REPUBLIC OF THE PHILIPPINES

SUPREME COURT
Manila

COMPANY A,
Petitioner,

-versus- G.R. No. 201963

CA-G.R. CV No. 93499

COMPANY B.,
Respondent.
x-------------------------------------------------x

PETITION FOR REVIEW

PETITIONER COMPANY A, (“Petitioner”), by counsel, respectfully

states:

I.
NATURE OF THE CASE

Before this Honorable Court is a Petition for Review on Certiorari under

Rule 45 of the Rules of Court from a decision rendered by the Special Former Third
Division of the Court of Appeals (“the Honorable Court of Appeals”).
Specifically, this instant Petition seeks the review of the Resolution and Decision
promulgated by the Honorable Court of Appeals on 24 November 2011 and 17
May 2012, respectively (collectively the “Assailed Resolutions”).

Attached hereto as ANNEXES “A” and “B” and made integral parts
hereof are the Certified True Copies of the Decision of the Honorable Court of
Appeals dated 24 November 2011 and Resolution dated 17 May 2012,
respectively.

In both instances, the Honorable Court of Appeals, with due respect,

failed to recognize the applicable law on the given state of facts. Furthermore, it
committed misapprehensions of the facts submitted for appeal.

II.
STATEMENT OF MATERIAL DATES
 2

2.1 On 1 December 2011, petitioner received the Decision of the

Honorable Court of Appeals dated 24 November 2011 (the “Assailed Decision”).
Pursuant to Section 1, Rule 53 of the Rules of Court, petitioner had fifteen (15) days
from receipt of the Assailed Decision within which to file its Motion for
Reconsideration (the “Motion”). Said Motion was filed on 14 December 2011,
within the reglementary period prescribed by the Rules.

2.2 On 25 May 2012, petitioner received a copy of the Resolution of the

Honorable Court of Appeals dated 17 May 2012 (the “Assailed Resolution”)
denying petitioner's Motion.

2.3 Section 2, Rule 45 of the Rules of Court states that a party desiring to
appeal from a judgment, final order or resolution of the Court Appeals shall file
a verified petition for review or an extension thereof within fifteen (15) days from
notice of the said judgment, final order or resolution or of the denial of
petitioner's motion for reconsideration. Hence, Petitioner had until 9 June 2012
within which to file the necessary pleading.

2.4 Petitioner filed on 8 June 2012 its Entry of Appearance with Motion
for Extension of Time to File Petition for Review on Certiorari (the “Entry with
Motion”) and then paid the required docket and filing fees. In its Entry with
Motion, petitioner prayed that this Honorable Court grant it an additional thirty
(30) days from 8 June 2012, or until 9 July 2012, within which to file its Petition
for Review. Hence, this present Petition is seasonably filed.

III.
PARTIES

3.1 Petitioner, formerly known as COMPANY A, is a corporation duly

organized and existing under and by virtue of the laws of the Republic of the
Philippines with principal office at Unit 908 Taipan Place, Emerald Avenue,
Quezon City. It is engaged in the business of waste management, waste
collection, transportation and disposal. It may be served with copies of
pleadings, resolutions, decisions, notices and other processes through counsel at
its address stated below.
 3

3.2 Respondent is a foreign corporation, doing business in the

Philippines without a license, by supplying local markets with waste disposal
and waste management equipment and apparatus through its appointed
representative/distributor domiciled in the Philippines and provides the latter
with technical assistance and promotional aids when necessary. Respondent is in
the business of supplying high quality mobile garbage bins, containers, and
lifting systems to customers across Asia. It may be served with copies of
pleadings, resolutions, decisions, notices and other processes through counsel at
its address stated below.
IV.
STATEMENT OF FACTS

4.1 Sometime in December 1995, respondent and petitioner executed a

Distributorship Agreement, whereby the latter was appointed distributor of
respondent in the Philippines. Between the early part of 1996 and late 1997,
petitioner placed several orders of assorted garbage waste disposal equipment
and accessories with the respondent for delivery to the former. Attached hereto
as ANNEX “C” and made an integral part hereof is a copy of the Distributorship
Agreement dated 26 December 1995.

4.2 Explaining that it was going through business reverses at the time,
petitioner conveyed to respondent that it needed the spare parts to be supplied
by the latter in order for petitioner to fix the trucks and be able to pay its
obligations to respondent. However, Respondent explained that its parent
company, which is based in Germany, would not allow the sale of the much-
needed spare parts to petitioner, considering that petitioner had pending unpaid
orders.

4.3 As such, petitioner and respondent arrived at an arrangement, on

12 September 1997, and agreed to enter into a Settlement Agreement whereby
petitioner would issue seven (7) checks for the sole purpose of respondent
showing the same to its parent company to obtain its approval to sell and deliver
the spare parts much-needed by the petitioner. Specifically, it was agreed upon
that:
 4

4.3.1 Petitioner needed to carry on its business of waste management

and disposal to generate revenue to pay the outstanding account
under the Agreement;
4.3.2 Petitioner would require spare parts and accessories to maintain
the equipment and apparatus bought from respondent in good
operating condition to carry on its said business;
4.3.3 At the request of respondent, petitioner would issue six (6) post-
dated checks; and,
4.3.4 That the rationale of said request was that the parent company of
the respondent would not sanction any further deliveries of the
spare parts and accessories that the petitioner needed in view of
petitioner’s outstanding account, and that the said checks were to
be held by the respondent as an assurance and security so that
respondent may:

i. Show said checks to Respondent’s German parent company

to obtain its authority to sell and deliver the spare
parts/accessories to Petitioner to maintain the equipment
and apparatus Petitioner bought from the respondent in
good operating condition so that petitioner would not be
able to carry on its said business and thus be able to pay its
account to the respondent; and,
ii. Apply the said checks as payment for future orders of spare
parts/accessories which the petitioner may place after the
date of the Settlement Agreement.

4.4 The checks petitioner’s officers issued in favor of the respondent,

pursuant to the Settlement Agreement, were thus, clearly intended as security for
future purchases of spare parts by the petitioner and were never intended as
payment under the terms of the Settlement Agreement. Respondent required
petitioner to execute a Settlement Agreement with the assurance that the checks
would be used as payment for future purchases of the needed spare parts and
accessories for the trucks.

4.5 Respondent then drafted the supposed Settlement Agreement but

titled it “Agreement for the Settlement of Oustanding Accounts Receivable”
 5

which it insisted petitioner to sign. However, after a perusal of the Agreement,

the officers of petitioner refused to sign the same, noting that, contrary to the
earlier agreement of the parties, the draft presented stated that the subject checks
were now to be applied to the outstanding accounts of petitioner which
respondent had earlier agreed to a moratorium until such time that petitioner’s
cash flow improved. The representatives of Respondent explained that, while
indeed the “Settlement Agreement” failed to express the true intent of the
parties, it was merely for the benefit of respondent’s principal in Germany, but
that it in no way altered or superseded the earlier agreement of the parties for the
checks to merely guarantee future purchase of the petitioner. Relying on good
faith on these representations, the “Settlement Agreement” was executed.

4.6 Faithful to its commitment, petitioner made substantial payments

to the respondent.

4.7 On the other hand, respondent, in breach of the “Settlement

Agreement” of the parties, sought to apply the amounts covered by the subject
checks to the earlier unsecured obligations of petitioner instead of to the
subsequent orders which, at the time of the maturity of the checks, had not
amounted or even approximated the face value of the first check. Evidently, since
the checks, as agreed to by the parties, were never intended to be deposited, the
checks were dishonored upon deposit.

