Plaintiff learned that, through the intercession of the Saudi Arabian
G.R. No. 122191 October 8, 1998
SAUDI ARABIAN AIRLINES, petitioner,
vs.
COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A.
ORTIZ, in his capacity as Presiding Judge of Branch 89, Regional Trial Court
of Quezon City, respondents.
QUISUMBING, J.:
This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul
and set aside the Resolution 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 Orders5
dated August 29, 1994 6 and February 2, 19957 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 Decision9, 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 te (sic) room, Allah left on some pretext. Shortly after
he did, Thamer attempted to rape plaintiff. Fortunately, a roomboy
and several security personnel heard her cries for help and
rescued her. Later, the Indonesian police came and arrested
Thamer and Allah Al-Gazzawi, the latter as an accomplice.
When plaintiff returned to Jeddah a few days later, several
SAUDIA officials interrogated her about the Jakarta incident. They
then requested her to go back to Jakarta to help arrange the
release of Thamer and Allah. In Jakarta, SAUDIA Legal Officer
Sirah Akkad and base manager Baharini negotiated with the police
for the immediate release of the detained crew members but did
not succeed because plaintiff refused to cooperate. She was afraid
that she might be tricked into something she did not want because
of her inability to understand the local dialect. She also declined to
sign a blank paper and a document written in the local dialect.
Eventually, SAUDIA allowed plaintiff to return to Jeddah but barred
her from the Jakarta flights.
government, the Indonesian authorities agreed to deport Thamer
and Allah after two weeks of detention. Eventually, they were
again put in service by defendant SAUDI (sic). In September 1990,
defendant SAUDIA transferred plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that the Jakarta
incident was already behind her, her superiors requested her to
see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah,
Saudi Arabia. When she saw him, he brought her to the police
station where the police took her passport and questioned her
about the Jakarta incident. Miniewy simply stood by as the police
put pressure on her to make a statement dropping the case
against Thamer and Allah. Not until she agreed to do so did the
police return her passport and allowed her to catch the afternoon
flight out of Jeddah.
One year and a half later or on lune 16, 1993, in Riyadh, Saudi
Arabia, a few minutes before the departure of her flight to Manila,
plaintiff was not allowed to board the plane and instead ordered to
take a later flight to Jeddah to see Mr. Miniewy, the Chief Legal
Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA
office brought her to a Saudi court where she was asked to sign a
document written in Arabic. They told her that this was necessary
to close the case against Thamer and Allah. As it turned out,
plaintiff signed a notice to her to appear before the court on June
27, 1993. Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to
report to Jeddah once again and see Miniewy on June 27, 1993
for further investigation. Plaintiff did so after receiving assurance
from SAUDIA's Manila manager, Aslam Saleemi, that the
investigation was routinary and that it posed no danger to her.
In Jeddah, a SAUDIA legal officer brought plaintiff to the same
Saudi court on June 27, 1993. Nothing happened then but on June
28, 1993, a Saudi judge interrogated plaintiff through an interpreter
about the Jakarta incident. After one hour of interrogation, they let
her go. At the airport, however, just as her plane was about to take
off, a SAUDIA officer told her that the airline had forbidden her to
take flight. At the Inflight Service Office where she was told to go,
the secretary of Mr. Yahya Saddick took away her passport and
told her to remain in Jeddah, at the crew quarters, until further
orders.
 On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to
the same court where the judge, to her astonishment and shock,
rendered a decision, translated to her in English, sentencing her to
five months imprisonment and to 286 lashes. Only then did she
realize that the Saudi court had tried her, together with Thamer
and Allah, for what happened in Jakarta. The court found plaintiff
guilty of (1) adultery; (2) going to a disco, dancing and listening to
the music in violation of Islamic laws; and (3) socializing with the
male crew, in contravention of Islamic tradition. 10
Facing conviction, private respondent sought the help of her employer, petitioner
SAUDIA. Unfortunately, she was denied any assistance. She then asked the
Philippine Embassy in Jeddah to help her while her case is on appeal. Meanwhile,
to pay for her upkeep, she worked on the domestic flight of SAUDIA, while Thamer
and Allah continued to serve in the international
flights. 11
Because she was wrongfully convicted, the Prince of Makkah dismissed the case
against her and allowed her to leave Saudi Arabia. Shortly before her return to
Manila, 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.
15
On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss)
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 Defendant's 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 SAUDIA's 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 attorney's fees, upon the basis of the applicable
Philippine law, Article 21 of the New Civil Code of the Philippines,
is, clearly, within the jurisdiction of this Court as regards the
subject matter, and there being nothing new of substance which
might cause the reversal or modification of the order sought to be
reconsidered, the motion for reconsideration of the defendant, is
DENIED.
SO ORDERED. 25
Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and
. Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or
Temporary Restraining Order 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 SAUDIA's 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.
29
On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition
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 Complaint's
basis for recovery of damages is Article 21 of the Civil Code, and thus, clearly
within the jurisdiction of respondent Court. It further held that certiorari is not the
proper remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner
should have proceeded to trial, and in case of an adverse ruling, find recourse in
an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for
Temporary Restraining Order 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 WHETHER RESPONDENT APPELLATE COURT ERRED IN
The trial court has no jurisdiction to hear and try Civil Case No. Q-
93-18394 based on Article 21 of the New Civil Code since the
proper law applicable is the law of the Kingdom of Saudi Arabia
inasmuch as this case involves what is known in private
international law as a "conflicts problem". Otherwise, the Republic
of the Philippines will sit in judgment of the acts done by another
sovereign state which is abhorred.
