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Canada: Case Study: Nevsun Resources Ltd. v. Araya, 2020 SCC 5

21 March 2020

by John A. Campion

Gardiner Roberts LLP

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Introduction

Slavery, forced labour, cruel and degrading treatment and crimes against humanity have long
been recognized as prohibited conduct under the norms of customary international law. The
question that confronted the Supreme Court of Canada is whether alleged breaches of
customary international norms of prohibitions against slavery, forced labour, cruel and
degrading treatment and crimes against humanity can form the basis of tort claims in
damages in a Canadian civil court.

The Nevsun Case

In Nevsun Resources Ltd. v. Araya, the Supreme Court of Canada decided (five to four) that it
was not "plain and obvious" that claims in damages arising from allegations of breach of
customary international norms "have no reasonable likelihood of success". In short, the tort
claims based on a breach of customary international norms of slavery, forced labour, cruel
and degrading treatment, and crimes against humanity must proceed to discovery and trial.

This is a radical change in law. Let me explain. The decision of the Supreme Court of Canada
was a preliminary, technical pleadings motion seeking to strike out the plaintiffs' claims for
damages based on causes of action in tort for breaches of customary international norms
against a Canadian corporation, Nevsun Resources Ltd. ("Nevsun").

The Facts

The Bisha Mine in Eritrea, produces gold, copper and zinc. It represents one of the largest
sources of revenue for the Eritrean economy. It is owned by the Bisha Mining Share Company

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("Bisha"). Bisha is 40% owned by the Eritrean National Mining Corporation and, through
subsidiaries, 60% owned by Nevsun.

Three workers being Eritrean employees working in the mine claim that their country's
military "conscripted them" into a forced labour regime, compelling them to work in the
mine. The workers claim that their treatment was in breach of customary international law
containing prohibitions against forced labour, slavery, cruel and degrading treatment and
crimes against humanity (the "four customary international norms").

Nevsun is a publicly held corporation incorporated under the laws of British Columbia. The
workers commenced their claim in the British Columbia Supreme Court against Nevsun.

The Procedural Context: Preliminary Motion

Nevsun brought a preliminary motion to strike out and dismiss the claims based on a breach
of the four customary international norms because the claims did not show recognized
causes of action in Canadian common law. The motions court, the British Columbia Court of
Appeal and the Supreme Court of Canada all dismissed the preliminary motion to strike the
pleading. As a result, the action will proceed to discovery and trial in the ordinary course
based upon allegations of breach of the four customary international norms.

The Act of State Doctrine

Nevsun based its motion on the "act of state doctrine" which, while recognized elsewhere in
the common law, is not recognized in Canada. The act of state doctrine would preclude
domestic courts in Canada from assessing the sovereign acts of a foreign government.
Canada does have a legal doctrine that could permit the application of the four customary
international norms in a civil lawsuit in Canada, namely the "doctrine of adoption".

The Doctrine of Adoption

The doctrine of adoption specifically sets out two requirements whereby a norm of
customary international law can be recognized by Canadian courts in a civil damage claim (as
opposed to a criminal prosecution, for which the analysis is different). The two requirements
are: (1) show that the claim is a "general" practice in customary international law (it is not
necessary to show it to be a universal practice); and (2) it can be shown that the norm is
"opinio juris", meaning the belief that such a general practice amounts to a legal right or
obligation. It is important to note that within the norms of customary international law there
is a subset called "jus cogens". A norm which fits into this subset is a peremptory norm from
which no derogation is permitted. The majority in the Supreme Court of Canada found that
the claims of slavery, forced labour and cruel and degrading treatment had attained the
status of jus cogens.

The doctrine of adoption considered by the majority in the Supreme Court of Canada was
found to be applicable, permitting the court to convert customary international norms into
domestic law without the requirement for legislative action in the federal parliament or

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provincial legislatures. The majority held that a Canadian corporation facing allegations of
breach of jus cogens and customary international norms requires a stronger legal response
than is currently recognized in the civil liability torts of assault and battery.

The Decisions of the Dissenting Minority

The four judges who disagreed in the result did so in two separate dissenting judgments. The
judges variously found that the doctrine of adoption does not permit a Canadian court to
convert a general prohibition lying against sovereign states or found in the realm of criminal
prohibitions into a civil liability regime permitting individuals to claim damages for a breach of
the four customary international norms. The norms can only be given effect through the
criminal law, and the criminal law does not provide private law causes of action. The
dissenting judges noted that the existing torts of assault, battery and intentional infliction of
emotional distress are sufficient to provide relief for the plaintiffs.

The dissenting judges found that any conversion of the four customary international norms
into civil causes of action in Canada required legislation by the Parliament of Canada or the
provincial legislatures. The dissenting judges said that nominate torts cannot be created by
Canadian courts where: (1) there are alternative remedies; (2) it is not a wrong committed by
one person against another person; and (3) the change brought in the legal system would be
indeterminate and substantial. The four customary international norms did not meet the
three-part test.

Finally, the minority variously noted that new domestic tort claims cannot be based upon a
foreign state's conduct under international law. The minority found that claims as pleaded
require proof that Eritrea's acts in that sovereign country were unlawful as a matter of public
international law. On that basis alone, new tort claims based on the four customary
international norms require proof that Eritrea's conduct breached those norms and therefore
cannot be

The minority would have found that the claims must fail and therefore could not form the
basis of a cause of action in the British Columbia courts. The minority would have struck out
the claims based on the four customary international norms because it was plain and obvious
they would have no reasonable chance of success.

Conclusion

Unless this matter is settled, the trial of the action will be lengthy and fraught with complex
expert testimony, and equally lengthy cross examinations of the complainants, state officials
and corporate representatives. The mere fact that the Supreme Court of Canada has
discussed the application of the four customary international norms and approved their
possible application in a civil case in Canada is ground breaking.

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RABI ABDULLAHI V. PFIZER, INC.

UNITED STATES
Title:
Rabi Abdullahi v Pfizer, Inc.
Court:
United States Court of Appeals for the Second Circuit
Citation:
Docket Nos: 05-4863-cv (L), 05-6768-cv (CON)
Date:
30 January 2009
Instrument(s) Cited:
Alien Tort Statute, 28 U.S.C. § 1350
Connecticut Unfair Trade Practices Act
Connecticut Products Liability Act
International Court of Justice Statute, article 38
Nuremberg Code, First Principle
World Medical Association's Declaration of Helsinki
Council for International Organisations of Medical Services
International Covenant on Civil and Political Rights, article 7
Case Summary:
Background:
A group of Nigerian children and their guardians alleged that Pfizer experimented on 200 children suffering
from meningitis without their consent or knowledge. At the time of the 1996 meningitis epidemic in
northern Nigeria, Pfizer was attempting to obtain Food and Drug Administration (FDA) approval for a new
antibiotic Trovafloxacin Mesylate (Trovan). The complainants further alleged that Pfizer purposefully
under-dosed the children treated with the well-established and FDA-approved drug Ceftriaxone in order to
skew the trial results in favour of Trovan. 11 children died as a result of the trial and many others were left
blind, paralysed or brain-damaged.
The complainants filed a claim under the Alien Tort Statute (ATS) grounded in the prohibitions of the
Nuremberg Code, the World Medical Association's Declaration of Helsinki, the guidelines of the Council
for International Organisations of Medical Services and the International Covenant on Civil and Political
Rights which categorically forbid medical experimentation without consent.
Issue and resolution:
Prohibition on medical experimentation on non-consenting human subjects. Although the US has not ratified
or adopted the above international instruments, the ATS provides that District Courts have jurisdiction in
civil actions committed in contravention of the law of nations, or customary international law. The Second
Circuit Court of Appeal held that the restriction on medical experimentation without consent is a norm of
international law and is capable of being enforced under the ATS. The case was subsequently referred back
to the District Court for further proceedings.
Court reasoning:
The Court held that the three-part test to determine whether the restriction was an obligation under
customary international law was satisfied. The test required the restriction to be (1) universal in nature; (2)

4
specific and definable; and (3) of mutual concern. The Court gave the following reason for each strand of
the test:   
(1) The legal principles of the Nuremberg Code and the ICCPR are examples of the normality and
universality of this restriction;
(2) The allegations stated that Pfizer carried out these experiments knowingly and purposefully which went
beyond a simple isolated case of failing to obtain consent, and would therefore be clearly covered by the
restriction on experimentation on non-consenting human beings; and
(3) The case was of mutual concern to both the US and Nigeria as such conduct could foster distrust, reduce
co-operation between nations and generate substantial anti-American feeling in the region.
Dissenting Opinion:
Circuit Judge Wesley dissented for the following reasons: (1) customary international law only applies to
state actors and not to private actors such as Pfizer; (2) the restriction should not be regarded as a customary
norm simply because other States have prohibited this behaviour; (3) the international instruments listed
above were put forward by private organisations who were not in a position to create laws; and (4) some of
the instruments came into effect after the incident happened without reference to any retrospective effect.
Impact:
In July 2009, Pfizer petitioned the US Supreme Court to appeal this ruling. In November, the Supreme Court
asked the US Solicitor General to file a brief, which he did in May 2010, denying Pfizer's petition. On 23
February 2011, the parties announced that they had reached a confidential settlement in the lawsuit.
Following various proceedings in Nigeria, Pfizer and the Kano state government came to an out-of-court
settlement worth $75 million in August 2009. A new lawsuit was filed by the victims in November 2013 in
the Federal High Court in Kano who complained that, by restricting the criteria for compensation, Pfizer had
breached the terms of the 2009 agreement. In November 2014, Pfizer paid out full and final compensation to
the 14 victims who passed the DNA tests in accordance with the terms of the 2009 settlement.

Conflict of Laws Case Digest: HASEGAWA vs KITAMURA 538 SCRA 26 (2007)

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

vs 
MINORU KITAMURA

G.R. No. 149177

November 23, 2007
 

FACTS:

Nippon Engineering Consultants (Nippon), a Japanese consultancy firm

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

Hasegawa, Nippon’s general manager for its International Division, informed

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

Kitamaru demanded that he be assigned to the BBRI project. Nippon insisted

that Kitamaru’s contract was for a fixed term that had expired. Kitamaru
then filed for specific performance & damages w/ the RTC of Lipa City.
Nippon filed a MTD.

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

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

ISSUE:

Whether or not the subject matter jurisdiction of Philippine courts in civil

cases for specific performance & damages involving contracts executed
outside the country by foreign nationals may be assailed on the principles of
lex loci celebrationis, lex contractus, “the state of the most significant
relationship rule,” or forum non conveniens.

HELD:

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

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

In this case, only the 1 st phase is at issue—jurisdiction. Jurisdiction,

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

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

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

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

Lex loci celebrationis relates to the “law of the place of the ceremony” or the
law of the place where a contract is made. The doctrine of lex contractus 
or lex loci contractus  means the “law of the place where a contract is
executed or to be performed.” It controls the nature, construction, and
7
validity of the contract and it may pertain to the law voluntarily agreed upon
by the parties or the law intended by them either expressly or
implicitly. Under the “state of the most significant relationship rule,” to
ascertain what state law to apply to a dispute, the court should determine
which state has the most substantial connection to the occurrence and the
parties. In a case involving a contract, the court should consider where the
contract was made, was negotiated, was to be performed, and the domicile,
place of business, or place of incorporation of the parties. This rule takes
into account several contacts and evaluates them according to their relative
importance with respect to the particular issue to be resolved.

Since these 3 principles in conflict of laws make reference to the law

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

Further, Nippon’s premature invocation of choice-of-law rules is exposed by

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

It should be noted that when a conflicts case, one involving a foreign

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

Neither can the other ground raised, forum  non conveniens, be used to

deprive the RTC of its jurisdiction. 1st, it is not a proper basis for a motion to
dismiss because Sec. 1, Rule 16 of the Rules of Court does not include it as a
ground. 2nd, whether a suit should be entertained or dismissed on the basis
of the said doctrine depends largely upon the facts of the particular case and
8
is addressed to the sound discretion of the RTC. In this case, the RTC decided
to assume jurisdiction. 3rd, the propriety of dismissing a case based on this
principle requires a factual determination; hence, this conflicts principle is
more properly considered a matter of defense.

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

FACTS:

Nippon, a Japanese consultancy firm entered into a one-year ICA contract with Kitamura, a
Japanese national permanently residing in the Philippines. On February 2000, Kitamura was
informed that Nippon is no longer renewing his ICA and his services would only be utilized until
March 31, 2000. Aggrieved, Kitamura now filed an action for specific performance and damages
with the RTC of Lipa City. Nippon filed a motion to dismiss. The trial and appellate court ruled in
favor of Kitamura, hence this petition.

