SAUDI ARABIAN AIRLINES (SAUDIA) vs. COURT OF APPEALS, MILAGROS P.

MORADA
and HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch 89, RTC of
Quezon City
G.R. No. 122191 October 8, 1998

FACTS: Petitioner SAUDIA hired private respondent MORADA as a flight attendant in

1988, based in Jeddah. On 1990, while on a lay-over in Jakarta, Indonesia, she went
to party with 2 male attendants, and on the following morning in their hotel, one of
the male attendants attempted to rape her. She was rescued by hotel attendants
who heard her cry for help. The Indonesian police arrested the 2.

MORADA returned to Jeddah, but was asked by the company to go back to Jakarta
and help arrange the release of the 2 male attendants. MORADA did not cooperate
when she got to Jakarta.

What followed was a series of interrogations from the Saudi Courts which she did
not understand as this was in their language. In 1993, she was surprised, upon
being ordered by SAUDIA to go to the Saudi court, that she was being convicted of
(1) adultery; (2) going to a disco, dancing and listening to the music in violation of
Islamic laws; and (3) socializing with the male crew, in contravention of Islamic
tradition, sentencing her to five months imprisonment and to 286 lashes. Only then
did she realize that the Saudi court had tried her, together with the 2, for what
happened in Jakarta.

SAUDIA denied her the assistance she requested, But because she was wrongfully
convicted, Prince of Makkah dismissed the case against her and allowed her to
leave Saudi Arabia. Shortly before her return to Manila, she was terminated from the
service by SAUDIA, without her being informed of the cause.

On November 23, 1993, Morada filed a Complaint for damages against SAUDIA, and
Khaled Al-Balawi (Al-Balawi), its country manager.
SAUDIA ALLEGES: Private respondents claim for alleged abuse of rights occurred in
the Kingdom of Saudi Arabia. It alleges that the existence of a foreign element
qualifies the instant case for the application of the law of the Kingdom of Saudi
Arabia, by virtue of the lex loci delicti commissi rule.

MORADA ALLEGES: Since her Amended Complaint is based on Articles 19 and 21 of

the Civil Code, then the instant case is properly a matter of domestic law.

ISSUE: WON the Philippine courts have jurisdiction to try the case

HELD: YES.

On the presence of a Foreign Element in the case: A factual situation that cuts
across territorial lines and is affected by the diverse laws of two or more states is
said to contain a foreign element. The presence of a foreign element is inevitable
since social and economic affairs of individuals and associations are rarely confined
to the geographic limits of their birth or conception. The forms in which this foreign
element may appear are many. The foreign element may simply consist in the fact
that one of the parties to a contract is an alien or has a foreign domicile, or that a
contract between nationals of one State involves properties situated in another
State. In other cases, the foreign element may assume a complex form.

In the instant case, the foreign element consisted in the fact that private respondent
Morada is a resident Philippine national, and that petitioner SAUDIA is a resident
foreign corporation. Also, by virtue of the employment of Morada with the petitioner
Saudia as a flight stewardess, events did transpire during her many occasions of
travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi
Arabia, and vice versa, that caused a conflicts situation to arise.

COURT disagrees with MORADA that his is purely a domestic case. However, the
court finds that the RTC of Quezon City possesses jurisdiction over the subject
matter of the suit. Its authority to try and hear the case is provided for under
Section 1 of Republic Act No. 7691, to wit:

BP129 Sec. 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise
exclusive jurisdiction:
xxx xxx xxx

(8) In all other cases in which demand, exclusive of interest, damages of whatever
kind, attorney`ys fees, litigation expenses, and cots or the value of the property in
controversy exceeds One hundred thousand pesos (P100,000.00) or, in such other
cases in Metro Manila, where the demand, exclusive of the above-mentioned items
exceeds Two hundred Thousand pesos (P200,000.00). (Emphasis ours)
xxx xxx xxx
Section 2 (b), Rule 4 of the Revised Rules of Court the venue, Quezon City, is
appropriate:
Sec. 2 Venue in Courts of First Instance. [Now Regional Trial Court]
(a) xxx xxx xxx
(b) Personal actions. All other actions may be commenced and tried where the
defendant or any of the defendants resides or may be found, or where the plaintiff
or any of the plaintiff resides, at the election of the plaintiff.

