CONFLICT OF LAWS DIGESTS: INTRODUCTION ABAD

GUERRERO'S TRANSPORT SERVICES, INC. v. BLAYLOCK TRANSPORTATION SERVICES EMPLOYEES ASSOCIATION-KILUSAN (BTEA-KILUSAN), LABOR ARBITER FRANCISCO M. DE LOS REYES and JOSE CRUZ FACTS In 1972, the US Naval Base authorities in Subic conducted a public bidding for a 5year 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. Thus, 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 & executory 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 The agreement is deemed to have superseded the Resolution of the NLRC.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 W/N 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 as an international agreement between states, and as municipal law for the people of each state to observe. As part of the municipal law,

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the aforesaid 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: a) that they were bona fide employees of the Blaylock Transport Service at the time its concession expired; and b) 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. SAUDI ARABIAN AIRLINES v. CA FACTS Saudia hired Milagros Morada as a flight Attendant for its airlines based in Jeddah, Saudi Arabia. While on a lay-over in Jakarta, Morada went to a disco dance w/ fellow crew members Thamer & Allah, both Saudi nationals. Because it was almost morning when they returned to their hotels, they agreed to have breakfast together at the room of Thamer. When they were in the room, Allah left, and thats when Thamer attempted to rape Morada. Fortunately, a roomboy & several security personnel heard her cries for help & rescued her. The Indonesian police came & arrested Thamer & Allah. Saudia officials interrogated Morada about the Jakarta incident. They tried to pressure her in making a statement to drop the case against Thamer & Allah, but Morada refused to cooperate. Indonesian authorities agreed to deport Thamer & Allah after 2 weeks of detention, & they were again employed by Saudia. 1 years later, in Riyadh, a few minutes before the departure of her flight to Manila, Morada was not allowed to board the plane & instead ordered to take a later flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of Saudia. When she did,

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she was brought to a Saudi court where she was asked to sign a document written in Arabic. They told her this was necessary to close the case against Thamer & Allah. As it turned out, Morada signed a notice to her to appear before the court. Morada returned to Manila. Later on, Morada was brought to the same Saudi court, & she was informed that the investigation was merely routinary & posed no danger to her. A Saudi judge interrogated her through an interpreter about the Jakarta incident. When her plane was about to take off, a Saudia officer told her that the airline had forbidden her to take flight. She was escorted to the same court where the judge rendered a decision sentencing her to 5 months imprisonment & to 286 lashes. It was then that she realized that the Saudi court tried her, together w/ Thamer & Allah, for the Jakarta incident. The court found Morada guilty of (1) adultery, (2) going to a disco, dancing & listening to the music in violation of Islamic laws (3) socializing w/ the male crew, in contravention of Islamic tradition Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her & allowed her to leave Saudi Arabia. She was terminated from the service by Saudia, w/o her being informed of the cause. Morada filed a Complaint for Damages against Saudia. Saudia filed a MTD. Saudias contention: The trial court has no jurisdiction to try the case. Moradas claim for alleged abuse of rights occurred in Saudi. The existence of a foreign element qualifies the instant case for the application of the law of Saudi, by virtue of the lex loci delicti commissi rule. Moradas contention: Since her complaint is based on Arts. 19 and 21 of the NCC, then the instant case is properly a matter of domestic law. ISSUE (a) W/N the instant case is a matter of domestic law. (b) W/N Philippine courts have jurisdiction to hear & try the case. (c) W/N Philippine law should govern. RULING (a) NO. A factual situation that cuts across territorial lines & is affected by the diverse laws of 2 or more states is said to contain a foreign element. In the instant case, the foreign element consisted in the fact that Morada is a resident Philippine national, & that Saudia is a resident foreign corporation. Also, by virtue of the employment of Morada w/ Saudia as a flight stewardess, events did transpire during her many occasions of travel across national borders, particularly from Manila to Jeddah & vice versa, that caused a conflicts situation to arise. (b) YES. The RTC of QC possesses jurisdiction over the subject matter of the suit. Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor the RTC of QC assuming jurisdiction. Paramount is the private

