SAN BEDA COLLEGE ALABANG

SCHOOL OF LAW

A WRITTEN REPORT ON CONFLICT

OF LAWS CHAPTER II: CHOICE OF
LAW

Submitted by:
Cadorna, Jerekko
Ebersole, Philip
Gayatin, Catriona Janelle
Guidote, Michael Christopher
Lomeda, Dan Allen
Siccuan, John Boris

Submitted to:

Dean Ulpiano Sarmiento III

Professor
4B Conflict of Laws

30 January 2019

1
 CHOICE OF LAW
Choice of law refers to what jurisdiction's law is to be applied when there is a
dispute in a transaction. Choice of laws refers to the area of law in which the court
where an action is brought determines whether to apply the law applicable in that court
(forum state law) or apply the law applicable in another jurisdiction which has an interest
in the controversy. 1

“Choice of law” refers to situations in which a court must decide which

jursidiction‘s laws apply to a particular case or to a particular issue in a case. The
question a choice of law conflict asks is “Which laws should apply to this case?”2

Questions that Choice of Law seeks to answer:

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 system regulate the situation

CHOICE OF LAW PRINCIPLES

CHOICE OF LAW THEORIES

1. Theory of Comity
The application of foreign legal systems in cases involving foreign element is
proper, otherwise, the non-application would constitute a disregard of foreign
sovereignty or lack of comity towards other States.3 Comity is the courtesy one
jurisdiction gives by enforcing the laws of another jurisdiction. Comity is granted
out of respect, deference, or friendship, rather than as an obligation. 4
2. Vested Rights Theory
Propounded by A.V. Dicey and by J.H. Beale. Any right which has been duly
acquired under the law of any civilized country is recognized and, in general,
enforced by the forum courts. A right having been created by the appropriate law,
the recognition of its existence should follow everywhere, and thus it logically
follows that an act valid where done cannot be called in question anywhere.5

1
Choice of Law and Legal Definition. US Legal. Retrieved from https://definitions.uslegal.com/c/choice-of-law/

2
What is “choice of law?. Rottenstein Law Group. Retrieved from http://www.rotlaw.com/legal-library/what-is-
choice-of-law/
3
Paras, Philippine Conflict of Laws
4
Ibid
5
Ibid

2
 According to Salonga, courts enforce not the foreign law or foreign judgment but
the rights vested under such law or judgment. Thus, rights acquired in one
country must be recognized and legally protected in other countries. The forum
will not apply the foreign law but will simply recognize the right vested by said
law.
3. Local Law Theory
Propounded by W.W. Cook. It denies that the forum accords extraterritorial effect
to a foreign created right but grants a local remedy which approximates the result
which would have obtained under the foreign law.

According to Sempio-Diy, this involves the appropriation of a foreign rule by the

State of the forum and transforming it into a domestic rule. A foreign law is
applied because our own law, by applying a similar rule, requires us to do so, as
if the foreign law has become part of our own internal or domestic law. 6
4. Theory of Justice
Propounded by David Cavers, the choice of law should be determined by
considerations of justice and social expediency and should not be the result of
mechanical application of the rule or principle of selection.
5. Harmony of Laws Theory
Identical or similar problems should be given identical or similar solutions,
resulting in harmony of laws.

GENERAL RULE: A court, subject to constitutional restrictions, will follow a

statutory directive of its own state on choice of law.

EXCEPTION: When there is no such directive, the factors relevant to the choice of
the applicable rule of law include:

a) the needs of the interstate and international systems,

b) the relevant policies of the forum,
c) the relevant policies of other interested states and the relative interests of
those states in the determination of the particular issue,
d) the protection of justified expectations,
e) the basic policies underlying the particular field of law,
f) certainty, predictability and uniformity of result, and
g) ease in the determination and application of the law to be applied.7

Legislatures usually legislate, and courts usually adjudicate, only with the local
situation in mind. They rarely give thought to the extent to which the laws they enact,

6
Supra
7
Restatement (Second) of Conflict of Laws. American Law Institute. Retrieved from
http://www.kentlaw.edu/perritt/conflicts/rest6.html

3
and the common law rules they enunciate, should apply to out-of-state facts. When
there are no adequate directives in the statute or in the case law, the court will take
account of the factors listed in the factors in determining the state whose local law will
be applied to determine the issue at hand. It is not suggested that this list of factors is
exclusive. Undoubtedly, a court will on occasion give consideration to other factors in
deciding a question of choice of law. Also it is not suggested that the factors mentioned
are listed in the order of their relative importance. Varying weight will be given to a
particular factor, or to a group of factors, in different areas of choice of law. 8

Principle 1: Local Law

Statutes directed to choice of law. A court, subject to constitutional limitations,

must follow the directions of its legislature. The court must apply a local statutory
provision directed to choice of law provided that it would be constitutional to do so.9

Statutes that are expressly directed to choice of law, that is to say, statutes which
provide for the application of the local law of one state, rather than the local law of
another state, are comparatively few in number. b. Intended range of application of
statute. A court will rarely find that a question of choice of law is explicitly covered by
statute. That is to say, a court will rarely be directed by statute to apply the local law of
one state, rather than the local law of another state, in the decision of a particular issue.
On the other hand, the court will constantly be faced with the question whether the issue
before it falls within the intended range of application of a particular statute. The court
should give a local statute the range of application intended by the legislature when
these intentions can be ascertained and can constitutionally be given effect. If the
legislature intended that the statute should be applied to the out-of-state facts involved,
the court should so apply it unless constitutional considerations forbid. On the other
hand, if the legislature intended that the statute should be applied only to acts taking
place within the state, the statute should not be given a wider range of application.
Sometimes a statute's intended range of application will be apparent on its face, as
when it expressly applies to all citizens of a state including those who are living abroad.
When the statute is silent as to its range of application, the intentions of the legislature
on the subject can sometimes be ascertained by a process of interpretation and
construction. Provided that it is constitutional to do so, the court will apply a local statute
in the manner intended by the legislature even when the local law of another state
would be applicable under usual choice-of-law principles.10

The Lex fori (law of the forum or local law) theory contends that the basic law is
the law of the forum and that foreign law should be used only to fill "gaps" in that law.

8
Ibid
9
Ibid
10
Ibid

4
This theory does not deny the application of foreign law in "appropriate" cases. In other
words, to soften the strict application of the lex fori, some specific conflict rules have
been developed as an exception.11

The following are situations where local law is to be applied in conflict of laws cases:

1. When the local law expressly so provides.

2. When the foreign law or judgment has not been properly pleaded and proved.
3. When the case involves any of the exceptions to the application of the proper
foreign law.
a. The application of foreign law would run counter to public policy. (i.e. joint
wills, incestuous marriage)
b. Foreign law is contrary to universally conceded principles of morality.
c. Foreign law is penal in character
d. Foreign law is procedural in character.
e. Foreign fiscal or administrative laws
f. The case involves real or personal property located in the country of the
forum.

The problem of renvoi

Renvoi is a procedure whereby a jural matter presented is referred by the conflict

of laws rules of the forum to a foreign state, the conflicts of laws rule of which turn refers
the matter back to the law of the forum (remission) or a third state (transmission).
(Coquia, Conflict of Laws)

It is sometimes called “table tennis” theory, as the law is being referred back and
forth from the forum law to the law of domicile of the foreign party which involves a
conflict of laws rule, pointing back to the forum law as applicable law. (Agpalo, Private
International Law)

CASES:

Aznar and Christensen vs Garcia

G.R. No. L-16749, 31 January 1963

Facts: Edward E. Christensen, though born in New York, migrated to California, where
he resided and consequently was considered a California citizen. In 1913, he came to
the Philippines where he became a domiciliary until his death. However, during the
entire period of his residence in this country he had always considered himself a citizen

11
Kabede and Kassim. Development of Conflicts Theories. Abyssinia Law. Retrieved from
https://www.abyssinialaw.com/study-on-line/item/406-development-of-conflicts-theories-general

5
of California. In his will executed on March 5, 1951, he instituted an acknowledged
natural daughter, Maria Lucy Christensen as his only heir, but left a legacy of sum of
money in favor of Helen Christensen Garcia who was rendered to have been declared
acknowledged natural daughter.

Counsel for appellant claims that California law should be applied; that under California
law, the matter is referred back to the law of the domicile; that therefore Philippine law is
ultimately applicable; that finally, the share of Helen must be increased in view of the
successional rights of illegitimate children under Philippine law. On the other hand,
counsel for the heir of Christensen contends that inasmuch as it is clear that under
Article 16 of our Civil Code, the national law of the deceased must apply, our courts
must immediately apply the internal law of California on the matter; that under California
law there are no compulsory heirs and consequently a testator could dispose of any
property possessed by him in absolute dominion and that finally, illegitimate children not
being entitled to anything and his will remain undisturbed.

Issue: Whether or not the Philippine law should prevail in administering the estate of
Christensen?

