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REVIEWER: FABI II.

Jurisdiction and Choice of Law

Phases in Conflicts Resolution A. JURISDICTION AND VENUE


1. Jurisdiction 1. Distinction
2. Choice of Law VENUE
3. Recognition of Foreign Judgment  Particular country or geographical area in which a court with jurisdiction may
hear or determine a case
Steps in determining applicable law
 Procedural
1. Characterization – spotting the legal issue.  In civil cases, may be waived or stipulated by the parties
2. Connecting factors – which jurisdiction hast the most connection to the case.
Jurisdiction Choice of law/Characterization Enforcement of Judgment JURISDICTION
 -Power of the court to decide a case on the merits
Cases:  -Substantive
 -Cannot be waived
Saudi Arabian Airlines v. Court of Appeals, GR No. 122191, October 8, 1998
- On the presence of a “Foreign Element” in the 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 2. Rules on Venue
presence of a foreign element is inevitable since social and economic affairs of individuals and associations are rarely a. Stipulations as to venue (Case doctrine)
confined to the geographic limits of their birth or conception. The forms in which this foreign element may appear are b. Arbitral Clauses
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 c. Special rules on libel suits (Case doctrine)
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.

In the instant case, the foreign element consisted in the fact that private respondent Morada is a resident Philippine Cases:
national, and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the employment of Morada with Unimasters Conglomeration, Inc. v. Court of Appeals, G.R. No. 119657, 7 February 1997;
the petitioner Saudia as a flight stewardess, events did transpire during her many occasions of travel across national  Parties may by stipulation waive the legal venue and such waiver is valid and effective being merely a personal privilege,
borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a “conflicts” situation which is not contrary to public policy or prejudicial to third persons.
to arise.  Venue stipulations shoud be deemed permissive merely, and that interpretation should be adopted which most serves
the parties’ convenience. (MAIN PURPOSE – CONVENIENCE)
PE BENITO: A foreign element is anything which is not domestic and has a foreign component to it. It can be a Sweet Lines, Inc. v. Teves, G.R. No. L-37750, 19 May 1978;
foreigner, a foreign corporation, an incident happening in a foreign country, or a foreign law chosen by the parties.
 Condition 14 of shipping ticket which provides that all actions arising out of conditions and provision of the ticket
Hasegawa vs Kitamura GR 149177 (Nov 23, 2007) irrespective of where issued shall be filed in the City of Cebu is void as it was prepared solely at petitioner’s instance
In the judicial resolution of conflicts problems, 3 consecutive phases are involved: jurisdiction, choice without participation of respondents; Courts take judicial notice of fact that passengers availing of shipping facilities
of law, and recognition and enforcement of judgments. Jurisdiction & choice of law are 2 distinct concepts. Jurisdiction come from low income and less literate groups.
considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether  Conditions 14 subversive of public policy on transfers of venue of actions; Although venue may be changed or
the application of a substantive law w/c will determine the merits of the case is fair to both parties. The power to transferred by agreement of the parties in writing (Rule 4, Sec 3 of ROC), such agreement will not be held valid where it
exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. While jurisdiction practically negates the action of the claimants.
and the choice of the lex fori will often coincide, the “minimum contacts” for one do not always provide the necessary  The philosophy of Transfer of venue of actions is the convenience of the plaintiffs as well as his witnesses
“significant contacts” for the other. The question of whether the law of a state can be applied to a transaction is different and to promote ends of justice.
from the question of whether the courts of that state have jurisdiction to enter a judgment. Time, Inc. v. Andres Reyes, G.R. No. L-28882, 31 May 1971;
 Under the first proviso in section 1, Rep. Act 4363, the venue of a civil action for damages in cases of written
Salvador H. Laurel v. Ramon Garcia, G.R. No. 92013, 25 July 1990; defamations is localized upon the basis of, first, whether the offended party or plaintiff is a public officer or a
Facts: The subject property in this case is one of the 4 properties in Japan acquired by the Philippine government under private individual; and second, if he is a public officer, whether his office is in Manila or not in Manila, at the time
the Reparations Agreement entered into with Japan, the Roppongi property. The said property was acquired from the of the commission of the offense. If the offended party is a public officer with office in the City of Manila, the proviso
Japanese government through Reparations Contract No. 300. It consists of the land and building for the Chancery of the limits him to two (2) choices of venue, namely, "in the Court of First Instance of the City of Manila or in the city or
Philippine Embassy. As intended, it became the site of the Philippine Embassy until the latter was transferred to province where the libelous article is printed and first published.
Nampeidai when the Roppongi building needed major repairs. President Aquino created a committee to study the  REASON: To minimize or limit the filing of out-of-town libel suits to protect an alleged offender from "hardships,
disposition/utilization of Philippine government properties in Tokyo and Kobe, Japan. The President issued EO 296 inconveniences and harassments" and, furthermore, to protect "the interest of the public service" where one of the
entitling non-Filipino citizens or entities to avail of separations' capital goods and services in the event of sale, lease or offended parties is a public officer.
disposition.