Weighing the relative claims of the parties, the court a quo found it best to hear the
case in the Philippines. Had it refused to take cognizance of the case, it would be
forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in
the Kingdom of Saudi Arabia where she no longer maintains substantial
connections. That would have caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines no unnecessary difficulties and
inconvenience have been shown by either of the parties. The choice of forum of the
plaintiff (now private respondent) should be upheld.

The trial court also acquired jurisdiction over the parties. MORADA through her act
of filing, and SAUDIA by praying for the dismissal of the Amended Complaint on
grounds other than lack of jurisdiction.

As to the choice of applicable law, we note that choice-of-law problems seek to

answer two important questions:
(1) What legal system should control a given situation where some of the significant
facts occurred in two or more states; and
(2) to what extent should the chosen legal system regulate the situation.

Considering that the complaint in the court a quo is one involving torts, the
connecting factor or point of contact could be the place or places where the
tortious conduct or lex loci actus occurred. And applying the torts principle in a
conflicts case, we find that the Philippines could be said as a situs of the tort (the
place where the alleged tortious conduct took place). This is because it is in the
Philippines where petitioner allegedly deceived private respondent, a Filipina
residing and working here. According to her, she had honestly believed that
petitioner would, in the exercise of its rights and in the performance of its duties,
act with justice, give her due and observe honesty and good faith. Instead,
petitioner failed to protect her, she claimed. That certain acts or parts of the injury
allegedly occurred in another country is of no moment. For in our view what is
important here is the place where the over-all harm or the totality of the alleged
injury to the person, reputation, social standing and human rights of complainant,
had lodged, according to the plaintiff below (herein private respondent). All told, it is
not without basis to identify the Philippines as the situs of the alleged tort.

In applying State of the most significant relationship rule, to determine the State
which has the most significant relationship, the following contacts are to be taken
into account and evaluated according to their relative importance with respect to
the particular issue: (a) the place where the injury occurred; (b) the place where the
conduct causing the injury occurred; (c) the domicile, residence, nationality, place of
incorporation and place of business of the parties, and (d) the place where the
relationship, if any, between the parties is centered.

As already discussed, there is basis for the claim that over-all injury occurred and
lodged in the Philippines. There is likewise no question that private respondent is a
resident Filipina national, working with petitioner, a resident foreign corporation
engaged here in the business of international air carriage. Thus, the relationship
between the parties was centered here, although it should be stressed that this suit
is not based on mere labor law violations. From the record, the claim that the
Philippines has the most significant contact with the matter in this dispute, raised
by private respondent as plaintiff below against defendant (herein petitioner), in our
view, has been properly established.

NOTE:

These test factors or points of contact or connecting factors could be any of

the following:

(1) The nationality of a person, his domicile, his residence, his place of sojourn, or
his origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) the situs of a thing, that is, the place where a thing is, or is deemed to be
situated. In particular, the lex situs is decisive when real rights are involved;
(4) the place where an act has been done, the locus actus, such as the place where
a contract has been made, a marriage celebrated, a will signed or a tort committed.
The lex loci actus is particularly important in contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the place of
performance of contractual duties, or the place where a power of attorney is to be
exercised;
(6) the intention of the contracting parties as to the law that should govern their
agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are instituted or done.
The lex fori the law of the forum is particularly important because, as we have
seen earlier, matters of procedure not going to the substance of the claim
involved are governed by it; and because the lex fori applies whenever the content
of the otherwise applicable foreign law is excluded from application in a given case
for the reason that it falls under one of the exceptions to the applications of foreign
law; and
(8) the flag of a ship, which in many cases is decisive of practically all legal
relationships of the ship and of its master or owner as such. It also covers
contractual relationships particularly contracts of affreightment.