Ruling: Philippine law governs. The court in deciding to grant more successional rights
to Helen said in effect that there are two rules in California on the matter: the internal
law which should apply to Californians domiciled in California; and the conflict rule
which should apply to Californians domiciled outside of California. The California conflict
rule says: “If there is no law to the contrary in the place where personal property is
situated, is deemed to follow the person of its owner and is governed by the law of his
domicile.” Christensen being domiciled outside California, the law of his domicile, the
Philippines, ought to be followed.

ART. 16. Real property as well as personal property is subject to the law of the country
where it is situated.

However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country where said property may be found.

There is no single American law governing the validity of testamentary provisions in the
United States, each state of the Union having its own private law applicable to its
citizens only and in force only within the state. The “national law” indicated in Article 16
of the Civil Code above quoted can not, therefore, possibly mean or apply to any
general American law. So it can refer to no other than the private law of the State of
California.

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Bellis vs Bellis

G.R. No. L-23678, 6 June 1967

Facts: Amos Bellis, born in Texas, was a citizen of the State of Texas and of the United
States. He had 5 legitimate children with his wife, Mary Mallen, whom he had divorced,
3 legitimate children with his 2nd wife, Violet Kennedy and finally, 3 illegitimate children.

Prior to his death, Amos Bellis executed a will in the Philippines in which his
distributable estate should be divided in trust in the following order and manner:

a. $240,000 to his 1st wife Mary Mallen;

b. P120,000 to his 3 illegitimate children at P40,000 each;

c. The remainder shall go to his surviving children by his 1st and 2nd wives, in equal
shares.

Subsequently, Amos Bellis died a resident of San Antonio, Texas, USA. His will was
admitted to probate in the Philippines. The People’s Bank and Trust Company, an
executor of the will, paid the entire bequest therein.

Preparatory to closing its administration, the executor submitted and filed its “Executor’s
Final Account, Report of Administration and Project of Partition” where it reported, inter
alia, the satisfaction of the legacy of Mary Mallen by the shares of stock amounting to
$240,000 delivered to her, and the legacies of the 3 illegitimate children in the amount
of P40,000 each or a total of P120,000. In the project partition, the executor divided the
residuary estate into 7 equal portions for the benefit of the testator’s 7 legitimate
children by his 1st and 2nd marriages.

Among the 3 illegitimate children, Mari Cristina and Miriam Palma Bellis filed their
respective opposition to the project partition on the ground that they were deprived of
their legitimes as illegitimate children.

The lower court denied their respective motions for reconsideration.

Issue: Which law must apply – Texas Law or Philippine Law?

Ruling: Texas law. Order of the probate court is hereby affirmed.

The foreign law, whenever applicable, should be proved by the proponent thereof,
otherwise, such law shall be presumed to be exactly the same as the law of the forum.

In the absence of proof as to the conflict of law rule of Texas, it should not be presumed
different from ours. Apply Philippine laws.

7
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of
the decedent, in intestate or testamentary successions, with regard to four items: (a) the
order of succession; (b) the amount of successional rights; (e) the intrinsic validity of the
provisions of the will; and (d) the capacity to succeed. They provide that —ART. 16.
Real property as well as personal property is subject to the law of the country where it is
situated.

However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found.

ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.

The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas,
U.S.A., and that under the laws of Texas; there are no forced heirs or legitimes.
Accordingly, since the intrinsic validity of the provision of the will and the amount of
successional rights are to be determined under Texas law, the Philippine law on
legitimes cannot be applied to the testacy of Amos G. Bellis.

In this regard, the parties do not submit the case on, nor even discuss, the doctrine of
renvoi, applied by this Court in Aznar v. Christensen Garcia, L-16749, January 31,
1963. Said doctrine is usually pertinent where the decedent is a national of one country,
and a domicile of another. In the present case, it is not disputed that the decedent was
both a national of Texas and a domicile thereof at the time of his death. So that even
assuming Texas has a conflict of law rule providing that the domiciliary system (law of
the domicile) should govern, the same would not result in a reference back (renvoi) to
Philippine law, but would still refer to Texas law. Nonetheless, if Texas has a conflicts
rule adopting the situs theory (lex rei sitae) calling for the application of the law of the
place where the properties are situated, renvoi would arise, since the properties here
involved are found in the Philippines. In the absence, however, of proof as to the conflict
of law rule of Texas, it should not be presumed different from ours. Appellants position is
therefore not rested on the doctrine of renvoi. As stated, they never invoked nor even
mentioned it in their arguments. Rather, they argue that their case falls under the
circumstances mentioned in the third paragraph of Article 17 in relation to Article 16 of
the Civil Code.

How to resolve renvoi problem in the absence of definitive laws on the matter

The theory to be adopted should be that which, considering the circumstances of

a given situation, will best result in fairness, equity, and justice. (Sempio- Diy. Conflict of
Laws)

8
Principle 2: Needs of Interstate and International Systems

Probably the most important function of choice-of-law rules is to make the

interstate and international systems work well. Choice-of-law rules, among other things,
should seek to further harmonious relations between states and to facilitate commercial
intercourse between them. In formulating rules of choice of law, a state should have
regard for the needs and policies of other states and of the community of states. Rules
of choice of law formulated with regard for such needs and policies are likely to
commend themselves to other states and to be adopted by these states. Adoption of the
same choice-of-law rules by many states will further the needs of the interstate and
international systems and likewise the values of certainty, predictability and uniformity of
result.12

Principle 3: Relevant Policies of the Forum

Two situations should be distinguished. One is where the state of the forum has
no interest in the case apart from the fact that it is the place of the trial of the action.
Here the only relevant policies of the state of the forum will be embodied in its rules
relating to trial administration. The second situation is where the state of the forum has
an interest in the case apart from the fact that it is the place of trial. In this latter
situation, relevant policies of the state of the forum may be embodied in rules that do
not relate to trial administration.13

CASES

BIENVENIDO M. CADALIN v. POEA, GR No. 104776, Dec 05, 1994

Facts: Complainants-appellants allege that they were recruited by respondent-appellant

AIBC for its accredited foreign principal, Brown & Root, on various dates from 1975 to
1983. They were all deployed at various projects undertaken by Brown & Root in
several countries in the Middle East, such as Saudi Arabia, Libya, United Arab Emirates
and Bahrain, as well as in Southeast Asia, in Indonesia and Malaysia.Having been
officially processed as overseas contract workers by the Philippine Government, all the
individual complainants signed standard overseas employment contracts with AIBC
before their departure from the Philippines.In the State of Bahrain, where some of the
individual complainants were deployed, His Majesty Isa Bin Salman Al Kaifa, Amir of
Bahrain, issued his Amiri Decree No. 23 on June 16, 1976, otherwise known as the
Labour Law for the Private SectorThis decree took effect on August 16, 1976. The
amended complaint sought the payment of the unexpired portion of the employment
contracts, which was terminated prematurely, and secondarily, the payment of the
12
Restatement (Second) of Conflict of Laws. American Law Institute. Retrieved from
http://www.kentlaw.edu/perritt/conflicts/rest6.html
13
Ibid

9
interest of the earnings of the Travel and Reserved Fund; interest on all the unpaid
benefits; area wage and salary differential pay; fringe benefits; reimbursement of SSS
and premium not remitted to the SSS; refund of withholding tax not remitted to the BIR;
penalties for committing prohibited practices; as well as the suspension of the license of
AIBC and the accreditation of BRII

Also, in all the petitions, complainants-appellants claims, among others, that that the
prescriptive period for the filing of the claims is ten years. Respondent appellants claims
that the prescriptive period for filing the claims is that prescribed by Article 291 of the
Labor Code of the Philippines (three years) and not the one prescribed by Article 1144
of the Civil Code of the Philippines (ten years). To the POEA Administrator, the
prescriptive period was ten years, applying Article 1144 of the Civil Code of the
Philippines. NLRC believed otherwise, fixing the prescriptive period at three years as
provided in Article 291 of the Labor Code of the Philippines.On the other hand, Article
156 of the Amiri Decree No. 23 of 1976 provides:"A claim arising out of a contract of
employment shall not be actionable after the lapse of one year from the date of the
expiry of the contract"

ISSUE: 1. Whether or not the claim has prescribed?

2. Whether or not Amiri Decree No. 23 of Bahrain should be applied to the

employment- contracts?

