I.

INTRODUCTION
Part of international law which deals with legal problems involving foreign element concerning the conflict in the application of local and foreign laws, raised in a proper forum. That part of municipal law of a state which directs its courts and administrative agencies, when confronted with a legal problem involving a foreign element, whether or not they should apply a foreign law/s (Paras). That part of the law of each State or nation which determines whether, in dealing with a legal situation, the law or some other State or nation will be recognized, given effect, or applied (16 Am Jur, 2d, Conflict of Laws, 1)

SCOPE OF CONFLICT OF LAWS

DEFINITION OF CONFLICT OF LAWS

ELEMENTS FOR THE APPLICATION OF CONFLICT OF LAWS 1. 2. 3. 4. Conflict of laws is that part of the municipal law of the State The direction to Courts and Administrative agencies A legal problem involving a foreign element The application or non-application of foreign law/foreign laws

I. Legal problem involving foreign element

If there is no foreign element, there is no conflict of law. Foreign elements is a factual situation that cut across territorial lines and affected by diverse laws of two or more states -- Saudia vs Morada 1. One or both litigant is alien 2. Cause of action arises in foreign state - location of the res - place of celebration - place of the act - place of the crime

II. Assumption of the proper forum

Cases involving COL, forum may: 1. Refuse - apply forum non conviniens, no COL

2. Assume- forum may apply the following: a. local law -- lex fori b. Foreign law - lex causae c. apply both -- Cadalin vs POEA

III. Conflict between local and foreign law

if there is no conflict between the two, there is nothing to resolve. court can apply foreign law if properly pleaded and proved, application discretionary to the court.

IV. Choice of law to be applied Which law applies?

depends on the factual situation and connection of the foreign element, apply characterization process of determining under what category a certain set of facts or rules falls. Purpose - to enable the forum to select the proper law

FUNCTIONS OF CONFLICT OF LAWS (IS 3 FOLD) 1. To prescribe the conditions under which a court or agency is competent to entertain a suit or proceeding involving facts containing a foreign element; 2. To determine the extent, validity and enforceability of foreign judgment (or to specify the circumstances in which foreign judgment will be recognized as valid and binding in the forum) 3. To determine for each class of cases the particular system if law by reference to which the rights of the parties must be ascertained this is the fundamental problem of choice of law In other words, 1. The determination of which country has jurisdiction 2. The applicability to a particular case of either the local or the foreign law 3. The determination of the force, validity and effectiveness of a foreign judgment 4 important points: 1. Rules of Private International Law, like all other rules of law, apply only to certain given facts not characterized as creating some legal relationship

2. The selection of legal systems open to the court is limited to those that are simultaneously valid 3. The legal effects of a certain set of facts are not always determined by one single legal system. 4. It is sometimes necessary to apply several systems, either cumulatively or alternatively Cumulative application: 1. a given set of facts may produce legal effects each of which is governed by a different legal system, 2. or a given set of facts may produce legal effects only if certain conditions common to two legal systems are fulfilled Alternative application: Under the Philippine law, if an alien executes a will in the Philippines, the formal validity of the will may be judged alternatively by the requirement of internal Philippine law or of his own national law. If either law considers it formally valid, it may be admitted to probate ALSO: Promoting the peaceable intercourse of private persons, made imperative by the economic and social demands of an interdependent world, through rules that are eminently just and workable, may well be the ultimate objective of Private International Law protection of the justified and rational expectations of parties to a transaction, the application of the law of the state having a dominant interest in a given set of facts, the promotion of stability and predictability by achieving uniformity of solution to a case wherever the forum may be situated, and of course, the dispensing of justice in individual cases. SIGNIFICANCE/IMPORTANCE OF CONFLICT OF LAWS 1. To adjust conflicting rights in international mercantile and corporate transactions 2. To solve personal, family, property and successional contractual problems, possessed of facts or elements operating in two or more states. Why conflict of law is observed? States must of necessity observe the subject because it is part of their municipal law. Surely, a government, anywhere and anytime, is duty bound to enforce and respect its own municipal legislation

individuals observe it because of fear of municipal sanctions

IDENTIFYING ISSUES IN CONFLICT OF LAWS HISTORY OF CONFLICT OF LAWS ORIGIN HISTORY OF THE SUBJECT Earliest Period Theory of Statutes to solve conflicts Bartolus (from the Italian city-states) Father of Private International Law Determined CoL rules by differentiating 3 types of statutes 1. real statutes 2. personal statutes 3. mixed statutes The French Jurists of the 16th century: 2 thinkers Charles Dumoulin Doctrine: Parties to the contract could choose the law that was to govern their agreement Bertrand DArgentre Doctrines Whenever there was any doubt as to whether a statutory rule was personal or real, presumed it is real In matters of succession, where a person leaves immovables in various countries, the law of the countries concerned should be applied respectively to the immovable therein situated rather than for the latter to be regulated by one and only one law The Doctrine of Comitas Gentium Doctrine: States are not obligated to take note of foreign laws unless imposed by treaty Product of Netherlands independence Principles: Doctrine of Pure Territoriality Laws of every state operate within the territorial limits, and such is binding to all subjects but not beyond those limits Subjects of a state are all those who are found within the limits of its territory, whether they reside there permanently or whether their presence there is only temporary

Every sovereign, out of comity, admits that a law which has already operated in the country of origin shall retain its force everywhere, provided that this will not prejudice the subjects of the sovereign by whom its recognition is sought

This doctrine merely states that the Theory of Statutes is subordinate to the idea of Comitas

Beginning of codifications Prussian General Code of 1794 made emphasis of res magis valet quam, which as applied to Private International Law: If a person has 2 domiciles, which is possible under European laws, that domicile is decisive under the law of which the contract or act in question is valid If a person domiciled abroad enters into contract within Prussian territory respecting chattels there, the contract is valid if under the law is either (his domicile or that of Prussia) he is capable of entering into contracts 19th Century Jurists 2 groups of writers 1. Theoretical -Deductive method- Begins with a set of priori principles to derive a body of consistent rules 2. Positive - Inductive method- Studies actual rules in force and reduce them to systematic order; do not claim universal validity Joseph Story American judge, Commentaries on the Conflict of Laws (1834) Approach was more positive than theoretical Maxims: 1. Every nation possesses an exclusive sovereignty and jurisdiction within its own territory that directly binds all properties within its territory, and all persons who are residents within it (territorial sovereignty) 2. No state or nation can by its law directly affect or bind property out of its own territory, or bind persons not resident therein, whether they are natural born subjects or others Friedrich Carl von Savigny Great German jurist, System of Modern Roman Law (1849) It is expedient that in cases containing a foreign element, the same legal relations have to expect the same decision whether the judgment be pronounced in this state or in that

It is essential to bear in mind the existence of an international community of nations having intercourse with one another Comity is beneficial and advantageous to all concerned, the state and the individuals The question is not W/N the rule is related to property, persons or acts but to classify legal relationships so as to ascertain for every legal relation that law to which, in its proper nature, it belongs or is subject and thus find out where a relation has its seat (the situs) the seat of a particular legal relationship

Pasquale Stanislao Mancini Nationality as the Basis of the Law of Nations (1851) Opposing the rule on domicile, Mancini asserts the rule of nationality, the components of which are: religion, customs of life, language, race of the people, historical traditions, even the landscape of the country and its climate Personality of an individual is determined only by his nationality; an individuals personality is recognized only if his nationality is recognized In every kind of legal system, there are 2 kinds of rules i. those created in the interest of private individuals binding to persons who belong to the country by nationality ii. those for the protection of public order binding to all within the territory

(other version:) Roman Empire Ius gentium:

-law of nations in PIL -governs relations of States -body of rules developed by the PRAETOR PEREGRINUS to resolve disputes between Foreigners and Roman Citizens

Ius Civile: applied only to Roman Citizens Italy

-Italy was divided into many city-states, each have own law so they have conflicts of law problems BARTOLUS (father of conflict of laws): formulated the THEORY OF STATUTES -the theory of statutes was used by the Italian city-states to resolve conflict of law issues

STATUTES classification 1. REAL STATUTES (STATUTA REALIA): applied to immovable property w/n the state 2. PERSONAL STATUTES (STATUTA PERSONALIA): followed persons even outside his domicile, governed all questions concerning o o o personal status capacity movables

3. MIXED STATUTES (STATUTA MIXTA): on contracts - depend on where entered

16th century France

CHARLES DUMOULIN: method to determine what law would govern CONTRACTS BETWEEN DIFFERENT NATIONALS BERTRAND D'ARGENTE: PRINCIPLE OF UNIVERSAL SUCCESSION

Netherlands
BURGUDNOU, RODENBERG, ULRICH HUBER (first used CONFLICT OF LAWS): State was under no obligation to apply foreign law UNLESS imposed by o o o treaty COMITAS GENTIUM (Comity of Nations?) on consideration of courtesy and expediency

JOHN VOET: no statue, real, personal or mixed, can act by itself beyond the territory of the legislator nor can it have any effect elsewhere against the will of the legislator of another state

-Territorial Principle:
GR: laws of every state may operate ONLY WITHIN THE TERRITORIAL LIMIT OF SUCH STATE X: may recognize laws of another country PROVIDED that it will not prejudice the subjects of the sovereign whose recognition is sought *Comitas Gentium (Comity of Nations) approach readily accepted -most trans-jurisdictional disputes to be resolved by the application of IUS GENTIUM or IUS COMMUNE

Ius Commne: supranational law based on Roman Law, became continental European Common
Law -nations began codifying their national laws to include conflict of laws provisions: *Bavarian Code: theory of statutes *Prussian Code: theory of efficacy of contracts *French Civil Code: pattern for Civil Codes of Spain, Belgium, and Romania: nationality principle -adopted by RP: ART15, NCC J. JOSEPTH STORY: Commentaries on the Conflict of Laws - territorial theory/comitas gentium

approach -territorial sovereignty, founded conflict of laws on the principle of comity of nations
-adopted by JOSEPH BEALE, American Restatement of Conflict of Laws, developed territorial

"VESTED RIGHTS" school of thought

FREDERICH CARL VON SAVIGNY: System of Modern Law - Situs theory -advocated historical school of jurisprudence -applicationof foreign law was not due to comity BUT the resultant benefits for everyone concerned -founder of MODERN PRIL -theory of situs/seat of legal relationship: every element of a transaction be governed by the law of the place with which said element has the most substantive connection PASCUALE MANICINI: Nationality as the Basis of Law of Nations- nationality theory(sortof

Mixed statute)
-nationality theory on o o o Status Capacity Private interests of the individual -NEW THEORY OF PRIL MODERN VIEWS/DEVELOPMENTS Modern Developments Neo-statutory system Assumption: 2 or more independent laws are applicable to conflicts problem Then proceed to devise some method to determine the law that shall prevail

Many adhere to Mancinis theory

International system There exists or should exist, a single body of international rules that can and should solve all legal problems that involve a foreign element A juridical act should in all countries be governed by the law of the place in which the act has its seat (Savigny) But while almost every adherent of the international system is agreed on this abstract principle, there are wide differences of opinion on the most appropriate law to govern each legal relation Territorial system Only the law of a state applies to persons and things within its territory. Foreign law is not applied in the forum 2 Factions only rights vested or acquired under the foreign law are recognized in the forum, but not the foreign law itself vested rights theory is illogical and is not true in practice

Second Restatement of the Conflicts of Law (by American Law Institute) In the absence of statutory rules, it holds that the applicable law in a conflicts case is the law of the most significant relationship which is determined by weighing the factors considered more relevant

