CONFLICT OF LAWS “Soft law” – normative

statements in non-
CHAPTER 1 binding political
INTRO TO PRIVATE INTERNATIONAL LAW instruments
International Law (declarations,
“Rules and principles of general application resolutions, programs
dealing with the conduct of states and of of action)
international organizations with their relations Subjects
inter se, as well as will some of their relations States and Individuals and
with persons, whether natural or juridical.” international corporations
organizations
Includes questions of right between nations and
questions concerning the rights of persons (corporations and
within the territory and dominion of one nation, individuals included – in
by reason of acts done within the dominions of recent cases)
another nation.
Transformation to Customary International Law
A branch of law that deals with the relationship Elements for a norm to become a customary
of: international law:
• states 1. Norm must have become universal in
• individuals of different states character
2. Must be of mutual concern to states
Branches of International Law 3. Must of specific character that is definite in
1. Public International Law (Public character) – content
relationship of states and international
entities Foreign Element
• Example: territorial disputes Most important component of a conflict of law
problem.
2. Private International Law (Private
character) – when individuals, domestic It is anything which is not domestic and has
laws, or local events intermingle foreign component to it (i.e., foreigner, foreign
necessitating a determination of the corp., incident in foreign country, foreign law
applicable law. chosen by parties)
• Example: invocation of forum non
conveniens; laws of State A and B are Phases in Conflicts Resolution
different 1. Jurisdiction – authority of court to take
cognizance of the case.
Public IL Private IL 2. Choice of law – applicable law to the
Source problem.
“Hard law” – Domestic and 3. Recognition and enforcement of judgments
international municipal law – enforcement of foreign laws and
conventions, judgments in another jurisdiction.
international customs,
general principles of Importance: to determine the applicable theories
law recognized by of law and defenses available thereto.
civilized nations,
judicial decisions, These phases are separate from each other –
teachings of the most defense in one phase in not a defense in other
highly qualified phases.
publicists of various
nations. Steps in Determining Applicable Law
1. Characterization
 • Identification of the issues in the
problem.
• Spotting the legal issues from the facts
of the case.
• Determine the branch of law implicated
by the problem.
• Determine if presence of a foreign
element:
o Yes – employ applicable
conflicts of law doctrines to
determine applicable law.
o No – apply the rule, law or
jurisprudence prevailing in the
forum.
2. Connecting factors
• Analysis which jurisdiction or for a has
the most connection to the case.
• Determine the applicable legal system
between 2 or more legal systems.
o Look into the nationality of
parties, locations of the act,
terms of agreement/contract,
etc.
• Apply the applicable branch of law in
identified legal system to resolve the
dispute.
Choice of Applicable Law
Parties to a contract are free to stipulate the
applicable law that will govern their contractual
relations (Art. 1306, NCC). Not necessary that it
be a local law, as long as it does not violate the
public policy or the laws of the forum.
Once chosen, it shall apply to govern the duties
and responsibilities of the parties to each other.
Extraterritoriality
GR: Laws are territorial in application.
XPN: It can be extraterritorial when so provided
by the legislature.
To determine – examine the legislative intent by:
• looking at the words and phrases of the
statute;
• rules of interpretation through
examining congressional debates and
records.
Examples of laws providing extraterritorial
application:
Article 15. Laws relating to family rights and
duties, or to the status, condition and legal
capacity of persons are binding upon citizens of
the Philippines, even though living abroad.
Article 16. Real property as well as personal
property is subject to the law of the country
where it is stipulated.
However, intestate and testamentary
successions, both with respect to the order of
succession and to the amount of successional
rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law
of the person whose succession is under
consideration, whatever may be the nature of
the property and regardless of the country
wherein said property may be found.
Corporate Liability for Human Rights Violation
Two conflicting views:
1. US Supreme Court: corporation cannot
violate international law because there is no
historical antecedent for holding so. No case
in the past has ever held that corporation can
commit or violate human rights and that only
its officers may be held liable for violation.
Criminal tribunals often have no jurisdiction
over corporations.
2. Supreme Court of Canada: corporation can
violate international law since recent
developments in human rights law have
conferred upon them a certain personality or
standing in the international community. IN
view of heinous nature of human rights
violations, corporations must be held
accountable for criminal acts that they
commit.