HELD: No. As a general rule, a foreign procedural law will not be applied in the forum.
Procedural matters, such as service of process, joinder of actions, period and requisites
for appeal, and so forth, are governed by the laws of the forum. This is true even if the
action is based upon a foreign substantive law. A law on prescription of actions is sui
generis in Conflict of Laws in the sense that it may be viewed either as procedural or
substantive, depending on the characterization given such a law.However, the
characterization of a statute into a procedural or substantive law becomes irrelevant
when the country of the forum has a "borrowing statute." Said statute has the practical
effect of treating the foreign statute of limitation as one of substance. A "borrowing
statute" directs the state of the forum to apply the foreign statute of limitations to the
pending claims based on a foreign law (Siegel, Conflicts 183 [1975]). While there are
several kinds of "borrowing statutes," one form provides that an action barred by the
laws of the place where it accrued, will not be enforced in the forum even though the
local statute has not run against it. Section 48 of our Code of Civil Procedure is of this
kind. Said Section provides:"If by the laws of the state or country where the cause of
action arose, the action is barred, it is also barred in the Philippine Islands."In the light of
the 1987 Constitution, however, Section 48 cannot be enforced ex propriovigore insofar
as it ordains the application in this jurisdiction of Section 156 of the Amiri Decree No. 23
of 1976.The courts of the forum will not enforce any foreign claim obnoxious to the

10
forum's public policy. To enforce the one-year prescriptive period of the Amiri Decree
No. 23 of 1976 as regards the claims in question would contravene the public policy on
the protection to labor. Thus, the Philippine Law on prescription should be applied.

Having determined that the applicable law on prescription is the Philippine law, the next
question is whether the prescriptive period governing the filing of the claims is three
years, as provided by the Labor Code or ten years, as provided by the Civil Code of the
Philippines.The three-year prescriptive period fixed in the Eight-Hour Labor Law (CA
No. 444 as amended) will apply, if the claim for differentials for overtime work is solely
based on said law, and not on a collective bargaining agreement or any other contract.
In the instant case, the claim for overtime compensation is not so much because of
Commonwealth Act No. 444, as amended but because the claim is a demandable right
of the employees, by reason of the above-mentioned collective bargaining agreement.
(Thus, Art. 1144 was applied.)

2. NLRC applied the Amiri Decree No. 23 of 1976, which provides for greater benefits
than those stipulated in the overseas-employment contracts of the claimants. It was of
the belief that "where the laws of the host country are more favorable and beneficial to
the workers, then the laws of the host country shall form part of the overseas
employment contract." It quoted with approval the observation of the POEA
Administrator that "xxx in labor proceedings, all doubts in the implementation of the
provisions of the Labor Code and its implementing regulations shall be resolved in favor
of labor (Rollo, pp. 90-94).

Any ambiguity in the overseas-employment contracts should be interpreted against

AIBC and BRII, the parties that drafted it. Article 1377 of the Civil Code of the
Philippines provides:

"The interpretation of obscure words or stipulations in a contract shall not favor the party
who caused the obscurity."

Said rule of interpretation is applicable to contracts of adhesion where there is already a

prepared form containing the stipulations of the employment contract and the
employees merely "take it or leave it." The presumption is that there was an imposition
by one party against the other and that the employees signed the contracts out of
necessity that reduced their bargaining power. Applying the said legal precepts, we read
the overseas-employment contracts in question as adopting the provisions of the Amiri
Decree No. 23 of 1976 as part and parcel thereof.

The parties to a contract may select the law by which it is to be governed (Cheshire,
Private International Law, 187 [7th ed]). In such a case, the foreign law is adopted as a
"system" to regulate the relations of the parties, including questions of their capacity to

11
enter into the contract, the formalities to be observed by them, matters of performance,
and so forth (16 Am Jur 2d, 150-161).

Instead of adopting the entire mass of the foreign law, the parties may just agree that
specific provisions of a foreign statute shall be deemed incorporated into their contract
"as a set of terms." By such reference to the provisions of the foreign law, the contract
does not become a foreign contract to be governed by the foreign law. The said law
does not operate as a statute but as a set of contractual terms deemed written in the
contract

Bank of America, NT and SA vs American Realty Corporation, Court of Appeals

GR No. 133876, December 29, 1999

Facts: Bank of America NT & SA (BANTSA) granted three major multi-million loans to
several corporate borrowers. Due to the borrowers’ default, a restructuring agreement
was signed and entered with the respondent American Realty Corporation (ARC) as
third party mortgagors over two real estate properties. When the corporate borrowers
defaulted once again, BANTSA filed civil actions before foreign courts in England and
Hongkong for the collection of the principal loans while also filing an application for
extrajudicial foreclosure of real estate mortgage in the Philippines for ARC’s real estate
properties. ARC filed an action for damages for the filing of the foreclosure suit despite
the pendency of civil suits in the foreign courts for the collection of the principal loans.
BANTSA contented among others that under English law, which is the governing law
under the principal agreements, the mortgagee does not lose its security interest by
filing civil actions for sums of money.

Issue: W/N a mortgage-creditor waives is remedy to foreclose the real estate mortgage
constituted over a 3rd party mortgagors property situated in the Philippines by filing an
action for the collection of the principal loan before foreign courts?

Held: No, as held in jurisprudence, when the foreign law, judgment or contract is
contrary to a sound and established public policy of the forum, the said foreign law,
judgment, or order shall not be applied. Additionally, prohibitive laws concerning
persons, their acts or property, and those which have for their object public order, public
policy and good customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a foreign court. The
public policy sought to be protected in the instant case is the principle in our jurisdiction
proscribing the splitting up of a single cause of action. The filing of the suit for the
collection of the principal loans in foreign courts and the filing of the foreclosure suit in
the Philippines constitutes as splitting a single cause of action which is prohibited under
Philippine laws.

12
Dacasin vs Dacasin

GR No. 168785, February 5, 2010

Facts: Petitioner, an American, and Respondent, a Filipino were married and have one
daughter Stephanie born on September 21, 1995. Respondent obtained a divorce
decree against petitioner in the Illinois Court. The court awarded the respondent with
the sole custody of Stephanie and retained jurisdiction over the case for enforcement
purposes. On January 28, 2002, both parties executed in Manila a contract for the joint
custody of Stephanie, choosing the Philippines as the exclusive forum to adjudicate the
dispute arising from the contract. In 2004, petitioner sued the respondent for violation of
the agreement as the latter continued to exercise sole custody over their daughter.
Respondent sought to dismiss the complaint for lack of jurisdiction, contending that the
Illinois Court retains jurisdiction to enforce the divorce decree.

Issue: W/N the PH courts have jurisdiction to take cognizance of the suit and enforce
the agreement on the joint custody of the parties’ child?

Held: The trial court has jurisdiction to entertain the suit but not to enforce the
agreement which is void. The jurisdiction of the Illinois Court is over the enforcement of
the various provisions of its judgment of divorce. The agreement between the parties
was made post divorce hence it is already outside the jurisdiction of the Illinois Court.
However, our courts cannot enforce the agreement which is contrary to law. At the time
the agreement was executed, Stephanie was under 7 years old and the parties are no
longer married. The Family Code provides that no child under 7 years of age shall be
separated from the mother. Hence upon separation of the spouses, the mother shall
take full custody under the law if the child is below 7 years old and any agreement to the
contrary is void. The divorce decree is likewise valid against the petitioner pursuant to
his national laws even if the same was obtained by his Filipino spouse as the court
which rendered the divorce decree has jurisdiction over the petitioner.

The problem dealt with in this factor arises in the common situation where a
statute or common law rule of the forum was formulated solely with the intrastate
situation in mind or, at least, where there is no evidence to suggest that the statute or
rule was intended to have extraterritorial application. If the legislature or court (in the
case of a common law rule) did have intentions with respect to the range of application
of a statute or common law rule and these intentions can be ascertained, the GENERAL
RULE is applicable. If not, the court will interpret the statute or rule in the light of the
factors stated in the EXCEPTION.

Every rule of law, whether embodied in a statute or in a common law rule, was
designed to achieve one or more purposes. A court should have regard for these

13
purposes in determining whether to apply its own rule or the rule of another state in the
decision of a particular issue. If the purposes sought to be achieved by a local statute
or common law rule would be furthered by its application to out-of-state facts, this is a
weighty reason why such application should be made. On the other hand, the court is
under no compulsion to apply the statute or rule to such out-of-state facts since the
originating legislature or court had no ascertainable intentions on the subject. The court
must decide for itself whether the purposes sought to be achieved by a local statute or
rule should be furthered at the expense of the other choice-of-law factors mentioned.

Principle 4: Relevant policies of the other interested states

In determining a question of choice of law, the forum should give consideration

not only to its own relevant policies but also to the relevant policies of all other
interested states. The forum should seek to reach a result that will achieve the best
possible accommodation of these policies. The forum should also appraise the relative
interests of the states involved in the determination of the particular issue. In general, it
is fitting that the state whose interests are most deeply affected should have its local law
applied. Which is the state of dominant interest may depend upon the issue involved.
So if a husband injures his wife in a state other than that of their domicile, it may be that
the state of conduct and injury has the dominant interest in determining whether the
husband's conduct was tortious or whether the wife was guilty of contributory
negligence. On the other hand, the state of the spouses' domicile is the state of
dominant interest when it comes to the question whether the husband should be held
immune from tort liability to his wife .