(Other version: )
*Neostatutists: when two or more independent laws are applicable to a conflict of laws problem, the method so devised determines what law shall prevail *Internationalists: there should be a single body of rules that can solve problems involving foreign element *Territorialists: law of the State applied to persons and things within the State, no foreign law

should be applied
-branch: only rights vested or acquired under a foreign law are recognized but not the foreign law itself

*2nd Restatement, William Reese: the law to be applied in a conflict of laws case is the law of the most significant relationship *CAVERS, CURRIE AND EHRENZWEIG: policy-centered Approaches

CONFLICT OF LAWS IN THE PHILIPPINES

Conflicts of Laws in the Philippines

-only when RP became sovereign state In NCC: Article 15: nationality principle Art. 15. Laws relating to *family rights and duties, *or to the status, *condition and *legal capacity of persons are binding upon citizens of the Philippines, even though living abroad. (9a) Article 16(1): lex situs rule Art. 16. Real property as well as personal property is subject to the law of the country where it is stipulated. Article 16(2): universal succession However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. Article 17(1): lex loci contractus Art. 17. The forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the country in which they are executed.

CONFLICT OF LAWS VS. PUBLIC INTERNATIONAL LAW DISTINGUISH BASIS Nature Persons involved CONFLICT OF LAW Municipal in character LAW OF NATIONS International in character international e.g., their affected UN; governs relationships by public

Dealt with by private individuals; Sovereign states and other entities governs individuals in their private possessing transactions which involve a personality, states in foreign element

amongst themselves Transactions involved Private transactions between Generally private individuals Remedies and Sanctions Resort to municipal tribunals interest; those in general are of interest only to sovereign states May be peaceful or forcible Peaceful: includes diplomatic negotiation, tender & exercise of good offices, mediation, inquiry & conciliation, arbitration, judicial settlement by ICJ, reference to regional agencies Forcible: includes severance of diplomatic intercourse, relations, pacific retorsions, blockades, reprisals, embargo, boycott, noncollective measures under the UN Charter, and war. Sources Generally derived from the internal Custom, Treaty and General law of the state; except any conflict Principles of law, recognized by of law question governed by a civilized nations treaty and juridical of decisions the most and highly teachings

qualified publicists

SOURCES Sources of Conflict of laws: 1. Indirect

- Natural Moral Law - Work of Writers 2. Direct - Constitutions - Codifications - Special Laws - Treaties and Conventions - Judicial Decisions - International Customs A.CODES AND STATUTES Note: -Conflict of Laws from Continental Europe - codified - so Civil Codes are primary sources of Conflict of Laws rules -principle of ius gentium: codified in Roman Codes

In RP
Spanish Civil Code of 1888: enforced in RP Dec7, 1889 until August 30, 1950 -Conflict of laws provisions adopted by RP NCC Code of Commerce of Spain: foreign transactions provisions - also enforced in Dec1, 1888 New: 1987 Consti: Nationality, Comity

Special Statutes
1. Corporation Code 2. General Banking Act 3. Act Instituting Foreign Currency System in the Philippines 4. Philippine Foreign Law Guarantee Corporation 5. Act Regulating Retail Business 6. Anti-Dummy Law 7. Nationalization of the Rice and Corn Industry 8. Insurance Code 9. Protection of Intellectual Property 10. Patent Law 11. Tradesmark Law 12. COGSA

13. Salvage Law 14. Public Service Act 15. Civil Aeronautics Act 16. Philippine Overseas Shipping Act 17. Investment Incentives Act 18. Export Incentives Act 19. RA 7722 liberalizing entry of foreign banks in the Philippines B.TREATIES AND INTERNATIONAL CONVENTIONS 1. Convention on International Civil Aviation 2. Convention for the Unification of Certain Rules relating to international Carriage by Air - Warsaw Convention 3. Convention on Offenses Committed on Board Aircraft 4. Convention for Suppression of Unlawful Acts against the Safety of Civil Aviation 5. UN COGSA 6. Convention on the Consent to Marriage, Minimum Age for Marriage and Registration of Marriages 7. Convention on Traffic of Person 8. Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) 9. Convention on Political Rights of Women 10. International Convention for the Suppression of the Traffic in Women and Children 11. Convention for the Suppression of the Traffic in Persons and of the Exploitation of the Prostitution of Others 12. Convention Establishing the World Intellectual Property Organization 13. Berne Conventions for the Protection of Literary and Artistic Works 14. Convention for the Protection of Industrial Property 15. Paris Convention for the Protection of Industrial Property 16. Hague Conventions on PRIL: personal status patrimonial family status patrimonial status such as agency and trusts 17. Convention on Recognition of Foreign Judgment on Civil and Commercial matters 18. Convention in Respect of Inter Country Adoption C.TREATISES ,COMMENTARIES AND STUDIES OF LEARNED SOCIETIES European Ulrich Huber, De Conflicto Legum Diversarum in Diversia Impecis

Mareas (di ba Manresa?), Comentarios al Codigo Civil Espanol FK von Savigny, System des Beutigen Romishcen Rights, English translation by Guthrie Andrei Weiss, Traite Theorique et Pratique de Droit International Prive American and English JH Beale, Conflict of Laws DF Cavers, The Choice of Law Process E. Cheatham, Cases and Materials on Conflict of Laws B. Currie, Selected Essays on the Conflict of Laws A. Ehrenzweig, A Treatise on the Conflict of Laws HF Goodrich, Conflict of Laws AK Kuhn, Commentarieson PRIL A Gussbaum, Principles of PRIL E Rabel, The Conflict of Laws J Story, Commentaries on the Conflict of Laws F Wharton, Treatiese on the Conflict of Laws GC Chesire, Private International Law RH Graveson, Conflict of laws American Institute Restatement of the Conflicts of Laws Second Restatement D.JUDICIAL DECISIONS