Forum Non Conveniens
Forum is not convenient. Instances may be:
a. Chosen forum or place where the suit is filed
has no substantial connection to the parties
or to the dispute that it becomes very
inconvenient to litigate the suit in the chosen
venue.
b. Parties to the case are not residents of the
forum or that the witnesses are located
somewhere else, in a jurisdiction which
offers more convenient forum to litigate.
c. Jurisdiction could be an adequate forum
where courts of law operating and may offer
the plaintiffs a venue where they could
obtain justice.
Instances where a court may desist from
exercising jurisdiction:
1. Belief that the matter can be better tried and
decided elsewhere, either because:
a. Main aspects of the case transpired
in a foreign jurisdiction; or
b. Material witnesses have their
residences there.
2. Belief that the non-resident plaintiff sought
the forum, a practice of known as forum
shopping, merely to secure procedural
advantages or to convey or harass the
defendant.
3. Unwillingness to extend local judicial
facilities to non-residents or aliens when the
docket may already be overcrowded.
4. Inadequacy of the local judicial machinery for
effectuating the right sought to be
maintained.
5. Difficulty of ascertaining foreign law.
CHAPTER 2
CHOICE OF LAW
Choice of Law Principles
Principle 1: Local Law
Looks into the statutory directive of the state on
the choice of law.
Local law to be the default law that will govern
the relationship of the parties to a dispute. Most
states have conflicts of law rules specified in their
civil codes, and they must be applied before one
even considers the application of foreign law. If
there is specification, and provided these
directives comply with the constitution of the
state, the statutory directive must be followed.
Examples: Art. 15 and 16 of the NCC.
The problem of renvoi. a local law requires the
forum court to apply a foreign law to the case in
dispute. On the other hand, the foreign law
directs the application of laws of the forum court
to the case under consideration.
Solution: Local courts must, after looking at the
conflicts-of-law rules of the foreign state, apply
the directive of the latter’s law.
• Directive is the application of forum
court’s laws = the court must follow this.
Principle 2: Needs of the Intestate and
International Systems
Courts must formulate principles and reconcile
multistate laws with the end in view of
encouraging international trade among people.
Principle 3: Relevant Policies of the Forum
Each forum considers certain values to be of
highest import to them.
Example:
▪ US may take fairness and due process to be
the cornerstone of their judicial system. In
considering foreign laws, US courts may look
at the fundamental fairness of a law before
recognizing its validity.
▪ PH courts consider protection for labor to be
of highest import. If a case implicates a
foreign law which is prejudicial to the
interest of labor, courts are quick to strike
down the foreign law in favor if the
applicability of the local law.
▪ Divorce in PH is not recognized for being
against public policy.
Elements of fundamental public policy:
1. They cannot be contractually waived;
2. They protect against otherwise inequitable
results; and
3. They promote the public interest.
Principle 4: Relevant Policies of Other Interested
States
Indulges courts to engage in a governmental
interest analysis when 2 states have conflicting
laws and interests.
Governmental interest analysis –
1. courts compare the law and interests of 2
states.
2. determine if there is real conflict.
3. if there is, apply the law of the state whose
interest is more impaired.
Important to consider the interest of other states
since commercial transactions involve people
located in several jurisdictions which have
conflicting interests in a transaction.
Criticism of Governmental Interest Analysis
Approach: tends to favor the laws and interest of
the forum court.
Principle 5: Protection of Justifies Expectations
Parties are free to stipulate the terms and
conditions of their agreement, which terms and
conditions become part of the law of the
contract, and courts must enforce this choice of
law. Provided that it is not contrary to a statutory
directive of the forum court or contravenes
public policy.
Principle 6: Basic Policies Underlying the
Particular Field of Law
Reason and objectives of the laws in question
should be given consideration. Hence, courts
should look into the type of law involved. By
looking at the particular laws involved, courts
may be in a better position to decide which rights
to uphold and protect.
Principle 7: Certainty, Predictability, and
Uniformity of Result
Favoring stability in judicial decisions. When the
facts of a case falls squarely with the facts of a
previously decided case, the doctrine in the latter
case is usually applied to the case in dispute. Res
judicata and stare decisis.
Rationale: To provide stability in judicial decisions
so judges will stick to their functions of
interpreting the laws instead of setting policies.
Principle 8: Ease in the Determination and
Application of the Law to be Applied
Simplicity is always the virtue in determining in
which law to apple. If a court is bound by a
particular doctrine, it is usually simpler for the
courts to apply the same doctrine in future cases.
No longer need to adopt new and more
complicated analyses – what needs to be done is
to apply the law which has been applied before.
Stare decisis.
Other Principles Affecting Choice of Law
Proof of Foreign Law and Processual Presumption
Foreign laws have to properly proved before
they are admitted into evidence. Failure to prove
foreign law will result to the exclusion of the
foreign law and a presumption will arise that
foreign law is the same as local law.
Exceptions to Proof of Foreign Laws:
1. presentation of a foreign-licensed attorney
who will testify in open court concerning her
knowledge of the law in question.
2. Case of administrative agencies recognizing
foreign laws without proof thereof.
3. Lack of objection to the improper
presentation by one party of proof of foreign
law.
4. Laws appearing in official websites like those
of the Office of the President or the Library
of Congress may be properly recognized
since these are official sites of government
agencies which have custody of laws.
Scrivener’s Error – failure of the agreement to
express the intention of the parties resulting to
the disregard of the chosen law. Failure can be
attributed to:
• Wrong terminology
• Missing terminology
• Clerical error
Failure to express the intent of the parties, the
agreement is interpreted according to plain or
obvious meaning.
CHAPTER 3
CONTRACTS
Conflict of Laws in Contractual Relations
Contract – agreement among several parties
involving the delivery of a product or the
performance of an act.
To induce a conflict of laws scenario, the contract
involves a foreign element (i.e., alien party,
choice of law is foreign law, place of execution
and performance are different from each other).
It is local when relationship of the parties and all
other relevant elements, regardless of chosen
law, are connected with that State.
Lex loci contractus – law of the place where the
contract was executed. In the absence of law
stipulated by the parties to their choice of law,
this is the default law.
• If there is choice of law stipulated in the
contract, the law of the place of
performance will always find
applicability to ensure that local laws
thereof are not violated or public policy
 infringed by the execution of the
contract.
Primacy of Contractual Stipulations
Article 1306 - The contracting parties may
establish such stipulations, clauses, terms and
conditions as they may deem convenient,
provided they are not contrary to law, morals,
good customs, public order, or public policy.
Choice of Law Stipulations
Principle of autonomy of contracts – allows the
parties to stipulate the law that shall govern their
contractual relations.
If parties do not specify the extent of the
applicability of their chosen law, the chosen law
will normally apply to the following concerns:
a. interpretation;
b. rights and obligations arising from the
contract;
c. performance and the consequences of non-
performance, including the assessment of
damages;
d. the various ways of extinguishing
obligations, and prescriptions and limitation
periods;
e. validity and the consequences of invalidity of
the contract;
f. burden of proof and legal presumptions; and
g. pre-contractual obligations.
Pandemics and Force Majeure
2 important issues emerge from conflicts arising
from contractual stipulations across national
borders:
1. Presence of mandatory domestic law to
which everybody must comply.
2. Specificity of the contractual stipulation so
as to cover ambiguities that may be found in
domestic laws.
Problem during the COVID-19 Pandemic: debtors
and obligors were unable to meet their
obligations = regulations disallowed most forms
of commercial activity and prohibited people
from getting out of their homes.
• Some of the moratoriums or
suspensions set in place were vague
enough to cover every situation that an
affected business may face.
Ambiguity in the definition and scope of force
majeure: some jurisdictions were not specific
enough to prevent disputes between contracting
parties. Example is Art. 1174 of NCC – “Except in
cases expressly specified by the law, or when it is
otherwise declared by stipulation, or when the
nature of the obligation requires the assumption
of risk, no person shall be responsible for those
events which could not be foreseen, or which,
though foreseen, were inevitable.”
SC’s definition of force majeure – not all
situations fall into those specific categories (act
of God, natural occurrences like flood or
typhoons, or act of man like riots, strikes or
wars).
In response, International Chamber of
Commerce (ICC) has come up with guidelines
that parties to a contract may follow. Force
majeure is defined as –
Occurrence of an event or circumstance
that prevents or impedes a party from
performing one or more of its
contractual obligations under the
contract, if and to the extent that party
proves: (a) that such impediment is
beyond its reasonable control; and (b)
that it could not reasonably have been
foreseen at the time of the conclusion of
the contract; and (c) that the effects of
the impediment could not reasonably
have been avoided or overcome by the
affected party.
Force majeure events enumerated under ICC
Force Majeure Clause:
a. War (whether declared or not), hostilities,
invasion, act of foreign enemies, extensive
military mobilization;
b. Civil war, riot, rebellion and revolution,
military or usurped power, insurrection, act
of terrorism, sabotage or piracy;
c. Currency and trade restriction, embargo,
sanction;
d. Act of authority whether lawful or unlawful,
compliance with any law or governmental
order, expropriation, seizure of works,
requisition, nationalization;
e. Plague, epidemic, natural disaster or
extreme natural event;
f. Explosion, fire, destruction of equipment,
prolonged break-down of transport,
 telecommunication, information system or
energy;
g. General labour disturbance such as boycott,
strike and lock-out, go-slow, occupation of
factories and premises.
Waiver of Renvoi
Rule of private international law will find no
application once a foreign law is chosen by the
parties.
Renvoi – usually mandates the parties to look to
the totality of foreign law in determining their
rights and obligations.
Phrase “without regard to the conflicts of law
provisions” – expresses the parties’ intention to
exclude consideration of all (regardless if
substantive or procedural in nature) conflicts of
law provisions in determining which law to apply
to various aspects of a dispute arising under the
CDA.
Approaches to Contractual Conflicts of Law
1. Lex loci contractus – law of the place where
the contract is executed.
• Without specifying the choice of law, it
is understood that the parties wanted
the local law to govern their contractual
relation.
• Place of execution is the default law
2. Lex loci solutionis – law of the place where
the contract is performed or celebrated.
• Since parties to a contract are expected
to follow and comply with the laws
where they are operating or performing
their obligations.
• Otherwise, there is a chance that they
will be in violation of the law of the place
of performance = ground for
invalidation of contract, or render
performance impossible.
3. State of the most significant relationship rule
– law of the place with the most connection
to the dispute.
• For convenience and practicality
• More factors connecting the case to a
particular state = easier to determine the
rights and obligations of the parties.
• Section 188 of Restatement (Second) of
Conflict of Laws:
LAW GOVERNING IN ABSENCE OF
EFFECTIVE CHOICE BY THE PARTIES
(1) The rights and duties of the parties
with respect to an issue in contract are
determined by the local law of the state
which, with respect to that issue, has the
most significant relationship to the
transaction and the parties under the
principles stated in s 6.
(2) In the absence of an effective choice of
law by the parties (see s 187), the contacts
to be taken into account in applying the
principles of s 6 to determine the law
applicable to an issue include:
(a) the place of contracting,
(b) the place of negotiation of the
contract,
(c) the place of performance,
(d) the location of the subject matter of
the contract, and
(e) the domicil, residence, nationality,
place of incorporation and place of
business of the parties.
These contacts are to be evaluated
according to their relative importance
with respect to the particular issue.
(3) If the place of negotiating the contract
and the place of performance are in the
same state, the local law of this state will
usually be applied, except as otherwise
provided in ss 189-199 and 203.
• This approach is unlike the previous two
approaches where one just applies the
law of the place of performance or
execution
Depecage
Process whereby different issues in a single case
arising out of single set of facts may be decided
according to the laws of different states.
It has always been understood that different
substantive issues could properly be decided
under the laws of different states, when the
choice-influencing consideration differ as they
apply to the different issues.
Philippines Follows Lex Loci Contractus
SC declared that “lex loci contractus governs in
this jurisdiction”. Thus, courts are obliged to
apply the law of the place of execution of the
contract in case of a conflict of laws dispute
concerning contracts is brought to the courts.
:: Contract executed in PH, and specifies no
choice of law = governing law will be the PH laws.
Defenses to Jurisdiction and Choice of Law
Hasegawa v. Kitamura
▪ In judicial resolution of conflicts problems, 3
consecutive phases are involved:
a. Jurisdiction – “where can or should
litigation be initiated?”
b. Choice of law – “which law will the
court apply?”
c. Recognition and enforcement of
judgments – “where can the
resulting judgment be enforced?”
▪ Jurisdiction and choice of law are 2 distinct
concepts.
a. Jurisdiction – whether it is fair to
cause a defendant to travel to this
state.
b. Choice of law – further questions
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 constitutional
authority to apply forum law.
▪ Whether the law of a state can be applied to
a transaction =/= whether the courts of that
state have jurisdiction to enter a judgment.
▪ In this case, the only issue is that of
jurisdiction hence choice-of-law rules are not
only inapplicable but also not yet called for.
▪ Before determining which law should apply,
there should first exist a conflict of law
situation requiring the application of the
conflict of laws rules.
▪ Three alternatives for a court or
administrative agency in disposing a case
involving a foreign element:
a. Dismiss the case – either lack of
jurisdiction or refusal to assume
jurisdiction
b. Assume jurisdiction and apply the
internal law of the forum
c. Assume jurisdiction over the case
and take into account or apply the
law of some other State/s.
CHAPTER 4
TORTS AND DAMAGES
Torts as a Source of Obligation
Torts or Quasi-delicts are sources of obligation.
Quasi delicts – “Whoever by act or omission
causes damage to another, there being fault or
negligence, is obliged to pay for the damage
done.” (Art. 2176, NCC). The elements are:
1. Damages suffered by the plaintiff.
2. The fault or negligence of the defendant
or some other person to whose act he
must respond.
3. The connection of cause and effect
between the fault or negligence and the
damages incurred.
4. That there must be preexisting
contractual relation between the
parties.
Concept of Negligence
“consists in the omission of that diligence which
is required by the nature of the obligation and
corresponds with the circumstances of the
persons, of the time and of the place.” (Art. 1173,
NCC)
Ordinary prudent person test – standard
employed in determining negligence.
▪ Could a prudent man foresee harm as a
result of the course actually pursued? If
so, it was the duty of the actor to take
precautions to guard against that harm,
followed by ignoring of the suggestion
born of this prevision, is always
necessary before negligence can be held
to exist.
▪ Negligent if – when a prudent man in the
position of the tortfeasor would have
foreseen that an effect harmful to
another was sufficiently probable to
warrant his foregoing conduct or
guarding against its consequences.
Conflicts of Laws in Torts
Conflicts usually occur in cases of cross-border
torts when the act or conduct causing the injury
happens in one state while the resulting injury is
felt in another state. Some states employ the law application, stability, litigation, flexibility,
of the place of injury while others employ the law and predictability. fairness, and
of the state with the most significant relationship judiciousness.
to the case. Apply the law of the There is greater
place of injury with no chance of justice being
Approaches to Conflicts’ Torts need for contracts- obtained, and is fine-
1. Lex loci delicti (vested rights doctrine) – counting. tuned to modern
traditional rule that employs the law of the litigation where it is
place of injury. difficult to pinpoint the
• Since the rights of the parties vested in place of injury or
the place of injury ad nowhere else. where the place of
• When someone is wronged in a injury could be in
particular place, the rights of the parties several states.
arise from that jurisdiction whose law Disfavored because it Eclectic for its
must then be applied to determine the is inflexible and does tendency to ignore
parties’ rights and liabilities. not respond to the stare decisis; makes
needs of modern judicial decision
2. Governmental interest analysis approach – litigation. unpredictable
involves examination of:
a. Whether there is a difference in the law Philippine’s Preference for Most Significant
of jurisdictions involved. Relationship
b. Whether there is a true conflict of law SC in the case of Saudi Arabian Airlines vs. CA
c. If true conflict exists, the court will apply expressed preference for most significant
the law of the states whose interest is relationship, being in step with the modern trend
more impaired. in tort liability as against the widely criticized lex
loci delicti.
3. Choice-influencing considerations approach
– this requires examination of the 5 factors Abandonment of Stare Decisis
to determine the applicable law: Concurrence of the following grounds for
a. Predictability of result overruling a prior constitutional decision:
b. Maintenance of the interstate and 1. When the prior decision is not only wrong,
international order but grievously or egregiously wrong;
c. Simplification of the judicial task 2. When the prior decision caused significant
d. Advancement of the forum’s negative jurisprudential or real-world
governmental interest consequences;
e. Application of the better rule of law 3. When overruling the prior decision would
unduly upset reliance interests, based on the
4. Lex fori – where the rights and liabilities of variety of reliance interests and the age of
the parties are governed by the law of the the precedent.
forum.

5. Most significant relationship approach –

examination as to what state has the most
connection to a case. See Restatement
(Second) of Conflict of Laws.

Lex Loci Delicti Most Significant

Relationship
Jurisdiction which Jurisdiction that
employs this favor its employs this favor its
simplicity, ease of responsiveness to
modern times and