4.8 On 13 July 1998, respondent filed a criminal complaint for alleged

violation of Batas Pambansa Blg. 22 with the Office of the City Prosecutor of
Makati City against the officers of Petitioner, Ale
xander Tantoco and Ronald Salonga, who were then signatories of the checks.
Attached hereto as ANNEX “D” and made an integral part hereof is a copy of
respondent’s Complaint-Affidavit filed on 13 July 1996.

4.9 Tantoco and Salonga filed their Counter-Affidavit and pointed out
that the complaint was unmeritorious since Respondent filed the complaint
despite being fully aware that it had no justifiable ground to do so since it was
respondent that deceived petitioner into issuing the said checks relying on
respondent’s representations that the checks would merely serve as an
 6

accommodation. Attached hereto as ANNEX “E” and made an integral part

hereof is a copy of the Counter-Affidavit executed by petitioner’s President and
Chairman, Alexander Tantoco and Ronald Salonga, respectively, dated 10
August 1998.

4.10 On 3 November 1998, respondent filed a Motion to Withdraw.

Attached hereto as ANNEX “F” and made an integral part hereof is a copy of
respondent’s Motion to Withdraw dated 26 October 1998.

4.11 Pursuant to the Amicable Settlement, petitioner made several

payments to the respondents. However, due to substantial and irreconcilable
differences between the parties’ respective positions as to the exact amount of the
obligation to the respondent, petitioner suspended further payments.

4.12 In response to the impasse, respondent filed yet another case for
violation of Batas Pambansa Blg. 22 against the officers of petitioner, alleging
substantially the same facts that they alleged in the previous complaint dated 22
June 1998. Attached hereto as ANNEX “G” and made an integral part hereof is a
copy of respondent’s Complainant-Affidavit executed by Peter Koh on 12
September 2002.

4.13 On 24 April 2003, the Office of the City Prosecutor of Makati City
issued a Resolution dismissing the case on the ground that “(c)learly, the
complaint for Violation of Batas Pambansa Blg. 22 have already prescribed at the
time of the filing of the instant complaint.” Attached hereto as ANNEX “H” and
made an integral part hereof is a copy of the Resolution dated 24 April 2003
issued by the City Prosecution Office of Makati.

4.14 Respondent filed a Motion for Reconsideration on 23 May 2003

which was again denied by the Office of the City Prosecution of Makati City per
its Resolution dated 3 June 2003. Attached hereto as ANNEX “I” and made an
integral part hereof is a copy of the Order dated 3 June 2003 issued by the City
Prosecution Office of Makati.

4.15 Not satisfied with the findings of the Office of the City Prosecutor
of Makati City, respondent filed a Petition for Review with the Department of
 7

Justice. The Chief State Prosecutor of the Department of Justice, acting on the
Petition for Review, issued a Resolution dated 23 August 2004 dismissing the
Petition. Attached hereto as ANNEXES “J” and “K” and made integral parts
hereof are copies of respondent’s Petition For Review dated 18 July 2003 and the
Resolution dated 23 August 2003 issued by the Department of Justice,
respectively.

4.16 Unfazed by the dismissal of its claim and the poetic justice it
rightfully deserved for its deceit, respondent decided that another jurisdiction
may perhaps act favorably on its alleged claim. As such, respondent filed a case
against the Petitioner in Singapore, alleging virtually the same facts and causes of
action. The case was filed before the Subordinate Court of Singapore for the
collection of the amount equivalent to Two Million Pesos (Php 2,000,000.00)
representing the value of a dishonored check issued by the officers of petitioner.
The suit was docketed as Suit No. 688 of 2005/C.

Attached hereto as ANNEX “L” and made an integral part hereof is a

copy of respondent’s Statement of Claim dated 9 June 2004 filed with the
Subordinate Court of Singapore.

4.16.1 The case before the Subordinate Court of Singapore was

subsequently transferred to the High Court of Singapore.

4.17 Respondent filed a Motion to Amend its Statement of Claim, which

was granted by the Singapore Court. In the Amended Statement of Claims,
inclusion was made of an alternative prayer for the amounts of Three Hundred
Ninety-Nine Thousand Five Hundred Sixty-One and 3/100 Singaporean Dollars
(S$ 399,561.03) and Two Hundred Fifty-One Thousand Nine Hundred Seventy-
Six German Marks (DEM 251,976.00). Respondent falsely alleged in its Amended
Claim that petitioner acknowledged this debt to respondent through its former
counsel’s letters dated 23 May 2002 and 5 August 2002. Attached hereto as
ANNEX “M” is a copy of respondent’s Amended Statement of Claim filed in
2006

4.18 On the other hand, petitioner, after filing its Statement of Defence,
similarly moved to amend its Statement of Defence on the ground that
 8

Petitioner’s counsel in Singapore was just then very recently been made aware
that, under the Rules of Court of the Philippines, particularly Section 27, Rule 130,
any correspondence entered into to negotiate a settlement, which would include
the 23 May 2002 and 5 August 2002 letters, is inadmissible as evidence of
liability1. However, the motion was denied by Singapore Court outright without
the benefit of any further hearing,

Attached hereto as ANNEX “N” is petitioner’s Statement of Defence dated

16 December 2004.

4.19 Subsequently, Respondent filed another motion—a Motion for a

Preliminary Hearing. Again, the motion was granted. Thus, respondent applied
with the Singapore Court for trial on a “preliminary issue”, i.e., whether or not
petitioner has, by the letter of its former counsel dated 23 May 2002 and/or other
documents, acknowledged its debt to the respondent. The Singapore Court ruled
in favor of the respondent and effectively gave judgment by taking cognizance of
a “preliminary issue” without the benefit of an actual trial proceeding.

4.20 This was extremely prejudicial to petitioner, since this “rocket-

docket” method of disposing cases without trial and presentation/examination
of witnesses, effectively and summarily deprived the petitioner of its
constitutional right to be heard and present evidence on its defense, i.e., to raise
and prove its affirmative defense that the initial and critical breach was
committed by the respondent when it reneged on its commitment to hold on to
the checks in trust and not to apply the same to the existing obligations of
petitioner but, instead presented the accommodation checks for payment despite
respondent’s failure to deliver the required spare parts and accessories for the
trucks.

4.21 On 29 September 2006, the Singapore Court rendered its decision in

favor of the respondent. According to the Singapore Court,

“Having heard the arguments, I agreed with the plaintiff (herein

Respondent) that this case was one in which would be correct to
order a trial on a preliminary issue. This was because
determining the issue involved the construction of documents,

1
Sec. 27.Offer of compromise not admissible. — In civil cases, an offer of compromise is not an admission
of any liability, and is not admissible in evidence against the offeror.
 9

in particular, the letters passing between the plaintiff

(Respondent herein)’s attorneys and defendant (Petitioner
herein)’s attorneys in 2002. The court’s task in construing these
documents was to decide whether they or any of them
constituted an acknowledgement of debt. No oral evidence
would be required to decide this question. Secondly, if the court
did not determine that the documents acknowledged the
defendant’s liability, the plaintiff was willing to give up its
alternative claim for 2m Philippine Pesos and therefore none of
the issues relating to that claim would need to be decided.
Thirdly, facts giving rise to the debt were not in dispute. What
was in dispute was whether the amounts outstanding could still
be claimed or were time barred. If the material letters or other
document relied on by the plaintiff constituted an
acknowledgement of debt by the defendant, then there would be
no issue of time bar in respect of the amounts so admitted.”

Attached hereto as ANNEX “O” and made an integral part hereof is a

copy of the Decision dated 29 September 2006 issued by the High Court of
Singapore.

4.22 Petitioner then filed an appeal with the Court of Appeals of

Singapore but the same was denied in an order issued on 5 February 2007, which
reads as follows:

“THIS APPEAL form the Order of the Honorable Justice Judith

Prakash dated 28th June 2006 coming on for hearing this day in
the presence of Counsel for the Appellant and for the
Respondent, AND UPON HEARING the Record of the Appeal
and the respective written Cases lodged by the Appellant and
Respondent herein, AND UPON HEARING Counsel as
aforesaid,
THIS COURT DOTH ORDER that the Appellant’s
Appeal be and is hereby dismissed.