II
Leave of court before filing a supplemental pleading is not a
jurisdictional requirement. Besides, the matter as to absence of
leave of court is now moot and academic when this Honorable
Court required the respondents to comment on petitioner's April
30, 1996 Supplemental Petition For Review With Prayer For A
Temporary Restraining Order Within Ten (10) Days From Notice
Thereof. Further, the Revised Rules of Court should be construed
with liberality pursuant to Section 2, Rule 1 thereof.
III
Petitioner received on April 22, 1996 the April 10, 1996 decision in
CA-G.R. SP NO. 36533 entitled "Saudi Arabian Airlines v. Hon.
Rodolfo A. Ortiz, et al." and filed its April 30, 1996 Supplemental
Petition For Review With Prayer For A Temporary Restraining
Order on May 7, 1996 at 10:29 a.m. or within the 15-day
reglementary period as provided for under Section 1, Rule 45 of
the Revised Rules of Court. Therefore, the decision in CA-G.R. SP
NO. 36533 has not yet become final and executory and this
Honorable Court can take cognizance of this case. 33
From the foregoing factual and procedural antecedents, the following issues
emerge for our resolution:
I.
WHETHER RESPONDENT APPELLATE COURT ERRED IN
HOLDING THAT THE REGIONAL TRIAL COURT OF QUEZON
CITY HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO.
Q-93-18394 ENTITLED "MILAGROS P. MORADA V. SAUDI
ARABIAN AIRLINES".
II.
RULING THAT IN THIS CASE PHILIPPINE LAW SHOULD
GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at
the outset. It maintains that private respondent's claim for alleged abuse of rights
occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign
element qualifies the instant case for the application of the law of the Kingdom of
Saudi Arabia, by virtue of the lex loci delicti commissi rule. 34
On the other hand, private respondent contends that since her Amended
Complaint is based on Articles 19 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.
38
As stated by private respondent in her Amended Complaint 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 reauested
her to see MR. Ali Meniewy, Chief Legal Officer of SAUDIA in
Jeddah, Saudi Arabia. When she saw him, he brought her to the
police station where the police took her passport and questioned
her about the Jakarta incident. Miniewy simply stood by as the
police put pressure on her to make a statement dropping the case
against Thamer and Allah. Not until she agreed to do so did the
police return her passport and allowed her to catch the afternoon
flight out of Jeddah.
8. One year and a half later or on June 16, 1993, in Riyadh, Saudi
Arabia, a few minutes before the departure of her flight to Manila,
plaintiff was not allowed to board the plane and instead ordered to
take a later flight to Jeddah to see Mr. Meniewy, the Chief Legal
Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA
office brought her to a Saudi court where she was asked to sigh a
document written in Arabic. They told her that this was necessary
to close the case against Thamer and Allah. As it turned out,
plaintiff signed a notice to her to appear before the court on June
27, 1993. Plaintiff then returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff to
report to Jeddah once again and see Miniewy on June 27, 1993
for further investigation. Plaintiff did so after receiving assurance
from SAUDIA's Manila manger, Aslam Saleemi, that the
investigation was routinary and that it posed no danger to her.
10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same
Saudi court on June 27, 1993. Nothing happened then but on June
28, 1993, a Saudi judge interrogated plaintiff through an interpreter
about the Jakarta incident. After one hour of interrogation, they let
her go. At the airport, however, just as her plane was about to take
off, a SAUDIA officer told her that the airline had forbidden her to
take that flight. At the Inflight Service Office where she was told to
go, the secretary of Mr. Yahya Saddick took away her passport
and told her to remain in Jeddah, at the crew quarters, until further
orders.
11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff
to the same court where the judge, to her astonishment and
shock, rendered a decision, translated to her in English,
sentencing her to five months imprisonment and to 286 lashes.
Only then did she realize that the Saudi court had tried her,
together with Thamer and Allah, for what happened in Jakarta. The
court found plaintiff guilty of (1) adultery; (2) going to a disco,
dancing, and listening to the music in violation of Islamic laws; (3)
socializing with the male crew, in contravention of Islamic tradition.
12. Because SAUDIA refused to lend her a hand in the case,
plaintiff sought the help of the Philippines Embassy in Jeddah. The
latter helped her pursue an appeal from the decision of the court.
To pay for her upkeep, she worked on the domestic flights of
defendant SAUDIA while, ironically, Thamer and Allah freely
served the international flights. 39
Where the factual antecedents satisfactorily establish the existence of a foreign
element, we agree with petitioner that the problem herein could present a
"conflicts" case.
A factual situation that cuts across territorial lines and is affected by the diverse
laws of two or more states is said to contain a "foreign element". The presence of a
foreign element is inevitable since social and economic affairs of individuals and
associations are rarely confined to the geographic limits of their birth or
conception. 40
The forms in which this foreign element may appear are many. 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 respondent's 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 respondent's 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.
45
Thus, in Philippine National Bank (PNB) vs. Court of Appeals, 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 respondent's 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, attorney's
fees, litigation expenses, and cots or the value of
the property in controversy exceeds One hundred
thousand pesos (P100,000.00) or, in such other
cases in Metro Manila, where the demand,
exclusive of the above-mentioned items exceeds
Two hundred Thousand pesos (P200,000.00).