ISSUE:

Whether or not the RTC of Lipa City has jurisdiction for contracts executed by and between two
foreign nationals in foreign country wholly written in a foreign language?

RULING:

Yes. In the judicial resolution of conflict problems, 3 consecutive phases are involved: jurisdiction,
choice of law, and recognition and enforcement of judgments. Jurisdiction and choice of law are
two different concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this
state; choice of law asks the further question whether the application of a substantive law which
will determine the merits of the case is fair to both parties. The power to exercise jurisdiction does
not automatically give a state a constitutional authority to apply forum law.

The only issue is the jurisdiction, hence, choice of law rules as raised by the petitioner is
inapplicable and not yet called for. The petitioner prematurely invoked the said rules before
pointing out any conflict between the laws of Japan and the Philippines.

SMALL v. UNITED STATES
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD
CIRCUIT

No. 03—750.Argued November 3, 2004–Decided April 26, 2005

9
Petitioner Small was convicted in a Japanese Court of trying to smuggle firearms and
ammunition into that country. He served five years in prison and then returned to the
United States, where he bought a gun. Federal authorities subsequently charged
Small under 18 U.S.C. § 922(g)(1), which forbids “any person … convicted in any
court … of a crime punishable by imprisonment for a term exceeding one year … to …
possess … any firearm.” (Emphasis added.) Small pleaded guilty while reserving the
right to challenge his conviction on the ground that his earlier conviction, being
foreign, fell outside §922(g)(1)’s scope. The Federal District Court and the Third
Circuit rejected this argument.
Held: Section 922(g)(1)’s phrase “convicted in any court” encompasses only
domestic, not foreign, convictions. Pp. 2—9.
(a) In considering the scope of the phrase “convicted in any court” it is appropriate to
assume that Congress had domestic concerns in mind. This assumption is similar to
the legal presumption that Congress ordinarily intends its statutes to have domestic,
not extraterritorial, application, see, e.g., Foley Bros., Inc. v. Filardo, 336 U.S. 281,
285. The phrase “convicted in any court” describes one necessary portion of the “gun
possession” activity that is prohibited as a matter of domestic law. Moreover, because
foreign convictions may include convictions for conduct that domestic laws would
permit, e.g., for engaging in economic conduct that our society might encourage,
convictions from a legal system that are inconsistent with American understanding of
fairness, and convictions for conduct that domestic law punishes far less severely, the
key statutory phrase “convicted in any court of, a crime punishable by imprisonment
for a term exceeding one year” somewhat less reliably identifies dangerous
individuals for the purposes of U.S. law where foreign convictions, rather than
domestic convictions, are at issue. In addition, it is difficult to read the statute as
asking judges or prosecutors to refine its definitional distinctions where foreign
convictions are at issue. To somehow weed out inappropriate foreign convictions that
meet the statutory definition is not consistent with the statute’s language; it is not
easy for those not versed in foreign laws to accomplish; and it would leave those
previously convicted in a foreign court (say of economic crimes) uncertain about their
legal obligations. These considerations provide a convincing basis for applying the
ordinary assumption about the reach of domestically oriented statutes here. Thus, the
Court assumes a congressional intent that the phrase “convicted in any court” applies
domestically, not extraterritorially, unless the statutory language, context, history, or
purpose shows the contrary. Pp. 2—5.
(b) There is no convincing indication to the contrary here. The statute’s language
suggests no intent to reach beyond domestic convictions. To the contrary, if read to
include foreign convictions, the statute’s language creates anomalies. For example, in
creating an exception allowing gun possession despite a conviction for an antitrust or
business regulatory crime, §921(a)(20)(A) speaks of “Federal or State” antitrust or
regulatory offenses. If the phrase “convicted in any court” generally refers only to
domestic convictions, this language causes no problem. But if the phrase includes
foreign convictions, the words “Federal or State” prevent the exception from applying
where a foreign antitrust or regulatory conviction is at issue. Such illustrative
examples suggest that Congress did not consider whether the generic phrase
“convicted in any court” applies to foreign convictions. Moreover, the statute’s
legislative history indicates no intent to reach beyond domestic convictions. Although
the statutory purpose of keeping guns from those likely to become a threat to
society does offer some support for reading §922(g)(1) to include foreign convictions,
10
the likelihood that Congress, at best, paid no attention to the matter is reinforced by
the empirical fact that, according to the Government, since 1968, there have fewer
than a dozen instances in which such a foreign conviction has served as a predicate
for a felon-in-possession prosecution. Pp. 5—8.
333 F.3d 425, reversed and remanded.
Breyer, J., delivered the opinion of the Court, in which Stevens, O’Connor, Souter,
and Ginsburg, JJ., joined. Thomas, J., filed a dissenting opinion, in which Scalia and
Kennedy, JJ., joined. Rehnquist, C. J., took no part in the decision of the case.

Kiobel v. Royal Dutch Petroleum

 international law

 subject matter jurisdiction

 Alien Tort Statute

 human rights

Issues 
Whether an American federal court can hear a claim under the Alien Tort statute,
when that claim arose out of conduct in a foreign country.
Oral argument: 
October 1, 2012
Court below: 
United States Court of Appeals for the Second Circuit
Petitioner Esther Kiobel, representing a group of individuals from the Ogoni region in
Nigeria, filed a class action lawsuit against Respondents, the Royal Dutch Petroleum
Co., Shell Transport and Trading Company PLC, and Shell Petroleum Development
Company of Nigeria, LTD (“Royal Dutch”) under the Alien Tort Statute (“ATS”). The
ATS grants jurisdiction to some federal courts for certain violations of international
law. Petitioners allege that Royal Dutch aided the Nigerian government in committing
various acts of violence against protestors of the oil exploration projects in the Ogoni
region. Petitioners claim that they have standing to sue under the ATS because the
history, text, and purpose of the statute support the application of the ATS to actions
in foreign countries. Petitioner also contends that previous court decisions interpreted
the ATS to extend beyond U.S. territory. In response, Royal Dutch argues that the
ATS is not an exception to the presumption that U.S. law does not apply
extraterritorially, and should not be applicable to actions outside of the U.S. The
Court's decision in this case will clarify the reach of the U.S. federal courts'
jurisdiction over certain extraterritorial tort claims.

Questions as Framed for the Court by the Parties 

11
Whether the issue of corporate civil tort liability under the Alien Tort Statute ("ATS"),
28 U.S.C. § 1350, is a merits question, as it has been treated by all courts prior to
the decision below, or an issue of subject matter jurisdiction, as the court of appeals
held for the first time.

Facts 
Esther Kiobel represents a class of citizens from the Ogoni region in Nigeria who filed
a class action suit against the respondents Royal Dutch Petroleum, Shell Transport
and Trading Company and Shell Petroleum Development Company of Nigeria (“Royal
Dutch Petroleum”) in the United States District Court for the Southern District of New
York in 2002. Respondent corporations are incorporated in the Netherlands, United
Kingdom, and Nigeria, respectively. Respondents are companies that have been
engaged in oil exploration and production in the Ogoni region of Nigeria since 1958.
In response to Royal Dutch Petroleum’s exploration efforts, a group of Ogoni citizens
formed the “Movement for the Survival of Ogoni People” which protested the
detrimental environmental effects that Royal Dutch’s oil exploration has on the
region.
Petitioners in this case (“Kiobel”) allege that Royal Dutch Petroleum partnered with
the Nigerian government in 1993 to stop the Ogoni from protesting the oil exploration
projects. Petitioners allege that Nigerian military forces committed atrocities against
the Ogoni people including raping, murdering, beating, and making unlawful arrests
to further the government’s efforts to stop the protesting, which would allow Royal
Dutch to continue oil exploration in the region. Petitioners claim that Royal Dutch
Petroleum provided the Nigerian soldiers with transportation, food, compensation and
staging areas for carrying out attacks against the Ogoni.
Kiobel brings the claim under the Alien Tort Statute (“ATS”), which allows foreign
citizens to bring suits in U.S. federal courts for certain violations of the law of nations.
Kiobel brought suit arguing that Royal Dutch Petroleum had aided and abetted the
Nigerian government, or was otherwise complicit, in the atrocities committed against
the people. In 2006, the District Court dismissed some of the claims of aiding and
abetting but allowed claims of aiding and abetting arbitrary arrest and detention;
crimes against humanity; and torture or cruel, inhuman, and degrading treatment to
stand. The District Court recognized the importance of interpreting the law properly
and thus certified the whole case for interlocutory appeal by the United States Court
of Appeals for the Second Circuit. The Second Circuit ruled that the ATS had never
served as a basis for liability on the part of corporations. The court dismissed all of
Kiobel’s claims for lack of subject matter jurisdiction. This case was the first time that
the Second Circuit directly addressed whether its jurisdiction under ATS extends to
civil actions involving corporations.
The Supreme Court heard oral arguments for the case on February 28, 2012 and on
March 5, 2012 ordered re-arguments. The re-arguments will be on the question of
under what circumstances the Alien Tort Statute allows American courts to litigate
tort claims that are based on actions that did not occur within the territory of the
United States.

Analysis 

Application of Sosa v. Alvarez-Machain to International Torts

12
Petitioner argues that the seminal case, Sosa v. Alvarez-Machain, already resolved
the question of whether the ATS allows U.S. courts to recognize a cause of action
for international law violations that occur outside the United States. Petitioner
contends that Sosa, a case in which plaintiffs sued the defendants for kidnapping
under the ATS, held that ATS jurisdiction extends to a small subset of common law
tort cases derived from international law. Petitioner points out that the Sosa court
held that the plaintiffs were not entitled to damages under the ATS, since the ATS
was a jurisdictional statute that was intended to regulate common law causes of
actions for a small number of international law violations, including crimes against
ambassadors, breaches of safe conducts, and piracy. Petitioner argues
that Sosa authorized ATS jurisdiction to include human rights violations by foreign
nationals in its discussion of remedies. Petitioner further argues that international law
prohibits any government from committing human rights violations against their
citizens, especially within their own sovereignty. Moreover, Petitioner states that no
court since Sosa has held that ATS jurisdiction is limited to conduct occurring within
the U.S. or on the high seas.
Respondent argues that Sosa stands for the proposition that to apply the ATS
and federal common law is to recognize U.S. law in a foreign country. Respondent
asserts that, under the ATS, courts apply federal common law to a violation of an
international law “norm,” therefore applying U.S. law to foreign nations. Thus,
respondent argues, that while these causes of action do look partially to international
law for substantive content, because it is based on a violation of an international law
custom, it is nonetheless an application of U.S. federal common law. Respondent
argues that to find otherwise would likely be a violation of international law, which
prohibits universal civil jurisdiction. Respondent further argues that even if it would
not be a clear violation of international law, it would be an arguable violation. In
support of this, Respondent cites Sosa , which lists the potential violation of
international law as a consideration a court should use when determining whether or
not to extend jurisdiction to international tort cases under the ATS. Respondent
further contends that there is no acceptable circumstance where it would be
appropriate for the U.S. to apply its own laws to a case such as this one.

Presumption Against Extraterritoriality

Petitioner argues that the presumption against extraterritoriality is not applicable to
the ATS because it is a jurisdictional statute and that the presumption against
extraterritoriality does not apply to jurisdictional statutes. Petitioner also asserts that
the ATS does not have any geographic limitations on the scope of its jurisdiction.
Moreover, Petitioner compares the ATS to U.S. adjudication of international tort
claims (also known as Transitory Tort claims), where both parties are based outside
of the United States. Petitioner states that international tort claims may
be adjudicated in the U.S. regardless of where the cause of action arose, so long as
the plaintiffs can satisfy personal jurisdiction requirements. Petitioner argues that
both the ATS and the Transitory Tort doctrine derive their power from customary
international law and not the substantive law of any particular nation. Petitioner notes
that although the ATS uses some federal common law to provide rules, this is
consistent with international law principles, which dictate that each state may enforce
international law through their own legal system. Thus, petitioner contends that
adjudication of this case would not apply U.S. law extraterritoriality.

13
Respondent contends that the ATS and federal common law should not be interpreted
to apply to conduct on foreign soil because U.S. law is presumed not to apply
extraterritorially. Respondent thus argues that, by extending ATS and federal
common law to suits involving foreign territories and parties, the Court would extend
U.S. law outside of its borders. Respondent contends that this presumption against
extraterritoriality applies to the ATS despite the fact that it is a jurisdictional statute.
In support of this claim, Respondent cites the Sosa decision, in which the Court
determined that the decision to create a private right of action is usually best left to
the legislature. Respondent continues by stating that the Court intended for the
extraterritoriality presumption to also apply to the ATS. Respondent argues that,
although several lower courts have permitted suits arising from incidents in foreign
nations, the Court should explicitly foreclose such suits because they cause
international friction. In response to Petitioner’s comparison of international tort cases
and ATS claims, Respondent replies that ATS cases and international tort claims
require entirely different procedural rules: while international tort cases are
adjudicated in a U.S. forum, the law of wherever the violation occurred supplies the
choice of law. Respondent argues that in contrast, ATS cases require application of
U.S. federal common law—meaning the law of the nation where the incident occurred
has no impact.

