DOJ Opinion No. 140, s. 1984

DOJ OPINION NO. 140 , s. 1984 September 3, 1984 Crocker National Bank International Banking Group 333 South Grand Avenue Los Angeles, California 90071 Gentlemen : I have acted as legal advisor to the Republic of the Philippines (the "Guarantor"), issued in favor of Crocker National Bank ("Bank"), in respect of the obligations of the Development Bank of the Philippines ("DBP") under the Loan Agreement dated June 1, 1984, among the Bank, Associated Bank, DBP and Guarantor (the "Loan Agreement"). Unless the context otherwise requires, all terms which are defined in the Loan Agreement shall have the same respective meanings herein as therein. prcd In so acting, I have examined the Guarantee, the Loan Agreement, the form of Letter of Credit to be issued pursuant to the Loan Agreement (the "Letter of Credit" or, if more than one, the "Letters of Credit"), and other documents delivered in connection therewith. I have also examined such documents, instruments, certificates of public officials and such questions of law as I have deemed necessary for the purposes of rendering the opinion set forth herein. No opinion as to laws other than those pertinent to the Philippines is expressed herein. Based upon and subject to the foregoing, I am of the opinion that: (a) The Guarantor has full power and authority to execute and deliver the Guarantee and to perform the terms thereof; (b) The execution, delivery and performance of the Guarantee by the Guarantor have been duly authorized by all necessary legislative, administrative and other governmental actions and do not contravene any statute or constitutional provision, or treaty, law, rule or regulation of the Philippines or any agreement, convention, treaty, protocol or judicial restriction binding on or affecting the Guarantor; (c) The Guarantee constitutes the valid and binding obligation of the Guarantor, enforceable in accordance with its terms and for which the full faith and credit of the Philippines is pledged; (d) No authorization or approval (including exchange control approval) or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Guarantor of the Guarantee, and for the performance of the transaction contemplated therein, except for the Governmental Approvals specified in Paragraph 13(a)(vii)(ii) and Paragraph 13(a)(vii)(iii) of the Loan Agreement; (e) The obligations of the Guarantor under the Guarantor rank at least pari passu in priority of payment with all the other External Indebtedness of the Guarantor as of the date hereof; (f) The execution, delivery, issuance and performance of the Guarantee by the Guarantor constitute private and commercial acts rather than governmental and public acts. The Guarantor, with respect to its obligations under the Guarantee, is subject to civil and commercial law; by reason thereof, neither the Guarantor nor any of its property has any immunity from jurisdiction of any court or from any legal process (whether through service or notice attachment in aid of execution, execution or otherwise) under the laws of the Philippines. The waiver of immunities by the Guarantor, the submission to the jurisdiction of any Philippine court, and of the courts of the States of California, and the appointment of the Process Agent, as contained in Paragraph 18 of the Loan Agreement, are valid and enforceable under the laws of the Philippines and are irrevocably binding on the Guarantor. In the event a final judgment of such California courts were to be obtained after service of process in the manner specified in the Loan Agreement, the same would be enforced by the courts of the Philippines without further review on the merits, subject only to the defenses of lack of jurisdiction, lack of notice fraud, collusion, or clear mistake of fact or law. If process is served on the Guarantor in the manner contemplated by Paragraph 18 of the Loan Agreement, enforcement by the courts of the Philippines of a judgment of a court which has jurisdiction over the Guarantor, would not be subject to defenses based on lack of jurisdiction over the Guarantor or lack of notice. The Process Agent's Letter has been duly authorized, executed and delivered by the Process Agent and is irrevocably binding on the Process Agent; LexLib (g) There is no pending or, to the best of my knowledge, after due diligence or inquiry, threatened action or proceeding (judicial or administrative) affecting the Guarantor before any court, governmental agency or arbitrator that may materially adversely affect the financial condition or operations of the Guarantor or which purports to affect the legality, validity or enforceability of the Guarantee; (h) The Guarantee, when issued, would, if enforcement were sought in any court of the Philippines, be in proper form for such enforcement, and it is not necessary that the Guarantee or any other document executed or filed in connection therewith be filed or recorded with any court or authority in the Philippines or that any stamp or similar tax be paid on or in respect of the Guarantee; (i) Solely by reason of the Bank's execution of the Loan Agreement, it is not necessary for the Bank to be qualified or entitled to do business under any of the laws or regulations of the Philippines to be able to enforce any right afforded to it under the Guarantee in the Philippines; (j) The choice of California law to govern the Guarantee is under the laws of the Philippines, a valid effective and irrevocable choice of law. A Philippine court, however, would also refer to Philippine laws, decrees and administrative regulations bearing upon the capacity of the Guarantor to enter into contracts generally, and the Guarantee in particular; (k) The Guarantor is a member in good standing of the International Monetary Fund (the "IMF") and is eligible to use the General Account of, and its Special Drawing Account with the IMF under the Article of Agreement of the IMF; and (l) The credit facility under the Loan Agreement, constitutes a loan guaranteed by a foreign government export credit agency and is, as such, exempt from the postponement requested by the Philippine Government in respect of the repayment by the Philippine obligors of any principal amount of external debt owed to foreign financial institutions falling due within the period commencing October 16, 1983 up to and until October 9, 1984. The expression herein of a specific opinion with regard to a matter covered by a more general opinion also expressed herein is not intended to limit the latter. No opinion is expressed as to any laws other than those of the Philippines as at present existing and the regulations made pursuant thereto. Very truly yours, (SGD.) ESTELITO P. MENDOZA Minister of Justice