Graveson: this branch of law is more completely judge-made Than almost any other
CONFLICT OF LAWS UNDER COMMON LAW AND PRIVATE INTERNATIONAL LAW UNDER CIVIL LAW

CASES:
1. GUERREROS TRANSPORT SERICES, INC VS BLAYBLOCK TRANSPORT SERVICES, 71 SCRA 621 (1976) FACTS In 1972, the US Naval Base authorities in Subic conducted a public bidding for a 5-year contract for the right to operate and/or manage the transportation services inside the naval base. This bidding was won by Santiago Guerrero, owner-operator of Guerreros Transport Services, Inc. (Guerrero), over Concepcion Blayblock, the then incumbent concessionaire doing business under the name of Blayblock Transport Services Blayblock. Blayblocks 395 employees are members of the union BTEA-KILUSAN (the Union). When Guererro commenced its operations, it refused to employ the members of the Union. So the Union filed a complaint w/ the NLRC against Guerrero to compel it to employ its members, pursuant to Art. 1, Sec. 2 of the RP-US Base Agreement. The case was dismissed by the NLRC upon Guerreros MTD on jurisdictional grounds, there being no employer-employee relationship between the parties. Upon appeal, the Sec. of Labor remanded the case to the NLRC. The NLRC issued a Resolution ordering Guererro to absorb all complainants who filed their applications on or before the deadline set by Guerrero, except those who may have derogatory records w/ the US Naval Authorities in Subic. The Sec. of Labor affirmed. Guerrero claims that it substantially complied w/ the decision of the Sec. of Labor affirming the NLRC Resolution, & that any non-compliance was attributable to the individual complainants who failed to submit themselves for processing & examination. The Labor Arbiter ordered the reinstatement of 129 individuals. The Union filed a Motion for Issuance of Writ of Execution. The order wasnt appealed so it was declared final & executor Subsequently, the parties arrived at a Compromise Agreement wherein they agreed to submit to the Sec. of Labor the determination of members of the Union who shall be reinstated by Guerrero, w/c determination shall be final. The agreement is deemed to have superseded the Resolution of the NLRC. The Sec. of Labor ordered the absorption of 175 members of the Union subject to 2 conditions. ISSUE Whether or not the said members of the Union were entitled to be reinstated by Guerrero. RULING YES. Pursuant to Sec. 6 of Art. I of the RP-US Labor Agreement, the US Armed Forces undertook, consistent w/ military requirements, "to provide security for employment, and, in the event

certain services are contracted out, the US Armed Forces shall require the contractor or concessioner to give priority consideration to affected employees for employment. A treaty has 2 aspects o o as an international agreement between states, and as municipal law for the people of each state to observe.

As part of the municipal law, the provision of the treaty enters into and forms part of the contract between Guerrero and the US Naval Base authorities. In view of said stipulation, the new contractor (Guerrero) is, therefore, bound to give "priority" to the employment of the qualified employees of the previous contractor (Blaylock). It is obviously in recognition of such obligation that Guerrero entered into the aforementioned Compromise Agreement.

Under the Compromise Agreement, the parties agreed to submit to the Sec. of Labor the determination as to who of the members of the Union shall be absorbed or employed by Guerrero, and that such determination shall be considered as final.

The Sec. of Labor issued an Order directing the NLRC, through Labor Arbiter Francisco de los Reyes, to implement the absorption of the 175 members into Guerrero's Transport Services, subject to the following conditions: 1. that they were bona fide employees of the Blaylock Transport Service at the time its concession expired; and 2. that they should pass final screening and approval by the appropriate authorities of the U.S. Naval Base concerned.

For this purpose, Guerrero is ordered to submit to and secure from the appropriate authorities of the U.S. naval Base at Subic, Zambales the requisite screening and approval, the names of the members of the Union.

Considering that the Compromise Agreement of the parties is more than a mere contract and has the force and effect of any other judgment, it is, therefore, conclusive upon the parties and their privies.

For it is settled that a compromise has, upon the parties, the effect and authority of res judicata and is enforceable by execution upon approval by the court.

2. SAUDI ARABIAN AIRLINES VS. CA, 297 SCRA 469 (1998) FACTS: Plaintiff Morada is a flight attendant for defendant SAUDIAs airlines based in Jeddah. On April 27, 1990, while on a lay-over in Jakarta, Indonesia, Morada became a victim of attempted rape by fellow crewmembers, Thamer and Allah, who are both Saudi nationals. The two were eventually arrested and deported back to Saudi Arabia while Morada was transferred to Manila. On various dates after the incident, Morada was summoned to Jeddah by her employer in order to sign documents, purporting to be statements dropping the case against Thamer and Allah. However, it turned out that a case was in fact filed against her before the Saudi court, which later found her guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition. Hence, Morada filed this complaint for damages based on Article 21 of the New Civil Code against SAUDIA and its country manager. ISSUE: 1. Whether or not the trial court has jurisdiction over the case 2. Whether the proper law applicable is Philippine law or the law of the Kingdom of Saudi Arabia 3. Whether or not the case involves a conficts problem HELD: Is there a conflicts case? The Supreme Court held in the affirmative. 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. The presence of a foreign element is inevitable since social and economic affairs of individuals and associations are rarely confined to the geographic limits of their birth or conception. The forms in which this foreign element may appear are many. 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. Jurisdiction is based on allegations on the pleading State of the Most Significant Relationship Theory Conflicts of Laws Problem Points of Contact

In the instant case, the foreign element consisted in the fact that private respondent Morada is a resident Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the employment of Morada with the petitioner SAUDIA as a flight stewardess, events did transpire during her many occasions of travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a conflicts situation to arise.