AND THIS COURT DOTH FURTHER ORDER that the

costs of this Appeal be agreed or taxed and paid by the
Appellants to the Respondents.

xxx“

Attached hereto as ANNEXES “P” and made an integral part hereof is a copy of
petitioner’s Appellant Case filed on 28 November 2006

4.23 On 19 May 2008, respondent filed a Petition for Recognition and

Enforcement of Foreign Judgment with the Regional Trial Court of Pasig City.
This case was raffled to the sala of the Hon. Luis R. Tongco then of the Regional
Trial Court of Pasig City, Branch 155. Notably, respondent failed to disclose in its
Petition that it filed a second case for an alleged violation of Batas Pambansa
Bldg. 22 against the officers of the petitioner. It was only after petitioner pointed
out this fact in its Motion to Dismiss that respondent admitted having filed the
 10

same. Attached hereto as ANNEX “Q” and made an integral part hereof is a copy
of respondent’s Petition For Recognition and Enforcement of Judgment filed
with the Regional Trial Court of Pasig City Branch 155.

4.24 On 4 July 2008, petitioner filed its Motion to Dismiss raising the
following grounds, to wit:

1. The respondent has no capacity to sue as it is a foreign

corporation doing business in the Philippines without a
license;
2. The respondent engaged in Forum Shopping in filing the
case in Singapore;
3. The Decision of the Singapore Court is void for utter failure
of the said court to observe basic due process, and thus,
cannot be enforced by the Regional Trial Court of Pasig City
as the same violates public policy on the mandatory
observance by the courts of due process;
4. The Singapore Court had no jurisdiction to issue the subject
Decision as it was ousted of its jurisdiction when it denied
petitioner (sic) its Constitutional right to due process;
5. The petition is fatally defective for not being verified in
accordance with the requirements of the 1997 Rules of Civil
Procedure.

Attached hereto as ANNEX “R” and made an integral part hereof is a copy of
petitioner’s Motion to Dismiss filed on 4 July 2008.

4.25 Respondent countered by filing an Opposition on 8 August 2008.

Attached hereto as ANNEX “S” and made an integral part hereof is a copy of
respondent’s Opposition (to Motion to Dismiss) dated 5 August 2008.

4.26 Thereafter, petitioner and respondent filed their Reply and

Rejoinder on 26 August 2008 and 18 September 2008, respectively. Attached
hereto as ANNEXES “T” and “U” and made integral parts hereof are copies of
petitioner’s Reply (to Opposition dated 5 August 2008) dated 25 August 2008 and
respondent’s Rejoinder dated 18 September 2008, respectively.

4.27 On 5 December 2008, the Regional Trial Court of Pasig City issued
its Order granting Petitioner’s Motion to Dismiss. The Regional Trial Court of
Pasig City dismissed the Petition in this wise:

“As regards the first issue raised by respondent, the

Court holds that the instant petition is dismissible on the ground
of petitioner’s evident lack of capacity to sue.
xxx
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In the case at bar, no less than petitioner itself has

admitted in paragraphs 2.1 to 2.5 of the Petition that it has
entered into a Distributorship Agreement with defendant
COMPANY Awhereby the latter was appointed as “an exclusive
distributor to promote and commercialise the sale of COMPANY
B products in the said territories of the Philippines” (Cf. Annex
“C”, par 1.A, Petition). Thus, under the aforesaid law, such
distributorship agreement is deemed as “doing business in the
Philippines.”

Attached hereto as ANNEX “V” and made an integral part hereof is a

copy of the Order dated 9 December 2008 issued by Regional Trial Court Branch
155 of Pasig City granting the Motion to Dismiss.

4.28 Regarding the issue that petitioner was deprived due process, the
Regional Trial Court of Pasig City held that:

“x x x
With respect to the second, third and fourth issues,
which are interrelated, regarding the unenforceability of the
Decision rendered by the Singapore High Court, the Court
likewise finds for the respondent.

xxx
In the instant case, a judicious scrutiny of the records
reveals that the Singapore court failed to conduct presentation of
evidence on the factual allegations of the parties that are
pertinent to the issue of liability under the contract subject of the
case lodged therein. From the Amended Defence attached to the
Petition itself, it is clear that respondent raised as issue in the
case before the Singapore High Court the matter of petitioner’s
breach of their agreement through its allegation that petitioner
prematurely presented for payment the checks issued by
respondent and that petitioner (Respondent herein) did not
deliver future order for spare parts and accessories for which the
checks issued by the respondent were being held by petitioner.
Likewise significant is respondent’s allegation in its Amended
Defence that the Singapore High Court is not the proper forum
since the case involves checks governed by the Philippine law on
negotiable instruments.

However, instead of addressing the aforementioned

issued raised by respondent, the Singapore High Court based its
judgment on a preliminary issued raised by petitioner, i.e.,
whether or not the May 23, 2002 letter of respondent (Petitioner
herein)’s counsel constituted an acknowledgment of debt. In
other words, the Singapore Court already assumed without the
benefit of a hearing or presentation of evidence by the parties,
that it is the proper forum for the case and that there was no
breach committed by petitioner with regard to respondent’s
allegation in its Amended Defence that petitioner prematurely
presented for payment the checks and that petitioner failed to
deliver respondent’s orders for spare parts and accessories.

xxx

Therefore, the foreign judgment sought to be enforced

herein cannot be given due course in this jurisdiction because the
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same is contrary to the avowed public policy of affording due

process to party litigants.

4.29 On the other hand, the issue on the fatal defect of the signatory of
the Verification and Certificate of Non-Forum Shopping to execute the same was
deemed unnecessary to be addressed. The Regional Trial Court of Pasig City
considered the foregoing grounds are sufficient to justify the dismissal of the
Petition.

4.30 Respondent filed a Motion for Reconsideration on 22 December

2008 which was denied by the Regional Trial Court of Pasig City per its Order
dated 3 April 2009, for lack of merit. Attached hereto as ANNEX “W” and “X”
and made integral parts hereof are copies of respondent’s Motion for
Reconsideration dated 22 December 2008 and the Order dated 3 April 2008
denying respondent’s Motion for Reconsideration, respectively.

4.31 Aggrieved by the Orders dated 5 December 2008 and 3 April 2009,
Respondent elevated the matter to the Honorable Court of Appeals.

4.32 Parties respectively filed their Appellant’s Brief and Appellee’s

Brief. It must be emphasized that, once more, respondent failed to disclose that it
filed a second case for an alleged violation of B.P. Bldg. 22 against officers of
petitioner. Attached hereto as ANNEX “Y” and “Z” and made integral parts
hereof are copies of respondent’s Appellant’s Brief dated 7 June 2010 and
petitioner’s Appellee’s Brief dated 15 September 2010, respectively.

4.33 On 24 November 2011, the Honorable Court of Appeals rendered

the Assailed Decision the dispositive portion of which states:

“WHEREFORE, the Order dated December 5, 2008, of the

Regional Trial Court of Pasig City, Branch 155, in Civil Case No.
71635 is REVERSED AND SET ASIDE. The Petition for
Recognition and Enforcement of Foreign Judgment is hereby
REINSTATED and the court a quo is DIRECTED to RESUME the
proceedings therein.”

Attached hereto as ANNEX “AA” and made an integral part hereof is a

copy of the Decision dated 24 November 2011 of the Honorable Court of
Appeals.
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4.34 On 14 December 2011, petitioner filed its Motion for

Reconsideration. However, the Honorable Court of Appeals denied petitioner’s
Motion in its Assailed Resolution which was received by the petitioner on 25
May 2012. Attached hereto as ANNEX “BB” and “CC” and made integral parts
hereof are copies of petitioner’s Motion for Reconsideration dated 14 December
2011 and the Resolution dated 17 May 2012 issued by the Court of Appeals,
respectively.

