courts inconvenient forums.
The foreign elements of the dispute necessitate the
raytheon international vs rouzie gr 162894
FACTS
Brand Marine Services, Inc. (BMSI), a corporation duly organized & existing under the
laws of Connecticut, &Stockton Rouzie, Jr., an American citizen, entered into a
contract
BMSI hired Rouzie as its representative to negotiate the sale of services in several
government projects in thePhilippines for an agreed remuneration of 10% of the gross
receipts.
Rouzie secured a service contract w/ the Rep. of Phil. on behalf of BMSI for the
dredging of rivers affected by the Mt.Pinatubo eruption & mudflows.
Rouzie filed before the NLRC a suit against BMSI and Rust International (Rust) for
alleged nonpayment of commissions, illegal termination, & breach of employment
contract.
The Labor Arbiter order
ed BMSI & Rust to pay Rouzie’s money claims.
Upon appeal, the NLRC reversed & dismissed Rouzie’s complaint on the ground of
lack of jurisdiction.
Rouzie filed an action for damages before the RTC of La Union (where he was a
resident) against Raytheon International. He reiterated that he was not paid the
commissions due him from the Pinatubo dredging project w/c hesecured on behalf of
BMSI. The complaint also averred that BMSI, RUST and Raytheon had combined &
functioned as 1 company.
RAYTHEON SOUGHT THE DISMISSAL OF THE COMPLAINT ON THE GROUNDS
OF FAILURE TO STATE ACAUSE OF ACTION & FORUM NON CONVENIENS &
PRAYED FOR DAMAGES BY WAY OF COMPULSORY
COUNTERCLAIM. THE RTC DENIED RAYTHEON’S MOTION. THE CA AFFIRMED.
Raytheon’s contention: The written contract between Rouzie & BMSI included a valid
choice of law clause, that is, that the contract shall be governed by the laws of the
State of Connecticut. It also mentions the presence of foreign elements in the dispute,
namely that the parties & witnesses involved are American corporations & citizens &
the evidence to be presented is located outside the Philippines, that renders our local
immediate application of the doctrine of forum non conveniens.
ISSUES(a) W/N the RTC had jurisdiction.(b) W/N the complaint should be dismissed
on the ground of forum non conveniens.
RULING
(a) YES.
On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in
a Philippine court and where the court has jurisdiction over the subject matter, the
parties and the res, it may or can proceed to try the case even if the rules of conflict-
of-laws or the convenience of the parties point to a foreign forum. This is an exercise
of sovereign prerogative of the country where the case is filed.
Jurisdiction over the nature and subject matter of an action is conferred by the
Constitution and the law & by the material allegations in the complaint, irrespective of
w/n the plaintiff is entitled to recover all or some of the claims or reliefs sought therein.
The case file was an action for damages arising from an alleged breach of contract.
Undoubtedly, the nature of the action and the amount of damages prayed are w/in the
jurisdiction of the RTC.
As regards jurisdiction over the parties, the RTC acquired jurisdiction over
Rouzi upon the filing of the complaint. On the other hand, jurisdiction over the person
of Raytheon was acquired by its voluntary appearance in court.
That THE SUBJECT CONTRACT INCLUDED A STIPULATION THAT THE SAME
SHALL BE GOVERNED BYTHE LAWS OF THE STATE OF CONNECTICUT DOES
NOT SUGGEST THAT THE PHILIPPINE COURTS,
OR ANY OTHER FOREIGN TRIBUNAL FOR THAT MATTER, ARE PRECLUDED F
ROM HEARING THE CIVIL ACTION.
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 which will
determine the merits of the case is fair to both parties. The choice of law stipulation
will be come relevant only when the substantive issues of the instant case develop,
that is, after hearing on the merits proceeds before the trial court.
(b) NO.

UNDER THE DOCTRINE OF FORUM NON CONVENIENS, A COURT, IN
CONFLICTS-OF-LAWS CASES, MAY
REFUSE IMPOSITIONS ON ITS JURISDICTION WHERE IT IS NOT THE MOST
“CONVENIENT” OR
AVAILABLE FORUM AND THE PARTIES ARE NOT PRECLUDED FROM
SEEKING REMEDIES ELSEWHERE.
Raytheon’s averments of the foreign elements are not sufficient to oust the RTC of its
jurisdiction over the case and the parties involved.
Moreover, the propriety of dismissing a case based on the principle of forum non
conveniens requires a factual determination; hence, it is more properly considered as
a matter of defense. While it is w/c the discretion of the trial court to abstain from
assuming jurisdiction on this ground, it should do so only after vital facts are
established, to determine whether special circumstances require the court’s
desistance.
Bank Of America V. CA (2003)
G.R. No. 120135 March 31, 2003
Lessons Applicable: forum non conveniens (conflicts of laws)
FACTS:
Eduardo K. Litonjua, Sr. and Aurelio J. Litonjua (Litonjuas) were engaged in the
shipping business owning 2 vessels: Don Aurelio and El Champion
Because their business where doing well, Bank of America (BA) offered them to take
a loan for them to increase their ships.
BA acquired through them as borrowers four more ships: (a) El Carrier; (b) El General;
(c) El Challenger; and (d) El Conqueror. The registration, operation, income, funds,
possession of the vessel belonged to the corporation.
May 10, 1993: Litonjuas filed a complaint to the RTC Pasig claming that during its
operations and the foreclosure sale, BA as trutees failed to fully render an account of
the income. They lost all their 6 vessels and 10% of their personal funds and they still
have an unpaid balance of their loans.
BA NT&SA, and BA international filed a Motion to Dismiss on grounds of forum non
conveniens and lack of cause of action against them
RTC and CA: Dismissed
ISSUE:
1. W/N there is grounds of forum non conveniens
2. W/N there is litis pendentia
HELD: Denied
1. NO.
The doctrine of forum non-conveniens, literally meaning 'the forum is inconvenient',
emerged in private international law to deter the practice of global forum shopping
Under this doctrine, a court, in conflicts of law cases, may refuse impositions on its
jurisdiction where it is not the most "convenient" or available forum and the parties are
not precluded from seeking remedies elsewhere.
Whether a suit should be entertained or dismissed on the basis of said doctrine
depends largely upon the facts of the particular case and is addressed to the sound
discretion of the trial court.
Philippine Court may assume jurisdiction over the case if it chooses to do so; provided,
that the following requisites are met:
(1) that the Philippine Court is one to which the parties may conveniently resort to; -
present
(2) that the Philippine Court is in a position to make an intelligent decision as to the
law and the facts; and, - present
(3) that the Philippine Court has or is likely to have power to enforce its decision -
present
This Court further ruled that while it is within the discretion of the trial court to abstain
from assuming jurisdiction on this ground, it should do so only after vital facts are
established, to determine whether special circumstances require the court's
desistance; and that the propriety of dismissing a case based on this principle of forum
non conveniens requires a factual determination, hence it is more properly considered
a matter of defense
2. NO.
litis pendentia to be a ground for the dismissal of an action there must be:
(a) identity of the parties or at least such as to represent the same interest in both
actions -present
(b) identity of rights asserted and relief prayed for, the relief being founded on the same
acts - not shown
(c) the identity in the two cases should be such that the judgment which may be
rendered in one would, regardless of which party is successful, amount to res judicata
in the other - not shown
It merely mentioned that civil cases were filed in Hongkong and England.
Manila Hotel vs NLRC
G.R. No. 120077
October 13, 2000
THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD.
petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ARBITER CEFERINA J.
DIOSANA AND MARCELO G. SANTOS
respondents.
Background: Marcelo Santos, overseas contract worker in Oman. Manila Hotel
Corporation (MHC)- is an “incorporator” of MHICL, owning 50% of its capital stock.
Manila Hotel International Company, Limited (MHIC) trained the personnel and staff
of the Palace Hotel at Beijing, China.
Santos was hired by Palace Hotel in a 2-year contract, through recommendation of his
friend Buenio, thus he resigned in his current job in Oman.
He started to work at the Palace Hotel.
Subsequently, Santos signed an amended “employment agreement” with the Palace
Hotel.
Shmidt represented the Palace Hotel.
The VP of MHICL Miguel D. Cergueda also signed the employment agreement under
the word “noted”.
Later, Santos was in the Philippines on vacation leave.
Days later when he returned to China and reassumed his post Mr. Shmidt’s Executive
Secretary suggested in a handwritten note that Santos be given one (1) month notice
of his release from employment.
Palace Hotel informed Santos by letter signed by Mr. Shmidt that his employment at
Palace Hotel would be terminated due to business reverses brought about by the
political upheaval in China.
Palace Hotel paid all benefits due him, including his plane fare back to the Philippines.
Santos wrote Mr. Shmidt, demanding full compensation pursuant to the employment
agreement.
Shmidt declined.
Santos filed a complaint for illegal dismissal with the Arbitration Branch, National
Capital Region, National Labor Relations Commission (NLRC).
The complaint named MHC, MHICL, the Palace Hotel and Mr. Shmidt as respondents.
Petitioners appealed to the NLRC, arguing that the POEA, not the NLRC had
jurisdiction over the case.
Santos argued that the case was not cognizable by the POEA as he was not an
“overseas contract worker.”
On December 15, 1994, the NLRC ruled in favor of Santos.
W/N NLRC has the jurisdiction over the case of Santos.
Ruling: NO.
Rule of forum non conveniens, a Philippine court or agency may assume jurisdiction
over the case if:
(1) Philippine court is one to which the parties may conveniently resort to;
(2) Philippine court is in a position to make an intelligent decision as to the law and the
facts; and
(3) Philippine court has or is likely to have power to enforce its decisions
The conditions are unavailing in the case at bar.
Not Convenient.
given that all the incidents of the case occurred outside the Philippines.
Also, defendants, the Palace Hotel and MHICL are not nationals of the Philippines.
Main witnesses, Mr. Shmidt and Mr. Henk are non-residents of the Philippines.
No power to determine applicable law.
Employment contract was perfected in foreign soil.
Application of the principle of lex loci contractus (the law of the place where the
contract was made)
No power to determine the facts.
All acts complained of took place in Beijing, People’s Republic of China.
NLRC was not in position to determine whether the Tiannamen Square incident truly
adversely affected operations of the Palace Hotel to justify respondent Santos’
retrenchment.
Principle of effectiveness, no power to execute decision.
Even assuming that a proper decision could be reached by the NLRC, such would not
have any binding effect against the employer, the Palace Hotel.
Jurisdiction over person of Palace Hotel was not acquired.
If Santos were an “overseas contract worker”, a Philippine forum in POEA would
protect him. He is not an “overseas contract worker”.
MHC Not Liable
MHC is an incorporator of MHICL and owns fif ty percent (50%) of its capital stock.
However, this is not enough to pierce the veil of corporate fiction between MHICL and
MHC.
MHICL not Liable
VP Cergueda signed the employment contract as a mere witness.
Also, there was no existing employer-employee relationship between Santos and
MHICL.
Finally, it was the Palace Hotel, through Mr. Schmidt and not MHICL that terminated
respondent Santos’ services.
Continental Micronesia v. Basso
GR No. 178382-83
Labor Relations: Jurisdiction
Facts:
Petitioner Continental Micronesia is a foreign corporation organized and existing under
the laws of and domiciled in the United States of America. It is licensed to do business
in the Philippines. Respondent, a US citizen residing in the Philippines, accepted an
offer to be a General Manager position by Mr. Braden, Managing Director-Asia of
Continental Airlines. On November 7, 1992, CMI took over the Philippine operations
of Continental, with respondent retaining his position as General Manager. Thereafter,
Yes. The Court ruled that the labor tribunals had jurisdiction over the parties and the
respondent received a letter from Mr. Schulz, who was then CMI’s Vice President of
subject matter of the case. The employment contract of Basso was replete with
Marketing and Sales, informing him that he has agreed to work in CMI as a consultant
references to US laws, and that it originated from and was returned to the US, do not
on an “as needed basis.” Respondent wrote a counter-proposal that was rejected by
automatically preclude our labor tribunals from exercising jurisdiction to hear and try
CMI.
this case.

Respondent then filed a complaint for illegal dismissal against the petitioner
On the other hand, jurisdiction over the person of CMI was acquired through the
corporation. Alleging the presence of foreign elements, CMI filed a Motion to Dismiss
coercive process of service of summons. CMI never denied that it was served with
on the ground of lack of jurisdiction over the person of CMI and the subject matter of
summons. CMI has, in fact, voluntarily appeared and participated in the proceedings
the controversy.
before the courts. Though a foreign corporation, CMI is licensed to do business in the
Philippines and has a local business address here. The purpose of the law in requiring
that foreign corporations doing business in the country be licensed to do so, is to
The Labor Arbiter agreed with CMI that the employment contract was executed in the
subject the foreign corporations to the jurisdiction of our courts.
US “since the letter-offer was under the Texas letterhead and the acceptance of
Complainant was returned there.” Thus, applying the doctrine of lex loci celebrationis,
US laws apply. Also, applying lex loci contractus, the Labor Arbiter ruled that the
Where the facts establish the existence of foreign elements, the case presents a
parties did not intend to apply Philippine laws.
conflicts-of-laws issue. Under the doctrine of forum non conveniens, a Philippine court
in a conflict-of-laws case may assume jurisdiction if it chooses to do so, provided, that
the following requisites are met: (1) that the Philippine Court is one to which the parties
The NLRC ruled that the Labor Arbiter acquired jurisdiction over the case when CMI
may conveniently resort to; (2) that the Philippine Court is in a position to make an
voluntarily submitted to his office’s jurisdiction by presenting evidence, advancing
intelligent decision as to the law and the facts; and (3) that the Philippine Court has or
arguments in support of the legality of its acts, and praying for reliefs on the merits of
is likely to have power to enforce its decision. All these requisites are present here.
the case.

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

The Court of Appeals ruled that the Labor Arbiter and the NLRC had jurisdiction over
the subject matter of the case and over the parties. vs MINORU KITAMURA

G.R. No. 149177, November 23, 2007

Issue: FACTS:
Nippon Engineering Consultants (Nippon), a Japanese consultancy firm providing
Whether labor tribunals have jurisdiction over the case. 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
Held:
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, Nippon’s 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
Kitamaru’s 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.
Nippon’s 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 Kitamaru’s 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 issue—jurisdiction. 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.
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 court’s 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.

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-of-law
rules are not only inapplicable but also not yet called for.

Further, Nippon’s 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