Second Issue. Should the complaint be dismissed on the ground of forum non-conveniens?

No. The doctrine of forum non-conveniens, literally meaning 'the forum is inconvenient', emerged in private
international law to deter the practice of global forum shopping, 42 that is to prevent non-resident litigants from
choosing the forum or place wherein to bring their suit for malicious reasons, such as to secure procedural
advantages, to annoy and harass the defendant, to avoid overcrowded dockets, or to select a more friendly venue.
Under this doctrine, a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not the
most "convenient" or available forum and the parties are not precluded from seeking remedies elsewhere. 43

Whether a suit should be entertained or dismissed on the basis of said doctrine depends largely upon the facts of
the particular case and is addressed to the sound discretion of the trial court. 44 In the case of Communication
Materials and Design, Inc. vs. Court of Appeals,45 this Court held that "xxx [a Philippine Court may assume
jurisdiction over the case if it chooses to do so; provided, that the following requisites are met: (1) that the
Philippine Court is one to which the parties may conveniently resort to; (2) that the Philippine Court is in a
position to make an intelligent decision as to the law and the facts; and, (3) that the Philippine Court has or is
likely to have power to enforce its decision."46 Evidently, all these requisites are present in the instant case.

Moreover, this Court enunciated in Philsec. Investment Corporation vs. Court of Appeals,47 that the doctrine of
forum non conveniens should not be used as a ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules
of Court does not include said doctrine as a ground. This Court further ruled that while it is within the discretion of
the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are
established, to determine whether special circumstances require the court's desistance; and that the propriety of
dismissing a case based on this principle of forum non conveniens requires a factual determination, hence it is
more properly considered a matter of defense. 48

G.R. No. 120135            March 31, 2003

BANK OF AMERICA NT & SA, BANK OF AMERICA INTERNATIONAL, LTD., petitioners,

vs.
COURT OF APPEALS, HON. MANUEL PADOLINA, EDUARDO LITONJUA, SR., and AURELIO K.
LITONJUA, JR., respondents.

Petitioner mainly asserts that the written contract between respondent and BMSI included a valid choice of law
clause, that is, that the contract shall be governed by the laws of the State of Connecticut. It also mentions the
presence of foreign elements in the dispute – namely, the parties and witnesses involved are American
corporations and citizens and the evidence to be presented is located outside the Philippines – that renders our local
courts inconvenient forums. Petitioner theorizes that the foreign elements of the dispute necessitate the immediate
application of the doctrine of forum non conveniens.

Recently in Hasegawa v. Kitamura,26 the Court outlined three consecutive phases involved in judicial resolution of
conflicts-of-laws problems, namely: jurisdiction, choice of law, and recognition and enforcement of judgments.
Thus, in the instances27 where the Court held that the local judicial machinery was adequate to resolve
controversies with a foreign element, the following requisites had to be proved: (1) that the Philippine Court is one
to which the parties may conveniently resort; (2) that the Philippine Court is in a position to make an intelligent
decision as to the law and the facts; and (3) that the Philippine Court has or is likely to have the power to enforce
its decision.28

On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court and
where the court has jurisdiction over the subject matter, the parties and the res, it may or can proceed to try the
case even if the rules of conflict-of-laws or the convenience of the parties point to a foreign forum. This is an
exercise of sovereign prerogative of the country where the case is filed. 29

Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law 30 and by
the material allegations in the complaint, irrespective of whether or not the plaintiff is entitled to recover all or
some of the claims or reliefs sought therein.31 Civil Case No. 1192-BG is an action for damages arising from an
alleged breach of contract. Undoubtedly, the nature of the action and the amount of damages prayed are within the
jurisdiction of the RTC.

As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent (as party
plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person of petitioner (as party
defendant) was acquired by its voluntary appearance in court. 32
That the subject contract included a stipulation that the same shall be governed by the laws of the State of
Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter, are precluded
from hearing the civil action. Jurisdiction and choice of law are two 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 which will determine the merits of the case is fair to both parties. 33 The choice of
law stipulation will become relevant only when the substantive issues of the instant case develop, that is, after
hearing on the merits proceeds before the trial court.

