CONFLICT OF LAWS

12 September 2008

Definition
Part of the law of each State which determines whether in dealing with a factual situation involving a foreign element, the law or the judgment of some other State will be recognized or applied in the forum.

Elements
Nature: -merely part of municipal law - directive to courts [& preliminarily, to administrative agencies: DFA, BI, SEC, etc.] Subject: any factual situation/legal problem containing any foreign element Primary function: determine whether the rules of law or the judgment of some other State(s), and if so, to what extent, should be recognized or applied in the forum.

Scope & Functions

1. Determine which country has jurisdiction:
-prescribe conditions under which the forum court/agency is competent to entertain a suit or proceeding involving facts containing a foreign element;

2. Choice of Law:
-determine for each class of cases the particular system of law by reference to which the rights of the parties must be ascertained

3. Recognition & Enforcement of Foreign Judgments

-specify circumstances in which foreign judgment will be recognized as valid and binding in the forum; determination of its force, validity & effectiveness Hasegawa v. Kitamura (2007): three consecutive phases involved in judicial resolution of conflicts-of-laws problems. Raytheon International v. Rouzie (2008, by J. Tinga)

COL v. PIL
Nature: municipal Who: private persons Transactions involved
international Sovereign States & intl orgs. those with public interest Peaceful (e.g., diplomatic negotiation, good offices, mediation, ICJ)

Private transactions
Remedies or Sanctions Resort to municipal tribunals

Forcible (e.g., severance of diplomatic relations, retortions, reprisals, embargo, etc.)

Sources of COL
Codifications [Civil Code, Code of Commerce, Insurance Code] Special Legislation [FIA, Corporation Code, Banking Law, COGSA, IP Law] Multilateral treaties & international conventions [Warsaw Convention, UNCITRAL, Convention relation to Stateless Persons] Bilateral treaties Case law International customs [lex situs for immovables; lex loci celebrationis re formalities; lex loci delicti commissi re torts. PIL [state & diplomatic immunities, territorial jurisdiction, prohibition against denial of justice] Constitution Indirect sources [natural law and the work of jurists]

Ways of Disposing a COL case

DISMISS a. Lack of jurisdiction (SM, person, res) b. Possess jurisdiction, but refuse to assume (forum non conveniens)
ASSUME JURISDICTION a. Apply internal law of the forum (lex fori) b. Apply the proper foreign law (lex causae)

Forum non conveniens

Refusal based on inconvenience to the forum:
Evidence & witnesses not readily available Clogged dockets Forum shopping Forum has no particular interest in the case (does not involve its citizens or residents) Other foreign courts are open and case would be better tried there

Apply Internal/Domestic Law

1. The forum expressly so provides in its conflicts rules; 2. Processual presumption: when the proper foreign law has not been properly pleaded and proved; 3. Exceptions to Comity: when the case involves any of the exceptions to the application of the proper foreign law

Apply Internal/Domestic Law

1. The forum expressly so provides in its conflicts rules:
Art. 16, par. 2: intestate & testamentary successions (order & amount of successional rights), and intrinsic validity of testamentary provisions governed by national law Art. 829 CC: will executed by alien abroad but revoked here, the revocation must comply with formalities of Phil. Law Art. 80, Family Code: in the absence of contrary stipulation, property relations of Filipino spouses governed by Phil. Law, regardless of place of celebration and residence. Also applies to marriages where husband is Filipino. [n.b. matrimonial property regime follows the husband]

Apply Internal/Domestic Law

3. Exceptions to Comity: (when the case involves any of the
exceptions to the application of the proper foreign law)
a. Contrary to sound & established public policy of the forum (Art. 17, par.3), e.g., joint wills, bigamous, polygamous & incestuous marriages; splitting of single cause of action (BA case) Contrary to almost universally conceded principles of morality (contra bonos mores), e.g., slavery, human trafficking, piracy Procedural matters (lex fori determines which are substantial and which are procedural) Penal laws, judgments & contracts (see: purpose of penalty), based on principle of territoriality Purely fiscal/revenue-producing or administrative matters Lead to undeniable injustice to citizens/residents Against the vital interests & national security of the forum (BA case) Involves real & personal property in the forum (lex situs)

b. c. d.

e. f. g. h.

