CADALIN vs POEA ADMINISTRATOR 238 SCRA 721 (L-104776)

“Borrowing Statute” –

Ex: Sec. 48, Rule on Civil Procedure – “if by the laws of the State or country where the cause of
action arose the action is barred, it is also barred in the Philippines.

Facts: Cadalin et al. are Filipino workers recruited by Asia Int’l Builders Co. (AIBC), a domestic
recruitment corporation, for employment in Bahrain to work for Brown & Root Int’l Inc. (BRII)
which is a foreign corporation with headquarters in Texas. Plaintiff instituted a class suit with
the POEA for money claims arising from the unexpired portion of their employment contract
which was prematurely terminated. They worked in Bahrain for BRII and they filed the suit after
1 yr. from the termination of their employment contract.

As provided by Art. 156 of the Amiri Decree aka as the Labor Law of the Private Sector of
Bahrain: “a claim arising out of a contract of employment shall not be actionable after the lapse
of 1 year from the date of the expiry of the contract,” it appears that their suit has prescribed.
Plaintiff contends that the prescription period should be 10 years as provided by Art. 1144 of
the Civil Code as their claim arise from a violation of a contract.
The POEA Administrator holds that the 10 year period of prescription should be applied but the
NLRC provides a different view asserting that Art 291 of the Labor Code of the Phils with a 3
years prescription period should be applied. The Solicitor General expressed his personal point
of view that the 1 yr period provided by the Amiri Decree should be applied.

Ruling:

The Supreme Court held that as a general rule a foreign procedural law will not be applied in
our country as we must adopt our own procedural laws.

EXCEPTION:

Philippines may adopt foreign procedural law under the Borrowing Statute such as Sec. 48 of
the Civil Procedure Rule stating “if by the laws of the State or country where the cause of action
arose the action is barred, it is also barred in the Philippines.” Thus, Bahrain law must be
applied. However, the court contends that Bahrain’s law on prescription cannot be applied
because the court will not enforce any foreign claim that is obnoxious to the forum’s public
policy and the 1 yr. rule on prescription is against public policy on labor as enshrined in the
Phils. Constitution.

The court ruled that the prescription period applicable to the case should be Art 291 of the
Labor Code of the Phils with a 3 years prescription period since the claim arose from labor
employment.