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CA: It sustained the trial courts dismissal of the In the present controversy, ZUIDEN is a foreign
complaint. CA found that the parties entered into corporation which claims that it is not doing
a contract of sale whereby ZUIDEN sold lace business in the Philippines. As such, it needs no
products to GTVL in a series of transactions. license to institute a collection suit against
While ZUIDEN delivered the goods in Hong Kong respondent before Philippine courts.
acts performed in foreign territories. Here, there
GTVL argues otherwise. It insists that ZUIDEN is is no showing that ZUIDEN performed
doing business in the Philippines without the within the Philippine territory the specific
required license. Hence, ZUIDEN has no legal acts of doing business mentioned in
capacity to sue before Philippine courts. Section 3(d) of RA 7042. ZUIDEN did not also
open an office here in the Philippines, appoint a
Under Section 3(d) of Republic Act No. 7042 (RA representative or distributor, or manage,
7042) or The Foreign Investments Act of supervise or control a local business. While
1991, the phrase doing business includes: ZUIDEN and GTVL entered into a series of
transactions implying a continuity of commercial
x x x soliciting orders, service dealings, the perfection and consummation of
contracts, opening offices, whether these transactions were done outside the
called liaison offices or branches; Philippines.
appointing representatives or
distributors domiciled in the In its complaint, ZUIDEN alleged that it is
Philippines or who in any calendar engaged in the importation and exportation of
year stay in the country for a period several products, including lace
or periods totalling one hundred products. ZUIDEN asserted that on several
eighty (180) days or more; occasions, GTVL purchased lace products from
participating in the management, it. ZUIDEN also claimed that respondent
supervision or control of any instructed it to deliver the purchased goods
domestic business, firm, entity or to Kenzar, which is a Hong Kong company based
corporation in the Philippines; in Hong Kong. Upon Kenzars receipt of the
and any other act or acts that imply a goods, the products were considered
continuity of commercial dealings or sold. Kenzar, in turn, had the obligation to deliver
arrangements, and contemplate to the lace products to the Philippines. In other
that extent the performance of acts words, the sale of lace products was
or works, or the exercise of some of consummated in Hong Kong.
the functions normally incident to,
and in progressive prosecution of, As earlier stated, the series of transactions
commercial gain or of the purpose between ZUIDEN and GTVL transpired and were
and object of the business consummated in Hong Kong. We also find no
organization: Provided, however, single activity which petitioner performed here in
That the phrase doing business shall the Philippines pursuant to its purpose and object
not be deemed to include mere as a business organization.[10] Moreover,
investment as a shareholder by a petitioners desire to do business within the
foreign entity in domestic Philippines is not discernible from the allegations
corporations duly registered to do of the complaint or from its
business, and/or the exercise of attachments. Therefore, there is no basis for
rights as such investor; nor having a ruling that petitioner is doing business in the
nominee director or officer to Philippines.
represent its interests in such
corporation; nor appointing a SC disagrees with the CA’s ruling that the
representative or distributor proponents to the transaction determine whether
domiciled in the Philippines which a foreign corporation is doing business in the
transacts business in its own name Philippines, regardless of the place of delivery or
and for its own account. place where the transaction took place. To accede
to such theory makes it possible to classify, for
The series of transactions between instance, a series of transactions between a
ZUIDEN and GTVL cannot be classified as Filipino in the United States and an American
doing business in the Philippines under company based in the United States as doing
Section 3(d) of RA 7042. An essential business in the Philippines, even when these
condition to be considered as doing business in transactions are negotiated and consummated
the Philippines is the actual performance of only within the United States.
specific commercial acts within the territory of
the Philippines for the plain reason that the An exporter in one country may export its
Philippines has no jurisdiction over commercial products to many foreign importing countries
without performing in the importing countries
specific commercial acts that would constitute
doing business in the importing countries. The
mere act of exporting from ones own country,
without doing any specific commercial act within
the territory of the importing country, cannot be
deemed as doing business in the importing
country. The importing country does not acquire
jurisdiction over the foreign exporter who has not
performed any specific commercial act within the
territory of the importing country. Without
jurisdiction over the foreign exporter, the
importing country cannot compel the foreign
exporter to secure a license to do business in the
importing country.