DOJ Opinion No. 082, s. 1985

DOJ OPINION NO. 082 , s. 1985 To the Banks parties to the Revolving Short Term Trade Facility Agreement referred to below and to Chemical Bank, as Coordinating Bank Central Bank of the Philippines Gentlemen: This opinion is furnished to you pursuant to Section 9.01(a)(vi) of the Revolving Short Term Trade Facility Agreement dated as of May 20, 1985 (the "Trade Facility Agreement") among the Central Bank of the Philippines (the "Central Bank"), the Republic of the Philippines (the "Guarantor"), the financial institutions listed as Banks therein and Chemical Bank, as Coordinating Bank. Terms defined in the Trade Facility Agreement are used herein as therein defined. I am the Minister of Justice of the Philippines and have acted in such capacity in connection with the preparation, execution and delivery of, and satisfaction of the conditions precedent to the Effective Date under, the Trade Facility Agreement. LibLex In that connection, I have reviewed the Constitution of the Philippines (the "Constitution"), the Charter of the Central Bank (Republic Act No. 265, as amended, of the Philippines), the Foreign Borrowings Act (Republic Act No. 4860, as amended, of the Philippines), Presidential Decree No. 1961 dated January 11, 1985, and such treaties, laws, Presidential Decree, Executive Orders, and the like as I have deemed necessary for the opinions hereinafter expressed. I have also examined the originals or copies, photocopied, certified or otherwise identified to my satisfaction of: (1) A counterpart of the Trade Facility Agreement, executed by the Central Bank, the Guarantor and the Coordinating Bank: (2) The form of Deposit Certificate annexed as Exhibit A to the Trade Facility Agreement: (3) The documents furnished pursuant to clauses (i),(ii) and (v) of Section 9.01 (a) of the Trade Facility Agreement; (4) Trade documents furnished pursuant to clauses (ix) and (xiii) of Section 9.01 (a) of the Trade Facility Agreement (the "Process Agents' Letters");and (5) Such official records, certificates, rulings and orders of agencies and officers of the Guarantor, such corporate and official records and certificates of the Central Bank, and such other agreements and documents as I have deemed appropriate as bases for the opinions expressed herein. In my examination of the documents listed above, I have assumed that, except for all documents executed by the Guarantor, (i) all such documents are authentic and have been duly executed and delivered by or on behalf of each of the parties thereto, (ii) all signatures on all such documents are genuine and copies of all documents submitted to me are complete and conform to the original documents, and (iii) the Trade Facility Agreement has been duly authorized by each of the Banks and the Coordinating Bank. Insofar as the opinions expressed herein relate to factual matters, information with respect to which is in the possession of the Guarantor but not in my possession, I have made inquiries with respect to such matters and relied upon representations of officers of the Guarantor, and nothing has come to my attention leading me to question, or giving me reasonable grounds to question, the accuracy of such information. prcd As I am qualified to advise the Guarantor regarding the laws of the Philippines and do not represent myself to be familiar with the laws of any jurisdiction other than the Philippines, I do not pass upon and express no opinion in respect of those matters governed by or construed in accordance with any such laws. Based upon the foregoing and subject to the qualifications and observations set forth below, I am of the opinion that: (a) The Central Bank is the custodian of the International Monetary Assets of the Philippines and, by law, the Central Bank is vested with all right, title and interest in such international Monetary Assets. The Central Bank is wholly-owned by the Guarantor. (b) The execution, delivery and performance by the Guarantor of the Trade Facility Agreement and the Deposit Certificates are within the Guarantor's powers, have been duly authorized by all necessary legislative, executive administrative and other governmental action, and do not contravene (i) the Constitution, (ii) any treaty, law, regulation, decree, or to the best of my knowledge after due inquiry, any judgment, award, injunction or similar legal restriction applicable to the Guarantor, or (iii) to the best of my knowledge after due inquiry, any contractual restriction which binds are affects (or purports to bind or affect) the Guarantor or its assets. The Guarantor has full power and authority to execute and deliver the trade Facility Agreement and the Deposit Certificates and to perform and observe the provisions of the Trade Facility Agreement and the Deposit Certificates, on its part to be performed or observed and to guarantee, in accordance with the terms of the Trade Facility Agreement and the Deposit Certificates, the obligations of the Central Bank under the Trade Facility Agreement and the Deposit Certificates, (c) No authorization or approval (including exchange control or transfer approval) or other action by, and be notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery of, and the performance by the Guarantor of its obligations under, the Trade Facility