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.

DECISION
QUISUMBING, J.:
This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul and set
aside the Resolution 1 dated September 27, 1995 and the Decision 2 dated April 10, 1996 of
the Court of Appeals 3 in CA-G.R. SP No. 36533, 4 and the Orders 5 dated August 29,
1994 6 and February 2, 1995 7 that were issued by the trial court in Civil Case No. Q-93-
18394. 8
The pertinent antecedent facts which gave rise to the instant petition, as stated in the
questioned Decision 9, are as follows:
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 the (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 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. 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 SAUDIAs 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, 12 she was
terminated from the service by SAUDIA, without her being informed of the cause.
On November 23, 1993, Morada filed a Complaint 13 for damages against SAUDIA, and
Khaled Al-Balawi (Al-Balawi), its country manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss 14 which raised the
following grounds, to wit: (1) that the 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) 15. Saudia filed a
reply 16 thereto on March 3, 1994.
On June 23, 1994, Morada filed an Amended Complaint 17 wherein Al-Balawi was dropped as
party defendant. On August 11, 1994, Saudia filed its Manifestation and Motion to Dismiss
Amended Complaint 18.
The trial court issued an Order 19 dated August 29, 1994 denying the Motion to Dismiss
Amended Complaint filed by Saudia.
From the Order of respondent Judge 20 denying the Motion to Dismiss, SAUDIA filed on
September 20, 1994, its Motion for Reconsideration 21 of the Order dated August 29, 1994. It
alleged that the trial court has no jurisdiction to hear and try the case on 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 22 (To Defendants Motion for
Reconsideration).
In the Reply 23 filed with the trial court on October 24, 1994, SAUDIA alleged that since its
Motion for Reconsideration raised lack of 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 24 dated February 2, 1995, denying
SAUDIAs Motion for Reconsideration. 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
attorneys 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 26 with the Court of Appeals.
Respondent Court of Appeals promulgated a Resolution with Temporary Restraining
Order 27 dated February 23, 1995, prohibiting the respondent Judge from further conducting
any proceeding, unless otherwise directed, in the interim.
In another Resolution 28 promulgated on September 27, 1995, now assailed, the appellate
court denied SAUDIAs Petition for the 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 29 for Review
with Prayer for Temporary Restraining Order dated October 13, 1995.
However, during the pendency of the instant Petition, respondent Court of Appeals rendered
the Decision 30 dated April 10, 1996, now also assailed. It ruled that the Philippines is an
appropriate forum considering that the Amended Complaints 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 31 dated April 30, 1996, given due course by this Court. After both parties
submitted their Memoranda, 32 the instant case is now deemed submitted for decision.
Petitioner SAUDIA raised the following issues:
I
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 petitioners 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 respondents 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 35 and 21 36 of the Civil 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 38
dated June 23, 1994:
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 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.
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 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.
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 SAUDIAs 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. 41 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. 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 respondents assertion that the case is purely domestic, imprecise.
A conflicts problem presents itself here, and the question of jurisdiction 43 confronts the
court a quo.
After a careful study of the private respondents Amended Complaint, 44 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.
Thus, in Philippine National Bank (PNB) vs. Court of Appeals, 45 this Court held that:
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 respondents assertion that violations of Articles 19 and 21 are
actionable, with judicially enforceable remedies in the municipal forum.
Based on the allegations 46 in the Amended Complaint, read in the light of the Rules of Court
on jurisdiction 47 we find that the Regional Trial Court (RTC) of Quezon City possesses
jurisdiction over the subject matter of the suit.48 Its authority to try and hear 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,
attorneys 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 50 praying for the dismissal
of Moradas Amended Complaint. 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 courts 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
courts jurisdiction over defendants person, prayed for dismissal of the complaint on the
ground that plaintiffs 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 latters
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. 55 The purpose of characterization is to enable the
forum to select the proper law. 56
Our starting point of analysis here is not a legal relation, but a factual situation, event, or
operative fact. 57 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. 58
Note that one or more circumstances may be present to serve as the possible test for the
determination of the applicable law. 59 These test factors or points of contact or connecting
factors could be any of the following:
(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,
the lex 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. 60(Emphasis ours.)
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 respondents 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. Petitioners 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 petitioners 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 61 have been advanced to offer fresh judicial
approaches to arrive at just results. In keeping abreast with the modern theories 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, 63 raised by private respondent as plaintiff below against defendant (herein
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 petitioners insistence that [s]ince private respondent instituted this suit,
she has the burden of pleading and proving the applicable Saudi law on the matter. 64 As
aptly said by private respondent, she has no 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. 65 And as correctly held by the respondent
appellate court, considering that it was the petitioner who was invoking 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
courts denial of defendants (herein petitioners) 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 countrys 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.
DIGEST

