Case A - GIL MIGUEL PUYAT vs.

RON ZABARTE

FACTS:

Respondent Zabarte commenced an action to enforce the money judgment rendered by the
Superior Court for the State of California before the trial court.

Petitioner Puyat filed his Answer saying that:

- the Superior Court did not properly acquire jurisdiction over the subject matter of and over the
persons involved in a case (that jurisdiction was vested in Securities and Exchange Commission,
and not in the Superior Court of California)

Respondent filed a Motion for Summary Judgment alleging that the Answer filed by petitioner
failed to tender any genuine issue as to the material facts.
- The RTC granted the Motion for Summary Judgment filed by respondent. (Because petitioner
admitted the existence of the Judgment on Stipulation for Entry in Judgment. There being no
genuine issue as to any material fact, the case should properly be resolved through summary
judgment)

Petitioner filed a Motion to Dismiss on the ground of lack of jurisdiction over the subject matter
of the case and FORUM NON CONVENIENS. (He claimed 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 transaction took place in a foreign country, and
respondent is not even a Filipino.)
- Respondent opposed contending that petitioner could no longer question the jurisdiction of the
lower court on the ground that the latter's Answer had failed to raise the issue of jurisdiction.

- Petitioner countered by asserting that jurisidiction could not be fixed by agreement of the
parties.

RTC rendered a decision in favor of respondent, ordering petitioner to pay the latter for the costs
of suit.

CA affirmed the trial court.

- it held that petitioner was estopped from assailing the judgment that had become final and had
in fact been partially executed
- it cited Ingenohl vs. Olsen in rejecting petitioner's argument that the RTC should have dismissed
the action for the enforcement of foreign judgment, on the ground of forum non conveniens
- it reasoned out that the recognition of the foreign judgment was based on comity, reciprocity
and res judicata

Hence, the Petition for Review on Certiorari under Rule 5 of the Rules of Court.

ISSUE: Whether or not the RTC had no jurisdiction over the case. NO.
Whether or not the principle of forum non conveniens is inapplicable in the case. NO.

RULING: 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.”

NONE OF THESE REASONS BARRED RTC FROM EXERCISING ITS JURISDICTION.

Since the present action lodged in the RTC was for the enforcement of a foreign judgment, there
was no need to ascertain 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.

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.

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 CONVENIENS IS NOT CALLED FOR.

*Petitioner alleges that jurisdiction was vested in the SEC, not in the Superior Court of California.

Ruling: No. In the absence of proof of California law on the jurisdiction of courts, the Court
presume that such law, if any, is similar to Philippine law base on the presumption of identity or
similarity, also known as processual presumption.

The Complaint filed by respondent was for the enforcement of a foreign judgment. (Action for
collection of a sum of money, breach of promissory notes, and damages) This case falls under the
jurisdiction of civil courts, not of the SEC.
- the jurisdiction of SEC is exclusively over matters enumerated in Section 5, PD 90-A, prior to its
latest amendment
CASE B - THE MANILA HOTEL CORP & MANILA HOTEL INTL. vs. NLRC, Diosana and Santos

FACTS:

Private respondent Marcelo Santos was an overseas worker employed as a printer at the Mazoon
Printing Press, Sultanate of Oman. Subsequently, he was hired directly by the Palace Hotel at
Beijing, China as printer, but with a higher monthly salary and increased benefits, and later
terminated due to retrenchment.

(When the case was filed, MHC and MHICL was still a GOCC duly organized and existing under the
laws of the Philippines.

MHICL is a corporation duly organized and existing under the laws of Hong Kong. MHC is an
incorporator of MHICL. By virtue of a "management agreement" with the Palace Hotel, MHICL
trained the personnel and staff of the Palace Hotel at Beijing, China.)

Respondent wrote the General Manage of Palace Hotel demanding full compensation pursuant
to the employment agreement.

In his Reply, the General Manager said that Mr. Santos received all the benefits due him. And
when he received the letter of notice he hardly showed up for work but still enjoyed free
accommodation up to the day of his departure.

Respondent filed a complaint for illegal dismissal with the NLRC.

- Labor Arbiter Diosana decided the case against petitioners.

Petitioners appealed to the NLRC, arguing that the POEA, not the NLRC, had jurisdiction over the
case.

Respondent Santos argued that the case was not cognizable by the POEA as he was not an
"overseas contract worker."

ISSUE: Whether or not the

RULING:

THE NLRC WAS A SERIOUSLY INCONVENIENT FORUM

- the main aspects of the case transpired in two foreign jurisdictions
- the case involved purely foreign elements
- the ONLY LINK THAT PHILIPPINE HAS with the case is that respondent Santos is a Filipino citizen
- the Palace Hotel and MHICL are foreign corporations
- Note: Not all cases involving our citizens can be tried in the Philippines
RULE ON FORUM NON CONVENIENS

A Philippine court or agency may assume jurisdiction over the case if it chooses to do so,
Provided:
A.) that the PH court is one to which the parties may conveniently resort to;

The inconvenience compounded by the fact that:

- the proper defendants (Palace Hotel and MHICL) are not nationals of the Philippines
- neither are they doing business in the Philippines
- the main witnesses (Mr. Shmidt and Mr. Henk) are non-residents of the Philippines

B.) that the PH court is in a position to make an intelligent decision as to the law and the facts;
and

No power to determine applicable law.

- The employment contract was perfected in foreign soil.
- This calls for the application of the Principle of Lex Loci Contractus. (The law of the place where
the contract was made.)

No power to determine the facts.

- All acts complained of took place in China

C.) that the PH court has or is likely to have power to enforce its decision

Principle of effectiveness, no power to execute decision.

- even assuming that a proper decision could be reached by the NLRC, such would not have any
binding effect against the employer, the Palace Hotel. (The latter is a corporation incorporated
under the laws of China and was not even served summons. Jurisdiction over its person was not
acquired.)

*the conditions are unavailing in the case at bar

WHY? From the time of recruitment, to employment to dismissal occurred OUTSIDE THE
PHILIPPINES.

ON LIABILITY

MHC AND MHICL NOT LIABLE

- Because it has a s separate and distinct juridical entity, it cannot be held liable.
- the Vice President of MHICL signed the employment contract as mere witness; he merely signed
under the word "noted" (when one "notes" a contract, one is not expressing his agreement or
approval)
- no existing EER between Santos and MHICL
GRAVE ABUSE OF DISCRETION (Labor Arbiters)
- jurisdiction of LAs is limited to disputes arising from an EER

CASE C - PIONEER CONCRETE, INC. vs., PIONEER PHILIPPINE HOLDINGS and PHILIP J. KLEPZIG vs.
ANTONIO TODARO

FACTS:

Respondent Todaro (the managing director of Betonval Readyconcrete, Inc. until he was resigned)
filed with the RTC a complaint for Sum of Money and Damages with Preliminary Attachment
against petitioners.
- he alleged that PIL (a corporation duly organized under the laws of Australia) contacted Todaro
and asked him if he was available to join them in connection with their intention to establish a
ready-mix concrete plant and other related operations in the Philippines.
- PIL and Todaro came to an agreement wherein the PIL consented to engage the services Todaro
as a consultant for to months, after which, he would be employed as the manager of PIL's
operation should the company decide to invest in the Philippines
- Subsequently, PIL started its operation in the Philippines
- However, it refused to comply with its undertaking to employ Todaro on a permanent basis

The petitioners separately moved to dismiss the complaint on the following grounds:
- that the complaint states no cause of action;
- that the RTC has no jurisdiction over the subject matter of the complaint, as the same is within
the jurisdiction of the NLRC; and
- that the complaint should be dismissed on the basis of the doctrine of Forum Non Conveniens

ISSUE: Whether or not the complaint should be dismissed on the basis of the doctrine of Forum
Non Conveniens.

*Petitioners contend that:

- *there was no perfected employment contract between PIL and respondent
- PCPI and PPHI may not also be held liable because they are juridical entities with personalities
separate and distinct from PIL
- that the negotiations on the alleged employment contract took place between respondent and
PIL through its office in Hongkong
- *since respondent's claim for actual, moral and exemplary damages are solely premised on the
alleged breach of employment contract, the present case should be considered as falling within
the exclusive jurisdiction of the NLRC
- *the principle of Forum Non Conveniens dictates that even where exercise of jurisdiction is
authorized by law, courts may refuse to entertain a case involving a foreign element where the
matter can be better tried and decided elsewhere, either because the main aspects transpired in
a foreign jurisdiction or the material witnesses have their residence there and the plaintiff sought
the forum merely to secure procedural advantage
- The events which led to the present controversy occurred outside the Philippines
Respondent contends:
(On jurisidiction)
- that the complaint he filed was not based on a contract of employment
- It was based on petitioners' unwarranted breach of their contractual obligation to employ
respondent
- Which gave rise to an action for damages which is cognizable by the regular courts

(Forum Non Conveniens)

- that the question of whether a suit should be entertained or dismissed on the basis of this
principle depends largely upon the facts of the particular case
- and is addressed to the sound discretion of the trial judge

RULING: NO.

JURISDICTION

Where no EER exists between the parties and no issue is involved which may be resolved by
reference to the Labor Code, other labor statutes or any collective bargaining agreement IT IS
THE RTC THAT HAS JURISDICTION.
- no EER
- Respondent is not seeking relief under the Labor Code
- but he seeks payment of damages (Article 19 and 1 of the Civil Code) on account of petitioners'
alleged breach of their obligation under their agreement to employ him
- the present action is within the realm of civil law, and jurisdiction over it belongs to the regular
courts,

APPLICABILITY OF FORUM NON CONVENIENS

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.

Communication Materials and Design, Inc. vs. CA, the Court held: "a Philippine court may assume
jurisdiction over the case if it chooses to do so, Provided:
A. That the Philippine Court is one to which the parties may conveniently resort to;
B. That the Philippine Court is in a position to make an intelligent decision as to the law and the
facts; and
C. That the Philippine Court has or is likely to have power to enforce its decision.

In Philsec. Investment Corporation vs. Court of Appeals, the Court enunciated 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.
- 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.

In this case, the factual circumstances presented by petitioner which would allegedly justify the
application of the doctrine of forum non conveniens are matters of defense, the merits of which
should properly be threshed out during trial.

CASE D - SAUDI ARABIAN AIRLINES vs. MA. JOPETTE REBESENCIO

FACTS:

(Saudia is a foreign corporation established and existing under the laws of Jeddah, Kingdom of
Saudi Arabia and has a Philippine office.)

Respondents were recruited and hired by Saudia as Flight Attendants. They then entered into
Cabin Attendant contracts with Saudia until they were separated from service. Respondents
contends that the termination of their employment was illegal alleging:
- that it was made solely because they were pregnant
- they alleged that they had informed Saudia of their pregnancies but the latter had disapproved
their maternity leaves and required them to file their resignation letters.

Saudia based its disapproval on its Unified Contract.

- Under said contract, the employment of a Flight Attendant who becomes pregnant (at any time
during the term of the contract) is rendered void.

Respondents emphasized that the Unified Contract took effect after they had filed and had their
maternity leaves approved. Respondents filed a Complaint against Saudia for illegal dismissal. The
case was assigned to Labor Arbiter Suelo docketed as NLRC case.

Saudia assailed the jurisdiction of the Labor Arbiter

(The Labor Arbiter dismissed the Complaint for lack of jurisdiction, which was reversed by the
NLRC 6th Division:
- considering that complainants are OFWs, the LA and the NLRC has jurisdiction to hear and
decide their complaint
- (Forum non conveniens) there were no special circumstances that warranted its abstention
from exercising jurisdiction)

Petitioners claim that the LA and the NLRC had no jurisdiction over it:
- because summons were never served on it but on "Saudia Manila" which was never a party to
the Cabin Attendants entered into by respondents
- It asserts the Philippine courts and/or tribunals are not in a position to make an intelligent
decision as to the law and the facts because respondents' Cabin Attendant contracts require the
application of the laws of Saudi Arabia, rather than those of the Philippines
- It claims that the difficulty of ascertaining foreign law calls into operation the principle of forum
non conveniens

ISSUE: Whether or not the complaint should be dismissed on the ground of forum non
conveniens.

RULING: NO.

(A choice of law governing the validity of contracts or the interpretation of its provision does not
necessarily imply forum non conveniens. Choice of law and Forum Non Conveniens are entirely
different matters.

Choice of Law are an offshoot of the fundamental principle of autonomy of contracts.

Forum Non Conveniens is a device akin to the rule against forum shopping
- designed to frustrate illicit means for securing advantages
- and vexing litigants that would otherwise be possible if the venue of litigation were left entirely
to the whim of either party

Contractual Choice of Law provisions factor into transnational litigation and dispute resolution in
one of or in a combination of ways: a) procedures for settling disputes; b) forum (venue); c)
governing law; and d) basis for interpretation.
- Forum Non Conveniens relates to, but is not subsumed by, the second of these.

Contractual Choice of Law is not determinative of jurisdiction. Stipulating on the laws of a given
jurisdiction as the governing law of a contract does not preclude the exercise of jurisdiction by
tribunals elsewhere. THE ASSUMPTION OF JURISDICTION BY TRIBUNALS DOES NOT IPSO FACTO
MEAN THAT IT CANNOT APPLY AND RULE ON THE BASIS OF THE PARTIES' STIPULATION.

*Hasegawa vs. Kitamura: jurisdiction and choice of law are two distinct concepts:

Jurisdiction considers where it is fair to cause a defendant to travel to this state.

Choice of Law asks the further question whether the application of substantive law which will
determine the merits of the case is fair to both parties.)

MAIN:

Under the 1997 Rules on Civil Procedure, a party may seek the dismissal of a Complaint or
another pleading asserting a claim on the ground of:
- Litis pendentia (that there is another action pending between the same parties for the same
cause)
- Res Judicata (that the cause of action is barred by a prior judgment)

Forum Non Conveniens

- a means of addressing the problem of parallel litigation arising in multiple jurisdictions (forum
shopping, litis pendentia and res judicata - problem within a single litigation)
- Unlike the rule on res judicata, as well as those on litis pendentia and forum shopping, it finds
no textual anchor in our civil law system (nevertheless, jurisprudence has applied FNC as a basis
for a court to decline its exercise of jurisdiction)
- It is grounded on principles of comity and judicial efficiency
- *Entails a recognition not only that tribunals elsewhere are better suited to rule on and resolve
a controversy, but also, that these tribunals are better positioned to enforce judgments

Under the Doctrine of FNC, a court 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.

In Puyat v. Zabarte, this court recognized the following situations as among those that may
warrant a court's desistance from exercising jurisdiction:

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
5) The difficulty of ascertaining foreign law.

In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of Appeals, this court
underscored that a Philippine court may properly assume jurisdiction over a case if it chooses
to do so to the extent:
(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

A court should renounce jurisdiction ONLY "after vital facts are established, to determine
whether special circumstances require the court's desistance."
- As the propriety of applying FNC is contingent on a factual determination, it is, therefore, a
matter of defense.
ON THE MATTER OF PLEADING FORUM NON CONVENIENS

Rule: FNC must not only be clearly pleaded as a ground for dismissal; it must be pleaded as
such at the earliest possible opportunity. Otherwise, it shall be deemed waived.

A case will not be stayed or dismissed on FNC grounds unless the plaintiff is shown to have an
available alternative forum elsewhere. The moving party bears the burden of proof.

FORUM NON CONVENIENS FINDS NO APPLICATION & DOES NOT OPERATE TO DIVEST
PHILIPPINE TRIBUNALS OF JURISDICTION AND TO REQUIRE THE APPLICATION OF FOREIGN LAW.
- Saudia invokes FNC to supposedly effectuate the stipulations of the Cabin Attendant contracts
that require the application of the laws of Saudi Arabia

FNC relates to forum, NOT to the choice of governing law.