ATTY. ANTHONY

interest of the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative advantages & obstacles to a fair trial are equally important. Saudia may not, by choice of an inconvenient form, vex, harass or oppress Morada, i.e. inflicting upon him needless expense or disturbance. But unless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed. Weighing the relative claims of the parties, QC RTC found it best to hear the case in the Philippines. Had it refused to take cognizance of the case, it would be forcing Morada to seek remedial action elsewhere, i.e. in Saudi where she no longer maintains substantial connections. That would have caused a fundamental unfairness to her. Moreover, by hearing the case in the Philippines no unnecessary difficulties and inconvenience have been shown by either of the parties. The choice of forum of Morada should be upheld. Similarly, the QC RTC also possesses jurisdiction over the persons of the parties. By filing her Complaint w/ QC RTC, Morada has voluntary submitted herself to the jurisdiction of the court. The records show that Saudia filed several motions praying for the dismissal of Moradas Complaint. Saudia also filed an Answer In Ex Abundante Cautelam. What is very patent and explicit from the motions filed, is that Saudia prayed for other reliefs under the premises. Undeniably, Saudia has effectively submitted to QC RTCs jurisdiction by praying for the dismissal of the Complaint on grounds other than lack of jurisdiction. (c) YES. Considering that the complaint in the court a quo is one involving torts, the connecting factor or point of contact could be the place where the tortuous conduct or lex loci actus occurred. And applying the torts principle in a conflicts case, we find that the Philippines could be said as situs of the tort (the place where the alleged tortuous conduct took place). This is because it is in the Philippines where Saudia allegedly deceived Morada, a Filipina residing & working here. That certain acts or parts of the injury allegedly occurred in another country is of no moment. What is important is the place where the overall harm or the fatality of the alleged injury to the person, reputation, social standing & human rights of complainant, had lodged, according to the Morada. Also, 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. There is basis for the claim that over-all injury occurred and lodged in the Philippines. There is likewise no question that Morada is a resident Filipina national, working w/ Saudia, a resident foreign corporation engaged here in the business of

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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. NORTHERN PACIFIC RAILROAD COMPANY v. BABCOCK 154 US 190 (1894) FACTS This was an action by Albert L. Babcock , as administrator of Hugh M. Munro, deceased, against the Northern Pacific Railroad Company (the Company), for damages for the death of said Munro. Munro was a locomotive engineer employed by the Company within the territory of Montana. In January 10, 1888, Munro was assigned to operate Train No. 161. During that day, there was a severe snowstorm in progress yet it was alleged that the Company negligently refused to send a snow plow ahead of Train No. 161 to clear the snow and ice that had accumulated from the track where the train was to pass. This made the passage of the train unsafe and improper. As a result, the train got derailed when it ran into an accumulation of snow and ice near Gray Cliff (also in Montana), and Munro was instantly killed. The estate of Munro filed a case for $25,000 in damages in the district court of Minnesota. ISSUE Was the amount of damage to be controlled by the law of the place of employment and where the accident occurred (lex loci), or by the law of the forum in which the suit was pending (lex fori)? * 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. **Under the law of Montana, where the death of a person is caused by the negligence of another, the only limitation for the amount of damages which may be given is as under all the circumstances of the case may be just." RULING The law of Montana applies. The statute of another state has, of course, no extraterritorial force, but rights acquired under it will always, in comity, be enforced if not against the public policy of the laws of the former. In such cases, the law of the place where the right was acquired or the liability was incurred will govern as to the right of action, while all that pertains merely to the remedy will be controlled by the law of the state where the action is brought. The principle is the same whether the right of action be ex contractu or ex delicto.

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Therefore, as a general rule, where the lex loci contractus and the lex fori are altogether different, and they are construed these contracts and enforce rights under them according to their force and effect under the laws of the state where made. As an exception, which is 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. LAUREL v. GARCIA 187 SCRA 797 (1990) FACTS The subject Roppongi property is one of the four properties in Japan acquired by the Philippine government under the Reparations Agreement entered into with Japan on 9 May 1956, the other lots being the Nampeidai Property (site of Philippine Embassy Chancery), the Kobe Commercial Property (Commercial lot used as warehouse and parking lot of consulate staff), and the Kobe Residential Property (a vacant residential lot). 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. The Roppongi property was acquired from the Japanese government through Reparations Contract. The Roponggi property consists of the land and building "for the Chancery of the Philippine Embassy." As intended, it became the site of the Philippine Embassy until the latter was transferred to Nampeidai on 22 July 1976 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. During the incumbency of President Aquino, a proposal was made by former Philippine Ambassador to Japan, Carlos J. Valdez, to lease the subject property to Kajima Corporation, a Japanese firm, in exchange of the construction of 2 buildings in Roppongi, 1 building in Nampeidai, and the renovation of the Philippine Chancery in Nampeidai. The President issued EO 296 entitling non-Filipino citizens or entities to avail of reparations' capital goods and services in the event of sale, lease or disposition. Amidst opposition by various sectors, the Executive branch of the government has been pushing, with great vigor, its decision to sell the reparations properties starting with the Roppongi lot. ISSUE 1. 2.

