Topic: Recognition & Enforcement of Foreign Judgement

OIL & NATURAL GAS vs CA

GR no. 114332
Jul 23 1998

Facts:
Oil& Natural Gas Commission is a foreign corporation owned and controlled by the Government
of India. While Pacific Cement Co. is a private corporation duly organized and existing under
Philippine law. The present conflict between ONGC and PCC has its roots in a contract entered
into by and between both parties whereby PCC undertook to supply the ONGC 4,300 metric
tons of oil well cement. In consideration therefor, ONGC bound itself to pay PCC the amount of
$477,300.00 by opening an irrevocable, divisible, and confirmed letter of credit in favor of PCC.
Both parties entered into a contract obligating Pacific Company to supply Oil and Natural Gas.
The oil well cement was loaded on board the ship MV SURUTANA NAVA at the port of Surigao
City, Philippines for delivery at Bombay and Calcutta, India. However, due to a dispute between
the shipowner and PCC, the cargo was held up in Bangkok and did not reach its point
destination. Notwithstanding the fact that PCC had already received payment and despite
several demands made by ONGC, PCC failed to deliver the oil well cement. Thereafter,
negotiations ensued between the parties and they agreed that PCC will replace the entire 4,300
metric tons of oil well cement with Class "G" cement cost free at PCC's designated port.
However, upon inspection, the Class "G" cement did not conform to ONGC's specifications. The
ONGC then informed PCC that it was referring its claim to an arbitrator pursuant to Clause 16 of
their contract. ONGC’s chosen arbitrator, Mr. Malhotra, resolved dispute and set arbitral award
in favor of ONGC. To execute award, ONGC filed Petition before the Court of the Civil Judge in
Dehra Dun, India (foreign court). Without responding to PCC’s letter asking how much was to be
paid, foreign court did not admit
PCC’s objections, so it issued its ruling, entitling ONGC to get from PCC $899k. So, ONGC sent
notices of demand to PCC but the latter refused to pay.
Then, ONGC filed a complaint for enforcement of judgment against PCC at Surigao’s RTC.

Issue: WON the judgment made by the foreign court is enforceable.

Held:
YES. The constitutional mandate 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 does not
preclude the validity of “memorandum decisions” which adopt by reference the findings of fact
and conclusions of law contained in the decisions of inferior tribunals. In Francisco v. Permskul,
this Court held that the following memorandum decision of the Regional Trial Court of Makati did
not transgress the requirements of Section 14, Article VIII of the Constitution: “MEMORANDUM
DECISION—After a careful perusal, evaluation and study of the records of this case, this Court
hereby adopts by reference the findings of fact and conclusions of law contained in the decision
of the Metropolitan Trial Court of Makati, Metro Manila, Branch 63 and finds that there is no
cogent reason to disturb the same. “WHEREFORE, judgment appealed from is hereby affirmed
in toto.”

Hence, 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.

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 arbitrator’s 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.

Time and again this Court has held that the essence of due process is to be found in the
reasonable opportunity to be heard and submit any evidence one may have in support of one’s
defense or stated otherwise, what is repugnant to due process is the denial of opportunity to be
heard. Thus, there is no violation of due process even if no hearing was conducted, where the
party was given a chance to explain his side of the controversy and he waived his right to do so.