FOREIGN JUDGMENTS

Section. 14, Art. VIII of the 1987 Constitution requires 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."

The constitutional provision has outlawed so-called memorandum decision, one which
merely contains the disposition of the court, as to who won or as to how much one party
is entitled against the adverse party, without a statement of facts upon which it is based
and without a citation or discussion of the law which supports it.

The question is whether or not a foreign judgment sought to be enforced in the country
should comply with the constitutional requirement as to the form of judgment. There are
at least two Supreme Court decisions on the question. One is Oil Natural Gas
Commission v. Court of Appeals, in which the foreign judgment of India was challenged
for being a memorandum decision, in violation of Section 14 of Article VIII of the
Constitution.

In Oil Natural Gas Commission v. Court of Appeals ruled that 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.

The Court in Oil and Natural Gas Commission relied on Francisco v. Permskul, to arrive
at the conclusion that a memorandum judgment by reference to the findings of fact and
conclusions of law is valid and that since the foreign judgment adopted the findings of
fact and law of the arbitrator, said foreign judgment is valid. However, the Court did not
say that in Francisco v. Permskul, the Court ruled that for a memorandum or reference
decision to be valid, the statement of facts and conclusions of law should be attached to
the judgment, and the foreign judgment of India did not show such attachment. At any
rate, on motion for reconsideration of the decision in Oil Natural Gas Commission v.
Court of Appeals, the Court reconsidered the same and remanded the case to the trial
court for hearing with both parties presenting evidence, so that the court can better
appreciate the factual and legal bases of the judgment by reference, as required by due
process. This means that the trial court conduct proceedings in the usual course, by the
parties presenting their respective evidence and on the basis thereof and
the applicable law, to render judgment in the form required by Section 14 of Article VIII
of the Constitution. In other words, the foreign judgment is tried on the merits all over
again to comply with the due process requirements of the Constitution.
The other case is Asiawest Merchant Bankers (M) Brahd v. Court of Appeals also of the
Second Division, where the foreign judgment of Kuala Lumpur sought to be enforced in
the country was in the form of a memorandum judgment. The Court upheld the validity
of the foreign memorandum judgment in this wise:

"Lastly, there is no merit to the argument that the foreign judgment is not enforceable in
view of the absence of any statement and law upon which the award in favor of the
petitioner was based. As aforesaid, the lex fori or the internal law of the forum governs
matters of remedy and procedure. Considering that under the procedural rules of the
High Court of Malaysia, a valid judgment may be rendered even without stating in the
judgment every fact and law upon which the judgment is based, then the same must be
accorded respect and the courts in this jurisdiction cannot invalidate the judgment of the
foreign court simply because our rules provide otherwise."

The Court in the above case applied the lex fori or the internal law of Kuala Lumpur,
without any qualification, our Court stating that under Kaula Lumpur's conflict of laws
rule, a valid judgment may be rendered in said country even without stating in the
judgment the facts and the law upon which the judgment is based. This is in direct
conflict with or in violation of the Philippine Constitution, which requires that the court
shall state the facts and the law upon which its decision is based, otherwise it may be
set aside. For this reason, the lex fori rule should not have been applied, as an
exception to the rule

The constitutional provision as the form of judgment in Section 14 of Article VIII of the
Constitution is mandatory for courts to follow in rendering decisions in cases filed by or
against Filipino citizens in our country. The same requirement must be complied with by
a non-resident who seeks to enforce in the Philippines a foreign judgment against a
citizen of our country, otherwise our own nationals will be treated unfairly in favor of
foreigners. Moreover, to enforce in the Philippines a foreign decision in the form of a
memorandum judgment as sanctioned by the foreign law on procedure is to grant the
foreign law extraterritorial application in our country.

Any foreign law, whether substantive or procedural, cannot overrule, nor prevail over,
this constitutional provision, nor should our courts allow it do so. When a foreign
judgment is contrary to a sound and established public policy of the forum, the said
foreign judgment shall not be applied. Where there is a conflict between a foreign law
and Philippine law, even when the latter is procedural in nature, the former must yield to
the latter

When a prevailing party seeks to enforce a foreign judgment which does not state the
facts and the law upon which it is based, the proper course for him to do is to file an
action not so much predicated on the foreign judgment but on the facts constituting his
cause of action, so that the defendant may be able to raise all possible defenses, as if
the case is tried anew on the merits in our country, because Section 48 of Rule 39 of the
Rules of Court grants him such right; and the court should decide it based on evidence
adduced and the applicable law, in the form of judgment required by Section 14 of
Article VIII of the Constitution. This is the course of action required by the Court in Oil
Natural Gas Commission v. Court of Appeals and in Yao v. Court of Appeals, when the
Court remanded the case to the trial court for hearing on the merits.