(Emphasis ours)
xxx xxx xxx
And following Section 2 (b), Rule 4 of the Revised Rules of Court — the venue,
Quezon City, is appropriate:
Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial
Court]
(a) xxx xxx xxx
(b) Personal actions. — All other actions may be commenced and
tried where the defendant or any of the defendants resides or may
be found, or where the plaintiff or any of the plaintiff resides, at the
election of the plaintiff.
Pragmatic considerations, including the convenience of the parties, also weigh
heavily in favor of the RTC Quezon City assuming jurisdiction. Paramount is the
private interest of the litigant. Enforceability of a judgment if one is obtained is quite
obvious. Relative advantages and obstacles to a fair trial are equally important.
Plaintiff may not, by choice of an inconvenient forum, "vex", "harass", or "oppress"
the defendant, e.g. by inflicting upon him needless expense or disturbance. But
unless the balance is strongly in favor of the defendant, the plaintiffs choice of
forum should rarely be disturbed. 49
Weighing the relative claims of the parties, the court a quo found it best to hear the
case in the Philippines. Had it refused to take cognizance of the case, it would be
forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in
the Kingdom of Saudi Arabia where she no longer maintains substantial
connections. That would have caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines no unnecessary difficulties and
inconvenience have been shown by either of the parties. The choice of forum of
the plaintiff (now private respondent) should be upheld.
Similarly, the trial court also possesses jurisdiction over the persons of the parties
herein. By filing her Complaint and Amended Complaint with the trial court, private
respondent has voluntary submitted herself to the jurisdiction of the court.
The records show that petitioner SAUDIA has filed several motions 50 praying for
the dismissal of Morada's 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 court's
jurisdiction by praying for the dismissal of the Amended Complaint on grounds
other than lack of jurisdiction.
As held by this Court in Republic vs. Ker and Company, Ltd.: 51
We observe that the motion to dismiss filed on April 14, 1962,
aside from disputing the lower court's jurisdiction over defendant's
person, prayed for dismissal of the complaint on the ground that
plaintiff's cause of action has prescribed. By interposing such
second ground in its motion to dismiss, Ker and Co., Ltd. availed
of an affirmative defense on the basis of which it prayed the court
to resolve controversy in its favor. For the court to validly decide
the said plea of defendant Ker & Co., Ltd., it necessarily had to
acquire jurisdiction upon the latter's person, who, being the
proponent of the affirmative defense, should be deemed to have
abandoned its special appearance and voluntarily submitted itself
to the jurisdiction of the court.
Similarly, the case of De Midgely vs. Ferandos, held that;
When the appearance is by motion for the purpose of objecting to
the jurisdiction of the court over the person, it must be for the sole
and separate purpose of objecting to the jurisdiction of the court. If
his motion is for any other purpose than to object to the jurisdiction
of the court over his person, he thereby submits himself to the
jurisdiction of the court. A special appearance by motion made for
the purpose of objecting to the jurisdiction of the court over the
person will be held to be a general appearance, if the party in said
motion should, for example, ask for a dismissal of the action upon
the further ground that the court had no jurisdiction over the
subject matter. 52
Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of
Quezon City. Thus, we find that the trial court has jurisdiction over the case and
that its exercise thereof, justified.
As to the choice of applicable law, we note that choice-of-law problems seek to
answer two important questions: (1) What legal system should control a given
situation where some of the significant facts occurred in two or more states; and
(2) to what extent should the chosen legal system regulate the situation. 53
Several theories have been propounded in order to identify the legal system that
should ultimately control. Although ideally, all choice-of-law theories should
intrinsically advance both notions of justice and predictability, they do not always
do so. The forum is then faced with the problem of deciding which of these two
important values should be stressed. 54
Before a choice can be made, it is necessary for us to determine under what
category a certain set of facts or rules fall. This process is known as
"characterization", or the "doctrine of qualification". It is the "process of deciding
whether or not the facts relate to the kind of question specified in a conflicts rule."
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 respondent's assertion that
although she was already working in Manila, petitioner brought her to Jeddah on
the pretense that she would merely testify in an investigation of the charges she
made against the two SAUDIA crew members for the attack on her person while
they were in Jakarta. As it turned out, she was the one made to face trial for very
serious charges, including adultery and violation of Islamic laws and tradition.
There is likewise logical basis on record for the claim that the "handing over" or
"turning over" of the person of private respondent to Jeddah officials, petitioner
may have acted beyond its duties as employer. Petitioner's purported act
contributed to and amplified or even proximately caused additional humiliation,
misery and suffering of private respondent. Petitioner thereby allegedly facilitated
the arrest, detention and prosecution of private respondent under the guise of
petitioner's authority as employer, taking advantage of the trust, confidence and
faith she reposed upon it. As purportedly found by the Prince of Makkah, the
alleged conviction and imprisonment of private respondent was wrongful. But
these capped the injury or harm allegedly inflicted upon her person and reputation,
for which petitioner could be liable as claimed, to provide compensation or redress
for the wrongs done, once duly proven.
Considering that the complaint in the court a quo is one involving torts, the
"connecting factor" or "point of contact" could be the place or places where the
tortious conduct or lex loci actus occurred. And applying the torts principle in a
conflicts case, we find that the Philippines could be said as a situs of the tort (the
place where the alleged tortious conduct took place). This is because it is in the
Philippines where petitioner allegedly deceived private respondent, a Filipina
residing and working here. According to her, she had honestly believed that
petitioner would, in the exercise of its rights and in the performance of its duties,
"act with justice, give her due and observe honesty and good faith." Instead,
petitioner failed to protect her, she claimed. That certain acts or parts of the injury
allegedly occurred in another country is of no moment. For in our view what is
important here is the place where the over-all harm or the totality of the alleged
injury to the person, reputation, social standing and human rights of complainant,
had lodged, according to the plaintiff below (herein private respondent). All told, it
is not without basis to identify the Philippines as the situs of the alleged tort.
