Saudi Arabia case: the case calls for the application of the law of the Kingdom of Saudi Arabia,

by virtue of lex loci delicti

commissi, since the abuse of rights were allegedly in Saudi

-when is there a foreign element? When there is a factual situation that cuts across territorial lines and is affected by the
diverse laws of two or more states is said to contain a “foreign element”

Example of foreign elements:

 The foreign element may simply consist in the fact that one of the parties to a
contract is an alien or has a foreign domicile,
or that a contract between nationals of one State involves properties situated in
another State.
In other cases, the foreign element may assume a complex form. 

WHAT ARE THE FOREIGN ELEMENTS PRESENT IN THIS CASE:

1) Morada is resident, Saudi is a foreign corporation.

2) Employment with Saudia as a flight stewardess, so she was travelling abroad.

PRAGMATIC CONSIDERATIONS WEIGH IN THAT THE CASE BE TRIED IN PH:

1) The case is one for damages, which is properly cognizable under PH courts (BP 129)
2) Enforceability and ease, may not vex or harass by inflicting needless expenses or disturbance.
3) NO DIFFICULTY HAS BEEN SHOWN BY THE PARTIES.
4) By filing a motion to dismiss, the respondent has submitted to the jurisdiction of the court.

-also filed an answer ex abudante cautelam, sought dismissal other than lack of jurisdiction

As to the choice of applicable law, we note that choice-of-law problems seek to answer two important questions:

(1) What legal system should control a given situation where some of the significant facts occurred in two or more
states; and

(2) to what extent should the chosen legal system regulate the situation.

characterization", or the "doctrine of qualification". It is the "process of deciding whether or not the facts relate to
the kind of question specified in a conflicts rule." The purpose of "characterization" is to enable the forum to select
the proper law

SO HOW TO CHARACTERIZE?
 1) An essential element of conflict rules is the indication of a "test" or "connecting factor" or "point of contact".
Choice-of-law rules invariably consist of a factual relationship (such as property right, contract claim) and a
connecting factor or point of contact, such as the situs of the res, the place of celebration, the place of
performance, or the place of wrongdoing.

WHAT MAY SERVE AS CONNECTING FACTORS:

(1) The nationality of a person, his domicile, his residence, his place of sojourn, or his origin;

(2) the seat of a legal or juridical person, such as a corporation;

(3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex situs is
decisive when real rights are involved;

4) (4) the place where an act has been done, the locus actus, such as the place where a contract has been made, a
marriage celebrated, a will signed or a tort committed. The lex loci actus is particularly important in contracts and
torts;

(5) the place where an act is intended to come into effect, e.g., the place of performance of contractual duties, or
the place where a power of attorney is to be exercised;

(6) the intention of the contracting parties as to the law that should govern their agreement, thelex loci intentionis;

(7) the place where judicial or administrative proceedings are instituted or done. The lex fori — the law of the forum
— is particularly important because, as we have seen earlier, matters of "procedure" not going to the substance of
the claim involved are governed by it; and because the lex fori applies whenever the content of the otherwise
applicable foreign law is excluded from application in a given case for the reason that it falls under one of the
exceptions to the applications of foreign law; and

(8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and of its master
or owner as such. It also covers contractual relationships particularly contracts of affreightment. 60 (Emphasis ours.)

ALTHOUGH SHE WAS WORKING IN MANILA, SHE WAS BROUGHT TO JEDDAH ON THE PRETENSE THAT SHE WOULD
MERELY TESTIFY IN THE INVESTIGATION HOWEVER, IT TURNED TO BE AN INVESTIGATION FOR CHARGES OF VIOLATION
OF ISLAMIC TRADITION.