G.R. No. 122191 October 8, 1998

Laws Applicable: Art 19 and 21 of Civil Code

Lessons Applicable: Conflict of Laws, factual situation, connecting factor, characterization, choice of
law, State of the most significant relationship

FACTS:
Saudi Arabian Airlines (SAUDIA), foreign airlines corporation doing business in the
Philippines and may be served summons in agent in Makati, hired Milagros P. Morada as a
flight attendant for its airlines based in Jeddah, Saudi Arabia.
April 27, 1990: While on a lay-over in Jakarta, Indonesia, Morada went to a disco dance with
fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi nationals. It
was almost morning when they returned to their hotels so they agreed to have breakfast
together at the room of Thamer. Shortly after Allah left the room, Thamer attempted to rape
Morada. Fortunately, a roomboy and several security personnel heard her cries for help and
rescued her. Indonesian police arrested Thamer and Allah Al-Gazzawi, the latter as an
accomplice.
When Morada returned to Jeddah, SAUDIA officials interrogated her about the Jakarta
incident and requested her to go back to Jakarta to help arrange the release of Thamer and
Allah. In Jakarta, SAUDIA Legal Officers negotiated with the police for the immediate
release of the detained crew members but did not succeed. Afraid that she might be tricked
into something she did not want because of her inability to understand the local dialect,
Morado refused to cooperate and declined to sign a blank paper and a document written in
the local dialect. Eventually, SAUDIA allowed Morada to return to Jeddah but barred her
from the Jakarta flights.
Indonesian authorities agreed to deport Thamer and Allah and they were again put in
service. While, Morada was transferred to Manila.
January 14, 1992: Morada was asked to see Mr. Ali Meniewy, Chief Legal Officer of
SAUDIA, in Jeddah, Saudi Arabia. He brought her to the police station where the police took
her passport and questioned her about the Jakarta incident. The police pressured her to
drop 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.
June 16, 1993: Morada, while in Riyadh Saudi Arabia, was not allowed to board the plane to
Manila and instead ordered to take a later flight to Jeddah to see Mr. Miniewy. 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
but it was actually a notice for her to appear before the court on June 27, 1993. Plaintiff then
returned to Manila.
June 27, 1993: SAUDIA's Manila manager, Aslam Saleemi, assured Morada that the
investigation was routinary and that it posed no danger to her so she reported to Miniewy in
Jeddah for further investigation. She was brought to the Saudi court.
June 28, 1993: Saudi judge interrogated Morada through an interpreter about the Jakarta
incident for an hour and let her go. SAUDIA officers forbidden her to take flight. She was
told to go the Inflight Service Office where her passport was taken and they told her to
remain in Jeddah, at the crew quarters, until further orders.
July 3, 1993: She was brought to court again and to her astonishment and shock, rendered a
decision, translated to her in English, sentencing her to five months imprisonment and to 286
lashes. The court tried her, together with Thamer and Allah, and 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.
 Failing to seek the assistance of her employer, SAUDIA, she asked the Philippine Embassy
in Jeddah to help her while her case is on appeal. She continued to workon the domestic
flight of SAUDIA, while Thamer and Allah continued to serve in the international flights.
Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her
and allowed her to leave Saudi Arabia. Before her return to Manila, she was terminated from
the service by SAUDIA, without her being informed of the cause.
November 23, 1993: Morada filed a Complaint for damages against SAUDIA, and Khaled Al-
Balawi, its country manager.
January 19, 1994: SAUDIA filed an Omnibus Motion To Dismiss on following grounds: (1)
that the 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.
After opposition to the motion to dismiss by Morada and reply by SAUDIA, Morada filed an
Amended Complaint dropping Al-Balawi. SAUDIA filed its Manifestation, Motion to Dismiss
Amended Complaint, subsequently motion for reconsideration which were all denied.
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. TRO
was granted but Writ of Preliminary Injunction was denied.
CA: 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.
SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary Restraining
Order:

o It is a conflict of laws that must be settled at the outset:

Morada's claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia.
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.
Morada: Amended Complaint is based on Articles 19 and 21 of the Civil Code which is a
matter of domestic law

ISSUE: W/N the RTC of Quezon City has jurisdiction over the case and it is the proper forum for
recovery of damages under Art. 21 of the Civil Code which should govern.