Agreement and the Deposit Certificates, except for the authorizations contained in the certificate of the Presidential Executive Assistant of the Guarantor delivered to the Coordinating Bank pursuant to Section 9.01(a)(ii) of the Trade Facility Agreement, which have been duly obtained, are unconditional and are in full force and effect. (d) The Trade Facility Agreement has been duly executed and delivered by the guarantor. The Trade Facility Agreement is, and each Deposit Certificate when duly executed and delivered by the Guarantor pursuant thereto will be, the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as enforceability in the Philippines may be limited or effected by moratorium or similar laws affecting creditors' rights generally. (e) The Trade Facility agreement, the Deposit Certificates and the guarantee obligations of the guarantor thereunder are the direct unconditional and general obligations of the guarantor, for the payment of which there is pledge and the full faith and credit of the Philippines. (f) The obligations of the Guarantor under the Trade facility Agreement and the Deposit certificate rank at least pari passu in priority of payment with all existing unsecured External Indebtedness of the Guarantor. There is no (and there will be not be as the result of the execution or performance of the Trade Facility Agreement or the Deposit Certificate any) lien upon or with respect to any of the properties (including, but not limited to, International Monetary Assets) or revenue of the Guarantor. which secures, or otherwise provides for payment of, Indebtedness, which lien would be prohibited by Section 8.02 of the New Money Agreement. prcd (g) There is no pending or, to the best of my knowledge after due inquiry, threatened action or proceeding affecting the Guarantor before any court, governmental agency or arbitrator, which may individually or in the aggregate materially adversely affect the financial condition or operations of the Guarantor or which purports to affect the legality, validity or enforceability of the Trade facility Agreement or the Deposit Certificates. (h) The Guarantor is subject to civil and commercial law with respect to its obligations under the Trade Facility Agreement and the Deposit Certificate and the execution, delivery and performance by the Guarantor of the Trade Facility Agreement and the Deposit Certificates constitute and will constitute, private and commercial acts rather than public or governmental acts. The Guarantor is a sovereign entity which has given its consent to be sued in respect of its obligations under the Trade Facility Agreement and the Deposit Certificates. Except as provided in Section 15.08(d) of the Trade Facility Agreement, the provisions of such Section 15.08(d) are effective to waive, on behalf of the Guarantor and its property whether or not held for its own account, any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any Philippine court or from set-off or any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) under the laws of the Philippines in respect of its obligations under the Trade Facility Agreement and the Deposit Certificates. The waiver of immunities, the submission to the jurisdiction of the New York States and Federal courts sitting in The City of New York, the High Court of Justice in London and the competent courts of the Philippines, the agreement to suit therein and the appointment of the New York Process Agent and the London Process Agent and the other agreements contained in Section 15.08 of the Trade Facility Agreement, are irrevocably binding on the Guarantor. The Process Agents' Letters have each been duly authorized and executed by, and are irrevocably binding on, said Process Agents. (i) The Philippines is a member, and is eligible to use the general resources, of the IMF. (j) There are no Philippine Taxes or Other Applicable Taxes imposed by the Philippines (i) on or by virtue of the execution of the Trade Facility Agreement, the Deposit Certificates or any other document to be furnished by the Guarantor thereunder or (ii) on any payment to be made by the Guarantor pursuant to the Trade Facility Agreement or any Deposit Certificate. (k) To ensure the legality, validity, enforceability or admissibility in evidences of the Trade Facility Agreement and the Deposit Certificates in the Philippines, it is not necessary that the Trade Facility Agreement, the Deposit Certificates or any other document be filed, registered or recorded with any court or other authority in the Philippines or that any registration charge or stamp or similar tax be paid on or in respect of the Trade Facility Agreement, the Deposit Certificates or any other document. (l) The Trade Facility Agreement and the Deposit Certificates are in proper legal form under the law of the Philippines for the enforcement thereof against the Guarantor under the law of the Philippines. (m) In any action or proceeding arising out of or relating to the Trade Facility Agreement or the Deposit Certificate in any court in the Philippines, such court would recognize and give effect to the provisions of Section 15.11 of the Trade Facility Agreement and of the Deposit Certificates wherein the parties thereto agree that the Trade Facility Agreement and the Deposit Certificates shall