The content of the relevant local law rule of a state may be significant in
determining whether this state is the state with the dominant interest. So, for example,
application of a state's statute or common law rule which would absolve the defendant
from liability could hardly be justified on the basis of this state's interest in the welfare of
the injured plaintiff.14

Kearney v. Salomon Smith Barney, Inc., S124739 (Sup. Ct. Cal. July 13, 2006)
("Kearney"), is a putative class action suit brought in the California Superior Court for
San Francisco County. The plaintiffs alleged that Salomon Smith Barney, Inc. ("SSB")
recorded conversations between its employees in Georgia and the plaintiffs in
California. According to the complaint, those recordings were made without the
plaintiffs’ consent.

The Superior Court in San Francisco dismissed the complaint on the ground that
the alleged calls were subject to — and lawful under — Georgia’s one‑party consent
law. The California Court of Appeals upheld that decision. The Supreme Court’s
14
Ibid

14
decision of July 13, however, found that the complaint was properly governed by
California law and the lower court’s dismissal of the complaint was therefore in error.

The Supreme Court’s decision turned primarily upon the question of choice of
law – in this case, whether California or Georgia law should be applied to a set of facts
in which both states had a legitimate interest but as to which the two states’ laws were
in conflict. Under California precedent, such conflicts are resolved by a "governmental
interest" analysis, which consists of three steps. "First, the court determines whether
the relevant law of each of the potentially affected jurisdictions with regard to the
particular issue is the same or different. Second, if there is a difference, the court
examines each jurisdiction’s interest in the application of its own law under the
circumstances of the particular case to determine whether a true conflict exists. Third, if
the court finds that there is a true conflict, it carefully evaluates and compares the
nature and strength of the interest of each jurisdiction in the application of its own law ‘to
determine which state’s interest would be more impaired if its policy were subordinated
to the policy of the other state.’ Once this analysis is complete, the court applies the law
of the state that would suffer the greater adverse impact if its law was not applied.

The court had little difficulty finding that the Georgia and California
eavesdropping laws were in conflict, and that the conflict applied directly to the facts
alleged in the complaint. Accordingly, the court proceeded to the third element of the
"governmental interest" analysis, and found: (1) that California’s interest in protecting
its residents’ privacy would be substantially impaired by failure to enforce its two-party
consent law in this case; and (2) that the harm to Georgia from failure to enforce that
state’s law would be substantially less. As to the second point, the court found, for
example, that enforcing California’s law would affect only calls made from Georgia to
California, and that even this limitation on Georgia callers could be mitigated by
obtaining prior consent from California residents before their calls were recorded. The
California Supreme Court’s decision in Kearney does not find that SSB’s conduct was
unlawful, but it does find that California law will decide that question if the case
proceeds to trial. 15

In Butler vs Adoption Media, LLC, Defendants Dale R. Gwilliam and

Nathan W. Gwilliam ("the Gwilliams") are Arizona residents who run businesses
that operate adoption-related websites. These websites constitute the largest,
most active, and most well-known Internet adoption-related business in the
United States. One of the websites, ParentProfiles.com, offers a service that
allows prospective adoptive parents, for a fee, to post "profiles" containing

15
(2006) California "Two-Party Consent Law" Applies to Recording of Calls Made from Other States. Morrison-
Fester

15
information about themselves, for review by women who have given birth or are
about to give birth and plan to give up the children for adoption.

Plaintiffs Michael Butler and Richard Butler ("the Butlers") have been
registered domestic partners in the state of California since 2000. In 2002, they
were seeking to adopt a child. They were certified and approved to adopt in
California, and applied to have their profile posted on ParentProfiles.com. Their
application was rejected, on the reason that the business ad adopted a policy
allowing only individuals in an opposite-sex marriage to post profiles on the
website. Dale testified in his deposition that the "opposite gender component is
an essential component of the policy." Nathan testified that a same-sex couple
registered under California's domestic partnership law would not qualify under
the policy because they are not married, and that even if same-sex couples were
permitted to marry in all 50 states, defendants would still be reluctant to change
the policy and would instead "look at all the evidence gathered altogether and
make a decision" as to whether to modify their policy.

Plaintiffs filed suit against the Gwilliams and two Arizona limited liability
companies owned and managed by the Gwilliams — Adoption Media LLC and
Adoption Profiles LLC. Plaintiffs alleged violations of the Unruh Civil Rights Act
("the Unruh Act" or "the Act"), California Civil Code §§ 51 and 51.5; and violations
of California's unfair competition and false advertising laws, California Business
and Professions Code.

The Unruh Civil Rights Act has always provided that "[a]ll persons within
the jurisdiction of this state are free and equal, and no matter what their
[specified personal characteristics], . . . are entitled to the full and equal
accommodations, advantages, facilities, privileges, or services in all business
establishments of every kind whatsoever." Cal. Civ.Code § 51(b). Section 51.5
provides, in part, that "[n]o business establishment of any kind whatsoever shall
discriminate against, boycott or blacklist, or refuse to buy from, contract with, sell
to, or trade with any person in this state on account of any characteristic listed or
defined in subdivision (b) or (e) of Section 51. . . ." Cal. Civ.Code § 51.5(a).

Defendants argue that California law does not apply to plaintiffs'

substantive claims, while plaintiffs contend that it does.

Federal courts sitting in diversity look to the law of the forum state when
making a choice-of-law determination. In the absence of an effective choice of
law by the parties, California applies the "governmental interest" test.

Under that analysis, a court carefully examines the govern mental

interests or purposes served by the applicable statute or rule of law of each of

16
the affected jurisdictions to determine whether there is a "true conflict." If such a
conflict is found to exist, the court analyzes the jurisdictions' respective interests
to determine which jurisdiction's interests would be more severely impaired if that
jurisdiction's law were not applied in the particular con text presented by the
case.

The Court found that there is comparative impairment of each state’s

interest in this case that amounts to a “true conflict”, as California has a strong
interest in enforcing its anti-discrimination laws. It is less clear what interest
Arizona might have in allowing discrimination in public accommodations on the
basis of sexual orientation or marital status, or in applying its own law to
California residents. The only interest plaintiffs have articulated is Arizona's
interest in protecting its resident businesses from uncertainty.

In Kearney, the court found, with regard to the impairment of California's

interest, that the failure to apply California law in that case would "substantially
undermine the protection afforded by the statute" because it would permit out-of-
state companies doing business in California to invade the privacy of California
residents in contravention of California law. The court finds that the failure to
apply California law in the present case would undermine the Unruh Act for the
same reasons. If businesses with headquarters in other states could maintain a
regular practice of discriminating against California residents, that practice would
substantially impair the protection afforded by the statute. In the present case,
the Unruh Act is more protective of consumers than the comparable Arizona law.
Application of California law would not violate any right protected by Arizona law,
and the Unruh Act merely provides protections in addition to those specifically
enumerated protections in Arizona. Arizona law does not require, or even permit,
discrimination by businesses against same-sex couples.

Thus, defendants can comply with California law while doing business in
California without violating any provision of Arizona law, and any interest Arizona
may have in its own law would not be seriously impaired by the application of
California law. Moreover, defendants have provided no evidence that the
application of California law would pose an undue and excessive burden on
interstate commerce by making it impossible or infeasible for defendants to
comply with the requirements of the Unruh Act without altering their conduct with
regard to ParentProfiles.com's non-California clients. As plaintiffs point out, the
same geographic limitation applies in the present case, as they are seeking to
prevent defendants from discriminating against California residents while they
are in California. The evidence shows that defendants already require all persons
who wish to use the ParentProfiles service to identify their state of residence and
where they are certified to adopt. Thus, defendants can easily distinguish
17
 California residents from others, and the application of California law will not
require defendants to alter their policy or practice with regard to residents of
other states.

The court granted the injunction prayed for by the plaintiffs to to compel
Adoption Media, LLC to accept for publication on its websites the plaintiff’s
adoption information. The court found in this case, California has the
constitutional authority to bar discrimination on the basis of sexual orientation in
public accommodations, California's interest in combating discrimination on the
basis of sexual orientation is compelling, and the Unruh Act prohibits such
discrimination in order to eliminate the harms caused by the discriminatory
conduct, not to silence particular viewpoints.

Criticism of Governmental Interest Analysis Approach

In the US, the concept of governmental interest analysis was developed by

Brainerd Currie and is preferred by many American conflicts writers. Currie focused on
each state's substantive rules, rather than on a metaphorical test, for the seat of the
legal relationships and assumed that governments are less interested in what happens
within their territorial boundaries than in the well-being of their subjects. The
methodology that he proposed relies almost entirely on the personal nexus between the
litigants and the states. However, there is no single test for this nexus at an international
level. Some states use the concept of domicile, others nationality, and the remainder
citizenship; also, definitions of domicile vary from state to state. That methodology has
thus never been accepted outside the US. Also, if the litigants are from different states,
relying on one personal law rather than another may be arbitrary. To cope with that
difficulty, Currie advocated that the lex fori should be applied whenever his method
produced what he called a "true conflict". Critics have alleged that Currie's approach is
nothing more than a complex pretext to avoid applying foreign law if there are two or
more personal laws.