History, Text, and Purpose of the ATS

Petitioner contends that maintaining federal jurisdiction over these types of alien tort
cases is appropriate and has been assumed since the formation of the United States.
Petitioner argues that the ATS was enacted to adjudicate treaty violations and
therefore extends territorial jurisdiction everywhere international law reaches.
Moreover, Petitioner argues that even if the presumption against extraterritoriality
does apply, it is rebutted by the text, history, and purpose of the statute. Petitioner
states that the ATS has long been understood to include violations committed in
foreign nations by foreign actors. In support of this, Petitioner points to the fact that
Congress has long supported international human rights compliance and
accountability and that, by restricting the jurisdiction of ATS claims, U.S. foreign
policy would be compromised. Petitioner additionally argues that the founders did not
apply a territorial limitation to the scope of the ATS.
Respondent supports its ATS interpretation by claiming that, where Congress has
intended for an Act to include violations that occur on foreign soil, it has explicitly said
so. Respondent cites the Torture Victim Protection Act (“TVPA”) as an example of this.
The TVPA explicitly extends jurisdiction to acts occurring in foreign nations regardless
of the actors. Respondent further contends that application of the ATS has historically
involved incidents occurring on U.S. soil. Respondent thus concludes that only
Congress may outline territorial jurisdiction of the ATS and, if it intends for
jurisdiction to include acts committed on foreign soil by foreign nations, it must
explicitly say so. Respondent argues that to conclude otherwise would be to establish
absolute U.S. jurisdiction over all international matters.

Application of U.S. Law to International Claims

Petitioner argues that U.S. law is not applied here because the ATS and federal
common law call for the application of international law to any disputes filed under
the statute. Petitioner states that these laws are utilized worldwide and are easily
applied by the federal courts to ATS disputes. In this way, Petitioner argues that it is
14
not U.S. law that applies extraterritorially but rather international law that applies
universally. Petitioner argues that the history of the ATS demonstrates that Congress
intended it to provide federal courts with extraterritorial reach, a prospect shown by
the many foreign tort cases litigated in U.S. federal courts. Petitioner also notes that
adjudication of foreign violations does not violate the prohibition on universal civil
jurisdiction because there are restrictions on ATS jurisdiction, such as where
defendant is not sufficiently connected to the forum nation to satisfy due process
requirements. Petitioner concludes that these jurisdictional limitations are sufficient to
prevent U.S. courts from unilaterally exercising universal civil jurisdiction.
Respondent responds first by pointing to the fact that the case before the Court is
especially sensitive because it involves passing judgment on the commercial conduct
of a foreign government, not just a non-government actor. Respondent additionally
argues that the ATS was enacted as a means of preventing international conflict and
was not intended to include violations committed by alien actors in foreign nations.
Respondent states that the alleged conduct occurred entirely in Nigeria and Nigeria
objects to U.S. adjudication of the matter because they believe it will jeopardize their
ability to reconcile the country with the Ogoni people. Respondent argues that foreign
nations often object to the application of laws outside the construct of their own
sovereignty because they choose their own means of dealing with internal conflict.
Respondent points to South Africa as an example of a country that took an alternative
route—by creating the Truth and Reconciliation Commission (“TRC”)—to address the
disputes that arose in the aftermath of apartheid. Respondent argues that this as an
example of a situation where imposition of foreign jurisdiction would have been a
serious disruption of South Africa’s autonomy.

Discussion 
Petitioners argue that the text, history, and purpose of the Alien Tort Statute (“ATS”)
support their contention that the ATS was applicable in foreign nations. However,
Respondents argue that the ATS is not an exception to the presumption that U.S. law
does not apply extraterritorially, and should not be applicable to actions outside of the
U.S.

Business Implications
BP America and others (“BP America”) point out that the U.S corporations often have
contacts with foreign military and government entities when the corporations conduct
foreign business. BP America maintains that if ATS liability for aiding and abetting is
extended in this case, many corporations conducting business in developing countries
will be at risk of billion-dollar claims based solely on their incidental contacts with the
governing regimes in these countries. The Chamber of Commerce further argues that
if ATS is extended to cases involving U.S. corporations’ conduct in foreign countries,
the ATS could effectively act as embargos or international sanctions. Moreover, the
Chamber of Commerce contends that the ATS will impose additional risks to
corporations and discourage corporations from investing overseas. Furthermore, the
Chamber of Commerce argues that the decrease in investment in developing nations
will not only harm corporations but also the developing nations themselves, as well as
negatively affect U.S. foreign policy. The Chamber of Commerce also contends that
the United States has often encouraged investment in developing nations to further
political policies, and the ATS will serve as a barrier to those policies.

15
Ambassador David J. Scheffer (“Scheffer”) contends that if the ATS has
extraterritorial reach, it will enforce the global trend that is moving towards applying
more civil liability for corporations that violate international human rights, and as a
permanent member of the United Nations Security Council, the. U.S. should support
the trend and hold corporations accountable for their human rights violations.
Scheffer also argues that if the ATS has foreign reach, it will signal to other countries
America’s commitment to justice, and promote international justice. The members of
the Parliament of the Federal Republic of Germany (“German Parliament”) also
maintain that the ATS would support notions of international justice, and provide a
remedy to victims of human rights violations. The German Parliament contends that
the ATS does not act as a barrier to international corporations, since the number of
human rights claims that are brought against multinational corporations are very
small due to the high cost of bringing a class action lawsuit. Petitioners further state
that the settlements in these types of human rights cases are so minor for large
corporations that they will not greatly hamper income so drastically as to prevent a
corporation from considering foreign investment.

Sovereign Power vs. Protection of Human Rights

The Cato Institute states that a sovereign should limit its punishment of crimes to
those crimes that occur within the sovereign’s jurisdiction, independent of the nature
of the crime. The Cato Institute argues that allowing the Petitioners to continue to
litigate the case would greatly expand the boundaries of the reach of American courts
in cases dealing with international law. The Cato Institute maintains that this will
create an overreach of U.S. power, which will undermine U.S. foreign policy by
allowing U.S. courts to decide disputes in foreign countries. The Federal Republic of
Germany believes that if the Court finds for Petitioners, the sovereign judicial powers
of foreign nations will be reduced even though they have stronger interests in cases
that concern their own corporations.
Navi Pillay, the United Nations High Commissioner for Human Rights (“Pillay”),
believes that victims of human rights violations are entitled to compensation for the
atrocities committed against them and this compensation is necessary because often
human rights violations create an inability to support a family or make a livelihood.
Pillay also states that often there are no avenues in the domestic judicial systems to
recover for human rights violations and if Petitioners are unsuccessful in this instance,
a potential avenue for recovery will be lost to victims of human rights violations.
Petitioners also state that the need for a forum to hear the human rights violations far
outweighs any infraction on the sovereignty of a nation.

Conclusion 
The re-arguments in this case will focus on the interpretation of the Alien Tort Statute
as it relates to the ability for an American court to have jurisdiction on civil cases that
would otherwise be outside their reach. The Court’s decision will greatly affect
corporate investment in emerging markets and international human rights law.
Petitioners will argue that they must be allowed to bring their claim in a United States
court in order to allow for justice for human rights cases, while Respondents will urge
to the Court that there is no jurisdiction on the part of the United States and the case
would be better served in a jurisdiction that has greater ties to the underlying action.

16
NORMA DEL SOCORRO V. WILSEM CASE DIGEST - CIVIL LAW
DEL SOCORRO VS. WILSEM                                                 G.R. No. 193707 December 10, 2014

FACTS:

Norma A. Del Socorro and Ernst Van Wilsem contracted marriage in Holland. They were blessed with a son
named Roderigo Norjo Van Wilsem. Unfortunately, their marriage bond ended by virtue of a Divorce
Decree issued by the appropriate Court of Holland. Thereafter, Norma and her son came home to the
Philippines. According to Norma, Ernst made a promise to provide monthly support to their son. However,
since the arrival of petitioner and her son in the Philippines, Ernst never gave support to
Roderigo. Respondent remarried again a Filipina and resides again the Philippines particulary in Cebu
where the petitioner also resides. Norma filed a complaint against Ernst for violation of R.A. No. 9262 for
the latter’s unjust refusal to support his minor child with petitioner. The trial court dismissed the complaint
since the facts charged in the information do not constitute an offense with respect to the accused, he
being an alien

ISSUES:

1. Does a foreign national have an obligation to support his minor child under the Philippine law?
2. Whether or not a foreign national can be held criminally liable under R.A. No. 9262 for his unjustified
failure to support his minor child.

RULING:

1. YES. While it is true that Respondent Ernst is a citizen of Holland or the Netherlands, we agree with the
RTC that he is subject to the laws of his country, not to Philippine law, as to whether he is obliged to give
support to his child, as well as the consequences of his failure to do so. This does not, however, mean that
Ernst is not obliged to support Norma’s son altogether. 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. In the present case,
Ernst hastily concludes that being a national of the Netherlands, he is governed by such laws on the matter
of provision of and capacity to support. While Ernst pleaded the laws of the Netherlands in advancing his
position that he is not obliged to support his son, he never proved the same. It is incumbent upon Ernst to
plead and prove that the national law of the Netherlands does not impose upon the parents the obligation
to support their child. Foreign laws do not prove themselves in our jurisdiction and our courts are not
authorized to take judicial notice of them. Like any other fact, they must be alleged and proved. 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. Applying the
foregoing, even if the laws of the Netherlands neither enforce a parent’s obligation to support his child
nor penalize the non-compliance therewith, such obligation is still duly enforceable in the Philippines

17
because it would be of great injustice to the child to be denied of financial support when the latter is
entitled thereto.

2. YES. The court has jurisdiction over the offense (R.A 9262) because the foreigner is living here in the
Philippines and committed the offense here.

Jesner v. Arab Bank, PLC - 138 S. Ct. 1386 (2018)

RULE:

Courts are wary to extend or create private causes of action even in the realm of domestic law, where a
decision to create a private right of action is one better left to legislative judgment in the great majority
of cases. That is because the Legislature is in the better position to consider if the public interest would
be served by imposing a new substantive legal liability. Thus, if there are sound reasons to think
Congress might doubt the efficacy or necessity of a damages remedy, courts must refrain from creating
the remedy in order to respect the role of Congress. This caution extends to the question whether the
courts should exercise the judicial authority to mandate a rule that imposes liability upon artificial
entities like corporations.

FACTS:

Petitioners filed suits under the Alien Tort Statute (ATS), alleging that they, or the persons on whose
behalf they assert claims, were injured or killed by terrorist acts committed abroad, and that those acts
were in part caused or facilitated by respondent Arab Bank, PLC, a Jordanian financial institution with a
branch in New York. They sought to impose liability on the bank for the conduct of its human agents,
including high-ranking bank officials. They claimed that the bank used its New York branch to clear
dollar-denominated transactions that benefited terrorists through the Clearing House Interbank
Payments System (CHIPS) and to launder money for a Texas-based charity allegedly affiliated with
Hamas. While the litigation was pending, the U.S. Supreme Court held, in Kiobel v. Royal Dutch
Petroleum Co., 569 U. S. 108,  that the ATS does not extend to suits against foreign corporations when “all
the relevant conduct took place outside the United States,” but it left unresolved the Second Circuit's
broader holding in its Kiobel decision: that foreign corporations may not be sued under the ATS.
Deeming that broader holding binding precedent, the District Court dismissed petitioners' ATS claims.
On appeal, the Second Circuit affirmed.

ISSUE:

Can foreign corporations be sued under the Alien Tort Statute?

ANSWER:

No
18
CONCLUSION:

The Court held that foreign corporations may not be defendants in suits brought under the Alien Tort
Statute (ATS), thus, affirming the lower courts’ judgment. According to the Court, the courts are not well
suited to make the required policy judgments implicated by foreign corporate liability. Like the
presumption against extraterritoriality, judicial caution under Sosa guards against the courts triggering
serious foreign policy consequences, and instead defers such decisions, quite appropriately, to the
political branches. The Court ruled that because foreign-policy concerns were involved, absent further
action from Congress, it was inappropriate for courts to extend ATS liability to foreign corporations.

