I.

1987 PHILIPPINE CONSTITUTION

ARTICLE I
NATIONAL TERRITORY

The national territory comprises the Philippine archipelago, with all the islands and waters embraced therein, and all other
territories over which the Philippines has sovereignty or jurisdiction, consisting of its terrestrial, fluvial and aerial domains, including
its territorial sea, the seabed, the subsoil, the insular shelves, and other submarine areas. The waters around, between, and
connecting the islands of the archipelago, regardless of their breadth and dimensions, form part of the internal waters of the
Philippines.

ARTICLE IV
CITIZENSHIP

Section 1. The following are citizens of the Philippines:

1. Those who are citizens of the Philippines at the time of the adoption of this Constitution;
2. Those whose fathers or mothers are citizens of the Philippines;

3. Those born before January 17, 1973, of Filipino mothers, who elect Philippine Citizenship upon reaching the age of
majority; and

4. Those who are naturalized in the accordance with law.

Section 2. Natural-born citizens are those who are citizens of the Philippines from birth without having to perform any act to
acquire or perfect their Philippine citizenship. Those who elect Philippine citizenship in accordance with paragraph (3), Section 1
hereof shall be deemed natural-born citizens.

Section 3. Philippine citizenship may be lost or reacquired in the manner provided by law.

Section 4. Citizens of the Philippines who marry aliens shall retain their citizenship, unless by their act or omission they are
deemed, under the law to have renounced it.

Section 5. Dual allegiance of citizens is inimical to the national interest and shall be dealt with by law.

ARTICLE XII
NATIONAL ECONOMY AND PATRIMONY

Section 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained
increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity
as the key to raising the quality of life for all, especially the underprivileged.

The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform,
through industries that make full of efficient use of human and natural resources, and which are competitive in both domestic and
foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all region s of the country shall be given optimum opportunity to
develop. Private enterprises, including corporations, cooperatives, and similar collective organizations, shall be encouraged to
broaden the base of their ownership.

Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural
resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may
enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at
least 60 per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five
years, renewable for not more than twenty-five years, and under such terms and conditions as may provided by law. In cases of
water rights for irrigation, water supply, fisheries, or industrial uses other than the development of waterpower, beneficial use may
be the measure and limit of the grant.

The State shall protect the nations marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and
reserve its use and enjoyment exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish farming,
with priority to subsistence fishermen and fish workers in rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms
and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of local scientific and technical resources.

The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its
execution.

Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands and national parks. Agricultural
lands of the public domain may be further classified by law according to the uses to which they may be devoted. Alienable lands of
the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of
the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and
not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire
not more than twelve hectares thereof, by purchase, homestead, or grant.

Taking into account the requirements of conservation, ecology, and development, and subject to the requirements of agrarian
reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or
leased and the conditions therefor.

Section 4. The Congress shall, as soon as possible, determine, by law, the specific limits of forest lands and national parks,
marking clearly their boundaries on the ground. Thereafter, such forest lands and national parks shall be conserved and may not be
increased nor diminished, except by law. The Congress shall provide for such period as it may determine, measures to prohibit
logging in endangered forests and watershed areas.

Section 5. The State, subject to the provisions of this Constitution and national development policies and programs, shall protect
the rights of indigenous cultural communities to their ancestral lands to ensure their economic, social, and cultural well-being.

The Congress may provide for the applicability of customary laws governing property rights or relations in determining the
ownership and extent of ancestral domain.

Section 6. The use of property bears a social function, and all economic agents shall contribute to the common good. Individuals
and private groups, including corporations, cooperatives, and similar collective organizations, shall have the right to own, establish,
and operate economic enterprises, subject to the duty of the State to promote distributive justice and to intervene when the
common good so demands.

Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands of the public domain.

Section 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines who has lost his
Philippine citizenship may be a transferee of private lands, subject to limitations provided by law.

Section 9. The Congress may establish an independent economic and planning agency headed by the President, which shall, after
consultations with the appropriate public agencies, various private sectors, and local government units, recommend to Congress,
and implement continuing integrated and coordinated programs and policies for national development.

Until the Congress provides otherwise, the National Economic and Development Authority shall function as the independent
planning agency of the government.

Section 10. The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates,
reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such
citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures
that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos.

In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to
qualified Filipinos.

The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its
national goals and priorities.

Section 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to
citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of
whose capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for a
longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject
to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity
participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation
or association must be citizens of the Philippines.
Section 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and
adopt measures that help make them competitive.

Section 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of
exchange on the basis of equality and reciprocity.

Section 14. The sustained development of a reservoir of national talents consisting of Filipino scientists, entrepreneurs,
professionals, managers, high-level technical manpower and skilled workers and craftsmen in all fields shall be promoted by the
State. The State shall encourage appropriate technology and regulate its transfer for the national benefit. The practice of all
professions in the Philippines shall be limited to Filipino citizens, save in cases prescribed by law.

Section 15. The Congress shall create an agency to promote the viability and growth of cooperatives as instruments for social
justice and economic development.

Section 16. The Congress shall not, except by general law, provide for the formation, organization, or regulation of private
corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the
common good and subject to the test of economic viability.

Section 17. In times of national emergency, when the public interest so requires, the State may, during the emergency and under
reasonable terms prescribed by it, temporarily take over or direct the operation of any privately-owned public utility or business
affected with public interest.

Section 18. The State may, in the interest of national welfare or defense, establish and operate vital industries and, upon payment
of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government.

Section 19. The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of
trade or unfair competition shall be allowed.

Section 20. The Congress shall establish an independent central monetary authority, the members of whose governing board must
be natural-born Filipino citizens, of known probity, integrity, and patriotism, the majority of whom shall come from the private sector.
They shall also be subject to such other qualifications and disabilities as may be prescribed by law. The authority shall provide
policy direction in the areas of money, banking, and credit. It shall have supervision over the operations of banks and exercise such
regulatory powers as may be provided by law over the operations of finance companies and other institutions performing similar
functions.

Until the Congress otherwise provides, the Central Bank of the Philippines operating under existing laws, shall function as the
central monetary authority.

Section 21. Foreign loans may only be incurred in accordance with law and the regulation of the monetary authority. Information on
foreign loans obtained or guaranteed by the Government shall be made available to the public.

Section 22. Acts which circumvent or negate any of the provisions of this Article shall be considered inimical to the national interest
and subject to criminal and civil sanctions, as may be provided by law.

II. CASES

G.R. No. 149177 November 23, 2007

KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., Petitioners,

vs.
MINORU KITAMURA, Respondent.

DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the April 18, 2001 Decision1 of
the Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July 25, 2001 Resolution2 denying the motion for reconsideration
thereof.

On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese consultancy firm providing technical
and management support in the infrastructure projects of foreign governments,3 entered into an Independent Contractor Agreement
(ICA) with respondent Minoru Kitamura, a Japanese national permanently residing in the Philippines.4 The agreement provides that
respondent was to extend professional services to Nippon for a year starting on April 1, 1999.5 Nippon then assigned respondent to
work as the project manager of the Southern Tagalog Access Road (STAR) Project in the Philippines, following the company's
consultancy contract with the Philippine Government.6

When the STAR Project was near completion, the Department of Public Works and Highways (DPWH) engaged the consultancy
services of Nippon, on January 28, 2000, this time for the detailed engineering and construction supervision of the Bongabon-Baler
Road Improvement (BBRI) Project.7 Respondent was named as the project manager in the contract's Appendix 3.1.8

On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its International Division, informed respondent
that the company had no more intention of automatically renewing his ICA. His services would be engaged by the company only up
to the substantial completion of the STAR Project on March 31, 2000, just in time for the ICA's expiry.9

Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation conference and demanded
that he be assigned to the BBRI project. Nippon insisted that respondent’s contract was for a fixed term that had already expired,
and refused to negotiate for the renewal of the ICA.10

As he was not able to generate a positive response from the petitioners, respondent consequently initiated on June 1, 2000 Civil
Case No. 00-0264 for specific performance and damages with the Regional Trial Court of Lipa City.11

For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and between Japanese nationals,
moved to dismiss the complaint for lack of jurisdiction. They asserted that the claim for improper pre-termination of respondent's
ICA could only be heard and ventilated in the proper courts of Japan following the principles of lex loci celebrationis and lex
contractus.12

In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement of Kitamura by a certain Y. Kotake
as project manager of the BBRI Project.13

On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank14 that matters connected with the performance of
contracts are regulated by the law prevailing at the place of performance,15 denied the motion to dismiss.16 The trial court
subsequently denied petitioners' motion for reconsideration,17 prompting them to file with the appellate court, on August 14, 2000,
their first Petition for Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205].18 On August 23, 2000, the CA resolved to
dismiss the petition on procedural grounds—for lack of statement of material dates and for insufficient verification and certification
against forum shopping.19 An Entry of Judgment was later issued by the appellate court on September 20, 2000.20

Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within the reglementary period,
a second Petition for Certiorari under Rule 65 already stating therein the material dates and attaching thereto the proper
verification and certification. This second petition, which substantially raised the same issues as those in the first, was docketed as
CA-G.R. SP No. 60827.21

Ruling on the merits of the second petition, the appellate court rendered the assailed April 18, 2001 Decision22finding no grave
abuse of discretion in the trial court's denial of the motion to dismiss. The CA ruled, among others, that the principle of lex loci
celebrationis was not applicable to the case, because nowhere in the pleadings was the validity of the written agreement put in
issue. The CA thus declared that the trial court was correct in applying instead the principle of lex loci solutionis.23

Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July 25, 2001 Resolution.24

Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant Petition for Review
on Certiorari25 imputing the following errors to the appellate court:

A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE TRIAL COURT VALIDLY
EXERCISED JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE THE FACT THAT THE CONTRACT
SUBJECT MATTER OF THE PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO JAPANESE
NATIONALS, WRITTEN WHOLLY IN THE JAPANESE LANGUAGE AND EXECUTED IN TOKYO, JAPAN.

B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE NEED TO REVIEW OUR
ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN THE LIGHT OF RECENT DEVELOPMENT[S] IN
PRIVATE INTERNATIONAL LAWS.26

The pivotal question that this Court is called upon to resolve is whether the subject matter jurisdiction of Philippine courts in civil
cases for specific performance and damages involving contracts executed outside the country by foreign nationals may be assailed
on the principles of lex loci celebrationis, lex contractus, the "state of the most significant relationship rule," or forum non
conveniens.

However, before ruling on this issue, we must first dispose of the procedural matters raised by the respondent.

Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No. 60205 has already barred the filing of the
second petition docketed as CA-G.R. SP No. 60827 (fundamentally raising the same issues as those in the first one) and the
instant petition for review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's defective certification of non-forum
shopping, it was a dismissal without prejudice.27 The same holds true in the CA's dismissal of the said case due to defects in the
formal requirement of verification28 and in the other requirement in Rule 46 of the Rules of Court on the statement of the material
dates.29 The dismissal being without prejudice, petitioners can re-file the petition, or file a second petition attaching thereto the
appropriate verification and certification—as they, in fact did—and stating therein the material dates, within the prescribed
period30 in Section 4, Rule 65 of the said Rules.31

The dismissal of a case without prejudice signifies the absence of a decision on the merits and leaves the parties free to litigate the
matter in a subsequent action as though the dismissed action had not been commenced. In other words, the termination of a case
not on the merits does not bar another action involving the same parties, on the same subject matter and theory.32

Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and even if petitioners still indicated in
the verification and certification of the second certiorari petition that the first had already been dismissed on procedural
grounds,33 petitioners are no longer required by the Rules to indicate in their certification of non-forum shopping in the instant
petition for review of the second certiorari petition, the status of the aforesaid first petition before the CA. In any case, an omission
in the certificate of non-forum shopping about any event that will not constitute res judicata and litis pendentia, as in the present
case, is not a fatal defect. It will not warrant the dismissal and nullification of the entire proceedings, considering that the evils
sought to be prevented by the said certificate are no longer present.34

The Court also finds no merit in respondent's contention that petitioner Hasegawa is only authorized to verify and certify, on behalf
of Nippon, the certiorari petition filed with the CA and not the instant petition. True, the Authorization35 dated September 4, 2000,
which is attached to the second certiorari petition and which is also attached to the instant petition for review, is limited in scope—
its wordings indicate that Hasegawa is given the authority to sign for and act on behalf of the company only in the petition filed with
the appellate court, and that authority cannot extend to the instant petition for review.36 In a plethora of cases, however, this Court
has liberally applied the Rules or even suspended its application whenever a satisfactory explanation and a subsequent fulfillment
of the requirements have been made.37 Given that petitioners herein sufficiently explained their misgivings on this point and
appended to their Reply38 an updated Authorization39 for Hasegawa to act on behalf of the company in the instant petition, the Court
finds the same as sufficient compliance with the Rules.

However, the Court cannot extend the same liberal treatment to the defect in the verification and certification. As respondent
pointed out, and to which we agree, Hasegawa is truly not authorized to act on behalf of Nippon in this case. The aforesaid
September 4, 2000 Authorization and even the subsequent August 17, 2001 Authorization were issued only by Nippon's president
and chief executive officer, not by the company's board of directors. In not a few cases, we have ruled that corporate powers are
exercised by the board of directors; thus, no person, not even its officers, can bind the corporation, in the absence of authority from
the board.40 Considering that Hasegawa verified and certified the petition only on his behalf and not on behalf of the other petitioner,
the petition has to be denied pursuant to Loquias v. Office of the Ombudsman.41 Substantial compliance will not suffice in a matter
that demands strict observance of the Rules.42 While technical rules of procedure are designed not to frustrate the ends of justice,
nonetheless, they are intended to effect the proper and orderly disposition of cases and effectively prevent the clogging of court
dockets.43

Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question the trial court's denial of their motion
to dismiss. It is a well-established rule that an order denying a motion to dismiss is interlocutory, and cannot be the subject of the
extraordinary petition for certiorari or mandamus. The appropriate recourse is to file an answer and to interpose as defenses the
objections raised in the motion, to proceed to trial, and, in case of an adverse decision, to elevate the entire case by appeal in due
course.44 While there are recognized exceptions to this rule,45 petitioners' case does not fall among them.

This brings us to the discussion of the substantive issue of the case.

Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to hear and resolve the civil case
for specific performance and damages filed by the respondent. The ICA subject of the litigation was entered into and perfected in
Tokyo, Japan, by Japanese nationals, and written wholly in the Japanese language. Thus, petitioners posit that local courts have no
substantial relationship to the parties46 following the [state of the] most significant relationship rule in Private International Law.47

The Court notes that petitioners adopted an additional but different theory when they elevated the case to the appellate court. In the
Motion to Dismiss48 filed with the trial court, petitioners never contended that the RTC is an inconvenient forum. They merely argued
that the applicable law which will determine the validity or invalidity of respondent's claim is that of Japan, following the principles
of lex loci celebrationis and lex contractus.49 While not abandoning this stance in their petition before the appellate court, petitioners
on certiorari significantly invoked the defense of forum non conveniens.50 On petition for review before this Court, petitioners
dropped their other arguments, maintained the forum non conveniens defense, and introduced their new argument that the
applicable principle is the [state of the] most significant relationship rule.51

Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in theory, as explained
in Philippine Ports Authority v. City of Iloilo.52 We only pointed out petitioners' inconstancy in their arguments to emphasize their
incorrect assertion of conflict of laws principles.

To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction, choice of law, and
recognition and enforcement of judgments. Corresponding to these phases are the following questions: (1) Where can or should
litigation be initiated? (2) Which law will the court apply? and (3) Where can the resulting judgment be enforced?53
Analytically, jurisdiction and choice of law are two distinct concepts.54 Jurisdiction considers whether it is fair to cause a defendant to
travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the
merits of the case is fair to both parties. The power to exercise jurisdiction does not automatically give a state constitutional
authority to apply forum law. While jurisdiction and the choice of the lex fori will often coincide, the "minimum contacts" for one do
not always provide the necessary "significant contacts" for the other.55 The question of whether the law of a state can be applied to
a transaction is different from the question of whether the courts of that state have jurisdiction to enter a judgment.56

In this case, only the first phase is at issue—jurisdiction. Jurisdiction, however, has various aspects. For a court to validly exercise
1âwphi1

its power to adjudicate a controversy, it must have jurisdiction over the plaintiff or the petitioner, over the defendant or the
respondent, over the subject matter, over the issues of the case and, in cases involving property, over the res or the thing which is
the subject of the litigation.57 In assailing the trial court's jurisdiction herein, petitioners are actually referring to subject matter
jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which establishes and organizes
the court. It is given only by law and in the manner prescribed by law.58 It is further determined by the allegations of the complaint
irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein.59 To succeed in its motion for the
dismissal of an action for lack of jurisdiction over the subject matter of the claim,60 the movant must show that the court or tribunal
cannot act on the matter submitted to it because no law grants it the power to adjudicate the claims.61

In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly vested by law with
jurisdiction to hear the subject controversy for, indeed, Civil Case No. 00-0264 for specific performance and damages is one not
capable of pecuniary estimation and is properly cognizable by the RTC of Lipa City.62 What they rather raise as grounds to question
subject matter jurisdiction are the principles of lex loci celebrationis and lex contractus, and the "state of the most significant
relationship rule."

The Court finds the invocation of these grounds unsound.

Lex loci celebrationis relates to the "law of the place of the ceremony"63 or the law of the place where a contract is made.64 The
doctrine of lex contractus or lex loci contractus means the "law of the place where a contract is executed or to be performed."65 It
controls the nature, construction, and validity of the contract66 and it may pertain to the law voluntarily agreed upon by the parties or
the law intended by them either expressly or implicitly.67 Under the "state of the most significant relationship rule," to ascertain what
state law to apply to a dispute, the court should determine which state has the most substantial connection to the occurrence and
the parties. In a case involving a contract, the court should consider where the contract was made, was negotiated, was to be
performed, and the domicile, place of business, or place of incorporation of the parties.68 This rule takes into account several
contacts and evaluates them according to their relative importance with respect to the particular issue to be resolved.69

Since these three principles in conflict of laws make reference to the law applicable to a dispute, they are rules proper for the
second phase, the choice of law.70 They determine which state's law is to be applied in resolving the substantive issues of a
conflicts problem.71 Necessarily, as the only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but
also not yet called for.

Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they have not yet pointed out any
conflict between the laws of Japan and ours. Before determining which law should apply, first there should exist a conflict of laws
situation requiring the application of the conflict of laws rules.72 Also, when the law of a foreign country is invoked to provide the
proper rules for the solution of a case, the existence of such law must be pleaded and proved.73

It should be noted that when a conflicts case, one involving a foreign element, is brought before a court or administrative agency,
there are three alternatives open to the latter in disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal
to assume jurisdiction over the case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3) assume
jurisdiction over the case and take into account or apply the law of some other State or States.74 The court’s power to hear cases
and controversies is derived from the Constitution and the laws. While it may choose to recognize laws of foreign nations, the court
is not limited by foreign sovereign law short of treaties or other formal agreements, even in matters regarding rights provided by
foreign sovereigns.75

Neither can the other ground raised, forum non conveniens,76 be used to deprive the trial court of its jurisdiction herein. First, it is
not a proper basis for a motion to dismiss because Section 1, Rule 16 of the Rules of Court does not include it as a
ground.77 Second, whether a suit should be entertained or dismissed on the basis of the said doctrine depends largely upon the
facts of the particular case and is addressed to the sound discretion of the trial court.78 In this case, the RTC decided to assume
jurisdiction. Third, the propriety of dismissing a case based on this principle requires a factual determination; hence, this conflicts
principle is more properly considered a matter of defense.79

Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed by respondent and the grounds
raised by petitioners to assail that jurisdiction are inappropriate, the trial and appellate courts correctly denied the petitioners’
motion to dismiss.

WHEREFORE, premises considered, the petition for review on certiorari is DENIED.

SO ORDERED.
G.R. No. 198587, January 14, 2015

SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA J. BETIA, Petitioners, v. MA. JOPETTE M. REBESENCIO,
MONTASSAH B. SACAR-ADIONG, ROUEN RUTH A. CRISTOBAL AND LORAINE S. SCHNEIDER-CRUZ, Respondents.

DECISION

LEONEN, J.:

All Filipinos are entitled to the protection of the rights guaranteed in the Constitution.

This is a Petition for Review on Certiorari with application for the issuance of a temporary restraining order and/or writ of preliminary
injunction under Rule 45 of the 1997 Rules of Civil Procedure praying that judgment be rendered reversing and setting aside the
June 16, 2011 Decision1 and September 13, 2011 Resolution2 of the Court of Appeals in CA-G.R. SP. No. 113006.

