BIENVENIDO CADALIN, et.al. v. PHILIPPINE OVERSEAES EMPLOYMENT ADMINISTRATION ADMINISTRATOR, et.al.

G.R. No. L-104776, 05 December 1994

Quiason, J.

DOCTRINES:
1. As a general rule, a foreign procedural law will not be applied in the Philippine forum. However, there is
an exception whereby the characterization of a statute into a procedural or substantive law becomes
irrelevant when the country of the forum has a borrowing statute. A borrowing statute directs the state of
the forum to apply the foreign statute of limitations to pending claims based on a foreign law.

2. Parties of to a contract may select the law by which it is governed. In such a case, the foreign law is
adopted as a system to regulate the relations of the parties, including questions of their capacity to enter
into the contract, the formalities to be observed by them, and matters to be observed by them. However,
the choice of law must bear some relationship to the parties of their transaction.

FACTS: Petitioners Bienvenido Cadalin and 728 other overseas contract workers (OCW) instituted a class suit with
the Philippine Overseas Employment Administration (POEA) for money claims against Respondents Asia
International Builders Corporation (AIBC), a domestic corporation engaged in recruitment, and Brown Root
International, Inc. (BRII), a foreign corporation engaged in construction. Thereafter, the POEA Administrator
rendered its decision in favor of the Petitioners but only for 324 of them. Hence, both the Petitioners and
Respondents filed an appeal before the National Labor Relations Commission (NLRC),

Deciding on the case, the NLRC modified the decision of the POEA Adminsitrator. In the same decision, the NLRC
dismissed the claims of 94 complainants for having been prescribed. It ruled that the prescriptive period for filing
of claims of said complainants was three (3) years as provided under Art. 291 of the Labor Code, and not ten (10)
years as provided under Art. 1144 of the Civil Code nor the one (1) year prescriptive period as provided under
Amiri Decree 23 of Bahrain, where the claimants used to work, was applicable in the present case.

Hence, the present Petition. The Petitioners asserted their claims based on the violation of their employment
contracts as amended by Amiri Decree 23, and therefore claims may be brought within ten (10) years as provided
under Art. 1144 of the Civil Code. They further contended that the claims referred to under Art. 291 of the Labor
Code refers to claims arising from the employer’s violation of employees’ rights under the said Code. On the other
hand, the Respondents contended that the NLRC committed grave abuse of discretion when it enforced the
provisions on Amiri Decree 23 and not the terms of the employment contracts.

ISSUES:
1. Whether or not Bahrain law or Philippine law on prescription shall apply in the present case.
2. Whether or not Bahrain law should govern in the present petition.

HELD:
1. Philippine law. The Supreme Court ruled that as a general rule, a foreign procedural law will not be
applied in the Philippine forum. Indeed, there is an exception whereby the characterization of a statute
into a procedural or substantive law becomes irrelevant when the country of the forum has a borrowing
statute. A borrowing statute directs the state of the forum to apply the foreign statute of limitations to
pending claims based on a foreign law. However, the 1987 Constitution cannot enforce such an exception
insofar as it contravenes with Philippine law.

In the present case, Amiri Decree 23 provides that a claim arising from an employment contract shall
prescribed after lapse of one year from its expiration. Such provision contravenes with the public policy of
the Philippines on the protection of labor. Hence, Philippine law on prescription shall apply.

2. Yes. The Supreme Court held that the parties of to a contract may select the law by which it is governed.
In such a case, the foreign law is adopted as a system to regulate the relations of the parties, including
 questions of their capacity to enter into the contract, the formalities to be observed by them, and matters
to be observed by them. However, the choice of law must bear some relationship to the parties of their
transaction.

In the present case, the overseas employment contracts prepared by the Respondents provided that laws
of the host country became applicable to the said contracts if they offer terms and conditions more
favorable than those stipulated. Further, the services of the claimnants were rendered in Bahrain. As
such, there is no question that the contracts sought to be enforced by the claimnants have a direct
connection with Bahrain. Hence, Bahrain law should govern.

RULING: Petitions are DISMISSED.