Considering that the complaint in the court a quo is one involving torts, the "connecting factor" or "point of contact"
could be the place or places where the tortious conduct or lex loci actus occurred. And applying the torts principle in a
conflicts case, we find that the Philippines could be said as a situs of the tort (the place where the alleged tortious
conduct took place). This is because it is in the Philippines where petitioner allegedly deceived private respondent, a
Filipina residing and working here. According to her, she had honestly believed that petitioner would, in the exercise of
its rights and in the performance of its duties, "act with justice, give her due and observe honesty and good faith."
Instead, petitioner failed to protect her, she claimed. That certain acts or parts of the injury allegedly occurred in
another country is of no moment. For in our view what is important here is the place where the over-all harm or

State of the most significant

2) WIDESPREAD CRITICISM OF LEX COMMISSION DELICTI:
relationship rule applies There is likewise no question that private
respondent is a resident Filipina national, working with petitioner, a resident
 foreign corporation engaged here in the business of international air
carriage.

HASEGAWA VS KITAMURA

NIPPON ENGINEEREING CONSULTANTS WORKED WITH KITAMURAC ICA for STAR PROJET

NIPPON LATER HIRED BY KITAMURA FOR THE BBRI

HASEGAWA LATER INFORMED KITAMURA THAT IT WAS NO LONGER INTERESTED IN RENEWING HIS CONTRACT, AND
THUS WOULD ONLY BE WORKING FOR THE COMPLETION OF THE STAR PROJECT.

THE CONTRACT WAS FOR A FIXED TERM, AND THAT THE ICA WOULD NO LONGER BE RENEWED.

FILED A CASE FOR SPECIFIC PERFORMANCE AND DAMAGES

ICA HAD BEEN PERFECTED IN JAPAN AND EXECUTED BETWEEN JAP NATIONALS, SHOULD BE HEARD IN COURTS OF
JAPAN FOLLOWING THE LEX LOCI CELEBRATIONIS RULE

RTC – DISMISSED, CONTRACT DISPUTE SHOULD BE RESOLVED BY THE LAW INVOLVING

The pivotal question that this Court is called upon to resolve is whether the subject
matter jurisdiction of Philippine courts in civil cases for specific performance and
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.

ON THE RTC – APPLICABLE LAW IS THE LAW OF JAPAN

ON APPEAL – FORUM NON CONVENIENS APPLIES introduced their new argument that the applicable principle is the
[state of the] most significant relationship rule
To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved:

Jurisdiction - considers whether it is fair to cause a defendant to travel to this state;

choice of law, - 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

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?

JURISDICTION - establishes and organizes the court. It is given only by law and in the manner prescribed by law

THEY DO NOT DISPUTE THAT THE RTC HAS JURISDICTION. THEY INVOKE THE LEX LOCI CELEBRATIONIS AND THE FORUM
CONVENIENS RULE

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.

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.6

4 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 contract66 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

THESE PRINCIPLES HOWEVER ARE MORE APPROPRIATELY USED IN THE 2 ND PHASE 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.
CONTINENTAL MICRONESIA

CMI and BASSO

Basso filed for illegal dismissal

INITIALLY DISMISSED BY LA, NLRC REMANDED THE CASES

The Labor Arbiter agreed with CMI that the employment contract was xecuted in the US "since the letter-offer was
under the Texas letterhead and the acceptance of Complainant was returned there."19 Thus, applying the doctrine of
lex loci celebrationis, US laws apply. Also, applying lex loci contractus, the Labor Arbiter ruled that the parties did not
intend to apply Philippine laws, thus:

NLRC later reversed the ruling

The Court of Appeals ruled that the Labor Arbiter and the NLRC had jurisdiction over the subject matter of the case and
over the parties. The Court of Appeals explained that jurisdiction over the subject matter of the action is determined by
the allegations of the complaint and the law. Since the case filed by Basso is a termination dispute that is "undoubtedly
cognizable by the labor tribunals", the Labor Arbiter and the NLRC had jurisdiction to rule on the merits of the case. On
the issue of jurisdiction over he person of the parties, who are foreigners, the Court of Appeals ruled that jurisdiction
over the person of Basso was acquired when he filed the complaint for illegal dismissal, while jurisdiction over the
person of CMI was acquired through coercive process of service of summons to its agent in the Philippines.

Jurisdiction is defined as the power and authority of the courts to hear, try and
decide cases. Jurisdiction over the subject matter is conferred by the Constitution
or by law and by the material allegations in the complaint, regardless of whether
or not the plaintiff is entitled to recover all or some of the claims or reliefs sought
therein.42 It cannot be acquired through a waiver or enlarged by the omission of
the parties or conferred by the acquiescence of the court.43 That the employment
contract of Basso was replete with references to US laws, and that it originated
from and was returned to the US, do not automatically preclude our labor

As regards jurisdiction over the parties, we agree with the Court of Appeals that
the Labor Arbiter acquired jurisdiction over the person of Basso, notwithstanding
his citizenship, when he filed his complaint against CMI. On the other hand,
jurisdiction over the person of CMI was acquired through the coercive process of
service of summons. We note that CMI never denied that it was served with
summons. CMI has, in fact, voluntarily appeared and participated in the
proceedings before the courts.

Considering that the Labor Arbiter and the NLRC have jurisdiction over the parties
and the subject matter of this case, these tribunals may 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 being an exercise of sovereign prerogative of the country
where the case is filed

THAT PH COURTS IS NOT THE PROPER FORUM:

Under the doctrine of forum non conveniens, a Philippine court in a conflict-of-
laws case may assume jurisdiction 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.

The labor tribunals can make an intelligent decision as to the law and facts. The
incident subject of this case (i.e. dismissal of Basso) happened in the Philippines,
the surrounding circumstances of which can be ascertained without having to
leave the Philippines. The acts that allegedly led to loss of trust and confidence and
Basso's eventual dismissal were committed in the Philippines. As to the law, we
hold that Philippine law is the proper law of he forum, as we shall discuss shortly.
Also, the labor tribunals have the power to enforce their judgments because they
acquired jurisdiction over the persons of both parties.
The choice-of-law issue in a conflict-of-laws case seeks to answer the following
important questions: (1) What legal system should control a given situation where
some of the significant facts occurred in two or more states; and (2) to what extent
should the chosen legal system regulate the situation

That under US LAWS they are relevant

In Saudi Arabian Airlines v. Court of Appeals,51 we emphasized that an essential
element of conflict rules is the indication of a "test" or "connecting factor" or
"point of contact". Choice-of-law rules invariably consist of a factual relationship
(such as property right, contract claim) and a connecting fact or point of contact,
such as the situs of the res, the place of celebration, the place of performance, or
the place of wrongdoing. Pursuant to Saudi Arabian Airlines, we hold that the "test
factors," "points of contact" or "connecting factors" in this case are the
following:chanRoblesvirtualLawlibrary

(1) The nationality, domicile or residence of Basso;ChanRoblesVirtualawlibrary

(2) The seat of CMI;ChanRoblesVirtualawlibrary

(3) The place where the employment contract has been made, the locus
actus;ChanRoblesVirtualawlibrary

(4) The place where the act is intended to come into effect, e.g., the place of
performance of contractual duties;ChanRoblesVirtualawlibrary
(5) The intention of the contracting parties as to the law that should govern their
agreement, the lex loci intentionis; and

(6) The place where judicial or administrative proceedings are instituted or

done.52

Applying the foregoing in this case, we conclude that Philippine law the applicable
law. Basso, though a US citizen, was a resident here from he time he was hired by
CMI until his death during the pendency of the case. CMI, while a foreign
corporation, has a license to do business in the Philippines and maintains a branch
here, where Basso was hired to work. The contract of employment was negotiated
in the Philippines. A purely consensual contract, it was also perfected in the
Philippines when Basso accepted the terms and conditions of his employment as
offered by CMI. The place of performance relative to Biasso's contractual duties
was in the Philippines. The alleged prohibited acts of Basso that warranted his
dismissal were committed in the Philippines.

Clearly, the Philippines is the state with the most significant relationship to the
problem. Thus, we hold that CMI and Basso intended Philippine law to govern,
notwithstanding some references made to US laws and the fact that this intention
was not expressly stated in the contract.