FACTS:
Saudi Arabian Airlines (SAUDIA), foreign airlines corporation doing business in the
Philippines and may be served summons in agent in Makati, hired Milagros P.
Morada as a flight attendant for its airlines based in Jeddah, Saudi Arabia.
April 27, 1990: While on a lay-over in Jakarta, Indonesia, Morada went to a disco
dance with fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, both
Saudi nationals. It was almost morning when they returned to their hotels so they
agreed to have breakfast together at the room of Thamer. Shortly after Allah left
the room, Thamer attempted to rape Morada. Fortunately, a roomboy and several
security personnel heard her cries for help and rescued her. Indonesian police
arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice.
When Morada returned to Jeddah, SAUDIA officials interrogated her about the
Jakarta incident and requested her to go back to Jakarta to help arrange the release
of Thamer and Allah. In Jakarta, SAUDIA Legal Officers negotiated with the police
for the immediate release of the detained crew members but did not succeed.
Afraid that she might be tricked into something she did not want because of her
inability to understand the local dialect, Morado refused to cooperate and declined
to sign a blank paper and a document written in the local dialect. Eventually,
SAUDIA allowed Morada to return to Jeddah but barred her from the Jakarta flights.
Indonesian authorities agreed to deport Thamer and Allah and they were again put
in service. While, Morada was transferred to Manila.
January 14, 1992: Morada was asked to see Mr. Ali Meniewy, Chief Legal Officer of
SAUDIA, in Jeddah, Saudi Arabia. He brought her to the police station where the
police took her passport and questioned her about the Jakarta incident. The police
pressured her to drop the case against Thamer and Allah. Not until she agreed to
do so did the police return her passport and allowed her to catch the afternoon
flight out of Jeddah.
June 16, 1993: Morada, while in Riyadh Saudi Arabia, was not allowed to board the
plane to Manila and instead ordered to take a later flight to Jeddah to see Mr.
Miniewy. Khalid of the SAUDIA office brought her to a Saudi court where she was
asked to sign a document written in Arabic. They told her that this was necessary to
close the case against Thamer and Allah but it was actually a notice for her to
appear before the court on June 27, 1993. Plaintiff then returned to Manila.
June 27, 1993: SAUDIA's Manila manager, Aslam Saleemi, assured Morada that the
investigation was routinary and that it posed no danger to her so she reported to
Miniewy in Jeddah for further investigation. She was brought to the Saudi court.
June 28, 1993: Saudi judge interrogated Morada through an interpreter about the
Jakarta incident for an hour and let her go. SAUDIA officers forbidden her to take

flight. She was told to go the Inflight Service Office where her passport was taken
and they told her to remain in Jeddah, at the crew quarters, until further orders.
July 3, 1993: She was brought to court again and to her astonishment and shock,
rendered a decision, translated to her in English, sentencing her to five months
imprisonment and to 286 lashes. The court tried her, together with Thamer and
Allah, and found her guilty of (1) adultery (2) going to a disco, dancing and listening
to the music in violation of Islamic laws and (3) socializing with the male crew, in
contravention of Islamic tradition.
Failing to seek the assistance of her employer, SAUDIA, she asked the Philippine
Embassy in Jeddah to help her while her case is on appeal. She continued to
workon the domestic flight of SAUDIA, while Thamer and Allah continued to serve in
the international flights.
Because she was wrongfully convicted, the Prince of Makkah dismissed the case
against her and allowed her to leave Saudi Arabia. Before her return to Manila, she
was terminated from the service by SAUDIA, without her being informed of the
cause.
November 23, 1993: Morada filed a Complaint for damages against SAUDIA, and
Khaled Al-Balawi, its country manager.
January 19, 1994: SAUDIA filed an Omnibus Motion To Dismiss on following grounds:
(1) that the Complaint states no cause of action against SAUDIA (2) that defendant
Al-Balawi is not a real party in interest (3) that the claim or demand set forth in the
Complaint has been waived, abandoned or otherwise extinguished and (4) that the
trial court has no jurisdiction to try the case.
After opposition to the motion to dismiss by Morada and reply by SAUDIA, Morada
filed an Amended Complaint dropping Al-Balawi. SAUDIA filed its Manifestation,
Motion to Dismiss Amended Complaint, subsequently motion for reconsideration
which were all denied.
SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for Issuance of Writ
of Preliminary Injunction and/or Temporary Restraining Order with the Court of
Appeals. TRO was granted but Writ of Preliminary Injunction was denied.
CA: Philippines is an appropriate forum considering that the Amended Complaint's
basis for recovery of damages is Article 21 of the Civil Code, and thus, clearly within
the jurisdiction of respondent Court. It further held that certiorari is not the proper
remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should have
proceeded to trial, and in case of an adverse ruling, find recourse in an appeal.
SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary
Restraining Order:

It is a conflict of laws that must be settled at the outset:

Morada's claim for alleged abuse of rights occurred in the Kingdom of Saudi
Arabia.
Existence of a foreign element qualifies the instant case for the application of the
law of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule.
Morada: Amended Complaint is based on Articles 19 and 21 of the Civil Code which
is a matter of domestic law

ISSUE: W/N the RTC of Quezon City has jurisdiction over the case and it is the proper
forum for recovery of damages under Art. 21 of the Civil Code which should govern.