Petitioner Saudi Arabian Airlines (Saudia) is a foreign corporation established and existing under the laws of Jeddah, Kingdom of
Saudi Arabia. It has a Philippine office located at 4/F, Metro House Building, Sen. Gil J. Puyat Avenue, Makati City.3 In its Petition
filed with this court, Saudia identified itself as follows:

1. Petitioner SAUDIA is a foreign corporation established and existing under the Royal Decree No. M/24 of 18.07.1385H
(10.02.1962G) in Jeddah, Kingdom of Saudi Arabia ("KSA"). Its Philippine Office is located at 4/F Metro House Building,
Sen, Gil J. Puyat Avenue, Makati City (Philippine Office). It may be served with orders of this Honorable Court through
undersigned counsel at 4th and 6th Floors, Citibank Center Bldg., 8741 Paseo de Roxas, Makati City. (Emphasis supplied)
Respondents (complainants before the Labor Arbiter) were recruited and hired by Saudia as Temporary Flight Attendants with the
accreditation and approval of the Philippine Overseas Employment Administration.5 After undergoing seminars required by the
Philippine Overseas Employment Administration for deployment overseas, as well as training modules offered by Saudia (e.g.,
initial flight attendant/training course and transition training), and after working as Temporary Flight Attendants, respondents
became Permanent Flight Attendants. They then entered into Cabin Attendant contracts with Saudia: Ma. Jopette M. Rebesencio
(Ma. Jopette) on May 16, 1990;6 Montassah B. Sacar-Adiong (Montassah) and Rouen Ruth A. Cristobal (Rouen Ruth) on May 22,
1993;7 and Loraine Schneider-Cruz (Loraine) on August 27, 1995.

Respondents continued their employment with Saudia until they were separated from service on various dates in 2006.

Respondents contended that the termination of their employment was illegal. They alleged that the termination was made solely
because they were pregnant.

As respondents alleged, they had informed Saudia of their respective pregnancies and had gone through the necessary
procedures to process their maternity leaves. Initially, Saudia had given its approval but later on informed respondents that its
management in Jeddah, Saudi Arabia had disapproved their maternity leaves. In addition, it required respondents to file their
resignation letters.

Respondents were told that if they did not resign, Saudia would terminate them all the same. The threat of termination entailed the
loss of benefits, such as separation pay and ticket discount entitlements.

Specifically, Ma. Jopette received a call on October 16, 2006 from Saudia's Base Manager, Abdulmalik Saddik
(Abdulmalik).13 Montassah was informed personally by Abdulmalik and a certain Faisal Hussein on October 20, 2006 after being
required to report to the office one (1) month into her maternity leave.14Rouen Ruth was also personally informed by Abdulmalik on
October 17, 2006 after being required to report to the office by her Group Supervisor.15 Loraine received a call on October 12,
2006 from her Group Supervisor, Dakila Salvador.

Saudia anchored its disapproval of respondents' maternity leaves and demand for their resignation on its "Unified Employment
Contract for Female Cabin Attendants" (Unified Contract).17 Under the Unified Contract, the employment of a Flight Attendant who
becomes pregnant is rendered void. It provides:

H. Due to the essential nature of the Air Hostess functions to be physically fit on board to provide various services required in
normal or emergency cases on both domestic/international flights beside her role in maintaining continuous safety and
security of passengers, and since she will not be able to maintain the required medical fitness while at work in case of
pregnancy, accordingly, if the Air Hostess becomes pregnant at any time during the term of this contract, this shall render
her employment contract as void and she will be terminated due to lack of medical fitness.18 (Emphasis supplied)
In their Comment on the present Petition,19 respondents emphasized that the Unified Contract took effect on September 23, 2006
(the first day of Ramadan),20 well after they had filed and had their maternity leaves approved. Ma. Jopette filed her maternity
leave application on September 5, 2006.21 Montassah filed her maternity leave application on August 29, 2006, and its approval
was already indicated in Saudia's computer system by August 30, 2006.22 Rouen Ruth filed her maternity leave application on
September 13, 2006,23 and Loraine filed her maternity leave application on August 22, 2006.

Rather than comply and tender resignation letters, respondents filed separate appeal letters that were all rejected.

Despite these initial rejections, respondents each received calls on the morning of November 6, 2006 from Saudia's office secretary
informing them that their maternity leaves had been approved. Saudia, however, was quick to renege on its approval. On the
evening of November 6, 2006, respondents again received calls informing them that it had received notification from Jeddah, Saudi
Arabia that their maternity leaves had been disapproved.
Faced with the dilemma of resigning or totally losing their benefits, respondents executed handwritten resignation letters. In
Montassah's and Rouen Ruth's cases, their resignations were executed on Saudia's blank letterheads that Saudia had provided.
These letterheads already had the word "RESIGNATION" typed on the subject portions of their headings when these were handed
to respondents.

On November 8, 2007, respondents filed a Complaint against Saudia and its officers for illegal dismissal and for underpayment of
salary, overtime pay, premium pay for holiday, rest day, premium, service incentive leave pay, 13th month pay, separation pay, night
shift differentials, medical expense reimbursements, retirement benefits, illegal deduction, lay-over expense and allowances, moral
and exemplary damages, and attorney's fees.28 The case was initially assigned to Labor Arbiter Hermino V. Suelo and docketed as
NLRC NCR Case No. 00-11-12342-07.

Saudia assailed the jurisdiction of the Labor Arbiter.29 It claimed that all the determining points of contact referred to foreign law
and insisted that the Complaint ought to be dismissed on the ground of forum non conveniens.30 It added that respondents had no
cause of action as they resigned voluntarily.31

On December 12, 2008, Executive Labor Arbiter Fatima Jambaro-Franco rendered the Decision32dismissing respondents'
Complaint. The dispositive portion of this Decision reads:

WHEREFORE, premises' considered, judgment is hereby rendered DISMISSING the instant complaint for lack of
jurisdiction/merit.

On respondents' appeal, the National Labor Relations Commission's Sixth Division reversed the ruling of Executive Labor Arbiter
Jambaro-Franco. It explained that "[considering that complainants-appellants are OFWs, the Labor Arbiters and the NLRC has [sic]
jurisdiction to hear and decide their complaint for illegal termination."34 On the matter of forum non conveniens, it noted that there
were no special circumstances that warranted its abstention from exercising jurisdiction.35 On the issue of whether respondents
were validly dismissed, it held that there was nothing on record to support Saudia's claim that respondents resigned voluntarily.

The dispositive portion of the November 19, 2009 National Labor Relations Commission Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered finding the appeal impressed with merit. The
respondents-appellees are hereby directed to pay complainants-appellants the aggregate amount of SR614,001.24
corresponding to their backwages and separation pay plus ten (10%) percent thereof as attorney's fees. The decision of
the Labor Arbiter dated December 12, 2008 is hereby VACATED and SET ASIDE. Attached is the computation prepared
by this Commission and made an integral part of this Decision.

In the Resolution dated February 11, 2010,38 the National Labor Relations Commission denied petitioners' Motion for
Reconsideration.

In the June 16, 2011 Decision,39 the Court of Appeals denied petitioners' Rule 65 Petition and modified the Decision of the National
Labor Relations Commission with respect to the award of separation pay and backwages.

The dispositive portion of the Court of Appeals Decision reads:

WHEREFORE, the instant petition is hereby DENIED. The Decision dated November 19, 2009 issued by public
respondent, Sixth Division of the National Labor Relations Commission - National Capital Region is MODIFIED only
insofar as the computation of the award of separation pay and backwages. For greater clarity, petitioners are
ordered to pay private respondents separation pay which shall be computed from private respondents' first day of
employment up to the finality of this decision, at the rate of one month per year of service and backwages which
shall be computed from the date the private respondents were illegally terminated until finality of this decision.
Consequently, the ten percent (10%) attorney's fees shall be based on the total amount of the award. The assailed
Decision is affirmed in all other respects.

The labor arbiter is hereby DIRECTED to make a recomputation based on the foregoing.

In the Resolution dated September 13, 2011,41 the Court of Appeals denied petitioners' Motion for Reconsideration.

Hence, this Appeal was filed.

The issues for resolution are the following:

First, whether the Labor Arbiter and the National Labor Relations Commission may exercise jurisdiction over Saudi Arabian Airlines
and apply Philippine law in adjudicating the present dispute;

Second, whether respondents' voluntarily resigned or were illegally terminated; and

Lastly, whether Brenda J. Betia may be held personally liable along with Saudi Arabian Airlines.

Summons were validly served on Saudia and jurisdiction over it validly acquired.
There is no doubt that the pleadings and summons were served on Saudia through its counsel.42 Saudia, however, claims that the
Labor Arbiter and the National Labor Relations Commission had no jurisdiction over it because summons were never served on it
but on "Saudia Manila."43 Referring to itself as "Saudia Jeddah," it claims that "Saudia Jeddah" and not "Saudia Manila" was the
employer of respondents because:

First, "Saudia Manila" was never a party to the Cabin Attendant contracts entered into by respondents;

Second, it was "Saudia Jeddah" that provided the funds to pay for respondents' salaries and benefits; and

Lastly, it was with "Saudia Jeddah" that respondents filed their resignations.44

Saudia posits that respondents' Complaint was brought against the wrong party because "Saudia Manila," upon which summons
was served, was never the employer of respondents.45

Saudia is vainly splitting hairs in its effort to absolve itself of liability. Other than its bare allegation, there is no basis for concluding
that "Saudia Jeddah" is distinct from "Saudia Manila."

What is clear is Saudia's statement in its own Petition that what it has is a "Philippine Office . . . located at 4/F Metro House
Building, Sen. Gil J. Puyat Avenue, Makati City."46 Even in the position paper that Saudia submitted to the Labor Arbiter,47 what
Saudia now refers to as "Saudia Jeddah" was then only referred to as "Saudia Head Office at Jeddah, KSA,"48 while what Saudia
now refers to as "Saudia Manila" was then only referred to as "Saudia's office in Manila."49

By its own admission, Saudia, while a foreign corporation, has a Philippine office.

Section 3(d) of Republic Act No.. 7042, otherwise known as the Foreign Investments Act of 1991, provides the following:

The phrase "doing business" shall include . . . opening offices, whether called "liaison" offices or
branches; . . . and any other act or acts that imply a continuity of commercial dealings or arrangements and
contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally
incident to, and in progressive prosecution of commercial gain or of the purpose and object of the business
organization. (Emphasis supplied)

A plain application of Section 3(d) of the Foreign Investments Act leads to no other conclusion than that Saudia is a foreign
corporation doing business in the Philippines. As such, Saudia may be sued in the Philippines and is subject to the jurisdiction of
Philippine tribunals.

Moreover, since there is no real distinction between "Saudia Jeddah" and "Saudia Manila" — the latter being nothing more than
Saudia's local office — service of summons to Saudia's office in Manila sufficed to vest jurisdiction over Saudia's person in
Philippine tribunals.