Hence, this Petition for Review.

V.
GROUNDS RELIED UPON TO GRANT THE PETITION

I.

THE UNVERIED PETITION IS A MERE

SCRAP OF PAPER FOR LACK OF A
VERIFICATION AND CERTIFICATE OF
NON-FORUM SHOPPING EXECUTED
BY RESPONDENT’S AUTHORIZED
REPRESENTATIVE.

II.

THE PETITION OF RESPONDENT

SHOULD BE DISMISSED. THE
HONORABLE COURT OF APPEALS
ERRED IN APPLYING AND RELYING
ON THE CASE OF MERRIL LYNCH
FUTURES VS. COURT OF APPEALS 2
AND RELATED JURISPRUDENCE. THE
APPLICABLE CASE LAW IS
EUROPEAN RESOURCES AND
TECHNOLOGIES VS. INGENIEUBURO
BIRKHAHN.3

III.

PETITIONER HAS NO CAPACITY TO

SUE BEING A FOREIGN
CORPORATION DOING BUSINESS IN
THE PHILIPPINES WITHOUT A
LICENSE.

2
G.R. No. 97816, 24 JULY 1992
3
G.R. No. 159586, 26 JULY 2004
 14

IV.

THE DECISION OF THE SINGAPORE

COURT CANNOT BE ENFORCED IN
THE PHILIPPINES FOR WANT OF
JURISDICTION SINCE, BY DEPRIVING
PETITIONER OF ITS RIGHT TO PROVE
ITS AFFIRMATIVE DEFENSE, THE
SINGAPORE COURT RENDERED
JUDGMENT WITHOUT COMPLYING
WITH THE UNIVERSAL AND MOST
BASIC REQUIREMENTS OF DUE
PROCESS, I.E., THE RIGHT TO BE
HEARD AND PRESENT EVIDENCE.

VI.
DISCUSSIONS

The Petition Was Not Properly

Verified By The Duly Authorized
Representative Of Respondent.
Further, The Certificate Of Non-Forum
Shopping Is Fatally Defective.

6.1 In fact, on this score alone, the Petition for Recognition and

Enforcement of Foreign Judgment should have been dismissed outright.

6.2 As shown by the respondent’s Petition for Recognition and

Enforcement of Foreign Judgment, it was verified by a certain Elsa A. Villflor,
who was purportedly authorized by one Koh Hock Lim Peter. However, there is
no Board Resolution or anything to show that respondent, a foreign corporation,
authorized the filing of the Petition for Recognition and Enforcement of Foreign
Judgment , let alone issue a Special Power of Attorney for the filing of the same.

6.3 Considering that the signatory of the Verification and Certificate of

Non-Forum Shopping was not authorized to file the Petition for Recognition and
Enforcement of Foreign Judgment, let alone sign the same, the Verification and
Certificate is evidently a mere scrap of paper and as such, rendered said Petition
fatally defective.
 15

6.4 In the case of BA Savings vs. Sia4, the Honorable Supreme Court

held that:

In the present case, the corporation’s board of directors issued a

Resolution specifically authorizing its lawyers “to act as their
agents in any action or proceeding before the Supreme Court, the
Court of Appeals, or any other tribunal or agency[;] and to sign,
execute and deliver in connection therewith the necessary
pleadings, motions, verification, affidavit of merit, certificate of
non-forum shopping and other instruments necessary for such
action and proceeding.” The Resolution was sufficient to vest
such persons with the authority to bind the corporation and was
specific enough as to the acts they were empowered to do.

In the case of natural persons, Circular 28-91 requires the parties

themselves to sign the certificate of non-forum shopping.
However, such requirement cannot be imposed on artificial
persons, like corporations, for the simple reason that they cannot
personally do the task themselves. As already stated,
corporations act only through their officers and duly authorized
agents. In fact, physical actions, like the signing and the delivery
of documents, may be performed, on behalf of the corporate
entity, only by specifically authorized individuals.

xxx

Circular 28-91 was prescribed by the Supreme Court to prohibit

and penalize the evils of forum shopping. We see no
circumvention of this rationale if the certificate was signed by the
corporation’s specifically authorized counsel, who had personal
knowledge of the matters required in the Circular” (Emphasis
supplied)

It is observed that it was repeatedly emphasized that the Certificate of Non

Forum Shopping must be signed by the person “specifically” authorized to sign
by the Board of Directors.

6.5 The “specific” authority referred to in the above-cited decision was

clarified in the case of BPI Leasing Corporation vs. CA5 where the Honorable
Supreme Court explicitly mentioned two specific grants by the Board of
Directors/Trustees of authority in the Board Resolution, viz., (1) to file the
Petition; and (2) to execute the Certification, to wit:

“The records are bereft of the authority of BLC’s counsel to

institute the present petition and to sign the certification of non-

4
G.R. No. 131214. July 27, 2000
5
G.R. No. 127624. November 18, 2003
 16

forum shopping. While said counsel may be the counsel of

record for BLC, the representation does not vest upon him the
authority to execute the certification on behalf of his client. There
must be a resolution issued by the board of directors that
specifically authorizes him to institute the petition and execute
the certification, for it is only then that his actions can be legally
binding upon BLC.” (Emphasis supplied)

6.6 This was reiterated in the case of Maranaw Hotels and Resorts
Corporation vs. CA6 where the Honorable Supreme Court was explicit that the
person signing the Petition must be specifically authorized to both file the
Petition and sign the Verification/Certificate of Non-Forum Shopping.

“Any doubt on the matter has been resolved by the Court’s

ruling in BPI Leasing Corp. v. Court of Appeals where this Court
emphasized that the lawyer acting for the corporation must be
specifically authorized to sign pleadings for the corporation.
Specific authorization, the Court held, could only come in the
form of a board resolution issued by the Board of Directors that
specifically authorizes the counsel to institute the petition and
execute the certification, to make his actions binding on his
principal, i.e., the corporation.”

This Court has not wavered in stressing the need for strict
adherence to procedural requirements. The rules of procedure
exist to ensure the orderly administration of justice. They are not
to be trifled with lightly. (Emphasis and underscoring supplied)

6.7 In the case at bar, there was no specific authority granted by the
Board of Directors of respondent to Elsa A. Villaflor or Koh Hock Lim Peter to
either (1) file the Petition for Recognition and Enforcement of Foreign Judgment
or (2) sign the Certification. As such, following the ruling in both the above-cited
decisions, the Petition for Recognition and Enforcement of Foreign Judgment
was not legally binding. The Petition for Recognition and Enforcement of Foreign
Judgment is therefor a mere scrap of paper and must be dismissed outright.

6.8 Furthermore, it must be clearly pointed out that the respondent

attempted to mislead the Honorable Trial Court by alleging in its Opposition to
the Motion to Dismiss filed by Petitioner that “x x x the non-attachment of the
Corporate Secretary’s Certificate was only due to inadvertence and oversight x x
x (t)o belie the contention of the defendants, a Corporate Secretary’s Certificate
duly authorizeing Mr. Koh Hock Lim Peter x x x is attached hereto to form part
of the records of this case”

6
G.R. No. 149660, 20 January 2009
 17

6.9 However, the Corporate Secretary’s Certificate referred to was

merely notarized in Singapore and was not authenticated by the Philippine
Consulate.

6.10 More importantly, as shown by the Corporate Secretary’s

Certificate attached to the Opposition, the date thereof was 30 July 2008 whereby
the Petition for Recognition and Enforcement of Foreign Judgment was filed on
19 May 2008. It was just made to appear that the meeting by the Board was
conducted earlier. Clearly, there was NO Corporate Secretary Certificate issued
and which was inadvertently not attached to the Petition.