be governed by, and construed in accordance with, the laws of the State of New York, Accordingly, such court would apply the laws of the State of New York in any legal action seeking enforcement of the Trade Facility Agreement or the Deposit Certificates. Such court would also award a judgment in the currencies in which such obligations are payable. The foregoing opinion is subject to the qualification that in the event of any such action or proceeding in a Philippine court, such court would apply the law of the Philippines with respect to (i) matters bearing upon the power and authority of the Central Bank and the Guarantor to execute, deliver and perform the Trade Facility Agreement, the Deposit Certificates and the other agreements contemplated thereunder, and (ii) compliance with all requirements of governmental approvals, authorizations and consents under Philippine laws, decrees and administrative regulations. (n) It is not necessary under the laws of the Philippines (i) in order to enable the Banks and the Coordinating Bank or any of them to enforce their respective rights under the Trade Facility Agreement or the Deposit Certificates or (ii) by reason of the execution or performance of the Trade Facility Agreement or the Deposit Certificates that any of them should be licensed, qualified or entitled to carry on business in the Philippines. The foregoing opinion is subject to the qualification, with respect to any Bank or the Coordinating Bank otherwise carrying on business in the Philippines (other than by reason only of the execution, performance or enforcement of the Trade Facility Agreement and the Deposit Certificates), that such Bank or the Coordinating Bank will not be permitted to maintain by itself or by an assignee any suit for recovery of any debt, claims or demand whatsoever unless it has or shall have obtained, upon order of the Monetary Board of the Central Bank, a license to transact business in the Philippines from the Philippine Securities and Exchange Commission. (o) Neither the Coordinating Bank and the Banks nor any of them is or will be deemed to be resident, domiciled, carrying on business or subject to taxation in the Philippines by reason only of the execution, performance or enforceability of the Trade Facility Agreement and the Deposit Certificates. The performance by the Coordinating Bank and the Banks or any of them of any Section required or permitted under the Trade Facility Agreement or the Deposit Certificates will not violate any law or regulation of the Philippines. prcd (p) If any judgment of a competent court outside the Philippines were rendered against the Guarantor in connection with any action arising out of or relating to the Trade Facility Agreement or the Deposit Certificates, such judgment would be recognized and could be sued upon in the courts of the Philippines, and such courts would grant a judgment which would be enforceable against the Guarantor in the Philippines without any retrial unless it is shown that (i) the foreign court did not have jurisdiction in accordance with its jurisdictional rules, (ii) the party against when the judgment of such foreign court was obtained had no notice of the proceedings, or (iii) the judgment of such foreign court was obtained through collusion or fraud or was based on clear mistake of law or fact. (q) Assuming the due execution and delivery by the Guarantor of the Deposit Certificates, all conditions precedent on the part of the Guarantor provided for in the Trade Facility Agreement relating to the Effective Date have been duly complied with and the other documents (including this opinion) being delivered to the Coordinating Bank and the Banks by or on behalf of the Guarantor pursuant to Section 901(a) of the Trade Facility Agreement conform to the requirement of the Trade Facility Agreement. The opinion is further subject to the following qualifications: (i) We express no opinion as to the enforceability in the Philippines of Section 15.07(b) of the Trade Facility Agreement to the extent that it purports to permit a second or separate suit, after recovery on a judgment in a judgment currency, for recovery of the difference between the amount of judgment currency stated in such judgment and the amount of the Agreement currency due under the Trade Facility Agreement. (ii) Nothing in this opinion should be taken as indicating that the remedy of specific performance or injunction under any particular provision of the Trade Facility Agreement would necessarily be granted by a Philippine court in any particular instance, if there is otherwise available an adequate compensatory remedy with respect thereto. prcd (iii) The enforceability of the obligations of the Guarantor under the Trade Facility Agreement and the Deposit Certificates is subject to the general principles of equity. In applying these principles, a Philippine court might require that parties exercising any right under the Trade Facility Agreement or the Deposit Certificates act reasonably and in good faith. Such a requirement might be applied among other situations, to the provisions of the Trade Facility Agreement purporting to authorize conclusive determinations by the Coordinating Bank, any Bank or any other party. Very truly yours, (SGD.) ESTELITO P. MENDOZA Minister of Justice