CHICO, RICHARD L.

LLB-III BC Law

Choice of Law: A Summary

Involvement of a foreign element necessitates the application of principles in
determining the law applicable to a certain case, or the choice of law, especially in
instances when the parties stipulate a foreign law to govern their relationship, or even
when the law of the domicile of the person applies except when there are compelling
reasons not to apply the same.
Local law is the default law that will govern the relationship of the parties to a
dispute – the conflict of law rules of the state should first be applied before resorting to
the foreign law. Articles 15 and 16 of the New Civil Code (NCC) under lex nationali and
lex rei sitae, respectively, are noted examples under Philippine law.
Although a problem of renvoi or the endless reference to two laws back and forth
may occur, such may be resolved by the application of the forum court’s laws to put an
end to such throwing back of the case. This is exhibited in the case of Aznar v. Garcia1
where the validity of the testamentary dispositions of the decedent is first governed by
Paragraph 2 of Article 16 of the NCC which refers the matter to the national law of the
person, but Article 946 of the California Civil Code refers the matter back to the law of
the domicile, which is Philippine law. However, when the decedent is a national of one
country and a domicile of another, the doctrine of renvoi is usually not relevant as
demonstrated in Bellis v. Bellis2 where it would not result in a reference back to the local
law, but would still refer to the foreign law.
In the absence of an applicable local law, or a foreign law is either specified in
the agreement or is inapplicable, other principles would determine the applicable law to
a particular case, one of which is the court’s consideration of the interstate and
international systems – formulating principles and reconciling multistate laws in the
process with the end view of encouraging international trade.
Relevant policies of the forum, where each considers certain values to be of
highest import to them, is also of primordial consideration, and a court may strike down
a foreign law if such is found to be prejudicial to the forum’s consideration of policies. In
Cadalin et al. v. POEA Administrator3, the application of the foreign law could not be
applied in Philippine jurisdiction being contrary to public policy on the protection of labor.

1
G.R. No. L-16749, January 31, 1963
2
G.R. No. L-23678, June 6, 1967
3
G.R. Nos. L-104776, 104911-14, and 105029-32, December 5, 1994
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,
as enunciated in Bank of America NT & Asia v. American Realty Corporation 4 where the
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. In
Dacasin v. Dacasin5 it was held that an agreement for the joint custody of a child was
struck down being contrary to Philippine law which awards custody of a child under
seven years to the mother.
Relevant policies of other interested states, where the laws and interests of two
states are compared and the law of the state whose interest is more impaired is applied,
is also an important factor especially when such states have conflicting interests in a
certain transaction. In the cases of Kearney v. Salomon Smith Barney6 and Butler v.
Adoption Media, LLC7 the governing laws of the first state were applied rather than the
laws of the second state because of the finding that the interests of the former state
would be severly impaired if its laws were not applied, whereas the latter state’s interest
would not be significantly impaired if the former state’s laws were applied. A noted
criticism of this approach is that it tends to favor the laws and interests of the forum
court – an inherent bias exists for such court to favor their own laws over that of others.
Courts must enforce the choice of law of the parties to a contract which they
themselves specified, unless contrary to a statutory directive of the forum court or
contravenes public policy. A motion to compel arbitration in accordance with the
contract agreed upon by the parties was upheld in Francisco v. Stolt Achievement MT8
because such terms and conditions become part of the law of the contract – a look into
the justified expectations of the parties which should be protected.
The type of law involved and the reasons and objectives of such law in question
should be also considered in order for the court to be in a better position to decide
which rights to uphold and protect. In Hancock v. Watson9 a complaint for alienation of
affection was filed and it was decided that the applicable law is the law of the place
where the tort occured, applying “the most significant relationship” test in discovering
the details of the case at hand.
4
G.R. No. 133876, December 29, 1999
5
G.R. No. 168785, February 5, 2010
6
137 P.3d 914 (2006)
7
486 F. Supp. 2d 1022 (2007)
8
293 F.3d 270 (2002)
9
962 So.2d 627 (2007)
 Stability is favored in judicial decisions, where the doctrine in a previously
decided case is usually applied to the current case in dispute, as shown in the case of
Dowis v. Mud Slinger10 where the doctrine of lex loci delicti on the basis of stability and
certainty in the law was upheld.
The simplicity and ease in determining and applying which law is also
considered, citing the same case of Dowis, in the sense that it is a much simpler
approach as compared to other approaches which a more elaborate analysis and
contact-counting is required, like “the most significant relationship” test.
The doctrine of processual presumption, which presumes that foreign law to be
the same as the local law when there is failure to prove such foreign law, is also a factor
that affects the choice of law. However, the foreign law should be duly proved before
being admitted into evidence, as in the cases of Wildvalley Shipping v. Court of
Appeals11, Manufacturers Hanover Trust Co. v. Guerrero12 and Edi-staff Builders
International v. NLRC13 where the relevant foreign law was not pleaded, or if such was
pleaded, it was not properly proved before the court for it to be considered, thus,
rendering the foreign law inapplicable and irrelevant.
Not without exceptions, this presumption may be overcome when there is a
presentation of a foreign-licensed attorney, when administrative agencies recognize
such laws without proof (as enunciated in Norse Management Co. v. National Seamen
Board14), when one party failed to object to the improper presentation by the other party
of proof of foreign law, when a tribunal recognizes the existence of a universally known
law, and those laws appearing in official websites like those of the Office of the
President or the Library of Congress.
Scrivener’s error, which means the failure of the agreement to express the
intention of the parties, was illustrated in Hong Kong and Shanghai Banking Corporation
v. Sherman et al.15 where the parties did not stipulate that only a particular court, to the
exclusion of the rest, has jurisdiction, unlike in Carnival Cruise Lines, Inc. v. Shute16
where such exclusive forum selection clause was validly stipulated and thus, held
enforceable.

10
621 S.E.2d 413 (Ga. 2005)
11
G.R. No. 119602, October 6, 2000
12
G.R. No. 136804, February 19, 2003
13
G.R. No. 145587, October 26, 2007
14
G.R. No. L-54204, September 30, 1982
15
G.R. No. 72494, August 11, 1989
16
499 U.S. 585 (1990)