Saudi Arabian Airlines v.
CA raised the ground that the court has no jurisdiction,
Facts:
Saudi Arabian Airlines (SAUDIA) hired Morada as a
Flight Attendant for its airlines based in Jeddah,
Saudi Arabia. While on a lay-over in Jakarta, Morada
went to a disco with fellow crew members Thamer &
Allah, both Saudi nationals. Because it was almost
morning when they returned to their hotels, they
agreed to have breakfast together at the room of
Thamer. In which Allah left on some pretext. Thamer
attempted to rape Morada but she was rescued by
hotel personnel when they heard her cries for help.
Indonesian police came and arrested Thamer and
Allah, the latter as an accomplice.
Morada refused to cooperate when SAUDIA’s Legal
Officer and its base manager tried to negotiate the
immediate release of the detained crew members
with Jakarta police. Through the intercession of Saudi
Arabian government, Thamer and Allah were
deported and, eventually, again put in service by
SAUDIA. But Morada was transferred to Manila. One
year and a half year later, Morada was again ordered
to see SAUDIA’s Chief Legal Officer. Instead, she was
brought to a Saudi court where she was asked to sign
a blank document, which turned out to be a notice
to her to appear in court. Monada returned to
Manila.
The next time she was escorted by SAUDIA’s legal
officer to court, the judge rendered a decision
against her sentencing her to 5 months
imprisonment and to 286 lashes. Apparently, she was
tried by the court which found her 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.
After denial by SAUDIA, Morada sought help from
Philippine Embassy during the appeal. Prince of
Makkah dismissed the case against her. SAUDIA fired
her without notice. Morada filed a complaint for
damages against SAUDIA, with the RTC of
QC. SAUDIA filed Omnibus Motion to Dismiss which
among others which was denied.
ISSUE: Whether RTC of QC has jurisdiction to hear
and try the case
HELD:
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.
On the other hand, private respondent contends that
since her Amended Complaint is based on Articles
19 and 21 of the Civil Code, then the instant case is
properly a matter of domestic law.
Where the facts 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 2 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.
The forms in which this foreign element may appear
are many. The foreign element may simply consist in
the fact that one of the parties to a contract is an
alien or has a foreign domicile, or that a contract
between nationals of one State involves properties
situated in another State. In other cases, the foreign
element may assume a complex form.
In the instant case, the foreign element consisted in
the fact that Morada is a resident Philippine national,
and that SAUDIA is a resident foreign corporation.
Also, by virtue of the employment of Morada with
the 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.
After a careful study of the private respondent's
Amended Complaint, and the Comment thereon, we
note that she aptly 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
Based on the allegations in the Amended Complaint,
the RTC of QC has jurisdiction and Philippine law
should govern. Section 19 of BP 129 reads as
follows:
Sec. 19. Jurisdiction in Civil Cases. - Regional Trial
Courts shall exercise exclusive jurisdiction:
(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 P100,000.00 or, in
such other cases in Metro Manila, where the
demand, exclusive of the above-mentioned items
exceeds P200,000.00.
And following Section 2 (b), Rule 4 of the Revised
Rules of Court - the venue, Quezon City, is
appropriate:
Sec. 2 Venue in Regional Trial Court
(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
QC assuming jurisdiction. Paramount is the private
interest of the litigant. 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 Morada
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. By filing a
complaint, Morada has voluntarily submitted to the
jurisdiction of the court. By filing several motions and
praying for reliefs (such as dismissal), SAUDIA has
effectively submitted to the trial court’s jurisdiction.
Notes:
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." 55 The purpose of "characterization" is to
enable the forum to select the proper law.
Our starting point of analysis here is not a legal
relation, but a factual situation, event, or operative
fact. An essential element of 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.
KAZUHIRO HASEGAWA and NIPPON ENGINEERING
CONSULTANTS CO., LTD., vs. MINORU KITAMURA
G.R. No. 149177 November 23, 2007
FACTS:
Nippon Engineering Consultants (Nippon), a
Japanese consultancy firm providing technical and
management support in the infrastructure projects
national is permanently residing in the Philippines.
The agreement provides that Kitamaru was to extend
professional services to Nippon for a year. Nippon
assigned Kitamaru to work as the project manager of
the Southern Tagalog Access Road (STAR) project.
When the STAR project was near completion, DPWH
engaged the consultancy services of Nippon, this
time for the detailed engineering & construction
supervision of the Bongabon-Baler Road
Improvement (BBRI) Project. Kitamaru was named as
the project manager in the contract.
Hasegawa, Nippon‘s general manager for its
International Division, informed Kitamaru 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.