6.11 Apparently, there was malicious attempt on the part of Respondent

to mislead the court into believing that, on 19 May 2008—the date the Petition
was filed, there was a Corporate Secretary’s Certificate and concomitantly an
authority to file the Petition for Recognition and Enforcement of Foreign
Judgment. Respondent would like this Honorable Court to believe that it was not
attached and alleged due to mere inadvertence. This is an outright lie.

6.12 As shown by the Corporate Secretary’s Certificate itself, it was

issued and the concomitant authority was passed on a later date—30 July 2008.

6.13 Regardless, the Corporate Secretary’s Certificate attached to

respondent’s Opposition, a submission subsequent to the Petition for
Recognition and Enforcement of Foreign Judgment, cannot cure the fatal defect
of the initiatory Petition’s lack of Certificate of Non-Forum Shopping. Since the
Petition is void and jurisidictionally flawed ab initio, a remedy subsequent
thereto cannot restore jurisdiction which was never obtained.

6.14 It must be emphasized that this procedural rule on the Certificates

of Non-Forum Shopping is mandatory and jurisdictional. This fatal defect cannot
be cured by subsequent submissions. Strict observance is required. Case law is
clear, parties and the courts cannot resort to liberal construction.

“In the recent case of Spouses Valentin Ortiz and Camilla Milan
Ortiz v. Court of Appeals, et al., 299 SCRA 708, 711-712 (1998), we
ruled that

"Regrettably, we find that substantial compliance will

not suffice in a matter involving strict observance as
 18

provided for in Circular No. 28-91. The attestation

contained in the certification on non-forum shopping
requires personal knowledge by the party who executed
the same. To merit the Court's consideration, petitioners
here must show reasonable cause for failure to
personally sign the certification. The petitioners must
convince the court that the outright dismissal of the
petition would defeat the administration of justice."

In this case, petitioner has not adequately explained its failure to

have the certification against forum shopping signed by one of
its officers.

Neither has it shown any compelling reason for us to disregard

strict compliance with the rules.

As we further stated in Spouses Ortiz,

"Utter disregard of the rules cannot justly be rationalized

by harking on the policy of liberal construction.”7

The Honorable Court Of Appeals

Committed Serious Error In Relying
And Applying The Case Of Merril
Lynch Futures vs. Court of Appeals
And Related Jurisprudence. The
Applicable Case Law Is European
Resources and Technologies vs
Ingenieuburo Birkhahn.

6.15 As a rule, it is the policy of law to disallow foreign corporation

doing business without a license “x x x to maintain or intervene in any action,
suit or proceeding in any court or administrative agency in the Philippines.” 8
While petitioner admits that there is an exception to this rule, it must be
emphasized that, as matter of law, exceptions are strictly construed. Further, it
must clearly and explicitly fall under the language of the rule or law creating the
exception. Above all, in case of doubt as to application, all doubts should be
resolved in favor of the general rule rather than the exception.

6.16 In its 24 November 2011, the Honorable Court of Appeals ruled

that:

7
DIGITAL MICROWAVE CORP. vs CA G.R. No. 128550 March 16, 2000
8
Section 133 of the Corporation Code
 19

“Thus, for doing business in the Philippines without a license,

COMPANY B Systems is barred from suing before Philippine
courts pursuant to Section 133 of the Corporation Code.

However, this prohibition admits of a well-recognized

exception—that is, the principle of estoppel.

In Merril Lynch Futures vs Court of Appeals, the

Supreme Court held that a party is estopped to challenge the
personality of a corporation after having acknowledged the
same by entering into a contract with it. This doctrine of estoppel
to deny corporate existence applies to foreign as well as
domestic corporations.

Then, in Agilent Technologies Singapore vs Integrated Silicon

Technology Philippines, the Supreme Court ruled that this
principle [of estoppel] prevents a person contracting with a
foreign corporation from later taking advantage of its
noncompliance with the statutes chiefly in cases where such
person has received the benefits of the contract.” (Emphasis
supplied)

6.17 However, a careful perusal of the cases cited in the assailed

decision and a thorough consideration of the principle therein regarding the
Doctrine of Estoppel to Deny Foreign Corporate Existence invoked will reveal
that the same finds no application to the factual circumstances surrounding the
instant case. Succinctly, the application of the principle that domestic
corporations, contracting with a foreign entity, are estopped from questioning
the legal capacity of the latter is permitted only when the reason therefor exists,
i.e., the domestic corporation had unduly “x x x received the benefits of the
contract.”

6.18 As held in the case of Rimbunan Hijau Group vs Oriental Wood9 cited
in the Assailed Decision, “x x x considerations of fair play dictate that after
having contracted and benefited from its business transaction with the foreign
corporation, the other contracting party should be barred from questioning the
said foreign corporation’s lack of license to transact business in the
Philippines10.”

6.19 Consistent with the sporting idea of equity and fair play, this
jurisprudential rule exists to prevent domestic corporations from deriving undue
benefit when it commits a breach of contract against a foreign entity,
notwithstanding the latter’s failure to obtain a license to do business in the
Philippines.

9
GR No. 152228, 23 September 2005
10
Supra
 20

“The rule is deeply rooted in the time-honored axiom of

Commodum ex injuria sua non habere debet - no person ought to
derive any advantage of his own wrong. This is as it should be
for as mandated by law, “every person must in the exercise of
his rights and in the performance of his duties, act with justice,
give everyone his due, and observe honesty and good faith.11 ”

6.20 It is evident from the foregoing that merely contracting with a

foreign entity does not operate to make the exceptional rule of Doctrine of
Estoppel to Deny Foreign Corporate Existence applicable. Rather, what is
essential to make said principle applicable is that the domestic corporation
received undue benefits because of the contract with the unlicensed foreign
entity. Since the doctrine is adopted to prevent unjust enrichment, it must be
established beyond doubt, so as to apply this exception, that indeed the domestic
corporation was unjustly enriched.

6.21 This was precisely the ruling upheld by this Honorable Court in the
case of European Resources and Technologies vs. Ingenieuburo Birkhahn 12. In the said
case, it was held that, since the domestic corporation did not derive any benefit
from its contract with the unlicensed foreign entity, the Doctrine of Estoppel to
Deny Foreign Corporate Existence as espoused in the case of Merril Lynch vs CA
and related cases cannot be applied. In fact, it was the finding of the Honorable
Supreme Court that it was the domestic corporation which incurred deficit and
business reverses due to its reliance that the unlicensed foreign corporation
would comply with the commitment it had agreed to with the domestic
corporation. As such, the High Tribunal ruled that the Doctrine of Estoppel
cannot apply.