The two most significant aspects of Currie’s theory were: (1) appreciation of
interest analysis as a choice of law technique; (2) the conclusion that an interested
forum must always apply its own law.

On the view that every state has a governmental interest in effecting the policies
underlying its own law having some connection with the transaction, Brainerd Currie's
extreme position (accepting the lex fori principle) was: "we would be better off without
choice of law rules. Normally, even in cases involving foreign elements, the court should
be expected as a matter of course to apply the rules of decision found in the law of the
forum". Upon consideration of policy and fairness in determination of the matter, despite
the position that the forum must enforce its own interest and apply its law where there is

18
a conflict between the government interest of the forum and that of another state; the
law of the forum could be displaced if where another state is shown to have a
government interest superior to that of the forum which in this case the law of that state
will be used as a model for the rule of decision in the particular case. 16

Principle 5: Protection of justified expectations

This is an important value in all fields of the law, including choice of law.
Generally speaking, it would be unfair and improper to hold a person liable under the
local law of one state when he had justifiably molded his conduct to conform to the
requirements of another state. Also, it is in part because of this factor that the parties
are free within broad limits to choose the law to govern the validity of their contract and
that the courts seek to apply a law that will sustain the validity of a trust of movables

There are occasions, particularly in the area of negligence, when the parties act
without giving thought to the legal consequences of their conduct or to the law that may
be applied. In such situations, the parties have no justified expectations to protect, and
this factor can play no part in the decision of a choice-of-law question.

CASE:

Francisco v Stolt

2001 WL 290172 (E.D.La. 2001)

Facts: Appellant Ernesto Francisco, a Philippine national, was injured on a chemical

tanker ship located on the Mississippi river. Francisco was employed aboard the M/T
STOLT ACHIEVEMENT (the vessel), which was allegedly operated by Stolt-Nielsen
Transportation Group, Inc., (Stolt) a Liberian corporation. Stolt's “Crewing Manager”
submitted an affidavit attesting that when Stolt hires Philippine seamen, it must comply
with employment contract requirements of the Philippine Overseas Employment
Administration. Francisco signed such a contract. It provides in section 29 of the
“Standard Terms and Conditions” that in the event of “claims and disputes arising from
this employment,” the parties agree to arbitrate their disputes in the Philippines. Section
31 of the same document provides that “any unresolved dispute, claim or grievance
arising out of or in connection with this Contract ․ shall be governed by the laws of the
Republic of the Philippines, international conventions, treaties and covenants where the
Philippines is a signatory.” Francisco sued Stolt in Louisiana state court, asserting
claims under the Jones Act 2 and under general maritime law for unseaworthiness and
for maintenance and cure. He alleged that suit in state court was authorized by the
saving to suitors clause of 28 U.S.C. § 1333(1). Stolt removed the case to federal

16
Supra, page 3

19
district court, alleging that Francisco had signed an employment contract agreeing to
arbitrate claims against Stolt in the Philippines. Francisco filed a motion to remand the
case to state court, and Stolt filed a motion to compel arbitration. The district court
denied the motion to remand, granted the motion to compel arbitration, and dismissed
the suit. This appeal by Francisco followed on the grounds that this case does not fall
under the Convention Act because there is an exception making that Act inapplicable to
seaman employment contracts, second that, under the Convention itself, his case is not
“capable of settlement by arbitration” and otherwise does not fall under the Convention,
third that his claims are not subject to the arbitration agreement.

Issue: Whether or not the Louisiana state court has jurisdiction over the case

Held: No, the Louisiana state court does not have jurisdiction over the case. The
Convention Act provides that “[a] court having jurisdiction under this chapter may direct
that arbitration be held in accordance with the agreement at any place therein provided
for, whether that place is within or without the United States.”  In applying the
Convention, we have held that it “contemplates a very limited inquiry by courts when
considering a motion to compel arbitration,” and that the court should compel arbitration
if (1) there is an agreement in writing to arbitrate the dispute, (2) the agreement
provides for arbitration in the territory of a Convention signatory, (3) the agreement
arises out of a commercial legal relationship, and (4) a party to the agreement is not an
American citizen. “If these requirements are met, the Convention requires district courts
to order arbitration.” 

These elements were met in the pending case. Francisco, a Philippine national,
signed a written employment contract stating that claims and disputes arising from his
employment, including personal injury claims, were subject to arbitration in the
Philippines. The employment contract states that it shall be governed by the law of the
Philippines and such conventions and treaties to which the Philippines is a signatory.
The Philippines and the United States are both signatories to the Convention. Francisco
correctly points out that the Arbitration Act does not cover seaman employment
contracts. Section 2 of the Arbitration Act  generally recognizes the validity of
arbitration provisions “in any maritime transaction or a contract evidencing a transaction
involving commerce.” However, § 1 of the Arbitration Act  expressly excludes
“contracts of employment of seamen” from the reach of the Arbitration Act. This
exclusion of seamen employment contracts in the Arbitration Act, however, conflicts
with the Convention Act and “with the Convention as ratified by the United States” under
§ 208 of the Convention Act, and therefore is not applicable to the Convention Act. In
short, the language of the Convention, the ratifying language, and the Convention Act
implementing the Convention do not recognize an exception for seamen employment
contracts. On the contrary, they recognize that the only limitation on the type of legal

20
relationship falling under the Convention is that it must be considered “commercial,” and
we conclude that an employment contract is “commercial.”

Second, Francisco argues that, aside from the issue of the scope of the Convention Act,
the Convention itself is inapplicable to his suit. He bases this argument on his claim
that on September 11, 2000, the Supreme Court of the Philippines suspended section
20(G) of the standard terms and conditions of his employment contract. We assume
without deciding that Francisco is correct regarding the suspension of section 20(G) by
the Philippine court and the applicability of this change to his case. The suspension of
section 20(G) only means that the seaman no longer acknowledges that the receipt of
scheduled payments set out in the contract are the only benefits he can recover from
his employer. If anything, the suspension would seem to give the arbitrators greater
discretion to grant the relief to which Francisco thinks he is entitled.

Third, Francisco separately argues that his claims against Stolt are federal and general
maritime tort claims that are not covered by the arbitration provision of the employment
contract. The contract clearly provides remedies for work-related personal injuries,
and states in paragraph 29 that “claims and disputes arising from this employment” are
subject to arbitration in the Philippines. The arbitration provision is not by its language
limited to contract claims but covers all claims “arising from this employment.”
Francisco alleged in his original petition that his injuries were sustained “in the course
and scope of his employment.” Francisco’s claim is thus covered by the arbitration
provision of the employment contract.

Principle 6: Basic policies underlying particular field of law

This factor is of particular importance in situations where the policies of the

interested states are largely the same but where there are nevertheless minor
differences between their relevant local law rules. In such instances, there is good
reason for the court to apply the local law of that state which will best achieve the basic
policy, or policies, underlying the particular field of law involved. This factor explains in
large part why the courts seek to apply a law that will sustain the validity of a contract
against the charge of commercial usury or the validity of a trust of movables against the
charge that it violates the Rule Against Perpetuities.

Principle 7: Predictability and uniformity of result

These are important values in all areas of the law. To the extent that they are
attained in choice of law, forum shopping will be discouraged. These values can,
however, be purchased at too great a price. In a rapidly developing area, such as
choice of law, it is often more important that good rules be developed than that
predictability and uniformity of result should be assured through continued adherence to
existing rules. Predictability and uniformity of result are of particular importance in

21
areas where the parties are likely to give advance thought to the legal consequences of
their transactions. It is partly on account of these factors that the parties are permitted
within broad limits to choose the law that will determine the validity and effect of their
contract (see § 187) and that the law that would be applied by the courts of the state of
the situs is applied to determine the validity of transfers of interests in land. Uniformity
of result is also important when the transfer of an aggregate of movables, situated in
two or more states, is involved. Partly for this reason, the law that would be applied by
the courts of the state of a decedent's domicile at death is applied to determine the
validity of his will in so far as it concerns movables and the distribution of his movables
in the event of intestacy.

Principle 8: Ease in the determination and application of the law to be applied

Ideally, choice-of-law rules should be simple and easy to apply. This policy
should not be overemphasized, since it is obviously of greater importance that choice-
of-law rules lead to desirable results. The policy does, however, provide a goal for
which to strive.

Other Principles affecting choice of law

Reciprocity. In formulating common law rules of choice of law, the courts are
rarely guided by considerations of reciprocity. Private parties, it is felt, should not be
made to suffer for the fact that the courts of the state from which they come give
insufficient consideration to the interests of the state of the forum. It is also felt that
satisfactory development of choice-of-law rules can best be attained if each court gives
fair consideration to the interests of other states without regard to the question whether
the courts of one or more of these other states would do the same. As to whether
reciprocity is a condition to the recognition and enforcement of a judgment of a foreign
nation.

States sometimes incorporate a principle of reciprocity into statutes and treaties.

