DOJ Opinion No. 172, s. 1982

DOJ OPINION NO. 172 , s. 1982 August 6, 1982 Bankers Trust Company Corinthian Plaza, 3rd Floor 121 Paseo de Roxas Makati, Metro Manila Philippines as Agent (the "Agent") for the banks and financial institutions named as leaders (the "Leader") in the Loan Agreement referred to below. Re: Loan Agreement dated as of December 16, 1981. Gentlemen: As the Minister of Justice of the Republic of the Philippines (the "Republic"), I have been requested to render an opinion in connection with the agreement (the "Loan Agreement"), dated as of December 16, 1981 among the Development Bank of the Philippines, as Borrower (the "Borrower"), the Republic of the Philippines as guarantor (the "Guarantor"), the several lending institutions named in Section 2.1 of the Loan Agreement (the "Banks") and Bankers Trust Company, as Agent. In this regard, I have examined a signed copy of the Loan Agreement and all such other documents as I have considered it necessary or desirable to examine in order that I may give this opinion. Terms defined in the Loan Agreement shall have their defined meanings when used herein. Based upon the foregoing and in the light of the law of the Philippines as it exists at the date hereof, I am of the opinion that: (1) under Republic Act No. 85 as amended by Republic Acts Nos. 2081, 3147, 3517 and 6044 and by Presidential Decree Nos. 195 and 423 all of the Philippines (the "Republic Act as Amended") the President of the Philippines has full power and authority on behalf of the Guarantor to execute and deliver the Loan Agreement and the Guaranty and to perform and observe the terms and conditions of the Loan Agreement and the Guaranty; (2) under the Republic Act as Amended, the President of the Philippines has full power and authority to authorize the person who signed the Loan Agreement and the Guaranty on behalf of the Guarantor to sign on his behalf the Loan Agreement and the Guaranty and any document to be given, made or delivered by or on behalf of the Guarantor for the purpose of the Loan Agreement; (3) under the Republic Act as Amended and otherwise all acts, conditions and things required to be done, fulfilled and performed before the execution of the Loan Agreement and the Guaranty in order to constitute the obligations assumed by the Guarantor under the Loan Agreement and the Guaranty the legal, valid and binding obligations of the Guarantor have been done, fulfilled and performed in due compliance with all applicable laws and regulations (it being understood and agreed that the phrase "laws and regulations" as used herein shall include, without limitation, all constitutional preventions, laws, ordinances, statutes, decrees, treaties, conventions and other similar authorities). Due authority has been given by the President of the Philippines to the person who signed the Loan Agreement and the Guaranty on behalf of the Guarantor for the purpose of the Republic Act as Amended; (4) neither the execution and delivery of the Loan Agreement or the Guaranty, nor the consummation of the transactions herein or therein contemplated, nor compliance with the terms and provisions thereof, will contravene any constitutional provision or any other provision of law, ordinance, statute, decree, treaty, convention, rule or regulation to which the Guarantor is subject or will conflict with or will be inconsistent with, or will result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, security interest, charge or encumbrance upon any of the property or assets of the Guarantor pursuant to the terms of, any indenture, mortgage, deed of trust, license, contract, concession agreement or other instrument payable in any currency other than Philippine Pesos to which the Guarantor is a party or by which it may be bound, or to which it may be subject; (5) the obligation of the Guarantor under the Loan Agreement and the Guaranty are direct, unconditional and enforceable and general obligations of the Guarantor for which the full faith and credit of the Guarantor is pledge ranking at least pari passu in priority of payment and in all other respect with all other unsecured external indebtedness of the Guarantor payable in a currency other than Philippine Peso, and no external indebtedness of the Guarantor payable in a currency other than Philippine Pesos is secured by, or otherwise benefits from, any lien, pledge, mortgage, charge of encumbrance or segregation or other preferential arrangement (whether or not constituting a security interest), on, or with respect to, any present of future properties, assets, revenues or rights of the Guarantor to receive income other than (i) liens created on property at the time of purchase thereof solely to secure payment of the purchase price of such property, and (ii) liens arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date; (6) the Guarantor is not in breach of nor in default under any of its obligations in respect of borrowed money payable in a currency other than Philippine pesos; LexLib (7) there is no action, suit or proceeding of or before any court or governmental authority or agency pending or, (so far as I am aware after reasonable inquiry threatened to question or annul the execution or performance of the Loan Documents or in any manner to question the laws and proceedings of the Guarantor under which the Loan Agreement and the Guaranty were executed, performed of enforced and none of the said laws and proceedings have been repealed, revoked or rescinded in whole or in part; (8) the Guarantor is a member in good standing of the I.M.F. and fully eligible to use the resources of the I.M.F. in accordance with the Articles of Agreement of the I.M.F.; (9) other than the Central Bank Approval which approval has been obtained and is in full force and effect and registration of the Loan Agreement with the Central Bank which registration has been done, no order, consent, license, authorization or approval of, or exemption by, or the giving of notice to, or registration with, or the taking of any other action in respect of, any