“As a general rule, unlicensed foreign non-resident corporations

cannot file suits in the Philippines.
xxx
However, there are exceptions to this rule. In a number of
cases, we have declared a party estopped from challenging or
questioning the capacity of an unlicensed foreign corporation
from initiating a suit in our courts.
xxx
Hence, the party is estopped from questioning the capacity of a
foreign corporation to institute an action in our courts where it
had obtained benefits from its dealings with such foreign
corporation and thereafter committed a breach of or sought to
renege on its obligations. The rule relating to estoppel is deeply

11
Communication Materials and Design, Inc., vs Court of Appeals, G.R. No. 102223, 22 August
1996
12
G.R. No. 159586, 26 July 2004
 21

rooted in the axiom of commodum ex injuria sua non habere debet—

no person ought to derive any advantage from his own wrong.
In the case at bar, petitioners have clearly not received any
benefit from its transactions with the German Consortium. In
fact, there is no question that petitioners were the ones who have
expended a considerable amount of money and effort
preparatory to the implementation of the MOA. Neither do
petitioners seek to back out from their obligations under both the
MOU and the MOA by challenging respondents’ capacity to sue.
The reverse could not be any more accurate. Petitioners are
insisting on the full validity and implementation of their
agreements with the German Consortium.
To rule that the German Consortium has the capacity to
institute an action against petitioners even when the latter
have not committed any breach of its obligation would be
tantamount to an unlicensed foreign corporation gaining
access to our courts for protection and redress. We cannot
allow this without violating the very rationale for the law
prohibiting a foreign corporation not licensed to do business in
the Philippines from suing or maintaining an action in
Philippine courts. The object of requiring a license is not to
prevent the foreign corporation from performing single acts, but
to prevent it from acquiring domicile for the purpose of business
without taking the steps necessary to render it amenable to suits
in the local courts. In other words, the foreign corporation is
merely prevented from being in a position where it takes the
good without accepting the bad.”13 (Emphasis supplied)

The ruling in the case of European Resources and Technologies vs. Ingenieuburo
Birkhahn 14 applies with equal force and effect to the case at bar.

6.22 As clearly shown from the factual circumstances surrounding the

instant case, it was the unlicensed foreign corporation, Respondent, which
committed the initial and critical breach of its obligation when it failed to make
deliveries to the petitioner of the much-needed parts and instead presented the
accommodation checks for payment. Petitioner was not enriched by its
transaction with the respondent. Petitioner did not derive any benefit therefrom.
Instead, the transaction between petitioner and respondent and the concomitant
breach of the terms by the respondent caused serious and irreparable business
reverses to the petitioner.

6.23 Since respondent has yet to deliver to the petitioner the subsequent
orders commensurate to the value of the checks, the respondent should not have
deposited the checks issued by the petitioner. It was then premature and in total
contravention of the agreement between the parties.

13
European Resources and Technologies vs Ingenieuburo Birkhahn (G.R. No. 159586, 26 July 2004)
14
Supra
 22

6.24 The fact that it was not the true intent of the parties to make the
checks as settlement of the alleged previous indebtedness of petitioner to
respondent is evidenced by the statements made by Peter Koh, then Operations
Manager of the respondent, in his facsimile transmittal dated 05 December 1997,
where he threatened to collect the “remaining debts”, referring to the Twenty-
Two Million Pesos (Php 22,000,000.00) petitioner allegedly still owed respondent,
in case the 25 November 1997 check was not made good. This clearly implied
that the checks were not issued on account or credit for value at the time the
same were drawn and issued.

6.25 Further, the clear intent and agreement not to use the checks as
payment for Petitioner’s previous obligations is shown by the fact that the seven
(7) checks petitioner issued did not match the Twenty-Two Million Pesos (Php
22,000,000.00), which petitioner allegedly originally owed respondent. Notably,
the seven (7) checks only totaled Twelve Million Pesos (Php 12,000,000.00), as
follows:

11A-C-0000030706 25 October 1997 Php 1,000,000.00

11A-C-0000030707 25 November 1997 2,000,000.00
11A-C-0000030708 15 January 1998 1,000,000.00
11A-C-0000030709 25 February 1998 2,000,000.00
11A-C-00000307010 25 March 1998 2,000,000.00
11A-C-00000307011 25 April 1998 2,000,000.00
11A-C-00000307012 25 May 1998 2,000,000.00
TOTAL 12,000,000.00

6.25 As such, Respondent committed a serious breach of the “Settlement

Agreement” when it presented the checks for payment even when respondent
never delivered the required spare parts and accessories for the trucks to
petitioner. All things considered, there was no benefit, undue or otherwise,
derived by petitioner from the transactions with the unlicensed foreign entity,
herein respondent.

6.26 Therefore, it is humbly submitted that it was grave error on the

part of the Honorable Court of Appeals to apply the exception expressed in the
case of Merril Lynch vs CA and related cases to the present case. Applying the
 23

case of European Resources and Technologies vs. Ingenieuburo Birkhahn, to rule that
respondent has the capacity to institute an action against the petitioner even
when the former was the one which committed a breach of its obligation, would
be tantamount to an unlicensed foreign corporation gaining access to our courts
for protection and redress. Since there was no benefit derived by the petitioner
from contracting with the respondent, which is an unlicensed foreign entity, the
general rule under Section 133 of the Corporation Code should stand and the
respondent, being an unlicensed foreign corporation, has no legal capacity to
institute any action in the Philippines.

Respondent Is An Unlicensed Foreign

Corporation Doing Business In The
Philippines. As Such, It Has No Legal
Capacity To Sue

6.27 The law is clear. A foreign corporation doing business in the

Philippines without the requisite license to do so cannot institute and maintain
any action in this jurisdiction. Section 133 of the Corporation Code explicitly
provides:

SECTION 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.

6.28 As explained by the Honorable Supreme Court in the above-cited

case of European Resources and Technologies vs. Ingenieuburo Birkhahn 15, “(a) corporation
has legal status only within the state or territory in which it was organized. For
this reason, a corporation organized in another country has no personality to file
suits in the Philippines. In order to subject a foreign corporation doing business
in the country to the jurisdiction of our courts, it must acquire a license from the
Securities and Exchange Commission (SEC) and appoint an agent for service of
process. Without such license, it cannot institute a suit in the Philippines.”

15
Supra
 24

6.29 Applying the foregoing to the instant case, the Honorable Court of
Appeals, affirming the findings of the Honorable Trial Court, correctly held that:

“From the provisions of the Distributorship Agreement dated 26

December 1995 between COMPANY B Systems and Greenline, it
is clear that COMPANY B Systems had a presence in the
country, performing activities that can be deemed as “doing or
transacting business” in the Philippines. Thus, the
Distributorship Agreement provides, among others, that:
1) Distribution States
A) It is agreed that COMPANY A will be appointed as an exclusive
distributor to promise and commercialise the sales of
COMPANY B Products in the said territories of Philippines.
B) G.E.P. will establish a Sales department solely for the purpose of
distribution and commercializing our products and will be
assisted by COMPANY B on the technical and commercial
support.

xxx

2) Products under this agreement

xxx
B) Training and presentation will be made by COMPANY B.
This will include product development, networking,
distributorship, pilot project schemes and so on.
C) Periodical reports and meetings are encouraged to review the
market conditions and to enable better market intelligence on the
product paper.
xxx
6) Other Points
xxx

B) In order to facilitate COMPANY B in the Philippines, G.E.P.

agrees to locate COMPANY B representation in the same
premise as G.E.P. [T]hese facilities will be provided Free of
Charge unless a permanent office is required with respective
facilities.
C) From time to time, COMPANY B will provide promotional
and selling aids for G.E.P. Distribution.
D) In time should the requirement be for COMPANY B to
produce their products in [the] Philippines, G.E.P. will be told
and finalization of this will be handled by COMPANY B’s
International Holdings which is today responsible for such
decisions.
xxx

Furthermore, the activities of COMPANY B Systems fall

under the term “doing business” as defined under Section 3(d)
of Republic Act 7042, otherwise known as the “Foreign
Investments Act of 1991,” to wit:

“d) The phrase "doing business" shall include soliciting orders,

service contracts, opening offices, whether called "liaison" offices
or branches; appointing representatives or distributors
domiciled in the Philippines or who in any calendar year stay
in the country for a period or periods totalling one hundred
eighty (180) days or more; participating in the management,
supervision or control of any domestic business, firm, entity or
corporation in the Philippines; and any other act or acts that
imply a continuity of commercial dealings or arrangements,
and contemplate to that extent the performance of acts or
works, or the exercise of some of the functions normally
 25

incident to, and in progressive prosecution of, commercial gain

or of the purpose and object of the business organization:
Provided, however, That the phrase "doing business: shall not be
deemed to include mere investment as a shareholder by a
foreign entity in domestic corporations duly registered to do
business, and/or the exercise of rights as such investor; nor
having a nominee director or officer to represent its interests in
such corporation; nor appointing a representative or distributor
domiciled in the Philippines which transacts business in its own
name and for its own account;

Thus, for doing business in the Philippines without a

license COMPANY B Systems is barred from suing before
Philippine courts pursuant to Section 133 of the Corporation
Code.” (Emphasis supplied)

6.30 While the Honorable Court of Appeals correctly ruled that the
respondent, as an unlicensed foreign corporation, is doing business in the
Philippines, it nonetheless erred when it ruled that the exception, i.e., the
Doctrine of Estoppel, applies.