HELD: YES. petition for certiorari is hereby DISMISSED. REMANDED to RTC of Quezon City,
Branch 89 for further proceedings
Where the factual antecedents satisfactorily establish the existence of a foreign element, the
problem 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".
o Morada is a resident Philippine national
o SAUDIA is a resident foreign corporation
o 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
Forms of foreign element:
o Simple: 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
o Complex
 Violations of Articles 19 and 21 are actionable, with judicially enforceable remedies in the
municipal forum. RTC of Quezon City possesses jurisdiction over the subject matter of the
suit.
Pragmatic considerations, including the convenience of the parties, also weigh heavily in
favor of the RTC Quezon City assuming jurisdiction:
o private interest of the litigant
o enforceability of a judgment if one is obtained
o relative advantages and obstacles to a fair trial
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.
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.
Trial court possesses jurisdiction over the persons of the parties
o By filing her Complaint and Amended Complaint with the trial court, private respondent has voluntary
submitted herself to the jurisdiction of the court
o 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 to the choice of applicable law, it seeks to answer 2 important questions:
o (1) What legal system should control a given situation where some of the significant facts occurred in
two or more states
o (2) to what extent should the chosen legal system regulate the situation
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.
Before a choice can be made, it is necessary for us to determine under what category a
certain set of facts or rules fall
o "characterization" or the "doctrine of qualification
process of deciding whether or not the facts relate to the kind of question specified in a conflicts
rule
purpose: to enable the forum to select the proper law

Choice-of-law rules invariably consist of: (essential element of conflict rules)

o factual situation/relationship or operative fact (such as property right, contract claim); and
starting point of analysis
o test or 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) could be:
(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, the lex
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
Note that one or more circumstances may be present to serve as the possible test for the
determination of the applicable law.
Based on pleadings on record, including allegations in the Amended Complaint:
o Morada was made to face trial for very serious charges, including adultery and violation of Islamic
laws and tradition
o SAUDIA may have acted beyond its duties as employer by handing over the person of Morada to
Jeddah officials which contributed to and amplified or even proximately caused additional
humiliation, misery and suffering. It also took advantage of the trust, confidence and faith in the
guise of authority as employer.
o Conviction and imprisonment was wrongful but injury or harm was inflicted upon her person and
reputation which must be compensated or redress for the wrong doing
Complaint involving torts
"connecting factor" or "point of contact" - place or places where the tortious conduct or lex
loci actus occurred = Philippines where SAUDIA deceived Morada, a Filipina residing and
working here.
"State of the most significant relationship" applied
o 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
(d) the place where the relationship, if any, between the parties is centered
private respondent is a resident Filipina national, working here
a resident foreign corporation engaged here in the business of international air
carriage

SAUDI ARABIAN AIRLINES v. CA, G.R. No. 122191. October 8, 1998

Where the factual antecedents satisfactorily establish the existence of a foreign element, the
problem herein could present a conflicts case.
FOREIGN ELEMENT: 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.
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 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.
 Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions.
Thus, we agree with private respondents 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 Regional Trial Court
(RTC) of Quezon City possesses jurisdiction over the subject matter of the suit. Its authority to try and
hear the case is provided for under Section 1 of Republic Act No. 7691.
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.
Forcing a party to seek remedial action in a place where she no longer maintains substantial
connections would cause a fundamental unfairness to her.
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 Moradas Amended Complaint. 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
courts jurisdiction by praying for the dismissal of the Amended Complaint on grounds other than lack of
jurisdiction. 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.
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.
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.
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 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.
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:
(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, thelocus actus, such as the place where a
contract has been made, a marriage celebrated, a will signed or a tort committed. The lex
loci actusis 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,
the lex loci intentionis;
(7) the place where judicial or administrative proceedings are instituted or done. The lex fori
the law of the forumis 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.
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.