B. JURISDICTION
Issues: Whether or not the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the
Roppongi property. 1. Definition - official power to make legal decisions and judgments.
2. Jurisdiction over the Person – generally, acquired through:
Ruling: It is not for the President to convey valuable real property of the government on his or her own sole will. Any Acquisition—
such conveyance must be authorized and approved by a law enacted by the Congress. It requires executive and 1. Over plaintiff: filing of suit
legislative concurrence. It is indeed true that the Roppongi property is valuable not so much because of the inflated
2. Over defendant:
prices fetched by real property in Tokyo but more so because of its symbolic value to all Filipinos, veterans and civilians
alike. Whether or not the Roppongi and related properties will eventually be sold is a policy determination where both a. entry of appearance, or
the President and Congress must concur. Considering the properties' importance and value, the laws on conversion and b. service of legal process/summons
disposition of property of public dominion must be faithfully followed Other cases:
1. Upon the lawful arrest of the accused
2. Upon his voluntary appearance or submission to the court
a. Service of summons as requirement of procedural due process
Guerrero Transport Services, Inc. v. Blayblock Transportation Services Employees Association, G.R. No. L-  proceeding in rem – service of summons by publication is sufficient because the case is
enforced against the rest of the world
41518 / 71 SCRA 621, 30 June 1976;
 proceeding in personam – personal service of summons or voluntary appearance of the
Pacific R. Co. v. Babcock, 154 US 190, 28 May 1894; defendant, by himself or counsel, is required
International School Alliance of Educators v. Hon. Leonardo A. Quisumbing, G.R. No. 128845 / 333 SCRA  proceeding quasi in rem – summons by publication is sufficient
13, 1 June 2000;  NB: a state does not have jurisdiction in the absence of some reasonable basis for
Cayetano Lim v. Insular Collector of Customs, G.R. No. L-11759 / 36 Phil 472, 16 March 1917; 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

b. Jurisdictional issues under conflicts of law cases as a question of due process


(1) Mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do
business, and/or the exercise of rights as such investor;
c. Governing law – lex fori - law of the forum;
Law of the forum; that is, the positive law of the state, country or jurisdiction of whose (2) Having a nominee director or officer to represent its interests in such corporation;
judicial system of the court where the suit is brought or remedy is sought is an integral part.
Substantive rights are determined by the law where the action arose (lex loci) while the procedural (3) Appointing a representative or distributor domiciled in the Philippines which transacts business in the
rights are governed by the law of the place of the forum (lex fori) representative’s or distributor’s own name and account;

(4) The publication of a general advertisement through any print or broadcast media;
d. Foreign corporations
(5) Maintaining a stock of goods in the Philippines solely for the purpose of having the same processed by another
entity in the Philippines;
Readings:
Sec. 123, 127, 128 and 133, Corporation Code of the Philippines; (6) Consignment by a foreign entity of equipment with a local company to be used in the processing of products for
TITLE XV - FOREIGN CORPORATIONS export;
Section 123. Definition and rights of foreign corporations. - For the purposes of this Code, a foreign corporation is (7) Collecting information in the Philippines; and
one formed, organized or existing under any laws other than those of the Philippines and whose laws allow Filipino
citizens and corporations to do business in its own country or state. It shall have the right to transact business in the (8) Performing services auxiliary to an existing isolated contract of sale which are not on a continuing basis,
Philippines after it shall have obtained a license to transact business in this country in accordance with this Code and a such as installing in the Philippines machinery it has manufactured or exported to the Philippines, servicing the same,
certificate of authority from the appropriate government agency. training domestic workers to operate it, and similar incidental services.

Rule 14, Rules of Court;


Section 127. Who may be a resident agent. –
RULE 14
A resident agent may be either an individual residing in the Philippines or a domestic corporation lawfully transacting
Summons
business in the Philippines: Provided, That in the case of an individual, he must be of good moral character and of sound
financial standing. (n)
Section 12. Service upon foreign private juridical entities. — When the defendant is a foreign private juridical entity which
has transacted business in the Philippines, service may be made on its resident agent designated in accordance with law for that
Section 128. Resident agent; service of process. –
purpose, or, if there be no such agent, on the government official designated by law to that effect, or on any of its officers or agents
The Securities and Exchange Commission shall require as a condition precedent to the issuance of the license to transact
within the Philippines.
business in the Philippines by any foreign corporation that such corporation file with the Securities and Exchange
Commission a written power of attorney designating some person who must be a resident of the Philippines, on whom
Defendant is a Foreign private juridical entity; Service may be made:
any summons and other legal processes may be served in all actions or other legal proceedings against such
1.) GENERAL: Resident agent designanted;
corporation, and consenting that service upon such resident agent shall be admitted and held as valid as if served upon
2.) NO AGENT:
the duly authorized officers of the foreign corporation at its home office.
a. Government official designated by law;
b. Any of its officers or agents within Phil.
such foreign corporation shall likewise execute and file with the Securities and Exchange Commission an agreement or
stipulation, executed by the proper authorities of said corporation, in form and substance as follows:
A.M. No. 11-3-6 (New Rules on Service of Summons on Foreign JuridicalEntities)
"The (name of foreign corporation) does hereby stipulate and agree, in consideration of its being granted
by the Securities and Exchange Commission a license to transact business in the Philippines, that if at any AMENDMENT OF SECTION 12, RULE 14 OF THE RULES OF COURT ON SERVICE UPON FOREIGN PRIVATE JURIDICAL
time said corporation shall cease to transact business in the Philippines, or shall be without any resident ENTITY
agent in the Philippines on whom any summons or other legal processes may be served, then in any
action or proceeding arising out of any business or transaction which occurred in the Philippines, service of Section 12, Rule 14 of the Rules of Court is hereby amended to read
any summons or other legal process may be made upon the Securities and Exchange Commission and as follows:
that such service shall have the same force and effect as if made upon the dulyauthorized officers of the
corporation at its home office." SEC. 12. Service upon foreign private juridical entity. — When the defendant is a foreign private juridical entity which has
transacted business in the Philippines, service may be made on its resident agent designated in accordance with law for that purpose,
Whenever such service of summons or other process shall be made upon the Securities and Exchange Commission, the or, i f there be no such agent, on the government official designated by law to that effect, or on any of its officers or agents within the
Commission shall, within ten (10) days thereafter, transmit by mail a copy of such summons or other legal process to Philippines.
the corporation at its home or principal office.
If the foreign private juridical entity is not registered in the Philippines or has no resident agent, service may, with leave of
The sending of such copy by the Commission shall be necessary part of and shall complete such service. All expenses court, be effected out of the Philippines through any of the following means:
incurred by the Commission for such service shall be paid in advance by the party at whose instance the service is
made. a) By personal service coursed through the appropriate court in the foreign country with the assistance of the
Department of Foreign Affairs;
In case of a change of address of the resident agent, it shall be his or its duty to immediately notify in writing the
Securities and Exchange Commission of the new address. b) By publication once in a newspaper of general circulation in the country where the defendant may be found
and by serving a copy of the summons and the court order by-registered mail at the last known address of the
defendant;
Section 133. Doing business without a license. - No foreign corporation transacting business in the Philippines
without a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or
c) By facsimile or any recognized electronic means that could generate proof of service; or
proceeding in any court or administrative agency of the Philippines; but such corporation may be sued or proceeded
against before Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws.
d) By such other means as the court may in its discretion direct.

Rule 1, Sec. 1 (f) of the Implementing Rules and Regulations of the Foreign Investments Act Sec. 12,
Cases:
Patricia S. Villareal v. Court of Appeals, G.R. No. 107314, 17 September1998; Pennoyer v. Neff, 95
RULE I. DEFINITIONS
US 714 (1878)
SECTION 1. DEFINITION OF TERMS. – For purposes of these Rules and Regulations:
3. Jurisdiction over the Res
f. Doing business shall include soliciting orders, service contracts, opening offices, whether liaison offices or branches; appointing
representatives or distributors, operating under full control of the foreign corporation, domiciled in the Philippines or who in any 1. Acquisition
calendar year stay in the country for a period or periods totaling one hundred eighty (180) days or more; participating in the a. seizure of property under a legal process
management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other act or acts b. institution of legal proceedings wherein the court’s power over the property is recognized and made
that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or effective
the exercise of some of the functions normally incident to and in progressive prosecution of commercial gain or of the purpose and 2. Basis of jurisdiction: the presence of the property within the territorial jurisdiction of the forum
object of the business organization.

The following acts shall not be deemed “doing business” in the Philippines: Cases:
Pennoyer v. Neff, 95 US 714 (1878)
International Shoe Co. v. Washington 326 US 310 (1945)
Mullane v. Central Hanover Bank and Trust Co., Trustee, et al, 399 US 306 (1950)
Shaffer v. Heitner, 433 US 186 (1977)
El Banco-Espanol-Filipino v. Palanca, 37 Phil. 921 (1918)

4. Jurisdiction over the Subject Matter


Acquisition—
1. competence of the court to hear, try and decide the case is conferred by law
2. necessary that said power be properly invoked by the filing of petition
3. cannot be conferred by mere consent of parties
Cases: Idonah Perkins v. Roxas, 72 Phil 514 (1941)

5. Act of State Doctrine


-The act of state doctrine is one of the methods by which States prevent their national courts from deciding disputes
which relate to the internal affairs of another State, the other two being immunity and non-justiciability.
-It is an avoidance technique that is directly related to a State’s obligation to respect the independence and equality of
other States by not requiring them to submit to adjudication in a national court or to settlement of their disputes without
their consent.
-It requires the forum court to exercise restraint in the adjudication of disputes relating to legislative or other
governmental acts which a foreign State has performed within its territorial limits.

Cases:
French vs. Banco National de Cuba, 295 NY 2d, 422-423 (1968)
In Re: Philippine National Bank v. United States District Court for the District of Hawaii, No. 04-71843, D.C. No.
MDL-00840-MLR
Republic v. Marcos, 862 F.2d 1355, 1361 (9th Cir. 1988) (en banc), cert. denied, 490 U.S. 1035, 109 S.Ct.
1933, 104 L.Ed.2d 404 (1989)

6. Assumption of jurisdiction v. forum non-conveniens

Cases: Heine v. New York Insurance Company 45 F2d 426 (1940) Wing On Company v. SYYAP, 64 O.G.8311
(1967) Gulf Oil Corporation vs. Gilbert, 330 U.S. 501 (1947) K.K. Shell Sekiyu Osaka Hatsubaisho and Fu Hing
Oil Co., Ltd. v. Court of Appeals, G.R. Nos. 90306-07 (30 July 1990) Communications Materials and Design v.
Court of Appeals, G.R. No. 102223 (22 August 1996) First Philippine International Bank v. Court of Appeals,
322 Phil. 280 (1996) Manila Hotel Corp v. NLRC, G.R. No. 120077 (13 October 2000)
Pacific Consultants v. Schonfeld, G.R. No. 166920 (19 February 2007) Fleumer v. Hix, 54 Phil. 610 (1930)

C. Choice of Law
1. Application of Foreign Law
2. Choice of Law Theories

CASES:
Santos III v. Northwest Orient Airlines, Inc., G.R. No. 101538, June 23, 1992
Communications Materials and Design v. CA, G.R. No. 102223, August 22, 1996
First Philippine International Bank v. CA, G.R. No. 115849, January 24, 1996
Aznar v. Christensen-Garcia, G.R. No. L-16749 (31 January 1963)
Bellis v. Bellis, G.R. No. L-23678 (6 June 1967)
Cadalin vs. POEA Administrator, G.R. No. L-104776, G.R. Nos. 104911-14, December 5, 1994, and G.R. Nos.
105029-32 (1994)