Any evaluation of the propriety of contracting parties' choice of a forum and its incidents must
grapple with considerations:
(a) the availability and adequacy of recourse to a foreign tribunal; and
(b) the question of where, as between the forum court and a foreign court, the balance of
interests inhering in a dispute weighs more heavily

THE CASE IS IMMUTABLY A MATTER OF PUBLIC INTEREST AND PUBLIC POLICY

- Philippine laws properly find application in and govern this case
- As the premise for Saudia's insistence on the application FNC has been shattered, it follows that
Philippine tribunals may properly assume jurisdiction over the present controversy

ON JURISDICTION OF NLRC: (court's observation)

- the main aspects transpired in 2 foreign jurisdictions: Oman and China,
- The case involved purely foreign elements
- The NLRC was in no position to conduct the following: a) determine the law governing the
employment contract, as it was entered into in foreign soil; b) determine the facts, as Santos'
employment was terminated in Beijing; and c) enforce its judgment, since Santos' employer was
incorporated under the laws of China and was not even served with summons

THE CASE AT BAR DOES NOT ENTAIL A PREPONDERANCE OF LINKAGES THAT FAVOR A FOREIGN
JURISDICTION.
- In this case, the circumstances of the parties and their relation do not approximate the
circumstances enumerated in Puyat case.

COURT'S RULING:
A) there is no basis for concluding that the case can be more conveniently tried elsewhere
- Saudia is doing business in the Philippines
- All four respondents are Filipino citizens maintaining residence in the Philippines
- and apart from their previous employment with Saudia, respondents have no other connected
to the KSA
- It would even be to respondent's inconvenience if this case were to be tried elsewhere
B) The records are bereft of any indication that respondents filed their Complaint in an effort to
engage in forum shopping or to vex and inconvenience Saudia.
C) There is no indication of "unwillingness to extend local judicial facilities to non-residents or
aliens."
- Saudia has managed to bring the present controversy all the way to this court proves this
D) It cannot be said that the local judicial machinery is inadequate for effectuating the right
sought to be maintained.
- Summons were properly served on Saudia
- Jurisdiction over its person was validly acquired
E) There is not even room for considering foreign law. Philippine law properly governs the present
dispute.

NOTE: The supposed difficulty of ascertaining foreign law provides no insurmountable

inconvenience or special circumstance that will justify depriving Philippine tribunals of
jurisdiction.

Even assuming that Saudi Arabia laws should apply, it does not follow that PH tribunals should
refrain from exercising jurisdiction.

Puyat case and Bank of America: What justifies a court's desistance from exercising jurisdiction is
the difficulty of ascertaining foreign law or the inability of a Philippine court to make an
intelligent decision as to the law.

Consistent with Lex Loci Intentionis, Philippine tribunals may apply the foreign law selected by
the parties.
- in fact, respondents themselves have made averments as to the laws of Saudi Arabia:

In their Comment, respondents write:

Under the Labor Laws of Saudi Arabia and the Philippines[,] it is illegal and unlawful to terminate
the employment of any woman by virtue of pregnancy. The law in Saudi Arabia is even more
harsh and strict [sic] in that no employer can terminate the employment of a female worker or
give her a warning of the same while on Maternity Leave, the specific provision of Saudi Labor
Laws on the matter is hereto quoted as follows:

"An employer may not terminate the employment of a female worker or give her a warning of
the same while on maternity leave." (Article 155, Labor Law of the Kingdom of Saudi Arabia,
Royal Decree No. M/51.) [99]
THUS, THE PHILIPPINE TRIBUNALS HAS JURISDICTION

First, all the parties are based in the Philippines AND all the material incidents transpired in this
jurisdiction. Thus, the parties may conveniently seek relief from Philippine tribunals..
Second, Ph tribunals are in a position to make an intelligent decision as to the law and the facts.

Third, Ph tribunals are in a position to enforce its decision

CASE E - BANK OF AMERICA NT & SA, BANK OF AMERICA INTL LTD vs. CA, HON. PANDOLINA,
LITONJUA, SR. And LITONJUA, JR.

FACTS:

Litonjuas filed a Complaint before the RTC against petitioner Banks alleging that they deposited
their revenues from their shipping business together with other funds with the branches of
petitioner Banks in the United Kingdom and Hongkong.
- they owned two vessels through their wholly-owned corporations
- with their business doing well, the Banks induced them to increase the number of their ships in
operation, offering them easy loans to acquire said vessels
- thereafter, the Banks acquired, through their corporations as borrower (registered in the names
of their corporations)
- Litonjuas claimed that defendant Banks as trustees did not fully render an account of all the
income derived from the operation of the vessels as well as the proceeds of subsequent
foreclosure sale

Petitioner Banks filed a Motion to Dismiss on ground of forum non conveniens and lack of cause
of action against Litonjuas. But the RTC denied said Motion.

So herein petitioners went to the CA on a Petition for Review on Certiorari assailing the order of
the trial court. But the CA dismissed said petition.

Petitioner Banks argue that:

FIRST ERROR
- the borrowers and the registered owners of the vessels are the foreign corporations and not
private respondents Litonjuas who are mere stockholders;
- the revenues derived from the operations of all the vessels are deposited in the accounts of the
corporations
- these foreign corporations are the legal entities that have the personalities to sue and not
herein private respondents

SECOND ERROR
- while the application of the principle of Forum Non Conveniens is discretionary on the part of
the Court, said discretion is limited by the guidelines pertaining to the private as well as public
interest factors in determining whether plaintiff's choice of forum should be disturbed.

THAT: The local court is not the proper forum.

- the Banks are based in Hongkong and England; evidence and witnesses are not readily available
in the Philippines;
- the loan transactions were perfected outside the Philippines; the loans involved were granted to
the Private Respondents' foreign CORPORATIONS;
- the Restructuring Agreement were ALL governed by the laws of England;
- Bank of America International Ltd. is NOT LICENSED NOR ENGAGED in trade or business in the
Philippines

*the loan agreement, security documentation and all subsequent restructuring agreements
uniformly, unconditionally and expressly provided that they will be governed by the laws of
England

*that Philippine courts would then have to apply English law in resolving whatever issues may be
presented to it in the event it recognizes and accepts herein case

*that the inconvenience and difficulty of applying English law with respect to a wholly foreign
transaction in a case pending in the Philippines may be avoided by its dismissal on the ground of
FNC.

Private respondents contend that:

- while the complaint was filed only by the stockholders of the corporate borrowers, the latter are
wholly-owned by them who are Filipinos and therefore under Philippine laws
- as upheld by the CA, the decision of the trial court in not applying the principle of FNC is in the
lawful exercise of its discretion
- they did not actually participate in the proceedings in the foreign courts

ISSUE: Whether or not the complaint should be dismissed on the ground of forum non
conveniens.

RULING: NO. The doctrine of Forum Non Conveniens (the forum is inconvenient) emerged in
private international law to deter the practice of global forum shopping.

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.
- *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

Communication Materials and Design, Inc. vs. CA: "a Philippine court may assume jurisdiction
over the case if it chooses to do so, Provided:
A. That the Philippine Court is one to which the parties may conveniently resort to;
B. That the Philippine Court is in a position to make an intelligent decision as to the law and the
facts; and
C. That the Philippine Court has or is likely to have power to enforce its decision

*ALL THESE REQUISITES ARE PRESENT IN THE INSTANT CASE*

Philsec. Investment Corporation vs. CA

- 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 ROC does not include said doctrine as a ground
- 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 FNC requires a factual
determination, hence it is more properly considered a matter of defense

PRIVATE RESPONDENTS ARE NOT GUILTY OF FORUM SHOPPING (because of the pendency of
foreign action)

Forum shopping exists where the elements of litis pendentia are present and where a final
judgment in one case will amount to res judicata in the order.

Litis pendentia as a ground for dismissal of action:

A) identity of the parties or at least such as to represent the same interest in both actions;
B) identity of rights asserted and relief prayed for, the relief being founded on the same acts; and
C) identity in the two cases should be such that the judgment which may be rendered in one
would, regardless of which party is successful, amount to res judicata in the other

*NOT ALL THE REQUIREMENTS ARE PRESENT

- while there may be identity of parties, still the other requirements were not shown by
petitioner
- It merely mentioned that civil cases were filed in Hongkong and England without however
showing the identity of rights asserted and the reliefs sought for as well as the presence of the
elements of res judicata should one of the cases be adjudged

CASE F - HASEGAWA and NIPPON ENGINEERING CONSULTANTS vs. KITAMURA

FACTS:

Nippon (a Japanese consultancy firm) entered into an Independent Contractor Agreement (ICA)
with Kitamura, a Japanese national permanently residing in the Philippines.
- the ICA provides that Kitamura was to extend professional services to Nippon for one year
- Kitamura was then assigned to work as project manager of STAR Project in the Philippines

Petitioner Hasegawa (Nippon's GM) informed Kitamura that the company had no more intention
of automatically renewing his ICA
- that his services would be engaged by the company only up to the substantial completion of the
STAR Project

Respondent, through his lawyer, requested a negotiation conference, but Nippon refused to
negotiate.

Thus, Kitamura initiated a civil case for specific performance and damages with the RTC.

Petitioners moved to dismiss the complaint for lack of jurisdiction contending that the ICA had
been perfected in Japan and executed by and between Japanese nationals.
- the claim for improper pre-termination of the Kitamura's ICA could only be heard in the proper
courts of Japan following the principle of lex loci celebrationis and lex contractus

The RTC invoking the ruling in Insular Government vs. Frank that matters connected with the
performance of contracts are regulated by the law prevailing at the place of performance, denied
the motion to dismiss.

The CA ruled that the principle of lex loci celebrationis was not applicable to this case, because
nowhere in the pleadings was the validity of the written agreement put in issue.
- applicable: lex loci solutionis

Thus, petitioner instituted a Petition for Review on Certiorari. (This is where FNC was invoked.
*imputing error to the CA)

Petitioners on certiorari invoked the defense of FNC. On petition for review before the SC,
petitioners dropped their other arguments, maintained FNC, and introduced new argument that
the applicable principle is the state of the most significant relationship rule.

ISSUE: Whether or not 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 "the state of the
most significant relationship rule", or forum non conveniens.

RULING: NO.

In the judicial resolution of conflicts problems, three 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 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

In this case, only the Jurisdiction is at issue. 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
- Over the res (in cases involving property)

JURISDICTION OVER THE SUBJECT MATTER

- conferred by the sovereign authority which establishes and organizes the court
- Given only by law and in the manner prescribed by law
- Further determined by the allegations of the complaint

NOTE: To succeed in its motion for dismissal of an action for lack of jurisdiction over the subject
matter of the claim, 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.

In the instant case, petitioners do not claim that the trial court is not properly vested by law with
jurisdiction to hear the subject controversy. (The case is not capable of pecuniary estimation and
is properly cognizable by the RTC)
- what they 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

LEX LOCI CELEBRATIONIS relates to the law of the place of the ceremony, or the law of the place
where a contract is made.

LEX CONTRACTUS or LEX LOCI CONTRACTUS means the law of the place where a contract is
executed or to be performed.

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 the following:

- where the contract was made
- was negotiated
- was to be performed
- and the domicile, place of business, or place of incorporation of the parties

These principles in conflict of laws are rules proper for the second phase (make reference to the
law applicable to a dispute) - the Choice of Law.
In this case, Choice of Law Rules are not only inapplicable but also not yet called for.
- petitioners have not yet pointed out any conflict between the laws of Japan and the PH
- Note: When the law of a foreign country is invoked, the existence of such law must be pleaded
and proved.

When a conflicts case (one involving a foreign element), is brought before a court or
administrative agency, there are three alternatives:
A) dismiss the case (lack of jurisdiction or refusal to assume jurisdiction)
B) assume jurisdiction and apply the internal law of the forum; and
C) assume jurisdiction over the case and take into account or apply the law of som other State/s

FORUM NON CONVENIENS CANNOT BE USED TO DEPRIVE THE TRIAL COURT OF ITS
JURISDICTION
- it is not a proper basis for a Motion to Dismiss
- Whether a suit should be entertained or dismissed on the basis of FNC depends largely upon
the facts of the particular case and is addressed to the sound discretion of the trial court (The
RTC decided to assume jurisdiction)
- the propriety of dismissing a case based on FNC requires a factual determination, hence, FNC is
more properly considered a matter of defense.