DOJ Opinion No. 009, s. 1985

DOJ OPINION NO. 009 , s. 1985 January 23, 1985 Marubeni Corporation 4-2, Oatemachi 1-chome Chiyoda-ku Tokyo Japan RE : Loan Agreement dated as of July 9, 1984 Gentlemen : I am the Minister of Justice of the Republic of the Philippines and you have requested my opinion in connection with the loan agreement dated as of July 9, 1984 (the "Agreement") by and between Philippine Associated Smelting and Refining Corporation as borrower (the "Borrower"), and Marubeni Corporation as lender (the "Lender") and providing for loans to the borrower in the aggregate principal amount not to exceed a sum in Japanese Yen equivalent to Philippine Pesos 183,066,000, subject to the terms and conditions stated therein. the obligation of the Borrower under the Agreement and its related documentation have been guaranteed by National Development Company, a corporation organized under the law of the Republic of the Philippines (the "Corporate Guarantor"), pursuant to its guaranty dated August 24, 1984 (the "Corporate Guaranty") and the obligations of the Corporate Guarantor thereunder have in turn been guaranteed by the Republic of the Philippines (in such capacity, the "Government Guarantor"), pursuant to its guaranty dated August 24, 1984 (the "Government Guaranty"). The Corporate Guarantor and the Government Guarantor are collectively referred to herein as the "Guarantors" and the Corporate Guaranty and the Government Guaranty as the "Guaranties". All capitalized terms used herein have the meanings set forth in the Agreement except as otherwise defined herein. prcd In rendering this opinion I have examined the Constitution, the relevant Civil Code provisions, Presidential Decrees, laws and regulations of the Republic of the Philippines and all such public records and other documents as are necessary in connection herewith, including the following: 1. Full powers issued by the President of the Philippines on April 10, 1984 in connection with the Agreement; 2. Final approval of the loan subject of the Agreement by the Central Bank of the Philippines on December 27, 1984. In such examination, I have assumed the genuineness of all signatures and the authenticity of all documents submitted to me as originals, and the conformity with the originals of all documents submitted to me as copies to and I have found nothing to indicate that such assumptions are not fully justified. As to any other matters of fact material to the opinions expressed herein, I have relied upon certificates of officials and other representatives of the Government Guarantor. As I am qualified to advise that Government Guarantor regarding the laws of the Republic of the Philippines, only I do not pass upon and express no opinion in respect of those matters governed by or construed in accordance with the laws of any jurisdiction other than the Republic of the Philippines. Based upon and subject to the foregoing, I am of the opinion that: 1. The Government Guarantor has full legal right, power and authority to execute and deliver the Government Guaranty and any documents and instruments, required thereunder to be executed and delivered by the Government Guarantor and to perform and observe the terms and conditions of the Government Guaranty and any documents and instruments required thereunder. 2. The Government Guarantor has taken all necessary legal action to authorize the execution, delivery and performance of the Government Guaranty and any documents and instruments required thereunder to be executed and delivered by the Government Guarantor. prcd 3. There is no constitutional or treaty provision, law, ordinance, decree, regulation, statute or similar enactment and no contractual or other obligation relating to External Indebtedness binding on the Government Guarantor that is or will be contravened by the execution and delivery of the Government Guaranty or any document or instrument required thereunder to be executed and delivered by the Government Guarantor or by the performance or observance of any of the terms and conditions thereof. 4. All governmental registrations and approvals necessary for the due execution and delivery of the Government Guaranty and any documents and instruments required thereunder to be executed and delivered by the Government Guarantor have been obtained, and all such registrations and approvals necessary for the performance and enforceability thereof have been obtained and are in full force and effect. 5. The Government Guaranty and each document or instrument required thereunder to be executed and delivered by the Government Guarantor constitute the legal, valid and binding obligations of the Government Guarantor enforceable in accordance with their respective terms. 6. No litigation, arbitration or administrative proceeding is presently in progress or, to the best of my knowledge, pending or threatened against the Government Guarantor or any of its assets which relates to the transactions contemplated by the Agreement or the Government Guaranty or which, if adversely determined, would have a material adverse effect on the Government Guarantor. 7. The obligations of the Government Guarantor under the Government Guaranty and any documents and instruments required thereunder to be executed and delivered by the Government Guarantor are direct, unconditional, enforceable and general obligations of the Government Guarantor for which the full faith and credit of the Government Guarantor is pledged, and which rank at least pari passu in priority of payment, security and all other respects with all other existing unsecured External Indebtedness of the Government Guarantor. No existing External Indebtedness of the Government Guarantor is secured by or otherwise benefits from any lien on or with respect to any present or future assets, revenues or rights to the receipt of income of the Government Guarantor, other than (i) liens upon the Government Guarantor's property established at the time of the purchase of such property to secure payment of the purchase price of such property (ii) liens arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date of creation, and (iii) liens created by the operation of law. 8. The Government Guarantor is a member in good standing of the IMF and is fully eligible to utilize the resources of the IMF under the Article of Agreement thereof. 9. The Government Guarantor's obligation under the Government Guaranty are commercial in nature and are subject to civil and commercial law, and the execution, delivery, performance and observance of the Government Guaranty by it constitute private and commercial acts. Neither the Government Guarantor nor any of its property has any right of immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceeding, from the giving of relief in any legal action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any competent court, from service of process upon it or any agent, from attachment prior to judgment, from attachment in aid of execution, or from execution or any other process for the enforcement of any judgment or other legal process. The waiver of any rights to sovereign immunity contained in the Second Paragraph of the Government Guaranty is irrevocably binding on the Government Guarantor. 10. The performance by the Lender of any action required or permitted under the Agreement, the Guaranties or any document or instrument required thereunder will not violate any law or regulation of the Republic of the Philippines or any political subdivision thereof or Government Agency, or result in any unfavorable tax consequences for the Lender. The Lender is not or will not be deemed to be resident or domiciled, to have an office or to be doing business, in the Republic of the Philippines solely by reason of the execution, delivery, performance or enforcement of the Agreement, the Guaranties or any document or instrument required thereunder. 11. It is not necessary or advisable under the laws of the Republic of the Philippines in order to assure the validity, effectiveness and enforceability of the Agreement, the Guaranties or any document or instrument required thereunder or any part thereof that any such agreement or instrument be filed, registered or recorded in any public office (other than with the Central Bank of the Philippines) or elsewhere or that any other instrument relating thereto to be executed, delivered, filed, registered or recorded. prcd 12. Under the laws of the Republic of the Philippines, the choice of Japanese law to govern the validity, construction and performance of the Agreement, the Guaranties and the documents and instruments required thereunder and the transactions therein contemplated is a valid irrevocable choice of law and the submission by the Government Guarantor to the jurisdiction of the Tokyo District Court, Tokyo, Japan, is a valid submission to the jurisdiction of such court. In the event that a judgment of such court was obtained after service of process in the manner specified in the Government Guaranty, the same would be enforced by the courts of the Republic of the Philippines by suit on the judgment, subject only to defenses based on lack of jurisdiction, lack of notice, fraud, collusion, or clear mistake of law or fact. 13. A court in the Republic of the Philippines may render and enforce a judgment expressed in Yen and the obligations of the Borrower and the Guarantor to pay in Yen are valid and enforceable under the law of the Republic of the Philippines. 14. The transactions contemplated by the Agreement, the Guaranties and documents and instruments required thereunder are not subject to any currency deposit requirements or any reserve requirements or whatsoever nature under the laws of the Republic of the Philippines. Very truly yours, (SGD.) ESTELITO P. MENDOZA Minister of Justice