Kitamaru demanded that he be assigned to the BBRI
project. Nippon insisted that Kitamaru‘s contract was
for a fixed term that had expired. Kitamaru then filed
for specific performance & damages w/ the RTC of
Lipa City. Nippon filed a MTD.
Nippon‘s contention: The ICA had been perfected in
Japan and executed by, and between Japanese
nationals. Thus, the RTC of Lipa City has no
jurisdiction. The claim for improper pre-termination
of Kitamaru‘s ICA could only be heard & ventilated in
the proper courts of Japan following the principles of
lex loci celebrationis & lex contractus.
The RTC denied the motion to dismiss. The CA ruled
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. It held that the RTC was correct in
applying the principle of lex loci solutionis.
ISSUE: Whether or not the subject matter jurisdiction
of Philippine courts in civil cases for specific
performance & 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.
HELD: NO. In the judicial resolution of conflicts
problems, 3 consecutive phases are involved:
jurisdiction, choice of law, and recognition and
enforcement of judgments. Jurisdiction & choice of
law are 2 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. In this case, only the
1st phase is at issue — jurisdiction. Jurisdiction,
however, has various aspects. For a court to validly
exercise its power to adjudicate a controversy, it
must have jurisdiction over the plaintiff/petitioner,
over the defendant/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. In assailing the trial
court's jurisdiction herein, Nippon is 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. 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.
To succeed in its motion for the dismissal of an
action for lack of jurisdiction over the subject matter
of the claim, 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.
In the instant case, Nippon, in its MTD, does not
claim that the RTC is not properly vested by law with
jurisdiction to hear the subject controversy for a civil
case for specific performance & damages is one not
capable of pecuniary estimation & is properly
cognizable by the RTC of Lipa City. 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 or the law of the place
where a contract is made. The doctrine of lex
contractus or lex loci contractus means the ―law of
the place where a contract is executed or to be
performed.
It controls the nature, construction, and validity of
the contract and it may pertain to the law voluntarily
agreed upon by the parties or the law intended by
them either expressly or implicitly.
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. This rule takes
into account several contacts and evaluates them
according to their relative importance with respect
to the particular issue to be resolved. Since these 3
principles in conflict of laws make reference to the
law applicable to a dispute, they are rules proper for
the 2nd phase, the choice of law. They determine
which state's law is to be applied in resolving the
substantive issues of a conflicts problem. 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, Nippon‘s 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, 1st there should exist a conflict of laws
situation requiring the application of the conflict of
laws rules. 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. It should be noted that when a conflicts
case, one involving a foreign element, is brought
before a court or administrative agency, there are 3
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. 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.
Neither can the other ground raised, forum non
conveniens , be used to deprive the RTC of its
jurisdiction. 1st, it is not a proper basis for a motion
to dismiss because Sec. 1, Rule 16 of the Rules of
Court does not include it as a ground. 2nd, 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 RTC. In this case, the RTC
decided to assume jurisdiction. 3rd, 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.
SMALL v. UNITED STATES
Petitioner Small was convicted in a Japanese Court of
trying to smuggle firearms and ammunition into that
country. He served 5 years in prison and then
returned to the US, where he bought a gun. Federal
authorities subsequently charged Small under 18
U.S.C. § 922(g)(1), which forbids “any person …
convicted in any court … of a crime punishable by
imprisonment for a term exceeding 1 year … to …
possess … any firearm.” Small pleaded guilty while
reserving the right to challenge his conviction on the
ground that his earlier conviction, being foreign, fell
outside §922(g)(1)’s scope. The Federal District Court
and the Third Circuit rejected this argument.
Held: Section 922(g)(1)’s phrase “convicted in any
court” encompasses only domestic, not foreign,
convictions.
(a) In considering the scope of the phrase “convicted
in any court” it is appropriate to assume that
Congress had domestic concerns in mind. This
assumption is similar to the legal presumption that
Congress ordinarily intends its statutes to have
domestic, not extraterritorial, application. The
phrase “convicted in any court” describes one
necessary portion of the “gun possession” activity
that is prohibited as a matter of domestic law.