II

Saudia asserts that Philippine courts and/or tribunals are not in a position to make an intelligent decision as to the law and the
facts. This is because respondents' Cabin Attendant contracts require the application of the laws of Saudi Arabia, rather than those
of the Philippines.50 It claims that the difficulty of ascertaining foreign law calls into operation the principle of forum non
conveniens, thereby rendering improper the exercise of jurisdiction by Philippine tribunals.51

A choice of law governing the validity of contracts or the interpretation of its provisions dees not necessarily imply forum non
conveniens. Choice of law and forum non conveniens are entirely different matters.

Choice of law provisions are an offshoot of the fundamental principle of autonomy of contracts. Article 1306 of the Civil Code firmly
ensconces this:

Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may
deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

In contrast, forum non conveniens is a device akin to the rule against forum shopping. It is designed to frustrate illicit means for
securing advantages and vexing litigants that would otherwise be possible if the venue of litigation (or dispute resolution) were left
entirely to the whim of either party.

Contractual choice of law provisions factor into transnational litigation and dispute resolution in one of or in a combination of four
ways: (1) procedures for settling disputes, e.g., arbitration; (2) forum, i.e., venue; (3) governing law; and (4) basis for
interpretation. Forum non conveniens relates to, but is not subsumed by, the second of these.

Likewise, contractual choice of law is not determinative of jurisdiction. Stipulating on the laws of a given jurisdiction as the
governing law of a contract does not preclude the exercise of jurisdiction by tribunals elsewhere. The reverse is equally true: The
assumption of jurisdiction by tribunals does not ipso factomean that it cannot apply and rule on the basis of the parties' stipulation.
In Hasegawa v. Kitamura:

Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause
a defendant to travel to this state; choice of law asks the further question whether the application of a substantive
law which will determine the merits of the case is fair to both parties. The power to exercise jurisdiction does not
automatically give a state constitutional authority to apply forum law. While jurisdiction and the choice of the lex
 fori will often, coincide, the "minimum contacts" for one do not always provide the necessary "significant contacts"
for the other. The question of whether the law of a state can be applied to a transaction is different from the
question of whether the courts of that state have jurisdiction to enter a judgment.

As various dealings, commercial or otherwise, are facilitated by the progressive ease of communication and travel, persons from
various jurisdictions find themselves transacting with each other. Contracts involving foreign elements are, however, nothing new.
Conflict of laws situations precipitated by disputes and litigation anchored on these contracts are not totally novel.

Transnational transactions entail differing laws on the requirements Q for the validity of the formalities and substantive provisions of
contracts and their interpretation. These transactions inevitably lend themselves to the possibility of various fora for litigation and
dispute resolution. As observed by an eminent expert on transnational law:

The more jurisdictions having an interest in, or merely even a point of contact with, a transaction or relationship, the
greater the number of potential fora for the resolution of disputes arising out of or related to that transaction or relationship.
In a world of increased mobility, where business and personal transactions transcend national boundaries, the jurisdiction
of a number of different fora may easily be invoked in a single or a set of related disputes.

Philippine law is definite as to what governs the formal or extrinsic validity of contracts. The first paragraph of Article 17 of the Civil
Code provides that "[t]he forms and solemnities of contracts . . . shall be governed by the laws of the country in which they are
executed"55 (i.e., lex loci celebrationis).

In contrast, there is no statutorily established mode of settling conflict of laws situations on matters pertaining to substantive content
of contracts. It has been noted that three (3) modes have emerged: (1) lex loci contractus or the law of the place of the making;
(2) lex loci solutionis or the law of the place of performance; and (3) lex loci intentionis or the law intended by the parties.56

Given Saudia's assertions, of particular relevance to resolving the present dispute is lex loci intentionis.

An author observed that Spanish jurists and commentators "favor lex loci intentionis."57 These jurists and commentators proceed
from the Civil Code of Spain, which, like our Civil Code, is silent on what governs the intrinsic validity of contracts, and the same
civil law traditions from which we draw ours.

In this jurisdiction, this court, in Philippine Export and Foreign Loan Guarantee v. V.P. Eusebio Construction, Inc.,58 manifested
preference for allowing the parties to select the law applicable to their contract":chanroblesvirtuallawlibrary

No conflicts rule on essential validity of contracts is expressly provided for in our laws. The rule followed by most
legal systems, however, is that the intrinsic validity of a contract must be governed by the lex contractus or "proper
law of the contract." This is the law voluntarily agreed upon by the parties (the lex loci voluntatis) or the law
intended by them either expressly or implicitly (the lex loci intentionis). The law selected may be implied from such
factors as substantial connection with the transaction, or the nationality or domicile of the parties. Philippine courts
would do well to adopt the first and most basic rule in most legal systems, namely, to allow the parties to select the
law applicable to their contract, subject to the limitation that it is not against the law, morals, or public policy of the
forum and that the chosen law must bear a substantive relationship to the transaction.59 (Emphasis in the original)

Saudia asserts that stipulations set in the Cabin Attendant contracts require the application of the laws of Saudi Arabia. It insists
that the need to comply with these stipulations calls into operation the doctrine of forum non conveniens and, in turn, makes it
necessary for Philippine tribunals to refrain from exercising jurisdiction.

As mentioned, contractual choice of laws factors into transnational litigation in any or a combination of four (4) ways.
Moreover, forum non conveniens relates to one of these: choosing between multiple possible fora.

Nevertheless, the possibility of parallel litigation in multiple fora — along with the host of difficulties it poses — is not unique to
transnational litigation. It is a difficulty that similarly arises in disputes well within the bounds of a singe jurisdiction.

When parallel litigation arises strictly within the context of a single jurisdiction, such rules as those on forum shopping, litis
pendentia, and res judicata come into operation. Thus, in the Philippines, the 1997 Rules on Civil Procedure provide for willful and
deliberate forum shopping as a ground not only for summary dismissal with prejudice but also for citing parties and counsels in
direct contempt, as well as for the imposition of administrative sanctions.60 Likewise, the same rules expressly provide that a party
may seek the dismissal of a Complaint or another pleading asserting a claim on the ground "[t]hat there is another action pending
between the same parties for the same cause," i.e., litis pendentia, or "[t]hat the cause of action is barred by a prior
judgment,"61 i.e., res judicata.

Forum non conveniens, like the rules of forum shopping, litis pendentia, and res judicata, is a means of addressing the problem of
parallel litigation. While the rules of forum shopping, litis pendentia, and res judicata are designed to address the problem of parallel
litigation within a single jurisdiction, forum non conveniens is a means devised to address parallel litigation arising in multiple
jurisdictions.

Forum non conveniens literally translates to "the forum is inconvenient."62 It is a concept in private international law and was
devised to combat the "less than honorable" reasons and excuses that litigants use to secure procedural advantages, annoy and
harass defendants, avoid overcrowded dockets, and select a "friendlier" venue.63 Thus, the doctrine of forum non
conveniens addresses the same rationale that the rule against forum shopping does, albeit on a multijurisdictional scale.

Forum non conveniens, like res judicata,64 is a concept originating in common law.65 However, unlike the rule on res judicata, as
well as those on litis pendentia and forum shopping, forum non conveniens finds no textual anchor, whether in statute or in
procedural rules, in our civil law system. Nevertheless, jurisprudence has applied forum non conveniens as basis for a court to
decline its exercise of jurisdiction.66

Forum non conveniens is soundly applied not only to address parallel litigation and undermine a litigant's capacity to vex and
secure undue advantages by engaging in forum shopping on an international scale. It is also grounded on principles of comity and
judicial efficiency.

Consistent with the principle of comity, a tribunal's desistance in exercising jurisdiction on account of forum non conveniens is a
deferential gesture to the tribunals of another sovereign. It is a measure that prevents the former's having to interfere in affairs
which are better and more competently addressed by the latter. Further, forum non conveniens entails a recognition not only that
tribunals elsewhere are better suited to rule on and resolve a controversy, but also, that these tribunals are better positioned to
enforce judgments and, ultimately, to dispense justice. Forum non conveniens prevents the embarrassment of an awkward
situation where a tribunal is rendered incompetent in the face of the greater capability — both analytical and practical — of a
tribunal in another jurisdiction.

The wisdom of avoiding conflicting and unenforceable judgments is as much a matter of efficiency and economy as it is a matter of
international courtesy. A court would effectively be neutering itself if it insists on adjudicating a controversy when it knows full well
that it is in no position to enforce its judgment. Doing so is not only an exercise in futility; it is an act of frivolity. It clogs the dockets
of a.tribunal and leaves it to waste its efforts on affairs, which, given transnational exigencies, will be reduced to mere academic, if
not trivial, exercises.

Accordingly, under the doctrine of forum non conveniens, "a court, in conflicts of law cases, may refuse impositions on its
jurisdiction where it is not the most 'convenient' or available forum and the parties are not precluded from seeking remedies
elsewhere."67 In Puyat v. Zabarte,68 this court recognized the following situations as among those that may warrant a court's
desistance from exercising jurisdiction:

1) The belief that the matter can be better tried and decided elsewhere, either because the main aspects of the case transpired
in a foreign jurisdiction or the material witnesses have their residence there;
2) The belief that the non-resident plaintiff sought the forum[,] a practice known as forum shopping[,] merely to secure
procedural advantages or to convey or harass the defendant;
3) The unwillingness to extend local judicial facilities to non residents or aliens when the docket may already be overcrowded;
4) The inadequacy of the local judicial machinery for effectuating the right sought to be maintained; and
5) The difficulty of ascertaining foreign law.

In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of Appeals,70 this court underscored that a Philippine
court may properly assume jurisdiction over a case if it chooses to do so to the extent: "(1) that the Philippine Court is one to which
the parties may conveniently resort to; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and
the facts; and (3) that the Philippine Court has or is likely to have power to enforce its decision."71

The use of the word "may" (i.e., "may refuse impositions on its jurisdiction"72) in the decisions shows that the matter of jurisdiction
rests on the sound discretion of a court. Neither the mere invocation of forum non conveniens nor the averment of foreign elements
operates to automatically divest a court of jurisdiction. Rather, a court should renounce jurisdiction only "after 'vital facts are
established, to determine whether special circumstances' require the court's desistance."73 As the propriety of applying forum non
conveniens is contingent on a factual determination, it is, therefore, a matter of defense.74

The second sentence of Rule 9, Section 1 of the 1997 Rules of Civil Procedure is exclusive in its recital of the grounds for dismissal
that are exempt from the omnibus motion rule: (1) lack of jurisdiction over the subject matter; (2) litis pendentia; (3) res judicata;
and (4) prescription. Moreover, dismissal on account offorum non conveniens is a fundamentally discretionary matter. It is,
therefore, not a matter for a defendant to foist upon the court at his or her own convenience; rather, it must be pleaded at the
earliest possible opportunity.

On the matter of pleading forum non conveniens, we state the rule, thus: Forum non conveniens must not only be clearly pleaded
as a ground for dismissal; it must be pleaded as such at the earliest possible opportunity. Otherwise, it shall be deemed waived.

This court notes that in Hasegawa,76 this court stated that forum non conveniens is not a ground for a motion to dismiss. The
factual ambience of this case however does not squarely raise the viability of this doctrine. Until the opportunity comes to review
the use of motions to dismiss for parallel litigation, Hasegawa remains existing doctrine.

Consistent with forum non conveniens as fundamentally a factual matter, it is imperative that it proceed from & factually established
basis. It would be improper to dismiss an action pursuant to forum non conveniens based merely on a perceived, likely, or
hypothetical multiplicity of fora. Thus, a defendant must also plead and show that a prior suit has, in fact, been brought in another
jurisdiction.

The existence of a prior suit makes real the vexation engendered by duplicitous litigation, the embarrassment of intruding into the
affairs of another sovereign, and the squandering of judicial efforts in resolving a dispute already lodged and better resolved
elsewhere. As has been noted:

A case will not be stayed o dismissed on [forum] non conveniens grounds unless the plaintiff is shown to have an
available alternative forum elsewhere. On this, the moving party bears the burden of proof.

A number of factors affect the assessment of an alternative forum's adequacy. The statute of limitations abroad may
have run, of the foreign court may lack either subject matter or personal jurisdiction over the defendant. . . .
Occasionally, doubts will be raised as to the integrity or impartiality of the foreign court (based, for example, on
suspicions of corruption or bias in favor of local nationals), as to the fairness of its judicial procedures, or as to is
operational efficiency (due, for example, to lack of resources, congestion and delay, or interfering circumstances
 such as a civil unrest). In one noted case, [it was found] that delays of 'up to a quarter of a century' rendered the
foreign forum... inadequate for these purposes.

We deem it more appropriate and in the greater interest of prudence that a defendant not only allege supposed dangerous
tendencies in litigating in this jurisdiction; the defendant must also show that such danger is real and present in that litigation or
dispute resolution has commenced in another jurisdiction and that a foreign tribunal has chosen to exercise jurisdiction.

III

Forum non conveniens finds no application and does not operate to divest Philippine tribunals of jurisdiction and to require the
application of foreign law.

Saudia invokes forum non conveniens to supposedly effectuate the stipulations of the Cabin Attendant contracts that require the
application of the laws of Saudi Arabia.

Forum non conveniens relates to forum, not to the choice of governing law. Thai forum non conveniensmay ultimately result in the
application of foreign law is merely an incident of its application. In this strict sense, forum non conveniens is not applicable. It is not
the primarily pivotal consideration in this case.

In any case, even a further consideration of the applicability of forum non conveniens on the incidental matter of the law governing
respondents' relation with Saudia leads to the conclusion that it is improper for Philippine tribunals to divest themselves of
jurisdiction.

Any evaluation of the propriety of contracting parties' choice of a forum and'its incidents must grapple with two (2) considerations:
first, the availability and adequacy of recourse to a foreign tribunal; and second, the question of where, as between the forum court
and a foreign court, the balance of interests inhering in a dispute weighs more heavily.

The first is a pragmatic matter. It relates to the viability of ceding jurisdiction to a foreign tribunal and can be resolved by juxtaposing
the competencies and practical circumstances of the tribunals in alternative fora. Exigencies, like the statute of limitations, capacity
to enforce orders and judgments, access to records, requirements for the acquisition of jurisdiction, and even questions relating to
the integrity of foreign courts, may render undesirable or even totally unfeasible recourse to a foreign court. As mentioned, we
consider it in the greater interest of prudence that a defendant show, in pleading forum non conveniens, that litigation has
commenced in another jurisdiction and that a foieign tribunal has, in fact, chosen to exercise jurisdiction.

Two (2) factors weigh into a court's appraisal of the balance of interests inhering in a dispute: first, the vinculum which the parties
and their relation have to a given jurisdiction; and second, the public interest that must animate a tribunal, in its capacity as an
agent of the sovereign, in choosing to assume or decline jurisdiction. The first is more concerned with the parties, their personal
circumstances, and private interests; the second concerns itself with the state and the greater social order.

In considering the vinculum, a court must look into the preponderance of linkages which the parties and their transaction may have
to either jurisdiction. In this respect, factors, such as the parties' respective nationalities and places of negotiation, execution,
performance, engagement or deployment, come into play.

In considering public interest, a court proceeds with a consciousness that it is an organ of the state. It must, thus, determine if the
interests of the sovereign (which acts through it) are outweighed by those of the alternative jurisdiction. In this respect, the court
delves into a consideration of public policy. Should it find that public interest weighs more heavily in favor of its assumption of
jurisdiction, it should proceed in adjudicating the dispute, any doubt or .contrary view arising from the preponderance of linkages
notwithstanding.

Our law on contracts recognizes the validity of contractual choice of law provisions. Where such provisions exist, Philippine
tribunals, acting as the forum court, generally defer to the parties' articulated choice.

This is consistent with the fundamental principle of autonomy of contracts. Article 1306 of the Civil Code expressly provides that
"[t]he contracting parties may establish 'such stipulations, clauses, terms and conditions as they may deem
convenient."78 Nevertheless, while a Philippine tribunal (acting as the forum court) is called upon to respect the parties' choice of
governing law, such respect must not be so permissive as to lose sight of considerations of law, morals, good customs, public
order, or public policy that underlie the contract central to the controversy.

Specifically with respect to public policy, in Pakistan International Airlines Corporation v. Ople,79 this court explained that:

counter-balancing the principle of autonomy of contracting parties is the equally general rule that provisions of
applicable law, especially provisions relating to matters affected with public policy, are deemed written inta the
contract. Put a little differently, the governing principle is that parties may not contract away applicable provisions of
law especially peremptory provisions dealing with matters heavily impressed with public interest.80(Emphasis
supplied)

Article II, Section 14 of the 1987 Constitution provides that "[t]he State ... shall ensure the fundamental equality before the law of
women and men." Contrasted with Article II, Section 1 of the 1987 Constitution's statement that "[n]o person shall ... be denied the
equal protection of the laws," Article II, Section 14 exhorts the State to "ensure." This does not only mean that the Philippines shall
not countenance nor lend legal recognition and approbation to measures that discriminate on the basis of one's being male or
female. It imposes an obligation to actively engage in securing the fundamental equality of men and women.

The Convention on the Elimination of all Forms of Discrimination against Women (CEDAW), signed and ratified by the Philippines
on July 15, 1980, and on August 5, 1981, respectively,81 is part of the law of the land. In view of the widespread signing and
ratification of, as well as adherence (in practice) to it by states, it may even be said that many provisions of the CEDAW may have
become customary international law. The CEDAW gives effect to the Constitution's policy statement in Article II, Section 14. Article I
of the CEDAW defines "discrimination against women" as:

any distinction, exclusion or restriction made on the basis of sex which has the effect or purpose of impairing or
nullifying the recognition, enjoyment or exercise by women, irrespective of their marital status, on a basis of equality
of men and women, of human rights and fundamental freedoms in the political, economic, social, cultural, civil or
any other field.82cralawlawlibrary

The constitutional exhortation to ensure fundamental equality, as illumined by its enabling law, the CEDAW, must inform and
animate all the actions of all personalities acting on behalf of the State. It is, therefore, the bounden duty of this court, in rendering
judgment on the disputes brought before it, to ensure that no discrimination is heaped upon women on the mere basis of their being
women. This is a point so basic and central that all our discussions and pronouncements — regardless of whatever averments
there may be of foreign law — must proceed from this premise.

So informed and animated, we emphasize the glaringly discriminatory nature of Saudia's policy. As argued by respondents,
Saudia's policy entails the termination of employment of flight attendants who become pregnant. At the risk of stating the
obvious, pregnancy is an occurrence that pertains specifically to women. Saudia's policy excludes from and restricts employment
on the basis of no other consideration but sex.

We do not lose sight of the reality that pregnancy does present physical limitations that may render difficult the performance of
functions associated with being a flight attendant. Nevertheless, it would be the height of iniquity to view pregnancy as a disability
so permanent and immutable that, it must entail the termination of one's employment. It is clear to us that any individual, regardless
of gender, may be subject to exigencies that limit the performance of functions. However, we fail to appreciate how pregnancy
could be such an impairing occurrence that it leaves no other recourse but the complete termination of the means through which a
woman earns a living.

Apart from the constitutional policy on the fundamental equality before the law of men and women, it is settled that contracts
relating to labor and employment are impressed with public interest. Article 1700 of the Civil Code provides that "[t]he relation
between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to
the common good."

Consistent with this, this court's pronouncements in Pakistan International Airlines Corporation83 are clear and unmistakable:

Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which specifies, firstly, the law of
Pakistan as the applicable law of the agreement, and, secondly, lays the venue for settlement of any dispute arising
out of or in connection with the agreement "only [in] courts of Karachi, Pakistan". The first clause of paragraph 10
cannot be invoked to prevent the application of Philippine labor laws and'regulations to the subject matter of this
case, i.e., the employer-employee relationship between petitioner PIA and private respondents. We have already
pointed out that the relationship is much affected with public interest and that the otherwise applicable Philippine
laws and regulations cannot be rendered illusory by the parties agreeing upon some other law to govern their
relationship. . . . Under these circumstances, paragraph 10 of the employment agreement cannot be given effect so
as to oust Philippine agencies and courts of the jurisdiction vested upon them by Philippine law.84 (Emphasis
supplied)

As the present dispute relates to (what the respondents allege to be) the illegal termination of respondents' employment, this case
is immutably a matter of public interest and public policy. Consistent with clear pronouncements in law and jurisprudence, Philippine
laws properly find application in and govern this case. 'Moreover, as this premise for Saudia's insistence on the application forum
non conveniens has been shattered, it follows that Philippine tribunals may properly assume jurisdiction over the present
controversy. Philippine jurisprudence provides ample illustrations of when a court's renunciation of jurisdiction on account of forum
non conveniens is proper or improper.'

In Philsec Investment Corporation v. Court of Appeals,85 this court noted that the trial court failed to consider that one of the
plaintiffs was a domestic corporation, that one of the defendants was a Filipino, and that it was the extinguishment of the latter's
debt that was the object of the transaction subject of the litigation. Thus, this court held, among others, that the trial court's refusal
to assume jurisdiction was not justified by forum non conveniens and remanded the case to the trial court.

In Raytheon International, Inc. v. Rouzie, Jr.,86 this court sustained the trial court's assumption of jurisdiction considering that the
trial court could properly enforce judgment on the petitioner which was a foreign corporation licensed to do business in the
Philippines.

In Pioneer International, Ltd. v. Guadiz, Jr.,87 this court found no reason to disturb the trial court's assumption of jurisdiction over a
case in which, as noted by the trial court, "it is more convenient to hear and decide the case in the Philippines because Todaro [the
plaintiff] resides in the Philippines and the contract allegedly breached involve[d] employment in the Philippines."88

In Pacific Consultants International Asia, Inc. v. Schonfeld,89 this court held that the fact that the complainant in an illegal dismissal
case was a Canadian citizen and a repatriate did not warrant the application of forum non conveniens considering that: (1) the
Labor Code does not include forum non conveniens as a ground for the dismissal of a complaint for illegal dismissal; (2) the
propriety of dismissing a case based on forum non conveniens requires a factual determination; and (3) the requisites for
assumption of jurisdiction as laid out in Bank of America, NT&SA90 were all satisfied.

In contrast, this court ruled in The Manila Hotel Corp. v. National Labor Relations Commission91 that the National Labor Relations
Q Commission was a seriously inconvenient forum. In that case, private respondent Marcelo G. Santos was working in the
Sultanate of Oman when he received a letter from Palace Hotel recruiting him for employment in Beijing, China. Santos accepted
the offer. Subsequently, however, he was released from employment supposedly due to business reverses arising from political
upheavals in China (i.e., the Tiananmen Square incidents of 1989). Santos later filed a Complaint for illegal dismissal impleading
Palace Hotel's General Manager, Mr. Gerhard Schmidt, the Manila Hotel International Company Ltd. (which was, responsible for
training Palace Hotel's personnel and staff), and the Manila Hotel Corporation (which owned 50% of Manila Hotel International
Company Ltd.'s capital stock).

In ruling against the National Labor Relations Commission's exercise of jurisdiction, this court noted that the main aspects of the
case transpired in two (2) foreign jurisdictions, Oman and China, and that the case involved purely foreign elements. Specifically,
Santos was directly hired by a foreign employer through correspondence sent to Oman. Also, the proper defendants were neither
Philippine nationals nor engaged in business in the Philippines, while the main witnesses were not residents of the Philippines.
Likewise, this court noted that the National Labor Relations Commission was in no position to conduct the following: first, determine
the law governing the employment contract, as it was entered into in foreign soil; second, determine the facts, as Santos'
employment was terminated in Beijing; and third, enforce its judgment, since Santos' employer, Palace Hotel, was incorporated
under the laws of China and was not even served with summons.

Contrary to Manila Hotel, the case now before us does not entail a preponderance of linkages that favor a foreign jurisdiction.

Here, the circumstances of the parties and their relation do not approximate the circumstances enumerated in Puyat,92 which this
court recognized as possibly justifying the desistance of Philippine tribunals from exercising jurisdiction.

First, there is no basis for concluding that the case can be more conveniently tried elsewhere. As established earlier, Saudia is
doing business in the Philippines. For their part, all four (4) respondents are Filipino citizens maintaining residence in the
Philippines and, apart from their previous employment with Saudia, have no other connection to the Kingdom of Saudi Arabia. It
would even be to respondents' inconvenience if this case were to be tried elsewhere.

Second, the records are bereft of any indication that respondents filed their Complaint in an effort to engage in forum shopping or to
vex and inconvenience Saudia.

Third, there is no indication of "unwillingness to extend local judicial facilities to non-residents or aliens."93That Saudia has
managed to bring the present controversy all the way to this court proves this.

Fourth, it cannot be said that the local judicial machinery is inadequate for effectuating the right sought to be maintained. Summons
was properly served on Saudia and jurisdiction over its person was validly acquired.

Lastly, there is not even room for considering foreign law. Philippine law properly governs the present dispute.

As the question of applicable law has been settled, the supposed difficulty of ascertaining foreign law (which requires the
application of forum non conveniens) provides no insurmountable inconvenience or special circumstance that will justify depriving
Philippine tribunals of jurisdiction.

Even if we were to assume, for the sake of discussion, that it is the laws of Saudi Arabia which should apply, it does not follow that
Philippine tribunals should refrain from exercising jurisdiction. To. recall our pronouncements in Puyat,94 as well as in Bank of
America, NT&SA,95 it is not so much the mere applicability of foreign law which calls into operation forum non conveniens. Rather,
what justifies a court's desistance from exercising jurisdiction is "[t]he difficulty of ascertaining foreign law"96 or the inability of a
"Philippine Court to make an intelligent decision as to the law[.]"97

Consistent with lex loci intentionis, to the extent that it is proper and practicable (i.e., "to make an intelligent decision"98), Philippine
tribunals may apply the foreign law selected by the parties. In fact, (albeit without meaning to make a pronouncement on the
accuracy and reliability of respondents' citation) in this case, respondents themselves have made averments as to the laws of
Saudi Arabia. In their Comment, respondents write:

Under the Labor Laws of Saudi Arabia and the Philippines[,] it is illegal and unlawful to terminate the employment of
any woman by virtue of pregnancy. The law in Saudi Arabia is even more harsh and strict [sic] in that no employer
can terminate the employment of a female worker or give her a warning of the same while on Maternity Leave, the
specific provision of Saudi Labor Laws on the matter is hereto quoted as follows:

"An employer may not terminate the employment of a female worker or give her a warning of the same
while on maternity leave." (Article 155, Labor Law of the Kingdom of Saudi Arabia, Royal Decree No.
M/51.)99

All told, the considerations for assumption of jurisdiction by Philippine tribunals as outlined in Bank of America, NT&SA100 have
been satisfied. First, all the parties are based in the Philippines and all the material incidents transpired in this jurisdiction. Thus, the
parties may conveniently seek relief from Philippine tribunals. Second, Philippine tribunals are in a position to make an intelligent
decision as to the law and the facts. Third, Philippine tribunals are in a position to enforce their decisions. There is no compelling
basis for ceding jurisdiction to a foreign tribunal. Quite the contrary, the immense public policy considerations attendant to this case
behoove Philippine tribunals to not shy away from their duty to rule on the case.

IV

Respondents were illegally terminated.

In Bilbao v. Saudi Arabian Airlines,101 this court defined voluntary resignation as "the voluntary act of an employee who is in a
situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no
other choice but to dissociate oneself from employment. It is a formal pronouncement or relinquishment of an office, with the
intention of relinquishing the office accompanied by the act of relinquishment."102 Thus, essential to the act of resignation is
voluntariness. It must be the result of an employee's exercise of his or her own will.

In the same case of Bilbao, this court advanced a means for determining whether an employee resigned voluntarily:

As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and
after the alleged resignation must be considered in determining whether he or she, in fact, intended, to sever his or
her employment.103 (Emphasis supplied)

On the other hand, constructive dismissal has been defined as "cessation of work because 'continued employment is rendered
impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay' and other benefits."104

In Penaflor v. Outdoor Clothing Manufacturing Corporation,105 constructive dismissal has been described as tantamount to
"involuntarily [sic] resignation due to the harsh, hostile, and unfavorable conditions set by the employer."106 In the same case, it
was noted that "[t]he gauge for constructive dismissal is whether a reasonable person in the employee's position would feel
compelled to give up his employment under the prevailing circumstances."107

Applying the cited standards on resignation and constructive dismissal, it is clear that respondents were constructively dismissed.
Hence, their termination was illegal.

The termination of respondents' employment happened when they were pregnant and expecting to incur costs on account of child
delivery and infant rearing. As noted by the Court of Appeals, pregnancy is a time when they need employment to sustain their
families.108 Indeed, it goes against normal and reasonable human behavior to abandon one's livelihood in a time of great financial
need.

It is clear that respondents intended to remain employed with Saudia. All they did was avail of their maternity leaves. Evidently, the
very nature of a maternity leave means that a pregnant employee will not report for work only temporarily and that she will resume
the performance of her duties as soon as the leave allowance expires.

It is also clear that respondents exerted all efforts to' remain employed with Saudia. Each of them repeatedly filed appeal letters (as
much as five [5] letters in the case of Rebesencio109) asking Saudia to reconsider the ultimatum that they resign or be terminated
along with the forfeiture of their benefits. Some of them even went to Saudia's office to personally seek reconsideration.110

Respondents also adduced a copy of the "Unified Employment Contract for Female Cabin Attendants."111This contract deemed
void the employment of a flight attendant who becomes pregnant and threatened termination due to lack of medical fitness.112 The
threat of termination (and the forfeiture of benefits that it entailed) is enough to compel a reasonable person in respondents'
position to give up his or her employment.

Saudia draws attention to how respondents' resignation letters were supposedly made in their own handwriting. This minutia fails to
surmount all the other indications negating any voluntariness on respondents' part. If at all, these same resignation letters are proof
of how any supposed resignation did not arise from respondents' own initiative. As earlier pointed out, respondents' resignations
were executed on Saudia's blank letterheads that Saudia had provided. These letterheads already had the word "RESIGNATION"
typed on the subject portion of their respective headings when these were handed to respondents.

"In termination cases, the burden of proving just or valid cause for dismissing an employee rests on the employer."114 In this case,
Saudia makes much of how respondents supposedly completed their exit interviews, executed quitclaims, received their separation
pay, and took more than a year to file their Complaint.115 If at all, however, these circumstances prove only the fact of their
occurrence, nothing more. The voluntariness of respondents' departure from Saudia is non sequitur.

Mere compliance with standard procedures or processes, such as the completion of their exit interviews, neither negates
compulsion nor indicates voluntariness.

As with respondent's resignation letters, their exit interview forms even support their claim of illegal dismissal and militates against
Saudia's arguments. These exit interview forms, as reproduced by Saudia in its own Petition, confirms the unfavorable conditions
as regards respondents' maternity leaves. Ma. Jopette's and Loraine's exit interview forms are particularly telling:

a. From Ma. Jopette's exit interview form:

3. In what respects has the job met or failed to meet your expectations?

THE SUDDEN TWIST OF DECISION REGARDING THE MATERNITY LEAVE.116

b. From Loraine's exit interview form:

1. What are your main reasons for leaving Saudia? What company are you joining?

xxx xxx xxx

Others

CHANGING POLICIES REGARDING MATERNITY LEAVE (PREGNANCY)

As to respondents' quitclaims, in Phil. Employ Services and Resources, Inc. v. Paramio,118 this court noted that "[i]f (a) there is
clear proof that the waiver was wangled from an unsuspecting or gullible person; or (b) the terms of the settlement are
unconscionable, and on their face invalid, such quitclaims must be struck down as invalid or illegal."119 Respondents executed
their quitclaims after having been unfairly given an ultimatum to resign or be terminated (and forfeit their benefits).

Having been illegally and unjustly dismissed, respondents are entitled to full backwages and benefits from the time of their
termination until the finality of this Decision. They are likewise entitled to separation pay in the amount of one (1) month's salary for
every year of service until the formality of this Decision, with a fraction of a year of at least six (6) months being counted as one (1)
whole year.

Moreover, "[m]oral damages are awarded in termination cases where the employee's dismissal was attended by bad faith, malice
or fraud, or where it constitutes an act oppressive to labor, or where it was done in a manner contrary to morals, good customs or
public policy."120 In this case, Saudia terminated respondents' employment in a manner that is patently discriminatory and running
afoul of the public interest that underlies employer-employee relationships. As such, respondents are entitled to moral damages.

To provide an "example or correction for the public good"121 as against such discriminatory and callous schemes, respondents are
likewise entitled to exemplary damages.

In a long line of cases, this court awarded exemplary damages to illegally dismissed employees whose "dismissal[s were] effected
in a wanton, oppressive or malevolent manner."122 This court has awarded exemplary damages to employees who were
terminated on such frivolous, arbitrary, and unjust grounds as membership in or involvement with labor unions,123 injuries
sustained in the course of employment,124development of a medical condition due to the employer's own violation of the
employment contract,125and lodging of a Complaint against the employer.126 Exemplary damages were also awarded to
employees who were deemed illegally dismissed by an employer in an attempt to evade compliance with statutorily established
employee benefits.127 Likewise, employees dismissed for supposedly just causes, but in violation of due process requirements,
were awarded exemplary damages.128

These examples pale in comparison to the present controversy. Stripped of all unnecessary complexities, respondents were
dismissed for no other reason than simply that they were pregnant. This is as wanton, oppressive, and tainted with bad faith as any
reason for termination of employment can be. This is no ordinary case of illegal dismissal. This is a case of manifest gender
discrimination. It is an affront not only to our statutes and policies on employees' security of tenure, but more so, to the
Constitution's dictum of fundamental equality between men and women.129

The award of exemplary damages is, therefore, warranted, not only to remind employers of the need to adhere to the requirements
of procedural and substantive due process in termination of employment, but more importantly, to demonstrate that gender
discrimination should in no case be countenanced.

Having been compelled to litigate to seek reliefs for their illegal and unjust dismissal, respondents are likewise entitled to attorney's
fees in the amount of 10% of the total monetary award.130

VI

Petitioner Brenda J. Betia may not be held liable.

A corporation has a personality separate and distinct from those of the persons composing it. Thus, as a rule, corporate directors
and officers are not liable for the illegal termination of a corporation's employees. It is only when they acted in bad faith or with
malice that they become solidarity liable with the corporation.131

In Ever Electrical Manufacturing, Inc. (EEMI) v. Samahang Manggagawa ng Ever Electrical,132 this court clarified that "[b]ad faith
does not connote bad judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of
wrong; it means breach of a known duty through some motive or interest or ill will; it partakes of the nature of fraud."133

Respondents have not produced proof to show that Brenda J. Betia acted in bad faith or with malice as regards their termination.
Thus, she may not be held solidarity liable with Saudia.

WHEREFORE, with the MODIFICATIONS that first, petitioner Brenda J. Betia is not solidarity liable with petitioner Saudi Arabian
Airlines, and second, that petitioner Saudi Arabian Airlines is liable for moral and exemplary damages. The June 16, 2011 Decision
and the September 13, 2011 Resolution of the Court of Appeals in CA-G.R. SP. No. 113006 are hereby AFFIRMED in all other
respects. Accordingly, petitioner Saudi Arabian Airlines is ordered to pay respondents:

(1) Full backwages and all other benefits computed from the respective dates in which each of the respondents were illegally
terminated until the finality of this Decision;

(2) Separation pay computed from the respective dates in which each of the respondents commenced employment until the
finality of this Decision at the rate of one (1) month's salary for every year of service, with a fraction of a year of at least six
(6) months being counted as one (1) whole year;

(3) Moral damages in the amount of P100,000.00 per respondent;

(4) Exemplary damages in the amount of P200,000.00 per respondent; and

(5) Attorney's fees equivalent to 10% of the total award.

Interest of 6% per annum shall likewise be imposed on the total judgment award from the finality of this Decision until full
satisfaction thereof.

This case is REMANDED to the Labor Arbiter to make a detailed computation of the amounts due to respondents which petitioner
Saudi Arabian Airlines should pay without delay.

SO ORDERED.

G.R. No. 122191 October 8, 1998

SAUDI ARABIAN AIRLINES, petitioner,

vs.
COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch 89,
Regional Trial Court of Quezon City, respondents.

QUISUMBING, J.:

This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul and set aside the Resolution dated September
1

27, 1995 and the Decision dated April 10, 1996 of the Court of Appeals in CA-G.R. SP No. 36533, and the Orders dated August
2 3 4 5

29, 1994 and February 2, 1995 that were issued by the trial court in Civil Case No. Q-93-18394.
6 7 8

The pertinent antecedent facts which gave rise to the instant petition, as stated in the questioned Decision , are as follows:
9

On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for its airlines based in Jeddah,
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 at the 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. 10

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.
11

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
12

cause.

On November 23, 1993, Morada filed a Complaint for damages against SAUDIA, and Khaled Al-Balawi ("Al-Balawi"), its country
13

manager.

On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss which raised the following grounds, to wit: (1) that the
14

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.

On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss) . Saudia filed a reply thereto on March 3, 1994.
15 16

On June 23, 1994, Morada filed an Amended Complaint wherein Al-Balawi was dropped as party defendant. On August 11, 1994,
17

Saudia filed its Manifestation and Motion to Dismiss Amended Complaint . 18

The trial court issued an Order dated August 29, 1994 denying the Motion to Dismiss Amended Complaint filed by Saudia.
19

From the Order of respondent Judge denying the Motion to Dismiss, SAUDIA filed on September 20, 1994, its Motion for
20

Reconsideration of the Order dated August 29, 1994. It alleged that the trial court has no jurisdiction to hear and try the case on
21

the basis of Article 21 of the Civil Code, since the proper law applicable is the law of the Kingdom of Saudi Arabia. On October 14,
1994, Morada filed her Opposition (To Defendant's Motion for Reconsideration).
22

In the Reply filed with the trial court on October 24, 1994, SAUDIA alleged that since its Motion for Reconsideration raised lack of
23

jurisdiction as its cause of action, the Omnibus Motion Rule does not apply, even if that ground is raised for the first time on appeal.
Additionally, SAUDIA alleged that the Philippines does not have any substantial interest in the prosecution of the instant case, and
hence, without jurisdiction to adjudicate the same.

Respondent Judge subsequently issued another Order dated February 2, 1995, denying SAUDIA's Motion for Reconsideration.
24

The pertinent portion of the assailed Order reads as follows:

Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines filed, thru counsel, on September
20, 1994, and the Opposition thereto of the plaintiff filed, thru counsel, on October 14, 1994, as well as the Reply
therewith of defendant Saudi Arabian Airlines filed, thru counsel, on October 24, 1994, considering that a perusal
of the plaintiffs Amended Complaint, which is one for the recovery of actual, moral and exemplary damages plus
attorney's fees, upon the basis of the applicable Philippine law, Article 21 of the New Civil Code of the
Philippines, is, clearly, within the jurisdiction of this Court as regards the subject matter, and there being nothing
new of substance which might cause the reversal or modification of the order sought to be reconsidered, the
motion for reconsideration of the defendant, is DENIED.

SO ORDERED. 25

Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for Issuance of Writ of
Preliminary Injunction and/or Temporary Restraining Order with the Court of Appeals.
26

Respondent Court of Appeals promulgated a Resolution with Temporary Restraining Order dated February 23, 1995, prohibiting
27

the respondent Judge from further conducting any proceeding, unless otherwise directed, in the interim.
In another Resolution promulgated on September 27, 1995, now assailed, the appellate court denied SAUDIA's Petition for the
28

Issuance of a Writ of Preliminary Injunction dated February 18, 1995, to wit:

The Petition for the Issuance of a Writ of Preliminary Injunction is hereby DENIED, after considering the Answer,
with Prayer to Deny Writ of Preliminary Injunction (Rollo, p. 135) the Reply and Rejoinder, it appearing that herein
petitioner is not clearly entitled thereto (Unciano Paramedical College, et. Al., v. Court of Appeals, et. Al., 100335,
April 7, 1993, Second Division).

SO ORDERED.

On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition for Review with Prayer for Temporary
29

Restraining Order dated October 13, 1995.

However, during the pendency of the instant Petition, respondent Court of Appeals rendered the Decision dated April 10, 1996,
30

now also assailed. It ruled that the Philippines is an appropriate forum considering that the Amended Complaint's basis for recovery
of damages is Article 21 of the Civil Code, and thus, clearly within the jurisdiction of respondent Court. It further held
that certiorari is not the proper remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to trial,
and in case of an adverse ruling, find recourse in an appeal.

On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary Restraining Order dated April 30,
31

1996, given due course by this Court. After both parties submitted their Memoranda, the instant case is now deemed submitted
32

for decision.

Petitioner SAUDIA raised the following issues:

The trial court has no jurisdiction to hear and try Civil Case No. Q-93-18394 based on Article 21 of the New Civil
Code since the proper law applicable is the law of the Kingdom of Saudi Arabia inasmuch as this case involves
what is known in private international law as a "conflicts problem". Otherwise, the Republic of the Philippines will
sit in judgment of the acts done by another sovereign state which is abhorred.

II

Leave of court before filing a supplemental pleading is not a jurisdictional requirement. Besides, the matter as to
absence of leave of court is now moot and academic when this Honorable Court required the respondents to
comment on petitioner's April 30, 1996 Supplemental Petition For Review With Prayer For A Temporary
Restraining Order Within Ten (10) Days From Notice Thereof. Further, the Revised Rules of Court should be
construed with liberality pursuant to Section 2, Rule 1 thereof.

III

Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP NO. 36533 entitled "Saudi
Arabian Airlines v. Hon. Rodolfo A. Ortiz, et al." and filed its April 30, 1996 Supplemental Petition For Review With
Prayer For A Temporary Restraining Order on May 7, 1996 at 10:29 a.m. or within the 15-day reglementary
period as provided for under Section 1, Rule 45 of the Revised Rules of Court. Therefore, the decision in CA-
G.R. SP NO. 36533 has not yet become final and executory and this Honorable Court can take cognizance of
this case. 33

From the foregoing factual and procedural antecedents, the following issues emerge for our resolution:

I.

WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING THAT THE REGIONAL TRIAL COURT
OF QUEZON CITY HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO. Q-93-18394 ENTITLED
"MILAGROS P. MORADA V. SAUDI ARABIAN AIRLINES".

II.

WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING THAT IN THIS CASE PHILIPPINE LAW
SHOULD GOVERN.

Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the outset. It maintains that private respondent's
claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign element qualifies
the instant case for the application of the law of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule.
34
On the other hand, private respondent contends that since her Amended Complaint is based on Articles 19 and 21 of the Civil
35 36

Code, then the instant case is properly a matter of domestic law. 37

Under the factual antecedents obtaining in this case, there is no dispute that the interplay of events occurred in two states, the
Philippines and Saudi Arabia.

As stated by private respondent in her Amended Complaint dated June 23, 1994:
38

2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign airlines corporation doing business in the
Philippines. It may be served with summons and other court processes at Travel Wide Associated Sales (Phils.).
Inc., 3rd Floor, Cougar Building, 114 Valero St., Salcedo Village, Makati, Metro Manila.

xxx xxx xxx

6. 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 SAUDIA. In September 1990, defendant SAUDIA transferred plaintiff to Manila.

7. On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind her, her
superiors reauested 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.

8. One year and a half later or on June 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. Meniewy, 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 sigh 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.

9. 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 manger,
Aslam Saleemi, that the investigation was routinary and that it posed no danger to her.

10. 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 that 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.

11. 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; (3) socializing with the male crew, in
contravention of Islamic tradition.

12. Because SAUDIA refused to lend her a hand in the case, plaintiff sought the help of the Philippines Embassy
in Jeddah. The latter helped her pursue an appeal from the decision of the court. To pay for her upkeep, she
worked on the domestic flights of defendant SAUDIA while, ironically, Thamer and Allah freely served the
international flights.
39

Where the factual antecedents satisfactorily establish the existence of a foreign element, we agree with petitioner that the problem
herein 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. 40

The forms in which this foreign element may appear are many. The foreign element may simply consist in the fact that one of the
41

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. 42

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.

We thus find private respondent's assertion that the case is purely domestic, imprecise. A conflicts problem presents itself here,
and the question of jurisdiction confronts the court a quo.
43

After a careful study of the private respondent's Amended Complaint, and the Comment thereon, we note that she aptly
44

predicated her cause of action on Articles 19 and 21 of the New Civil Code.

On one hand, Article 19 of the New Civil Code provides:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice give
everyone his due and observe honesty and good faith.

On the other hand, Article 21 of the New Civil Code provides:

Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for damages.

Thus, in Philippine National Bank (PNB) vs. Court of Appeals, this Court held that:
45

The aforecited provisions on human relations were intended to expand the concept of torts in this jurisdiction by
granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to
specifically provide in the statutes.

Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions. Thus, we agree with private
respondent's assertion that 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 we find that the
46 47

Regional Trial Court (RTC) of Quezon City possesses jurisdiction over the subject matter of the suit. Its authority to try and hear
48

the case is provided for under Section 1 of Republic Act No. 7691, to wit:

Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980",
is hereby amended to read as follows:

Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise exclusive jurisdiction:

xxx xxx xxx

(8) In all other cases in which demand, exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses, and cots or the value of the property in controversy
exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in Metro Manila,
where the demand, exclusive of the above-mentioned items exceeds Two hundred Thousand
pesos (P200,000.00). (Emphasis ours)

xxx xxx xxx

And following Section 2 (b), Rule 4 of the Revised Rules of Court — the venue, Quezon City, is appropriate:

Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial Court]

(a) xxx xxx xxx

(b) Personal actions. — All other actions may be commenced and tried where the defendant or any of the
defendants resides or may be found, or where the plaintiff or any of the plaintiff resides, at the election of the
plaintiff.

Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor of the RTC Quezon City assuming
jurisdiction. Paramount is the private interest of the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative
advantages and obstacles to a fair trial are equally important. Plaintiff may not, by choice of an inconvenient forum, "vex", "harass",
or "oppress" the defendant, e.g. by 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. 49
Weighing the relative claims of the parties, the court a quo found it best to hear the case in the Philippines. Had it refused to take
cognizance of the case, it would be forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in the Kingdom
of Saudi Arabia 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 the plaintiff (now private respondent) should be upheld.

Similarly, the trial court also possesses jurisdiction over the persons of the parties herein. By filing her Complaint and Amended
Complaint with the trial court, private respondent has voluntary submitted herself to the jurisdiction of the court.

The records show that petitioner SAUDIA has filed several motions praying for the dismissal of Morada's Amended Complaint.
50

SAUDIA also filed an Answer In Ex Abundante Cautelam dated February 20, 1995. What is very patent and explicit from the
motions filed, is that SAUDIA prayed for other reliefs under the premises. Undeniably, petitioner SAUDIA has effectively submitted
to the trial court's jurisdiction by praying for the dismissal of the Amended Complaint on grounds other than lack of jurisdiction.

As held by this Court in Republic vs. Ker and Company, Ltd.: 51

We observe that the motion to dismiss filed on April 14, 1962, aside from disputing the lower court's jurisdiction
over defendant's person, prayed for dismissal of the complaint on the ground that plaintiff's cause of action has
prescribed. By interposing such second ground in its motion to dismiss, Ker and Co., Ltd. availed of an affirmative
defense on the basis of which it prayed the court to resolve controversy in its favor. For the court to validly decide
the said plea of defendant Ker & Co., Ltd., it necessarily had to acquire jurisdiction upon the latter's person, who,
being the proponent of the affirmative defense, should be deemed to have abandoned its special appearance
and voluntarily submitted itself to the jurisdiction of the court.

Similarly, the case of De Midgely vs. Ferandos, held that;

When the appearance is by motion for the purpose of objecting to the jurisdiction of the court over the person, it
must be for the sole and separate purpose of objecting to the jurisdiction of the court. If his motion is for any other
purpose than to object to the jurisdiction of the court over his person, he thereby submits himself to the
jurisdiction of the court. A special appearance by motion made for the purpose of objecting to the jurisdiction of
the court over the person will be held to be a general appearance, if the party in said motion should, for example,
ask for a dismissal of the action upon the further ground that the court had no jurisdiction over the subject
matter. 52

Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of Quezon City. Thus, we find that the trial court has
jurisdiction over the case and that its exercise thereof, justified.

As to the choice of applicable law, we note that 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. 53

Several theories have been propounded in order to identify the legal system that should ultimately control. Although ideally, all
choice-of-law theories should intrinsically advance both notions of justice and predictability, they do not always do so. The forum is
then faced with the problem of deciding which of these two important values should be stressed. 54

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
55

law.56

Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact. An essential element of
57

conflict rules is the indication of a "test" or "connecting factor" or "point of contact". Choice-of-law rules invariably consist of a
factual relationship (such as property right, contract claim) 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 wrongdoing. 58

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:
59

(1) The nationality of a person, his domicile, his residence, his place of sojourn, 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. In particular, the lex situs is
decisive when real rights are involved;
 (4) 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;

(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 the law that should govern their agreement, thelex loci intentionis;

(7) 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

(8) the flag of a 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. (Emphasis ours.)
60

After a careful study of the pleadings on record, including allegations in the Amended Complaint deemed admitted for purposes of
the motion to dismiss, we are convinced that there is reasonable basis for private respondent's assertion that although she was
already working in Manila, petitioner brought her to Jeddah on the pretense that she would merely testify in an investigation of the
charges she made against the two SAUDIA crew members for the attack on her person while they were in Jakarta. As it turned out,
she was the one made to face trial for very serious charges, including adultery and violation of Islamic laws and tradition.

There is likewise logical basis on record for the claim that the "handing over" or "turning over" of the person of private respondent to
Jeddah officials, petitioner may have acted beyond its duties as employer. Petitioner's purported act contributed to and amplified or
even proximately caused additional humiliation, misery and suffering of private respondent. Petitioner thereby allegedly facilitated
the arrest, detention and prosecution of private respondent under the guise of petitioner's authority as employer, taking advantage
of the trust, confidence and faith she reposed upon it. As purportedly found by the Prince of Makkah, the alleged conviction and
imprisonment of private respondent was wrongful. But these capped the injury or harm allegedly inflicted upon her person and
reputation, for which petitioner could be liable as claimed, to provide compensation or redress for the wrongs done, once duly
proven.

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 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 totality of the alleged injury to the person, reputation, social standing and human rights of 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
61

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. 62

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
63

petitioner), in our view, has been properly established.

Prescinding from this premise that the Philippines is the situs of the tort complained of and the place "having the most interest in
the problem", we find, by way of recapitulation, that the Philippine law on tort liability should have paramount application to and
control in the resolution of the legal issues arising out of this case. Further, we hold that the respondent Regional Trial Court has
jurisdiction over the parties and the subject matter of the complaint; the appropriate venue is in Quezon City, which could properly
apply Philippine law. Moreover, we find untenable petitioner's insistence that "[s]ince private respondent instituted this suit, she has
the burden of pleading and proving the applicable Saudi law on the matter." As aptly said by private respondent, she has "no
64

obligation to plead and prove the law of the Kingdom of Saudi Arabia since her cause of action is based on Articles 19 and 21" of
the Civil Code of the Philippines. In her Amended Complaint and subsequent pleadings, she never alleged that Saudi law should
govern this case. And as correctly held by the respondent appellate court, "considering that it was the petitioner who was invoking
65

the applicability of the law of Saudi Arabia, then the burden was on it [petitioner] to plead and to establish what the law of Saudi
Arabia is".66

Lastly, no error could be imputed to the respondent appellate court in upholding the trial court's denial of defendant's (herein
petitioner's) motion to dismiss the case. Not only was jurisdiction in order and venue properly laid, but appeal after trial was
obviously available, and expeditious trial itself indicated by the nature of the case at hand. Indubitably, the Philippines is the state
intimately concerned with the ultimate outcome of the case below, not just for the benefit of all the litigants, but also for the
vindication of the country's system of law and justice in a transnational setting. With these guidelines in mind, the trial court must
proceed to try and adjudge the case in the light of relevant Philippine law, with due consideration of the foreign element or elements
involved. Nothing said herein, of course, should be construed as prejudging the results of the case in any manner whatsoever.

WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No. Q-93-18394 entitled "Milagros P. Morada vs.
Saudi Arabia Airlines" is hereby REMANDED to Regional Trial Court of Quezon City, Branch 89 for further proceedings.

SO ORDERED.