Moreover, with the widespread criticism of the traditional rule of lex loci delicti
commissi, modern theories and rules on tort liability 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 petitioner's insistence that "[s]ince private respondent instituted this suit,
she has the burden of pleading and proving the applicable Saudi law on the
matter." 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 court's denial of defendant's (herein petitioner's) motion to dismiss the case.
Not only was jurisdiction in order and venue properly laid, but appeal after trial was
obviously available, and expeditious trial itself indicated by the nature of the case
at hand. Indubitably, the Philippines is the state intimately concerned with the
ultimate outcome of the case below, not just for the benefit of all the litigants, but
also for the vindication of the country's system of law and justice in a transnational
setting. With these guidelines in mind, the trial court must proceed to try and
adjudge the case in the light of relevant Philippine law, with due consideration of
the foreign element or elements involved. Nothing said herein, of course, should
be construed as prejudging the results of the case in any manner whatsoever.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case
No. Q-93-18394 entitled "Milagros P. Morada vs. Saudi Arabia Airlines" is hereby
REMANDED to Regional Trial Court of Quezon City, Branch 89 for further
proceedings.
SO ORDERED.
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 Resolution 2 denying the motion for
reconsideration thereof.
On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon),
a Japanese consultancy firm providing technical and management support in the
infrastructure projects of foreign governments, 3 entered into an Independent
Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese
national permanently residing in the Philippines. 4 The agreement provides that
respondent was to extend professional services to Nippon for a year starting on
April 1, 1999.5 Nippon then assigned respondent to work as the project manager of
the Southern Tagalog Access Road (STAR) Project in the Philippines, following the
company's consultancy contract with the Philippine Government. 6
When the STAR Project was near completion, the Department of Public Works and
Highways (DPWH) engaged the consultancy services of Nippon, on January 28,
2000, this time for the detailed engineering and construction supervision of the
Bongabon-Baler Road Improvement (BBRI) Project. 7 Respondent was named as
the project manager in the contract's Appendix 3.1. 8
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager
for its International Division, informed respondent that the company had no more
intention of automatically renewing his ICA. His services would be engaged by the
company only up to the substantial completion of the STAR Project on March 31,
2000, just in time for the ICA's expiry. 9
Threatened with impending unemployment, respondent, through his lawyer,
requested a negotiation conference and demanded that he be assigned to the
BBRI project. Nippon insisted that respondent’s contract was for a fixed term that
had already expired, and refused to negotiate for the renewal of the ICA. 10
As he was not able to generate a positive response from the petitioners,
respondent consequently initiated on June 1, 2000 Civil Case No. 00-0264 for
specific performance and damages with the Regional Trial Court of Lipa City. 11
For their part, petitioners, contending that the ICA had been perfected in Japan
and executed by and between Japanese nationals, moved to dismiss the
complaint for lack of jurisdiction. They asserted that the claim for improper pre-
termination of respondent's ICA could only be heard and ventilated in the proper
courts of Japan following the principles of lex loci celebrationis and lex
contractus.12
In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the
replacement of Kitamura by a certain Y. Kotake as project manager of the BBRI
Project.13
On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank14
that matters connected with the performance of contracts are regulated by the law
prevailing at the place of performance, 15 denied the motion to dismiss. 16 The trial
court subsequently denied petitioners' motion for reconsideration, 17 prompting
them to file with the appellate court, on August 14, 2000, their first Petition for
Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205]. 18 On August 23,
2000, the CA resolved to dismiss the petition on procedural grounds—for lack of
statement of material dates and for insufficient verification and certification against
forum shopping.19 An Entry of Judgment was later issued by the appellate court on
September 20, 2000.20
Aggrieved by this development, petitioners filed with the CA, on September 19,
2000, still within the reglementary period, a second Petition for Certiorari under
Rule 65 already stating therein the material dates and attaching thereto the proper
verification and certification. This second petition, which substantially raised the
same issues as those in the first, was docketed as CA-G.R. SP No. 60827.21
Ruling on the merits of the second petition, the appellate court rendered the
assailed April 18, 2001 Decision 22 finding no grave abuse of discretion in the trial
court's denial of the motion to dismiss. The CA ruled, among others, that the
principle of lex loci celebrationis was not applicable to the case, because nowhere
in the pleadings was the validity of the written agreement put in issue. The CA thus
declared that the trial court was correct in applying instead the principle of lex loci
solutionis.23
Petitioners' motion for reconsideration was subsequently denied by the CA in the
assailed July 25, 2001 Resolution.24
Remaining steadfast in their stance despite the series of denials, petitioners
instituted the instant Petition for Review on Certiorari25 imputing the following
errors to the appellate court:
A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT THE TRIAL COURT VALIDLY EXERCISED
JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE THE
FACT THAT THE CONTRACT SUBJECT MATTER OF THE
PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO
JAPANESE NATIONALS, WRITTEN WHOLLY IN THE JAPANESE
LANGUAGE AND EXECUTED IN TOKYO, JAPAN.