Moreover, because foreign convictions may include
convictions for conduct that domestic laws would
permit, e.g., for engaging in economic conduct that
our society might encourage, convictions from a legal
system that are inconsistent with American
understanding of fairness, and convictions for
conduct that domestic law punishes far less severely,
the key statutory phrase “convicted in any court of, a
crime punishable by imprisonment for a term
exceeding one year” somewhat less reliably
identifies dangerous individuals for the purposes of
U.S. law where foreign convictions, rather than
domestic convictions, are at issue. In addition, it is
difficult to read the statute as asking judges or
prosecutors to refine its definitional distinctions
where foreign convictions are at issue. To somehow
weed out inappropriate foreign convictions that
meet the statutory definition is not consistent with
the statute’s language; it is not easy for those not
versed in foreign laws to accomplish; and it would
leave those previously convicted in a foreign court
(say of economic crimes) uncertain about their legal
obligations. These considerations provide a
convincing basis for applying the ordinary
assumption about the reach of domestically oriented
statutes here. Thus, the Court assumes a
congressional intent that the phrase “convicted in
any court” applies domestically, not extraterritorially,
unless the statutory language, context, history, or
purpose shows the contrary.
(b) There is no convincing indication to the contrary
here. The statute’s language suggests no intent to
reach beyond domestic convictions. To the contrary,
if read to include foreign convictions, the statute’s
language creates anomalies. For example, in creating
an exception allowing gun possession despite a
conviction for an antitrust or business regulatory
crime, §921(a)(20)(A) speaks of “Federal or State”
antitrust or regulatory offenses. If the phrase
“convicted in any court” generally refers only to
domestic convictions, this language causes no
problem. But if the phrase includes foreign
convictions, the words “Federal or State” prevent the
exception from applying where a foreign antitrust or
regulatory conviction is at issue. Such illustrative
examples suggest that Congress did not consider
whether the generic phrase “convicted in any court”
applies to foreign convictions. Moreover, the
statute’s legislative history indicates no intent to
reach beyond domestic convictions. Although the
statutory purpose of keeping guns from those likely
to become a threat to society does offer some
support for reading §922(g)(1) to include foreign
convictions, the likelihood that Congress, at best,
paid no attention to the matter is reinforced by the
empirical fact that, according to the Government,
since 1968, there have fewer than a dozen instances
in which such a foreign conviction has served as a
predicate for a felon-in-possession prosecution.
PUYAT v. ZABARTE
Facts:
On January 24, 1994, Zabarte commenced to enforce
the money judgment rendered by the Superior Court
for the State of California on petitioner. On 18 March
1994, petitioner said that the said court had no
jurisdiction over the people involved. Respondent on
the other hand said that petitioner’s appeal is not
material. Petitioner maintained that that said
Judgment on Stipulations for Entry in Judgment was
obtained without the assistance of counsel and
without sufficient notice to him and therefore, was
rendered in violation of his constitutional rights to
substantial and procedural due process.
Respondent said that petitioner can no longer
question the judgment of the said court because he
failed to raise the issue of jurisdiction in his answer.
The RTC rendered judgment in favor of Zabarte. The
claim for moral damages, not having been
substantiated, is denied. Petitioner said that the RTC
should have dismissed the action for the
enforcement of a foreign judgment, on the ground
of forum non conveniens. It reasoned out that the
recognition of the foreign judgment was based on
comity, reciprocity and res judicata. The CA denied
this appeal, hence this case.
Issue:
Whether or not the CA acted in a manner contrary to
law when it affirmed the Order of the trial court
granting respondent’s Motion for Summary
Judgment and rendering judgment against the
petitioner.
Ruling:
Summary judgment is a procedural device for the
prompt disposition of actions in which the pleadings
raise only a legal issue, and not a genuine issue as to
any material fact. It is resorted to in order to avoid
long drawn out litigations and useless delays.
Petitioner contends that by allowing summary
judgment, the two courts a quo prevented him from
presenting evidence to substantiate his claims. The
court does not agree. Summary judgment is based
on facts directly proven by affidavits, depositions or
admissions. In this case, the CA and the RTC both
merely ruled that trial was not necessary to resolve
the case. Petitioner’s affidavit of facts had raised no
genuine issue, thus no necessity for a resolution of
issues.
In the absence of proof of California law on the
jurisdiction of courts, we presume that such law, if
any, is similar to Philippine law. The court based this
conclusion on the presumption of identity or
similarity, also known as processual presumption.
Petitioner failed to establish substantial proof that
the foreign court had no jurisdiction over the case. In
any event, contrary to petitioner’s contention, unjust
enrichment or solutio indebiti does not apply to this
case. This doctrine contemplates payment when
there is no duty to pay, and the person who receives
the payment has no right to receive it. In this case,
petitioner merely argues that the other two
defendants whom he represented were liable
together with him. This is not a case of unjust
enrichment. The court does not also see this case to
be contrary to law, morals, public policy or the
canons of morality obtaining in the country.