6.31 As pointed out earlier, however, the exception cannot apply here
since petitioner did not derive any benefit from its transaction with the
respondent. On the contrary, it was because of petitioner’s transactions with the
respondent and the latter’s breach of the parties’ agreements that the former
incurred severe business reverses.

6.32 In a futile effort to stave off the inevitable conclusion that it is

“doing business” in the Philippines, respondent asserts that as an exporter, the
series of transactions with the petitioner cannot be considered as doing business
as there is no actual performance of specific commercial acts here. It further
asserts that it has not opened any office in the country.

6.33 But this is belied by the fact that under Section 3 (B) of the
Distribution Agreement. respondent mistakenly assumed that the obligation to
conduct trainings and presentations cannot be considered as “doing business.”
On the other hand, Section 6 (B) of the Agreement states that petitioner “x x x
agrees to locate respondent representatives in the same premises as petitioner.
Thus, clearly, while respondent may not have purchased or leased an office
space in the Philippines of petitioner, it had, by its act of entering into the
Distributorship Agreement, secured an office space for its representation through
Section 6 (B) of the said Agreement.
 26

6.34 Clearly, Petitioner is a foreign corporation doing business in the

Philippines, without any license. Under the law, such corporations have no
capacity to sue in the Philippines. Thus, respondent does not have any
personality to maintain the present suit.

6.35 On numerous occasions, respondent could have obtained a

license from the Securities and Exchange Commission (‘SEC”).

6.36 Respondent entered into a Distributorship Agreement on

and actively engaged in business in the Philippines since 1996. At any
time since then it could have secured a license from the SEC.

6.37 In 1997, the respondent, pursuant to previous arrangements

and in anticipation of further business with petitioner, entered into
another agreement of the petitioner entitled “Agreement for the
Settlement of Oustanding Accounts Receivable.”

6.38 It initiated a criminal suit in 1998 without any intention of

compling with the mandatory provisions of Section 133 of the Corporation
Code. Again, continuously defying the said provision of law, Respondent
re-filed the criminal complaint against Tantoco and Salonga devoid of any
sense of motivation to comply therewith.

6.39 This deliberate and open defiance by respondent of the

policy advocated by Philippine law continued even when respondent
chose to file the instant Petition for Recognition and Enforcement of
Foreign Judgment.

6.70 All in all, it is clear that respondent initiated and actively

maintained its business here in the Philippines by virtue of two (2) distinct
agreements and lodged three (3) actions before Philippine courts, offices and/or
agencies. In the span of more than ten (10) years of doing business, respondent
did not even bother to adhere to this most rudimentary requirement of law of
procuring a license before doing business in the Philippines. Thus, to allow
 27

Respondent to maintain its Petition subject of the appeal to the Honorable Court
of Appeals is tantamount to giving it a premium for doing an illicit act.

6.71 At any rate, both the Regional Trial Court of Pasig City and the
Honorable Court of Appeals held that respondent is doing business in the
Philippines without a license which is mandated by law. It is an oft-stated
doctrine that factual findings of the Court of Appeals affirming those of the trial
court are binding and conclusive16.

The Singapore Court Deprived

Petitioner Its Right To Be Heard And
Present Evidence On Its Affirmative
Defense. It Is Therefore Devoid Of
Jurisdiction To Render Its Decision
And, Thus, Cannot Be Enforced

6.72 Under Philippine jurisprudence, a foreign judgment that is

contrary to sound and established public policy of the forum shall not be
applied17.

6.73 In the case at bar, the Regional Trial Court of Pasig City correctly
held that proceedings taken by the Singapore Court violated an enshrined
constitutional right of petitioner, perhaps the most rudimentary of all the rights
guaranteed by the Bill of Rights—the right to due process.

6.74 The finding of the Honorable Trial Court was warranted by the fact
that the documents submitted by the petitioner and the respondent clearly
showed that the Singapore Court failed to conduct an actual trial on the merits
and permit the presentation of evidence as to petitioner’s affirmative defense.
While petitioner admits that indeed a hearing was conducted on the
“preliminary issues”, nevertheless the Singapore Court rendered its decision
without conducting trial proceedings on the most relevant and important issues,
specifically, whether or not prescription has set in, whether the Singapore Court
has jurisdiction over the matter, and, equally important, the weight of

16
FUENTES vs COURT OF APPEALS, G.R. No. 109849, 26 February 1997
17
Bank of America vs American Realty Corporation, 321 SCRA 559 [1999]
 28

petitioner’s affirmative defense, i.e., the initiatory breach committed by the

respondent.

6.75 Essentially, the fact that there was a hearing and a resulting
decision does not raise the conclusion that justice was served or that the
minimum requirements of due process were complied with. Indeed, a person’s
inherent right to be heard is not considered a no-holds-barred authority to speak
his or her mind and does not guarantee that he or she will be heard on all
matters he or she will consider pertinent. On the other hand, the imprimatur to
be heard cannot be too restrictive or selective so as to virtually negate being
heard at all.

6.76 The middle stance therefor is a minimum guarantee that a person,

at the very least, will be heard and be allowed to present his or her evidence-in-
chief on two (2) matters, namely: 1) on a specific denial of a material fact or facts
(negative defense); and/or, 2) an allegation on a new matter which, while
hypothetically admitting the material allegation of a cause of action, would
nevertheless prevent or bar recovery (affirmative defense).

6.77 In the case of Mongao vs. Pryce Properties Corp.18, the Honorable
Supreme Court explained the nature of an affirmative defense and emphasized
that a full blown trial is necessary when there is such a defense raised, thus:

“An affirmative defense is one which is not a denial of an

essential ingredient in the plaintiff’s cause of action, but one
which, if established, will be a good defense—i.e. an "avoidance"
of the claim. Affirmative defenses include fraud, statute of
limitations, release payment, illegality, statute of frauds,
estoppel, former recovery, discharge in bankruptcy, and any
other matter by way of confession and avoidance. When the
answer asserts affirmative defenses, there is proper joinder of
issues which must be ventilated in a full-blown trial on the
merits and cannot be resolved by a mere judgment on the
pleadings.” (Emphasis supplied)

6.78 In the case at bar, it is evident that the Singapore Court rendered its
decision by merely conducting a hearing on “preliminary issues” which is akin
to a Motion for Judgment on the Pleadings in this jurisdiction. But such summary
and heedless “rocket-docket” procedure cannot thresh out the weight of the
evidence presented by both parties when there are affirmative defenses

G.R. No. 156474, 16 August 2005 cited in the book of Justice E. S. Albano, Remedial Law, 2007
18

Edition
 29

presented. As held by this Honorable Court in the Mongao vs Pryce Properties

case, the issues “x x x must be ventilated in a full blown trial on the merits.”

6.79 Furthermore, the Singapore Court showed manifest partiality in

favor of the respondent when it granted both its Motion to Amend Statement of
Claim and its Motion for Hearing on a Preliminary Issue. On the other hand, it
denied outright and without justifiable cause petitioner’s Motion to Amend
Statement of Defense, which motion was made orally by Petitioner’s counsel in
Singapore since the latter was just very recently made aware that under the Rules
of Court of the Philippines, the 23 May 2002 and 5 August 2002 letters where
respondent allege that there was an admission of liability, are inadmissible as
evidence19.