HELD: YES. petition for certiorari is hereby DISMISSED. REMANDED to RTC of Quezon
City, Branch 89 for further proceedings
Where the factual antecedents satisfactorily establish the existence of a foreign
element, the problem could present a "conflicts" case
A factual situation that cuts across territorial lines and is affected by the diverse
laws of two or more states is said to contain a "foreign element".
o

Morada is a resident Philippine national

SAUDIA is a resident foreign corporation

o by virtue of the employment of Morada with the SAUDIA as a flight stewardess,

events did transpire during her many occasions of travel across national borders,
particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that
caused a "conflicts" situation to arise
Forms of foreign element:
o Simple: one of the parties to a contract is an alien or has a foreign domicile, or
that a contract between nationals of one State involves properties situated in
another State
o

Complex

Violations of Articles 19 and 21 are actionable, with judicially enforceable remedies

in the municipal forum. RTC of Quezon City possesses jurisdiction over the subject
matter of the suit.

Pragmatic considerations, including the convenience of the parties, also weigh

heavily in favor of the RTC Quezon City assuming jurisdiction:
o

private interest of the litigant

enforceability of a judgment if one is obtained

relative advantages and obstacles to a fair trial

Plaintiff may not, by choice of an inconvenient forum, "vex", "harass", or

"oppress" the defendant, e.g. by inflicting upon him needless expense or
disturbance. but unless the balance is strongly in favor of the defendant, the
plaintiffs choice of forum should rarely be disturbed.
Weighing the relative claims of the parties, the court a quo found it best to hear the
case in the Philippines. Had it refused to take cognizance of the case, it would be
forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in
the Kingdom of Saudi Arabia where she no longer maintains substantial
connections. That would have caused a fundamental unfairness to her. Moreover,
by hearing the case in the Philippines no unnecessary difficulties and inconvenience
have been shown by either of the parties.
Trial court possesses jurisdiction over the persons of the parties
o
By filing her Complaint and Amended Complaint with the trial court, private
respondent has voluntary submitted herself to the jurisdiction of the court
o
SAUDIA has effectively submitted to the trial court's jurisdiction by praying for
the dismissal of the Amended Complaint on grounds other than lack of jurisdiction.
As to the choice of applicable law, it seeks to answer 2 important questions:
o
(1) What legal system should control a given situation where some of the
significant facts occurred in two or more states
o

(2) to what extent should the chosen legal system regulate the situation

Although ideally, all choice-of-law theories should intrinsically advance both notions
of justice and predictability, they do not always do so. The forum is then faced with
the problem of deciding which of these two important values should be stressed.
Before a choice can be made, it is necessary for us to determine under what
category a certain set of facts or rules fall
o

"characterization" or the "doctrine of qualification

process of deciding whether or not the facts relate to the kind of question
specified in a conflicts rule

 purpose: to enable the forum to select the proper law

Choice-of-law rules invariably consist of: (essential element of conflict rules)
o
factual situation/relationship or operative fact (such as property right, contract
claim); and
starting point of analysis
o
test or connecting factor or point of contact (such as the situs of the res, the
place of celebration, the place of performance, or the place of wrongdoing) could
be:
(1) The nationality of a person, his domicile, his residence, his place of sojourn, or
his origin
(2) the seat of a legal or juridical person, such as a corporation
(3) the situs of a thing, that is, the place where a thing is, or is deemed to be
situated. In particular, the lex situs is decisive when real rights are involved
(4) the place where an act has been done, the locus actus, such as the place
where a contract has been made, a marriage celebrated, a will signed or a tort
committed. The lex loci actus is particularly important in contracts and torts
(5) the place where an act is intended to come into effect, e.g., the place of
performance of contractual duties, or the place where a power of attorney is to be
exercised
(6) the intention of the contracting parties as to the law that should govern their
agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are instituted or done.
The lex fori the law of the forum is particularly important because, as we have
seen earlier, matters of "procedure" not going to the substance of the claim
involved are governed by it; and because the lex fori applies whenever the content
of the otherwise applicable foreign law is excluded from application in a given case
for the reason that it falls under one of the exceptions to the applications of foreign
law; and
(8) the flag of a ship, which in many cases is decisive of practically all legal
relationships of the ship and of its master or owner as such. It also covers
contractual relationships particularly contracts of affreightment
Note that one or more circumstances may be present to serve as the possible test
for the determination of the applicable law.
Based on pleadings on record, including allegations in the Amended Complaint:

