CONFLICT OF LAWS Northwest was unable to execute the decision in Japan, hence,
CASE DIGESTS a suit for enforcement of the judgment was filed by Northwest
(Weeks 5 & 6 Coverage)
Based on Atty. Atty. Kristine Mae M. Quibod’s Syllabus
Jose Maria College – College of Law
b. How A Proved Foreign Law must be Interpreted by
Our Courts
c. Effect of Failure to Plead or Prove Foreign Law –
Options Available to the Court
d. Processual Presumption
CASES:
(Repeated Case)
NORTHWEST ORIENT AIRLINES, INC. VS. COURT OF APPEALS
AND C.F. SHARP & COMPANY INC.
G.R. NO. 112573 FEBRUARY 9, 1995
FACTS:
Northwest Airlines and C.F. Sharp & Company, through its
Japan branch, entered into an International Passenger Sales
Agency Agreement, whereby the former authorized the latter
to sell its air transportation tickets. Unable to remit the
proceeds of the ticket sales made by C.F. Sharp on behalf of
Northwest Airlines under the said agreement, Northwest sued
C.F. Sharp in Tokyo, Japan, for collection of the unremitted
proceeds of the ticket sales, with claim for damages.
A writ of summons was issued by the Tokyo District Court of
Japan against C.F Sharp at its office in Yokohoma. The attempt
to serve the summons was unsuccessful as well as the second
attempt.
After the two attempts of service were unsuccessful, the judge
of the Tokyo District Court decided to have the complaint and
the writs of summons served at the head office of C.F Sharp in
Manila. The Director of the Tokyo District Court requested the
Supreme Court of Japan to serve the summons through
diplomatic channels upon C.F Sharp’s head office in Manila.
C.F. Sharp received from Deputy Sheriff Balingit the writ of
summons. Despite receipt of the same, C.F Sharp failed to
appear at the scheduled hearing. Thus, the Tokyo Court
proceeded to hear Northwest Airlines’ complaint and
rendered judgment ordering C.F Sharp to pay the Northwest
Airlines.
C.F Sharp then received from Deputy Sheriff Balingit copy of
the judgment. C.F Sharp not having appealed the judgment,
the same became final and executory.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
before the Regional Trial Court of Manila.
C.F Sharp then filed its answer averring that the judgment of
the Japanese Court sought to be enforced is null and void and
unenforceable in this jurisdiction having been rendered
without due and proper notice to the defendant and/or with
collusion or fraud and/or upon a clear mistake of law and fact.
The trial court held that the foreign judgment in the Japanese
Court sought in this action is null and void for want of
jurisdiction over the person of the defendant considering that
this is an action in personam; the Japanese Court did not
acquire jurisdiction over the person of the defendant because
jurisprudence requires that the defendant be served with
summons in Japan in order for the Japanese Court to acquire
jurisdiction over it, the process of the Court in Japan sent to
the Philippines which is outside Japanese jurisdiction cannot
confer jurisdiction over the defendant in the case before the
Japanese Court of the case at bar. Boudard versus Tait 67 Phil.
170.
The Court of Appeals sustained the trial court. It agreed with
the latter in its reliance upon Boudard vs. Tait.
ISSUES:
(1) May the foreign judgment be enforced in this case?
(2) May the presumption of identity or similarity or the so-
called processual presumption be invoked in this case?
HELD:
(1) YES, the foreign judgment may be enforced in this case. A
foreign judgment is presumed to be valid and binding in the
country from which it comes, until the contrary is shown. It is
also proper to presume the regularity of the proceedings and
the giving of due notice therein.
Under Section 50, Rule 39 of the Rules of Court, a judgment in
an action in personam of a tribunal of a foreign country having
jurisdiction to pronounce the same is presumptive evidence of
a right as between the parties and their successors-in-interest
by a subsequent title. The judgment may, however, be assailed
by evidence of want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact. Also, under
Section 3 of Rule 131, a court, whether of the Philippines or
elsewhere, enjoys the presumption that it was acting in the
lawful exercise of jurisdiction and has regularly performed its
official duty.
Consequently, the party attacking a foreign judgment has the
burden of overcoming the presumption of its validity. Being
the party challenging the judgment rendered by the Japanese
1
CASE DIGESTS ON CONFLICT OF LAWS – WEEKS 5 & 6
court, SHARP had the duty to demonstrate the invalidity of
such judgment. In an attempt to discharge that burden, it
contends that the extraterritorial service of summons effected
at its home office in the Philippines was not only ineffectual
but also void, and the Japanese Court did not, therefore
acquire jurisdiction over it.
It is settled that matters of remedy and procedure such as
those relating to the service of process upon a defendant are
governed by the lex fori or the internal law of the forum. In this
case, it is the procedural law of Japan where the judgment was
rendered that determines the validity of the extraterritorial
service of process on SHARP. As to what this law is a question
of fact, not of law. It may not be taken judicial notice of and
must be pleaded and proved like any other fact. Sections 24
and 25, Rule 132 of the Rules of Court provide that it may be
evidenced by an official publication or by a duly attested or
authenticated copy thereof. It was then incumbent upon
SHARP to present evidence as to what that Japanese
procedural law is and to show that under it, the assailed
extraterritorial service is invalid. It did not. Accordingly, the
presumption of validity and regularity of the service of
summons and the decision thereafter rendered by the
Japanese court must stand.
(2) Yes, the presumption of identity or similarity or the so-
called processual presumption may be invoked.
Alternatively in the light of the absence of proof regarding
Japanese law, the presumption of identity or similarity or the
so-called processual presumption may be invoked. Applying it,
the Japanese law on the matter is presumed to be similar with
the Philippine law on service of summons on a private foreign
corporation doing business in the Philippines.
Section 14, Rule 14 of the Rules of Court provides that if the
defendant is a foreign corporation doing business in the
Philippines, service may be made:
(1) On its resident agent designated in accordance with law for
that purpose, or,
(2) If there is no such resident agent, on the government
official designated by law to that effect; or
(3) On any of its officers or agents within the Philippines.
If the foreign corporation has designated an agent to receive
summons, the designation is exclusive, and service of
summons is without force and gives the court no jurisdiction
unless made upon him.
Where the corporation has no such agent, service shall be
made on the government official designated by law, to wit:
(a) The Insurance Commissioner in the case of a foreign
insurance company;
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
(b) The Superintendent of Banks, in the case of a foreign
banking corporation; and
(c) The Securities and Exchange Commission, in the case of
other foreign corporations duly licensed to do business in the
Philippines.
Nowhere in its pleadings did SHARP profess to having had a
resident agent authorized to receive court processes in Japan.
This silence could only mean, or least create an impression,
that it had none. Hence, service on the designated government
official or on any of SHARP's officers or agents in Japan could
be availed of. SHARP, however, insists that only service of any
of its officers or employees in its branches in Japan could be
resorted to. We do not agree. As found by the respondent
court, two attempts at service were made at SHARP's
Yokohama branch. Both were unsuccessful. On the first
attempt, Mr. Dinozo, who was believed to be the person
authorized to accept court process, was in Manila. On the
second, Mr. Dinozo was present, but to accept the summons
because, according to him, he was no longer an employee of
SHARP. While it may be true that service could have been
made upon any of the officers or agents of SHARP at its three
other branches in Japan, the availability of such a recourse
would not preclude service upon the proper government
official, as stated above.
Furthermore, the domicile of a corporation belongs to the
state where it was incorporated. In a strict technical sense,
such domicile as a corporation may have is single in its essence
and a corporation can have only one domicile which is the
state of its creation.
Nonetheless, a corporation formed in one-state may, for
certain purposes, be regarded a resident in another state in
which it has offices and transacts business.
In as much as SHARP was admittedly doing business in Japan
through its four duly registered branches at the time the
collection suit against it was filed, then in the light of the
processual presumption, SHARP may be deemed a resident of
Japan, and, as such, was amenable to the jurisdiction of the
courts therein and may be deemed to have assented to the
said courts' lawful methods of serving process.
Accordingly, the extraterritorial service of summons on it by
the Japanese Court was valid not only under the processual
presumption but also because of the presumption of regularity
of performance of official duty.
(Repeated Case)
LAUREANO V. CA
G.R. No. 114776 February 2, 2000
FACTS:
2
CASE DIGESTS ON CONFLICT OF LAWS – WEEKS 5 & 6

Laureano, Director of Flight Operations and Chief Pilot of Air
Manila, applied for employment with Singapore Airlines
[herein private respondent] through its Area Manager in
Manila. He was then accepted. Sometime in 1982, Singapore
Airline, hit by a recession, initiated cost-cutting measures.
Seventeen (17) expatriate captains in the Airbus fleet were
found in excess of the defendant's requirement. Consequently,
defendant informed its expatriate pilots including plaintiff of
the situation and advised them to take advance leaves.
Realizing that the recession would not be for a short time,
defendant decided to terminate its excess. It did not, however,
immediately terminate its A-300 pilots. It reviewed their
qualifications for possible promotion to the B-747 fleet.
Among the 17 excess Airbus pilots reviewed, twelve were
found qualified. Unfortunately, Laureano was not one of the
twelve.
Laureano instituted a case for illegal dismissal before the Labor
Arbiter. Singapore Airline moved to dismiss on jurisdictional
grounds. Before said motion was resolved, the complaint was
withdrawn. Thereafter, Laureano filed the instant case for
damages due to illegal termination of contract of services
before the RTC.
CA reversed the decision of the RTC, it held that the action has
already prescribe, the prescriptive period was 4 years and
action was filed beyond the prescriptive period.
ISSUES:
Whether or not Singaporean Laws shall be applied in this case.
RULING:
The Supreme Court held that foreign laws must be proved as
fact in order to employ them. The plaintiff was not able to
prove the applicability of the laws of Singapore that he cited to
his case. Under the principle of processual presumption, if
foreign laws are not proved as facts it will be presumed as the
same as ours. Hence, Philippine Laws should apply. Further,
under Article 291 of the Labor Code of the Philippines, the
petitioner’s action for damages due to illegal dismissal has
already prescribed having been filed on January 8, 1987, or
more than four (4) years after the effective date has
prescribed.
Philippine law must be applied. SC quoted the findings of the
RTC, it says: "Neither can the Court determine whether the
termination of the plaintiff is legal under the Singapore Laws
because of the defendant's failure to show which specific laws
of Singapore Laws apply to this case. As substantially discussed
in the preceding paragraphs, the Philippine Courts do not take
judicial notice of the laws of Singapore. The defendant that
claims the applicability of the Singapore Laws to this case has
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
the burden of proof. The defendant has failed to do so.
Therefore, the Philippine law should be applied." Also
Respondent Court of Appeals acquired jurisdiction when
defendant filed its appeal before said court. On this matter,
respondent court was correct when it barred defendant-
appellant below from raising further the issue of jurisdiction.
(Repeated Case)
PHIL. EXPORT AND FOREIGN LOAN GUARANTEE CORP. vs.
V.P. EUSEBIO CONSTRUCTION INC.
G.R. No. 140047 March 31, 2003
FACTS:
State Organization of Buildings (SOB), Ministry of Housing and
Construction, Baghdad, Iraq, awarded the construction of the
Institute of Physical Therapy–Medical Rehabilitation Center,
Phase II, in Baghdad, Iraq, (Project) to Ajyal Trading Company
(Ajyal), a firm duly licensed with the Kuwait Chamber of
Commerce. 3-Plex International, Inc., a local contractor
engaged in construction business, entered into a joint venture
agreement with Ajyal. However since it was not accredited
under the Philippine Overseas Construction Board (POCB), it
had to assign and transfer all its right to V.P. Eusebio
Construction, Inc. (VPECI). VPECI entered into an agreement
that the execution of the project will be under their joint
management.
To comply with the requirements of performance bond 3-Plex
and VPECI applied for the issuance of a guarantee with
Philguarantee, a government financial institution empowered
to issue guarantees for qualified Filipino contractors to secure
the performance of approved service contracts abroad.
Subsequently, letters of guarantee were issued by
Philguarantee to the Rafidain Bank of Baghdad. Al Ahli Bank of
Kuwait was, therefore, engaged to provide a counter-
guarantee to Rafidain Bank, but it required a similar counter-
guarantee in its favor from the Philguarantee.
SOB and the joint venture VPECI and Ajyal executed the service
contract for the construction of the project .Prior to the
deadline, upon foreseeing the impossibility to meet it because
of the Iraq War, the surety bond was also extended for more
than 12 times until May 1987 and the Advance Payment
Guarantee was extended three times more until it was
cancelled for reimbursement.
Al Ahli Bank of Kuwait demanded full payment of its
performance bond counter-guarantee. VPECI advised the
Philguarantee not to pay yet Al Ahli Bank because efforts were
being exerted for the amicable settlement of the Project.
However, Philguarantee informed VPECI it would remit
payment to Al Ahli Bank, and reiterated the joint and solidary
obligation of the respondents to reimburse the Philguarantee
3
CASE DIGESTS ON CONFLICT OF LAWS – WEEKS 5 & 6
for the advances made on its counter-guarantee but they
failed to pay.
ISSUE:
Should the Philippine laws be applied?
RULING:
YES. In this case, though, the laws of Iraq bear substantial
connection to the transaction, since one of the parties is the
Iraqi Government and the place of performance is in Iraq the
issue of whether respondent VPECI defaulted in its obligations
may be determined by the laws of Iraq. However, since that
foreign law was not properly pleaded or proved, the
presumption of identity or similarity, otherwise known as the
processual presumption, comes into play. Where foreign law
is not pleaded or, even if pleaded, is not proved, the
presumption is that foreign law is the same as ours.
Our law, specifically Article 1169, last paragraph, of the Civil
Code, provides: "In reciprocal obligations, neither party incurs
in delay if the other party does not comply or is not ready to
comply in a proper manner with what is incumbent upon him."
Default or mora on the part of the debtor is the delay in the
fulfillment of the prestation by reason of a cause imputable to
the former. It is the non-fulfillment of an obligation with
respect to time.
It is undisputed that only 51.7% of the total work had been
accomplished. The 48.3% unfinished portion consisted in the
purchase and installation of electro-mechanical equipment
and materials, which were available from foreign suppliers,
thus requiring US Dollars for their importation. The monthly
billings and payments made by SOB reveal that the agreement
between the parties was a periodic payment by the Project
owner to the contractor depending on the percentage of
accomplishment within the period. The payments were, in
turn, to be used by the contractor to finance the subsequent
phase of the work.
The delay or the non-completion of the Project was caused by
factors not imputable to the respondent contractor such as the
war in Iraq. Petitioner as a guarantor, is entitled to the benefit
of excussion, that is, it cannot be compelled to pay the creditor
SOB unless the property of the debtor VPECI has been
exhausted and all legal remedies against the said debtor have
been resorted to by the creditor. It could also set up
compensation as regards what the creditor SOB may owe the
principal debtor VPECI. In this case, however, the petitioner
has clearly waived these rights and remedies by making the
payment of an obligation that was yet to be shown to be
rightfully due the creditor and demandable of the principal
debtor.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
EDI STAFFBUILDERS INC. VS. NLRC
G.R. No. 145587, October 26, 2007
FACTS:
Private respondent Gran was an OFW recruited by EDI, and
deployed by ESI to work for OAB, in Riyadh, Saudi Arabia. After
accepting OAB's offer of employment, Gran signed an
employment contract that granted him a monthly salary of
USD 850.00 for a period of two years. Gran was then deployed
to Riyadh on February 7, 1994.
After Gran had been working for about five months for OAB,
his employment was terminated. On July 11, 1994, 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.
On July 11, 1994, 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,
against ESI/EDI, OAB, Country Bankers Insurance Corporation,
and Western Guaranty Corporation with the NLRC, for
underpayment of wages/salaries and illegal dismissal.
The Labor Arbiter reasoned that there was no underpayment
of salaries since according to the POEA Information Sheet,
Gran's monthly salary was USD 600.00, and in his Confirmation
of Appointment as Computer Specialist, his monthly basic
salary was fixed at SR 2,500.00, which was equivalent to USD
600.00.
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. Dissatisfied, he
filed an appeal to the NLRC. The NLRC reversed the Decision of
the Labor Arbiter. The appellate court denied the petition to
set aside the NLRC Decision. Hence, this Petition.
ISSUE:
Whether or Not Saudi Labor Laws will apply on Gran’s
termination.
HELD:
NO. 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
4
CASE DIGESTS ON CONFLICT OF LAWS – WEEKS 5 & 6
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.
(Repeated Case)
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION vs.
ASIAVEST MERCHANT BANKERS (M) BERHAD
G.R. No. 172301, August 19, 2015
FACTS:
On April 12, 1994, respondent Malaysian corporation filed an
action for recovery of sum of money before the RTC of Pasig
against petitioner PNCC, a government acquired asset
corporation. It based its action on Malaysian laws, specifically
invoking Section 98 of the Malaysian Contracts Act of 1950 and
Section 11 of the Malaysian Civil Law Act of 1956.
The RTC declared PNCC in default for failure to file any
responsive pleading, and allowed respondent to present its
evidence ex parte.
The RTC ruled in favor of respondent, ordering petitioner to
pay the sum of Malaysian Ringgit M $3,915,053.54 or its
equivalent in Philippine peso at the bank rate of exchange on
the date of payment, plus legal interest from the date of
demand until fully paid. It found that respondent complied
with the requisites for proof of written foreign laws, and that
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
the Malaysian Laws invoked were similar to Articles 2066 and
2067 of the Civil Code:
ART. 2066. The guarantor who pays for a debtor must be
indemnified by the latter. The indemnity comprises:
(1) The total amount of the debt;
(2) The legal interests thereon from the time the payment was
made known to the debtor, even though it did not earn
interest for the creditor;
(3) The expenses incurred by the guarantor after having
notified the debtor that payment had been demanded of him;
(4) Damages, if they are due.
ART. 2067. The guarantor who pays is subrogated by virtue
thereof to all the rights which the creditor had against the
debtor. If the guarantor has compromised with the creditor,
he cannot demand of the debtor more than what he has really
paid.
The CA dismissed PNCC’s appeal because it raised pure
questions of law exclusively cognizable by the Supreme Court.
ISSUE:
Whether or not the trial court erred in taking cognizance of the
case and should have invoked the principle of forum non
conveniens.
RULING:
NO. Forum non conveniens literally translates to 'the forum is
inconvenient.” This doctrine applies in conflicts of law cases. It
gives courts the choice of not assuming jurisdiction when it
appears that it is not the most convenient forum and the
parties may seek redress in another one. It is a device
"designed to frustrate illicit means for securing advantages
and vexing litigants that would otherwise be possible if the
venue of litigation (or dispute resolution) were left entirely to
the whim of either party."
Puyat vs. Zabarte enumerated practical reasons when courts
may refuse to entertain a case even though the exercise of
jurisdiction is authorized by law:
1.) The belief that the matter can be better tried and decided
elsewhere, either because the main aspects of the case
transpired in a foreign jurisdiction or the material witnesses
have their residence there;
2.) The belief that the non-resident plaintiff sought the forum
[,] a practice known as forum shopping [,] merely to secure
procedural advantages or to convey or harass the defendant;
5
CASE DIGESTS ON CONFLICT OF LAWS – WEEKS 5 & 6
3.) The unwillingness to extend local judicial facilities to non--
residents or aliens when the docket may already be
overcrowded;
4.) The inadequacy of the local judicial machinery for
effectuating the right sought to be maintained; and
5.) The difficulty of ascertaining foreign law.
On the other hand, courts may choose to assume jurisdiction
subject to the following requisites:
(1) That the Philippine Court is one to which the parties may
conveniently resort to;
(2) That the Philippine Court is in a position to make an
intelligent decision as to the law and the facts; and
(3) That the Philippine Court has or is likely to have power to
enforce its decision."
The determination of whether to entertain a case is addressed
to the sound discretion of the court, which must carefully
consider the facts of the particular case. A mere invocation of
the doctrine of forum non conveniens or an easy averment
that foreign elements exist cannot operate to automatically
divest a court of its jurisdiction. It is crucial for courts to
determine first if facts were established such that special
circumstances exist to warrant its desistance from assuming
jurisdiction.
The trial court assumed jurisdiction and explained in its Order
dated August 11, 1995 that "on the contrary to try the case in
the Philippines, it is believed, would be more convenient to
defendant corporation as its principal office is located in the
Philippines, its records will be more accessible, witnesses
would be readily available and entail less expenses in terms of
legal services."
Petitioner is a domestic corporation with its main office in the
Philippines. It is safe to assume that all of its pertinent
documents in relation to its business would be available in its
main office. Most of petitioner's officers and employees who
were involved in the construction contract in Malaysia could
most likely also be found in the Philippines. Thus, it is
unexpected that a Philippine corporation would rather engage
this civil suit before Malaysian courts. Our courts would be
"better positioned to enforce [the] judgment and, ultimately,
to dispense" in this case against petitioner. Also, petitioner
failed to plead and show real and present danger that another
jurisdiction commenced litigation and the foreign tribunal
chose to exercise jurisdiction.
(Repeated Case)
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
CHIQUITA BRANDS, INC. AND CHIQUITA BRANDS
INTERNATIONAL, INC., VS. HON. GEORGE E. OMELIO,
REGIONAL TRIAL COURT, DAVAO CITY, BRANCH 14, SHERIFF
ROBERTO C. ESGUERRA, CECILIO G. ABENION, AND 1,842
OTHER PLAINTIFFS IN CIVIL CASE NO. 95-45
(G.R. No. 189102, June 07, 2017)
FACTS:
On August 31, 1993, thousands of banana plantation workers
from over 14 countrie instituted class suit for damages in the
United States against 11 foreign corporations, namely: (1) Shell
Oil Company; (2) Dow Chemical Company; (3) Occidental
Chemical Corporation; (4) Standard Fruit Company; (5)
Standard Fruit and Steamship Co.; (6) Dole Food Company,
Inc.; (7) Dole Fresh Fruit Company; (8) Chiquita Brands, Inc.; (9)
Chiquita Brands International, Inc.; (10) Del Monte Fresh
Produce, N.A.; and (11) Del Monte Tropical Fruit Co.
The banana plantation workers claimed to have been exposed
to dibromochloropropane (DBCP) in the 1970s up to the 1990s
while working in plantations that utilized it. As a result, these
workers suffered serious and permanent injuries to their
reproductive systems.
The United States courts dismissed the actions on the ground
of forum non conveniens and directed the claimants to file
actions in their respective home countries.
On May 3, 1996, 1,843 Filipino claimants filed a complaint for
damages against the same foreign corporations before the
Regional Trial Court in Panabo City, Davao del Norte,
Philippines.
Before pre-trial, Chiquita Brands, Inc., Chiquita Brands
International, Inc. (collectively, Chiquita), Dow Chemical
Company (Dow), Occidental Chemical Corporation
(Occidental), Shell Oil Company (Shell), Del Monte Fresh
Produce, N.A., and Del Monte Tropical Fruit Co. (collectively,
Del Monte) entered into a worldwide settlement in the United
States with all the banana plantation workers. The parties
executed a document denominated as the "Compromise
Settlement, Indemnity, and Hold Harmless Agreement"
(Compromise Agreement).
The Compromise Agreement also provided that the laws of
Texas, United States should govern its interpretation. Chiquita,
Dow, Occidental, Shell, and Del Monte moved to dismiss Civil
Case No. 95-45.
RTC: approved the Compromise Agreement by way of
judgment on compromise; dismissed Civil Case No. 95-45
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CASE DIGESTS ON CONFLICT OF LAWS – WEEKS 5 & 6
Several claimants moved for the execution of the judgment on
compromise. Chiquita, Dow, Occidental, Shell, and Del Monte
opposed the execution on the ground of mootness. They
argued that they had already complied with their obligation
under the Compromise Agreement by depositing the
settlement amounts into an escrow account.
RTC: granted the Motion for Execution because there was no
proof that the settlement amounts had been withdrawn and
delivered to each individual claimant
A writ of execution was issued. Shell, Dow, and Occidental
moved that they be allowed to photocopy, certify, and
authenticate the release documents in the United States
before a court-appointed commissioner or before Judge
Grageda. The release documents, which allegedly proved that
the claims had been settled in full, were stored in the Law
Offices of Baker Botts L.L.P. in Houston, Texas, United States.
RTC: ordered the reception of evidence at the Philippine
Consulate in San Francisco, California, United States and
undertook to preside over the proceedings; suspended the
implementation of the Writ of Execution and deferred action
on the pending motions until the termination of the
proceedings abroad.
The claimants objected to the reception of evidence in the
United States. They argued that Judge Grageda was not
authorized to receive evidence and hold hearings outside his
territorial jurisdiction without this Court's express permission.
Judge Grageda declared the photocopies of the release
documents as "authentic and true copies of the original[s].”
The claimants moved for reconsideration arguing that the
evidence was inadmissible because Judge Grageda was not
authorized "to conduct the proceedings abroad.”
RTC: considered the documents obtained from the
proceedings abroad "as part of the case record."
Insisting that the proceedings in San Francisco, California,
United States were void, the claimants moved to expunge the
documents that were adduced by the defendant corporations.
The claimants also moved for the implementation of the Writ
of Execution.
ISSUES:
1) Whether or not the doctrine of hierarchy of courts was
violated.
2) Whether or not the respondent court committed grave
abuse of discretion amounting to lack or excess of its
jurisdiction.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
RULING:
1) No. The doctrine on hierarchy of courts prohibits "parties
from directly resorting to this Court when relief may be
obtained before the lower courts.” This rule is founded upon
judicial economy and practical considerations. On the one
hand, it allows this Court to devote its time and attention to
those matters falling within its exclusive jurisdiction. It also
"prevent[s] the congestion of th[is] Court's dockets.” On the
other hand, it "ensure[s] that every level of the judiciary
performs its designated roles in an effective and efficient
manner.” The doctrine on hierarchy of courts was designed to
promote order and efficiency.
Nevertheless, a direct invocation of this Court's original
jurisdiction may be justified "when there are compelling
reasons clearly set forth in the petition.” Immediate resort to
this Court may be warranted:
(1) when genuine issues of constitutionality are raised that
must be addressed immediately; (2) when the case involves
transcendental importance; (3) when the case is novel; (4)
when the constitutional issues raised are better decided by
this Court; (5) when time is of the essence; (6) when the
subject of review involves acts of a constitutional organ; (7)
when there is no other plain, speedy, adequate remedy in the
ordinary course of law; (8) when the petition includes
questions that may affect public welfare, public policy, or
demanded by the broader interest of justice; (9) when the
order complained of was a patent nullity; and (10) when the
appeal was considered as an inappropriate remedy.
We may take cognizance of this case "in the interest of judicial
economy and efficiency.” The records of this case are sufficient
for this Court to decide on the issues raised by the parties. Any
further delay would unduly prejudice the parties.
2) Yes. A compromise is defined under the Civil Code as "a
contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already
commenced.” It may either be judicial or extrajudicial
depending on its object or the purpose of the parties. A
compromise is judicial if the parties' purpose is to terminate a
suit already commenced. On the other hand, a compromise is
extrajudicial if its object is to avoid litigation.
In any case, a compromise validly entered into has the
authority and effect of res judicata as between the parties. To
this extent, a judicial compromise and an extrajudicial
compromise are no different from each other.
However, unlike an extrajudicial compromise, a compromise
that has received judicial imprimatur "becomes more than a
mere contract.” A judicial compromise is regarded as a
"determination of the controversy" between the parties and
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CASE DIGESTS ON CONFLICT OF LAWS – WEEKS 5 & 6
"has the force and effect of [a final] judgment.” In other words,
it is both a contract and "a judgment on the merits.” It may
neither be disturbed nor set aside except in cases where there
is forgery or when either of the parties' consent has been
vitiated.
The doctrine on immutability of judgments applies to
compromise agreements approved by the courts in the same
manner that it applies to judgments that have been rendered
on the basis of a full-blown trial. Thus, a judgment on
compromise that has attained finality cannot be "modified in
any respect, even if the modification is meant to correct
erroneous conclusions of fact and law, and whether it be made
by the court that rendered it or by the Highest Court of the
land.”
The Writ of Execution ordering the collection of the settlement
amount directly from petitioners and its co-defendants in Civil
Case No. 95-45 is void.
Under the judicially approved Compromise Agreement,
petitioners are obliged to deposit the settlement amount in
escrow within 10 business days after they receive a signed
Compromise Agreement from the counsel of the claimants.
The implementation of the Writ of Execution, is likewise void.
Ordinarily, courts have the ministerial duty to grant the
execution of a final judgment. The prevailing party may
immediately move for execution of the judgment, and the
issuance of the writ follows as a matter of course. Execution,
being "the final stage of litigation ... [cannot] be frustrated."
Nevertheless, the execution of a final judgment may be stayed
or set aside in certain cases. "Courts have jurisdiction to
entertain motions to quash previously issued writs of
execution[.]” They "have the inherent power, for the
advancement of justice, to correct the errors of their
ministerial officers and to control their own processes.”
On the other hand, in resolving whether execution should be
suspended or whether a writ of execution should be quashed,
courts should be guided by the same principle in the execution
of final judgments. Certainly, they may require parties to
present evidence.
In this case, petitioners cannot rely on the five (5) quitclaims
for the trial court to quash or recall the writ of execution. The
quitclaims are insufficient to establish that petitioners
complied with their obligation under the Compromise
Agreement. They only prove that five (5) claimants received
their respective share in the settlement amount but do not
establish that petitioners deposited the entire settlement
amount in escrow. At the very least, petitioners should have
attached proof of actual deposit in their Opposition to the
Motion for Execution.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
Neither can petitioners rely on the evidence presented during
the proceedings conducted at the Philippine Consulate in San
Francisco, California, United States. This Court takes judicial
notice of the administrative case filed against Judge Grageda
for his act of receiving evidence abroad without proper
authority.
[N]o matter how noble [Judge Grageda's] intention was, he is
not at liberty to commit acts of judicial indiscretion. The
proceedings conducted by [Judge Grageda] abroad are outside
the territorial jurisdiction of the Philippine Courts. He is the
Presiding Judge of Branch 4 of the Regional Trial Court for the
Eleventh Judicial Region, the territorial jurisdiction of which is
limited only to Panabo, Davao del Norte. This Court had not
granted him any authority to conduct the proceedings abroad.
It is not [Judge Grageda's] duty to secure these documents for
the defendants, as he is the judge in the pending case and not
the counsel of the defendants. Judges in their zeal to search
for the truth should not lose the proper judicial perspective,
and should see to it that in the execution of their duties, they
do not overstep the limitations of their power as laid by the
rules of procedure.
However, presiding Judge Grageda inhibited himself from
further hearing the case before the Regional Trial Court,
Panabo City could act on the pending incidents. The case was
then transferred to Davao City due to the hostile environment
in Panabo City. Succeeding events further delayed the
proceedings.
Given the circumstances of this case, petitioners cannot be
faulted for failing to make a formal offer of evidence because
they were denied the opportunity to do so. Respondent court
should have given petitioners the chance to offer the
deposition of Mr. Stubbs in evidence before acting on the
pending incidents of the case. Thus, respondent court gravely
abused its discretion in issuing the Order dated July 10, 2009,
which affirmed execution against petitioners.
Under the Compromise Agreement, the law that shall govern
its interpretation is the law of Texas, United States. In this
jurisdiction, courts are not authorized to "take judicial notice
of foreign laws.” The laws of a foreign country must "be
properly pleaded and proved" as facts. Otherwise, under the
doctrine of processual presumption, foreign law shall be
presumed to be the same as domestic law. Unfortunately,
there is no evidence that Texan law has been proven as a fact.
Hence, this Court is constrained to apply Philippine law.
DALE STRICKLAND vs ERNST & YOUNG
G.R. no. 193782, August 1, 2018
FACTS:
8
CASE DIGESTS ON CONFLICT OF LAWS – WEEKS 5 & 6

On March 26, 2002, National Home Mortgage Finance
Corporation (NHMFC) and PA entered into a Financial Advisory
Services Agreement (FASA) for the liquidation of the NHMFC's
Unified Home Lending Program (UHLP). At the time of the
engagement, PA was the Philippine member of respondent
global company, EYLLP. In the March 26, 2002 letter of PA to
NHMFC confirming their engagement as exclusive Financial
Advisor for the UHLP Project, PA is designated as P&A/Ernst &
Young.
During this period, Strickland was a partner of EYLLP seconded
to respondent Ernst & Young Asia Pacific Financial Solutions
(EYAPFS), who was listed in the FASA as member of the
Engagement Team. Significantly, Strickland played a role in
negotiating the FASA between PA and NHMFC. In a letter
dated April 15, 2002, PA wrote Strickland to formalize the
working relationship between PA/EYLLP and EY/APFS for the
FASA with NHMFC.
By June 6, 2002, EYLLP wrote PA of the termination of its
membership in EYLLP. Despite the termination, the working
relationship among the parties continued. In an assignment
letter, EYLLP confirmed Strickland's assignment to Manila.
In July 2004, the transactional relationship between the
parties went awry. In an exchange of letters, notice was given
to NHMFC of PA's intention to remove Strickland from the
NHMFC Engagement Team as a result of Strickland's
resignation from EYLLP and/or EYAPFS effective on July 2, 2004
Responding to NHMFC's concerns on the removal of Strickland
from the UHLP Project and his replacement by Mark Grinis,
EYAPFS' Managing Director, EYLLP reiterated Grinis'
qualifications and affirmed its team of professionals'
dedication of "all the time necessary to close this transaction
and to make NHMFC first priority."
Since NHMFC was intent on retaining Strickland's services
despite his separation from EYLLP and/or EYAPFS, the parties
entered into negotiations to define Strickland's possible
continued participation in the UHLP Project. PA, NHMFC, and
Strickland exchanged letters containing proposed
amendments to cover the new engagement and Strickland's
participation within the UHLP Project. No actual written and
final agreement among the parties amending the original
engagement letter of March 26, 2002 materialized.On August
20, 2004, PA wrote a letter, signed by its President/Chairman
& CEO, Benjamin R. Punongbayan, to NHMFC to initiate
discussions on a "mutual voluntary termination of the NHMFC
Agreement."
Subsequently, conflict on Strickland's actual participation and
concurrent designation on the project arose among PA,
NHMFC, and Strickland as reflected in the proposed revisions
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
to the "Draft Financial Advisory Services" initially prepared by
PA
PA objected to Strickland's proposed amendments, specifically
on the terms of compensation, which now contemplated PA's
engagement of Strickland as subcontractor for the closing of
the UHLP Project.
By May 23, 2005, counsel for Strickland wrote PA asking for
"equitable compensation for professional services" rendered
to NHMFC on the UHLP Project from the time of his separation
from EYLLP and/or EYAPFS in July 2004 "up and through the
recent Signing and Closing Ceremony held on 22 April 2004 and
his continued provision of services as the final closing
approaches.
On June 2, 2005, counsel for PA responded, categorically
denying any contractual relationship with Strickland and his
assertion that he effectively substituted EYLLP and/or EYAPFS
for the portion of the work he carried out in the UHLP Project
Thus, Strickland filed a Complaint, which included EYAPFS, PA
and NHMFC among the defendants, seeking the following
reliefs:" Based on the foregoing, [Strickland] respectfully prays
for judgment directing defendants, either jointly or severally
or solidarily, or one or some or all defendants as may be
deemed appropriate after trial, to pay Strickland Eighteen
Million Pesos as equitable compensation for services rendered
or actual or nominal damages, moral damages, and attorney's
fees as may be proved.
The trial court admitted the Amended Complaint in its Order,
dated December 6, 2006. Subsequently, it also issued an
Order, dated January 2, 2007, denying EYAPFS' Motion To
Refer to Arbitration.
ISSUE:
Is the dispute between the parties arbitrable?
HELD:
YES. Plainly, considering that the arbitration clause is in itself a
contract, the setting forth of its provisions in EYLLP's answer
and in its motion to refer to arbitration, coupled with the
actual submission by EYLLP of the Partnership Agreement,
complies with the requirements of Section 7, Rule 8 of the
Rules of Court which Strickland should have specifically
denied.
we agree with the CA's ruling on the nature of the contract
between Strickland and EYLLP, and its application of our
commercial arbitration laws to this case:
The International Law doctrine of presumed identity approach
or processual presumption comes into play. Where a foreign
9
CASE DIGESTS ON CONFLICT OF LAWS – WEEKS 5 & 6
law is not pleaded, or, even if pleaded, is not proved, the
presumption is that foreign law is the same as ours."
In this jurisdiction, one of the laws governing arbitration is the
[Alternative Dispute Resolution (ADR)] Act. Under this statute,
international commercial arbitration shall be governed by the
Model Law on International Commercial Arbitration ("Model
Law") adopted by the United Nations Commission on
International Trade Law. Meanwhile, domestic arbitration is
governed by the Arbitration Law as amended by the ADR Act.
To determine the applicable law here, the nature of the
arbitration sought to be undertaken must be looked at. The
ADR Act defines domestic arbitration negatively by stating that
it is one that is not international as defined in the Model Law[].
In turn, Article 1 (3) of the Model Law provides that an
arbitration is international if:
"(a) the parties to an arbitration agreement have, at the time
of the conclusion of that agreement, their places of business in
different States; or
(b) one of the following places is situated outside the State in
which the parties have their places of business:
(i) the place of arbitration if determined in, or
pursuant to, the arbitration agreement;
(ii) any place where a substantial part of the
obligations of the commercial relationship is to be performed
or the place with which the subject-matter of the dispute is
most closely connected; or
(c) the parties have expressly agreed that the subject-matter
of the arbitration agreement relates to more than one
country." x x x (Emphasis in the original; citations omitted.)
It is obvious then that the arbitration sought in the instant
case is international for falling under Article 1(3)(b)(ii) quoted
above. The place of business of EYLLP is in the United States
of America. x x x It is here [the Philippines] that the services
for which [Strickland] seeks remuneration were rendered.
(Emphasis supplied.)
For the Model Law to apply, however, the arbitration should
also be commercial. The explanatory footnote to Article 1(l) of
the Model Law explains that "[t]he term 'commercial' should
be given a wide interpretation so as to cover matters arising
from all relationships of a commercial nature, whether
contractual or not." It also states that relationships of a
commercial nature include the following transactions among
others:
"any trade transaction for the supply or exchange of goods or
services; distribution agreement; commercial representation
or agency; factoring; leasing; construction of works;
consulting; engineering; licensing; investment; financing;
banking; insurance; exploitation agreement or concession;
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
joint venture and other forms of industrial or business co-
operation; carriage of goods or passengers by air, sea, rail or
road." x x x
The meaning attached to the term "commercial" by the Model
Law is broad enough to cover a partnership. The Civil Code x x
x defines a partnership as a contract where "two or more
persons bind themselves to contribute money, property, or
industry to a common fund, with the intention of dividing the
profits among themselves." Hence, considering that EYLLP and
Strickland had a partnership relationship, which was not
changed during his assignment [to] Manila for the Project, the
request for arbitration here has a commercial character. The
dispute between the said parties relates to Strickland's and
EYLLP's association with each other.45 x x x (Emphasis and
underscoring in the original; citations omitted.)
The following factors further militate against Strickland's
insistence on Philippine courts to primarily adjudicate his
claims of tortious conduct, and not commercial arbitration, as
stipulated in the Partnership Agreement:
1. From his complaint and amended complaint, Strickland's
causes of action against EYLLP and PA hinge primarily on
contract, i.e., the Partnership Agreement, and the resulting
transactions and working relationship among the parties,
where Strickland seeks to be paid.
2. The Partnership Agreement is bolstered by the assignment
letter of EYLLP to Strickland confirming his assignment to
Manila as partner
MARLYN NULLADA VS THE HON. CIVIL REGISTRAR OF
MANILA
G.R. NO. 224548 JANUARY 23, 2019
FACTS:
The action arose from a Petition for Registration and/or
recognition of foreign divorce decree and cancellation of entry
of marriage filed by Marlyn. On July 29, 1997, Marlyn and Akira
got married in Katsushika-Ku, Tokyo, Japan. The union resulted
in the birth of a child, Shin Ito. Their relationship, however,
eventually turned sour and so they later decided to obtain a
divorce by mutual agreement. In 2009, Akira and Marlyn
secured a divorce decree in Japan. Marlyn sought a recognition
of the divorce decree in the Philippines. The RTC rendered its
Decision denying the petition. For the Trial Court, the fact that
Marlyn also agreed to the divorce and jointly filed for it with
Akira barred the application of the second paragraph of Article
26 of the Family Code, which would have otherwise allowed a
Filipino spouse to remarry after the alien spouse had validly
obtained a divorce.
10
CASE DIGESTS ON CONFLICT OF LAWS – WEEKS 5 & 6
ISSUE:
Was the fact that the divorce was by the mutual agreement of
Marlyn and Akira a sufficient ground to reject the decree in
Philippine jurisdiction?
RULING:
NO. The dismissal of Marlyn’s petition based on the Trial
Court’s interpretation of Article 26 of the family code is
erroneous in light of the Court’s disposition in the case of
Republic of the Philippines v. Marelyn Tanedo Manalo. The fact
that the divorce was by the mutual agreement of Marlyn and
Akira was not sufficient ground to reject the decree in this
jurisdiction.
While Marlyn and Akira’s divorce was not disputed by the OSG,
a recognition of the divorce, however, could not extend as a
matter of course. Under prevailing rules and jurisprudence,
the submission of the decree should come with adequate
proof of the foreign law that allows it. the Japanese Law on
divorce must then be sufficiently proved. “Because our courts
do not take judicial notice of foreign laws and judgment, our
law on evidence requires that both the divorce decree and the
national law of the alien must be alleged and proven like any
other fact. In ATCI Overseas Corp., et al. v. Echin, the Court
reiterated the following rules on proof of foreign laws:
To prove a foreign law, the party invoking it must present a
copy thereof and comply with Sections 24 and 25 of Rule 132
of the Revised Rules of Court which reads:
SEC. 24. Proof of official record. — The record of public
documents referred to in paragraph (a) of Section 19, when
admissible for any purpose, may be evidenced by an official
publication thereof or by a copy attested by the officer having
the legal custody of the record, or by his deputy, and
accompanied, if the record is not kept in the Philippines, with
a certificate that such officer has the custody. If the office in
which the record is kept is in a 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. (emphasis supplied)
SEC. 25. What attestation of copy must state. — Whenever a
copy of a document or record is attested for the purpose of the
evidence, 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. The attestation must be under the official
seal of the attesting officer, if there be any, or if he be the clerk
of a court having a seal, under the seal of such court.
Marlyn failed to satisfy the foregoing requirements. The
records only include a photocopy of excerpts of The Civil Code
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
of Japan, merely stamped LIBRARY, Japan Information and
Culture Center, Embassy of Japan, 2627 Roxas Boulevard,
Pasay City 1300. This clearly does not constitute sufficient
compliance with the rules on proof of Japan’s law on divorce.
The petition for review on certiorari is GRANTED. The case is
REMANDED to the court of origin for further proceedings and
reception of evidence as to the relevant Japanese law on
divorce.
e. Exceptions to the Application of the Proper Foreign
Law (Exceptions to the application of Comity)
CASES:
BIENVENIDO M. CADALIN, ROLANDO M. AMUL, DONATO B.
EVANGELISTA, and the rest of 1,767 NAMED-
COMPLAINANTS, thru and by their Attorney-in-fact, Atty.
GERARDO A. DEL MUNDO vs. PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION’S ADMINISTRATOR, NLRC,
BROWN & ROOT INTERNATIONAL, INC. AND/OR ASIA
INTERNATIONAL BUILDERS CORPORATION
G.R. No.104776, December 5, 1994.
GENERAL RULE: A foreign procedural law will not be applied in
the forum.
EXCEPTION: When the country of the forum has a "borrowing
statute," the country of the forum will apply the foreign
statute of limitations.
EXCEPTION TO THE EXCEPTION: The court of the forum will
not enforce any foreign claim obnoxious to the forum's public
policy.
FACTS:
This is a consolidation of 3 cases of SPECIAL CIVIL ACTIONS in
the Supreme Court for Certiorari.
Cadalin et al. are Filipino workers recruited by Asia Int’l
Builders Co. (AIBC), a domestic recruitment corporation, for
employment in Bahrain to work for Brown & Root Int’l Inc.
(BRII) which is a foreign corporation with headquarters in
Texas. Plaintiff instituted a class suit with the POEA for money
claims arising from the unexpired portion of their employment
contract which was prematurely terminated. They worked in
Bahrain for BRII and they filed the suit after 1 yr. from the
termination of their employment contract.
As provided by Art. 156 of the Amiri Decree aka as the Labor
Law of the Private Sector of Bahrain: “a claim arising out of a
contract of employment shall not be actionable after the lapse
11
CASE DIGESTS ON CONFLICT OF LAWS – WEEKS 5 & 6
of 1 year from the date of the expiry of the contract,” it
appears that their suit has prescribed.
Plaintiff contends that the prescription period should be 10
years as provided by Art. 1144 of the Civil Code as their claim
arise from a violation of a contract.
The POEA Administrator holds that the 10 year period of
prescription should be applied but the NLRC provides a
different view asserting that Art 291 of the Labor Code of the
Phils with a 3 years prescription period should be applied. The
Solicitor General expressed his personal point of view that the
1 yr period provided by the Amiri Decree should be applied.
ISSUE:
Whether it is the Bahrain law on prescription of action based
on the Amiri Decree No. 23 of 1976 or a Philippine law on
prescription that shall be the governing law
RULING:
The Supreme Court held that as a general rule a foreign
procedural law will not be applied in our country as we must
adopt our own procedural laws.
EXCEPTION: Philippines may adopt foreign procedural law
under the Borrowing Statute such as Sec. 48 of the Civil
Procedure Rule stating “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 Philippines.” Thus, Bahrain law must be applied.
However, the court contends that Bahrain’s law on
prescription cannot be applied because the court will not
enforce any foreign claim that is obnoxious to the forum’s
public policy and the 1 yr. rule on prescription is against public
policy on labor as enshrined in the Phils. Constitution.
The court ruled that the prescription period applicable to the
case should be Art 291 of the Labor Code of the Phils with a 3
years prescription period since the claim arose from labor
employment.
The three petitions were filed under Rule 65 of the Revised
Rules of Court on the grounds that NLRC had committed grave
abuse of discretion amounting to lack of jurisdiction in issuing
the questioned orders. We find no such abuse of discretion.
WHEREFORE, all the three petitions are DISMISSED.
PAKISTAN INTERNATIONAL AIRLINES CORPORATION vs.
HON. BLAS F. OPLE
G.R. No. 61594 September 28, 1990
FACTS:
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
On December 2, 1978, petitioner Pakistan International
Airlines Corporation, a foreign corporation licensed to do
business in the Philippines, executed in Manila two separate
contracts of employment with private respondents Ethelynne
B. Farrales and Ma. M.C. Mamasig. The contracts provided in
pertinent portion as follows:
1. Duration of the agreement was for a period of 3 years, but
can be extended by mutual consent of the parties;
2. PIA reserves the right to terminate this agreement at any
time by giving the EMPLOYEE notice in writing in advance one
month before the intended termination or in lieu thereof, by
paying the EMPLOYEE wages equivalent to one month's salary;
3. This agreement shall be construed and governed under and
by the laws of Pakistan, and only the Courts of Karachi,
Pakistan shall have the jurisdiction to consider any matter
arising out of or under this agreement.
Roughly one year and four months prior to the expiration of
the contracts of employment, PIA through Mr. Oscar Benares,
counsel for and official of the local branch of PIA, sent separate
letters both dated August 1, 1980 to private respondents
advising both that their services as flight stewardesses would
be terminated "effective September 1, 1980”.
Private respondents Farrales and Mamasig jointly instituted a
complaint for illegal dismissal and non-payment of company
benefits and bonuses, against PIA with the then Ministry of
Labor and Employment. The PIA submitted its position paper,
3
but no evidence, and there claimed that both private
respondents were habitual absentees; that both were in the
habit of bringing in from abroad sizeable quantities of
"personal effects"; and that PIA personnel at the Manila
International Airport had been discreetly warned by customs
officials to advise private respondents to discontinue that
practice. PIA further claimed that the services of both private
respondents were terminated pursuant to the provisions of
the employment contract.
Regional Director Francisco L. Estrella ordered the
reinstatement of private respondents with full backwages or,
in the alternative, the payment to them of the amounts
equivalent to their salaries for the remainder of the fixed
three-year period of their employment contracts. This was
affirmed by Hon. Vicente Leogardo, Jr., Deputy Minister, of
MOLE.
PIA invokes the provisions of its contract of employment with
private respondents Farrales and Mamasig, arguing that its
relationship with them was governed by the provisions of its
contract rather than by the general provisions of the Labor
Code.
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CASE DIGESTS ON CONFLICT OF LAWS – WEEKS 5 & 6
ISSUE:
Whether or not petitioner’s arguments are tenable.
RULING:
NO. The principle of party autonomy in contracts is not an
absolute principle. The rule in Article 1306 of our Civil Code is
that the contracting parties may establish such stipulations as
they may deem convenient, "provided they are not contrary to
law, morals, good customs, public order or public policy." Thus,
counter-balancing the principle of autonomy of contracting
parties is the equally general rule that provisions of applicable
law, especially provisions relating to matters affected with
public policy, are deemed written into the contract.
The governing principle is that parties may not contract away
applicable provisions of law especially peremptory provisions
dealing with matters heavily impressed with public interest.
The law relating to labor and employment is clearly such an
area and parties are not at liberty to insulate themselves and
their relationships from the impact of labor laws and
regulations by simply contracting with each other.
Examining the provisions of the employment agreement
between PIA and private respondents, the provisions must be
read together and when so read, the fixed period of three
years specified in will be seen to have been effectively
neutralized by the provisions of the termination clause of that
agreement. The termination clause effect took back from the
employee the fixed three-year period ostensibly granted by
rendering such period in effect a facultative one at the option
of the employer PIA. For petitioner PIA claims to be authorized
to shorten that term, at any time and for any cause satisfactory
to itself, to a one-month period, or even less by simply paying
the employee a month's salary. Because the net effect of the
two clauses of the agreement here involved is to render the
employment of private respondents Farrales and Mamasig
basically employment at the pleasure of petitioner PIA, the
Court considers that these were intended to prevent any
security of tenure from accruing in favor of private
respondents and thus to escape completely the thrust of
Articles 280 and 281 of the Labor Code.
Petitioner PIA cannot take refuge in jurisdictional clause of its
employment agreement which specifies, firstly, the law of
Pakistan as the applicable law of the agreement and, secondly,
lays the venue for settlement of any dispute arising out of or
in connection with the agreement "only in courts of Karachi
Pakistan". The first part of the clause cannot be invoked to
prevent the application of Philippine labor laws and
regulations to the subject matter of this case, i.e., the
employer-employee relationship between petitioner PIA and
private respondents. We have already pointed out that the
relationship is much affected with public interest and that the
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
otherwise applicable Philippine laws and regulations cannot be
rendered illusory by the parties agreeing upon some other law
to govern their relationship.
Neither may petitioner invoke the second part, specifying the
Karachi courts as the sole venue for the settlement of dispute;
between the contracting parties. Even a cursory scrutiny of the
relevant circumstances of this case will show the multiple and
substantive contacts between Philippine law and Philippine
courts, on the one hand, and the relationship between the
parties, upon the other: the contract was not only executed in
the Philippines, it was also performed here, at least partially;
private respondents are Philippine citizens and respondents,
while petitioner, although a foreign corporation, is licensed to
do business (and actually doing business) and hence resident
in the Philippines; lastly, private respondents were based in
the Philippines in between their assigned flights to the Middle
East and Europe.
BANK OF AMERICA V. AMERICAN REALTY
G.R. No. 133876, December 29, 1999
FACTS:
Bank of America granted loans to 3 foreign corporations.
American Realty, being the 3rd party mortgagor, executed REM
over its 2 parcels of land including improvements thereof as
security for the loans.
The foreign corporations failed to pay its obligation. Thus, Bank
of America filed collection suits in foreign courts to enforce the
loan. They also filed a petition to extra-judicially foreclose the
mortgage executed by American Realty which was granted.
Subsequently, American Realty filed an action for damages
against Bank of America for its act of foreclosing extra-
judicially the REM despite the pendency of civil suits before the
foreign courts for the collection of sum of the principal loan.
Bank of America on its answer contended 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:
Can the doctrine of processual presumption apply on this
case?
HELD: NO.
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In a long line of decisions, this Court adopted the well-
imbedded principle in our jurisdiction that there is no judicial
notice of any foreign law. A foreign law must be properly
pleaded and proved as a fact. Thus, if the foreign law involved
is not properly pleaded and proved, our courts will presume
that the foreign law is the same as our local or domestic or
internal law. This is what we refer to as the doctrine of
processual presumption.
In the instant case, assuming arguendo that the English Law on
the matter were properly pleaded and proved in said foreign
law would still not find applicability.
Thus, 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
country.
The public policy sought to be protected in the instant case is
the principle imbedded in our jurisdiction proscribing the
splitting up of a single cause of action. (Sec. 4, Rule 2 of Rules
of Civil Procedure)
Moreover, foreign law should not be applied when its
application would work undeniable injustice to the citizens or
residents of the forum. To give justice is the most important
function of law; hence, a law, or judgment or contract that is
obviously unjust negates the fundamental principles of
Conflict of Laws.
f. When Foreign Law May be Applied
g. Theories on Why The Foreign Law May In Some
Cases Be Given Effect
1. Theory of Comity
2. Theory of Vested Rights
3. Theory of Local Law
4. Theory of Harmony of Laws
RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENT
a. Recognition and enforcement of Foreign Judgment
Distinguished
b. Reasons why not all foreign judgments can be
recognized or enforced in our country
c. Conditions and requisites before foreign judgments
may be recognized and enforced in the Philippines
d. Enforcement of Foreign Judgment
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
CASES:
SOORAJMULL NAGARMULL vs. BINALBAGAN-ISABELA
SUGAR COMPANY, INC.
G.R. No. L-22470; May 28, 1970
FACTS:
Under a Contract dated May 6, 1949, Nagarmull, a foreign
corporation with offices at Calcutta, India, agreed to sell to
Binalbagan (Sugar Company), a domestic corporation
1,700,000 pieces of Hessian bags at $26.20 per 100 bags.
Shipment of these bags was to be made in equal installments
of 425,000 pcs. or 425 bales during each of the months of July,
August, September and October, 1949.
On September 8, 1949, Nagarmull advised that of the 850
bales scheduled for shipment in July and August, the former
was able to ship only 310 bales owing to the alleged failure of
the Adamjee Jute Mills to supply the goods in due time. In a
letter dated September 29, 1949, Binalbagan requested
Nagarmull to ship 100 bales of the 540 bales defaulted from
the July and August shipments. In this connection, it may also
be mentioned that of the 425 bales scheduled for shipment in
September, 54 bales were likewise defaulted resulting in a
total of 154 bales which is now the object of the controversy.
On, October 1, 1949, the Government of India increased the
export duty of jute bags from 80 to 350 rupees per ton.
Nagarmull wrote to Binalbagan for an increase of $4,000.00 in
its letter of credit to cover the shipment of 154 bales which
under the contract should have been included in the July,
August and September shipments.
February 6, 1951, Binalbagan received a notification from the
Bengal Chamber of Commerce Tribunal of Arbitration in
Calcutta, India, advising it that Nagarmull applied to said
Tribunal for arbitration regarding their claim. The Tribunal
requested Binalbagan to send them its version of the case,
which Binalbagan did on March 1, 1951, thru the then
Government Corporate Counsel, Pompeyo Diaz.
The Bengal Chamber of Commerce, Tribunal of Arbitration,
refused to sustain Binalbgan’s contention and decided in favor
of the plaintiff, ordering it to pay to the Nagarmull the sum of
18,562 rupees and 8 annas. This award was thereafter referred
to the Calcutta High Court which issued a decree affirming the
award.
ISSUE:
Is the decision of the Tribunal of Arbitration of the Bengal
Chamber of Commerce, as affirmed by the High Court of
Judicature of Calcutta, enforceable in the Philippines?
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HELD:
NO. Though, under the Rules, a judgment for a sum of money
rendered by a foreign court “is presumptive evidence of a right
as between the parties and their successors in interest by a
subsequent title”, but when suit for its enforcement is brought
in a Philippine court, said judgment “may be repelled by
evidence of a want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact”
In the instant case, Nagarmull was guilty of a breach of
contract when it failed to deliver 154 Hessian bales which,
according to the contract entered into with Binalbagan, should
have been delivered to the latter in the months of July, August
and September, all of the year 1949. It is equally clear, that,
had these 154 bales been delivered in accordance with the
contract, the increase in the export tax due upon them would
not have been imposed because said increased export tax
became effective only on October 1, 1949. Therefore, the
decisions of the Tribunal of Arbitration of the Bengal Chamber
of Commerce and of the High Court of Judicature of Calcutta
failed to apply to the facts of this case fundamental principles
of contract, the same may be impeached, as they have been
sufficiently impeached by appellant, on the ground of “clear
mistake of law”. The court cannot sanction a clear mistake of
law that would work an obvious injustice upon appellant,
Binalbagan Sugar Company.
(Repeated Case)
PHILSEC INVESTMENT CORPORATION, BPI-INTERNATIONAL
FINANCE LIMITED, and ATHONA HOLDINGS, N.V. vs.
THE HONORABLE COURT OF APPEALS, 1488, INC., DRAGO
DAIC, VENTURA O. DUCAT, PRECIOSO R. PERLAS, and
WILLIAM H. CRAIG
G.R. No. 103493 June 19, 1997
FACTS:
Private respondent Ducat obtained separate loans from
petitioners Ayala International Finance Limited (AYALA) and
Philsec Investment Corp (PHILSEC), secured by shares of stock
owned by Ducat.
In order to facilitate the payment of the loans, private
respondent 1488, Inc., through its president, private
respondent Daic, assumed Ducat’s obligation under an
Agreement, whereby 1488, Inc. executed a Warranty Deed
with Vendor’s Lien by which it sold to petitioner Athona
Holdings, N.V. (ATHONA) a parcel of land in Texas, U.S.A., while
PHILSEC and AYALA extended a loan to ATHONA as initial
payment of the purchase price. The balance was to be paid by
means of a promissory note executed by ATHONA in favor of
1488, Inc. Subsequently, upon their receipt of the money from
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
1488, Inc., PHILSEC and AYALA released Ducat from his
indebtedness and delivered to 1488, Inc. all the shares of stock
in their possession belonging to Ducat.
As ATHONA failed to pay the interest on the balance, the entire
amount covered by the note became due and demandable.
Accordingly, private respondent 1488, Inc. sued petitioners
PHILSEC, AYALA, and ATHONA in the United States for
payment of the balance and for damages for breach of
contract and for fraud allegedly perpetrated by petitioners in
misrepresenting the marketability of the shares of stock
delivered to 1488, Inc. under the Agreement.
While the Civil Case was pending in the United States,
petitioners filed a complaint “For Sum of Money with Damages
and Writ of Preliminary Attachment” against private
respondents in the RTC Makati. The complaint reiterated the
allegation of petitioners in their respective counterclaims in
the Civil Action in the United States District Court of Southern
Texas that private respondents committed fraud by selling the
property at a price 400 percent more than its true value.
Ducat moved to dismiss the Civil Case in the RTC-Makati on the
grounds of (1) litis pendentia, vis- a-vis the Civil Action in the
U.S., (2) forum non conveniens, and (3) failure of petitioners
PHILSEC and BPI-IFL to state a cause of action.
The trial court granted Ducat’s MTD, stating that “the
evidentiary requirements of the controversy may be more
suitably tried before the forum of the litis pendentia in the
U.S., under the principle in private international law of forum
non conveniens,” even as it noted that Ducat was not a party
in the U.S. case.
Petitioners appealed to the CA, arguing that the trial court
erred in applying the principle of litis pendentia and forum non
conveniens.
The CA affirmed the dismissal of Civil Case against Ducat, 1488,
Inc., and Daic on the ground of litis pendentia.
ISSUE:
W/N the Civil Case in the RTC-Makati is barred by the judgment
of the U.S. court.
HELD:
NO. While this Court has given the effect of res judicata to
foreign judgments in several cases, it was after the parties
opposed to the judgment had been given ample opportunity
to repel them on grounds allowed under the law. This is
because in this jurisdiction, with respect to actions in
personam, as distinguished from actions in rem, a foreign
judgment merely constitutes prima facie evidence of the
justness of the claim of a party and, as such, is subject to proof
to the contrary. Rule 39, §50 provides:
15
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Sec. 50. Effect of foreign judgments. — The effect of a
judgment of a tribunal of a foreign country, having jurisdiction
to pronounce the judgment is as follows:
(a) In case of a judgment upon a specific thing, the judgment is
conclusive upon the title to the thing;
(b) In case of a judgment against a person, the judgment is
presumptive evidence of a right as between the parties and
their successors in interest by a subsequent title; but the
judgment may be repelled by evidence of a want of
jurisdiction, want of notice to the party, collusion, fraud, or
clear mistake of law or fact.
In the case at bar, it cannot be said that petitioners were given
the opportunity to challenge the judgment of the U.S. court as
basis for declaring it res judicata or conclusive of the rights of
private respondents. The proceedings in the trial court were
summary. Neither the trial court nor the appellate court was
even furnished copies of the pleadings in the U.S. court or
apprised of the evidence presented thereat, to assure a proper
determination of whether the issues then being litigated in the
U.S. court were exactly the issues raised in this case such that
the judgment that might be rendered would constitute res
judicata.
Second. Nor is the trial court’s refusal to take cognizance of the
case justifiable under the principle of forum non conveniens:
First, a MTD is limited to the grounds under Rule 16, sec.1,
which does not include forum non conveniens. The propriety
of dismissing a case based on this principle requires a factual
determination, hence, it is more properly considered a matter
of defense.
Second, 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. CA
reversed. Case remanded to RTC-Makati
(Repeated Case)
ASIAVEST VS. CA
GR NO. 128803, SEPTEMBER 25, 1998
FACTS:
The plaintiff Asiavest Limited filed a complaint on December 3,
1987 against the defendant Antonio Heras praying that said
defendant be ordered to pay to the plaintiff the amounts
awarded by the Hong Kong Court Judgment.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
The case was then set for pre-trial conference. At the
conference, the parties could not arrive at any settlement.
However, they agreed on the following stipulations of facts:
1) The defendant admits the existence of the judgment dated
December 28, 1984 as well as its amendment dated April 13,
1987, but not necessarily the authenticity or validity thereof;
2) The plaintiff is not doing business and is not licensed to do
business in the Philippines;
3) The residence of defendant, Antonio Heras, is New Manila,
Quezon City.
The defendant presented two witnesses, namely, Fortunata
dela Vega and Russel Warren Lousich.
The gist of Ms. dela Vegas testimony is to the effect that no
writ of summons or copy of a statement of claim of Asiavest
Limited was ever served in the office of the Navegante
Shipping Agency Limited and/or for Mr. Antonio Heras, and
that no service of the writ of summons was either served on
the defendant at his residence in New Manila, Quezon City.
Mr. Lousich’s affidavit (Exh. 2) which constitutes his direct
testimony, the said witness stated that:
The defendant was sued on the basis of his personal guarantee
of the obligations of Compania Hermanos de Navegacion S.A.
There is no record that a writ of summons was served on the
person of the defendant in Hong Kong, or that any such
attempt at service was made. Likewise, there is no record that
a copy of the judgment of the High Court was furnished or
served on the defendant; anyway, it is not a legal requirement
to do so under Hong Kong laws.
ISSUE:
Whether the Hong Kong judgment may be enforced in the
Philippines? (NO)
RULING:
NO. The Hong Kong court judgment cannot be given force and
effect here in the Philippines for having been rendered without
jurisdiction.
In an action in personam wherein the defendant is a non-
resident who does not voluntarily submit himself to the
authority of the court, personal service of summons within the
state is essential to the acquisition of jurisdiction over her
person. This method of service is possible if such defendant is
physically present in the country. If he is not found therein, the
court cannot acquire jurisdiction over his person and therefore
cannot validly try and decide the case against him.
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In the case at bar, the action filed in Hong Kong against HERAS
was in personam, since it was based on his personal guarantee
of the obligation of the principal debtor. Before we can apply
the foregoing rules, we must determine first whether HERAS
was a resident of Hong Kong.
In the pre-trial conference, the parties came up with
stipulations of facts, among which was that the residence of
defendant, Antonio Heras, is New Manila, Quezon City.
Accordingly, since HERAS was not a resident of Hong Kong and
the action against him was, indisputably, one in personam,
summons should have been personally served on him in Hong
Kong. The extraterritorial service in the Philippines was
therefore invalid and did not confer on the Hong Kong court
jurisdiction over his person.
PHILIPPINE ALUMINUM WHEELS, INC. v. FASGI
ENTERPRISES, INC.
G.R. No. 137378. October 12, 2000
FACTS:
FASGI Enterprises Incorporated (“FASGI”), a corporation
organized and existing under and by virtue of the laws of the
State of California, United States of America, entered into a
distributorship arrangement with Philippine Aluminum
Wheels, Incorporated (“PAWI”), a Philippine corporation, and
Fratelli Pedrini Sarezzo S.P.A. (“FPS”), an Italian corporation.
The agreement provided for the purchase, importation and
distributorship in the United States of aluminum wheels
manufactured by PAWI.
Pursuant to the contract, PAWI shipped to FASGI the
aluminum wheels, FASGI then paid PAWI the value of said
wheels. Unfortunately, FASGI later found the shipment to be
defective and in non-compliance with the requirements in the
contract.
FASGI instituted an action against PAWI and FPS for breach of
contract and recovery of damages before the United States
District Court. During the pendency of the case, two
agreements (entitled “Transaction” and “Supplemental
Settlement Agreement”) were entered by the parties to allow
PAWI to comply with its obligations. The Supplemental
Settlement Agreement expressly permits FASGI to enter the
Stipulation for Judgment in the event that PAWI has not
performed under said agreement.
PAWI, however, kept on failing to discharge its obligations.
Irked by PAWI’s persistent default, FASGI filed with the US
District Court of the Central District of California the
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
Stipulations for Judgment against PAWI. A certificate of finality
of judgment was issued by the US District Judge.
Unable to obtain satisfaction of the final judgment within the
United States, FASGI filed a complaint for “enforcement of
foreign judgment” before RTC Makati. The Makati court,
however, dismissed the case on the ground that the decree
was tainted with collusion, fraud, and clear mistake of law and
fact. It ruled that the foreign judgment ignored the reciprocal
obligations of the parties. While the assailed foreign judgment
ordered the return by PAWI of the purchase amount, no
similar order was made requiring FASGI to return to PAWI the
third and fourth containers of wheels. This situation amounted
to an unjust enrichment on the part of FASGI. Furthermore,
RTC ruled that agreements which the California court had
based its judgment were a nullity for having been entered into
by Mr. Thomas Ready, counsel for PAWI, without the latter’s
authorization.
On appeal, the Court of Appeals reversed such decision.
ISSUE:
May the Philippine Court enforce said foreign judgment?
HELD:
YES, the Philippine Court may enforce said foreign judgment.
Generally, in the absence of a special compact, no sovereign is
bound to give effect within its dominion to a judgment
rendered by a tribunal of another country; however, the rules
of comity, utility and convenience of nations have established
a usage among civilized states by which final judgments of
foreign courts of competent jurisdiction are reciprocally
respected and rendered efficacious under certain conditions
that may vary in different countries.
In this jurisdiction, a valid judgment rendered by a foreign
tribunal may be recognized insofar as the immediate parties
and the underlying cause of action are concerned so long as it
is convincingly shown that there has been an opportunity for a
full and fair hearing before a court of competent jurisdiction;
that trial upon regular proceedings has been conducted,
following due citation or voluntary appearance of the
defendant and under a system of jurisprudence likely to secure
an impartial administration of justice; and that there is nothing
to indicate either a prejudice in court and in the system of laws
under which it is sitting or fraud in procuring the judgment. A
foreign judgment is presumed to be valid and binding in the
country from which it comes, until a contrary showing, on the
basis of a presumption of regularity of proceedings and the
giving of due notice in the foreign forum.
17
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PAWI claims that its counsel, Mr. Ready, has acted without its
authority. Verily, in this jurisdiction, it is clear that an attorney
cannot, without a client’s authorization, settle the action or
subject matter of the litigation even when he honestly believes
that such a settlement will best serve his client’s interest.
However, PAWI failed to substantiate this complain with
sufficient evidence. Hence, the foreign judgment must be
enforced.
Even if PAWI assailed that fraud tainted the agreements which
the US Court based its judgment, this cannot prevent the
enforcement of said judgment. PAWI claimed that there was
collusion and fraud in the signing of the agreements. Although
the US Court already adjudicated on this matter, PAWI insisted
on raising it again in this Court. Fraud, to hinder the
enforcement within this jurisdiction of a foreign judgment,
must be extrinsic, i.e., fraud based on facts not controverted
or resolved in the case where judgment is rendered, or that
which would go to the jurisdiction of the court or would
deprive the party against whom judgment is rendered a
chance to defend the action to which he has a meritorious case
or defense. In fine, intrinsic fraud, that is, fraud which goes to
the very existence of the cause of action – such as fraud in
obtaining the consent to a contract – is deemed already
adjudged, and it, therefore, cannot militate against the
recognition or enforcement of the foreign judgment.
PAWI argue that it was incumbent upon FASGI to first return
the second and the third containers of defective wheels before
it could be required to return to FASGI the purchase price
therefor, relying on their original agreement (the
"Transaction"). Unfortunately, PAWI defaulted on its
covenants thereunder that thereby occasioned the
subsequent execution of the supplemental settlement
agreement. This time the parties agreed, under said
agreement, that any further default by PAWI would release
FASGI from any obligation to maintain, store or deliver the
rejected wheels. The supplemental settlement agreement
evidently superseded, at the very least on this point, the
previous arrangements made by the parties.
PAWI cannot, by this petition for review, seek refuge over a
business dealing and decision gone awry. Neither do the courts
function to relieve a party from the effects of an unwise or
unfavorable contract freely entered into. As has so aptly been
explained by the appellate court, the over-all picture might,
indeed, appear to be onerous to PAWI but it should bear
emphasis that the settlement which has become the basis for
the foreign judgment has not been the start of a business
venture but the end of a failed one, and each party, naturally,
has had to negotiate from either position of strength or
weakness depending on its own perception of who might have
to bear the blame for the failure and the consequence of loss.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
(Repeated Case)
ST. AVIATION SERVICES CO., PTE., LTD. vs. GRAND
INTERNATIONAL AIRWAYS, INC.
G.R. No. 14028 8. October 23, 2006
FACTS:
St. Aviation Services Co., Pte., Ltd., petitioner, is a foreign
corporation based in Singapore. It is engaged in the
manufacture, repair, and maintenance of airplanes and
aircrafts. Grand International Airways, Inc., respondent, is a
domestic corporation engaged in airline operations.
In January 1996, petitioner and respondent executed an
“Agreement for the Maintenance and Modification of Airbus A
300 B4-103 (First Agreement). Under this stipulation,
petitioner agreed to undertake maintenance and modification
works on respondent’s aircraft. The parties agreed on the
mode and manner of payment by respondent of the contract
price, including interest in case of default. They also agreed
that the “construction, validity and performance thereof” shall
be governed by the laws of Singapore. They further agreed to
submit any suit arising from their agreement to the non-
exclusive jurisdiction of the Singapore courts.
On January 12, 1996, the parties verbally agreed that
petitioner will repair and undertake maintenance works on
respondent’s other aircraft, Aircraft No. RP-C8881; and that
the works shall be based on a General Terms of Agreement
(GTA). Petitioner undertook the contracted works and
thereafter promptly delivered the aircrafts to respondent.
From March 1996 to October 1997, petitioner billed
respondent in the total amount of US$303,731.67 or
S$452,560.18. But despite petitioner’s repeated demands,
respondent failed to pay, in violation of the terms agreed
upon.
On December 12, 1997, petitioner filed with the High Court of
the Republic of Singapore an action for the sum of
S$452,560.18, including interest and costs, against
respondent. Upon petitioner’s motion, the court issued a Writ
of Summons to be served extraterritorially or outside
Singapore upon respondent. The court sought the assistance
of the sheriff of Pasay City to effect service of the summons
upon respondent. However, despite receipt of summons,
respondent failed to answer the claim.
Respondent contends that the service of summons is void and
that the Singapore court did not acquire jurisdiction over it.
ISSUE:
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Whether the Singapore High Court has acquired jurisdiction
over the person of respondent by the service of summons
upon its office in the Philippines.
HELD:
Yes. Generally, in the absence of a special contract, no
sovereign is bound to give effect within its dominion to a
judgment rendered by a tribunal of another country; however,
under the rules of comity, utility and convenience, nations
have established a usage among civilized states by which final
judgments of foreign courts of competent jurisdiction are
reciprocally respected and rendered efficacious under certain
conditions that may vary in different countries.
Certainly, the Philippine legal system has long ago accepted
into its jurisprudence and procedural rules the viability of an
action for enforcement of foreign judgment, as well as the
requisites for such valid enforcement, as derived from
internationally accepted doctrines. The conditions for the
recognition and enforcement of a foreign judgment in our legal
system are contained in Section 48, Rule 39 of the 1997 Rules
of Civil Procedure, as amended, thus:
“SEC. 48. Effect of foreign judgments. — The effect of a
judgment or final order of a tribunal of a foreign country,
having jurisdiction to render the judgment or final order is as
follows:
(a) In case of a judgment or final order upon a specific thing,
the judgment or final order is conclusive upon the title to the
thing; and
(b)In case of a judgment or final order against a person, the
judgment or final order is presumptive evidence of a right as
between the parties and their successors in interest by a
subsequent title;
In either case, the judgment or final order may be repelled by
evidence of a want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact.”
Generally, matters of remedy and procedure such as those
relating to the service of process upon a defendant are
governed by the lex forior the internal law of the forum, which
in this case is the law of Singapore.
In this case, petitioner moved for leave of court to serve a copy
of the Writ of Summons outside Singapore. In an Order dated
December 24, 1997, the Singapore High Court granted “leave
to serve a copy of the Writ of Summons on the Defendant by a
method of service authorized by the law of the Philippines for
service of any originating process issued by the Philippines.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
In the Philippines, jurisdiction over a party is acquired by
service of summons by the sheriff, his deputy or other proper
court officer either personally by handing a copy thereof to the
defendant or by substituted service. In this case, the Writ of
Summons issued by the Singapore High Court was served upon
respondent at its office located at Mercure Hotel (formerly
Village Hotel), MIA Road, Pasay City. The Sheriff’s Return
shows that it was received on May 2, 1998 by Joyce T. Austria,
Secretary of the General Manager of respondent company. But
respondent completely ignored the summons, hence, it was
declared in default. Considering that the Writ of Summons was
served upon respondent in accordance with our Rules,
jurisdiction was acquired by the Singapore High Court over its
person. Clearly, the judgment of default rendered by that court
against respondent is valid.
KOREA TECHNOLOGIES CO., LTD., vs. HON. ALBERTO A.
LERMA
G.R. No. 143581, January 7, 2008
FACTS:
Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean
corporation which is engaged in the supply and installation of
Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants,
while private respondent Pacific General Steel Manufacturing
Corp. (PGSMC) is a domestic corporation.
PGSMC and KOGIES executed a contract in the Philippines
whereby KOGIES would set up an LPG Cylinder Manufacturing
Plant in Carmona, Cavite. After the installation of the plant,
the initial operation could not be conducted as PGSMC
encountered financial difficulties affecting the supply of
materials, thus forcing the parties to agree that KOGIES would
be deemed to have completely complied with the terms and
conditions of the contract.
PGSMC issued two postdated checks for the remaining balance
pursuant to the contract which were dishonored. KOGIES sent
a demand letter to PGSMC threatening criminal action for
violation of Batas Pambansa Blg. 22 in case of non-payment.
On the other hand, PGSMC complained that not only did
KOGIES deliver a different brand of hydraulic press from that
agreed upon but it had not delivered several equipment parts
already paid for.
PGSMC informed KOGIES that PGSMC was canceling their
contract. KOGIES wrote PGSMC informing the latter that
PGSMC could not unilaterally rescind their contract nor
dismantle and transfer the machineries and equipment on
mere imagined violations by KOGIES. It also insisted that their
disputes should be settled by arbitration as agreed upon in
Article 15, the arbitration clause of their contract.
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KOGIES instituted an Application for Arbitration before the
Korean Commercial Arbitration Board (KCAB) in Seoul, Korea
pursuant to Art. 15 of the Contract as amended. KOGIES
averred that PGSMC violated Art. 15 of their Contract, as
amended, by unilaterally rescinding the contract without
resorting to arbitration. PGSMC filed an opposition to the TRO
arguing that KOGIES was not entitled to the TRO since Art. 15,
the arbitration clause, was null and void for being against
public policy as it ousts the local courts of jurisdiction over the
instant controversy.
ISSUE:
Whether the arbitration clause (Article 15 of the Contract) is
valid
RULING:
Yes. Art. 15 of the Contract provides:
Article 15. Arbitration.—All disputes, controversies, or
differences which may arise between the parties, out of or in
relation to or in connection with this Contract or for the breach
thereof, shall finally be settled by arbitration in Seoul, Korea in
accordance with the Commercial Arbitration Rules of the
Korean Commercial Arbitration Board. The award rendered by
the arbitration(s) shall be final and binding upon both parties
concerned. (Emphasis supplied.)
Established in this jurisdiction is the rule that the law of the
place where the contract is made governs. Lex loci contractus.
The contract in this case was perfected here in the Philippines.
Therefore, our laws ought to govern. Nonetheless, Art. 2044 of
the Civil Code sanctions the validity of mutually agreed arbitral
clause or the finality and binding effect of an arbitral award.
Art. 2044 provides, "Any stipulation that the arbitrators’ award
or decision shall be final, is valid, without prejudice to Articles
2038, 2039 and 2040." (Emphasis supplied.)
Arts. 2038, 2039, and 2040 abovecited refer to instances
where a compromise or an arbitral award, as applied to Art.
2044 pursuant to Art. 2043 may be voided, rescinded, or
annulled, but these would not denigrate the finality of the
arbitral award.
The arbitration clause was mutually and voluntarily agreed
upon by the parties. It has not been shown to be contrary to
any law, or against morals, good customs, public order, or
public policy. There has been no showing that the parties have
not dealt with each other on equal footing. We find no reason
why the arbitration clause should not be respected and
complied with by both parties.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
CORPUS VS STO. TOMAS
G.R.186571 AUGUST 11 2010
FACTS:
Gerbert R. Corpuz, a naturalized Canadian citizen married
respondent Daisylyn Sto. Tomas. Gerbert Corpuz returned to
the Philippines sometime in April 2005 to surprise Daisylyn,
but was shocked to discover that his wife was having an affair
with another man. Hurt and disappointed, Gerbert returned to
Canada and filed a petition for divorce. The Superior Court of
Justice, Windsor, Ontario, Canada granted Gerbert’s petition
for divorce on December 8, 2005. The divorce decree took
effect a month later, on January 8, 2006. Two years later,
Gerbert Corpuz fell in love with another Filipina. He went to
Civil Registry Office of Pasig City to register the Canadian
divorce decree on his marriage certificate with Daisylyn Sto.
Tomas. However, despite the registration, an official of
National Statistics Office informed Gerbert Corpuz that the
former marriage still subsists under the Philippine law until
there has been a judicial recognition of the Canadian divorce
decree by a competent judicial court in view of NSO Circular
No. 4, series of 1982.
Consequently, Gerbert Corpuz filed a petition for judicial
recognition of foreign divorce and/or declaration of
dissolution of marriage with the RTC. However, the RTC denied
the petition reasoning out that Gerbert Corpuz cannot
institute the action for judicial recognition of the foreign
divorce decree because he is a naturalized Canadian citizen. It
was provided further that Daisylyn Sto. Tomas was the proper
party who can institute an action under the principle of Article
26 of the Family Code which capacitates a Filipino citizen to
remarry in case the alien spouse obtains a foreign divorce
decree. Hence, this petition.
ISSUE:
Whether the second paragraph of Article 26 of the Family Code
grant aliens the right to institute a petition for judicial
recognition of a foreign divorce decree.
RULING:
The alien spouse can claim no right under the second
paragraph of Article 26 of the Family Code as the substantive
right it establishes is in favor of the Filipino spouse
The resolution of the issue requires a review of the legislative
history and intent behind the second paragraph of Article 26
of the Family Code.
The Family Code recognizes only two types of defective
marriages – void and voidable marriages. In both cases, the
basis for the judicial declaration of absolute nullity or
annulment of the marriage exists before or at the time of the
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marriage. Divorce, on the other hand, contemplates the
dissolution of the lawful union for cause arising after the
marriage. Our family laws do not recognize absolute divorce
between Filipino citizens.
Art. 26. All marriages solemnized outside the Philippines, in
accordance with the laws in force in the country where they
were solemnized, and valid there as such, shall also be valid in
this country, except those prohibited under Articles 35(1), (4),
(5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is
validly celebrated and a divorce is thereafter validly obtained
abroad by the alien spouse capacitating him or her to remarry,
the Filipino spouse shall likewise have capacity to remarry
under Philippine law.
As the RTC correctly stated, the provision was included in the
law "to avoid the absurd situation where the Filipino spouse
remains married to the alien spouse who, after obtaining a
divorce, is no longer married to the Filipino spouse." The
legislative intent is for the benefit of the Filipino spouse, by
clarifying his or her marital status, settling the doubts created
by the divorce decree. Essentially, the second paragraph of
Article 26 of the Family Code provided the Filipino spouse a
substantive right to have his or her marriage to the alien
spouse considered as dissolved, capacitating him or her to
remarry. Without the second paragraph of Article 26 of the
Family Code, the judicial recognition of the foreign decree of
divorce, whether in a proceeding instituted precisely for that
purpose or as a related issue in another proceeding, would be
of no significance to the Filipino spouse since our laws do not
recognize divorce as a mode of severing the marital bond;
Article 17 of the Civil Code provides that the policy against
absolute divorces cannot be subverted by judgments
promulgated in a foreign country. The inclusion of the second
paragraph in Article 26 of the Family Code provides the direct
exception to this rule and serves as basis for recognizing the
dissolution of the marriage between the Filipino spouse and
his or her alien spouse.
The purpose of the second paragraph of Article 26 of the
Family Code, the RTC was correct in limiting the applicability of
the provision for the benefit of the Filipino spouse. In other
words, only the Filipino spouse can invoke the second
paragraph of Article 26 of the Family Code; the alien spouse
can claim no right under this provision.
The foreign divorce decree is presumptive evidence of a right
that clothes the party with legal interest to petition for its
recognition in this jurisdiction.
That the second paragraph of Article 26 of the Family Code
bestows no rights in favor of aliens with the complementary
statement that this conclusion is not sufficient basis to dismiss
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
Gerbert’s petition before the RTC. The unavailability of the
second paragraph of Article 26 of the Family Code to aliens
does not necessarily strip Gerbert of legal interest to petition
the RTC for the recognition of his foreign divorce decree. The
foreign divorce decree itself, after its authenticity and
conformity with the alien’s national law have been duly proven
according to our rules of evidence, serves as a presumptive
evidence of right in favor of Gerbert, pursuant to Section 48,
Rule 39 of the Rules of Court which provides for the effect of
foreign judgments. This Section states:
SEC. 48. Effect of foreign judgments or final orders.—The
effect of a judgment or final order of a tribunal of a foreign
country, having jurisdiction to render the judgment or final
order is as follows:
(a) In case of a judgment or final order upon a specific thing,
the judgment or final order is conclusive upon the title of the
thing; and
(b) In case of a judgment or final order against a person, the
judgment or final order is presumptive evidence of a right as
between the parties and their successors in interest by a
subsequent title.
In either case, the judgment or final order may be repelled by
evidence of a want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact.
The starting point in any recognition of a foreign divorce
judgment is the acknowledgment that our courts do not take
judicial notice of foreign judgments and laws. Justice Herrera
explained that, as a rule, "no sovereign is bound to give effect
within its dominion to a judgment rendered by a tribunal of
another country." This means that the foreign judgment and
its authenticity must be proven as facts under our rules on
evidence, together with the alien’s applicable national law to
show the effect of the judgment on the alien himself or herself.
The recognition may be made in an action instituted
specifically for the purpose or in another action where a party
invokes the foreign decree as an integral aspect of his claim or
defense.
In Gerbert’s case, since both the foreign divorce decree and
the national law of the alien, recognizing his or her capacity to
obtain a divorce, purport to be official acts of a sovereign
authority, Section 24, Rule 132 of the Rules of Court comes into
play. This Section requires proof, either by (1) official
publications or (2) copies attested by the officer having legal
custody of the documents. If the copies of official records are
not kept in the Philippines, these must be (a) accompanied by
a certificate issued by the proper diplomatic or consular officer
in the Philippine foreign service stationed in the foreign
country in which the record is kept and (b) authenticated by
the seal of his office.
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The records show that Gerbert attached to his petition a copy
of the divorce decree, as well as the required certificates
proving its authenticity, but failed to include a copy of the
Canadian law on divorce. Under this situation, the court simply
dismiss the petition for insufficiency of supporting evidence.
Considerations beyond the recognition of the foreign divorce
decree:
As a matter of "housekeeping" concern, we note that the Pasig
City Civil Registry Office has already recorded the divorce
decree on Gerbert and Daisylyn’s marriage certificate based on
the mere presentation of the decree. The court consider the
recording to be legally improper.
Article 407 of the Civil Code states that "acts events and
judicial decrees concerning the civil status of persons shall be
recorded in the civil register." The law requires the entry in the
civil registry of judicial decrees that produce legal
consequences touching upon a person’s legal capacity and
status, i.e., those affecting "all his personal qualities and
relations, more or less permanent in nature, not ordinarily
terminable at his own will, such as his being legitimate or
illegitimate, or his being married or not."
A judgment of divorce is a judicial decree, although a foreign
one, affecting a person’s legal capacity and status that must be
recorded. In fact, Act No. 3753 or the Law on Registry of Civil
Status specifically requires the registration of divorce decrees
in the civil registry.
But while the law requires the entry of the divorce decree in
the civil registry, the law and the submission of the decree by
themselves do not ipso facto authorize the decree’s
registration. The law should be read in relation with the
requirement of a judicial recognition of the foreign judgment
before it can be given res judicata effect. In the present case,
no judicial order as yet exists recognizing the foreign divorce
decree. Thus, the Pasig City Civil Registry Office acted totally
out of turn and without authority of law when it annotated the
Canadian divorce decree on Gerbert and Daisylyn’s marriage
certificate, on the strength alone of the foreign decree
presented by Gerbert.
LANDOIL RESOURCES CORPORATION vs. AL RABIAH
LIGHTING COMPANY
G.R. No. 174720 (September 7, 2011)
FACTS:
Respondent Al Rabiah is a foreign corporation existing under
the laws of Kuwait. Defendant Construction Consortium, Inc.
(CCI) and petitioner Landoil are both domestic corporations
organized under the Philippines Laws.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
CCI and respondent Al Rabiah entered into a Sub-Contract
Agreement wherein respondent was assigned to carry out the
electrical works of Kuwait Oil Company's New Industrial
Training Centre project in Kuwait. Later, the project owner had
withdrawn the principal contract which led to the termination
of petitioner’s and CCI’s services. Consequently, respondent's
works were stopped before being completed.
Petitioner sent a letter to respondent confirming that
petitioner owed respondent the sum of KD 21,930,317 which
was already due and proposed the payment of 12% interest on
the overdue account until payment has been made.
Subsequently, petitioner acknowledged its indebtedness to
respondent in the amount of KD 91,580.059, plus general
overtime pay of KD 8,126. As petitioner failed to pay
respondent any part of the amount due, the latter referred
their dispute to the Commercial Kully Court of Kuwait for
arbitration.
Arbitrator -decided that Land Oil is indebted to Al Rabiah and
that it is compelled to pay in settlement of the account of the
contract concluded between them
Subsequently, respondent then filed with the RTC of Makati,
an action for Enforcement of Foreign Judgment Plus Damages
against defendant CCI and petitioner.
Petitioner’s arguments = In its Answer, petitioner admitted the
existence of the Sub-Contract Agreement, but claimed to have
no knowledge as to its genuineness and due execution.
Petitioner argued among others that respondent had no cause
of action; respondent's claims had been paid, set-off or
extinguished; the Commercial Kully Court of Kuwait did not
acquire jurisdiction over petitioner; and the arbitral award was
contrary to public policy, hence, illegal.
Defendant CCI’s arguments = In its Answer, specifically denied
the Sub-Contract Agreement for lack of knowledge, claiming
that it was not a party to the contract and that the Commercial
Kully Court of Kuwait did not acquire jurisdiction over it and
the arbitral award was contrary to public policy.
RTC – in favor of Al Rabiah, making petitioner Landoil liable to
Al Rabiah
CA - dismissed the appeal and affirmed the RTC decision
ISSUES:
1. Whether or not a Philippine Court, in enforcing a foreign
judgment that has become final and executory, has the
jurisdiction to alter, amend or expand such final foreign
judgment (YES)
2. Whether a foreign judgment may be enforced against a
party other than the party decreed and held liable therein (NO)
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3. Whether Estoppel was properly appreciated in this case
(YES)
RULING:
1. Yes. Petitioner’s argument that the party adjudged liable
under the foreign arbitral award was a different entity from it
was only raised for the first time in petitioner's motion for
reconsideration filed with it; thus, could not be entertained. It
is now too late for the defendant CCI to claim that the party
adjudged liable under the foreign arbitral award was a
different entity. Moreover, we note that this is the first time
that the defendant raises such defense. It is settled in
jurisprudence that an issue cannot be raised for the first time
on appeal. With more reason should we disallow and disregard
the issue if it is initially raised in a motion for reconsideration
of the decision of the appellate court.
We note that the defendant CCI had, in the course of this case,
repeatedly affirmed that it was the same party as the
defendant against whom the foreign judgment had been
rendered.
Indeed, petitioner Landoil had never claimed in the RTC that it
was not the party referred to in the foreign arbitral award.
2. No. The foreign arbitral award rendered judgment against
both defendants by placing the name of defendant LANDOIL
RESOURCES COMPANY (sic corporation) and thereafter
enclosed in parenthesis the name of the other defendant
Construction Consortium, Inc. without however specifying the
specific liabilities of either of the defendants. Being
corporations, defendants have legal personalities separate
and distinct from each other and as such must be taken
distinctly and separately from one another.
3. Yes. We find that Landoil itself is a party to the Subcontract
Agreement and has made representations in the past binding
itself to Al Rabiah for overdue accounts in favor of the latter.
Under the doctrine of estoppels, an admission or
representation is rendered conclusive upon the person making
it, and cannot be denied or disproved as against the person
relying thereof.
OIL AND NATURAL GAS COMMISSION V. COURT OF APPEALS
AND PACIFIC CEMENT COMPANY, INC.
(G.R. NO. 114323, JULY 23, 1998)
FACTS:
The petitioner OIL AND NATURAL GAS COMMISSION (ONGC) is
a foreign corporation owned and controlled by the
Government of India while private respondent PACIFIC
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
CEMENT COMPANY (PACIFIC) is a private corporation duly
organized and existing under the laws of the Philippines. The
present conflict between ONGC and PACIFIC has its roots in a
contract entered into by and between both parties on
February 26, 1983 whereby PACIFIC undertook to supply
ONGC 4,300 metric tons of oil well cement. In consideration
therefor, the ONGC bound itself to pay PACIFIC the amount of
$477,300.00 by opening an irrevocable, divisible, and
confirmed letter of credit in favor of the latter.
The oil well cement was loaded on board the ship MV
SURUTANA NAVA at the port of Surigao City, Philippines for
delivery at Bombay and Calcutta, India. However, due to a
dispute between the shipowner and PACIFIC, the cargo was
held up in Bangkok and did not reach its point of destination.
Notwithstanding the fact that PACIFIC had already received
payment and despite several demands made by ONGC, the
PACIFIC failed to deliver the oil well cement. Thereafter,
negotiations ensued between the parties and they agreed that
the PACIFIC will replace the entire 4,300 metric tons of oil
well cement with Class G cement cost free at ONGC’s
designated port. However, upon inspection, the Class G
cement did not conform to ONGC’s specifications. ONGC then
informed PACIFIC that it was referring its claim to an
arbitrator pursuant to Clause 16 of their contract.
On July 23, 1988, the chosen arbitrator, one Shri N.N.
Malhotra, resolved the dispute in petitioners favor.
To enable the petitioner to execute the above award in its
favor, it filed a Petition before the Court of the Civil Judge in
Dehra Dun, India (hereinafter referred to as the foreign court
for brevity), praying that the decision of the arbitrator be
made the Rule of Court in India. The foreign court issued
notices to the private respondent for filing objections to the
petition. The private respondent complied and sent its
objections dated January 16, 1989. Subsequently, the said
court directed the private respondent to pay the filing fees in
order that the latters objections could be given consideration.
Despite notice sent to the private respondent of the
foregoing order and several demands by the petitioner for
compliance therewith, the private respondent refused to pay
the amount adjudged by the foreign court as owing to the
petitioner. Accordingly, the petitioner filed a complaint with
Branch 30 of the Regional Trial Court (RTC) of Surigao City for
the enforcement of the aforementioned judgment of the
foreign court.
The RTC held that the rule prohibiting foreign corporations
transacting business in the Philippines without a license from
maintaining a suit in Philippine courts admits of an exception,
that is, when the foreign corporation is suing on an isolated
transaction as in this case. Anent the issue of the sufficiency of
the ONGC’s cause of action, however, the RTC found the
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referral of the dispute between the parties to the arbitrator
under Clause 16 of their contract erroneous.
The RTC characterized the erroneous submission of the
dispute to the arbitrator as a mistake of law or fact
amounting to want of jurisdiction. Consequently, the
proceedings had before the arbitrator were null and void and
the foreign court had therefore, adopted no legal award
which could be the source of an enforceable right.
The ONGC then appealed to the respondent Court of Appeals
which affirmed the dismissal of the complaint. In its decision,
the appellate court concurred with the RTCs ruling that the
arbitrator did not have jurisdiction over the dispute between
the parties, thus, the foreign court could not validly adopt the
arbitrators award. In addition, the appellate court observed
that the full text of the judgment of the foreign court contains
the dispositive portion only and indicates no findings of fact
and law as basis for the award. Hence, the said judgment
cannot be enforced by any Philippine court as it would violate
the constitutional provision that no decision shall be
rendered by any court without expressing therein clearly and
distinctly the facts and the law on which it is based. Lastly, it
pointed out that the arbitration proceeding was defective
because the arbitrator was appointed solely by the petitioner,
and the fact that the arbitrator was a former employee of the
latter gives rise to a presumed bias on his part in favor of the
petitioner.
ISSUE:
Is the judgment of the foreign court enforceable in this
jurisdiction in view of the private respondents allegation that
it is bereft of any statement of facts and law upon which the
award in favor of the petitioner was based? (YES)
RULING:
Yes. The recognition to be accorded a foreign judgment is not
necessarily affected by the fact that the procedure in the
courts of the country in which such judgment was rendered
differs from that of the courts of the country in which the
judgment is relied on. This Court has held that matters of
remedy and procedure are governed by the lex fori or the
internal law of the forum. Thus, if under the procedural rules
of the Civil Court of Dehra Dun, India, a valid judgment may
be rendered by adopting the arbitrators findings, then the
same must be accorded respect. In the same vein, if the
procedure in the foreign court mandates that an Order of the
Court becomes final and executory upon failure to pay the
necessary docket fees, then the courts in this jurisdiction
cannot invalidate the order of the foreign court simply
because our rules provide otherwise.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
We reiterate hereunder our pronouncement in the case of
Northwest Orient Airlines, Inc. v. Court of Appeals that:
A foreign judgment is presumed to be valid and binding in the
country from which it comes, until the contrary is shown. It is
also proper to presume the regularity of the proceedings and
the giving of due notice therein.
Under Section 50, Rule 39 of the Rules of Court, a judgment in
an action in personam of a tribunal of a foreign country having
jurisdiction to pronounce the same is presumptive evidence of
a right as between the parties and their successors-in-interest
by a subsequent title. The judgment may, however, be
assailed by evidence of want of jurisdiction, want of notice to
the party, collusion, fraud, or clear mistake of law or fact.
Also, under Section 3 of Rule 131, a court, whether of the
Philippines or elsewhere, enjoys the presumption that it was
acting in the lawful exercise of jurisdiction and has regularly
performed its official duty.
Consequently, the party attacking a foreign judgment, the
private respondent herein, had the burden of overcoming the
presumption of its validity which it failed to do in the instant
case.
The foreign judgment being valid, there is nothing else left to
be done than to order its enforcement, despite the fact that
the petitioner merely prays for the remand of the case to the
RTC for further proceedings. As this Court has ruled on the
validity and enforceability of the said foreign judgment in this
jurisdiction, further proceedings in the RTC for the reception
of evidence to prove otherwise are no longer necessary.
(Repeated Case)
PUYAT VS. ZABARTE
(G.R. No. 141536, February 26, 2001)
FACTS:
Respondent RON ZABARTE commenced an action to enforce
the money judgment rendered by the Superior Court for the
State of California, County of Contra Costa, U.S.A. Petitioner
GIL PUYAT filed his Answer with special and affirmative
defenses such that the Superior Court for the State of
California, County of Contra Costa did not properly acquire
jurisdiction over the subject matter of and over the persons,
the judgment on stipulation for entry in judgment is null and
void and unenforceable in the Philippines, and ZABARTE has no
capacity to sue in the Philippines, among others.
ZABARTE filed a Motion for Summary Judgment under Rule 34
of the Rules of Court alleging that the Answer filed by PUYAT
failed to tender any genuine issue as to the material facts.
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PUYAT begs to disagree. He interposed that the Judgment on
Stipulations for Entry in Judgment is null and void, fraudulent,
illegal and unenforceable, the same having been obtained by
means of fraud, collusion, undue influence and/or clear
mistake of fact and law.
RTC: granted ZABARTE’s Motion for Summary Judgment.
PUYAT filed MR. A motion to dismiss on the ground of lack of
jurisdiction over the subject matter and forum non
conveniens.
CA: affirmed RTC; rejected PUYAT’s argument that the RTC
should have dismissed the action for the enforcement of a
foreign judgment, on the ground of forum non conveniens. It
reasoned out that the recognition of the foreign judgment was
based on comity, reciprocity and res judicata.
ISSUE:
Whether or not the RTC should have refused to entertain the
Complaint for enforcement of the foreign judgment on the
principle of forum non conveniens.
RULING:
Note: the principle of forum non conveniens is not applicable
in this case.
No. Under the principle of forum non conveniens, even if the
exercise of jurisdiction is authorized by law, courts may
nonetheless refuse to entertain a case for any of the following
practical reasons:
1) The belief that the matter can be better tried and decided
elsewhere, either because the main aspects of the case
transpired in a foreign jurisdiction or the material witnesses
have their residence there;
2) The belief that the non-resident plaintiff sought the forum,
a practice known as forum shopping, merely to secure
procedural advantages or to convey or harass the defendant;
3) The unwillingness to extend local judicial facilities to non-
residents or aliens when the docket may already be
overcrowded;
4) The inadequacy of the local judicial machinery for
effectuating the right sought to be maintained; and
The difficulty of ascertaining foreign law.”
None of the aforementioned reasons barred the RTC from
exercising its jurisdiction. In the present action, there was no
more need for material witnesses, no forum shopping or
harassment of petitioner, no inadequacy in the local
machinery to enforce the foreign judgment, and no question
raised as to the application of any foreign law.
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
Authorities agree that the issue of whether a suit should be
entertained or dismissed on the basis of the above-mentioned
principle depends largely upon the facts of each case and on
the sound discretion of the trial court. Since the present action
lodged in the RTC was for the enforcement of a foreign
judgment, there was no need to ascertain the rights and the
obligations of the parties based on foreign laws or contracts.
The parties needed only to perform their obligations under the
Compromise Agreement they had entered into.
Under Section 48, Rule 39 of the 1997 Rules of Civil Procedure,
a judgment in an action in personam rendered by a foreign
tribunal clothed with jurisdiction is presumptive evidence of a
right as between the parties and their successors-in-interest by
a subsequent title.
Also, under Section 5(n) of Rule 131, a court -- whether in the
Philippines or elsewhere -- enjoys the presumption that it is
acting in the lawful exercise of its jurisdiction, and that it is
regularly performing its official duty. Its judgment may,
however, be assailed if there is evidence of want of
jurisdiction, want of notice to the party, collusion, fraud or
clear mistake of law or fact. But precisely, this possibility
signals the need for a local trial court to exercise jurisdiction.
Clearly, the application of forum non coveniens is not called
for.
The grounds relied upon by petitioner are contradictory. On
the one hand, he insists that the RTC take jurisdiction over the
enforcement case in order to invalidate the foreign judgment;
yet, he avers that the trial court should not exercise jurisdiction
over the same case on the basis of forum non conveniens. Not
only do these defenses weaken each other, but they bolster
the finding of the lower courts that he was merely
maneuvering to avoid or delay payment of his obligation.
MIJARES VS. RANADA
G.R. No. 139325, April 12, 2005
FACTS:
Invoking the Alien Tort Act, petitioners Mijares, et al.*, all of
whom suffered human rights violations during the Marcos era,
obtained a Final Judgment in their favor against the Estate of
the late Ferdinand Marcos amounting to roughly 1.9 Billion
U.S. Dollars in compensatory and exemplary damages for
tortuous violations of international law in the US District Court
of Hawaii. This Final Judgment was affirmed by the US Court of
Appeals.
As a consequence, Petitioners filed a Complaint with the
Regional Trial Court of Makati for the enforcement of the Final
Judgment, paying Php 410.00 as docket and filing fees based
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on Rule 141, Section 7(b) where the value of the subject matter
is incapable of pecuniary estimation. The Estate of Marcos
however, filed a MTD alleging the non-payment of the correct
filing fees. The Regional Trial Court of Makati dismissed the
Complaint stating that the subject matter was capable of
pecuniary estimation as it involved a judgment rendered by a
foreign court ordering the payment of a definite sum of money
allowing for the easy determination of the value of the foreign
judgment. As such, the proper filing fee was 472 Million
Philippine pesos, which Petitioners had not paid.
ISSUE:
What laws will apply in determining the filing fees for an action
to enforce a foreign judgment?
RULING:
Respondent judge was in clear and serious error when he
concluded that the filing fees should be computed on the basis
of the schematic table of Section 7(a), as the action involved
pertains to a claim against an estate based on judgment.
A proper understanding is required on the nature and effects
of a foreign judgment in this jurisdiction.
The rules of comity, utility and convenience of nations have
established a usage among civilized states by which final
judgments of foreign courts of competent jurisdiction are
reciprocally respected and rendered efficacious under certain
conditions that may vary in different countries.
The conditions required by the Philippines for recognition and
enforcement of a foreign judgment has remained unchanged.
SEC. 48. Effect of foreign judgments. The effect of a judgment
of a tribunal of a foreign country, having jurisdiction to
pronounce the judgment is as follows:
(a) In case of a judgment upon a specific thing, the judgment is
conclusive upon the title to the thing;
(b) In case of a judgment against a person, the judgment is
presumptive evidence of a right as between the parties and
their successors in interest by a subsequent title;
In either case, the judgment or final order may be repelled by
evidence of a want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact.
There is an evident distinction between a foreign judgment in
an action in rem and one in personam. For an action in rem,
the foreign judgment is deemed conclusive upon the title to
the thing, while in an action in personam, the foreign judgment
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
is presumptive, and not conclusive, of a right as between the
parties and their successors in interest by a subsequent title.
Thus, the party aggrieved by the foreign judgment is entitled
to defend against the enforcement of such decision in the local
forum. It is essential that there should be an opportunity to
challenge the foreign judgment, in order for the court in this
jurisdiction to properly determine its efficacy.
Consequently, the party attacking a foreign judgment has the
burden of overcoming the presumption of its validity. Petition
is GRANTED.
HERALD DACASIN vs SHARON DACASIN
G.R. no. 168785 February 5, 2010
FACTS:
Herald Dacasin(American) and Sharon Dacasin(Filipino) were
married in Manila on April 1994. They have a daughter,
Stephanie who was born on September 21 1995. In June 1999,
Sharon saught and obtained from the Illonois court a divorce
decree against Herald. The Illonois court dissolved the
marriage, awarded Sharon the sole custody of Stephanie and
retained jurisdiction over the case for enforcement purposes.
On January 2002, Herald and Sharon executed in Manila a
contract for joint custody of Stephanie. The parties chose
Philippine courts as exclusive forum to adjudicate the dispute.
Sharon undertook to obtain from Illonois court an order
“relinquishing” jurisdiction to Philippine courts.
Herald sued Sharon in the RTC of Makati to enforce the
agreement. Herald alleged that in violation of the agreement,
Sharon exercised sole custody over Stephanie.
Sharon sought the dismissal of the complaint for, among
others, lack of jurisdiction because of the Illonois Court’s
retention of jurisdiction to enforce the divorce decree.
The RTC sustained respondent’s motion and dismissed the
case for lack of jurisdiction. The trial court held that: (1) it is
precluded from taking cognizance over the suit considering the
Illinois court’s retention of jurisdiction to enforce its divorce
decree, including its order awarding sole custody of Stephanie
to respondent; (2) the divorce decree is binding on petitioner
following the "nationality rule" prevailing in this jurisdiction;
and (3) the Agreement is void for contravening Article 2035,
paragraph 5 of the Civil Code prohibiting compromise
agreements on jurisdiction.
ISSUE:
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Does the RTC of Makati have jurisdiction to enforce the
agreement on joint custody of Stephanie?
HELD:
The RTC has jurisdiction to entertain petitioner’s suit but not
to enforce the Agreement which is Void. However, factual and
equity considerations militate against the dismissal of
petitioner’s suit and call for the remand of the case to settle
the question of Stephanie’s custody.
The RTC has jurisdiction. Parties to a contract are free to
stipulate the terms of agreement subject to the minimum ban
on stipulations contrary to law, morals, good customs, public
order, or public policy.
The agreement is void.At the time the parties executed the
Agreement on 28 January 2002, two facts are undisputed:
(1) Stephanie was under seven years old (having been born on
21 September 1995). This is in contrary to law as stated in Art.
213 of the Civil Code; and
(2) petitioner and respondent were no longer married under
the laws of the United States because of the divorce
decree.Based on Art. 15 or the Nationality Rule, petitioner
cannot rely on the divorce decree’s alleged invalidity - not
because the Illinois court lacked jurisdiction or that the divorce
decree violated Illinois law, but because the divorce was
obtained by his Filipino spouse. Only Philippine nationals are
covered by the policy against absolute divorces the same being
considered contrary to our concept of public policy and
morality. However, aliens may obtain divorces abroad, which
may be recognized in the Philippines, provided they are valid
according to their national law. In this case, the divorce in
Nevada released private respondent from the marriage from
the standards of American law, under which divorce dissolves
the marriage.
Call for the Remand of the Case.Stephanie is now nearly 15
years old, thus removing the case outside of the ambit of the
mandatory maternal custody regime under Article 213 and
bringing it within coverage of the default standard on child
custody proceedings – the best interest of the child.
STEPHEN I. JUEGO-SAKAI vs. REPUBLIC OF THE PHILIPPINES
G.R. No. 224015 July 23, 2018
SUMMARY: The SC applied the landmark ruling in Republic vs.
Manalo in this similarly-situated case.
FACTS:
Petitioner Stephen I. Juego-Sakai and Toshiharu Sakai got
married on August 11, 2000 in Japan pursuant to the wedding
rites therein. After two (2) years, the parties, by agreement,
DIGESTED BY: DAHIROC, ERUM, FUENTES, OLACO, PANIZA, RIVERA, SALVANA, TAN, UNAS, VILLAHERMOSA & VILLARIN
obtained a divorce decree in said country dissolving their
marriage. Thereafter, on April 5, 2013, petitioner filed a
Petition for Judicial Recognition of Foreign Judgment before
the Regional Trial Court (RTC), Branch 40, Camarines Norte. In
its Decision dated October 9, 2014, the RTC granted the
petition and recognized the divorce between the parties as
valid and effective under Philippine Laws.
On November 25, 2015, the CA affirmed the decision of the
RTC.
In an Amended Decision dated March 3, 2016, however, the
CA revisited its findings and recalled and set aside its previous
decision.
ISSUES:
Whether or not petitioner's Petition for Judicial Recognition of
Foreign Judgment be granted.
RULING:
NO. The issue has already been resolved in the landmark ruling
of Republic v. Manalo, the facts of which fall squarely on point
with the facts herein.
Applying the foregoing pronouncement to the case at hand,
the Court similarly rules that despite the fact that petitioner
participated in the divorce proceedings in Japan, and even if it
is assumed that she initiated the same, she must still be
allowed to benefit from the exception provided under
Paragraph 2 of Article 26. Consequently, since her marriage to
Toshiharu Sakai had already been dissolved by virtue of the
divorce decree they obtained in Japan, thereby capacitating
Toshiharu to remarry, petitioner shall likewise have capacity to
remarry under Philippine law.
Nevertheless, as similarly held in Manalo, the Court cannot yet
grant petitioner's Petition for Judicial Recognition of Foreign
Judgment for she has yet to comply with certain guidelines
before our courts may recognize the subject divorce decree
and the effects thereof. Time and again, the Court has held
that the starting point in any recognition of a foreign divorce
judgment is the acknowledgment that our courts do not take
judicial notice of foreign judgments and laws. This means that
the foreign judgment and its authenticity must be proven as
facts under our rules on evidence, together with the alien's
applicable national law to show the effect of the judgment on
the alien himself or herself. Since both the foreign divorce
decree and the national law of the alien, recognizing his or her
capacity to obtain a divorce, purport to be official acts of a
sovereign authority, Section 24 of Rule 132 of the Rules of
Court applies. Thus, what is required is proof, either by (1)
official publications or (2) copies attested by the officer having
legal custody of the documents. If the copies of official records
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are not kept in the Philippines, these must be (a) accompanied
by a certificate issued by the proper diplomatic or consular
officer in the Philippine foreign service stationed in the foreign
country in which the record is kept and (b) authenticated by
the seal of his office.

The Office of the Solicitor General does not dispute the

existence of the divorce decree, rendering the same
admissible. What remains to be proven, therefore, is the
pertinent Japanese Law on divorce considering that Japanese
laws on persons and family relations are not among those
matters that Filipino judges are supposed to know by reason
of their judicial function.

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