B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
OVERLOOKING THE NEED TO REVIEW OUR ADHERENCE TO THE
PRINCIPLE OF LEX LOCI SOLUTIONIS IN THE LIGHT OF RECENT
DEVELOPMENT[S] IN PRIVATE INTERNATIONAL LAWS.26
The pivotal question that this Court is called upon to resolve is whether the subject
matter jurisdiction of Philippine courts in civil cases for specific performance and
damages involving contracts executed outside the country by foreign nationals
may be assailed on the principles of lex loci celebrationis, lex contractus, the "state
of the most significant relationship rule," or forum non conveniens.
However, before ruling on this issue, we must first dispose of the procedural
matters raised by the respondent.
Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP
No. 60205 has already barred the filing of the second petition docketed as CA-
G.R. SP No. 60827 (fundamentally raising the same issues as those in the first
one) and the instant petition for review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of
the petition's defective certification of non-forum shopping, it was a dismissal
without prejudice.27 The same holds true in the CA's dismissal of the said case due
to defects in the formal requirement of verification 28 and in the other requirement in
Rule 46 of the Rules of Court on the statement of the material dates. 29 The
dismissal being without prejudice, petitioners can re-file the petition, or file a
second petition attaching thereto the appropriate verification and certification—as
they, in fact did—and stating therein the material dates, within the prescribed
period30 in Section 4, Rule 65 of the said Rules.31
The dismissal of a case without prejudice signifies the absence of a decision on
the merits and leaves the parties free to litigate the matter in a subsequent action
as though the dismissed action had not been commenced. In other words, the
termination of a case not on the merits does not bar another action involving the
same parties, on the same subject matter and theory. 32
Necessarily, because the said dismissal is without prejudice and has no res
judicata effect, and even if petitioners still indicated in the verification and
certification of the second certiorari petition that the first had already been
dismissed on procedural grounds,33 petitioners are no longer required by the Rules
to indicate in their certification of non-forum shopping in the instant petition for
review of the second certiorari petition, the status of the aforesaid first petition
before the CA. In any case, an omission in the certificate of non-forum shopping
about any event that will not constitute res judicata and litis pendentia, as in the
present case, is not a fatal defect. It will not warrant the dismissal and nullification
of the entire proceedings, considering that the evils sought to be prevented by the
said certificate are no longer present.34
The Court also finds no merit in respondent's contention that petitioner Hasegawa
is only authorized to verify and certify, on behalf of Nippon, the certiorari petition
filed with the CA and not the instant petition. True, the Authorization 35 dated
September 4, 2000, which is attached to the second certiorari petition and which is
also attached to the instant petition for review, is limited in scope—its wordings
indicate that Hasegawa is given the authority to sign for and act on behalf of the
company only in the petition filed with the appellate court, and that authority cannot
extend to the instant petition for review. 36 In a plethora of cases, however, this
Court has liberally applied the Rules or even suspended its application whenever a
satisfactory explanation and a subsequent fulfillment of the requirements have
been made.37 Given that petitioners herein sufficiently explained their misgivings
on this point and appended to their Reply 38 an updated Authorization 39 for
Hasegawa to act on behalf of the company in the instant petition, the Court finds
the same as sufficient compliance with the Rules.
However, the Court cannot extend the same liberal treatment to the defect in the
verification and certification. As respondent pointed out, and to which we agree,
Hasegawa is truly not authorized to act on behalf of Nippon in this case. The
aforesaid September 4, 2000 Authorization and even the subsequent August 17,
2001 Authorization were issued only by Nippon's president and chief executive
officer, not by the company's board of directors. In not a few cases, we have ruled
that corporate powers are exercised by the board of directors; thus, no person, not
even its officers, can bind the corporation, in the absence of authority from the
board.40 Considering that Hasegawa verified and certified the petition only on his
behalf and not on behalf of the other petitioner, the petition has to be denied
pursuant to Loquias v. Office of the Ombudsman.41 Substantial compliance will not
suffice in a matter that demands strict observance of the Rules. 42 While technical
rules of procedure are designed not to frustrate the ends of justice, nonetheless,
they are intended to effect the proper and orderly disposition of cases and
effectively prevent the clogging of court dockets.43
Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition
to question the trial court's denial of their motion to dismiss. It is a well-established
rule that an order denying a motion to dismiss is interlocutory, and cannot be the
subject of the extraordinary petition for certiorari or mandamus. The appropriate
recourse is to file an answer and to interpose as defenses the objections raised in
the motion, to proceed to trial, and, in case of an adverse decision, to elevate the
entire case by appeal in due course. 44 While there are recognized exceptions to
this rule,45 petitioners' case does not fall among them.
This brings us to the discussion of the substantive issue of the case.
Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question
its jurisdiction to hear and resolve the civil case for specific performance and
damages filed by the respondent. The ICA subject of the litigation was entered into
and perfected in Tokyo, Japan, by Japanese nationals, and written wholly in the
Japanese language. Thus, petitioners posit that local courts have no substantial
relationship to the parties46 following the [state of the] most significant relationship
rule in Private International Law.47
The Court notes that petitioners adopted an additional but different theory when
they elevated the case to the appellate court. In the Motion to Dismiss 48 filed with
the trial court, petitioners never contended that the RTC is an inconvenient forum.