Petitioner owed money, and the judgment required
him to pay it. That is the long and the short of this
case. The petition is denied.
SAUDI ARABIAN AIRLINES (SAUDIA) AND BETIA v.
REBESENCIO, SACAR-ADIONG, CRISTOBAL AND
SCHNEIDER-CRUZ
FACTS:
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 Puyat Avenue, Makati
City. Respondents (complainants before the LA)
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.
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.
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.
Xxx 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.
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, (one of the officers
impleaded was petitioner Brenda) for illegal
dismissal and for underpayment of salary, overtime
pay, premium pay for holiday, etc.
ISSUE: WON petitioner Brenda may be held
personally liable for the illegal dismissal of
respondents?
HELD: No. 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.
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."
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.
THE MANILA HOTEL CORP. AND MANILA HOTEL
INTL. LTD. vs. NLRC, ARBITER DIOSANA AND
SANTOS
Background: Marcelo Santos, overseas contract
worker in Oman. Manila Hotel Corporation (MHC)- is
an “incorporator” of MHICL, owning 50% of its
capital stock. Manila Hotel International Company,
Limited (MHIC) trained the personnel and staff of the
Palace Hotel at Beijing, China.
Santos was hired by Palace Hotel in a 2-year contract,
through recommendation of his friend Buenio, thus
he resigned in his current job in Oman. He started to
work at the Palace Hotel.
Subsequently, Santos signed an amended
“employment agreement” with the Palace Hotel.
Shmidt represented the Palace Hotel. The VP of
MHICL Miguel D. Cergueda also signed the
employment agreement under the word “noted”.
Later, Santos was in the Philippines on vacation
leave.
Days later when he returned to China and reassumed
his post Mr. Shmidt’s Executive Secretary suggested
in a handwritten note that Santos be given one (1)
month notice of his release from employment.
Palace Hotel informed Santos by letter signed by Mr.
Shmidt that his employment at Palace Hotel would
be terminated due to business reverses brought
about by the political upheaval in China.
Palace Hotel paid all benefits due him, including his
plane fare back to the Philippines.
Santos wrote Mr. Shmidt, demanding full
compensation pursuant to the employment
agreement. Shmidt declined.
Santos filed a complaint for illegal dismissal with the
Arbitration Branch, National Capital Region, National
Labor Relations Commission (NLRC).
The complaint named MHC, MHICL, the Palace Hotel
and Mr. Shmidt as respondents. Petitioners appealed
to the NLRC, arguing that the POEA, not the NLRC
had jurisdiction over the case.
Santos argued that the case was not cognizable by
the POEA as he was not an “overseas contract
worker.” On December 15, 1994, the NLRC ruled in
favor of Santos.
Issue: W/N NLRC has the jurisdiction over the case of
Santos.
Ruling: NO. Rule of forum non conveniens, a
Philippine court or agency may assume jurisdiction
over the case if:
(1) Philippine court is one to which the parties may
conveniently resort to;
(2) Philippine court is in a position to make an
intelligent decision as to the law and the facts; and
(3) Philippine court has or is likely to have power to
enforce its decisions
The conditions are unavailing in the case at bar. Not
Convenient given that all the incidents of the case
occurred outside the Philippines. Also, defendants,
the Palace Hotel and MHICL are not nationals of the
Philippines. Main witnesses, Mr. Shmidt and Mr.
Henk are non-residents of the Philippines. No power
to determine applicable law. Employment contract
was perfected in foreign soil.
Application of the principle of lex loci contractus (the
law of the place where the contract was made)
No power to determine the facts. All acts complained
of took place in Beijing, People’s Republic of China.
NLRC was not in position to determine whether the
Tiannamen Square incident truly adversely affected
operations of the Palace Hotel to justify respondent
Santos’ retrenchment.
Principle of effectiveness, no power to execute
decision.
Even assuming that a proper decision could be
reached by the NLRC, such would not have any
binding effect against the employer, the Palace Hotel.
Jurisdiction over person of Palace Hotel was not
acquired.
If Santos were an “overseas contract worker”, a
Philippine forum in POEA would protect him. He is
not an “overseas contract worker”. MHC is not liable.
MHC is an incorporator of MHICL and owns 50% of
its capital stock. However, this is not enough to
pierce the veil of corporate fiction between MHICL
and MHC. MHICL is not liable. VP Cergueda signed
the employment contract as a mere witness. Also,
there was no existing employer-employee
relationship between Santos and MHICL.
Finally, it was the Palace Hotel, through Mr. Schmidt
and not MHICL that terminated respondent Santos’
services.