They may do so in order to induce other states to take certain action favorable to their
interests or to the interests of their citizens. Many States of the United States have
enacted statutes which provide that a suit by a sister State for the recovery of taxes will
be entertained in the local courts if the courts of the sister State would entertain a
similar suit by the State of the forum. Similarly, by way of further example, some States
of the United States provide by statute that an alien cannot inherit local assets unless
their citizens in turn would be permitted to inherit in the state of the alien's nationality. A
principle of reciprocity is also sometimes employed in statutes to permit reciprocating
states to obtain by cooperative efforts what a single state could not obtain through the
force of its own law. See, e.g., Uniform Reciprocal Enforcement of Support Act;

22
Uniform (Reciprocal) Act to Secure Attendance of Witnesses from Without a State in
Criminal Proceedings; Interpleader Compact Law.

Proof of Foreign Law

Courts do not take judicial notice of foreign laws. A foreign law must be properly
pleaded and proven as a fact. If alleged to apply, it must be proved according to the
rules. (Adong vs Cheong Seng Gee, G.R. No. L – 18081, March 3, 1922)

1. Written Law
a. By official publication
b. Copy attested by officer having legal custody thereof. If the record is not kept
in the Philippines, a certificate that such officer has the custody. If the office in
which the record is kept is in foreign country, the certificate may be made by a
secretary of the embassy or legation, consul general, consul, vice consul, or
consular agent or by any officer in the foreign service of the Philippines
stationed in the foreign country in which the record is kept, and authenticated
by the seal of his office.
c. A published treatise, periodical or pamphlet on a subject of history, law,
science, or art is admissible as tending to prove the truth of a matter stated
therein if the court takes judicial notice, or a witness expert in the subject
testifies, that the writer of the statement in the treatise, periodical or pamphlet
is recognized in his profession or calling as expert in the subject. (Rules of
Court)
2. Unwritten law
a. By oral testimony of expert witnesses (Sempio – Diy)
b. By printed and published books of reports of decisions of the country
involved, if proved to be commonly admitted in its court.

Processual Presumption of Law

When the proper foreign law has not been properly proved, the court of the forum
may presume that said foreign law is the same as the law of the forum which said court
can now apply. (Sempio – Diy)

WILDVALLEY SHIPPING CO., LTD. petitioner, vs. COURT OF APPEALS and

PHILIPPINE PRESIDENT LINES INC.,

G.R. No. 119602. October 6, 2000

Facts: Sometime in February 1988, the Philippine Roxas, a vessel owned by Philippine
President Lines, Inc., private respondent herein, arrived in Puerto Ordaz, Venezuela, to
load iron ore.Upon the completion of the loading and when the vessel was ready to

23
leave port. At around 4:35 a.m., the Philippine Roxas ran aground in the Orinoco River,
thus obstructing the ingress and egress of vessels.As a result of the blockage, the
Malandrinon, a vessel owned by herein petitioner Wildvalley Shipping Company, Ltd.,
was unable to sail out of Puerto Ordaz on that day.

Subsequently, Wildvalley Shipping Company, Ltd. filed a suit with the Regional Trial
Court of Manila, Branch III against Philippine President Lines, Inc. for damages in the
form of unearned profits, and interest. The trial court rendered its decision in favor of the
petitioner, Wildvalley Shipping Co., Ltd. However, the CA reversed the decision on
appeal and disregarded the application of Venezuelan Law. Hence this petition.
Petitioner claims, among others, that the Venezuelan law should be applied on the
ground that it has been substantially proved in the trial court without any objection from
private respondent, and whose objection was interposed belatedly on appeal.

ISSUE: Wheter or not Venezuelan law should be applied?

HELD: No. It is well-settled that foreign laws do not prove themselves in our jurisdiction
and our courts are not authorized to take judicial notice of them. Like any other fact,
they must be alleged and proved.

We do not dispute the competency of Capt. Oscar Leon Monzon, the Assistant Harbor
Master and Chief of Pilots at Puerto Ordaz, Venezuela, to testify on the existence of the
Reglamento General de la Ley de Pilotaje (pilotage law of Venezuela) and the
Reglamento Para la Zona de Pilotaje No 1 del Orinoco (rules governing the navigation
of the Orinoco River). Captain Monzon has held the aforementioned posts for eight
years. As such he is in charge of designating the pilots for maneuvering and navigating
the Orinoco River. He is also in charge of the documents that come into the office of the
harbour masters. Nevertheless, we take note that these written laws were not proven in
the manner provided by Section 24 of Rule 132 of the Rules of Court.For a copy of a
foreign public document to be admissible, the following requisites are mandatory: (1) It
must be attested by the officer having legal custody of the records or by his deputy; and
(2) It must be accompanied by a certificate by a secretary of the embassy or legation,
consul general, consul, vice consular or consular agent or foreign service officer, and
with the seal of his office. It is not enough that the GacetaOficial, or a book published by
the Ministerio de Comunicaciones of Venezuela, was presented as evidence with
Captain Monzon attesting it. It is also required by Section 24 of Rule 132 of the Rules of
Court that a certificate that Captain Monzon, who attested the documents, is the officer
who had legal custody of those records made by a secretary of the embassy or legation,
consul general, consul, vice consul or consular agent or by any officer in the foreign
service of the Philippines stationed in Venezuela, and authenticated by the seal of his
office accompanying the copy of the public document. No such certificate could be
found in the records of the case.With respect to proof of written laws, parol proof is

24
objectionable, for the written law itself is the best evidence. According to the weight of
authority, when a foreign statute is involved, the best evidence rule requires that it be
proved by a duly authenticated copy of the statute.At this juncture, we have to point out
that the Venezuelan law was not pleaded before the lower court.A foreign law is
considered to be pleaded if there is an allegation in the pleading about the existence of
the foreign law, its import and legal consequence on the event or transaction in issue.A
review of the Complaintrevealed that it was never alleged or invoked despite the fact
that the grounding of the M/V Philippine Roxas occurred within the territorial jurisdiction
of Venezuela.

Manufacturers Hanover Trust Co. vs. Guerrero

Facts:On May 17, 1994, respondent Rafael Ma. Guerrero (Guerrero for brevity) filed a
complaint for damages against petitioner Manufacturers Hanover Trust Co. and/or
Chemical Bank (the Bank for brevity) with the Regional Trial Court of Manila (RTC for
brevity). Guerrero sought payment of damages allegedly for (1) illegally withheld taxes
charged against interests on his checking account with the Bank; (2) a returned check
worth US$18,000.00 due to signature verification problems; and (3) unauthorized
conversion of his account. Guerrero amended his complaint on April 18, 1995.

On September 1, 1995, the Bank filed its Answer alleging, inter alia, that by stipulation
Guerreros account is governed by New York law and this law does not permit any of
Guerreros claims except actual damages. Subsequently, the Bank filed a Motion for
Partial Summary Judgment seeking the dismissal of Guerreros claims for
consequential, nominal, temperate, moral and exemplary damages as well as attorneys
fees on the same ground alleged in its Answer. The Bank contended that the trial
should be limited to the issue of actual damages.Guerrero opposed the motion.

The affidavit of Alyssa Walden, a New York attorney, supported the Banks Motion for
Partial Summary Judgment. Alyssa Waldens affidavit (Walden affidavit for brevity)
stated that Guerreros New York bank account stipulated that the governing law is New
York law and that this law bars all of Guerreros claims except actual damages. The
RTC and The CA denied the motion of petitioner ruling that the affidavit of Walden does
not serve as proof of the New York Law and Jurisprudence relied on by the Bank to
support its motion.

Issue:Whether or Not the Affidavit of the Bank can be relied on as proof of New York
Law.

Held: No. There can be no summary judgment where questions of fact are in issue or
where material allegations of the pleadings are in dispute.[7]The resolution of whether a
foreign law allows only the recovery of actual damages is a question of fact as far as the

25
trial court is concerned since foreign laws do not prove themselves in our courts.[8]
Foreign laws are not a matter of judicial notice.[9] Like any other fact, they must be
alleged and proven. Certainly, the conflicting allegations as to whether New York law or
Philippine law applies to Guerreros claims present a clear dispute on material
allegations which can be resolved only by a trial on the merits.

Under Section 24 of Rule 132, the record of public documents of a sovereign authority
or tribunal may be proved by (1) an official publication thereof or (2) a copy attested by
the officer having the legal custody thereof. Such official publication or copy must be
accompanied, if the record is not kept in the Philippines, with a certificate that the
attesting officer has the legal custody thereof. The certificate may be issued by any of
the authorized Philippine embassy or consular officials stationed in the foreign country
in which the record is kept, and authenticated by the seal of his office. The attestation
must state, in substance, that the copy is a correct copy of the original, or a specific part
thereof, as the case may be, and must be under the official seal of the attesting officer.

The Walden affidavit states conclusions from the affiants personal interpretation and
opinion of the facts of the case vis a vis the alleged laws and jurisprudence without
citing any law in particular. The citations in the Walden affidavit of various U.S. court
decisions do not constitute proof of the official records or decisions of the U.S. courts.
While the Bank attached copies of some of the U.S. court decisions cited in the Walden
affidavit, these copies do not comply with Section 24 of Rule 132 on proof of official
records or decisions of foreign courts.