They merely argued that the applicable law which will determine the validity or
invalidity of respondent's claim is that of Japan, following the principles of lex loci
celebrationis and lex contractus.49 While not abandoning this stance in their
petition before the appellate court, petitioners on certiorari significantly invoked the
defense of forum non conveniens.50 On petition for review before this Court,
petitioners dropped their other arguments, maintained the forum non conveniens
defense, and introduced their new argument that the applicable principle is the
[state of the] most significant relationship rule.51
Be that as it may, this Court is not inclined to deny this petition merely on the basis
of the change in theory, as explained in Philippine Ports Authority v. City of Iloilo.52
We only pointed out petitioners' inconstancy in their arguments to emphasize their
incorrect assertion of conflict of laws principles.
To elucidate, in the judicial resolution of conflicts problems, three consecutive
phases are involved: jurisdiction, choice of law, and recognition and enforcement
of judgments. Corresponding to these phases are the following questions: (1)
Where can or should litigation be initiated? (2) Which law will the court apply? and
(3) Where can the resulting judgment be enforced? 53
Analytically, jurisdiction and choice of law are two distinct concepts. 54 Jurisdiction
considers whether it is fair to cause a defendant to travel to this state; choice of
law asks the further question whether the application of a substantive law which
will determine the merits of the case is fair to both parties. The power to exercise
jurisdiction does not automatically give a state constitutional authority to apply
forum law. While jurisdiction and the choice of the lex fori will often coincide, the
"minimum contacts" for one do not always provide the necessary "significant
contacts" for the other. 55 The question of whether the law of a state can be applied
to a transaction is different from the question of whether the courts of that state
have jurisdiction to enter a judgment.56
In this case, only the first phase is at issue—jurisdiction.1âwphi1 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 court's jurisdiction herein, petitioners
are actually referring to subject matter jurisdiction.
Jurisdiction over the subject matter in a judicial proceeding is conferred by the
sovereign authority which establishes and organizes the court. It is given only by
law and in the manner prescribed by law. 58 It is further determined by the
allegations of the complaint irrespective of whether the plaintiff is entitled to all or
some of the claims asserted therein. 59 To succeed in its motion for the dismissal of
an action for lack of jurisdiction over the subject matter of the claim, 60 the movant
must show that the court or tribunal cannot act on the matter submitted to it
because no law grants it the power to adjudicate the claims. 61
In the instant case, petitioners, in their motion to dismiss, do not claim that the trial
court is not properly vested by law with jurisdiction to hear the subject controversy
for, indeed, Civil Case No. 00-0264 for specific performance and damages is one
not capable of pecuniary estimation and is properly cognizable by the RTC of Lipa
City.62 What they rather raise as grounds to question subject matter jurisdiction are
the principles of lex loci celebrationis and lex contractus, and the "state of the most
significant relationship rule."
The Court finds the invocation of these grounds unsound.
Lex loci celebrationis relates to the "law of the place of the ceremony" 63 or the law
of the place where a contract is made. 64 The doctrine of lex contractus or lex loci
contractus means the "law of the place where a contract is executed or to be
performed."65 It controls the nature, construction, and validity of the contract 66 and
it may pertain to the law voluntarily agreed upon by the parties or the law intended
by them either expressly or implicitly. 67 Under the "state of the most significant
relationship rule," to ascertain what state law to apply to a dispute, the court should
determine which state has the most substantial connection to the occurrence and
the parties. In a case involving a contract, the court should consider where the
contract was made, was negotiated, was to be performed, and the domicile, place
of business, or place of incorporation of the parties. 68 This rule takes into account
several contacts and evaluates them according to their relative importance with
respect to the particular issue to be resolved.69
Since these three principles in conflict of laws make reference to the law applicable
to a dispute, they are rules proper for the second phase, the choice of law. 70 They
determine which state's law is to be applied in resolving the substantive issues of a
conflicts problem.71 Necessarily, as the only issue in this case is that of jurisdiction,
choice-of-law rules are not only inapplicable but also not yet called for.
Further, petitioners' premature invocation of choice-of-law rules is exposed by the
fact that they have not yet pointed out any conflict between the laws of Japan and
ours. Before determining which law should apply, first there should exist a conflict
of laws situation requiring the application of the conflict of laws rules. 72 Also, when
the law of a foreign country is invoked to provide the proper rules for the solution of
a case, the existence of such law must be pleaded and proved. 73
It should be noted that when a conflicts case, one involving a foreign element, is
brought before a court or administrative agency, there are three alternatives open
to the latter in disposing of it: (1) dismiss the case, either because of lack of
jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction
over the case and apply the internal law of the forum; or (3) assume jurisdiction
over the case and take into account or apply the law of some other State or
States.74 The court’s power to hear cases and controversies is derived from the
Constitution and the laws. While it may choose to recognize laws of foreign
nations, the court is not limited by foreign sovereign law short of treaties or other
formal agreements, even in matters regarding rights provided by foreign
sovereigns.75
Neither can the other ground raised, forum non conveniens,76 be used to deprive
the trial court of its jurisdiction herein. First, it is not a proper basis for a motion to
dismiss because Section 1, Rule 16 of the Rules of Court does not include it as a
ground.77 Second, whether a suit should be entertained or dismissed on the basis
of the said doctrine depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court. 78 In this case, the RTC decided
to assume jurisdiction. Third, the propriety of dismissing a case based on this
principle requires a factual determination; hence, this conflicts principle is more
properly considered a matter of defense.79
Accordingly, since the RTC is vested by law with the power to entertain and hear
the civil case filed by respondent and the grounds raised by petitioners to assail
that jurisdiction are inappropriate, the trial and appellate courts correctly denied the
petitioners’ motion to dismiss.