Applicability of Art. 19 and 21, NCC and Jurisdiction of Quezon City RTC The Supreme Court held that private respondent aptly predicated her cause of action on Articles 19 and 21 of the New Civil Code. Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions. Thus, violations of Articles 19 and 21 are actionable, with judicially enforceable remedies in the municipal forum. Based on the allegations in the Amended Complaint, read in the light of the Rules of Court on jurisdiction, the Supreme Court found that the RTC of Quezon City possesses jurisdiction over the subject matter of the suit. Its authority to try and hear the case is provided under Section 1 of RA 7691. Venue was also held to be proper. Furthermore, jurisdiction over the person of the plaintiff and defendant were properly acquired. Choice-of-law Problem 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. Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as 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. Our starting point of analysis here is not a legal relation, but a factual situation, event or operative fact. 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 factual relationship (such as property right, contract claim) and a connecting factor or point of contract, such as the situs of the res, the place of celebration, the place of performance, or the place of wrongdoing. Note that one or more circumstances may be present to serve as the possible test for the determination of the applicable law. These test factors or points of contact or connecting factors could be any of the following: The nationality of a person, his domicile, his residence, his place of sojourn, or his origin; The seat of a legal or juridical person, such as a corporation; 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;

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;

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; The intention of the contracting parties as to the law that should govern their agreement, the lex loci intentionis; 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

The flag of the 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.

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 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 the fatality of the alleged injury to the person, reputation, social standing and human rights of the complainant, had lodged, according to the plaintiff below (herein private respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged tort.

Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories and rules on tort liability have been advanced to offer fresh judicial approaches to arrive at just results. In keeping abreast with the modern theories on tort liability, we find here an occasion to apply the State of the most significant relationship rule, which in our view should be appropriate to apply now, given the factual context of this case.

In applying said principle to determine the State which has the most significant relationship, the following contacts are to be taken into account and evaluated according to their relative

importance with respect to the particular issue: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and (d) the place where the relationship, if any, between the parties is centered. Over-all injury occurred in the Philippines As already discussed, there is basis for the claim that over-all injury occurred and lodged in the Philippines. 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. Thus, the relationship between the parties was centered here, although it should be stressed that this suit is not based on mere labor law violations. From the record, the claim that the Philippines has the most significant contact with the matter in this dispute, raised by private respondent as plaintiff below against defendant (herein petitioner), in our view, has been properly established. Other version: Facts: On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for its airlines based inJeddah, Saudi Arabia. . . . On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a disco dance with fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi nationals. Because it was almost morning when they returned to their hotels, they agreed to have breakfast together atthe room of Thamer. When they were in te (sic) room, Allah left on some pretext. Shortly after he did, Thamer attempted to rape plaintiff. Fortunately, a roomboy and several security personnel heard her cries for help and rescued her. Later, the Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice. When plaintiff returned to Jeddah a few days later, several SAUDIA officials interrogated her about the Jakarta incident. They then requested her to go back to Jakarta to help arrange the release of Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and base manager Baharini negotiated with the police for the immediate release of the detained crew members but did not succeed because plaintiff refused to cooperate. She was afraid that she might be tricked into something she did not want because of her inability to understand the local dialect. She also declined to sign a blank paper and a document written in the local dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but barred her from the Jakarta flights. Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were again put in service by defendant SAUDI (sic). In September 1990, defendant SAUDIA transferred plaintiff to Manila.

On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind her, her superiors requested her to see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah,Saudi Arabia. When she saw him, he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the police put pressure on her to make a statement dropping the case against Thamer and Allah. Not until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of Jeddah.

One year and a half later or on lune 16, 1993, in Riyadh, Saudi Arabia, a few minutes before the departure of her flight to Manila, plaintiff was not allowed to board the plane and instead ordered to take a later flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was asked to sign a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila.

Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving assurance from SAUDIA's Manila manager, Aslam Saleemi, that the investigation was routinary and that it posed no danger to her.

In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer told her that the airline had forbidden her to take flight. At the Inflight Service Office where she was told to go, the secretary of Mr. Yahya Saddick took away her passport and told her to remain in Jeddah, at the crew quarters, until further orders.

On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing her to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition.

Facing conviction, private respondent sought the help of her employer, petitioner SAUDIA. Unfortunately, she was denied any assistance. She then asked the Philippine Embassy in Jeddah to help her while her case is on appeal. Meanwhile, to pay for her upkeep, she worked on the domestic flight of SAUDIA, while Thamer and Allah continued to serve in the international flights.

Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly before her return to Manila, she was terminated from the service by SAUDIA, without her being informed of the cause.

On November 23, 1993, Morada filed a Complaint for damages against SAUDIA, and Khaled AlBalawi ("Al-Balawi"), its country manager. On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss which raised the following grounds, to wit: (1) that the Complaint states no cause of action against Saudia; (2) that defendant Al-Balawi is not a real party in interest; (3) that the claim or demand set forth in the Complaint has been waived, abandoned or otherwise extinguished; and (4) that the trial court has no jurisdiction to try the case.

Issue: Whether of not the trial court can validly take cognizance and decide upon the case. Held: Yes Conflicts of Laws ; Where the factual antecedents satisfactorily establish the existence of a foreign element, the problem could present a "conflicts case". 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". The presence of a foreign element is inevitable since social and economic affairs of individuals and associations are rarely confined to the geographic limits of their birth or conception. The forms in which a foreign element may appear are many, such as the fact that one party is a resident Philippine National and that the other is a resident foreign corporation - The forms in which this foreign element may appear are many. 1. The foreign element may simply consist in the fact that one of the parties to a contact is an alien or has a foreign domicile, or 2. that a contract between nationals of one State involves properties situated in another state. 3. it may assume complex form. 4. in this case, the foreign element consisted in the fact that private respondent Morada is a resident Philippine National and that petitioner SAUDIA is a resident foreign corporation. 5. by virtue of the employment, events transpire across national borders that caused "conflict" situation to arise. Forum Convenience - Pragmatic considerations 1. Convenience of the Parties 2. Paramount is the Private Interest of the Parties. 3. Enforceablility of a judgment if one is obtained. 4. Relative advantages and obstacles to a fair trial are equally important.