EDI-STAFFBUILDERS INTERNATIONAL, INC., vs NATIONAL LABOR RELATIONS

COMMISSION and ELEAZAR S. GRAN,

Facts: Petitioner EDI is a corporation engaged in recruitment and placement of

Overseas Filipino Workers (OFWs). ESI is another recruitment agency which
collaborated with EDI to process the documentation and deployment of private
respondent to Saudi Arabia. Private respondent Gran was an OFW recruited by EDI,
and deployed by ESI to work for OAB, in Riyadh, Kingdom of Saudi Arabia.Upon arrival
in Riyadh, Gran questioned the discrepancy in his monthly salary his employment
contract stated USD 850.00; while his POEA Information Sheet indicated USD 600.00
only. However, through the assistance of the EDI office in Riyadh, OAB agreed to pay
Gran USD 850.00 a month.After Gran had been working for about five months for OAB,
his employment was terminated through OABs letter on the following grounds:

1. Non-compliance to contract requirements by the recruitment agency primarily on

your salary and contract duration.

26
2. Non-compliance to pre-qualification requirements by the recruitment agency[,]
vide OAB letter ref. F-5751-93, dated October 3, 1993.

3. Insubordination or disobedience to Top Management Order and/or instructions

(non-submittal of daily activity reports despite several instructions).

Gran received from OAB the total amount of SR 2,948.00 representing his final pay, and
on the same day, he executed a Declarationreleasing OAB from any financial obligation
or otherwise, towards him.After his arrival in the Philippines, Gran instituted a complaint,
on July 21, 1994, against ESI/EDI, OAB, Country Bankers Insurance Corporation, and
Western Guaranty Corporation with the NLRC, National Capital Region, Quezon Cityfor
underpayment of wages/salaries and illegal dismissal.Labor Arbiter Manuel R. Caday,
to whom Grans case was assigned, ruled that there was neither underpayment nor
illegal dismissal.With regard to the issue of illegal dismissal, the Labor Arbiter found that
Gran failed to refute EDIs allegations; namely, (1) that Gran did not submit a single
activity report of his daily activity as dictated by company policy; (2) that he was not
qualified for the job as computer specialist due to his insufficient knowledge in
programming and lack of knowledge in ACAD system; (3) that Gran refused to follow
managements instruction for him to gain more knowledge of the job to prove his worth
as computer specialist; (4) that Grans employment contract had never been substituted;
(5) and that Gran was paid a monthly salary of USD 850.00, and USD 350.00 monthly
as food allowance.

Accordingly, the Labor Arbiter decided that Gran was validly dismissed from his work
due to insubordination, disobedience, and his failure to submit daily activity reports.

Issue:Whether Grans dismissal is justifiable by reason of incompetence,

insubordination, and disobedience

Held: In cases involving OFWs, the rights and obligations among and between the
OFW, the local recruiter/agent, and the foreign employer/principal are governed by the
employment contract. A contract freely entered into is considered law between the
parties; and hence, should be respected. In formulating the contract, the parties may
establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law, morals, good customs, public order,
or public policy. In the present case, the employment contract signed by Gran
specifically states that Saudi Labor Laws will govern matters not provided for in the
contract (e.g. specific causes for termination, termination procedures, etc.). Being the
law intended by the parties (lex loci intentiones) to apply to the contract, Saudi Labor
Laws should govern all matters relating to the termination of the employment of Gran.

27
In international law, the party who wants to have a foreign law applied to a dispute or
case has the burden of proving the foreign law. The foreign law is treated as a question
of fact to be properly pleaded and proved as the judge or labor arbiter cannot take
judicial notice of a foreign law. He is presumed to know only domestic or forum
law.Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the matter;
thus, the International Law doctrine of presumed-identity approach or processual
presumption comes into play.[Where a foreign law is not pleaded or, even if pleaded, is
not proved, the presumption is that foreign law is the same as ours.Thus, we apply
Philippine labor laws in determining the issues presented before us.

Petitioner EDI claims that it had proven that Gran was legally dismissed due to
incompetence and insubordination or disobedience.This claim has no merit.In illegal
dismissal cases, it has been established by Philippine law and jurisprudence that the
employer should prove that the dismissal of employees or personnel is legal and just.
Petitioners imputation of incompetence on private respondent due to his insufficient
knowledge in programming and zero knowledge of the ACAD system based only on the
above mentioned letters, without any other evidence, cannot be given credence. An
allegation of incompetence should have a factual foundation. Incompetence may be
shown by weighing it against a standard, benchmark, or criterion. However, EDI failed
to establish any such bases to show how petitioner found Gran incompetent.

Even though EDI and/or ESI were merely the local employment or recruitment agencies
and not the foreign employer, they should have adduced additional evidence to
convincingly show that Grans employment was validly and legally terminated. The
burden devolves not only upon the foreign-based employer but also on the employment
or recruitment agency for the latter is not only an agent of the former, but is also
solidarily liable with the foreign principal for any claims or liabilities arising from the
dismissal of the worker. Thus, petitioner failed to prove that Gran was justifiably
dismissed due to incompetence, insubordination, or willful disobedience.

Exceptions to Proof of Foreign Laws

1. Presentation of a foreign-licensed attorney who will testify in open court

concerning her knowledge of the law in question (Willamette Iron and Steel
Works v. A.H. Muzzal, G.R. No. L – 42538)
2. Administrative agencies recognizing foreign laws without proof thereof.
3. Lack of objection to the improper presentation by one party of proof of foreign
law; and
4. Laws appearing in official websites of government agencies which have custody
of laws. (Pe Benito, Conflict of Laws)

28
 5. A foreign sovereigny, diplomatic official, or public vessel or property of another
state is involved (Salonga)
6. The State accepted a limitation upon its jurisdiction over certain persons or things
of another State through a treaty
7. Foreign law has been pleaded and proved. (RULES OF COURT)

EDI-STAFFBUILDERS INTERNATIONAL, INC., vs NATIONAL LABOR RELATIONS

COMMISSION and ELEAZAR S. GRAN,

Facts: Petitioner EDI is a corporation engaged in recruitment and placement of

Overseas Filipino Workers (OFWs). ESI is another recruitment agency which
collaborated with EDI to process the documentation and deployment of private
respondent to Saudi Arabia. Private respondent Gran was an OFW recruited by EDI,
and deployed by ESI to work for OAB, in Riyadh, Kingdom of Saudi Arabia.Upon arrival
in Riyadh, Gran questioned the discrepancy in his monthly salary his employment
contract stated USD 850.00; while his POEA Information Sheet indicated USD 600.00
only. However, through the assistance of the EDI office in Riyadh, OAB agreed to pay
Gran USD 850.00 a month.After Gran had been working for about five months for OAB,
his employment was terminated through OABs letter on the following grounds:

1. Non-compliance to contract requirements by the recruitment agency primarily on

your salary and contract duration.

2. Non-compliance to pre-qualification requirements by the recruitment agency[,]

vide OAB letter ref. F-5751-93, dated October 3, 1993.

3. Insubordination or disobedience to Top Management Order and/or instructions

(non-submittal of daily activity reports despite several instructions).

Gran received from OAB the total amount of SR 2,948.00 representing his final pay, and
on the same day, he executed a Declaration releasing OAB from any financial obligation
or otherwise, towards him. After his arrival in the Philippines, Gran instituted a
complaint, on July 21, 1994, against ESI/EDI, OAB, Country Bankers Insurance
Corporation, and Western Guaranty Corporation with the NLRC, National Capital
Region, Quezon City for underpayment of wages/salaries and illegal dismissal. Labor
Arbiter Manuel R. Caday, to whom Grans case was assigned, ruled that there was
neither underpayment nor illegal dismissal. With regard to the issue of illegal dismissal,
the Labor Arbiter found that Gran failed to refute EDIs allegations; namely, (1) that Gran
did not submit a single activity report of his daily activity as dictated by company policy;
(2) that he was not qualified for the job as computer specialist due to his insufficient
knowledge in programming and lack of knowledge in ACAD system; (3) that Gran
refused to follow managements instruction for him to gain more knowledge of the job to
prove his worth as computer specialist; (4) that Grans employment contract had never

29
been substituted; (5) and that Gran was paid a monthly salary of USD 850.00, and USD
350.00 monthly as food allowance.

Accordingly, the Labor Arbiter decided that Gran was validly dismissed from his work
due to insubordination, disobedience, and his failure to submit daily activity reports.