GR 198587, January 14, 2015

FACTS:

          Respondents, who were regular flight attendants were illegally terminated by petitioner
Saudi Arabian Airlines due to their pregnancy which was alleged as a ground for termination under
their employment contract. Faced with the dilemma of resigning or totally losing their benefits,
respondents executed handwritten resignation letters. A year later, respondents filed a complaint
against Saudia for illegal dismissal; the case was assigned to Labor Arbiter Suelo. Saudia assailed
the jurisdiction of the Labor Arbiter claiming that the complaint be dismissed on the ground of
forum non conveniens and that the respondents had no cause of action as they resigned
voluntarily. Hence, this appeal.

ISSUE:

          Whether the case should be dismissed on the ground of forum non conveniens.
RULING:

No. On the matter of pleading forum non conveniens, we state the rule, thus: forum non
conveniens may 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. Furthermore, 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.
In addition, there is no basis for concluding that the case can be more conveniently tried
elsewhere because Saudia is doing business in the Philippines and all four respondents are
Filipino citizens, thus Saudia may be tried under the jurisdiction of Philippine tribunals.

19
United States court dismisses Bangladesh Bank case vs RCBC, Bloomberry for roles in 2016

heist
March 24, 2020 | 12:01 am

THE COMPLAINT filed against Rizal Commercial Banking Corp. (RCBC) and a local
casino by Bangladesh Bank in relation to the 2016 heist has been junked by a US
court as it cited the failure of the petitioner to state a federal racketeering claim and
as the court refused to exercise jurisdiction over all other state law claims by the
petitioner.

In a filing with the local bourse on Monday, the Yuchengco-led lender said the Federal
Court of New York granted its motion to dismiss the case in an opinion and order
dated March 20.

ADVERTISEMENT
“The case filed by Bangladesh Bank was dismissed for failure to state a federal
racketeering claim. The Court also declined to exercise jurisdiction over all other state
law claims of Bangladesh Bank,” RCBC said in a filing.

RCBC’s motion was based on the grounds that the case belonged to a Philippine court
and the lack of subject matter jurisdiction of the federal court on the issue.

In a separate filing, Bloomberry Resorts Corp., the parent unit of another defendant,
Bloomberry Resorts & Hotels, Inc., which operates Solaire Resort & Casino where the
stolen money was laundered through, explained that the US court found the
petitioner to have failed to state a Racketeer Influenced and Corrupt Organizations
(RICO) claim or RICO conspiracy claim.

The said civil case was filed by Bangladesh Bank to collect the $81 million it allegedly
lost to North Korean hackers who sent multiple remittance orders out of the central
bank’s account with the Federal Reserve Bank of New York.

Some of these orders were said to be allowed to be transacted through four

correspondent banks in New York and were then remitted to alleged fictitious
accounts with RCBC where they were transacted, converted and lost.

“[A] part of which went through Philippine casinos where they were used to purchase
gaming chips and were played in the casino and junket rooms,” Bloomberry Resorts
said in its filing with the local bourse.

20
 ADVERTISEMENT
In January 2019, a Makati City court convicted Maia Santos-Deguito, a former RCBC
branch manager, for eight counts of money laundering for the $81 million stolen from
Bangladesh Bank’s account with the Federal Reserve Bank of New York in 2016.

Ms. Deguito had to pay $109.5 million in fines and was sentenced to imprisonment for
four to seven years for each count.

BONDS
Meanwhile, in a separate development, RCBC said it is eyeing to raise at least P3
billion from its latest offering of fixed-rate peso bonds to be used to boost asset
growth, refinance its maturing liabilities and for other funding purposes.

The lender said they pushed through with the bond issuance despite the Luzon
enhanced community quarantine due to the coronavirus disease 2019 pandemic as it
wants to boost confidence in the capital markets’ capacity to provide support for
business activity.

In a separate filing with the local bourse on Monday, the bank said this upcoming
bond issue is the fourth tranche of its P100-billion bond and commercial paper
program where P69.5 billion remains unissued.

ADVERTISEMENT
The bonds have a tenor of two years and carry a rate of 4.848% per annum. They will
be offered until March 27, unless the offer period is adjusted, depending on RCBC’s
assessment.

“The funds raised from the bond offer will be utilized to support asset growth,
refinance maturing liabilities, and other general funding purposes,” the bank said.

The Hongkong and Shanghai Banking Corp. (HSBC) is the sole lead arranger and
bookrunner for the transaction, while RCBC Capital is the financial advisor for the
bond issuance. Together, RCBC and HSBC will be the selling agents for the papers.

The lender said they eye to list the bonds on the Philippine Dealing and Exchange
Corp. on April 7, subject to market and other conditions.

Before this tranche, RCBC also tapped the local market in 2019 for the first three
issuances out of its P100-billion bond program through the P15-billion ASEAN Green
bonds issued in February 2019, P8 billion in ASEAN sustainability bonds in June 2019,
and the P7.5 billion issued in November.

The bank said they acknowledge the challenges in logistics and execution in offering
the bonds due to the lockdown.

“By proceeding with the program documentation set up and with the bonds issuance,
the bank works towards conveying to the public that capital markets remain open to
support business activity,” it said.
21
Last week, Bank of the Philippine Islands said it expects a delay in the listing of the
P42 billion it raised via bonds this month due to the disruption in business operations
due to the quarantine.

Meanwhile, BDO Unibank, Inc. postponed its P5-billion offer of two-and-a-half-year

bonds in a move to allow investors to reassess their investment and liquidity amid the
month-long lockdown in Luzon.

RCBC saw its net income jumped 25% to P5.4 billion in 2019, supported by the better
performance of its core business, high margins, strong trading gains, as well as
higher fee-based income.

Revenues also climbed 35% to P35.9 billion bolstered by growth in its interest income
from loans and receivables.

Its shares closed at P16.50 apiece on Monday, down by 50 centavos or 2.94% from
previous session. 

AZNAR vs. GARCIA

G.R. No. L-16749
January 31, 1963
FACTS: EDWARD Christensen died testate. The estate was distributed by Executioner Aznar
according to the will, which provides that: Php 3,600 be given to HELEN Christensen as her
legacy, and the rest of his estate to his daughter LUCY Christensen, as pronounced by CFI Davao.
Opposition to the approval of the project of partition was filed by Helen, insofar as it deprives her
of her legitime as an acknowledged natural child, she having been declared by Us an acknowledged
natural child of the deceased Edward in an earlier case.

As to his citizenship, we find that the citizenship that he acquired in California when he resided in
Sacramento from 1904 to 1913, was never lost by his stay in the Philippines, and the deceased
appears to have considered himself as a citizen of California by the fact that when he executed his
will he declared that he was a citizen of that State; so that he appears never to have intended to
abandon his California citizenship by acquiring another. But at the time of his death, he was
domiciled in the Philippines.

ISSUE: what law on succession should apply, the Philippine law or the California law?
HELD: WHEREFORE, the decision appealed from is hereby reversed and the case returned to the
lower court with instructions that the partition be made as the Philippine law on succession
provides.
The law that governs the validity of his testamentary dispositions is defined in Article 16 of the
Civil Code of the Philippines, which is as follows:

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

However, intestate and testamentary successions, both with respect to the order of succession and
to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall
22
be regulated by the national law of the person whose succession is under consideration, whatever
may be the nature of the property and regardless of the country where said property may be found.

The application of this article in the case at bar requires the determination of the meaning of the
term “national law” is used therein.

The next question is: What is the law in California governing the disposition of personal property?
The decision of CFI Davao, sustains the contention of the executor-appellee that under the
California Probate Code, a testator may dispose of his property by will in the form and manner he
desires. But HELEN invokes the provisions of Article 946 of the Civil Code of California, which is
as follows:

If there is no law to the contrary, in the place where personal property is situated, it is deemed to
follow the person of its owner, and is governed by the law of his domicile.

It is argued on executor’s behalf that as the deceased Christensen was a citizen of the State of
California, the internal law thereof, which is that given in the Kaufman case, should govern the
determination of the validity of the testamentary provisions of Christensen’s will, such law being in
force in the State of California of which Christensen was a citizen. Appellant, on the other hand,
insists that Article 946 should be applicable, and in accordance therewith and following the
doctrine of the renvoi, the question of the validity of the testamentary provision in question should
be referred back to the law of the decedent’s domicile, which is the Philippines.

We note that Article 946 of the California Civil Code is its conflict of laws rule, while the rule
applied in In re Kaufman, its internal law. If the law on succ ession and the conflict of laws rules of
California are to be enforced jointly, each in its own intended and appropriate sphere, the principle
cited In re Kaufman should apply to citizens living in the State, but Article 946 should apply to
such of its citizens as are not domiciled in California but in other jurisdictions. The rule laid down
of resorting to the law of the domicile in the determination of matters with foreign element
involved is in accord with the general principle of American law that the domiciliary law should
govern in most matters or rights which follow the person of the owner.

Appellees argue that what Article 16 of the Civil Code of the Philippines pointed out as the national
law is the internal law of California. But as above explained the laws of California have prescribed
two sets of laws for its citizens, one for residents therein and another for those domiciled in other
jurisdictions.

It is argued on appellees’ (Aznar and LUCY) behalf that the clause “if there is no law to the
contrary in the place where the property is situated” in Sec. 946 of the California Civil Code refers
to Article 16 of the Civil Code of the Philippines and that the law to the contrary in the Philippines
is the provision in said Article 16 that the national law of the deceased should govern. This
contention can not be sustained.

As explained in the various authorities cited above, the national law mentioned in Article 16 of our
Civil Code is the law on conflict of laws in the California Civil Code, i.e., Article 946, which
authorizes the reference or return of the question to the law of the testator’s domicile. The conflict
of laws rule in California, Article 946, Civil Code, precisely refers back the case, when a decedent is
not domiciled in California, to the law of his domicile, the Philippines in the case at bar. The court
of the domicile can not and should not refer the case back to California; such action would leave
the issue incapable of determination because the case will then be like a football, tossed back and
23
forth between the two states, between the country of which the decedent was a citizen and the
country of his domicile. The Philippine court must apply its own law as directed in the conflict of
laws rule of the state of the decedent, if the question has to be decided, especially as the application
of the internal law of California provides no legitime for children while the Philippine law, Arts.
887(4) and 894, Civil Code of the Philippines, makes natural children legally acknowledged forced
heirs of the parent recognizing them.

We therefore find that as the domicile of the deceased Edward, a citizen of California, is the
Philippines, the validity of the provisions of his will depriving his acknowledged natural child, the
appellant HELEN, should be governed by the Philippine Law, the domicile, pursuant to Art. 946 of
the Civil Code of California, not by the internal law of California..

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

1 Reply

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

Testate of Amos Bellis vs. Edward A. Bellis, et al
FACTS:

Amos G. Bellis was a citizen of the State of Texas and of the United States. He had five
legitimate children with his first wife (whom he divorced), three legitimate children with his
second wife (who survived him) and, finally, three illegitimate children.

6 years prior Amos Bellis’ death, he executed two(2) wills, apportioning the remainder of his
estate and properties to his seven surviving children.  The appellants filed their oppositions to
the project of partition claiming that they have been deprived of their legitimes to which they
were entitled according to the Philippine law. Appellants argued that the deceased wanted
his Philippine estate to be governed by the Philippine law, thus the creation of two separate
wills.

ISSUE:

Whether or not the Philippine law be applied in the case in the determination of the
illegitimate children’s successional rights

RULING:

Court ruled that provision in a foreigner’s will to the effect that his properties shall be
distributed in accordance with Philippine law and not with his national law, is illegal and void,
for his national law cannot be ignored in view of those matters that Article 10 — now Article
16 — of the Civil Code states said national law should govern.

24
Where the testator was a citizen of Texas and domiciled in Texas, the intrinsic validity of his
will should be governed by his national law. Since Texas law does not require legitimes, then
his will, which deprived his illegitimate children of the legitimes, is valid.

The Supreme Court held that the illegitimate children are not entitled to the legitimes under
the texas law, which is the national law of the deceased.

Persons Case Digest: Bellis Vs Bellis

Bellis vs Bellis

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

Lessons Applicable: Divorce, Doctrine of Processual Presumption

Laws Applicable: Art. 16, 17 1039 NCC

Violet Kennedy (2nd wife) ß Amos G. Bellis --- Mary E. Mallen (1st wife)

Legitimate Children:                                      Legitimate Children:

Edward A. Bellis                                            Amos Bellis, Jr.                              

George Bellis (pre-deceased)                         Maria Cristina Bellis       

Henry A. Bellis                                              Miriam Palma Bellis

Alexander Bellis

Anna Bellis Allsman

FACTS:

 Amos G. Bellis, a citizen of the State of Texas and of the United States.
 By his first wife, Mary E. Mallen, whom he divorced, he had 5 legitimate children:
Edward A. Bellis, George Bellis (who pre-deceased him in infancy), Henry A. Bellis,
Alexander Bellis and Anna Bellis Allsman
 By his second wife, Violet Kennedy, who survived him, he had 3 legitimate children:
Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he had three
illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis
 August 5, 1952: Amos G. Bellis executed a will in the Philippines dividing his estate
as follows:
25
1.    $240,000.00 to his first wife, Mary E. Mallen

2.    P40,000.00 each to his 3 illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam
Palma Bellis

3.    remainder shall go to his seven surviving children by his first and second wives

July 8, 1958: Amos G. Bellis died a resident of Texas, U.S.A


 September 15, 1958: his will was admitted to probate in the CFI of Manila on
 People's Bank and Trust Company as executor of the will did as the will directed
 Maria Cristina Bellis and Miriam Palma Bellis filed their respective oppositions on the
ground that they were deprived of their legitimes as illegitimate children
 Probate Court: Relying upon Art. 16 of the Civil Code, it applied the national law of
the decedent, which in this case is Texas law, which did not provide for legitimes.
ISSUE: W/N Texas laws or national law of Amos should govern the intrinsic validity of the will

HELD: YES. Order of the probate court is hereby affirmed

 Doctrine of Processual Presumption:

 The foreign law, whenever applicable, should be proved by the proponent
thereof, otherwise, such law shall be presumed to be exactly the same as the
law of the forum.
 In the absence of proof as to the conflict of law rule of Texas, it should not be
presumed different from ours.  Apply Philippine laws.
 Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law
of the decedent, in intestate or testamentary successions, with regard to four items:
(a) the order of succession; (b) the amount of successional rights; (e) the intrinsic
validity of the provisions of the will; and (d) the capacity to succeed. They provide
that —
 ART. 16. Real property as well as personal property is subject to the law of the
country where it is situated.
However, intestate and testamentary successions, both with respect to the order of succession
and to the amount of successional rights and to the intrinsic validity of testamentary provisions,
shall be regulated by the national law of the person whose succession is under consideration,
whatever may he the nature of the property and regardless of the country wherein said property
may be found.

 ART. 1039. Capacity to succeed is governed by the law of the nation of the
decedent.
 The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of
Texas, U.S.A., and that under the laws of Texas, there are no forced heirs or
legitimes. Accordingly, since the intrinsic validity of the provision of the will and the
amount of successional rights are to be determined under Texas law, the Philippine
law on legitimes cannot be applied to the testacy of Amos G. Bellis.

26
 United States Court of Appeals, Ninth Circuit.

PITZER COLLEGE, Plaintiff-Appellant, v. INDIAN HARBOR INSURANCE COMPANY, Defendant-

Appellee.

No. 14-56017

Decided: January 13, 2017

Before: Harry Pregerson, Richard A. Paez, and Andrew D. Hurwitz, Circuit Judges. COUNSEL,
Michael J. Murtaugh, Lawrence J. DiPinto, and Thomas N. Fay, Murtaugh Meyer Nelson & Treglia
LLP, Irvine, California, for Plaintiff-Appellant. Max H. Stern and Jessica E. La Londe, Duane Morris
LLP, San Francisco, California; Katherine Nichols, Duane Morris LLP, Los Angeles, California; for
Defendant-Appellee.

ORDER CERTIFYING QUESTIONS TO THE CALIFORNIA SUPREME COURT

OrderSUMMARY *

Certification to California Supreme Court

The panel certified the following questions of state law to the California Supreme Court:

1. Is California's common law notice-prejudice rule a fundamental public policy for the purpose of
choice-of-law analysis? May common law rules other than unconscionability not enshrined in
statute, regulation, or the constitution, be fundamental public policies for the purpose of choice-of-
law analysis?

2. If the notice-prejudice rule is a fundamental public policy for the purpose of choice-of-law
analysis, can a consent provision in a first-party claim insurance policy be interpreted as a notice
provision such that the notice-prejudice rule applies?

We certify the questions set forth in Part II of this order to the California Supreme Court. The
answers to these questions are dispositive of the case, without clear California precedent, and
important to protections for California insureds. See Cal. R. Ct. 8.548. We therefore respectfully
request that the California Supreme Court exercise its discretion to decide the certified questions
presented below. Absent certification, we will “predict as best we can what the California Supreme
Court would do in these circumstances.” Pacheco v. United States, 220 F.3d 1126, 1131 (9th Cir.
2000).

I. Administrative Information

We provide the following information in accordance with California Rule of Court 8.548(b)(1).

The caption of this case is:

27
No. 14-56017

PITZER COLLEGE, Plaintiff and Appellant,

v.

INDIAN HARBOR INSURANCE COMPANY, Defendant and Appellee.

The names and addresses of counsel are:

For Plaintiff-Apellant Pitzer College: Michael J. Murtaugh, Lawrence J. DiPinto, Thomas N. Fay,
Murtaugh Meyer Nelson & Treglia LLP, 2603 Main Street, 9th Floor, Irvine, California, 92614.

For Defendant-Appellee Indian Harbor Insurance Company: Max H. Stern, Duane Morris LLP, One
Market Plaza, Suite 2200, San Francisco, California, 94105; Katherine Nichols, Duane Morris LLP,
865 South Figueroa Street, Suite 3100, Los Angeles, California, 90017.

If the request for certification is granted, Plaintiff-Appellant Pitzer College should be deemed the
petitioner in the California Supreme Court.

II. Certified Questions

Pursuant to California Rule of Court 8.548(b)(2), we certify the following questions of state law
before us:

1. Is California's common law notice-prejudice rule a fundamental public policy for the purpose of
choice-of-law analysis? May common law rules other than unconscionability not enshrined in
statute, regulation, or the constitution, be fundamental public policies for the purpose of choice-of-
law analysis?

2. If the notice-prejudice rule is a fundamental public policy for the purpose of choice-of-law
analysis, can a consent provision in a first-party claim insurance policy be interpreted as a notice
provision such that the notice-prejudice rule applies?

Our phrasing of the questions should not restrict the California Supreme Court's consideration of
the issues involved. Cal. R. Ct. 8.548(f)(5). We agree to accept and follow the decision of the
California Supreme Court. Cal. R. Ct. 8.548(b)(2); see Klein v. United States, 537 F.3d 1027, 1029
(9th Cir. 2008) (holding that “the Ninth Circuit is bound by the California Supreme Court's
interpretation of California law” with respect to a certified question).

III. Statement of Facts

Pitzer College (“Pitzer”) is one of the Claremont Colleges in Southern California. The Claremont
University Consortium (“CUC”) is an umbrella entity that enters into insurance contracts on behalf
of the Claremont Colleges. CUC purchased an insurance policy (the “Policy”) from Indian Harbor
Insurance Company (“Indian Harbor”) to cover Pitzer for remediation expenses caused by
pollution-related damage. New York law governs any issues arising under the Policy.1

28
On January 10, 2011, Pitzer became aware of darkened soils at the construction site for a new
dormitory. By January 21, 2011, Pitzer determined that remediation would be required. After
assessing its options, Pitzer secured one of two Transportable Treatment Units (“TTU”) located in
Southern California to remediate the soils. The remediation treatment was successful, and Pitzer
completed the dormitory a few days before the students' move-in date.

In its section describing coverage for remediation expenses (Section I.B.), the Policy contained a
notice provision requiring Pitzer to provide Indian Harbor with notice of any condition requiring
remediation.2 In its section describing reporting (Section VII.B.), the Policy contained a consent
provision stating that Indian Harbor would not cover any expenses Pitzer incurred for remediation
without first obtaining Indian Harbor's consent.3 The consent provision included an exception for
emergencies, but required Pitzer to notify Indian Harbor “immediately thereafter” it incurred any
emergency expenses.

Pitzer did not inform Indian Harbor of the remediation until July 11, 2011, approximately three
months after it completed remediation and six months after it discovered the darkened soils. Nor
did Pitzer obtain Indian Harbor's consent before commencing remediation or paying remediation
costs. On August 10, 2011, Indian Harbor acknowledged receipt of Pitzer's notice of remediation.
On March 16, 2012, Indian Harbor denied coverage on the basis of Pitzer's late notice and its
failure to obtain Indian Harbor's consent.

Pitzer sued Indian Harbor in Los Angeles County Superior Court, alleging that the insurer breached
the Policy by failing to indemnify Pitzer for the remediation costs. Indian Harbor removed the case
to federal court on the basis of diversity jurisdiction and moved for summary judgment.

The district court granted Indian Harbor summary judgment. The district court applied New York
law, finding that Pitzer failed to establish that the California notice-prejudice rule was a
fundamental public policy that overrode the Policy's choice of law provision. The district court
determined that summary judgment was warranted because Pitzer failed to notify Indian Harbor.
The district court also concluded that summary judgment was separately warranted because
Pitzer failed to comply with the Policy's consent provision. The district court further concluded
that Pitzer's remediation work did not fall within the emergency exception, but that, even if it did,
Pitzer was not entitled to rely on the exception because it failed to “immediately thereafter” notify
Indian Harbor of the emergency.

Pitzer timely appealed.

IV. Explanation of Certification

Resolution of this appeal turns on whether California's notice-prejudice rule is a fundamental

public policy for the purpose of choice-of-law analysis. If the California Supreme Court determines
that the notice-prejudice rule is fundamental, the appeal then turns on whether, in a first-party
policy like Pitzer's, a consent provision operates as a notice requirement subject to the notice-
prejudice rule. No controlling California precedent answers either question. See Cal. R. Ct.
8.548(a). Because the district court determined that “[i]f prejudice is required, [Indian Harbor]
would not be able to prevail at summary judgment,” these questions are dispositive. Cal. R. Ct.
8.548(a).

29
These questions involve issues of significant importance to the state. Kremen v. Cohen, 325 F.3d
1035, 1037 (9th Cir. 2003). In an amicus brief to the United States Supreme Court, the Council of
State Governments emphasized the “integral” policy behind California's notice-prejudice rule. Br.
for Council of State Governments, et al. as Amici Curiae Supporting Respondents, UNUM Life Ins.
Co. of Am. v. Ward, 526 U.S. 358 (1999) (No. 97-1868), 1999 WL 9773, at*3. Moreover, numerous
California insurance contracts contain choice-of-law decisions and the resolution of these
questions will apply to insureds throughout the state.

The following is a summary of the relevant case law and the parties' arguments with respect to
these questions.

Under California common law, the notice-prejudice rule provides that an insurer must show that it
was prejudiced by late notice in order for a notice clause in the policy to bar coverage. Clemmer v.
Hartford Ins. Co., 587 P.2d 1098, 1106 (Cal. 1978). Under California choice-of-law analysis, the
parties' contractual choice of law governs unless it conflicts with a fundamental public policy of
California, and California has a greater interest than the chosen state in the determination of the
particular issue. Nedlloyd Lines B.V. v. Super. Ct., 834 P.2d 1148, 1151, 1155 (Cal. 1992) (citing
Restatement (Second) of Conflict of Laws § 187 (Am. Law Inst. 1971)). 4 The California Supreme
Court has not yet stated whether the notice-prejudice rule is a fundamental public policy.

Pitzer argues that the notice-prejudice rule is a fundamental public policy. 5 California and federal
courts have generally recognized the importance of the notice-prejudice rule. See, e.g., Ward, 526
U.S. at 372; Campbell v. Allstate Ins. Co., 384 P.2d 155, 157 (Cal. 1963). But none have done so in
the choice of law context.

Indian Harbor argues that the notice-prejudice rule is not a fundamental public policy of California.
First, citing Nedlloyd, Indian Harbor argues that a rule cannot be fundamental public policy unless
established by the constitution, a statute, or it is related to a “principle of contractual
unconscionability.” 834 P.2d at 1153, 1155. It is unclear whether California law requires that a rule
be statutory, constitutional, or related to unconcsionability in order to constitute a fundamental
public policy. See, e.g, Clemmer, 587 P.2d at 1106; Restatement (Second) of Conflicts of Law §
187 cmt. g.

Indian Harbor also argues that the notice-prejudice rule cannot be fundamental because California
law recognizes exceptions for claims-made policies, time-limited reporting policies, policies with
statutes of limitations, and policies with consent provisions. See Burns v. Int'l Ins. Co., 929 F.2d
1422, 1425 (9th Cir. 1991) (explaining that California's notice-prejudice rule does not apply to
claims-made policies which “reduce[ ] the potential exposure of the insurer and [are] therefore less
expensive to the insured”); Venoco, Inc. v. Gulf Underwriters Ins. Co., 96 Cal. Rptr. 3d 409, 417 (Ct.
App. 2009) (explaining that the notice-prejudice rule does not apply to time-limited reporting
requirements because the rule “would expose [the insurer] to a risk broader than the risk expressly
insured against in the policy” (emphasis omitted)); State Farm Fire & Cas. Co. v. Super. Ct., 258
Cal. Rptr. 413, 418 (Ct. App. 1989) (explaining the purposes behind statutes of limitations); Insua
v. Scottsdale Ins. Co., 129 Cal. Rptr. 2d 138, 141 (Ct. App. 2002) (explaining that the notice-
prejudice rule does not apply to consent provisions as their purpose is to provide the insurer the
opportunity to control expenses).

30
With respect to the consent provision, Pitzer argues that its remediation fell under the emergency
exception because it operated on a tight schedule and had a time-limited opportunity to utilize the
only available TTU machine. Pitzer also argues that the consent provision should be interpreted as
a notice provision because the Policy covers first-party claims. See Howard v. Am. Nat'l Fire Ins.
Co., 115 Cal. Rptr. 3d 42, 70 (Ct. App. 2010) (explaining that first-party policies “obligate the insurer
to pay damages claimed by the insured itself,” while third-party policies “obligate the insurer to
defend, settle, and pay damages claimed by a third party against the insured”).

According to Indian Harbor, Pitzer's actions did not fall under the emergency exception to the
consent provision, and even if they did, Pitzer failed to “immediately” notify the insurer of any
emergency. In Jamestown Builders, Inc. v. General Star Indemnity Co., the California Court of
Appeal held that the notice-prejudice rule does not apply to consent provisions. 91 Cal. Rptr. 2d
514, 519 (Ct. App. 1999). The Jamestown court, however, did not consider whether a consent
provision in a first-party policy is analogous to a notice provision in a third-party policy, and
therefore subject to the notice-prejudice rule.

Finally, Indian Harbor argues that the consent provision should not be interpreted as a notice
provision because such an interpretation would render the provision redundant in violation of
contract interpretation principles.

V. Accompanying Materials

The clerk of this court is hereby directed to file in the California Supreme Court, under official seal
of the United States Court of Appeals for the Ninth Circuit, copies of all relevant briefs and
excerpts of record, and an original and ten copies of this order and request for certification, along
with a certification of service on the parties, pursuant to California Rule of Court 8.548(c) and (d).

This case is withdrawn from submission. Further proceedings before us are stayed pending final
action by the California Supreme Court. The panel will resume control and jurisdiction of this case
upon receiving a decision from the California Supreme Court or upon that court's decision to
decline to answer the certified question.

IT IS SO ORDERED.

FOOTNOTES

FOOTNOTE.   This summary constitutes no part of the opinion of the court. It has been prepared by
court staff for the convenience of the reader.

1.   The Policy provides that: “All matters arising hereunder including questions related to the
validity[,] interpretation, performance and enforcement of this Policy shall be determined in
accordance with the law and practice of the State of New York (notwithstanding New York's
conflicts of law rules).”

2.   The provision states that Indian Harbor would cover Pitzer's remediation expenses “provided
that the INSURED reports such CLAIM ․ to the company, in writing, during the POLICY PERIOD.”

31
3.   The provision states: “No costs, charges or expenses shall be incurred, nor payments made,
obligations assumed or remediation commenced without the Company's written consent which
shall not be unreasonably withheld. This provision does not apply to costs incurred by the
INSURED on an emergency basis, where any delay on the part of the INSURED would cause injury
to persons or damage to property, or increase significantly the cost of responding to any
POLLUTION CONDITION. If such emergency occurs, the INSURED shall notify the Company
immediately thereafter.”

4.   The parties agree that California has a materially greater interest in the determination of this
issue.

5.   Pitzer emphasized that applying New York Law would be particularly unfair because under
New York law, the notice-prejudice rule applies to policies “issued or delivered” inside of the state,
but not those “issued or delivered” outside of the state, such as the Policy at issue in this case.
See N.Y. Ins. Law § 3420(a)(5). There is no dispute that under New York law the notice-prejudice
rule would not apply to the Policy.

CADALIN ET AL VS. POEA ET AL

MARCH 28, 2013  ~ VBDIAZ

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
MUNDOvs. PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION’S
ADMINISTRATOR, NLRC, BROWN & ROOT INTERNATIONAL, INC. AND/OR ASIA
INTERNATIONAL BUILDERS CORPORATION
GRN 104776, December 5,1994.
FACTS:
This is a consolidation of 3 cases of SPECIAL CIVIL ACTIONS in the Supreme Court for Certiorari.

On June 6, 1984, Cadalin, Amul and Evangelista, in their own behalf and on behalf of 728 other OCWs
instituted a class suit by filing an “Amended Complaint” with the POEA for money claims arising from their
recruitment by ASIA INTERNATIONAL BUILDERS CORPORATION (AIBC) and employment by
BROWN & ROOT INTERNATIONAL, INC (BRI) which is a foreign corporation with headquarters in
Houston, Texas, and is engaged in construction; while AIBC is a domestic corporation licensed as a service
contractor to recruit, mobilize and deploy Filipino workers for overseas employment on behalf of its foreign
principals.

The amended complaint sought the payment of the unexpired portion of the employment contracts, which
was terminated prematurely, and secondarily, the payment of the interest of the earnings of the Travel and
Reserved Fund; interest on all the unpaid benefits; area wage and salary differential pay; fringe benefits;

32
reimbursement of SSS and premium not remitted to the SSS; refund of withholding tax not remitted to the
BIR; penalties for committing prohibited practices; as well as the suspension of the license of AIBC and the
accreditation of BRII

On October 2, 1984, the POEA Administrator denied the “Motion to Strike Out of the Records” filed by
AIBC but required the claimants to correct the deficiencies in the complaint pointed out.

AIB and BRII kept on filing Motion for Extension of Time to file their answer. The POEA kept on granting
such motions.

On November 14, 1984, claimants filed an opposition to the motions for extension of time and asked that
AIBC and BRII declared in default for failure to file their answers.

On December 27, 1984, the POEA Administrator issued an order directing AIBC and BRII to file their
answers within ten days from receipt of the order.

(at madami pang motions ang na-file, new complainants joined the case, ang daming inavail na remedies ng
both parties)
On June 19, 1987, AIBC finally submitted its answer to the complaint. At the same hearing, the parties were
given a period of 15 days from said date within which to submit their respective position papers. On
February 24, 1988, AIBC and BRII submitted position paper. On October 27, 1988, AIBC and BRII filed a
“Consolidated Reply,” POEA Adminitartor rendered his decision which awarded the amount of $824,
652.44 in favor of only 324 complainants. Claimants submitted their “Appeal Memorandum For Partial
Appeal” from the decision of the POEA. AIBC also filed its MR and/or appeal in addition to the “Notice of
Appeal” filed earlier.

NLRC promulgated its Resolution, modifying the decision of the POEA. The resolution removed some of
the benefits awarded in favor of the claimants. NLRC denied all the MRs. Hence, these petitions filed by the
claimants and by AlBC and BRII.

The case rooted from the Labor Law enacted by Bahrain where most of the complainants were deployed.
His Majesty Ise Bin Selman Al Kaifa, Amir of Bahrain, issued his Amiri Decree No. 23 on June 16, 1176,
otherwise known re the Labour Law for the Private Sector. Some of the provision of Amiri Decree No. 23
that are relevant to the claims of the complainants-appellants are as follows:

33
“Art. 79: x x x A worker shall receive payment for each extra hour equivalent to his wage entitlement
increased by a minimum of twenty-rive per centurn thereof for hours worked during the day; and by a
minimum off fifty per centurn thereof for hours worked during the night which shall be deemed to being
from seven o’clock in the evening until seven o’clock in the morning .”

Art. 80: Friday shall be deemed to be a weekly day of rest on full pay.
If employee worked, 150% of his normal wage shall be paid to him x x x.”

Art. 81; x x x When conditions of work require the worker to work on any official holiday, he shall be paid
an additional sum equivalent to 150% of his normal wage.”

Art. 84: Every worker who has completed one year’s continuous service with his employer shall be entitled
to Laos on full pay for a period of not less than 21 days for each year increased to a period not less than 28
days after five continuous years of service.”

A worker shall be entitled to such leave upon a quantum meruit in respect of the proportion of his service in
that year.”

Art. 107: A contract of employment made for a period of indefinite duration may be terminated by either
party thereto after giving the other party prior notice before such termination, in writing, in respect of
monthly paid workers and fifteen days’ notice in respect of other workers. The party terminating a contract
without the required notice shall pay to the other party compensation equivalent to the amount of wages
payable to the worker for the period of such notice or the unexpired portion thereof.”

Art. Ill: x x x the employer concerned shall pay to such worker, upon termination of employment, a leaving
indemnity for the period of his employment calculated on the basis of fifteen days’ wages for each year of
the first three years of service and of one month’s wages for each year of service thereafter. Such worker
shall be entitled to payment of leaving indemnity upon a quantum meruit in proportion to the period of his
service completed within a year.”

ISSUE:
1. WON the foreign law should govern or the contract of the parties.(WON the complainants who have
worked in Bahrain are entitled to the above-mentioned benefits provided by Amiri Decree No. 23 of
Bahrain).

34
2. WON the Bahrain Law should apply in the case. (Assuming it is applicable WON complainants’ claim for
the benefits provided therein have prescribed.)

3. Whether or not the instant cases qualify as; a class suit (siningit ko nalang)
(the rest of the issues in the full text of the case refer to Labor Law)

RULING:
1. NLRC set aside Section 1, Rule 129 of the 1989 Revised Rules on Evidence governing the pleading and
proof of a foreign law and admitted in evidence a simple copy of the Bahrain’s Amiri Decree No. 23 of 1976
(Labour Law for the Private Sector).

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

The overseas-employment contracts, which were prepared by AIBC and BRII themselves, provided that the
laws of the host country became applicable to said contracts if they offer terms and conditions more
favorable than those stipulated therein. However there was a part of the employment contract which
provides that the compensation of the employee may be “adjusted downward so that the total computation
plus the non-waivable benefits shall be equivalent to the compensation” therein agree,’ another part of the
same provision categorically states “that total remuneration and benefits do not fall below that of the host
country regulation and custom.”

Any ambiguity in the overseas-employment contracts should be interpreted against AIBC and BRII, the
parties that drafted it. Article 1377 of the Civil Code of the Philippines provides:
‘The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the
obscurity.”

Said rule of interpretation is applicable to contracts of adhesion where there is already a prepared form
containing the stipulations of the employment contract and the employees merely “take it or leave it.” The
presumption is that there was an imposition by one party against the other and that the employees signed the
contracts out of necessity that reduced their bargaining power.
We read the overseas employment contracts in question as adopting the provisions of the Amiri Decree No.
35
23 of 1976 as part and parcel thereof. The parties to a contract may select the law by which it is to be
governed. In such a case, the foreign law is adopted as a “system” to regulate the relations of the parties,
including questions of their capacity to enter into the contract, the formalities to be observed by them,
matters of performance, and so forth. Instead of adopting the entire mass of the foreign law, the parties may
just agree that specific provisions of a foreign statute shall be deemed incorporated into their contract “as a
set of terms.” By such reference to the provisions of the foreign law, the contract does not become a foreign
contract to be governed by the foreign law. The said law does not operate as a statute but as a set of
contractual terms deemed written in the contract.

A basic policy of contract is to protect the expectation of the parties. Such party expectation is protected by
giving effect to the parties’ own choice of the applicable law. The choice of law must, however, bear some
relationship the parties or their transaction. There is no question that the contracts sought to be enforced by
claimants have a direct connection with the Bahrain law because the services were rendered in that country.

2. NLRC ruled that the prescriptive period for the filing of the claims of the complainants was 3 years, as
provided in Article 291 of the Labor Code of the Philippines, and not ten years as provided in Article 1144
of the Civil Code of the Philippines nor one year as provided in the Amiri Decree No. 23 of 1976.

Article 156 of the Amiri Decree No. 23 of 1976 provides:

“A claim arising out of a contract of employment shall not actionable after the lapse of one year from the
date of the expiry of the Contract”.

As a general rule, a foreign procedural law will not be applied in the forum (local court), Procedural matters,
such as service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by
the laws of the forum. This is true even if the action is based upon a foreign substantive law.

A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be viewed either
as procedural or substantive, depending on the characterization given such a law. In Bournias v. Atlantic
Maritime Company (220 F. 2d. 152, 2d Cir. [1955]), where the issue was the applicability of the Panama
Labor Code in a case filed in the State of New York for claims arising from said Code, the claims would
have prescribed under the Panamanian Law but not under the Statute of Limitations of New York. The U.S.
Circuit Court of Appeals held that the Panamanian Law was procedural as it was not “specifically intended
to be substantive,” hence, the prescriptive period provided in the law of the forum should apply. The Court
observed: “. . . we are dealing with a statute of limitations of a foreign country, and it is not clear on the face
of the statute that its purpose was to limit the enforceability, outside as well as within the foreign country

36
concerned, of the substantive rights to which the statute pertains. We think that as a yardstick for
determining whether that was the purpose, this test is the most satisfactory one.

The Court further noted: “Applying that test here it appears to us that the libellant is entitled to succeed, for
the respondents have failed to satisfy us that the Panamanian period of limitation in question was
specifically aimed against the particular rights which the libellant seeks to enforce. The Panama Labor Code
is a statute having broad objectives.” The American court applied the statute of limitations of New York,
instead of the Panamanian law, after finding that there was no showing that the Panamanian law on
prescription was intended to be substantive. Being considered merely a procedural law even in Panama, it
has to give way to the law of the forum (local Court) on prescription of actions.

However the characterization of a statute into a procedural or substantive law becomes irrelevant when the
country of the forum (local Court) has a “borrowing statute.” Said statute has the practical effect of treating
the foreign statute of limitation as one of substance. A “borrowing statute” directs the state of the forum
(local Court) to apply the foreign statute of limitations to the pending claims based on a foreign law. While
there are several kinds of “borrowing statutes,” one form provides that an action barred by the laws of the
place where it accrued will not be enforced in the forum even though the local statute was not run against it.

Section 48 of Code of Civil Procedure is of this kind. It provides: “If by the laws of the state or country
where the cause of action arose, the action is barred, it is also barred in the Philippine Islands.”

Section 48 has not been repealed or amended by the Civil Code of the Philippines. In the light of the 1987
Constitution, however, Section 48 cannot be enforced ex proprio vigore insofar as it ordains the application
in this jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976.

The courts of the forum (local Court) will not enforce any foreign claim obnoxious to the forum’s public
policy. To enforce the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims
in question would contravene the public policy on the protection to labor.

In the Declaration of Principles and State Policies, the 1987 Constitution emphasized that:“The state shall
promote social justice in all phases of national development” (Sec. 10).
‘The state affirms labor as a primary social economic force. It shall protect the rights of workers and
promote their welfare” (Sec. 18).

37
In Article XIII on Social Justice and Human Rights, the 1987 Constitution provides:
“Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment opportunities for all.”

Thus, the applicable law on prescription is the Philippine law.

The next question is whether the prescriptive period governing the filing of the claims is 3 years, as provided
by the Labor Code or 10 years, as provided by the Civil Code of the Philippines.

Article 1144 of the Civil Code of the Philippines provides:

“The following actions must be brought within ten years from the time the right of action accross:

(1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment”
In this case, the claim for pay differentials is primarily anchored on the written contracts between the
litigants, the ten-year prescriptive period provided by Art. 1144(l) of the New Civil Code should govern.

3. NO. A class suit is proper where the subject matter of the controversy is one of common or general
interest to many and the parties are so numerous that it is impracticable to bring them all before the court.
When all the claims are for benefits granted under the Bahrain law many of the claimants worked outside
Bahrain. Some of the claimants were deployed in Indonesia under different terms and condition of
employment.

Inasmuch as the First requirement of a class suit is not present (common or general interest based on the
Amiri Decree of the State of Bahrain), it is only logical that only those who worked in Bahrain shall be
entitled to rile their claims in a class suit.

While there are common defendants (AIBC and BRII) and the nature of the claims is the same (for
employee’s benefits), there is no common question of law or fact. While some claims are based on the Amiri
Law of Bahrain, many of the claimants never worked in that country, but were deployed elsewhere. Thus,
each claimant is interested only in his own demand and not in the claims of the other employees of
defendants. A claimant has no concern in protecting the interests of the other claimants as shown by the fact,
that hundreds of them have abandoned their co-claimants and have entered into separate compromise
settlements of their respective claims. The claimants who worked in Bahrain can not be allowed to sue in a
class suit in a judicial proceeding.

WHEREFORE, all the three petitioners are DISMISSED.

38
BANK OF AMERICA VS. AMERICAN REALTY

MARCH 28, 2013  ~ VBDIAZ

Bank of America vs American Realty Corporation

GR 133876 December 29, 1999
Facts:
Petitioner granted loans to 3 foreign corporations. As security, the latter mortgaged a property located in the
Philippines owned by herein respondent ARC. ARC is a third party mortgagor who pledged its own property
in favor of the 3 debtor-foreign corporations.

The debtors failed to pay. Thus, petitioner filed collection suits in foreign courts to enforce the loan.
Subsequently, it filed a petition in the Sheriff to extra-judicially foreclose the said mortgage, which was
granted.

On 12 February 1993, private respondent filed before the Pasig RTC, Branch 159, an action for damages
against the petitioner, for the latter’s act of foreclosing extra-judicially the real estate mortgages despite the
pendency of civil suits before foreign courts for the collection of the principal loan.

Issue:
WON petitioner’s act of filing a collection suit against the principal debtors for the recovery of the loan
before foreign courts constituted a waiver of the remedy of foreclosure.

Held: Yes.
1. Loan; Mortgage; remedies:

In the absence of express statutory provisions, a mortgage creditor may institute against the mortgage debtor
either a personal action or debt or a real action to foreclose the mortgage. In other words, he may pursue
either of the two remedies, but not both. By such election, his cause of action can by no means be impaired,
for each of the two remedies is complete in itself.

In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative and not
cumulative. Notably, an election of one remedy operates as a waiver of the other. For this purpose, a remedy
is deemed chosen upon the filing of the suit for collection or upon the filing of the complaint in an action for
foreclosure of mortgage. As to extrajudicial foreclosure, such remedy is deemed elected by the mortgage
creditor upon filing of the petition not with any court of justice but with the Office of the Sheriff of the
province where the sale is to be made.

39
In the case at bar, petitioner only has one cause of action which is non-payment of the debt. Nevertheless,
alternative remedies are available for its enjoyment and exercise. Petitioner then may opt to exercise only
one of two remedies so as not to violate the rule against splitting a cause of action.

Accordingly, applying the foregoing rules, we hold that petitioner, by the expediency of filing four civil
suits before foreign courts, necessarily abandoned the remedy to foreclose the real estate mortgages
constituted over the properties of third-party mortgagor and herein private respondent ARC. Moreover, by
filing the four civil actions and by eventually foreclosing extra-judicially the mortgages, petitioner in effect
transgressed the rules against splitting a cause of action well-enshrined in jurisprudence and our statute
books.

2. Conflicts of Law

Incidentally, petitioner alleges that under English Law, which according to petitioner is the governing law
with regard to the principal agreements, the mortgagee does not lose its security interest by simply filing
civil actions for sums of money.

We rule in the negative.

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.

40
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.

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.

Clearly then, English Law is not applicable.

st Article 249-253

G.R. No. 168785

Herald Black Dacasin, Petitioner, 

versus

Sharon Del Mundo Dacasin, Respondent.

FACTS:
1. On April 1994, petitioner and respondent got married here in the Philippines.
2. The following year respondent got pregnant and gave birth to a baby girl whom they named Stephanie.
3. In June of 1999 respondent sought and obtained from the Illinois Court a divorce
decree against petitioner.
4. In its ruling, the Illinois court dissolved the marriage of petitioner and
respondent, awarded to respondent sole custody of Stephanie and retained jurisdiction over the case for
enforcement purposes.
5. On 28th of January 2002, petitioner and respondent executed in Manila a contract
(Agreement) for the joint custody of Stephanie.
6. Two years after, petitioner sued respondent in the Regional Trial Court of Makati City. 7. Petitioner
claimed that respondent exercised sole custody over Stephanie.
8. Respondent sought the dismissal of the complaint due to lack of jurisdiction, since Illinois Court hold the
jurisdiction in enforcing the divorce decree.
ISSUES:
– Whether the Trial Court have the jurisdiction over the case
– Whether the agreement or contract is valid

41
HELD:
Case was dismissed dated March 1, 2005.
It is precluded from taking cognizance over suit considering the Illinois Court’s
retention of jurisdiction to enforce its divorce decree, including its order awarding
sole custody of Stephanie to respondent. The divorce decree is binding on petitioner following
the “nationality rule” prevailing in this jurisdiction. Agreement is void
The agreement is void for contravening Article 2035 paragraph 5 of the Civil
Code prohibiting compromise agreements on jurisdiction.
II. FACTS:
1. Petitioner sought reconsideration his new argument is that the divorce decree obtained by respondent is
void.
2. The divorce is no bar to the trial court’s exercise of jurisdiction over the
case.
3. In its order on June 23, 2005, the trial court denied reconsideration because petitioner is under the laws
of his nationality, which is American. Hence, the petitioner filed alternative theories for the validity of the
agreement:
> The agreement noted the valid divorce decree, modifying the terms of child custody from the
sole to joint
> The agreement is independent of the divorce decree obtained by respondents
II. ISSUE
– Whether the trial court has jurisdiction to take cognizance of petitioner’s suit
– Whether the trial curt can enforce the Agreement on joint custody
II. HELD
Agreement is still void but the court calls for the remand of the case to settle
Stephanie’s custody. (Article 213 of the Family Code lost its coverage over
Stephanie. Stephanie was already almost 15 during this time thus, she is entitled to
choose to whom she want to be)
Instead of dismissing the case, court chose to remand the case in order to settle
Stephanie’s custody. Court decided to REVERSE the orders dated March 1, 2005 and June 23, 2005. The
case is REMANDED for further proceedings consistent with its ruling.

Kearney v. Salomon Smith Barney, Inc. - 39 Cal. 4th 95, 45 Cal. Rptr. 3d 730, 137 P.3d 914 (2006)

RULE:

42
Once a preliminary analysis has identified a true conflict of the governmental interests involved as
applied to the parties under the particular circumstances of a case, the comparative impairment
approach to the resolution of such conflict seeks to determine which state's interest would be more
impaired if its policy were subordinated to the policy of the other state. This analysis proceeds on the
principle that true conflicts should be resolved by applying the law of the state whose interest would be
more impaired if its law were not applied. Exponents of this process of analysis emphasize that it is very
different from a weighing process. The court does not weigh the conflicting governmental interests in
the sense of determining which conflicting law manifested the better or the worthier social policy on the
specific issue. The process can accurately be described as accommodation of conflicting state policies,
as a problem of allocating domains of law-making power in multi-state contexts -- limitations on the
reach of state policies -- as distinguished from evaluating the wisdom of those policies. Emphasis is
placed on the appropriate scope of conflicting state policies rather than on the quality of those policies.

FACTS:

Employees at the Atlanta-based branch of defendant Salomon Smith Barney, Inc. (SSB) — a large,
nationwide brokerage firm that has numerous offices and does extensive business in California —
repeatedly have recorded telephone conversations with California clients without the clients' knowledge
or consent. Consequently, several California clients of SSB filed a putative class action against SSB
seeking to obtain injunctive relief, and also seeking to recover damages and/or restitution based upon
recording that occurred in the past. SSB filed a demurrer to the complaint, maintaining that no relief is
warranted because the conduct of its Atlanta-based employees was and is permissible under Georgia
law. The trial court sustained SSB's demurrer and dismissed the action. The Court of Appeal affirmed the
judgment rendered by the trial court, concluding that application of Georgia law was appropriate and
supported the denial of all relief sought by plaintiffs. Plaintiffs appealed.

ISSUE:

1. Was the grant of injunctive relief proper?

2. Was the dismissal of the claims for monetary damages and restitution proper?

ANSWER:

1) Yes. 2) Yes.

CONCLUSION:

The Supreme Court of California reversed the judgment of the state appellate court as to the grant of
injunctive relief, but affirmed as to the dismissal of the claims for monetary damages and restitution. The
Court found a true conflict between California and Georgia law. Under a comparative impairment
analysis, the Court determined that California has a strong and continuing interest in protecting the
43
privacy of its residents, as set forth in Pen. Code, §§ 630, 637.2, 632, and that the application of California
law would not severely impair Georgia's interests under Ga. Code Ann., §§ 16-11-62, 16-11-66, because a
Georgia company that has a valid business justification for recording telephone calls could comply with
California law by disclosing at the outset of a call made to or received from a California customer that the
call was being recorded. Georgia did, however, have a legitimate interest in protecting its companies
from unexpected liability based on past actions that were lawful in Georgia.

Court of Appeals of Mississippi.

Roger Lionel HANCOCK, Appellant v. David Steven WATSON, Appellee.

No. 2005-IA-00413-COA.

Decided: January 09, 2007

Before KING, C.J., CHANDLER and ROBERTS, JJ. Chuck McRae, William B. Kirksey, Jackson,
attorneys for appellant. Robert D. Jones, Meridian, Palmer, Eddie Briggs, DeKalb, attorneys for
appellee.

¶ 1. Roger Lionel Hancock brought this interlocutory appeal following the trial court's denial of his
motion to dismiss.   Hancock asserts that the trial court erred in its conflicts of law analysis, its
failure to find lack of subject matter jurisdiction, and its statute of limitations analysis.

PROCEDURAL HISTORY

¶ 2. David Watson filed his complaint in the circuit court of Hinds County, alleging alienation of
affection, on April 23, 2004.   Hancock filed a motion to dismiss and a motion for a more definite
statement on June 2, 2004, contending that the complaint did not sufficiently allege facts in
support of the claim that would enable Hancock to respond properly.   After a hearing on October
27, 2004, the trial court ordered Watson to file an amended complaint that more specifically stated
the facts upon which Watson based his claim. The trial court stated that it would consider the
motion for a more definite statement moot and would take the motion to dismiss under
advisement, with a warning to Watson that the court would grant the motion to dismiss if the
amended complaint did not comply with his order.   Following the filing of the amended
complaint, in which Watson alleged Hancock conducted an affair with Lori Watson in 1999 and
2000, Hancock filed a second motion to dismiss.

¶ 3. Following a hearing in February 2005, the court denied both motions to dismiss.   The trial
court also denied Hancock's motion to reconsider and request for permission to file an
interlocutory appeal.   Hancock then advised the trial court that despite the trial court's denial, he
was proceeding with an interlocutory appeal.   On March 1, 2005, Hancock filed a petition for
interlocutory appeal with the Mississippi Supreme Court.   The court granted the petition and
assigned the case to this Court on May 10, 2005.

44
FACTS 1

¶ 4. David and Lori Watson, both residents of Tennessee, were married in 1989.   During the first
ten years of their marriage, the couple had two children.   According to the allegations of David
Watson's amended complaint, Hancock began a sexual affair with Lori in 1999.   The last incident
alleged in the amended complaint occurred in 2000.   The affair ended without Watson ever
knowing that the affair existed.   Lori continued in her marriage to Watson, giving birth to the
couple's third child in August 2002.

¶ 5. On May 19, 2003, while Lori was six months pregnant with the couple's fourth child, Watson
learned of the affair.   On November 12, 2003, Watson filed for divorce, citing May 20, 2003, as the
date of separation.   A Tennessee court granted the irreconcilable differences divorce on February
20, 2004.   Despite the divorce, the couple continued to reside together in the house that had
served as the marital residence and to share responsibilities in raising their four children. 2

ANALYSIS

¶ 6. Hancock argues that, for a variety of reasons, the trial court should have applied Tennessee
law.   Tennessee has abolished alienation of affection as a viable cause of action;  therefore,
Hancock argues, the trial court, applying a choice of law analysis, should have granted Hancock's
motion to dismiss for failure to state a claim for which relief can be granted.   Alternatively,
Hancock argues that even if Mississippi law applied, the statute of limitations has expired, and
Watson is procedurally barred from bringing his claim.

¶ 7. Watson contends that the trial court properly applied Mississippi law because Watson is
bringing a claim for a tort that occurred in Mississippi.   Watson also disputes Hancock's
assertion that the statute of limitations has expired.   Watson contends that whether the trial
court applied the one-year or the three-year statute of limitations, his complaint is not procedurally
barred because he filed the claim within one year of his discovery of the affair.

1. Choice of law analysis

 ¶ 8. The situation before the Court is a classic conflict of laws issue.   In Mississippi, alienation
of affection is a viable cause of action.   See Bland v. Hill, 735 So.2d 414, 418(¶ 17) (Miss.1999)
(stating that the court “decline[s] the invitation to abolish the tort of alienation of affection.”).   See
also Kirk v. Koch, 607 So.2d 1220 (Miss.1992) (upholding an award of $50,000 on an alienation of
affection claim).   In Tennessee, however, both the legislature and judiciary have abolished
alienation of affection as a viable cause of action.   See Tenn.Code Ann. § 36-3-701 (2006)
(abolished in 1989);  Dupuis v. Hand, 814 S.W.2d 340, 345 (Tenn.1991) (stating that “in the final
analysis, the action does not protect marriage or the family-its only real justification-and the harm
it causes far outweighs any reason for its continuance.”) (citation omitted).

 ¶ 9. Choice of law analysis is a three step process.   See Zurich Am. Ins. Co. v. Goodwin, 920
So.2d 427, 433-34 (¶¶ 9, 11, 13) (Miss.2006).   First, the Court must determine whether the
conflicting laws are substantive or procedural.   See id. at 433(¶ 9).   The Court must then classify
the substantive area of law-contract, tort, or property-applicable to the conflicting laws, as each

45
area of law has its own choice of law provisions.   See id. at 433(¶ 11).   Finally, the Court must
apply the appropriate analytical provisions to the conflict.   See id. at 434(¶ 13).

¶ 10.   In the case before the Court, the first two steps in the process are easily resolved.   Clearly,
the conflicting laws are substantive, as the outcome will determine whether Watson has a viable
cause of action.   If Tennessee law applies, the suit must be dismissed, as alienation of affection
has been abolished in Tennessee.   Categorizing the substantive area of law for an alienation of
affection claim is also a simple step.   Alienation of affection claims are tort actions.  
Accordingly, the Court will apply the test adopted by the Mississippi Supreme Court to resolve tort
choice of law questions-the “most significant relationship test” set forth in the Restatement
(Second) of Conflicts of Law Section 145.   See McDaniel v. Ritter, 556 So.2d 303, 310
(Miss.1989).   The Restatement section provides as follows:

(1) The rights and liabilities of the parties with respect to an issue in tort are determined by the
local law of the state which, with respect to that issue, has the most significant relationship to the
occurrence and the parties under the principles stated in § 6.3

(2) Contacts to be taken into account in applying the principles of § 6 to determine the law
applicable to an issue include:

(a) the place where the injury occurred,

(b) the place where the conduct causing the injury occurred,

(c) the domicile, residence, nationality, place of incorporation and place of business of the parties,
and

(d) the place where the relationship, if any, between the parties is centered.

Restatement (Second) of Conflicts of Law § 145 (2003).

¶ 11.   After reviewing the limited facts available in the record, given that this appeal is before the
Court as an interlocutory appeal of the trial court's denial of Hancock's motion to dismiss, the
Court finds that it is unable to complete the conflict of law analysis due to the lack of factual
information available from the record.   Although the amended complaint alleges that Lori Watson
conducted her affair with Hancock in the State of Mississippi, those allegations do not end the
inquiry as to the place where the injury or the conduct causing the injury occurred.

 ¶ 12.   An alienation of affection claim requires a finding of the following elements:  “(1)
wrongful conduct of the defendant;  (2) loss of affection or consortium;  and (3) causal connection
between such conduct and loss.”  Bland v. Hill, 735 So.2d 414, 417(¶ 13) (Miss.1999) (citations
omitted).   Moreover, “[a] claim for alienation of affections does not require that the plaintiff prove
an adulterous relationship.”  Id. Due to the nature of the marital relationship and the type of
conduct necessary to create a loss of affection or consortium, application of these elements
cannot be satisfied simply by an allegation that an extra-marital affair took place.   Unlike a tort
claim arising from an automobile accident, determining the location of an alienation of affection
claim is not a simple matter of naming the site of the incidents of Hancock's sexual encounters
with Lori. To determine where the injury or the conduct causing the injury occurred would require
46
an in-depth inquiry into the scope of the relationship between Lori and Hancock-including, for
example, the manner and frequency and content of their communications outside of their face-to-
face meetings.   The record provides us with no such additional information.

¶ 13.   Accordingly, the Court remands this case to the trial court so that the trial court may direct
the parties to engage in discovery on the details of the communications and actions between
Hancock and Lori which Watson contends led to the alienation of Lori's affections.   After that
discovery is complete, the trial court should then be able to apply “the most significant
relationship” test and complete the conflicts of law analysis.

2. Statute of Limitations Analysis

 ¶ 14.   Both parties stated initially in their briefs that alienation of affection claims are governed
by a three-year statute of limitations.   Hancock argues alternatively, however, that because
Watson is pleading an intentional tort rather than negligence, the one-year statute of limitation set
forth in Mississippi Code Annotated Section 15-1-35 should apply.

 ¶ 15.   Alienation of affection is an intentional tort with no specifically prescribed statute of

limitations;  therefore, the three-year statute of limitations applies to alienation of affection claims.
 Carr v. Carr, 784 So.2d 227, 230(¶ 8) (Miss.Ct.App.2000).   See also Miss.Code Ann. § 15-1-49
(Rev.2003).   On May 19, 2003, Watson discovered that his wife, Lori, engaged in an affair with
Hancock between 1999 and 2000.   He filed his claim for alienation of affection on April 23, 2004,
less than a year after he discovered the affair but more than three years after the affair ended.

 ¶ 16.   Accordingly, the crux of the statute of limitations issue in this case lies in the accrual of
the claim for alienation of affection.   Under Mississippi law, “[a] claim of alienation of affection
accrues when the alienation or loss of affection is finally accomplished.”  Carr, 784 So.2d at 229-
30(¶ 8) (citations omitted).   The accrual of the claim, then, occurs when the affections of the
spouse involved in the extramarital relationship are alienated.   The affections of the spouse
wronged by the affair are irrelevant to a determination of when the cause of action accrued.

¶ 17.   Watson argues that the claim accrued when he learned of the affair in May 2003 because it
was his discovery of the affair that led to the divorce.   Hancock, however, argues that he has had
no contact with Lori since the affair ended in 2000;  therefore, the cause of action could have
accrued no later than the date of his last contact with Lori. Because his last contact with Lori was
more than four years ago, Hancock argues that the statute of limitations has expired.

¶ 18.   Again, due to the procedural posture of this case, the Court is unable to determine when the
cause of action accrued.   Based on the limited facts before the Court, however, it appears that
Watson was never aware that the affair existed until several years after it had ended.  
Additionally, it appears that Watson, not Lori, ended the marriage, as he is the one who initiated the
divorce. The limited information available for this Court to review indicates that although Lori was
engaged in an affair, she continued to live with Watson in the matrimonial home and maintained
the appearance, at least, of a stable married family, as evidenced by Watson's ignorance of the
affair.   After the affair ended, Lori continued her marriage to her husband and proceeded to have
two more children with him.

47
¶ 19.   On remand, the Court instructs the trial judge to direct the parties to engage in discovery
that will ascertain when “the alienation or loss of affection [was] finally accomplished.”   Watson's
arguments before this Court-in both his brief and during oral argument-have left the Court, in light
of Lori's decision to remain with her husband during the course of the affair and afterward, with
the impression that Watson is arguing that the cause of action accrued upon his discovery of the
affair.   In other words, Hancock's affair with Lori caused his affections to be alienated. Under
Bland, 735 So.2d at 421(¶ 33) (Miss.1999), a claim for alienation of affection must be proven with
evidence “that the acts of the defendant in alienating the affection of the spouse were done with
malice or that there were circumstances or aggravation․” Again, Lori's affections must be the
focus of the discovery.   Watson's affections have no relevance in the statute of limitations
analysis.

¶ 20.   Alternatively, Watson's arguments have raised questions with this Court as to whether
Watson is simply disguising a claim for criminal conversation 4 , which has been abolished in
Mississippi, as a claim for alienation of affection.   These issues can be resolved, in conjunction
with the question of the accrual of the claim, only after further discovery between the parties.

¶ 21.   THE JUDGMENT OF THE HINDS COUNTY CIRCUIT COURT IS REMANDED FOR
PROCEEDINGS CONSISTENT WITH THIS COURT'S OPINION.   ALL COSTS OF THIS APPEAL ARE
ASSESSED TO THE APPELLANT.

FOOTNOTES

1.   As this case is currently before this Court following an interlocutory appeal of the denial of
Hancock's motion to dismiss, the facts available to this Court are derived from Watson's amended
complaint and Hancock's two motions to dismiss (including exhibits).

2.   The divorce decree converted ownership of the marital home to the Watsons as tenants in
common for a period of twenty-four months from the date of the divorce decree.   Thereafter, the
house was to be sold and the proceeds divided equally.

3.   Restatement (Second) of Conflicts of Law § 6 sets forth the general principles and factors to
be considered in a choice of law analysis, including policy considerations, uniformity of results in
the application of the analysis, and ease in application of the analysis.   See Restatement
(Second) of Conflicts of Law § 6(2).

4.   The Mississippi Supreme Court abolished the tort of criminal conversation, defined as “no
more or less than an act of adultery between the defendant and the plaintiff's spouse,” in Saunders
v. Alford, 607 So.2d 1214, 1216 (Miss.1992).

KING, C.J., for the Court.

LEE AND MYERS, P.JJ., CHANDLER, GRIFFIS, BARNES, ISHEE AND ROBERTS, JJ., CONCUR.  
IRVING, J., CONCURS IN RESULT ONLY. CARLTON, J., NOT PARTICIPATING.

48