o
Morada was made to face trial for very serious charges, including adultery and
violation of Islamic laws and tradition
o
SAUDIA may have acted beyond its duties as employer by handing over the
person of Morada to Jeddah officials which contributed to and amplified or even
proximately caused additional humiliation, misery and suffering. It also took
advantage of the trust, confidence and faith in the guise of authority as employer.
o Conviction and imprisonment was wrongful but injury or harm was inflicted upon
her person and reputation which must be compensated or redress for the wrong
doing
Complaint involving torts
"connecting factor" or "point of contact" - place or places where the tortious
conduct or lex loci actus occurred = Philippines where SAUDIA deceived Morada, a
Filipina residing and working here.
"State of the most significant relationship" applied
o
taken into account and evaluated according to their relative importance with
respect to the particular issue:
(a) the place where the injury occurred
(b) the place where the conduct causing the injury occurred
(c) the domicile, residence, nationality, place of incorporation and place of
business of the parties
(d) the place where the relationship, if any, between the parties is centered
v private respondent is a resident Filipina national, working here
v a resident foreign corporation engaged here in the business of international air
carriage

Llorente vs CA
GR 124371 November 23, 2000

Lessons Applicable: Divorce

Laws Applicable: Art. 15, Art. 17, Art. 26 FC

FACTS:
Alicia( 2nd wife) Lorenzo N. Llorente --- Paula (1ST wife) --- Ceferino Llorente
(brother)
Crisologo Llorente(son)
Lorenzo N. Llorente was an enlisted serviceman of the United States Navy from
March 10, 1927 to September 30, 1957
February 22, 1937: Lorenzo and Paula Llorente were married before a parish priest,
Roman Catholic Church, in Nabua, Camarines Sur
Before the outbreak of the Pacific War, Lorenzo departed for the United States and
Paula stayed in the conjugal home
November 30, 1943: Lorenzo was admitted to United States citizenship and
Certificate of Naturalization
1945: When Lorenzo was granted an accrued leave to visit his wife and he visited
the Philippines, He discovered that his wife Paula was pregnant and was living in
and having an adulterous relationship with his brother, Ceferino Llorente
December 4, 1945: Paula gave birth to a boy registered in the Office of the Registrar
of Nabua as Crisologo Llorente with the certificate stating that the child was not
legitimate and the line for the fathers name was left blank
Lorenzo refused to forgive Paula and live with her
February 2, 1946: the couple drew and signed a written agreement which was
witnessed by Paulas father and stepmother to the effect that
1. all the family allowances allotted by the United States Navy as part of Lorenzos
salary and all other obligations for Paulas daily maintenance and support would be
suspended

2.

they would dissolve their marital union in accordance with judicial proceedings

3.
they would make a separate agreement regarding their conjugal property
acquired during their marital life; and
4.
Lorenzo would not prosecute Paula for her adulterous act since she voluntarily
admitted her fault and agreed to separate from Lorenzo peacefully.
November 16, 1951: Lorenzo returned and filed for divorce with the Superior Court
of the State of California in and for the County of San Diego
December 4, 1952: the divorce decree became final
January 16, 1958: Lorenzo married Alicia F. Llorente in Manila and lived together as
husband and wife and bore 3 children: Raul, Luz and Beverly, all surnamed Llorente
March 13, 1981: Lorenzo executed a Last Will and Testament where he bequeathed
all his property to Alicia and their three children
December 14, 1983: Lorenzo filed with the RTC, Iriga, Camarines Sur, a petition for
the probate and allowance of his last will and testament wherein Lorenzo moved
that Alicia be appointed Special Administratrix of his estate
January 18, 1984: RTC denied the motion for the reason that the Lorenzo was still
alive
January 24, 1984: RTC admitted finding that the will was duly executedthe will to
probate
June 11, 1985: before the proceedings could be terminated, Lorenzo died
RTC on the petition for letters of administration filed by Paula over Lorenzos estate
contending that she was the surviving spouse and WITHOUT terminating the testate
proceedings filed by Alicia, gave due course to Paulas petition
divorce decree granted to the late Lorenzo Llorente is void and inapplicable in the
Philippines, therefore the marriage he contracted with Alicia Fortunato at Manila is
void
Paula T. Llorente: 1/3 estate and conjugal estate
illegitimate children, Raul, Luz and Beverly: 1/3 estate
RTC denied Alicias motion for reconsideration but modified that Raul and Luz
Llorente are not children legitimate or otherwise of Lorenzo since they were not
legally adopted by him thus, Beverly Llorente as the only illegitimate child of
Lorenzo, entitles her to 1/3 of the estate and one-third (1/3) of the free portion of
the estate