Issue:Whether Gran’s dismissal is justifiable by reason of incompetence,

insubordination, and disobedience

Held: In cases involving OFWs, the rights and obligations among and between the
OFW, the local recruiter/agent, and the foreign employer/principal are governed by the
employment contract. A contract freely entered into is considered law between the
parties; and hence, should be respected. In formulating the contract, the parties may
establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law, morals, good customs, public order,
or public policy. In the present case, the employment contract signed by Gran
specifically states that Saudi Labor Laws will govern matters not provided for in the
contract (e.g. specific causes for termination, termination procedures, etc.). Being the
law intended by the parties (lex loci intentiones) to apply to the contract, Saudi Labor
Laws should govern all matters relating to the termination of the employment of Gran.

In international law, the party who wants to have a foreign law applied to a dispute or
case has the burden of proving the foreign law. The foreign law is treated as a question
of fact to be properly pleaded and proved as the judge or labor arbiter cannot take
judicial notice of a foreign law. He is presumed to know only domestic or forum law.
Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the matter; thus,
the International Law doctrine of presumed-identity approach or processual presumption
comes into play.[Where a foreign law is not pleaded or, even if pleaded, is not proved,
the presumption is that foreign law is the same as ours. Thus, we apply Philippine labor
laws in determining the issues presented before us.

Petitioner EDI claims that it had proven that Gran was legally dismissed due to
incompetence and insubordination or disobedience. This claim has no merit. In illegal
dismissal cases, it has been established by Philippine law and jurisprudence that the
employer should prove that the dismissal of employees or personnel is legal and just.
Petitioners imputation of incompetence on private respondent due to his insufficient
knowledge in programming and zero knowledge of the ACAD system based only on the
above mentioned letters, without any other evidence, cannot be given credence. An
allegation of incompetence should have a factual foundation. Incompetence may be
shown by weighing it against a standard, benchmark, or criterion. However, EDI failed
to establish any such bases to show how petitioner found Gran incompetent.

30
Even though EDI and/or ESI were merely the local employment or recruitment agencies
and not the foreign employer, they should have adduced additional evidence to
convincingly show that Grans employment was validly and legally terminated. The
burden devolves not only upon the foreign-based employer but also on the employment
or recruitment agency for the latter is not only an agent of the former, but is also
solidarily liable with the foreign principal for any claims or liabilities arising from the
dismissal of the worker. Thus, petitioner failed to prove that Gran was justifiably
dismissed due to incompetence, insubordination, or willful disobedience.

Scrivener’s error

Legal principle that a map-drafting or typographical error in a written contract

may be corrected by oral evidence if the evidence is clear, convincing, and precise. If
such correction (called scrivener's amendment) affects property rights then it must be
approved by those affected by it.

HONGKONG AND SHANGHAI BANKING CORPORATION, petitioner, vs. JACK

ROBERTSHERMAN, DEODATO RELOJ AND THE INTERMEDIATE APPELLATE
COURT,respondents.

FACTS: A complaint for collection of sum of money was filed by Hongkong Shanghai
Banking Corporation (HSBC) against here private respondents because of the loan
granted by the HSBC Singapore Branch to Eastern Book Supply PTE, Ltd. whereby
private respondents, who were all directors of the said company during that time,
agreed to pay jointly and severally, on demand all sums owed by Eastern to HSBC,
which was evident in the Joint and Several Guanrantee duly signed by the private
respondents. Dueto the company’s failure to pay, HSBC demanded payment to the
respondents but to no avail, hence the afore stated complaint. The private respondents
moved for a Motion to Dismiss before the RTC of Quezon City on the ground that the
court has no jurisdiction over the subject matter as well as over the persons. The reason
that the private respondents interposed was that it was the courts of Singapore that has
jurisdiction over the case because the transaction took place in a Singaporean setting.
On the second argument that the court has no jurisdiction over the person was because
Robert Sherman was not a Filipino citizen nor a resident of the Philippines. Both
arguments hold no water, hence the Motion to Dismiss was denied. A motion for
reconsideration was filed but was denied. Thereafter, a petition for prohibition with
preliminary injunction and/or prayer for a restraining order was submitted to the
appellate court, which it granted. HSBC, filed a motion for reconsideration, to no avail,
hence, the present petition.

ISSUE: Whether or not Philippine courts have jurisdiction over the suit

Whether or not there is improper venue

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HELD: Yes. While it is true that the transaction took place in Singapore setting and that
the Joint and Several Guarantee contains a choice-of-forum clause, the very essence of
due process dictates that the stipulation be liberally construed. he defense of
respondents that the complaint should have been filed in Singapore is based merely on
technicality. They did not even claim, much less prove, that the filing of the action here
will cause them any unnecessary trouble, damage or expense.

In the case of Neville vs Lagamon it was ruled by the Supreme Court that a stipulation
as to venue does not preclude the filing of suits in the residence of plaintiff or defendant
under Section 2(b),Rule 4, Rules of Court, in the absence of qualifying or restrictive
words in the agreement which would indicate that the place named is the only venue
agreed upon by the parties. The court likewise ruled that the issue of venue now is of no
moment because the venue, in this case, was properly laid down.

One basic principle underlies all rules of jurisdiction in International Law: a State does
not have jurisdiction in the absence of some reasonable basis for exercising it, whether
the proceedings are in rem, quasi in rem or in personam. To be reasonable, the
jurisdiction must be based on some minimum contacts that will not offend traditional
notions of fair play and substantial justice.

In International Law, jurisdiction is often defined as the right of a State to exercise

authority over persons and things within its boundaries subject to certain exceptions.

Carnival Cruise Lines, Inc v Shutes

Facts: Eulala and Russel Shute, plaintiffs, purchased tickets through a travel agent in
Washington state for a cruise operated by Carnival Cruise Lines, Inc., defendant. Only
after purchasing their tickets from the travel agent did the Shutes receive paper tickets
containing a form contract with a forum selection clause requiring all disputes to be
brought in Florida. The form contract was comparable to form ticket contracts used by
other cruise lines. The face of the ticket warned that passage was subject to acceptance
of the terms of the ticket contract and the Shutes admitted having been made aware of
the forum selection clause. The ticket contract also contained a provision that no
refunds were available for the tickets once purchased. While on the cruise in
international waters, Mrs. Shute fell during a tour of the ship and the Shutes sued
Carnival for damages in District Court in Washington. Carnival moved to dismiss citing
the forum selection clause, and asserted a lack of personal jurisdiction in Washington.
The District Court granted the motion finding insufficient contacts for personal
jurisdiction in Washington. The Court of Appeals reversed. Turning to the forum
selection clause, the Court of Appeals acknowledged that a court concerned with the
enforceability of such a clause must begin its analysis with The Bremen v. Zapata Off-
Shore Co., 407 U.S. 1 (1972), where this Court held that forum selection clauses,

32
although not "historically . . . favored," are "prima facie valid." The appellate court
concluded that the forum clause should not be enforced because it "was not freely
bargained for."

Issue: Is the choice of forum provision enforceable?

Held: Yes. The Bremen Court's statement that a freely negotiated forum-selection
clause, such as the one there at issue, should be given full effect, 407 U.S. at 12-13,
does not support the Court of Appeals' determination that a non-negotiated forum
clause in a passage contract is never enforceable simply because it is not the subject of
bargaining. Whereas it was entirely reasonable for The Bremen Court to have expected
the parties to have negotiated with care in selecting a forum for the resolution of
disputes arising from their complicated international agreement, it would be entirely
unreasonable to assume that a cruise passenger would or could negotiate the terms of
a forum clause in a routine commercial cruise ticket form. Nevertheless, including a
reasonable forum clause in such a form contract well may be permissible for several
reasons. Because it is not unlikely that a mishap in a cruise could subject a cruise line
to litigation in several different fora, the line has a special interest in limiting such fora.
Moreover, a clause establishing ex ante the dispute resolution forum has the salutary
effect of dispelling confusion as to where suits may be brought and defended, thereby
sparing litigants time and expense and conserving judicial resources. Furthermore, it is
likely that passengers purchasing tickets [499 U.S. 585, 586] containing a forum
clause like the one here at issue benefit in the form of reduced fares reflecting the
savings that the cruise line enjoys by limiting the fora in which it may be sued.

The Court of Appeals' conclusion that the clause here at issue should not be enforced
because the Shutes are incapable of pursuing this litigation in Florida is not justified by
The Bremen Court's statement that "the serious inconvenience of the contractual forum
to one or both of the parties might carry greater weight in determining the
reasonableness of the forum clause." That statement was made in the context of a
hypothetical "agreement between two Americans to resolve their essentially local
disputes in a remote alien forum." Here, in contrast, Florida is not such a forum, nor -
given the location of Mrs. Shute's accident - is this dispute an essentially local one
inherently more suited to resolution in Washington than in Florida. In light of these
distinctions, and because the Shutes do not claim lack of notice of the forum clause,
they have not satisfied the "heavy burden of proof," required to set aside the clause on
grounds of inconvenience.

Although forum selection clauses contained in form passage contracts are subject to
judicial scrutiny for fundamental fairness, there is no indication that petitioner selected
Florida to discourage cruise passengers from pursuing legitimate claims or obtained the
Shutes' accession to the forum clause by fraud or overreaching.

33