c. Acts Contrary to Morals, Good Customs, or Public Policy

C. Thoughtless Extravagance (Civil Code, art. 25)

> Article 25. Thoughtless extravagance in expenses for pleasure or display during a period of acute public want or emergency may be stopped by order of the courts at the instance of any government or private charitable institution.

May be stopped by order of courts if the following requisites are present:

• Thoughtless extravagance in expenses for pleasure or display;
• During an acute public want or emergency; and
• Person seeking to stop it is the government or a private charitable institution.

J. Custom (Civil Code, arts. 11-12)

> Article 11. Customs which are contrary to law, public order or public policy shall not be countenanced. (n) Article 12. A custom must be proved as a fact, according to the rules of evidence. (n)

Customs

Customs are rules of conduct, legally binding and obligatory, formed by repetition of acts uniformly observed as a social rule.

SPECIAL DISQUALIFICATIONS

Any others specially disqualified by law (Art. 1491 [6])

NOTE: These contracts are void for public policy. They cannot be ratified, nor can the right to set up the defense of illegality be waived. (Rubias v. Batiller, G.R. No. L-35702, 1973)

Autonomy

Parties may freely enter into any stipulations provided they are not contrary to law, morals, good customs, public order or public policy. (CIVIL CODE, art. 1306)

Grounds for Refusal of Recognition and Enforcement of an Award

At the request of the party against whom it is invoked:

• Incapacity of the parties to the agreement;
• The arbitration agreement is invalid under the law to which the parties subjected it or, failing any indication of that law, under the law of the country where the award was made;
• Party against whom the award was invoked was not given proper Notice of the appointment of the arbitrator or of the arbitration proceedings;
• Party against whom the award is invoked was Unable to present his case;
• Award deals with a Difference not contemplated within the terms of the submission to arbitration;
• Composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, with the law of the country where the arbitration took place;
• Award has not yet become binding on the parties or has been Set aside or suspended by a competent authority of the country in which that award was made.

Based on the finding of the competent authority in the country where recognition and enforcement is sought

• The Subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
• The recognition or enforcement of the award would be contrary to the Public policy of that country (New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Article V).