CA: Affirmed with modification

ISSUE: W/N the divorce is valid and proven

HELD: YES. Petition is GRANTED. REVERSES the decision of the Regional Trial Court
and RECOGNIZES as VALID the decree of divorce granted in favor of the deceased
Lorenzo N. Llorente by the Superior Court of the State of California in and for the
County of San Diego, made final on December 4, 1952. REMANDS the cases to the
court of origin for determination of the intrinsic validity of Lorenzo N. Llorentes will
and determination of the parties successional rights allowing proof of foreign law
with instructions that the trial court shall proceed with all deliberate dispatch to
settle the estate of the deceased within the framework of the Rules of Court.

Van Dorn v. Romillo, Jr.:

o
nationality principle in Article 15 of the Civil Code, only Philippine nationals are
covered by the policy against absolute divorces, the same being considered
contrary to our concept of public policy and morality
o
Court ruled that aliens may obtain divorces abroad, provided they are valid
according to their national law
Quita v. Court of Appeals:
o once proven that NO longer a Filipino citizen when he obtained the divorce, the
ruling in Van Dorn would become applicable
Divorce of Lorenzo H. Llorente from his first wife Paula was valid and recognized in
this jurisdiction as a matter of comity. Now, the effects of this divorce (as to the
succession to the estate of the decedent) are matters best left to the determination
of the trial court.
The clear intent of Lorenzo to bequeath his property to his second wife and children
by her is glaringly shown in the will he executed. We do not wish to frustrate his
wishes, since he was a foreigner, not covered by our laws on family rights and
duties, status, condition and legal capacity.
Whether the will is intrinsically valid and who shall inherit from Lorenzo are issues
best proved by foreign law which must be pleaded and proved.
Whether the will was executed in accordance with the formalities required is
answered by referring to Philippine law. In fact, the will was duly probated.

LWV CONSTRUCTION V. DUPO (2009)

SECOND DIVISION
[ G.R. No. 172342, July 13, 2009 ]
LWV CONSTRUCTION
RESPONDENT.

CORPORATION,

PETITIONER,

VS.

MARCELO

B.

DUPO,

FACTS:
Petitioner, a domestic corporation which recruits Filipino workers, hired respondent
as Civil Structural Superintendent to work in Saudi Arabia for its principal,
Mohammad Al-Mojil Group/Establishment (MMG). On February 26, 1992, respondent
signed his first overseas employment contract, renewable after one year. It was
renewed five times on the following dates: May 10, 1993, November 16, 1994,
January 22, 1996, April 14, 1997, and March 26, 1998. All were fixed-period
contracts for one year. The sixth and last contract stated that respondent's
employment starts upon reporting to work and ends when he leaves the work site.
Respondent left Saudi Arabia on April 30, 1999 and arrived in the Philippines on May
1, 1999.
On May 28, 1999, respondent informed MMG, through the petitioner, that he needs
to extend his vacation because his son was hospitalized. He also sought a
promotion with salary adjustment.[3] In reply, MMG informed respondent that his
promotion is subject to management's review; that his services are still needed;
that he was issued a plane ticket for his return flight to Saudi Arabia on May 31,
1999; and that his decision regarding his employment must be made within seven
days, otherwise, MMG "will be compelled to cancel [his] slot." On July 6, 1999,
respondent resigned.
Under the Law of Saudi Arabia, an employee who rendered at least five (5) years in
a company within the jurisdiction of Saudi Arabia, is entitled to the so-called long
service award which is known to others as longevity pay of at least one half month
pay for every year of service. In excess of five years an employee is entitled to one
month pay for every year of service. In both cases inclusive of all benefits and
allowances.

ISSUE:
1.
WON respondent is entitled to a service award or longevity pay of
US$12,640.33 under the provisions of the Saudi Labor Law; and

2.
WON prescription barred respondent's claim for service award as the
complaint was filed one year and seven months after the sixth contract ended.
RULING:
1.
Respondent's service award under Article 87 of the Saudi Labor Law has
already been paid.
Article 87 clearly grants a service award. It reads:
Article 87

Where the term of a labor contract concluded for a specified period comes to an end
or where the employer cancels a contract of unspecified period, the employer shall
pay to the workman an award for the period of his service to be computed on the
basis of half a month's pay for each of the first five years and one month's pay for
each of the subsequent years. The last rate of pay shall be taken as basis for the
computation of the award. For fractions of a year, the workman shall be entitled to
an award which is proportionate to his service period during that year. Furthermore,
the workman shall be entitled to the service award provided for at the beginning of
this article in the following cases:

A. If he is called to military service.

B. If a workman resigns because of marriage or childbirth.

C. If the workman is leaving the work as a result of a force majeure beyond his
control.(Emphasis supplied.)

2.
On the matter of prescription, however, we cannot agree with petitioner that
respondent's action has prescribed under Article 13 of the Saudi Labor Law. What
applies is Article 291 of our Labor Code which reads:
ART. 291. Money claims. -- All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three (3)
years from the time the cause of action accrued; otherwise they shall be forever
barred.

xxxx

In Cadalin v. POEA's Administrator,[27] we held that Article 291 covers all money
claims from employer-employee relationship and is broader in scope than claims
arising from a specific law. It is not limited to money claims recoverable under the
Labor Code, but applies also to claims of overseas contract workers.
Thus, in our considered view, respondent's complaint was filed well within the threeyear prescriptive period under Article 291 of our Labor Code. This point, however,
has already been mooted by our finding that respondent's service award had been
paid, albeit the payroll termed such payment as severance pay.

KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD.,

vs
MINORU KITAMURA

G.R. No. 149177

November 23, 2007

FACTS:

Nippon Engineering Consultants (Nippon), a Japanese consultancy firm providing

technical and management support in the infrastructure projects national
permanently residing in the Philippines. The agreement provides that Kitamaru was
to extend professional services to Nippon for a year. Nippon assigned Kitamaru to
work as the project manager of the Southern Tagalog Access Road (STAR) project.
When the STAR project was near completion, DPWH engaged the consultancy
services of Nippon, this time for the detailed engineering & construction supervision
of the Bongabon-Baler Road Improvement (BBRI) Project. Kitamaru was named as
the project manger in the contract.

Hasegawa, Nippons general manager for its International Division, informed

Kitamaru that the company had no more intention of automatically renewing his
ICA. His services would be engaged by the company only up to the substantial
completion of the STAR Project.

Kitamaru demanded that he be assigned to the BBRI project. Nippon insisted that
Kitamarus contract was for a fixed term that had expired. Kitamaru then filed for
specific performance & damages w/ the RTC of Lipa City. Nippon filed a MTD.

Nippons contention: The ICA had been perfected in Japan & executed by & between
Japanese nationals. Thus, the RTC of Lipa City has no jurisdiction. The claim for
improper pre-termination of Kitamarus ICA could only be heard & ventilated in the
proper courts of Japan following the principles of lex loci celebrationis & lex
contractus.

The RTC denied the motion to dismiss. The CA ruled hat the principle of lex loci
celebrationis was not applicable to the case, because nowhere in the pleadings was
the validity of the written agreement put in issue. It held that the RTC was correct in
applying the principle of lex loci solutionis.

ISSUE:

Whether or not the subject matter jurisdiction of Philippine courts in civil cases for
specific performance & damages involving contracts executed outside the country
by foreign nationals may be assailed on the principles of lex loci celebrationis, lex
contractus, the state of the most significant relationship rule, or forum non
conveniens.

HELD:

NO. In the judicial resolution of conflicts problems, 3 consecutive phases are

involved: jurisdiction, choice of law, and recognition and enforcement of judgments.
Jurisdiction & choice of law are 2 distinct concepts. Jurisdiction considers whether it
is fair to cause a defendant to travel to this state; choice of law asks the further
question whether the application of a substantive law w/c will determine the merits
of the case is fair to both parties. The power to exercise jurisdiction does not
automatically give a state constitutional authority to apply forum law. While
jurisdiction and the choice of the lex fori will often coincide, the minimum contacts
for one do not always provide the necessary significant contacts for the other. The
question of whether the law of a state can be applied to a transaction is different
from the question of whether the courts of that state have jurisdiction to enter a
judgment.

In this case, only the 1st phase is at issuejurisdiction. Jurisdiction, however, has
various aspects. For a court to validly exercise its power to adjudicate a controversy,
it must have jurisdiction over the plaintiff/petitioner, over the defendant/respondent,
over the subject matter, over the issues of the case and, in cases involving
property, over the res or the thing w/c is the subject of the litigation. In assailing the
trial court's jurisdiction herein, Nippon is actually referring to subject matter
jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the

sovereign authority w/c establishes and organizes the court. It is given only by law
and in the manner prescribed by law. It is further determined by the allegations of
the complaint irrespective of whether the plaintiff is entitled to all or some of the
claims asserted therein. To succeed in its motion for the dismissal of an action for
lack of jurisdiction over the subject matter of the claim, the movant must show that
the court or tribunal cannot act on the matter submitted to it because no law grants
it the power to adjudicate the claims.

In the instant case, Nippon, in its MTD, does not claim that the RTC is not properly
vested by law w/ jurisdiction to hear the subject controversy for a civil case for
specific performance & damages is one not capable of pecuniary estimation & is
properly cognizable by the RTC of Lipa City. What they rather raise as grounds to
question subject matter jurisdiction are the principles of lex loci celebrationis and
lex contractus, and the state of the most significant relationship rule. The Court
finds the invocation of these grounds unsound.

Lex loci celebrationis relates to the law of the place of the ceremony or the law of
the place where a contract is made. The doctrine of lex contractus or lex loci
contractus means the law of the place where a contract is executed or to be
performed. It controls the nature, construction, and validity of the contract and it
may pertain to the law voluntarily agreed upon by the parties or the law intended
by them either expressly or implicitly. Under the state of the most significant
relationship rule, to ascertain what state law to apply to a dispute, the court should
determine which state has the most substantial connection to the occurrence and
the parties. In a case involving a contract, the court should consider where the
contract was made, was negotiated, was to be performed, and the domicile, place
of business, or place of incorporation of the parties. This rule takes into account
several contacts and evaluates them according to their relative importance with
respect to the particular issue to be resolved.

Since these 3 principles in conflict of laws make reference to the law applicable to a
dispute, they are rules proper for the 2nd phase, the choice of law. They determine
which state's law is to be applied in resolving the substantive issues of a conflicts
problem. Necessarily, as the only issue in this case is that of jurisdiction, choice-oflaw rules are not only inapplicable but also not yet called for.

Further, Nippons premature invocation of choice-of-law rules is exposed by the fact

that they have not yet pointed out any conflict between the laws of Japan and ours.
Before determining which law should apply, 1st there should exist a conflict of laws
situation requiring the application of the conflict of laws rules. Also, when the law of
a foreign country is invoked to provide the proper rules for the solution of a case,
the existence of such law must be pleaded and proved.

It should be noted that when a conflicts case, one involving a foreign element, is
brought before a court or administrative agency, there are 3 alternatives open to
the latter in disposing of it: (1) dismiss the case, either because of lack of
jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction
over the case and apply the internal law of the forum; or (3) assume jurisdiction
over the case and take into account or apply the law of some other State or States.
The courts power to hear cases and controversies is derived from the Constitution
and the laws. While it may choose to recognize laws of foreign nations, the court is
not limited by foreign sovereign law short of treaties or other formal agreements,
even in matters regarding rights provided by foreign sovereigns.

Neither can the other ground raised, forum non conveniens, be used to deprive the
RTC of its jurisdiction. 1st, it is not a proper basis for a motion to dismiss because
Sec. 1, Rule 16 of the Rules of Court does not include it as a ground. 2nd, whether a
suit should be entertained or dismissed on the basis of the said doctrine depends
largely upon the facts of the particular case and is addressed to the sound
discretion of the RTC. In this case, the RTC decided to assume jurisdiction. 3rd, the
propriety of dismissing a case based on this principle requires a factual
determination; hence, this conflicts principle is more properly considered a matter
of defense.