governmental or public body or authority, and no filing, recording, publication or registration in any public office or any other place, is required or is necessary or appropriate to authorize, or in connection with, the execution, delivery and performance of the Loan Agreement and the Guaranty; (10) the execution, delivery and performance of the Loan Agreement and the Guaranty and the transactions contemplated thereby have been duly authorized by all necessary authorities (including, without limitation, the Central Bank in the Central Bank Approval) under all applicable laws and regulations. The Loan Agreement and the Guaranty constitute legal, valid and binding obligations of the Guarantor, enforceable in accordance with their respective terms; (11) all requisite authorizations by the Philippines or any ministry or agency thereof (including, without limitation, the Central Bank Approval) for the foreign exchange payments due under the Loan Agreement and the Guaranty have been validly obtained; (12) there is no law or regulation of the Philippines or of any political subdivision thereof or therein which would prevent the Guarantor in any way from performing any of its obligations pursuant to the Loan Agreement of the Guaranty (including, without limitation, Section 4, 6.1 and 14 of the Loan Agreement; (13) there is no income or other tax of the Philippines or any political subdivision or taxing authority thereof or therein, imposed by withholding or otherwise, which is imposed on or by virtue of the execution or delivery of the Loan Agreement and the Guaranty by the Guarantor or any other document or instrument to be executed and delivered thereunder by the Guarantor; (14) the transactions contemplated by the Loan Agreement and the Guaranty are not subject to any currency deposit requirements or any reserve requirements of whatsoever nature under the laws of the Philippines; LexLib (15) no fees of taxes are required to be paid for the validity of enforceability of the Loan Documents, and the Loan Documents are each in proper legal form under the laws of the Philippines for the enforcement thereof in such jurisdiction without any further action on the part of the Agent or the Banks. The compliance by the Agent or the Banks with legal formalities, solely by reason of the execution of the loan documents for admission to do business under the laws or regulations of the Philippines does not constitute a condition to, and the failure to so comply does not affect, the exercise by the Agent or the Banks of any right, privilege or remedy afforded to the Agent or the Banks in, under or in connection with the Loan Documents or the enforcement of any such right, privilege or remedy; and the performance by the Agent or the Banks of any action required or permitted under the Loan Documents will not violate any law or regulation of the Philippines or any political subdivision thereof of result in any tax liability or other unfavorable consequences to the Agent or any of the Banks pursuant to the laws of the Philippines or any political subdivision or taxing authority thereof or therein or any rule or regulation of any federation or organization or similar entity of which the Philippines is a member; (16) the Guarantor is generally subject to set-off, suit, judgment and execution in respect of the Loan Agreement and the Guaranty and the transactions contemplated thereby and is not entitled by virtue of the waiver in Section 18(a) of the Loan Agreement to any present or future claim to any immunity, whether characterized as sovereign immunity, whether characterized as sovereign immunity or otherwise, from any legal proceedings, whether in the United States of America or elsewhere, to enforce or collect upon the Loan Agreement or the Guaranty (including, without limitation, immunity from service of process, immunity from jurisdiction of any courts or tribunal, and immunity of any of its property from attachment prior to judgment in order to obtain satisfaction thereof, from attachment in aid of execution, and from execution upon a judgment) in respect of itself or its property in any action or proceeding in respect of its obligations under the Loan Agreement or the Guaranty. The acceptance in Section 18(a) of the Loan Agreement by the Guarantor of the jurisdiction of proceeding brought with respect to the Loan Agreement or the Guaranty in such court is effective, insofar as the laws of the Philippines are concerned, to permit such court to exercise jurisdiction over the Guarantor in such action or proceeding provided that such court is otherwise entitled under the laws, regulations and rules applicable to it to exercise such jurisdiction; and (17) the choice by the parties of the law of the State of New York under Section 20.7 of the Loan Agreement is valid under the private international law of the Philippines, and such law of the State of New York would accordingly be applied by the courts of the Philippines if the Loan Agreement or any claim under it comes under their jurisdiction. A Philippine court would, however, also refer to Philippines laws, decrees and administrative regulations bearing upon the capacity and the authority of the Guarantor to enter into contracts generally and the Loan Agreement in particular, with respect to which matters you are referred to my opinions expressed in Paragraphs 1 and 4. A judgment of the Supreme Court of the State of New York or the United States Federal District Court for the Southern District of New York rendered in an action brought in any such court in the manner contemplated by Section 18 or otherwise in accordance with applicable law to enforce the obligation of the Guarantor under the Loan Agreement and the Guaranty or to claim from the Borrower any sum due as a result of default thereunder or for any other reason would be enforceable in the Philippines against the Guarantor upon the prior approval of any court or legal authority which may be required in accordance with the laws of the Philippines. LexLib Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice