MHC AND MHICL vs.

NLRC et al
G.R. No. 120077
October 13, 2000

FACTS: private respondent Santos was an overseas worker employed as a printer at

the Mazoon Printing Press, Sultanate of Oman. Subsequently he was directly hired by
the Palace Hotel, Beijing, People’s Republic of China and later terminated due to
retrenchment.

Petitioners are the Manila Hotel Corporation (“MHC”) and the Manila Hotel International
Company, Limited (“MHICL”).

When the case was filed in 1990, MHC was still a government-owned and controlled
corporation duly organized and existing under the laws of the Philippines. MHICL is a
corporation duly organized and existing under the laws of Hong Kong. MHC is an
“incorporator” of MHICL, owning 50% of its capital stock.

By virtue of a “management agreement” with the Palace Hotel, MHICL trained the
personnel and staff of the Palace Hotel at Beijing, China.

Now the facts.

During his employment with the Mazoon Printing Press, respondent Santos received a
letter from Mr. Shmidt, General Manager, Palace Hotel, Beijing, China. Mr. Schmidt
informed respondent Santos that he was recommended by one Buenio, a friend of his.
Mr. Shmidt offered respondent Santos the same position as printer, but with a higher
monthly salary and increased benefits. Respondent Santos wrote to Mr. Shmidt and
signified his acceptance of the offer.

The Palace Hotel Manager, Mr. Henk mailed a ready to sign employment contract to
respondent Santos. Santos resigned from the Mazoon Printing Press. Santos wrote the
Palace Hotel and acknowledged Mr. Henk’s letter. The employment contract stated that
his employment would be for a period of two years. He then started to work at the
Palace Hotel.

Subsequently, respondent Santos signed an amended “employment agreement” with

the Palace Hotel. In the contract, Mr. Shmidt represented the Palace Hotel. The Vice
President (Operations and Development) of petitioner MHICL Cergueda signed the
employment agreement under the word “noted”.

After working in the Palace hotel for less than 1 year, the Palace Hotel informed
respondent Santos by letter signed by Mr. Shmidt that his employment at the Palace
Hotel print shop would be terminated due to business reverses brought about by the
political upheaval in China. The Palace Hotel terminated the employment of Santos and
paid all benefits due him, including his plane fare back to the Philippines. Santos was
repatriated to the Philippines.
Santos filed a complaint for illegal dismissal with the Arbitration Branch, NCR, NLRC.
He prayed for an award of AD, ED and AF for. The complaint named MHC, MHICL, the
Palace Hotel and Mr. Shmidt as respondents. The Palace Hotel and Mr. Shmidt were
not served with summons and neither participated in the proceedings before the LA.

The LA decided the case against petitioners. Petitioners appealed to the NLRC, arguing
that the POEA, not the NLRC had jurisdiction over the case. The NLRC promulgated a
resolution, stating that the appealed Decision be declared null and void for want of
jurisdiction

Santos moved for reconsideration of the afore-quoted resolution. He argued that the
case was not cognizable by the POEA as he was not an “overseas contract worker. The
NLRC granted the motion and reversed itself. The NLRC directed another LA to hear
the case on the question of whether private respondent was retrenched or dismissed.
The La found that Santos was illegally dismissed from employment and recommended
that he be paid actual damages equivalent to his salaries for the unexpired portion of his
contract. The NLRC ruled in favor of private respondent. Petitioners filed an MR arguing
that the LA’s recommendation had no basis in law and in fact, however it was denied.
Hence, this petition.

ISSUE: Is the NLRC a proper forum to decide this case?

HELD: petition granted; the orders and resolutions of the NLRC are annulled.

NO

Forum Non-Conveniens

The NLRC was a seriously inconvenient forum.

We note that the main aspects of the case transpired in two foreign jurisdictions and the
case involves purely foreign elements. The only link that the Philippines has with the
case is that Santos is a Filipino citizen. The Palace Hotel and MHICL are foreign
corporations. Not all cases involving our citizens can be tried here.

The employment contract. — Respondent Santos was hired directly by the Palace
Hotel, a foreign employer, through correspondence sent to the Sultanate of Oman,
where respondent Santos was then employed. He was hired without the intervention of
the POEA or any authorized recruitment agency of the government.

Under the rule of forum non conveniens, a Philippine court or agency may assume
jurisdiction over the case if it chooses to do so provided: (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 conditions are
unavailing in the case at bar.

Not Convenient. — We fail to see how the NLRC is a convenient forum given that all the
incidents of the case — from the time of recruitment, to employment to dismissal
occurred outside the Philippines. The inconvenience is compounded by the fact that the
proper defendants, the Palace Hotel and MHICL are not nationals of the Philippines.
Neither .are they “doing business in the Philippines.” Likewise, the main witnesses, Mr.
Shmidt and Mr. Henk are non-residents of the Philippines.

No power to determine applicable law. — Neither can an intelligent decision be made as

to the law governing the employment contract as such was perfected in foreign soil.
This calls to fore the application of the principle of lex loci contractus (the law of the
place where the contract was made).

The employment contract was not perfected in the Philippines. Santos signified his
acceptance by writing a letter while he was in the Republic of Oman. This letter was
sent to the Palace Hotel in the People’s Republic of China.

No power to determine the facts. — Neither can the NLRC determine the facts
surrounding the alleged illegal dismissal as all acts complained of took place in Beijing,
People’s Republic of China. The NLRC was not in a position to determine whether the
Tiannamen Square incident truly adversely affected operations of the Palace Hotel as to
justify Santos’ retrenchment.

Principle of effectiveness, no power to execute decision. — Even assuming that a

proper decision could be reached by the NLRC, such would not have any binding effect
against the employer, the Palace Hotel. The Palace Hotel is a corporation incorporated
under the laws of China and was not even served with summons. Jurisdiction over its
person was not acquired.

This is not to say that Philippine courts and agencies have no power to solve
controversies involving foreign employers. Neither are we saying that we do not have
power over an employment contract executed in a foreign country. If Santos were an
“overseas contract worker”, a Philippine forum, specifically the POEA, not the NLRC,
would protect him. He is not an “overseas contract worker” a fact which he admits with
conviction.

Even assuming that the NLRC was the proper forum, even on the merits, the NLRC’s
decision cannot be sustained.

II. MHC Not Liable

Even if we assume two things: (1) that the NLRC had jurisdiction over the case, and (2)
that MHICL was liable for Santos’ retrenchment, still MHC, as a separate and distinct
juridical entity cannot be held liable.
True, MHC is an incorporator of MHICL and owns 50% of its capital stock. However,
this is not enough to pierce the veil of corporate fiction between MHICL and MHC. In
Traders Royal Bank v. CA, we held that “the mere ownership by a single stockholder or
by another corporation of all or nearly all of the capital stock of a corporation is not of
itself a sufficient reason for disregarding the fiction of separate corporate personalities.”

It is basic that a corporation has a personality separate and distinct from those
composing it as well as from that of any other legal entity to which it may be related.
Clear and convincing evidence is needed to pierce the veil of corporate fiction. In this
case, we find no evidence to show that MHICL and MHC are one and the same entity.

III. MHICL not Liable

Santos predicates MHICL’s liability on the fact that MHICL “signed” his employment
contract with the Palace Hotel. This fact fails to persuade us.

First, we note that the Vice President (Operations and Development) of MHICL,
Cergueda signed the employment contract as a mere witness. He merely signed under
the word “noted”.

When one “notes” a contract, one is not expressing his agreement or approval, as a
party would. In Sichangco v. Board of Commissioners of Immigration, the Court
recognized that the term “noted” means that the person so noting has merely taken
cognizance of the existence of an act or declaration, without exercising a judicious
deliberation or rendering a decision on the matter.
Second, and more importantly, there was no existing employer-employee relationship
between Santos and MHICL. In determining the existence of an employer-employee
relationship, the following elements are considered:

“(1) the selection and engagement of the employee;

“(2) the payment of wages;
“(3) the power to dismiss; and
“(4) the power to control employee’s conduct.”

MHICL did not have and did not exercise any of the aforementioned powers. It did not
select respondent Santos as an employee for the Palace Hotel. He was referred to the
Palace Hotel by his friend, Buenio. MHICL did not engage respondent Santos to work.
The terms of employment were negotiated and finalized through correspondence
between Santos, Mr. Schmidt and Mr. Henk, who were officers and representatives of
the Palace Hotel and not MHICL. Neither did Santos adduce any proof that MHICL had
the power to control his conduct. Finally, it was the Palace Hotel, through Mr. Schmidt
and not MHICL that terminated respondent Santos’ services.
Likewise, there is no evidence to show that the Palace Hotel and MHICL are one and
the same entity. The fact that the Palace Hotel is a member of the “Manila Hotel Group”
is not enough to pierce the corporate veil between MHICL and the Palace Hotel.

Considering that the NLRC was forum non-conveniens and considering further that no
employer-employee relationship existed between MHICL, MHC and Santos, the LA
clearly had no jurisdiction over respondent’s claim in the NLRC case. In all the cases
under the exclusive and original jurisdiction of the LA, an employer-employee
relationship is an indispensable jurisdictional requirement.

Bank of America NT&SA v. CA

GR No. 120135, 31 March 2003

FACTS:

On 10 May 1993, private respondents, the Litonjuas (Eduardo and Aurelio) filed a
complaint before the RTC against the Bank of America NT&SA and Bank of America
International, Ltd. (Defendant-banks) alleging that:

o they were engaged in the shipping business; they owned two vessels: Don Aurelio
and El Champion, through their wholly-owned corporations; they deposited their
revenues from said business together with other funds with the branches of said banks
in the United Kingdom and Hongkong up to 1979;

o and with their business doing well, the defendant banks induced them to increase the
number of their ships in operation, offering them easy loans to acquire said vessels;

o thereafter, the defendant banks acquired, through their (Litonjua’s) corporations as the
borrowers: (a) El Carrier; (b) El General; (c) El Challenger; and (d) El Conqueror;

o the vessels were registered in the names of their corporations; the operation and the
funds derived therefrom were placed under the complete and exclusive control and
disposition of the petitioners (BOA NT&SA) and the possession of the vessels was also
placed by defendant banks in the hands of persons selected and designated by them.

 The Litonjuas claimed that defendant banks as trustees did not fully render an
account of all the income derived from the operation of the vessels as well as of
the proceeds of the subsequent foreclosure sale; because of the breach of their
fiduciary duties and/or negligence of the petitioners and/or the persons
designated by them in the operation of private respondent’s six vessels, the
revenues derived drastically.
 The loans acquired for the purchase of the four additional vessels then matured
and remained unpaid, prompting defendant banks to have all the six vessels,
including the two vessels originally owned by the private respondents, foreclosed
 and sold at a public auction to answer for the obligations incurred for and in
behalf of the operation of the vessels.
 The Litonjuas lost sizeable amounts of their personal funds and were left with the
unpaid balance of their loans with defendant banks. Hence, the Litonjuas prayed
for the accounting of the revenues derived in the operation of the six vessels and
of the proceedings instituted by petitioners, damages for breach of trust,
exemplary damages and attorney’s fees.
 Defendant-bank filed a MTD on the grounds of forum non-conveniens and lack of
cause of action against them.
 RTC denied the MTD, instead of filing an answer, the defendant-banks went to
the CA on a Petition for Review on Certiorari which aptly treated by the CA as a
petition for certiorari. They assailed the dismissal of their MTD and their MR.
 CA dismissed the petition and denied their MR, Hence, this petition.
 In support of their claim that the local court is not the proper forum, petitioners
allege the following:

o The-Bank of America Branches involved, as clearly mentioned in the Complaint, are

based in Hongkong and England. As such, the evidence and the witnesses are not
readily available in the Philippines;

o The loan transactions were obtained, perfected, performed, consummated and

partially paid outside the Philippines;

o The monies were advanced outside the Philippines. Furthermore, the mortgaged
vessels were part of an offshore fleet, not based in the Philippines;

o All the loans involved were granted to the Private Respondents’ foreign
CORPORATIONS;
o The Restructuring Agreements were ALL governed by the laws of England;
o The subsequent sales of the mortgaged vessels and the application of the sales
proceeds

occurred and transpired outside the Philippines, and the deliveries of the sold
mortgaged vessels were likewise made outside the Philippines;
o The revenues of the vessels and the proceeds of the sales of these vessels were ALL
deposited

to the Accounts of the foreign CORPORATIONS abroad; and

o Bank of America International Ltd. is not licensed nor engaged in trade or business in
the Philippines.

 Petitioners argue further that the loan agreements, security documentation and
all subsequent restructuring agreements uniformly, unconditionally and expressly
provided that they will be governed by the laws of England; that Philippine Courts
would then have to apply English law in resolving whatever issues may be
 presented to it in the event it recognizes and accepts herein case; that it would
then be imposing a significant and unnecessary expense and burden not only
upon the parties to the transaction but also to the local court. Petitioners insist
that the inconvenience and difficulty of applying English law with respect to a
wholly foreign transaction in a case pending in the Philippines may be avoided by
its dismissal on the ground of forum non-conveniens.
 Lastly petitioners claim that private respondents have already waived their
alleged causes of action in the case at bar for their refusal to contest the foreign
civil cases earlier filed by the petitioners against them in Hongkong and England,
and that private respondents’ alleged cause of action is already barred by the
pendency of another action or by litis pendencia.
 On the other hand, private respondents contend that certain material facts are
omitted and/or misrepresented such as: that the security of the foreign loans
were mortrages on a piece of real estate located in the PH, that while the
complaint was filed by only by the stockholders of the corporate borrowers, the
latter are wholly-owned by the private respondents who are Filipinos, and
therefore under Philippine laws.

ISSUE: Whether the CA erred in not dismissing the case on the ground of
forum non-conveniens.

NO RATIO:

 The doctrine of forum non-conveniens, literally meaning the forum is

inconvenient, emerged in private international law to deter the practice of global
forum shopping, that is to prevent non-resident litigants from choosing the forum
or place wherein to bring their suit for malicious reasons, such as to secure
procedural advantages, to annoy and harass the defendant, to avoid
overcrowded dockets, or to select a more friendly venue. Under this doctrine, a
court, in conflicts of law cases, may refuse impositions on its jurisdiction where it
is not the most “convenient” or available forum and the parties are not precluded
from seeking remedies elsewhere.
 Whether a suit should be entertained or dismissed on the basis of said doctrine
depends largely upon the facts of the particular case and is addressed to the
sound discretion of the trial court. In the case of Communication Materials and
Design, Inc. vs. Court of Appeals, this Court held that “[a] Philippine Court may
assume jurisdiction over the case if it chooses to do so; provided, that the
following requisites are met: (1) that the Philippine Court is one to which the
parties may conveniently resort to; (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.” Evidently,
all these requisites are present in the instant case.
 Moreover, this Court enunciated in Philsec. Investment Corporation vs. Court of
Appeals, that the doctrine of forum non-conveniens should not be used as a
ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court
does not include said doctrine as a ground. This Court further ruled that while it is
 within the discretion of the trial court to abstain from assuming jurisdiction on this
ground, it should do so only after viral facts are established, to determine
whether special circumstance require the court’s desistance; and that the
propriety of dismissing a case based on this principle of forum non-conveniens
requires a factual determination, hence it is more properly considered a matter of
defense.

PIONEER CONCRETE PHILIPPINES v. TODARO

254 SCRA 153 June 8, 2007

FACTS
Antonio D. Todaro (Todaro) filed with the RTC of Makati City, a complaint for Sum of
Money and Damages with Preliminary Attachment against Pioneer International Limited
(PIL), Pioneer Concrete Philippines, Inc. (PCPI), Pioneer Philippines Holdings, Inc.
(PPHI), John G. McDonald (McDonald) and Philip J. Klepzig (Klepzig).

Todaro alleged that PIL is a corporation duly organized and existing under the laws of
Australia and is principally engaged in the ready-mix concrete and concrete aggregates
business; PPHI is the company established by PIL to own and hold the stocks of its
operating company in the Philippines; PCPI is the company established by PIL to
undertake its business of ready-mix concrete, concrete aggregates and quarrying
operations in the Philippines; McDonald is the Chief Executive of the Hongkong office of
PIL; and, Klepzig is the President and Managing Director of PPHI and PCPI; Todaro
has been the managing director of Betonval Readyconcrete, Inc. (Betonval), a company
engaged in pre-mixed concrete and concrete aggregate production; he resigned from
Betonval in February 1996; in May 1996, PIL contacted Todaro and asked him if he was
available to join them in connection with their intention to establish a ready-mix concrete
plant and other related operations in the Philippines; Todaro informed PIL of his
availability and interest to join them; subsequently, PIL and Todaro came to an
agreement wherein the former consented to engage the services of the latter as a
consultant for two to three months, after which, he would be employed as the manager
of PIL's ready-mix concrete operations should the company decide to invest in the
Philippines; subsequently, PIL started its operations in the Philippines; however, it
refused to comply with its undertaking to employ Todaro on a permanent basis. Instead
of filing an Answer, PPHI, PCPI and Klepzig separately moved to dismiss the complaint
on the grounds that the complaint states no cause of action, that the RTC has no
jurisdiction over the subject matter of the complaint, as the same is within the
jurisdiction of the NLRC, and that the complaint should be dismissed on the basis of the
doctrine of forum non conveniens. RTC dismissed the MTD which was affirmed by the
CA.

ISSUE
W/N the RTC should have dismissed the case on the basis of forum non conveniens
due to a presence of a foreign element

RULING
NO. Whether a suit should be entertained or dismissed on the basis of said doctrine
depends largely upon the facts of the particular case and is addressed to the sound
discretion of the trial court. In the case of Communication Materials and Design, Inc. vs.
Court of Appeals, this Court held that "xxx [a] Philippine Court may assume jurisdiction
over the case if it chooses to do so; provided, that the following requisites are met: (1)
that the Philippine Court is one to which the parties may conveniently resort to; (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 doctrine of forum non conveniens should not be used as a ground for a motion to
dismiss because Sec. 1, Rule 16 of the Rules of Court does not include said doctrine as
a ground. This Court further ruled that while it is within the discretion of the trial court to
abstain from assuming jurisdiction on this ground, it should do so only after vital facts
are established, to determine whether special circumstances require the court’s
desistance; and that the propriety of dismissing a case based on this principle of forum
non conveniens requires a factual determination, hence it is more properly considered a
matter of defense.

Note: the case was also being dismissed on the ground that there was no cause of
action but SC held that there was cause of action, to sustain a motion to dismiss for lack
of cause of action, the complaint must show that the claim for relief does not exist,
rather than that a claim has been defectively stated, or is ambiguous, indefinite or
uncertain. And it was also argued in this case that jurisdiction is with the NLRC and not
with the RTC. SC held it was with RTC, SC has consistently held that where no
employer-employee relationship exists between the parties and no issue is involved
which may be resolved by reference to the Labor Code, other labor statutes or any
collective bargaining agreement, it is the RTC that has jurisdiction.

Raytheon International, Inc. v. Rouzie Jr.

February 26, 2008

Doctrine:

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may
refuse impositions on its jurisdiction where it is not the most “convenient” or available
forum and the parties are not precluded from seeking remedies elsewhere.

Facts:
Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under the
laws of the State of Connecticut, United States of America, and respondent Stockton W.
Rouzie, Jr., an American citizen, entered into a contract whereby BMSI hired
respondent as its representative to negotiate the sale of services in several government
projects in the Philippines for an agreed remuneration of 10% of the gross receipts.

Respondent filed before the Arbitration Branch of the National Labor Relations
Commission (NLRC) a suit against BMSI and Rust International, Inc. (RUST), Rodney
C. Gilbert and Walter G. Browning for alleged nonpayment of commissions, illegal
termination and breach of employment contract which rendered judgment ordering
BMSI and RUST to pay respondent’s money claims.

Upon appeal by BMSI, the NLRC reversed the decision of the Labor Arbiter and
dismissed respondent’s complaint on the ground of lack of jurisdiction. Respondent
elevated the case to this Court but was dismissed in a Resolution which became final
and executory.

Respondent, then a resident of La Union, instituted an action for damages before the
Regional Trial Court (RTC) of Bauang, La Union to Raytheon International, Inc. as well
as BMSI and RUST, the two corporations impleaded in the earlier labor case. The
complaint essentially reiterated the allegations in the labor case that BMSI verbally
employed respondent to negotiate the sale of services in government projects and that
respondent was not paid the commissions due him from the Pinatubo dredging project
which he secured on behalf of BMSI. The complaint also averred that BMSI and RUST
as well as petitioner itself had combined and functioned as one company.

In response, petitioner alleged that contrary to respondent’s claim, it was a foreign

corporation duly licensed to do business in the Philippines and denied entering into any
arrangement with respondent or paying the latter any sum of money. Petitioner also
denied combining with BMSI and RUST for the purpose of assuming the alleged
obligation of the said companies. Petitioner sought the dismissal of the complaint on
grounds of failure to state a cause of action and forum non conveniens and prayed for
damages by way of compulsory counterclaim.

Petitioner then filed an Omnibus Motion for Preliminary Hearing Based on Affirmative
Defenses and for Summary Judgment seeking the dismissal of the complaint on
grounds of forum non conveniens and failure to state a cause of action. Respondent
opposed the same. Pending the resolution of the omnibus motion, the deposition of
Walter Browning was taken before the Philippine Consulate General in Chicago.

RTC denied petitioner’s omnibus motion and held that the factual allegations in the
complaint, assuming the same to be admitted, were sufficient for the trial court to render
a valid judgment thereon. It also ruled that the principle of forum non conveniens was
inapplicable because the trial court could enforce judgment on petitioner, it being a
foreign corporation licensed to do business in the Philippines.
The Court of Appeals rendered the assailed Decision denying the petition for certiorari
for lack of merit, and also denied petitioner’s motion for reconsideration.

Issue:

Whether or not the Court of Appeals erred in refusing to dismiss the complaint for failure
to state a cause of action against Raytheon International, Inc.
Whether or not the Court of Appeals erred in refusing to dismiss the complaint on the
ground of forum non conveniens.
Ruling:

No, the Court found a failure to state a cause of action against Raytheon International,
Inc., referring to the insufficiency of allegation in the pleading. As a general rule, the
elementary test for failure to state a cause of action is whether the complaint alleges
facts which if true would justify the relief demanded. The evidences are not quite
sufficient to meet a ruling that the complaint fails to state a cause of action.
No, the court finds lack of merit on the complaint on ground of forum non conveniens
and states that the Philippine Courts have the jurisdiction over the parties.
Hasegawa v. Kitamura – the Court outlined three consecutive phases involved in
judicial resolution of conflicts-of-laws problems, namely: jurisdiction, choice of law, and
recognition and enforcement of judgments. Thus, in the instances where the Court held
that the local judicial machinery was adequate to resolve controversies with a foreign
element, the following requisites had to be proved: (1) that the Philippine Court is one to
which the parties may conveniently resort; (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 the power to enforce
its decision.

Saudi Arabian Airlines v. Rebesencio

January 14, 2015

FACTS

Petitioner Saudi Arabian Airlines (Saudia) is a foreign corporation established and

existing under the laws of Jeddah, Kingdom of Saudi Arabia. Respondents were
recruited and hired by Saudia as Flight Attendants with the accreditation and approval
of the Philippine Overseas Employment Administration (POEA). Respondents continued
their employment with Saudia until they were separated from service on various dates in
2006. The respondents contended that the termination of their employment was illegal.

They alleged that the termination was made solely because they were pregnant. As
respondents alleged, they had informed Saudia of their respective pregnancies and had
gone through the necessary procedures to process their maternity leaves. Initially,
Saudia had given its approval but later on informed respondents that its management in
Jeddah, Saudi Arabia had disapproved their maternity leaves. In addition, it required
respondents to file their resignation letters. Respondents were told that if they did not
resign, Saudia would terminate them all the same. The threat of termination entailed the
loss of benefits, such as separation pay and ticket discount entitlements. The
respondents were required to report to the office one month into their maternity leave.

Saudia anchored its disapproval of respondents' maternity leaves and demand for their
resignation on its "Unified Employment Contract for Female Cabin Attendants" (Unified
Contract) which provides that if the Air Hostess becomes pregnant at any time during
the term of this contract, this shall render her employment contract as void and she will
be terminated due to lack of medical fitness. The respondents averred that the Unified
Contract took effect after the approval of their maternity leaves. Rather than comply and
tender resignation letters, respondents filed separate appeal letters that were all
rejected. Faced with the dilemma of resigning or totally losing their benefits,
respondents executed handwritten resignation letters.

ISSUE

1. Whether or not the respondents voluntarily resigned or were illegally terminated.

2. Whether or not the Philippine courts have jurisdiction over the case

RATIO

1. Yes, the respondents were illegally dismissed. The petitioner Saudia themselves
stated that the Saudi law does not allow the termination of employment of women who
take maternity leaves Under the Labor Laws of Saudi Arabia and the Philippines, it is
illegal and unlawful to terminate the employment of any woman by virtue of pregnancy.
The law in Saudi Arabia is even more harsh and strict in that no employer can terminate
the employment of a female worker or give her a warning of the same while on
Maternity Leave, the specific provision of Saudi Labor Laws on the matter is hereto
quoted as follows: “An employer may not terminate the employment of a female worker
or give her a warning of the same while on maternity leave.” (Article 155, Labor Law of
the Kingdom of Saudi Arabia, Royal Decree No. M/51.)

2. Yes, the Philippine court has jurisdiction over the case. Saudia asserts that
stipulations set in the Cabin Attendant contracts require the application of the laws of
Saudi Arabia. It insists that the need to comply with these stipulations calls into
operation the doctrine of forum non conveniens and, in turn, makes it necessary for
Philippine tribunals to refrain from exercising jurisdiction. Forum non conveniens, like
the rules of forum shopping, litis pendentia, and res judicata, is a means of addressing
the problem of parallel litigation. While the rules of forum shopping, litis pendentia, and
res judicata are designed to address the problem of parallel litigation within a single
jurisdiction, forum non conveniens is a means devised to address parallel litigation
arising in multiple jurisdictions. On the matter of pleading forum non conveniens, the
court state the rule, thus: Forum non conveniens must not only be clearly pleaded as a
ground for dismissal; it must be pleaded as such at the earliest possible opportunity.
Otherwise, it shall be deemed waived.

It further stated: Forum non conveniens finds no application and does not operate to
divest Philippine tribunals of jurisdiction and to require the application of foreign law.
Saudia invokes forum non conveniens to supposedly effectuate the stipulations of the
Cabin Attendant contracts that require the application of the laws of Saudi Arabia.

As argued by respondents, Saudia’s policy entails the termination of employment of

flight attendants who become pregnant. At the risk of stating the obvious, pregnancy is
an occurrence that pertains specifically to women. Saudia’s policy excludes from and
restricts employment on the basis of no other consideration but sex.

The court do not lose sight of the reality that pregnancy does present physical
limitations that may render difficult the performance of functions associated with being a
flight attendant. Nevertheless, it would be the height of iniquity to view pregnancy as a
disability so permanent and immutable that it must entail the termination of one’s
employment. It is clear that any individual, regardless of gender, may be subject to
exigencies that limit the performance of functions. However, they fail to appreciate how
pregnancy could be such an impairing occurrence that it leaves no other recourse but
the complete termination of the means through which a woman earns a living. Oddly
enough, the petitioner Saudia themselves stated that the Saudi law does not allow the
termination of employment of women who take maternity leaves;

Consistent with lex loci intentionis, to the extent that it is proper and practicable (i.e., “to
make an intelligent decision”), Philippine tribunals may apply the foreign law selected by
the parties. In fact, (albeit without meaning to make a pronouncement on the accuracy
and reliability of respondents’ citation) in this case, respondents themselves have made
averments as to the laws of Saudi Arabia.

FALLO

WHEREFORE, with the MODIFICATIONS that first, petitioner Brenda J. Betia is not
solidarily liable with petitioner Saudi Arabian Airlines, and second, that petitioner Saudi
Arabian Airlines is liable for moral and exemplary damages. The June 16, 2011
Decision and the September 13, 2011 Resolution of the Court of Appeals in CA-G.R.
SP. No. 113006 are hereby AFFIRMED in all other respects. Accordingly, petitioner
Saudi Arabian Airlines is ordered to pay respondents:

(1) Full backwages and all other benefits computed from the respective dates in which
each of the respondents were illegally terminated until the finality of this Decision;
(2) Separation pay computed from the respective dates in which each of the
respondents commenced employment until the finality of this Decision at the rate of one
( 1) month's salary for every year of service, with a fraction of a year of at least six ( 6)
months being counted as one ( 1) whole year;
(3) Moral damages in the amount of Pl00,000.00 per respondent;
(4) Exemplary damages in the amount of P200,000.00 per respondent; and
(5) Attorney's fees equivalent to 10% of the total award. Interest of 6% per annum shall
likewise be imposed on the total judgment award from the finality of this Decision until
full satisfaction thereof.

This case is REMANDED. to the Labor Arbiter to make a detailed computation of the
amounts due to respondents which petitioner Saudi Arabian Airlines should pay without
delay.

Continental Micronesia v. Basso

GR No. 178382-83
Labor Relations: Jurisdiction

Facts:

Petitioner Continental Micronesia is a foreign corporation organized and existing under

the laws of and domiciled in the United States of America. It is licensed to do business
in the Philippines. Respondent, a US citizen residing in the Philippines, accepted an
offer to be a General Manager position by Mr. Braden, Managing Director-Asia of
Continental Airlines. On November 7, 1992, CMI took over the Philippine operations of
Continental, with respondent retaining his position as General Manager. Thereafter,
respondent received a letter from Mr. Schulz, who was then CMI’s Vice President of
Marketing and Sales, informing him that he has agreed to work in CMI as a consultant
on an “as needed basis.” Respondent wrote a counter-proposal that was rejected by
CMI.

Respondent then filed a complaint for illegal dismissal against the petitioner corporation.
Alleging the presence of foreign elements, CMI filed a Motion to Dismiss on the ground
of lack of jurisdiction over the person of CMI and the subject matter of the controversy.

The Labor Arbiter agreed with CMI that the employment contract was executed in the
US “since the letter-offer was under the Texas letterhead and the acceptance of
Complainant was returned there.” Thus, applying the doctrine of lex loci celebrationis,
US laws apply. Also, applying lex loci contractus, the Labor Arbiter ruled that the parties
did not intend to apply Philippine laws.

The NLRC ruled that the Labor Arbiter acquired jurisdiction over the case when CMI
voluntarily submitted to his office’s jurisdiction by presenting evidence, advancing
arguments in support of the legality of its acts, and praying for reliefs on the merits of
the case.

The Court of Appeals ruled that the Labor Arbiter and the NLRC had jurisdiction over
the subject matter of the case and over the parties.
Issue:

Whether labor tribunals have jurisdiction over the case.

Held:

Yes. The Court ruled that the labor tribunals had jurisdiction over the parties and the
subject matter of the case. The employment contract of Basso was replete with
references to US laws, and that it originated from and was returned to the US, do not
automatically preclude our labor tribunals from exercising jurisdiction to hear and try this
case.

On the other hand, jurisdiction over the person of CMI was acquired through the
coercive process of service of summons. CMI never denied that it was served with
summons. CMI has, in fact, voluntarily appeared and participated in the proceedings
before the courts. Though a foreign corporation, CMI is licensed to do business in the
Philippines and has a local business address here. The purpose of the law in requiring
that foreign corporations doing business in the country be licensed to do so, is to
subject the foreign corporations to the jurisdiction of our courts.

Where the facts establish the existence of foreign elements, the case presents a
conflicts-of-laws issue. Under the doctrine of forum non conveniens, a Philippine court
in a conflict-of-laws case may assume jurisdiction if it chooses to do so, provided, that
the following requisites are met: (1) that the Philippine Court is one to which the parties
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. All these requisites are present here.

Philippine National Construction Corporation v. Asiavest Merchant Bankers (M)

Berhad
August 19, 2015

FACTS

Philippine National Construction Corporation (PNCC) and Asiavest Holdings (M) Sdn.
Bhd. (Asiavest Holdings) caused the incorporation of an associate company known as
Asiavest-CDCP Sdn. Bhd. (Asiavest-CDCP), through which they entered into contracts
to construct rural roads and bridges for the State of Pahang, Malaysia. In connection
with this construction contract, PNCC obtained various guarantees and bonds from
Asiavest Merchant Bankers (M) Berhad to guarantee the due performance of its
obligations. The four contracts of guaranty stipulate that Asiavest Merchant Bankers (M)
Berhad shall guarantee to the State of Pahang "the due performance by PNCC of its
construction contracts and the repayment of the temporary advances given to PNCC."
These contracts were understood to be governed by the laws of Malaysia.
There was failure to perform the obligations under the construction contract, prompting
the State of Pahang to demand payment against Asiavest Merchant Bankers (M)
Berhad's performance bonds. Asiavest Merchant Bankers (M) Berhad filed a
Complaint16 for recovery of sum of money against PNCC before the Regional Trial
Court of Pasig. It based its action on Malaysian laws. Specifically, it invoked Section
9818 of the Malaysian Contracts Act of 1950 and Section 1119 of the Malaysian Civil
Law Act of 1956. The trial court declared PNCC in default for failure to file any
responsive pleading and allowed Asiavest Merchant Bankers (M) Berhad to present its
evidence ex parte and rendered judgment in favor of Asiavest Merchant Bankers (M)
Berhad. The trial court found that Asiavest Merchant Bankers (M) Berhad complied with
the requisites for proof of written foreign laws.24 The Malaysian laws invoked were
found to be similar with Articles 2066 and 2067 of the Civil Code.

The trial court denied PNCC's Motion to Lift Order of and also denied PNCC's Motion
for Reconsideration Ad Cautelam. PNCC brought its case before the Court of Appeals.
The Court of Appeals dismissed PNCC's appeal for raising pure questions of law
exclusively cognizable by this court. It likewise denied reconsideration. Hence, PNCC
filed this Petition.

ISSUE
Whether or not our courts have subject matter jurisdiction over an action for recovery of
sum of money filed by a Malaysian corporation against a Philippine corporation
involving a contract executed and performed in Malaysia, and the applicability of the
forum non conveniens principle.

RATIO

Yes. Jurisdiction over the subject matter is conferred by law. Batas Pambansa Blg. 129,
otherwise known as The Judiciary Reorganization Act of 1980, is one such law that
provides for the jurisdiction of our courts. A plain reading of Section 19 shows that civil
actions for payment of sum of money are within the exclusive original jurisdiction of trial
courts:

SEC. 19. Jurisdiction in civil cases. -Regional Trial Courts shall exercise exclusive
original jurisdiction:

(8) In all other cases in which the demand, exclusive of interest, damages of whatever
kind, attorney's fees, litigation expenses, and costs or the value of the property in
controversy exceeds One hundred thousand pesos (P100,000) or, in such other cases
in Metro Manila, where the demand, exclusive of the above mentioned items exceeds
Two hundred thousand pesos (P200,000).

These jurisdictional amounts were adjusted to P300,000.00, and P400,000.00 in the

case of Metro Manila. Thus, the Regional Trial Court of Pasig has jurisdiction over
respondent's complaint for recovery of the sum of Malaysian Ringgit (MYR)
3,915,053.54.
"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.97 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.

In the case of Puyat v. Zabarte, the court 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;
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.

NO CASE DIGEST FOR Zamora v. Quinan Jr. November 29, 2017