6.80 At any rate, it is humbly submitted that petitioner was unduly

deprived of its inherent and constitutional right to due process. The arbitrary
and terse decision of the Singapore Court to hear only on the “preliminary issue”
and dispensed with the hearing and the presentation of evidence-in-chief on
petitioner’s affirmative evidence is gravely offensive to the rights guaranteed
and held sacrosanct in our Bill of Rights.

6.81 The rationale for making the “right to be heard and present
evidence” indispensable to any proceeding, here and everywhere, is simple:
without the granting of an opportunity to be reasonably heard and present
evidence, expediency in the administration of justice will be for naught because
pragmatism alone, devoid of truth, is ominously injurious. Under these
unceremonious circumstances, this so-called swift justice constitutes no less than
an unlawful taking.

6.82 Let us be reminded, lest we forget, that in this jurisdiction no

person shall be deprived of life, liberty or property without due process of law.20

19
Sec. 27.Offer of compromise not admissible. — In civil cases, an offer of compromise is not an
admission of any liability, and is not admissible in evidence against the offeror.

20
Section 1, Article III of the Constitution
 30

6.83 The right to due process is a constitutional right, and when there is
a violation of constitutional rights, the courts are ousted of their jurisdiction. As
the Honorable Supreme Court stated in People vs. Tac-an21 citing Saldana vs. CA22:

“The cardinal precept is that where there is a violation of basic

constitutional rights, courts are ousted of their jurisdiction.
Thus, the violation of the State’s right to due process raises a
serious jurisdiction issue (Gumabon vs. Director of the Bureau of
Prisons, L-300026, 37 SCRA 420 [Jan. 30, 1971]) which cannot be
glossed over or disregarded at will. Where the denial of the
fundamental right of due process is apparent, a decision
rendered in disregard of that right is void for lack of jurisdiction
(Aducayen vs. Flores, L-30370, [May 25, 1973] 51 SCRA 78; Shell
Co. vs. Enage, L-30111-12, 49 SCRA 416 [Feb. 27, 1973]). Any
judgment or decision rendered notwithstanding such violation
may be regarded as a ‘lawless thing, which can be treated as an
outlaw and slain at sight, or ignored wherever it exhibits its
head’ (Aducayen vs. Flores, supra).” (Emphasis supplied)

6.84 It is clear that the Singapore Court denied petitioner its right to due
process. Since the decision rendered by the said court was offensive to our basic
constitutional rights, the Honorable Court of Appeals gravely erred when it
upheld the ruling of said foreign court. For constitutional and jurisprudential
reasons, the decision must be regarded, as suggested by the case of People vs. Tac-
an23, “x x x a lawless thing, which can be treated as an outlaw and slain at sight,
or ignored wherever it exhibits its head.”

PRAYER

WHEREFORE, premises considered, petitioner most respectfully prays

that this Honorable Court REVERSE AND SET ASIDE the Decision of the
Honorable Court of Appeals dated 24 November 2011 and its Resolution dated
17 May 2012 and REINSTATE the Decision of the Regional Trial Court of Pasig
City Branch 155 dated 5 December 2008 which dismissed the Petition for
Recognition and Enforcement of Foreign Judgment filed by herein Respondent.

Other reliefs, just and equitable under the premises, are likewise prayed
for.

21
G.R. No. 148000, 27 February 2003
22
190 SCRA 396 (1990)
23
Supra
 31

Taguig City for the City of Manila, 3 July 2012.

KAPUNAN GARCIA & CASTILLO

Counsel for Petitioner
Units 301 to 306, 32nd & Fifth Building
32nd Street corner 5th Avenue
Bonifacio Global City
Taguig, Metro Manila 1634, Philippines
Tel. No.(02) 846-6247 up to 51
Fax No.:(02) 846-5057
Email: kapunanlaw@kapunanlaw.com
By:

LORNA PATAJO-KAPUNAN
PTR No. 1442199; Taguig City; 01/02/12
IBP O.R. No. 341161; 01/18/93
Attorney’s Roll No. 29626
MCLE Compliance No. III-0017035; 6/2/10

SONYA MARGARITA BENEMERITO-CASTILLO

PTR No. 1447951; Taguig City; 01/02/12
IBP O.R. No. 877118; Quezon City; 01/04/12
Attorney’s Roll No. 39978
MCLE Compliance No. III - 0005177; 10/08/09

DEANNA MELISSA S. LORENZO-SINGIAN

PTR No. 1447952; Taguig City; 01/02/12
IBP O.R. No. 877127; RSM; 01/04/12
Attorney's Roll No. 48078
MCLE Compliance No. III-0014930; 05/06/10

ROY E. CARLOS
PTR No. 3180214/ 5 January 2012/ Makati City
IBP No. 879541/ 5 January 2012/ Quezon City
Roll No. 57309
MCLE Compliance No. 0012085/6 April 2010

Copy Furnished:
COURT OF APPEALS
SPECIAL FORMER THIRD DIVISION
Manial

ATTY. JOAN THERESE F. BOMA

 32

SEDALAW, Averilla Defensor Enrile

Suite 1107, Tektite West Tower,
Phil. Stock Exchange Center
Ortigas Center 1605 Pasig City
 33

EXPLANATION ON SERVICE BY REGISTERED MAIL

Petitioner, by counsel, in compliance with Section 11, Rule 13 of the 1997

Rules on Civil Procedure, respectfully states that due to time constraints and in
view of the lack of messengers and the considerable distance between the offices
of the undersigned counsel for Petitioner and the Honorable Court of Appeals,
the copies of the foregoing Petition dated 26 June 2012, were served by registered
mail pursuant to Sections 5, 7, 11 and 13 of Rule 13 of the Revised Rules of Court.

ROY E. CARLOS
 34

REPUBLIC OF THE PHILIPPINES)

QUEZON CITY ) SS.

AFFIDAVIT OF SERVICE

I, IRENEO P. OCCENO, JR., an employee of Kapunan Garcia & Castillo

Law Offices with office address at Units 301 to 306, 32nd & Fifth Building 32nd
Street corner 5th Avenue Bonifacio Global City Taguig, Metro Manila, after being
duly sworn, depose and state that:

On ___ July 2012, I served upon the parties listed below, by registered
mail, copies of the Entry of Appearance with Motion for Extension of Time to
File Petition for Review on Certiorari dated 7 June 2012 in the case entitled
“Company APhilippines, Inc. vs COMPANY B Systems (S) PTE, LTD.,” docketed as
GR_____________ (CA-G.R. CV No. 93499)” filed before the Supreme Court in
accordance with Sections 5, 7, 11 and 13, Rule 13 of the 1997 Rules of Civil
Procedure, by depositing copies in the post office at ________________, for the
following, as evidenced by the Registry Receipts hereto attached and indicated
after the names of the addressee, and with instructions to the postmaster to
return the mail to the sender after ten (10) days if undelivered:

Addressee(s) Registry Receipt No.:

COURT OF APPEALS
SPECIAL FORMER THIRD DIVISION
Manial

ATTY. JOAN THERESE F. BOMA

SEDALAW, Averilla Defensor Enrile
Suite 1107, Tektite West Tower,
Phil. Stock Exchange Center
Ortigas Center 1605 Pasig City

IRENEO P. OCCENO, JR.

Affiant

SUBSCRIBED AND SWORN to before me this __th day of July 2012, affiant
being personally known to me and exhibiting his Social Security System I.D. with
No. 33-8520603-4.

Doc. No. _____;

Page No. _____;
Book No. _____;
Series of 2012.