WHEREFORE, premises considered, the petition for review on certiorari is
DENIED.
SO ORDERED.
G.R. No. 198587, January 14, 2015
SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA J. BETIA, Petitioners, v.
MA. JOPETTE M. REBESENCIO, MONTASSAH B. SACAR-ADIONG, ROUEN
RUTH A. CRISTOBAL AND LORAINE S. SCHNEIDER-CRUZ, Respondents.
DECISION
LEONEN, J.:
All Filipinos are entitled to the protection of the rights guaranteed in the
Constitution.
This is a Petition for Review on Certiorari with application for the issuance of a
temporary restraining order and/or writ of preliminary injunction under Rule 45 of
the 1997 Rules of Civil Procedure praying that judgment be rendered reversing
and setting aside the June 16, 2011 Decision1 and September 13, 2011
Resolution2 of the Court of Appeals in CA-G.R. SP. No. 113006.
Petitioner Saudi Arabian Airlines (Saudia) is a foreign corporation established and
existing under the laws of Jeddah, Kingdom of Saudi Arabia. It has a Philippine
office located at 4/F, Metro House Building, Sen. Gil J. Puyat Avenue, Makati City. 3
In its Petition filed with this court, Saudia identified itself as
follows:chanroblesvirtuallawlibrary
1. Petitioner SAUDIA is a foreign corporation established and existing under the
Royal Decree No. M/24 of 18.07.1385H (10.02.1962G) in Jeddah, Kingdom of
Saudi Arabia ("KSA"). Its Philippine Office is located at 4/F Metro House Building,
Sen, Gil J. Puyat Avenue, Makati City (Philippine Office). It may be served with
orders of this Honorable Court through undersigned counsel at 4 th and 6th Floors,
Citibank Center Bldg., 8741 Paseo de Roxas, Makati City. 4 (Emphasis supplied)
Respondents (complainants before the Labor Arbiter) were recruited and hired by
Saudia as Temporary Flight Attendants with the accreditation and approval of the
Philippine Overseas Employment Administration.5 After undergoing seminars
required by the Philippine Overseas Employment Administration for deployment
overseas, as well as training modules offered by Saudia (e.g., initial flight
attendant/training course and transition training), and after working as Temporary
Flight Attendants, respondents became Permanent Flight Attendants. They then
entered into Cabin Attendant contracts with Saudia: Ma. Jopette M. Rebesencio
(Ma. Jopette) on May 16, 1990;6 Montassah B. Sacar-Adiong (Montassah) and
Rouen Ruth A. Cristobal (Rouen Ruth) on May 22, 1993; 7 and Loraine Schneider-
Cruz (Loraine) on August 27, 1995.8
Respondents continued their employment with Saudia until they were separated
from service on various dates in 2006.9
Respondents contended that the termination of their employment was illegal. They
alleged that the termination was made solely because they were pregnant. 10
As respondents alleged, they had informed Saudia of their respective pregnancies
and had gone through the necessary procedures to process their maternity leaves.
Initially, Saudia had given its approval but later on informed respondents that its
management in Jeddah, Saudi Arabia had disapproved their maternity leaves. In
addition, it required respondents to file their resignation letters. 11
Respondents were told that if they did not resign, Saudia would terminate them all
the same. The threat of termination entailed the loss of benefits, such as
separation pay and ticket discount entitlements.12
Specifically, Ma. Jopette received a call on October 16, 2006 from Saudia's Base
Manager, Abdulmalik Saddik (Abdulmalik).13 Montassah was informed personally
by Abdulmalik and a certain Faisal Hussein on October 20, 2006 after being
required to report to the office one (1) month into her maternity leave. 14 Rouen
Ruth was also personally informed by Abdulmalik on October 17, 2006 after being
required to report to the office by her Group Supervisor. 15 Loraine received a call
on October 12, 2006 from her Group Supervisor, Dakila Salvador. 16
Saudia anchored its disapproval of respondents' maternity leaves and demand for
their resignation on its "Unified Employment Contract for Female Cabin Attendants"
(Unified Contract).17 Under the Unified Contract, the employment of a Flight
Attendant who becomes pregnant is rendered void. It
provides:chanroblesvirtuallawlibrary
(H) Due to the essential nature of the Air Hostess functions to be physically fit on
board to provide various services required in normal or emergency cases on both
domestic/international flights beside her role in maintaining continuous safety and
security of passengers, and since she will not be able to maintain the required
medical fitness while at work in case of pregnancy, accordingly, if the Air Hostess
becomes pregnant at any time during the term of this contract, this shall
render her employment contract as void and she will be terminated due to
lack of medical fitness.18 (Emphasis supplied)
In their Comment on the present Petition,19 respondents emphasized that the
Unified Contract took effect on September 23, 2006 (the first day of Ramadan), 20
well after they had filed and had their maternity leaves approved. Ma. Jopette filed
her maternity leave application on September 5, 2006. 21 Montassah filed her
maternity leave application on August 29, 2006, and its approval was already
indicated in Saudia's computer system by August 30, 2006. 22 Rouen Ruth filed her
maternity leave application on September 13, 2006,23 and Loraine filed her
maternity leave application on August 22, 2006.24
Rather than comply and tender resignation letters, respondents filed separate
appeal letters that were all rejected.25
Despite these initial rejections, respondents each received calls on the morning of
November 6, 2006 from Saudia's office secretary informing them that their
maternity leaves had been approved. Saudia, however, was quick to renege on its
approval. On the evening of November 6, 2006, respondents again received calls
informing them that it had received notification from Jeddah, Saudi Arabia that their
maternity leaves had been disapproved.26
Faced with the dilemma of resigning or totally losing their benefits, respondents
executed handwritten resignation letters. In Montassah's and Rouen Ruth's cases,
their resignations were executed on Saudia's blank letterheads that Saudia had
provided. These letterheads already had the word "RESIGNATION" typed on the
subject portions of their headings when these were handed to respondents. 27
On November 8, 2007, respondents filed a Complaint against Saudia and its
officers for illegal dismissal and for underpayment of salary, overtime pay, premium
pay for holiday, rest day, premium, service incentive leave pay, 13 th month pay,
separation pay, night shift differentials, medical expense reimbursements,
retirement benefits, illegal deduction, lay-over expense and allowances, moral and
exemplary damages, and attorney's fees.28 The case was initially assigned to
Labor Arbiter Hermino V. Suelo and docketed as NLRC NCR Case No. 00-11-
12342-07.
