OIL AND NATURAL GAS COMMISSION v.

COURT OF APPEALS
G.R. NO. 114323, July 23, 1998

Oil and Natural Gas Commission filed a case against Pacific Cement Company, Inc. on the
ground of non-delivery of cargo under Clause 16 of their contract.

The petitioner, Oil and Natural Gas Commission, is a foreign corporation owned and
controlled by the Government of India while the private respondent, Pacific Cement Company,
Inc., is a private corporation in the Philippines. On February 26, 1983 private respondent undertook
to supply petitioner 4,300 metric tons of oil well cement. During delivery, cargo was held up in
Bangkok and did not reach its point destination. Private respondent has already received payment
of $477,300.00 and despite several demands made by the petitioner, the private respondent failed
to deliver the oil well cement. On July 23, 1988, the chosen arbitrator resolved the dispute in
petitioner's favor setting forth the arbitral award that the respondent will pay to the petitioner with
a total of US $ 899,603.77. The petitioner filed a petition to the Court of Civil Judge in India and
thereafter issued an Order on February 7, 1990, executing the award. Despite notice sent to the
private respondent of the foregoing order and several demands by the petitioner for compliance
therewith, the private respondent refused to pay the amount adjudged by the foreign court as owing
to the petitioner.

The petitioner contends that the non-delivery of the cargo was a matter properly cognizable
by the provisions of clause 16 of the contract; the judgment of the civil court of dehradun, india
was an affirmation of the factual and legal findings of the arbitrator and therefore enforceable in
this jurisdiction; and that evidence must be received to repel the effect of a presumptive right under
a foreign judgment. The respondent, however, argues the plaintiffs lack of legal capacity to sue;
there is lack of cause of action; and the plaintiffs claim or demand has been waived, abandoned,
or otherwise extinguished.

Both RTC and Court of Appeals both affirmed the dismissal of the complaint ruling that
the arbitrator did not have jurisdiction over the dispute of the case.

The Supreme Court ruled that 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.

WHEREFORE, the instant petition is GRANTED.