Plaintiff may not by choice of a inconvenient forum, vex, harass or oppress the defendant by inflicting upon him needless expense or disturbance. Plaintiff's choice of forum should not be disturbed unless the balance is strongly in favor of the defendant. Forcing a party to seek remedial action in a place where she no longer maintains substantial connections would cause a fundamental unfairness to her.

Jurisdiction over the Persons 1. Over the respondent / plaintiff ; by filing her Complaint and Amended Complaint, she has voluntarily submitted herself to the jurisdiction of the court. 2. Over the petitioner / defendant ; praying for the dismissal of the complaint on grounds other than lack of jurisdiction Choice of Applicable Law ; seeks 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. Choice of Law Theories: Characterization or Doctrine of Qualification ; the process of deciding whether or not the facts relate to the kind of question specified in a conflicts rule. Determine under what category a certain set of facts or rules fall. The purpose of "characterization" is to enable the forum to select the proper law. An essential element of conflict rules is the indication of a "test" or "connecting factor" or "point of contact" Our starting point of analysis is factual situation, event or operative fact. A factual relationship 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 wrondoing. "Test factors" ; "points of contact" ; "connecting factors"; any of the following: (1) the nationality of a person, his domicile, his residence, his place of sojorn 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, lex situs is decisive when real reights are involved; (4) the place where an act has been done, the locus-actus, 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 what law should govern their agreement - lex loci intentionis; (7) the place where the judicial or administrative proceedings are instituted or done, the lex fori (8) the flag ship, practically decisive of all legal relationships of the ship and of its master or owner as such..

The Situs is the Philippines where the tort is committed (lex loci delicti commissi), it is in the Philippines where the defendant allegedly deceived the plaintiff, a citizen residing and working here and the fact that certain acts or parts of the injury occurred in another country is of no moment, for what is important is the place where the over-all harm or the totality of the injury to the person, reputation, social standing and human rights of the plaintiff had lodged. However there is the widespread criticism of the traditional rule of lex loci delicti commissi. Apply State of the Most Significant relationship Rule - appropriate theory on tort liability: 1) the place where the injury occurred 2) the place where the conduct causing the injury occurred 3) the domicile, residence, nationality, place of incorporation and place of business of the parties; 4 The place where the relationship, if any, between the parties is centered The Philippines is the situs of the tort complained of and the place " having the most interest in the problem", the Philippine Law on tort liability should have paramount application to and control in the resolution of the legal issues arising therein in view of the foregoing. 1) The respondent is a resident Filipina National 2) The petitioner is a resident foreign corporation engage here in the business of international air carriage 3) The relationship was centered in the Philippines 4) The Philippines has the most significant contact with the matter in this dispute 5) The Philippines is the situs of the tort complained of 6) The Philippines has the most interest in the problem 7) The RTC has jurisdiction over the parties and the subject matter of the complaint

3. NORTHERN P.R, CO VS. BABCOCK, 154 US 190 FACTS: an action by Albert L. Babcock, as administrator of Hugh M. Munro, deceased, against the Northern Pacific Railroad Company, for damages for the death of said Munro. plaintiff below, who was the administrator of the estate of Hugh M. Munro, sued in the district court of the fourth judicial district of Minnesota to recover $25,000 damages for the killing of Munro on Jan. 10, 1888, Munro was employed of the said NPRC, within the territory of Montana, in the capacity of locomotive the duty of running a locomotive engine upon said defendant's line of railway within Montana was assigned to said Hugh M. Munro on Jan. 10, and defendant directed and ordered Munro to run a certain locomotive engine owned by the defendant over and upon its said railway in said territory; prior to and at the time the said orders were so presented to Munro, there was a severe snowstorm in progress, and defendant's line of railway over and upon which said Munro was so ordered to run said engine was covered with drifting snow theretofore accumulated thereon, defendant corporation did willfully, improperly, negligently, and carelessly refuse and neglect to send a snow plow ahead of said engine No. 161 to clear the snow and ice from said defendant's said track, which had accumulated, so as to render the passage of said engine No. 161 safe and proper. there was attached to the forward part of said engine a certain attachment known as a 'pilot plow,' an appliance constructed thereon for the purpose of clearing the railway of snow and ice accumulated thereon, and render safe the passage of the engine to which said plow was attached over and upon said railway of defendant. defendant corporation knowingly, willfully, negligently, and carelessly allowed Munro to be and remain upon said engine No. 161 attached to the engine, a certain pilot plow, the iron braces, bolts, and rods of which were broken, imperfect, and insufficient, by reason of which condition the said plow was loose and insufficiently secured to the pilot of said engine, allowing the said pilot to raise up and ride over obstructing snow and ice instead of cutting through the same, as was the intention of its construction, rendering the running of said engine upon said railway dangerous; defendant well knew of the broken, defective, and dangerous condition of said engine No. 161 at the time the said Hugh M. Munro was so ordered to run the same upon and over said railway Munro was running said engine in performance of his duty as such engineer, and pursuant to the orders of defendant, and before daylight on Jan. 10, in territory of Montana, the said engine struck an accumulation of snow and ice which said defendant had carelessly and negligently

allowed to accumulate upon its said railway track, and the pilot plow of said engine, by reason of its broken, loose, and imperfect condition aforesaid, did ride upon said accumulation of snow and ice, thereby derailing said engine, and throwing the same from said railway track, whereby the said Hugh M. Munro was instantly killed. Law in the territory of Montana: "Sec. 13. A father, or, in case of his death or desertion of his family, the mother, may maintain an action for the injury or death of a child, or a guardian for the injury or death of his ward. "Sec. 14. Where the death of a person not being a minor is caused by the wrongful act or neglect of another, his heirs or personal representatives may maintain an action for damages against the person causing the death, or if such person be employed by another person who is responsible for his action, then also against such other person. In every action under this and the preceding section such damages may be given as under all the circumstances of the case may be just." The case was removed to the circuit court of the United States for the district of Minnesota, where an answer was filed by the defendant, denying the averments of the complaint, and alleging that the death of Munro was caused solely by his negligence and carelessness, and not by the negligence of the defendant or any of its servants or employes. There was a verdict and judgment in favor of the plaintiff for $10,000.

