Chapter I

General Rule: The law of one country has no effect of its own force
beyond the limits of its sovereignty from which its authority is
derived; and that the obligation of every law is confined to the
state in which it is established and can attach only to those who are
its citizens and others within its territorial jurisdiction.

Philippine laws have no extraterritorial effect and application

in another country. XPN: What the law provides with respect
to its citizens and nationals.
Corrolarily, laws of other states has no application in our
country.

CONFLICT OF LAWS

(or private international law) that which regulates the

comity of states relating to private persons or concerns the
rights of persons within the territory or dominion of one
state or nations, by reason of acts, private or public, done
within the dominion of another, and which is based on the
broad general principle that one country will respect and
give effect to the laws of another, so far as can be done
consistently with its own interests.

Treaty 2 aspects: 1) an international agreement between states;

and 2) municipal law to be observed by the people of the state.
Other Terms Defined:

Foreign Element When a factual situation cuts across

territorial lines and is thus affected by the diverse laws of
two or more states.
Comity recognition by which one state allows within its
territory the legislative, executive or judicial acts of another
state, having due regard both to international duty and
convenience and to the rights of its own citizens or other
persons who are under the protection of its laws.
Lex Situs (where the property is located) acquisition,
transfer, devolution of title to real property. Elements:
1. Dispute over title or ownership of the immovable
concerning capacity, formalities, elements, effect of
conveyance; and
2. A foreign law is asserted that conflicts the domestic
law.

Lex Fori (law of the forum) where the case is filed, where
the transaction took place, where the wrong causing
damage/injury occurred.
Lex Loci Actus (where the act was done)
Lex Loci Celebrationis (where the contract was entered into)
Lex Loci Contractus decides the essential validity of the
contract; system of law to which the transaction has the
closest and most real connection.
Lex Loci Delictus (where the offense or wrong took place)
Lex Loci Domicilii (law of the place of domicile of the person)
Lex Loci Rei Sitae (where the thing is situated)
Kilberg Doctrine forum is not bound by the law of the place
of injury or death as to the limitation of damages for the
wrongful act as this is procedural, hence the law of the
forum governs the issue.
Center of Gravity Doctrine/Most Significant Relationship
Theory/Grouping of Contacts application of the law of the
jurisdiction which has the most significant relationship to or
contact with event, parties to the litigation and issues
therein.

Two Remedies:
1. Action filed in Philippine courts by a citizen or an aggrieved
person; and
2. Recognition and enforcement of foreign judgment (petition
or complaint filed in the Philippines by the prevailing party.
Rights acquired under a foreign statute are enforceable in
the Philippines, in comity, if not against public policy.
The law of the country where the right was acquired or the
liability was incurred will govern the right of action; the law
of the country where the case was filed will govern the all
that pertain to the remedy.
The cause of action is transitory, not local.
Defendant is entitled to benefits of whatever
conditions and limitations the foreign law creates.
The enforcement of a right which accrued in a foreign
country or the execution of a foreign judgment is an
extraterritorial application of a foreign law. Such country
may expressly or impliedly consent thereto. XPN: 1)
countrys prohibitive laws; and 2) Public policies provide
otherwise.
Sources of Conflicts of Law:
1. Constitution;

2.
3.
4.
5.
6.
7.

Laws enacted by the Legislature;

Administrative rules and regulations;
Judicial rulings of the Supreme Court;
Treaties and international conventions;
Foreign decisions of foreign courts*; and
Commentaries and studies of well-known authors*.

(*not binding but only persuasive effect only)

Philippine courts apply Philippine laws and jurisprudence;
they do not automatically apply foreign laws, and if they do,
it is because treaty obligations and comity prescribe their
application.
Foreign laws are independent of, and are not superior than
Philippine laws, and they cannot be forced upon our courts.
Recognition of foreign judgment because losing party is:
1. Citizen or national of;
2. Domiciled in our country; or
3. Has property in the Philippines.
Grounds for Rejection of Enforcement:
1. Want of jurisdiction;
2. Want of notice to the party;
3. Fraud;
4. Collusion; and
5. Clear mistake of law and fact.
By filing the petition for the recognition and enforcement of
judgment, the prevailing party voluntary submits itself to
the Philippine courts and to the power or authority of the
latter to review the foreign judgment.
Conflict of laws not applied:
1. No conflict;
2. Conflict is merely apparent than real; or
3. No foreign element
How to Decide a Case When There is No Foreign Element:
1. Reconcile the laws;
2. If cannot be reconciled, one law having been impliedly
repealed by the later statute; or
3. Excepting one from the operation of the other.
How to Decide Conflict of Laws:
1. Reconciling the conflict by applying one in favor of the
other, or making one the exception of the other, taking into

account comity, reciprocity, mandatory law, public policy of

the forum, or interests of the parties and the country;
2. Will not consider the foreign law null and void or
unconstitutional, or having been impliedly repealed by the
municipal law;
3. f exceptions from the foreign law or by not applying the
foreign law for being contrary to public policy or good
customs, and decide it based on its own laws.

Conflict of laws or private international laws is in reality a

municipal or national law of the country where the case is
filed. If foreign law is applied, it is only because the local or
municipal law so requires. If the treaty or international
convention is applied, it is because the countrys adherence
makes them part of the national law with the force and
effect of laws.
When there is no foreign element, there is no conflict of
laws.

Three Ways of Dealing with Conflict Cases:

1. Refuse to hear and dismiss it no jurisdiction
2. Decide the case based on local law adhered to by the
Philippines; and
3. Devise special rules to deal with the case opportunity to
formulate or refine rules on conflict of laws.