Whether or not the Roppongi property and others of its kind can be alienated by the Philippine government. Whether there was a conflict of law between the Japanese law on property (as the real property is situated there) and Philippine law.

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RULING

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1.

No. 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. 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.

Eastern failed to pay its obligation. Thus, HSBC demanded payment of the obligation from Sherman & Reloj, conformably w/ the provisions of the Joint and Several Guarantee. Inasmuch as Sherman & Reloj still failed to pay, HSBC filed a complaint for collection of a sum of money against them. Sherman & Reloj filed a motion to dismiss on the grounds that (1) the court has no jurisdiction over the subject matter of the complaint, and (2) the court has no jurisdiction over the person of the defendants. ISSUE W/N Philippine courts should have jurisdiction over the suit. RULING YES. 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 "this guarantee and all rights, obligations & liabilities arising hereunder shall be construed & determined under & may be enforced in accordance w/ 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: 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 HSBC 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, w/ more reason as a defendant. However, in this case, Sherman & Reloj 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. Their stance is hardly comprehensible, unless their ultimate intent is to evade, or at least delay, the payment of a just obligation. The defense of Sherman & Reloj 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 Sherman & Reloj. 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 w/in 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 w/ the permission of the latter's authorities. This authority, which finds its source in the concept of sovereignty, is exclusive w/in and throughout the domain of the State. A

2.

No. A conflict of law rule cannot 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; 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 present case, none of the above elements exists. HONGKONG SHANGAI BANKING CORPORATION v. SHERMAN G.R. No. 72494 August 11, 1989

FACTS In 1981, Eastern Book Supply Service PTE, Ltd., (Eastern) a company incorporated in Singapore applied w/, & was granted by the Singapore branch of HSBC an overdraft facility in the max amount of Singapore $200,000 (w/c amount was subsequently increased to Singapore $375,000) w/ interest at 3% over HSBC prime rate, payable monthly, on amounts due under said overdraft facility. As a security for the repayment by Eastern of sums advanced by HSBC to it through the aforesaid overdraft facility, in 1982, Jack Sherman, Dodato Reloj, and a Robin de Clive Lowe, all of whom were directors of Eastern at such time, executed a Joint and Several Guarantee in favor of HSBC whereby Sherman, Reloj and Lowe agreed to pay, jointly and severally, on demand all sums owed by Eastern to HSBC under the aforestated overdraft facility. The Joint and Several Guarantee 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.

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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.

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RULING YES. 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. The practice of the School of according higher salaries to foreign-hires contravenes public policy and, certainly, does not deserve the sympathy of this Court. The Court held that there must be 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. 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. The employer in this case has failed to discharge this burden. There is no evidence here that foreign-hires perform 25% more efficiently or effectively than the localhires. Both groups have similar functions and responsibilities, which they perform under similar working conditions. The School cannot invoke the need to entice foreign-hires to leave their domicile to rationalize the distinction in salary rates without violating the principle of equal work for equal pay. 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 foreign-hires 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 dislocation factor and limited tenure affecting foreign-hires are adequately compensated by certain benefits accorded them which are not enjoyed by localhires, such as housing, transportation, shipping costs, taxes and home leave travel allowances.

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS v. QUISUMBING FACTS Private respondent International School, Inc. (the School), pursuant to Presidential Decree 732, is a domestic educational institution established primarily for dependents of foreign diplomatic personnel and other temporary residents. 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 employs four tests to determine whether a faculty member should be classified as a foreign-hire or a local hire: a.....What is one's domicile? b.....Where is one's home economy? c.....To which country does one owe economic allegiance? d.....Was the individual hired abroad specifically to work in the School and was the School responsible for bringing that individual to the Philippines? 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. The School grants such benefit to the foreign-hires because of economic factor, better opportunities are often available in the country where he foreign-hires are from. They have to adjust because they have to leave their country, family and friends. The School also reasoned that it is also their means of attracting competent professionals and to stay competitive. When negotiations for a new collective bargaining agreement were held, petitioner International School Alliance of Educators, "a legitimate labor union and the collective bargaining representative of all faculty members" of the School, contested the difference in salary rates between foreign and local-hires. This issue, as well as the question of whether foreign-hires should be included in the appropriate bargaining unit, eventually caused a deadlock between the parties. A notice of strike was filed and DOLE eventually acquired jurisdiction because of the failure to have a compromise. DOLE ruled in favor of the School. ISSUE W/N there is discrimination (equal protection) in the hiring and compensation method used by the School.

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