Nature of Conflict Rules

Kinds of legal rules: I. Rules of PIL II. Rules of Municipal/National Law a. domestic internal rules -authorize, command or prohibit b. rules of private international law or COL (aka conflict rules/choice-of-law rules) -decide only which law or jurisdiction will give final solution to the question

Characterization
Aka doctrine of qualification or classification Process of assigning a disputed question to its correct legal category, the purpose of which is to enable the forum to select the proper law Stages: [lex fori prevails]
1. Classification of factual situation 2. Determination & characterization of point of contact or the connecting factor 3. Extent of application of the chosen law, I.e., characterization of problem as procedural or substantive

Nature of Conflict Rules

Art. 16. [1]Real property as well as personal property [2] is subject to the law of the country where it is situated.

Parts of a conflicts rule: 1. Defines object: factual situation/event 2. Determines the legal consequences by prescribing the municipal law to which the question should be referred or connected: the test/connecting factor/point of contact:
e.g., nationality, domicile, residence, place of sojourn, origin, seat of legal or juridicial person, situs of the thing (lex situs), place where the act was done (locus actus), place of performance, intention of the parties (lex loci intentionis), place of the forum (lex forum), flag ship

Escape Devices [from the traditional rules]

Renvoi [double & transmission theory]
Aznar v. Garcia: conflict rules of forum refer to foreign law & latter refers it back to the internal law, the latter (law of the forum) shall apply; person is national of 1 state [adopting situs theory] & domiciled in another [nationality theory].

Characterization [substance v. procedural distinction]

Cadalin v. POEA: if forum state has borrowing law (prescription), this makes it of substance, but may still not be applied as contrary to public policy

Exceptions to application of foreign laws

Salvacion v. Central Bank: attachment of foreign deposits to prevent injustice to citizen

The center of gravity doctrine [aka most significant relationship or grouping of contacts]
Saudi Arabian Airlines v. CA: acts occur in more than 2 countries, not 1 of which is of sufficient significance to determine the law applicable.

System of Personal Law

(as distinguished from laws that concern property)

Concerns persons, their legal condition & civil status

Limited in scope in common law countries, while most civil law countries have extensive scope/coverage, e.g., beginning & end of personality, capacity to have rights in general, engage in legal transactions, persons & family relations, succession (e.g. Arts. 15 & 16, CC)

Theories:
1. Nationality: Phils. (generally) e.g., arts. 15, 16 par.2 CC; Art. 21 FC (certificate of legal capacity); Art. 1039 CC (capacity to succeed) 2. Domiciliary: domicile of: origin (birth), constructive (operation of law) & choice 3. Situs (eclectic): law of the place of important element of the problem: (a) active participation: actual situs; (b) passive participation: legal status (domicile)

Jurisprudence [by J. Tinga, 2008]

Raytheon International v. Rouzie (issue of FNC, review of COL principles in Phil. jurisprudence) three consecutive phases involved in judicial resolution of conflicts-of-laws problems: jurisdiction, choice of law, R&E of FJ (Hasegawa v. Kitamura, Nov. 2007) If local forum could assume jurisdiction, prove that Phil. Court: (1) one to which the parties may conveniently resort; (2) in a position to make an intelligent decision as to the law and the facts; and (3) likely to have the power to enforce its decision. [Bank of America v. CA, 2003]

Jurisprudence [by J. Tinga, 2008]

Raytheon International v. Rouzie:
Exercise of sovereign prerogative: If forum has jurisdiction (SM, parties, res), can try the case even if the conflicts rules or the convenience of the parties point to a foreign forum. Contractual stipulation as to choice-of-law cannot oust forum court of jurisdiction. 2 distinct concepts: jurisdiction looks at fairness to cause a defendant to travel to this state; choice of law is whether the application of a substantive law is fair to both parties. [Hasegawa v. Kitamura]. The choice of law stipulation relevant only when the substantive issues of the case develop, I.e., after hearing on the merits. Invocation by a party of FNC will not oust forum court of jurisdiction. Dismissal on FNC requires factual determination, & is more a defense. Trial court has discretion to abstain from assuming jurisdiction on FNC, but only after vital facts are established, to determine whether special circumstances require the court's desistance. FNC not a ground to dismiss. [Bank of America]

Jurisprudence [by J. Tinga]

A foreign judgment on the mere strength of its promulgation is not yet conclusive, as it can be annulled on the grounds of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact (Sec. 48, R39, RoC). It is likewise recognized in Philippine jurisprudence and international law that a foreign judgment may be barred from recognition if it runs counter to public policy. (Republic v. Gingoyon, 2006)

Jurisprudence [by J. Tinga]

Mijares v. Ranada (2005): meant to be jurisprudential

guidepost for enforcement of foreign judgments, particularly against an estate. action to enforce foreign judgment is one capable of pecuniary estimation Effect of foreign judgment: (a) thing (in rem): conclusive as to title; (b) person (in personam): presumptive evidence of a right as between the parties/ successors in interest. ---But same grounds to repel. Usually necessary to file action to enforce foreign judgment, but party attacking has burden to overcome presumption of validity. Distinctions, between COA from (a) the enforcement of a foreign judgment, and (b) the facts or allegations that occasioned the foreign judgment.

Jurisprudence [by J. Tinga]

Mijares v. Ranada (2005):
Policy of preclusion: strong

and pervasive policy in all legal systems to limit repetitive litigation on claims and issues, & provide for final resolution of all disputes. Is embodied in Sec. 48, R30, RoC. Complaint to enforce the US District Court judgment is one capable of pecuniary estimation, but also an action based on judgment against an estate. So what applies is Sec. 7(b)(3) on "other actions not involving property" (not 7(a) of Rule 141).

Jurisprudence [by J. Tinga]

Mijares v. Ranada (2005):
Basis for ruling not only based on procedural rule, but on consensus in the international plane that the viability of recognition & enforcement of foreign judgments is essential, & a consensus as to its requisites & defenses: The procedure and requisites in Section 48, Rule 39 derive their efficacy not merely from the procedural rule, but by virtue of the incorporation clause of the Constitutionthere is a general right recognized within our body of laws, and affirmed by the Constitution, to seek recognition and enforcement of foreign judgments, as well as a right to defend against such enforcement on the grounds of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.

Jurisprudence
Hasegawa v. Kitamura, Nov. 2007 [Re: specific
performance of contracts executed outside by foreign nationals, filed here]

If COL problem is on 1st phase (jurisdiction), arguments under choice of law (lex loci celebrationis, lex contractus, state of the most significant relationship rule) are inapplicable, unsound, premature. Review of forum courts alternatives to COL suit FNC not a valid ground for MD, & requires factual determination.

Jurisprudence
Parties may stipulate in their agreement as to applicable law & venue of action, but not as to jurisdiction of court over the subject matter. As long as there are minimum contacts, Phil. Courts may assume jurisdiction. (Hongkong & Shanghai Banking v. Sheman) No judicial notice of foreign law, must be properly pleaded & proved or else processual presumption. (Bank of America v. American Realty; EDI-Staff Builders v. NLRC (2007)) Do not apply foreign law, judgment contract when contrary to sound & established public policy, I.e., splitting of cause of action. (Bank of America v. American Realty Corp.)

Jurisprudence
The bare fact that respondent is a Canadian citizen & a repatriate does not warrant dismissal based on FNC. Labor Code (re: illegal dismissal) does not include FNC as ground to dismiss; merely a defense as it involves factual determination; Phil. Courts may exercise jurisdiction if requisites in BA case are met. [Pacific Consultants v. Schonfeld, 2007] Forum shopping originated as concept in COL. To combat the evils, FNC principle was developed. [Cruz v. Caraos, 2007]

Jurisprudence
Not all cases involving Filipino citizens can be tried in the Phils. If main aspect of case transpired in 2 foreign jurisdictions, and only link to Phils. Is citizenship, NLRC should have refused jurisdiction based on FNC (BA requisites not complied with) [Manila Hotel v. NLRC, 2000] Forum shopping originated as concept in COL. To combat the evils, FNC principle was developed. [Cruz v. Caraos, 2007] In an action to declare nullity of marriage based on bigamy: the divorce obtained abroad by an alien may be recognized here, if valid in national law of alien. But divorce decree & governing personal law of alien spouse must be proved. Australian divorce decree did not absolutely establish legal capacity to remarry under his national law. Remand case to receive evidence of capacity, otherwise, declare marriage as void (bigamous) [Garcia v. Garcia-Recio, 2001] Legal capacity is determined by national law of party concerned, not by absence of certificate of legal capacity. [Garcia v. Garcia-Recio, 2001]

Jurisprudence
Situs for real and personal actions are fixed by rules to attain greatest convenience possible to parties-litigants (maximum accessibility). Domicile is not synonymous to residence, as established in COL. [Saludo v. Amex Intl (2006): suit for damages] Phil. Laws will not apply when only connecting factor is as a forum [no significant relationship]. Party whose COA or defense depends on foreign law has burden of proving. [Crescent Petroleum v. M/V Lok Maheshwari, 2005]

Jurisprudence
No conflicts rule on essential validity of contracts is express in our laws, but most legal systems follow lex contractus (law of the contract), which may be lex loci voluntatis or lex loci intentionis. Phil. Courts should allow parties to choose, if not contrary to law, morals & public policy of the forum & bears substantive relationship to transaction. If no express choice of law in contract, follow most significant relationship to the transaction & parties. Place of performance (lex loci solutionis) in all matters relating to time, place, manner of performance & valid excused for non-performance. [PhilExport & Foreign Loan Guarantee v. V.P. Eusebio Construction (2004)] Contra: lex loci contractus governs. Phil. Law applies to contract of employment perfected here. [Triple Eight v. NLRC, 1998]

Jurisprudence
Lower courts in error in ruling that American law follows domiciliary theory. Renvoi inapplicable when national law of decedent (State of which he is resident) does not require it, so Phil. Law n/a to foreigners succession, including instrinsi validity of will. Divorce valid if obtained by alien spouse based on comity. [Llorente v. CA, 2000]

Jurisprudence
Saudi Arabian Air v. CA, 1998: illustration of escape device:

Jurisdiction: characterization of action, whether tort under SA or Art. 21 of CC [but implicitly, making a choice of law].
Choice-of-law: traditional notion of lex loci delicti commissi gives way to most significant relationship theory, and establishing points of contact.

Jurisprudence
Northwest v. CA, 1995
Foreign judgment is presumed valid & binding in the country from which it comes, until the contrary is shown. Presume regularity of proceedings & due notice. So party attacking foreign judgment has burden to overcome presumption. Matter of remedy & procedure (I.e. service of summons) are governed by lex fori. Party attacking must plead & prove foreign law as to service of summons, then show invalidity or service. Otherwise, presumption prevails. Alternatively, failure to prove will lead to processual presumption.

Jurisprudence
Foreign law may be proved by testimony in open court of an active law practitioner familiar with the foreign law, and quoting the specific foreign law involved, as an exception to Sec. 24 of Rule 132, RoC (official publication or authenticated copy). (Manufacturer Hanover Trust v. Guerrero)

Jurisprudence
Marriage is not a cause for loss of domicile. Domicile of origin is not replaced by operation of law unless there is actual change, a clear intention of abandoning & establishing a new one, and acts which corresponds to the purpose. Residence in political law is not the same in Civil Law (latter is only actual residence) [Romualdez-Marcos v. Comelec, 1995] Phil. Law follows lex loci celebrationis in formal validity of marriages (Art. 26, FC); and in case of doubt, all presumptions favor validity of marriage [Board of Commissions (of BI) v. Dela Rosa, 1991]

God Bless!