Local and foreign law should be equally applied to prevent

discrimination.
In case of doubt, the law of forum should tilt the balance in
favor of its citizens or interests as a nation.

Chapter 2
A nation possesses and exercises within its territory an absolute
and exclusive jurisdiction.
GR: Foreign law has no extraterritorial effect in the Philippines.
XPN:
1. Express consent:
a. Local law adopting a foreign law
b. Pointing to the foreign law as the applicable law
(Article 17 of the Civil Code.
c. Entering into a treaty or adhering to an international
convention

2. Implied consent courts applying the foreign law (not an

impeachment of sovereignty because it is a voluntary act)
Characterization (classification, qualification) process of
determining the nature of the problem; 1) analyze facts; 2)
determine cause of action; 3) formulate theory; 4) pursue the case;
5) other changes
GR: law of the forum should control
XPN: situs of tangible property (real or personal)
How?
1. Study operative fact;
2. Connecting factor/point of contact)
a. Nationality, domicile/residence, place of sojourn,
origin
b. Seat of juridical person
c. Situs of a thing (lex situs)
d. Place where the act was done (lex loci actus)
important in contract and torts
e. Place where the act is intended to take effect
f. Intention of the contracting parties (lex loci
intentionis)
g. Place where the action was instituted (lex fori)
h. Flag of ship
Choice of law:
1. What legal system should govern; and
2. To what extent should the chosen legal system regulate the
situation
Principles:
1. Will follow a statutory directive of its own state
2. When there is no such directive:
a. Interstate and international system
b. Relevant policies of the forum
c. Relevant policies of interested states
d. Protection of justified expectations
e. Basic policies
f. Certainty, predictability, uniformity of result
g. Case where the law will be applied.
Rules: LAW CHOSEN BY THE PARTIES

1. Law of the state chosen by the parties to govern their

contractual rights and duties IF the issue is one which the
parties could have resolved by an explicit provision in their
agreement directed to that issue.
2. Law of the state chosen by the parties to govern their
contractual rights and duties EVEN IF the issue is one which
the parties could have resolved by an explicit provision in
their agreement directed to that issue UNLESS:
a. The chosen state has no substantial relationship to
the parties or the transaction and there is no other
reasonable basis for the parties choice;
b. The application of the chosen law would be contrary
to a fundamental policy of the state which has
materially greater interest and whose law would be
applicable in the absence of the choice by the
parties.
3. In the absence of preferred law by the parties, the local law
shall be the applicable law.
The focal point is the local law.
Article 15 of the Civil Code family rights and duties, status,
condition, legal capacity binding upon the citizen even though
living abroad.
Domiciliary Rule the domicile is the determining factor
Nationality Rule the citizenship is the basis for determining his
personal law; followed by the Philippines.
Article 16 of the Civil Code Real property and personal property
governed by the law of the country in which it is situated. (lex loci
rei sitae)
XPN: Intestate and testamentary succession (order, amount of
successional rights and intrinsic validity, capacity to succeed)
national law of the person whatever may be the nature of the
property and regardless of the country where it may be found.
Article 17 of the Civil Code Forms and solemnities of contracts,
wills, and other public instruments law of the country in which it
was executed (lex contractus)
Section 129 of the Corporation Code creations, formation,
organization, dissolution of foreign corporations, or those that fix
the relations, liabilities, responsibilities, or duties of stockholders,
members, or officers to each other or to the corporation law of
the country of their creation or where they are incorporated

***When Philippine law is silent, the court is not justified in

extending the application of the foreign law to our jurisdiction. To
do so would incorporate foreign law into our statutes. No foreign
law may interfere with the operation and application of
Philippine laws.
XPN:
1. The legislature has given its consent to the extension of
specific foreign law to the Philippines.
2. When the Congress enacts a law or copying a specific
foreign statute (in construing the statute, the court should
consider the construction of the courts from the country in
which it was taken.
3. Borrowing statute directs the court of the forum to apply
the foreign statute to the pending claims based on foreign
law
Agreement of the Parties as to the law that shall govern and the
place where the action is to be instituted
GR: The Philippine court where the action is filed may refuse to
assume jurisdiction and dismiss the action without prejudice to
filing the same in the proper forum.
XPN:
1. Reasonable basis for exercising jurisdiction;
2. Plaintiff and defendant are both residents, as to be more
convenient to them; and
3. The agreement does not preclude the filing of the action on
the resident of the plaintiff or defendant.
Case: HSBC vs. Sheman the court exercised jurisdiction because:

The forum of choice was not exclusive (qualifying or

restricting words as to the exclusive venue)
Did not show that the filing of the case here would cause
inconvenience to the parties (FORUM NON CONVENIENS)
Jurisdiction cannot be equated to venue because the latter can be
fixed by the agreement of the parties, and may be waived by them.
Forum Selection Clause -- stipulation excluding other state or
country as the place or venue of the suit
-

May be sustained unless the choice of venue is

unreasonable (the burden of showing unreasonableness is
upon the defendant)

Rules: IN THE ABSENCE OF A LAW CHOSEN BY THE PARTIES

1. Local law which has the most significant relationship to the
transaction and to the parties
2. Contacts to be taken in to account:
a. Place of contracting;
b. Place of negotiation;
c. Place of performance;
d. Location of the subject matter of the contract
e. Domicile,
residence,
nationality,
place
of
incorporation, place of business of the parties
3. If the place of negotiating and place of performance are in
the same state, the local law will be applies