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 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 fatality 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.
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 petitioner), in our view, has been properly established.
Prescinding from this premise that the Philippines is the situs of the tort complaint 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 petitioners 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 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 the applicability of the law of Saudi Arabia,
thus the burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is.
IS FORUM NON-CONVENIENS APPLY? The Court has jurisdiction but still the court may
dismiss if it appears that it is inconvenient to the parties. Here, it is convenient.

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 companys 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 contracts Appendix
3.1.8
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippons 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 ICAs
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 respondents 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 respondents 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 Nippons 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
groundsfor 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 Decision 22 finding no grave abuse of discretion in the trial courts 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 courts 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 petitions
defective certification of non-forum shopping, it was a dismissal without prejudice.27 The same
holds true in the CAs 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
certificationas they, in fact didand 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 respondents 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 scopeits 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
Nippons president and chief executive officer, not by the companys 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 courts 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 respondents 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 issuejurisdiction. Jurisdiction, however, has various
aspects. For a court to validly exercise 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 courts 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.62What 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 ceremony63 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
states 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 courts 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.
 DIGEST

538 SCRA 261 Conflict of Laws Private International Law Jurisdiction Lex Loci
Celebrationis Lex Loci Solutionis State of the Most Significant Relationship Forum
Non Conveniens
In March 1999, Nippon Engineering Consultants Co., Ltd, a Japanese firm, was contracted
by the Department of Public Works and Highways (DPWH) to supervise the construction of
the Southern Tagalog Access Road. In April 1999, Nippon entered into an independent
contractor agreement (ICA) with Minoru Kitamura for the latter to head the said project. The
ICA was entered into in Japan and is effective for a period of 1 year (so until April 2000). In
January 2000, DPWH awarded the Bongabon-Baler Road project to Nippon. Nippon
subsequently assigned Kitamura to head the road project. But in February 2000, Kazuhiro
Hasegawa, the general manager of Nippon informed Kitamura that they are pre-terminating
his contract. Kitamura sought Nippon to reconsider but Nippon refused to negotiate. Kitamura
then filed a complaint for specific performance and damages against Nippon in the RTC of
Lipa.
Hasegawa filed a motion to dismiss on the ground that the contract was entered in Japan
hence, applying the principle of lex loci celebracionis, cases arising from the contract should
be cognizable only by Japanese courts. The trial court denied the motion. Eventually, Nippon
filed a petition for certiorari with the Supreme Court.
Hasegawa, on appeal significantly changed its theory, this time invoking forum non
conveniens; that the RTC is an inconvenient forum because the parties are Japanese
nationals who entered into a contract in Japan. Kitamura on the other hand invokes the trial
courts ruling which states that matters connected with the performance of contracts are
regulated by the law prevailing at the place of performance, so since the obligations in the
ICA are executed in the Philippines, courts here have jurisdiction.
ISSUE: Whether or not the complaint against Nippon should be dismissed.
HELD: No. The trial court did the proper thing in taking cognizance of it.
In the first place, the case filed by Kitamura is a complaint for specific performance and
damages. Such case is incapable of pecuniary estimation; such cases are within the
jurisdiction of the regional trial court.
Hasegawa filed his motion to dismiss on the ground of forum non conveniens. However, such
ground is not one of those provided for by the Rules as a ground for dismissing a civil case.
The Supreme Court also emphasized that the contention that Japanese laws should apply is
premature. In conflicts cases, there are three phases and each next phase commences when
one is settled, to wit:

1. Jurisdiction Where should litigation be initiated? Court must have jurisdiction over the
subject matter, the parties, the issues, the property, the res. Also 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.
2. Choice of Law Which law will the court apply? Once a local court takes cognizance, it does
not mean that the local laws must automatically apply. The court must determine which
substantive law when applied to the merits will be fair to both parties.
3. Recognition and Enforcement of Judgment Where can the resulting judgment be
enforced?

This case is not yet in the second phase because upon the RTCs taking cognizance of the
case, Hasegawa immediately filed a motion to dismiss, which was denied. He filed a motion
for reconsideration, which was also denied. Then he bypassed the proper procedure by
immediately filing a petition for certiorari. The question of which law should be applied should
have been settled in the trial court had Hasegawa not improperly appealed the interlocutory
order denying his MFR.