ISSUE: WON the court erred further in charging the jury as follows: 'Many states have different laws. The law in this state until recently was that only $5,000 could be given in a case of death. It has lately been increased to $10,000.' Or simply stated, was the amount of damage to be controlled by the law of the place of employment and where the accident occurred, or by the law of the forum in which the suit was pending? RULING: The plaintiff's intestate was an engineer in the employ of the defendant corporation in the territory of Montana, and the accident by which he lost his life occurred there. The law of the territory of Montana at the time provided as follows: 'Where the death of a person not being a minor is caused by the wrongful act or neglect of another his heirs or personal representatives may maintain an action for damages against the person causing the death, or if such person be employed by another person who is responsible for his action, then also against such other person. In every action

under this and the preceding section such damages may be given as under all the circumstances of the case may be just.' Under the law of Minnesota, when the death occurred, the limit of recovery in case of death was $5,000, but at the time of the trial of the case in the court below this limit had been increased to $10,000 by amendment of the Minnesota statutes. 'But it by no means follows that, because the statute of one state differs from the law of another state, therefore it would be held contrary to the policy of the laws of the latter state. To justify a court in refusing to enforce a right of action which accrued under the law of another state because against the policy of our laws, it must appear that it is against good morals or natural justice, or that, for some other such reason, the enforcement of it would be prejudicial to the general interests of our own citizens. If the state of Iowa sees fit to impose this obligation upon those operating railroads within her bounds, and to make it a condition of the employment of those who enter their service, we see nothing in such a law repugnant either to good morals or natural justice, or prejudicial to the interests of our own citizens.' We think there was no error in holding that the right to recover was governed by the lex loci, and not by the lex fori.

4. LAUREL VS. GARCIA, 187 SCRA 797 (1990) G. R. NO. 92013, JULY 25, 1990

FACTS: This is a petition for prohibition seeking to enjoin respondents, their representatives and agents from proceeding with the bidding for the sale of the 3,179 square meters of land at 306 Roppongi; 5-chome Minato-ku Tokyo, Japan scheduled on February 21, 1990. The subject property in this case is one of the four (4) properties in Japan acquired by the Philippine government under the Reparations Agreement entered into with Japan on 9 May 1956. The properties and the capital goods and services procured from the Japanese government for national development projects are part of the indemnification to the Filipino people for their losses in life and property and their suffering during World War II. ISSUES: 1. Whether or not the Roppongi property and others of its kind can be alienated by the Philippine government. 2. Whether or not the Chief Executive, her officers and agents have the authority, and jurisdiction to sell the Roppongi property. RULING: The Court ruled in the negative. The nature of the Roppongi lot as property for public service is expressly spelled out. It is dictated by the terms of the Reparations Agreement and the corresponding contract of procurement which bind both the Philippine government and the Japanese government. There can be no doubt that it is of public dominion and is outside the commerce of man. And the property continues to be part of the public domain, not available for private appropriation or ownership until there is a formal declaration on the part of the government to withdraw it from being such (Ignacio vs. Director of Lands, 108 Phil 335). It is not for the President to convey valuable real property of the government on his or her own sole will. Any such conveyances must be authorized and approved by a law enacted by the Congress. It requires executive and legislative concurrence. Petition is granted.

Other version: PRIVATE INTERNATIONAL LAW: Before determining whether it is domestic or foreign law that should be applied, one must first determine whether a conflict of laws situation exists.

FACTS: The Roppongi Property is one of the four properties in Japan acquired by the Philippine government under the Reparations Agreement, as part of the indemnification to the Filipino people for their losses in life and property and their suffering during WWII. The Roppongi property became the site of the Philippine Embassy until the latter was transferred to another site when the Roppongi building needed major repairs. Due to the failure of our government to provide necessary funds, the Roppongi property has remained undeveloped since that time. After many years, the Aquino administration advanced the sale of the reparation properties, which included the Roppongi lot. This move was opposed on the ground that the Roppongi property is public in character. For their part, the proponents of the sale raised that Japanese law should apply, following the doctrine of lex loci rei sitae. ISSUE: Whether or not the conflict of law rule on lex loci rei sitae should apply HELD: We see no reason why a conflict of law rule should apply when no conflict of law situation exists. A conflict of law situation arises only when: (1) There is a dispute over the title or ownership of an immovable, such that the capacity to take and transfer immovables, the formalities of conveyance, the essential validity and effect of the transfer, or the interpretation and effect of a conveyance, are to be determined (See Salonga, Private International Law, 1981 ed., pp. 377-383); and (2) A foreign law on land ownership and its conveyance is asserted to conflict with a domestic law on the same matters. Hence, the need to determine which law should apply. In the instant case, none of the above elements exists. The issues are not concerned with validity of ownership or title. There is no question that the property belongs to the Philippines. The issue is the authority of the respondent officials to validly dispose of property belonging to the State. And the validity of the procedures adopted to effect its sale. This is governed by Philippine Law. The rule of lex situs does not apply. The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex situs rule is misplaced. The opinion does not tackle the alienability of the real properties procured through reparations nor the existence in what body of the authority to sell them. In discussing who are capable of acquiring the lots, the Secretary merely explains that it is the foreign law which should determine who can acquire the properties so that the constitutional

limitation on acquisition of lands of the public domain to Filipino citizens and entities wholly owned by Filipinos is inapplicable. We see no point in belaboring whether or not this opinion is correct. Why should we discuss who can acquire the Roppongi lot when there is no showing that it can be sold?

5. HONG KONG AND SHANGHAI BANKING CORP. VS. SHERMAN, 176 SCRA 331 (1989) GR 72494, 8/11/89

Choice-of-forum clause Jurisdiction and Venue Parties can stipulate as to their choice of venue. But if the stipulation is not restrictive, it shall be treated as merely permissive and will not bar the other party from airing the case in a different forum which has jurisdiction over the subject matter. FACTS: Sometime in 1981, Eastern Book Supply PTE, Ltd. (Company), a company incorporated in Singapore, applied with and was granted by the Singapore Branch of HSBC an overdraft facility. To secure the overdraft facility, private respondents who were directors of the Company executed a Joint and Several Guarantee in favour of HSBC, which provides that: This 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 of Singapore shall have jurisdiction over all disputes arising under this guarantee. However, when the Company failed to pay its obligation, HSBC filed this action with the Philippine courts. In a Motion to Dismiss, the private respondents raised the abovementioned provision of the Joint and Several Guarantee. The trial court affirmed the plaintiffs but CA reversed, citing said provision as basis. ISSUE: Whether or not Philippine courts have jurisdiction over the suit HELD: The Supreme Court held that the clause in question did not operate to divest (deprive) the Philippine courts of jurisdiction. 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:

o o o

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. 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. 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.

6. INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS VS. QUISUMBING, 333 SCRA 13 (2000) FACTS: International School (IS) pays its teachers who are hired from abroad, or foreign-hires, a higher salary than its local-hires, whether the latter are Filipino or not (most are Filipino, but some are American). It justifies this under the dislocation factor that foreigners must be given a higher salary both to attract them to teach here, and to compensate them for the significant economic disadvantages involved in coming here. HELD: Discrimination exists. Equal pay for equal work is a principal long honored in this jurisdiction, as it rests on fundamental norms of justice 1. Art. XIII, Sec. 1 of the Constitution (Social Justice and Human Rights) exhorts Congress to give the highest priority to the enactment of measures that protect and ennhance the right od all people to human dignity, reduce social, economic, and political inequalitites. The Constitution also provides that labor is entitled to humane conditions of work.. These conditions are not restricted to the physical workplace, but include as well the manner by which employers treat their employees. Lastly, the Constitution directs the State to promote equality of employment opportunities for all, regardless of sex, race, or creed. It would be an affront to both the spirit and the letter of these provisions if the State closes its eyes to unequal and discriminatory terms and conditions of employment. 2. International law, which springs from general principles of law, likewise proscribes (bans) discrimination. General principles of law include principles of equity, i.e., fairness and justice, based on the test of what is reasonable. The Universal Declaration of Human Rights and numerous other international Conventions all embody the general principle against discrimination, the very antithesis of fairness and justice. The Philippines, through its Constitution, has incorporated this principle as part of its national laws. The Teachers Union cries discrimination.

Other version: Facts: Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent School, mostly Filipinos, cry discrimination. the local-hires are paid more than their colleagues in other schools is, of course, beside the point. The point is that employees should be given equal pay for work of equal value. Private respondent International School, Inc. (the School, for short), pursuant to Presidential Decree 732, is a domestic educational institution established primarily for dependents of foreign diplomatic personnel and other temporary residents. To enable the School to continue carrying out its educational program and improve its standard of instruction, Section 2(c) of the same decree authorizes the School to employ its own teaching and management personnel selected by it either locally or abroad, from Philippine or other nationalities, such personnel being exempt from otherwise applicable laws and regulations attending their employment, except laws that have been or will be enacted for the protection of employees. Accordingly, the School hires both foreign and local teachers as members of its faculty, classifying the same into two: (1) foreign-hires and (2) local-hires. The School grants foreign-hires certain benefits not accorded local-hires. These include housing, transportation, shipping costs, taxes, and home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five percent (25%) more than local-hires. The School justifies the difference on two "significant economic disadvantages" foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure. Issue: Whether or Not the grants provided by the school to foreign hires and not to local hires discriminative of their constitutional right to the equal protection clause. Held: The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries. This rule applies to the School, its "international character" notwithstanding. The School contends that petitioner has not adduced evidence that local-hires perform work equal to that of foreign-hires. The Court finds this argument a little cavalier. If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. This presumption is borne by logic and human experience. If the employer pays one employee less than the rest, it is not for that employee to explain why he receives less or why the others receive more. That would be adding insult to injury. The employer has discriminated against that employee; it is for the employer to explain why the employee is treated unfairly.

While we recognize the need of the School to attract foreign-hires, salaries should not be used as an enticement to the prejudice of local-hires. The local-hires perform the same services as foreignhires and they ought to be paid the same salaries as the latter. For the same reason, the "dislocation factor" and the foreign-hires' limited tenure also cannot serve as valid bases for the distinction in salary rates.

The Constitution enjoins the State to "protect the rights of workers and promote their welfare," "to afford labor full protection." The State, therefore, has the right and duty to regulate the relations between labor and capital. These relations are not merely contractual but are so impressed with public interest that labor contracts, collective bargaining agreements included, must yield to the common good. Should such contracts contain stipulations that are contrary to public policy, courts will not hesitate to strike down these stipulations.

In this case, we find the point-of-hire classification employed by respondent School to justify the distinction in the salary rates of foreign-hires and local hires to be an invalid classification. There is no reasonable distinction between the services rendered by foreign-hires and local-hires.

Wherefore, the petition is given due course. The petition is hereby granted in part. The orders of the secretary of labor and employment dated June 10, 1996 and march 19, 1997, are hereby reversed and set aside insofar as they uphold the practice of respondent school of according foreign-hires higher salaries than local-hires.