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its
jurisdiction where it is not the most "convenient" or available forum and the parties are not precluded from seeking
remedies elsewhere.34 Petitioner’s averments of the foreign elements in the instant case are not sufficient to oust
the trial court of its jurisdiction over Civil Case No. No. 1192-BG and the parties involved.

Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a factual
determination; hence, it is more properly considered as a matter of defense. While it is within the discretion of the
trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established,
to determine whether special circumstances require the court’s desistance. 35

Finding no grave abuse of discretion on the trial court, the Court of Appeals respected its conclusion that it can
assume jurisdiction over the dispute notwithstanding its foreign elements. In the same manner, the Court defers to
the sound discretion of the lower courts because their findings are binding on this Court.

Petitioner also contends that the complaint in Civil Case No. 1192-BG failed to state a cause of action against
petitioner. Failure to state a cause of action refers to the insufficiency of allegation in the pleading. 36 As a general
rule, the elementary test for failure to state a cause of action is whether the complaint alleges facts which if true
would justify the relief demanded.37

The complaint alleged that petitioner had combined with BMSI and RUST to function as one company. Petitioner
contends that the deposition of Walter Browning rebutted this allegation. On this score, the resolution of the Court
of Appeals is instructive, thus:

x x x Our examination of the deposition of Mr. Walter Browning as well as other documents produced in
the hearing shows that these evidence aliunde are not quite sufficient for us to mete a ruling that the
complaint fails to state a cause of action.

Annexes "A" to "E" by themselves are not substantial, convincing and conclusive proofs that Raytheon
Engineers and Constructors, Inc. (REC) assumed the warranty obligations of defendant Rust
International in the Makar Port Project in General Santos City, after Rust International ceased to exist
after being absorbed by REC. Other documents already submitted in evidence are likewise meager to
preponderantly conclude that Raytheon International, Inc., Rust International[,] Inc. and Brand Marine
Service, Inc. have combined into one company, so much so that Raytheon International, Inc., the
surviving company (if at all) may be held liable for the obligation of BMSI to respondent Rouzie for
unpaid commissions. Neither these documents clearly speak otherwise. 38

As correctly pointed out by the Court of Appeals, the question of whether petitioner, BMSI and RUST merged
together requires the presentation of further evidence, which only a full-blown trial on the merits can afford.

G.R. No. 162894             February 26, 2008

RAYTHEON INTERNATIONAL, INC., petitioner,

vs.
STOCKTON W. ROUZIE, JR., respondent.

Second Question: Forum Non Conveniens

Petitioner argues that the RTC should have refused to entertain the Complaint for enforcement of the foreign
judgment on the principle of forum non conveniens. He claims that the trial court had no jurisdiction, because the
case involved partnership interest, and there was difficulty in ascertaining the applicable law in California. All the
aspects of the transaction took place in a foreign country, and respondent is not even Filipino.
We disagree. Under the principle of forum non conveniens, even if the exercise of jurisdiction is authorized by law,
courts may nonetheless refuse to entertain a case for any of the following practical reasons:

“1) The belief that the matter can be better tried and decided elsewhere, either because the main aspects of the case
transpired in a foreign jurisdiction or the material witnesses have their residence there;

2) The belief that the non-resident plaintiff sought the forum[,] a practice known as forum shopping[,] merely to
secure procedural advantages or to convey or harass the defendant;

3) The unwillingness to extend local judicial facilities to non-residents or aliens when the docket may already be
overcrowded;

4) The inadequacy of the local judicial machinery for effectuating the right sought to be maintained; and

The difficulty of ascertaining foreign law.” 27

None of the aforementioned reasons barred the RTC from exercising its jurisdiction. In the present action, there
was no more need for material witnesses, no forum shopping or harassment of petitioner, no inadequacy in the
local machinery to enforce the foreign judgment, and no question raised as to the application of any foreign law.

Authorities agree that the issue of whether a suit should be entertained or dismissed on the basis of the above-
mentioned principle depends largely upon the facts of each case and on the sound discretion of the trial court. 28
Since the present action lodged in the RTC was for the enforcement of a foreign judgment, there was no need to
ascertain the rights and the obligations of the parties based on foreign laws or contracts. The parties needed only to
perform their obligations under the Compromise Agreement they had entered into. 1âwphi1.nêt

Under Section 48, Rule 39 of the 1997 Rules of Civil Procedure, a judgment in an action in personam rendered by
a foreign tribunal clothed with jurisdiction is presumptive evidence of a right as between the parties and their
successors-in-interest by a subsequent title. 29

Also, under Section 5(n) of Rule 131, a court -- whether in the Philippines or elsewhere -- enjoys the presumption
that it is acting in the lawful exercise of its jurisdiction, and that it is regularly performing its official duty. 30 Its
judgment may, however, be assailed if there is evidence of want of jurisdiction, want of notice to the party,
collusion, fraud or clear mistake of law or fact. But precisely, this possibility signals the need for a local trial court
to exercise jurisdiction. Clearly, the application of forum non coveniens is not called for.

The grounds relied upon by petitioner are contradictory. On the one hand, he insists that the RTC take jurisdiction
over the enforcement case in order to invalidate the foreign judgment; yet, he avers that the trial court should not
exercise jurisdiction over the same case on the basis of forum non conveniens. Not only do these defenses weaken
each other, but they bolster the finding of the lower courts that he was merely maneuvering to avoid or delay
payment of his obligation.

WHEREFORE, the Petition is hereby DENIED and the assailed Decision and Resolution AFFIRMED. Double
costs against petitioner.

SO ORDERED.

G.R. No. 141536. February 26, 2001

GIL MIGUEL T. PUYAT, petitioner,

vs.
RON ZABARTE, respondent.

Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to hear and
resolve the civil case for specific performance and damages filed by the respondent. The ICA subject of the
litigation was entered into and perfected in Tokyo, Japan, by Japanese nationals, and written wholly in the
Japanese language. Thus, petitioners posit that local courts have no substantial relationship to the parties 46
following the [state of the] most significant relationship rule in Private International Law. 47
The Court notes that petitioners adopted an additional but different theory when they elevated the case to the
appellate court. In the Motion to Dismiss48 filed with the trial court, petitioners never contended that the RTC is an
inconvenient forum. They merely argued that the applicable law which will determine the validity or invalidity of
respondent's claim is that of Japan, following the principles of lex loci celebrationis and lex contractus.49 While not
abandoning this stance in their petition before the appellate court, petitioners on certiorari significantly invoked
the defense of forum non conveniens.50 On petition for review before this Court, petitioners dropped their other
arguments, maintained the forum non conveniens defense, and introduced their new argument that the applicable
principle is the [state of the] most significant relationship rule. 51

Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in theory, as
explained in Philippine Ports Authority v. City of Iloilo.52 We only pointed out petitioners' inconstancy in their
arguments to emphasize their incorrect assertion of conflict of laws principles.

To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction,
choice of law, and recognition and enforcement of judgments. Corresponding to these phases are the following
questions: (1) Where can or should litigation be initiated? (2) Which law will the court apply? and (3) Where can
the resulting judgment be enforced?53

Analytically, jurisdiction and choice of law are two distinct concepts. 54 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 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.55 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. 56

In this case, only the first phase is at issue—jurisdiction.1âwphi1 Jurisdiction, however, has various aspects. For a
court to validly exercise its power to adjudicate a controversy, it must have jurisdiction over the plaintiff or the
petitioner, over the defendant or the respondent, over the subject matter, over the issues of the case and, in cases
involving property, over the res or the thing which is the subject of the litigation. 57 In assailing the trial court's
jurisdiction herein, petitioners are actually referring to subject matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which
establishes and organizes the court. It is given only by law and in the manner prescribed by law. 58 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.59 To succeed in its motion for the dismissal of an action for lack of jurisdiction over the
subject matter of the claim,60 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. 61

In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly vested by
law with jurisdiction to hear the subject controversy for, indeed, Civil Case No. 00-0264 for specific performance
and damages is one not capable of pecuniary estimation and is properly cognizable by the RTC of Lipa City. 62
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" 63 or the law of the place where a contract is
made.64 The doctrine of lex contractus or lex loci contractus means the "law of the place where a contract is
executed or to be performed."65 It controls the nature, construction, and validity of the contract 66 and it may pertain
to the law voluntarily agreed upon by the parties or the law intended by them either expressly or implicitly. 67
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. 68 This rule takes into account several
contacts and evaluates them according to their relative importance with respect to the particular issue to be
resolved.69

Since these three principles in conflict of laws make reference to the law applicable to a dispute, they are rules
proper for the second phase, the choice of law.70 They determine which state's law is to be applied in resolving the
substantive issues of a conflicts problem.71 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, petitioners' 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, first
there should exist a conflict of laws situation requiring the application of the conflict of laws rules. 72 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.73

It should be noted that when a conflicts case, one involving a foreign element, is brought before a court or
administrative agency, there are three 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.74 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.75

Neither can the other ground raised, forum non conveniens,76 be used to deprive the trial court of its jurisdiction
herein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of the Rules of Court does
not include it as a ground.77 Second, 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 is addressed to the sound discretion of the trial
court.78 In this case, the RTC decided to assume jurisdiction. Third, 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.79

G.R. No. 149177               November 23, 2007

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

vs.
MINORU KITAMURA, Respondent.

While it is true that "the transaction took place in Singaporean setting" and that the Joint and Several
Guarantee contains a choice-of-forum clause, the very essence of due process dictates that the
stipulation that "[t]his guarantee and all rights, obligations and liabilities arising hereunder shall be
construed and determined under and may be enforced in accordance with the laws of the Republic of
Singapore. We hereby agree that the Courts in Singapore shall have jurisdiction over all disputes arising
under this guarantee" be liberally construed. One basic principle underlies all rules of jurisdiction in
International Law: a State does not have jurisdiction in the absence of some reasonable basis for
exercising it, whether the proceedings are in rem quasi in rem or in personam. To be reasonable, the
jurisdiction must be based on some minimum contacts that will not offend traditional notions of fair play
and substantial justice (J. Salonga, Private International Law, 1981, p. 46). Indeed, as pointed-out by
petitioner BANK at the outset, the instant case presents a very odd situation. In the ordinary habits of
life, anyone would be disinclined to litigate before a foreign tribunal, with more reason as a defendant.
However, in this case, private respondents are Philippine residents (a fact which was not disputed by
them) who would rather face a complaint against them before a foreign court and in the process incur
considerable expenses, not to mention inconvenience, than to have a Philippine court try and resolve
the case. Private respondents' stance is hardly comprehensible, unless their ultimate intent is to evade,
or at least delay, the payment of a just obligation.

The defense of private respondents that the complaint should have been filed in Singapore is based
merely on technicality. They did not even claim, much less prove, that the filing of the action here will
cause them any unnecessary trouble, damage, or expense. On the other hand, there is no showing that
petitioner BANK filed the action here just to harass private respondents.

In the case of Polytrade Corporation vs. Blanco, G.R. No. L-27033, October 31, 1969, 30 SCRA 187, it
was ruled:

... An accurate reading, however, of the stipulation, 'The parties agree to sue and be
sued in the Courts of Manila,' does not preclude the filing of suits in the residence of
plaintiff or defendant. The plain meaning is that the parties merely consented to be
sued in Manila. Qualifying or restrictive words which would indicate that Manila and
Manila alone is the venue are totally absent therefrom. We cannot read into that
clause that plaintiff and defendant bound themselves to file suits with respect to the
last two transactions in question only or exclusively in Manila. For, that agreement did
 not change or transfer venue. It simply is permissive. The parties solely agreed to add
the courts of Manila as tribunals to which they may resort. They did not waive their
right to pursue remedy in the courts specifically mentioned in Section 2(b) of Rule 4.
Renuntiatio non praesumitur.

This ruling was reiterated in the case of Neville Y. Lamis Ents., et al. v. Lagamon, etc., et al., G.R. No.
57250, October 30, 1981, 108 SCRA 740, where the stipulation was "[i]n case of litigation, jurisdiction
shall be vested in the Court of Davao City." We held:

Anent the claim that Davao City had been stipulated as the venue, suffice it to say that
a stipulation as to venue does not preclude the filing of suits in the residence of
plaintiff or defendant under Section 2 (b), Rule 4, Rules of Court, in the absence of
qualifying or restrictive words in the agreement which would indicate that the place
named is the only venue agreed upon by the parties.

Applying the foregoing to the case at bar, the parties did not thereby stipulate that only the courts of
Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the clause in question operate to
divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as the light of a
State to exercise authority over persons and things within its boundaries subject to certain exceptions.
Thus, a State does not assume jurisdiction over travelling sovereigns, ambassadors and diplomatic
representatives of other States, and foreign military units stationed in or marching through State territory
with the permission of the latter's authorities. This authority, which finds its source in the concept of
sovereignty, is exclusive within and throughout the domain of the State. A State is competent to take
hold of any judicial matter it sees fit by making its courts and agencies assume jurisdiction over all kinds
of cases brought before them (J. Salonga, Private International Law, 1981, pp. 37-38).lâwphî1.ñèt

As regards the issue on improper venue, petitioner BANK avers that the objection to improper venue
has been waived. However, We agree with the ruling of the respondent Court that:

While in the main, the motion to dismiss fails to categorically use with exactitude the
words 'improper venue' it can be perceived from the general thrust and context of the
motion that what is meant is improper venue, The use of the word 'jurisdiction' was
merely an attempt to copy-cat the same word employed in the guarantee agreement
but conveys the concept of venue. Brushing aside all technicalities, it would appear
that jurisdiction was used loosely as to be synonymous with venue. It is in this spirit
that this Court must view the motion to dismiss. ... (p. 35, Rollo).

At any rate, this issue is now of no moment because We hold that venue here was properly laid for the
same reasons discussed above.

The respondent Court likewise ruled that (pp. 36-37, Rollo):

... In a conflict problem, a court will simply refuse to entertain the case if it is not
authorized by law to exercise jurisdiction. And even if it is so authorized, it may still
refuse to entertain the case by applying the principle of forum non conveniens. ...

However, whether a suit should be entertained or dismissed on the basis of the principle of forum non
conveniens depends largely upon the facts of the particular case and is addressed to the sound
discretion of the trial court (J. Salonga, Private International Law, 1981, p. 49).lâwphî1.ñèt Thus, the
respondent Court should not have relied on such principle.

Although the Joint and Several Guarantee prepared by petitioner BANK is a contract of adhesion and
that consequently, it cannot be permitted to take a stand contrary to the stipulations of the contract,
substantial bases exist for petitioner Bank's choice of forum, as discussed earlier.

Lastly, private respondents allege that neither the petitioner based at Hongkong nor its Philippine
branch is involved in the transaction sued upon. This is a vain attempt on their part to further thwart the
proceedings below inasmuch as well-known is the rule that a defendant cannot plead any defense that
has not been interposed in the court below.

G.R. No. 72494 August 11, 1989

HONGKONG AND SHANGHAI BANKING CORPORATION, petitioner,
vs.
JACK ROBERT SHERMAN, DEODATO RELOJ and THE INTERMEDIATE APPELLATE COURT,
respondents.