55. OIL AND NATURAL GAS V.

CA

FACTS
Oil and Natural Gas Commission is a foreign corporation, owned and controlled by the Government of India.
Pacific Cement Co is a Philippine corporation.
Pacific was supposed to deliver more than 4,000 metric tons of oil well cement to Bombay and Calcutta but because of a
dispute with the carrier, the shipment never reached the destination. Despite payment by Oil and Natural, as well as
repeated demands, Pacific does not deliver the oil well cement.
During negotiations, the parties agreed that the Pacific will replace the oil well cement with Class G cement. Pacific did
deliver the Class G cement but they were not according to specifications. Oil and Natural informed Pacific that they will
submit the dispute to arbitration as provided for in their contract.
The dispute was therefore submitted to arbitration, the arbitrator was Shri Malhotra, an employee of Oil and Natural Gas.
The decision of the arbitrator was in favour of Oil and Natural Gas. The arbitral decision was confirmed by an Indian court.
Oil and Natural Gas filed a complaint in Pasig RTC for the enforcement of the foreign judgment. This was opposed by
Pacific for being bereft of any statement of facts and law upon which the award in favor of the petitioner was based. The
judgment of the Indian court apparently simply adopted the award of the arbitrator without stating anything by way of
support for its judgment.
The Pasig RTC dismissed the complaint. The RTC said that the contract provided for some disputes to be settled by the
regular court and some to be submitted to arbitration. This type, the RTC said, was for the courts. Consequently, the
proceedings had before the arbitrator were null and void and the foreign court had therefore, adopted no legal award
which could be the source of an enforceable right.
The CA affirmed the dismissal by the RTC. Aside from agreeing with the RTC that the arbitral award was void, the CA also
said that the full text of the judgment of the foreign court contains the dispositive portion only and indicates no
findings of fact and law as basis for the award. Hence, the said judgment cannot be enforced by any Philippine court as it
would violate the constitutional provision that no decision shall be rendered by any court without expressing therein
clearly and distinctly the facts and the law on which it is based.

ISSUE
Whether or not the judgment of the foreign court is enforceable in this jurisdiction in view of the private respondent's
allegation that it is bereft of any statement of facts and law upon which the award in favor of the petitioner was based.

RULING
Yes, it is enforceable in this jurisdiction. The SC said that even in this jurisdiction, incorporation by reference is allowed if only
to avoid the cumbersome reproduction of the decision of the lower courts, or portions thereof, in the decision of the higher
court. This is particularly true when the decision sought to be incorporated is a lengthy and thorough discussion of the facts
and conclusions arrived at, as in this case, where Award Paper No. 3/B-1 consists of eighteen (18) single spaced pages.. In
effect, the SC was saying that we also do in this country what the Indian court did and it was okay for as long as the award or
decision adopted was complete in terms of the discussion of the facts and conclusions. The 18 pages of single spaced award by
the arbitrator was, according to the SC, complete enough. The short decision of the Indian court which merely adopted the
award was acceptable in our jurisdiction.
Furthermore, the recognition to be accorded a foreign judgment is not necessarily affected by the fact that the procedure in
the courts of the country in which such judgment was rendered differs from that of the courts of the country in which the
judgment is relied on. This Court has held that matters of remedy and procedure are governed by the lex fori or the internal
law of the forum. Thus, if under the procedural rules of the Civil Court of Dehra Dun, India, a valid judgment may be rendered
by adopting the arbitrators findings, then the same must be accorded respect. In the same vein, if the procedure in the foreign
court mandates that an Order of the Court becomes final and executory upon failure to pay the necessary docket fees, then the
courts in this jurisdiction cannot invalidate the order of the foreign court simply because our rules provide otherwise.

Finally, we reiterate hereunder our pronouncement in the case of Northwest Orient Airlines, Inc. v. Court of Appeals that:

"A foreign judgment is presumed to be valid and binding in the country from which it comes, until the contrary is shown. It is
also proper to presume the regularity of the proceedings and the giving of due notice therein.

"Under Section 50, Rule 39 of the Rules of Court, a judgment in an action in personam of a tribunal of a foreign country having
jurisdiction to pronounce the same is presumptive evidence of a right as between the parties and their successors-in-interest by
a subsequent title. The judgment may, however, be assailed by evidence of want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact. Also, under Section 3 of Rule 131, a court, whether of the Philippines or
elsewhere, enjoys the presumption that it was acting in the lawful exercise of jurisdiction and has regularly performed its official
duty."

Consequently, the party attacking a foreign judgment (Pacific Cement) had the burden of overcoming the presumption of its
validity which it failed to do in the instant case.

The foreign judgment being valid, there is nothing else left to be done than to order its enforcement, despite the fact that Oil
and Natural Gas merely prays for, the remand of the case to the RTC for further proceedings. As this Court has ruled on the
validity and enforceability of the said foreign judgment in this jurisdiction, further proceedings in the RTC for the reception of
evidence to prove otherwise are no longer necessary.