.
36 In relation to a petition “to determine any question concerning the existence, validity and enforceability of such arbitration agreement” available to the parties before the commencement of arbitration, Rule 3.6 provides:
RULE 3.6. Contents of petition. - The verified petition shall state the following:
a. The facts showing that the persons named as petitioner or respondent have legal capacity to sue or be sued;
b. The nature and substance of the dispute between the parties;
c. The grounds and the circumstances relied upon by the petitioner to establish his position; and
d. The relief/s sought.
Apart from other submissions, the petitioner must attach to the petition an authentic copy of the arbitration agreement.
In relation to a petition for “judicial relief from the ruling of the arbitral tribunal on a preliminary question upholding or declining its jurisdiction” after arbitration has already commenced, Rule 3.16 reads:
RULE 3.16. Contents of petition. - The petition shall state the following:
a. The facts showing that the person named as petitioner or respondent has legal capacity to sue or be sued;
b. The nature and substance of the dispute between the parties;
c. The grounds and circumstances relied upon by the petitioner; and
d. The relief/s sought.
In addition to the submissions, the petitioner shall attach to the petition a copy of the request for arbitration and the ruling of the arbitral tribunal.
The arbitrators shall be impleaded as nominal parties to the case and shall be notified of the progress of the case.
37 G.R. No. 121171, 29 December 1998, 300 SCRA 579
38 Id. at 631.
39 In its Resolution dated 21 November 2008, the court a quo observed: “This reliance by TPI solely upon the New York Convention in conjunction with Section 42 of Republic Act No. 9285 may not be correct. It is apparent from the Award of Arbitrator that the International Centre [f]or Dispute Resolution is a Commercial Arbitration Tribunal and hence, it is engaged in commercial arbitration. Under the third sentence of Section 40 of Republic Act No. 9285, [t]he recognition and enforcement of an award in an international commercial arbitration shall be governed by Article 35 of the Model Law [the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law on 21 June 1985] and not the so-called New York Convention. Rollo, p. 74.
40 Article 36 of the Model Law provides:
Article 36. Grounds for refusing recognition or enforcement
(1) Recognition or enforcement of an arbitral award, irrespective of the country in which it was made, may be refused only:
(a) at the request of the party against whom it is invoked, if that party furnishes to the competent court where recognition or enforcement is sought proof that:
(i) a party to the arbitration agreement referred to in article 7 was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or
(ii) the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or
(iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreeement of the parties or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or
(v) the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, that award was made; or
(b) if the court finds that:
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State; or
(ii) the recognition or enforcement of the award would be contrary to the public policy of this State.
(2) xxx
41 San Miguel Corporation v. Layoc, Jr., G.R. No. 149640, 19 October, 2007, 537 SCRA 77, 91; Bases Conversion and Development Authority v. Uy, G.R. No. 144062, 2 November 2006, 506 SCRA 524, 534; and Paa v. CA, G.R. No. 126560, 4 December 1997, 282 SCRA 448.
42 Catly v. Navarro, G.R. No. 167239, 5 May 2010, 620 SCRA 151, 193.
43 G.R. No. 156164, 4 September 2009, 598 SCRA 229.
44 Id. at 238 citing Mangaliag v. Catubig-Pastoral, G.R. No. 143951, 25 October 2005, 474 SCRA 153,161; Agan, Jr. v. Philippine International Air Terminals Co., Inc., G.R. Nos. 155001, 155547 and 155661, 21 January 2004, 420 SCRA 575, 584.
45 Id.
46 La Bugal-B'laan Tribal Association, Inc. v. Ramos, G.R. No. 127882, 27 January 2004, 421 SCRA 148, 183.
47 Rollo, pp. 427-428. Comment/Opposition on the petition dated 1 April 2009.
48 Id. at 459. Reply to “COMMENT/OPPOSITION (Re: Petitoner Tuna Processing, Inc.s Petition for Review on Certiorari Under Rule 45 dated January 23, 2009)” dated 1 April 2009.