DOJ Opinion No. 136, s. 1980

DOJ OPINION NO. 136 , s. 1980 September 23, 1980 To: The Banking and Financial Institutions Parties to the Loan Agreement dated as of June 30, 1980 (the "Agreement") among National Power Corporation (the "Borrower"), the Government of the Republic of the Philippines (the "Guarantor"), the Banking and Financial Institutions named therein (the "Lenders"), the Nippon Credit Bank, Ltd. (as Agent), and the Managers therein defined and the Nippon Credit Bank, Ltd. as such Agent. Gentlemen : As the Minister of Justice of the Guarantor, I have been requested to render an opinion to you in connection with the Agreement dated June 30, 1980, pursuant to which agreement, and subject to the express terms and conditions of which the Lenders agree to make loans to the Borrower to be unconditionally guaranteed by the Guarantor, up to the aggregate principal amount of One Billion Eight Hundred Sixty Five Million Japanese Yen Y1,865,000.00). In connection therewith, I have examined the Constitution, pertinent laws and decrees, including the Charter of the Borrower (Republic Act No. 6395, as amended), the judicial decisions and the regulations of the Republic of the Philippines applicable to the Agreement, and the Notes to be issued pursuant thereto, particularly those that affect the issuance of the guaranty by the Government of the Philippines. I have also examined other agreements, instruments, documents, and matters upon which the opinion hereinafter expressed is, I consider, necessarily founded, and which matters include, but are not limited to, the following documents: (1) An executed copy of the Agreement; (2) The letter dated 24 June 1980 of the President and Prime Minister of the Philippines approving and authorizing the guarantee by the Government of the Republic of the Philippines of the One Billion Eight Hundred Sixty Five Million Yen loan, and empowering Hon. Gabriel Y. Itchon in the absence of Minister Cesar E. Virata of the Ministry of Finance, to sign, execute and guarantee in behalf of the Government; LexLib (3) The letters of the Central Bank dated May 26, 1980 and September 11, 1980 authorizing the advances, to be guaranteed by the Government of the Republic of the Philippines, contemplated in the Agreement; (4) The acceptance by the Consul General of the Philippines in Tokyo, Japan of her appointment pursuant to the Agreement as the Agent of the Guarantor for the purpose of receiving service of process on the Guarantor. On the basis of the foregoing, I am of the opinion that: 1. Under the Charter of the Borrower (Republic Act No. 6395, as amended), the Guarantor has full power, authority and legal right to give the Guarantee provided for in the Agreement, to execute and deliver the Agreement, to endorse on the Notes the Guarantee referred to in Section 2.6 of the Agreement, and to perform and observe the terms and provisions of the Agreement and the Guarantee. 2. All acts and conditions which are required to be done and performed prior to the execution and delivery of the Agreement and the Guarantee (including the Guarantee to be endorsed on the Notes) and which are also required to make the said Guaranty a valid obligation of the Guarantor in accordance with the terms thereof have been done and performed in due and strict compliance with all applicable laws of the Philippines. 3. All registrations (except the registration of the advances with the Central Bank), consents, licenses, and approvals of all the government agencies, ministries and commissions which are necessary for the execution and delivery by the Guarantor of the Agreement and the Guarantee, or for the validity or enforceability thereof, have been duly obtained. 4. The execution, delivery and performance by the Guarantor of the Agreement and the Guarantee are duly authorized by law and will not violate any provision of law, statute, decree, rule or regulation of the Government of the Philippines, or result in the breach of, or constitute a default under, any treaty or other international agreement or instrument to which the Guarantor is a party, or by which the Guarantor or any of its properties may be bound or affected, and the Agreement does, and the Guarantee when duly executed will, constitute the legal, valid and binding obligations of the Guarantor, enforceable in accordance with the terms and provisions thereof. 5. The obligations of the Guarantor under the Agreement including the obligations under the Guarantee provided for in Section 8-2(a) of the Agreement and the obligations of the Guarantor under the Agreement to be endorsed on the Notes upon execution and delivery thereof will be direct, unconditional and irrevocable obligations carrying the full faith and credit of the Government of the Philippines and such obligations shall rank pari passu in all respects (which shall include priority of lien, pledge, charge or other security) with all other foreign debts of the Government of the Philippines, whether now or hereafter outstanding. 6. Any action relating to the Agreement and the Guarantee may be instituted against the Guarantor in the Tokyo District Court as provided therein or any court in the Philippines of competent jurisdiction by virtue of the (i) the waiver by the Guarantor expressed in Section 7.2 (f) of the Agreement of sovereign immunity to which it might otherwise be entitled in any such action, and (ii) consent by the Guarantor to jurisdiction expressed in Section 8.3(b) of the Agreement which waiver and consent are valid and binding under the laws of the Philippines, enforceable in accordance with their terms. 7. To the best of my knowledge and belief, all fees or taxes, if any, required to be paid in connection with the validity or enforceability of the Agreement and the Guarantee have been paid. 8. To the best of my knowledge and belief, no event has occurred or is continuing which constitutes, or which with the giving of notice or lapse of time or both would constitute, an Event of Default. 9. No provision of law, decree or administrative regulation prohibits, in the event of default on the part of the Borrower, (a) the payment by the Guarantor of all taxes and other charges levied or imposed by the Government of the Philippines or any ministry, agency, political or administrative subdivision or taxing authority therein, on the Lenders and/or the Agent with respect to payments to be made by the Guarantor under the Agreement and the Guarantee, and (b) the remittance in full of all payments required from the Guarantor under the Agreement and the Guarantee, subject to the provisions of Section 74 of Republic Act No. 265, as amended. 10. The choice of the law of Japan to govern the Agreement and the Guarantee and the rights and obligations of the parties thereunder is, under the law of the Philippines, a valid choice of law and will be honored by the Courts of the Philippines. 11. The Guarantor has validly submitted to the jurisdiction of the Tokyo District Court and a judgment of such court rendered in an action to enforce the obligations of the Guarantor under the Agreement and the Guarantee or to claim from the Guarantor any sum due as a result of default thereunder or for any other reason shall be enforceable in the Philippines upon prior approval of any court or legal authority which may be required in accordance with the law of the Philippines. 12. The Guarantor has duly and validly designated the Embassy of the Republic of the Philippines in Tokyo, Japan, as the address for the purpose of accepting service of process in Japan in connection with any action instituted in Japan relating to the Agreement and the Guarantee and has duly and validly appointed the Consul General of the Philippines in Tokyo, Japan as the authorized agent to accept such service of process. Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice