Answer | Forum non conveniens is a matter of defense which involves factual issues

PIONEER CONCERETE PHILS., INC. vs. TODARO

June 8, 2007
Austria - Martinez, J.

P: PIONEER CONCRETE PHILIPPINES (PCPI), INC., PIONEER PHILIPPINES

HOLDINGS (PHI), and PHILIP J. KLEPZIG
R: ANTONIO D. TODARO
Nature: Petition for review on certiorari
Tribunal/s: RTC —> CA —> SC

Facts:
R filed a complaint for sum of money and damages with preliminary attachment against P for the
• latter’s
RTC: breach of its contractual obligation to employ him based on their previous agreement.
Since•theRevents
filed a leading to such
complaint agreement
for sum of moneyallegedly occurred with
and damages in HKpreliminary
(PIL exists under Australian
attachment
laws, butagainst
it has an HK office),
Philippine P filed MTDs
International on the
Limited basis
(PIL), of, PPHI,
PCPI, amongJohn
others, the principle
G. McDonald, andof Klepzig
forum
non conveniens. The RTC,
• Allegations: CA, and SC ruled in favor of R, and held that said principle is a matter
of defense, which involves factual issues to be properly threshed out during trial.
• PIL - a corporation duly organized and existing under the laws of Australia,
engaged in the ready-mix concrete and concrete aggregates business
• PPHI - company established by PIL to own and hold the stocks of its operating
company in the PH
• PCPI - company established by PIL to undertake its business of ready-mix
concrete, concrete aggregates, and quarrying operations in the PH
• McDonald - CEO of HK office of PIL
• Klepzig - President and Managing Director of PPHI and PCPI
• R has been managing director of Bentonval Readyconcrete, Inc., a company
engaged in premixed concrete and concrete aggregate production. After he
resigned, PIL contacted him to join them in establishing a ready-mix concrete plant
and other related operations in the PH. PIL and R’s agreement: PIL consented to
engage R’s services as a consultant for 2-3 months, after which he would be
employed as manager of PIL’s ready-mix concrete operations should the company
decide to invest in the PH [NOTE: In case Sir asks where this agreement was
entered into, it was not explicitly stated in the facts, but basing on P’s arguments
(see below), it would appear to be in HK]
• PIL started operations in the PH but refused to employ R on a permanent basis

Q A2020 |
Answer | Forum non conveniens is a matter of defense which involves factual issues

• P filed MTDs
• Complaint does not states cause of action; subject matter jurisdiction is with NLRC
instead of RTC; complaint should be dismissed based on the doctrine of
forum non conveniens
• RTC denied MTDs
• P filed an Urgent Omnibus MR - denied
• CA:
• P filed petition for certiorari - denied
• MR denied
• SC:
• P filed the present petition for review on certiorari

Relevant issue/s:
W/N the principle of forum non coveniens is a valid ground for dismissing a complaint - NO

Ruling:
• P Argument/s:
• 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:
(1) Main aspects of case transpired in a foreign jurisdiction; or
(2) Material witnesses have their residence there, and the plaintiff sought the forum
merely to secure procedural advantage, or to annoy or harass the defendant
• One of the factors in determining the most convenient forum is the power the court to
enforce its decision. Since majority of P are not residents of PH, they are not subject to
compulsory processes of the PH court for requiring their attendance during trial. Even
assuming they can be summoned, appearance would entail excessive costs.
• No allegation in complaint that evidence to be presented during trial can be better
obtained in the PH
• Events that led to this case occurred outside of the PH
• R’s Comment:
• Whether a suit should be entertained or dismissed based on the principle of forum non
conveniens depends largely upon the facts and is addressed to the judge’s discretion,
who is in the best position to determine whether special circumstances require the
court to desist from assuming jurisdiction
• SUPREME COURT:
• The doctrine of forum non conveniens (literally, “the forum is convenient”) emerged in
private international law to deter the practice of global forum shopping for various
reasons, e.g., secure procedural advantages, annoy or harass defendant, avoid
overcrowded dockets, or select a more friendly venue
• Courts, in conflicts of law cases, may refuse impositions on its jurisdiction if it is not the
most “convenient” or available forum, and the parties may seek remedies elsewhere

Q A2020 |
Answer | Forum non conveniens is a matter of defense which involves factual issues

• 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 PH court may assume jurisdiction
if it chooses to do so, provided that the PH court—
(1) Is one to which the parties may conveniently resort to;
(2) Is in a position to make an intelligent decision as to the law and the facts; and
(3) Has or is likely to have power to enforce its decision
• Philsec. Investment Corporation vs. CA: S1, Rule 16 does not include said doctrine as
a ground for dismissal
• Although it is within the discretion of the trial court to abstain from assuming
jurisdiction
on this ground, the factual circumstances cited by P, which would justify the
application of the doctrine of forum non conveniens, are matters of defense to be
properly threshed out during trial

*Other issue/s:
• W/N complaint states a cause of action - YES
• P Argument/s: No perfected employment contract; annexes to complaint show that
PIL’s offer was for R to be employed as manager only of pre-mixed concrete
operations and not as the company’s managing director or CEO; R’s insistence on his
intention to become manager of PIL’s overall business venture in the PH constituted a
counter-offer and not an acceptance; no basis for damages under NCC 19 and 21;
assuming PIL is liable, PCPI and PHPI may not also be held liable because they are
separate juridical entities even if subsidiary corporations and are not privy to the
negotiations with respect to the employment contract that took place in HK; no cause
of action against Klepzig
• SUPREME COURT: S2, Rule 2 - Complaint states a cause of action; whether there
was a perfected contract should be taken up during trial; allegations show that Klepzig
conducted negotiations with R then later on withdrew
• W/N subject matter jurisdiction is with NLRC instead of RTC - NO
• P Argument/s: A, M, and E damages solely premised on alleged breach of employment
contract, so exclusive jurisdiction of NLRC
• R’s Comment: Complaint not based on contract of employment but on P’s unwarranted
breach of their contractual obligation to employ him; even assuming there was an
employment contract, for NLRC to acquire jurisdiction, claim for damages must have a
reasonable causal connection with the ER-EE relationship; there was a perfected contract,
but assuming there was none, complaint alleges an alternative cause of action based on
NCC 19 and 21.
• SUPREME COURT: RTC has jurisdiction - No EE-ER relationship; R is not seeking relief
under LC

Dispositive:
Petition denied. CA affirmed.

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