HONGKONG AND SHANGHAI BANKING CORPORATION the parties did not thereby stipulate that only the courts
the parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest,
vs.
JACK ROBERT SHERMAN, DEODATO RELOJ and THE INTERMEDIATE APPELLATE
COURT
FACTS:
A complaint for collection of a sum of money was filed by petitioner Hongkong and Shanghai Banking
Corporation against private respondents Jack Robert Sherman.
It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd., a company incorporated in
Singapore applied with, and was granted by, the Singapore branch of petitioner BANK an overdraft
facility in the maximum amount of Singapore dollars 200,000.00 later increase to 375K with interest at
3% over petitioner BANK prime rate, payable monthly; as a security for the repayment by the
COMPANY of sums advanced by petitioner BANK, both private respondents and a certain Robin de
Clive Lowe, all of whom were directors of the COMPANY at such time, executed a Joint and Several
Guarantee in favor of petitioner BANK whereby private respondents and Lowe agreed to pay, jointly
and severally, on demand all sums owed by the COMPANY to petitioner BANK. The Joint and Several
Guarantee provides: This guarantee and all rights, obligations and liabilities arising hereunder shall be
construed and determined under and may be enforced in accordance with the laws of the Republic of
Singapore.
The COMPANY failed to pay its obligation. Petitioner BANK filed a complaint. Private Respondents
filed a Motion to Dismiss on the ground that the court has no jurisdiction over the matter and over the
persons of the defendant. RTC denied the motion to dismiss. MR denied. IAC reversed the RTC
decision. MR denied.
ISSUE:
Whether or not Philippine Court have jurisdiction over the suit.
RULING:
Yes. While it is true that "the transaction took place in Singaporean setting" and that the Joint and
Several Guarantee contains a choice-of-forum clause, the very essence of due process dictates that the
stipulation that "[t]his guarantee and all rights, obligations and liabilities arising hereunder shall be
construed and determined under and may be enforced in accordance with the laws of the Republic of
Singapore. We hereby agree that the Courts in Singapore shall have jurisdiction over all disputes
arising under this guarantee" be liberally construed.
One basic principle underlies all rules of jurisdiction in International Law: a State does not have
jurisdiction in the absence of some reasonable basis for exercising it, whether the proceedings are in
rem quasi in rem or in personam. To be reasonable, the jurisdiction must be based on some minimum
contacts that will not offend traditional notions of fair play and substantial justice.
The defense of private respondents that the complaint should have been filed in Singapore is based
merely on technicality.
has jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In
International Law, jurisdiction is often defined as the light of a State to exercise authority over persons
and things within its boundaries subject to certain exceptions.
In a conflict problem, a court will simply refuse to entertain the case if it is not authorized by law to
exercise jurisdiction. And even if it is so authorized, it may still refuse to entertain the case by applying
the principle of forum non conveniens. ...
However, whether a suit should be entertained or dismissed on the basis of the principle of forum non
conveniens depends largely upon the facts of the particular case and is addressed to the sound
discretion of the trial court
REPUBLIC VS PIMENTEL
US SUPREME COURT
FACTS:
A class action for human rights victims (Pimentel class) of Ferdinand Marcos, while he was President
of the Republic of the Philippines (Republic), led to a nearly $2 billion judgment in a United States
District Court. The Pimentel class then sought to attach the assets of Arelma, S. A. (Arelma), a
company incorporated by Marcos, held by a New York broker (Merrill Lynch).. The Philippine
National Banc (PNB) holds some of the disputed assets in escrow, awaiting the outcome of pending
litigation in the Sandiganbayan, a Philippine court determining whether Marcos’ property should be
forfeited to the Republic.
The Philippine government claimed that it had sovereign immunity from suit and, because it was an
indispensable party to the suit under Federal Rule of Civil Procedure 19(b), justice required that the
case be stayed and brought before a special Philippine court established to return such misappropriated
funds to the public treasury. However, the district court continued to adjudicate the case, eventually
awarding the assets to the creditors.
The Ninth Circuit upheld the award, noting that the government's claim was barred by the applicable
Philippine statute of limitations. The Ninth Circuit further held that the "equity and good conscience"
requirements of Federal Rule of Civil Procedure 19(b) did not require the Philippine government's
participation in the case. In its petition for certiorari, the Philippine government argued that the award
of assets undermined the comity principles of the Foreign Sovereign Immunities Act and violated
Federal Rule of Civil Procedure 19(b) by not including the government as an indispensable party.
ISSUE:
Did the U.S. Court of Appeals for the Ninth Circuit err in approving the award of assets to creditors of
former Philippine President Ferdinand Marcos when the Philippine government, claiming rightful
ownership of the assets, excluded itself from the proceedings based on sovereign immunity?
RULING:
Yes, it did. The Court's opinion was unanimous in finding that the Philippine government was a
required party to the case under Rule 19(b). Such a required party must be joined to the suit if it is
"feasible," and the Court ruled that the government's inclusion was feasible in this case. The Court sent
the case back to the district court with instructions to dismiss the interpleader action.
It directs the court to consider, in determining whether the action may proceed, the prejudice to absent
entities and present parties in the event judgment is rendered without joinder. Rule 19(b)(1). The Ninth
Circuit gave insufficient weight to the sovereign status of the Republic and the Commission in
considering whether they would be prejudiced if the case proceeded. Giving full effect to sovereign
immunity promotes the comity and dignity interests that contributed to the development of the
immunity doctrine. The privilege of sovereign immunity from suit is much diminished if an important
and consequential ruling affecting the sovereign’s substantial interest is determined, or at least
assumed, by a federal court in its absence and over its objection. The Pimentel class’ interest in
recovering its damages is not discounted, but important comity concerns are implicated by assertion of
foreign sovereign immunity. The error is not that the courts below gave too much weight to the
Pimentel class’ interests, but that they did not accord proper weight to the compelling sovereign
immunity claim.