Saudia assailed the jurisdiction of the Labor Arbiter. 29 It claimed that all the
determining points of contact referred to foreign law and insisted that the
Complaint ought to be dismissed on the ground of forum non conveniens.30 It
added that respondents had no cause of action as they resigned voluntarily. 31
On December 12, 2008, Executive Labor Arbiter Fatima Jambaro-Franco rendered
the Decision32 dismissing respondents' Complaint. The dispositive portion of this
Decision reads:chanroblesvirtuallawlibrary
WHEREFORE, premises' considered, judgment is hereby rendered DISMISSING
the instant complaint for lack of jurisdiction/merit.33cralawlawlibrary
On respondents' appeal, the National Labor Relations Commission's Sixth Division
reversed the ruling of Executive Labor Arbiter Jambaro-Franco. It explained that
"[considering that complainants-appellants are OFWs, the Labor Arbiters and the
NLRC has [sic] jurisdiction to hear and decide their complaint for illegal
termination."34 On the matter of forum non conveniens, it noted that there were no
special circumstances that warranted its abstention from exercising jurisdiction. 35
On the issue of whether respondents were validly dismissed, it held that there was
nothing on record to support Saudia's claim that respondents resigned voluntarily.
The dispositive portion of the November 19, 2009 National Labor Relations
Commission Decision36 reads:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, judgment is hereby rendered finding the
appeal impressed with merit. The respondents-appellees are hereby directed to
pay complainants-appellants the aggregate amount of SR614,001.24
corresponding to their backwages and separation pay plus ten (10%) percent
thereof as attorney's fees. The decision of the Labor Arbiter dated December 12,
2008 is hereby VACATED and SET ASIDE. Attached is the computation prepared
by this Commission and made an integral part of this Decision. 37cralawlawlibrary
In the Resolution dated February 11, 2010,38 the National Labor Relations
Commission denied petitioners' Motion for Reconsideration.
In the June 16, 2011 Decision,39 the Court of Appeals denied petitioners' Rule 65
Petition and modified the Decision of the National Labor Relations Commission
with respect to the award of separation pay and backwages.
The dispositive portion of the Court of Appeals Decision
reads:chanroblesvirtuallawlibrary
WHEREFORE, the instant petition is hereby DENIED. The Decision dated
November 19, 2009 issued by public respondent, Sixth Division of the National
Labor Relations Commission - National Capital Region is MODIFIED only insofar
as the computation of the award of separation pay and backwages. For greater
clarity, petitioners are ordered to pay private respondents separation pay which
shall be computed from private respondents' first day of employment up to the
finality of this decision, at the rate of one month per year of service and backwages
which shall be computed from the date the private respondents were illegally
terminated until finality of this decision. Consequently, the ten percent (10%)
attorney's fees shall be based on the total amount of the award. The assailed
Decision is affirmed in all other respects.
The labor arbiter is hereby DIRECTED to make a recomputation based on the
foregoing.40cralawlawlibrary
In the Resolution dated September 13, 2011,41 the Court of Appeals denied
petitioners' Motion for Reconsideration.
Hence, this Appeal was filed.
The issues for resolution are the following:
First, whether the Labor Arbiter and the National Labor Relations Commission may
exercise jurisdiction over Saudi Arabian Airlines and apply Philippine law in
adjudicating the present dispute;
Second, whether respondents' voluntarily resigned or were illegally terminated;
and
Lastly, whether Brenda J. Betia may be held personally liable along with Saudi
Arabian Airlines.chanRoblesvirtualLawlibrary
I
Summons were validly served on Saudia and jurisdiction over it validly acquired.
There is no doubt that the pleadings and summons were served on Saudia through
its counsel.42 Saudia, however, claims that the Labor Arbiter and the National
Labor Relations Commission had no jurisdiction over it because summons were
never served on it but on "Saudia Manila."43 Referring to itself as "Saudia Jeddah,"
it claims that "Saudia Jeddah" and not "Saudia Manila" was the employer of
respondents because:
First, "Saudia Manila" was never a party to the Cabin Attendant contracts entered
into by respondents;
Second, it was "Saudia Jeddah" that provided the funds to pay for respondents'
salaries and benefits; and
Lastly, it was with "Saudia Jeddah" that respondents filed their resignations. 44
Saudia posits that respondents' Complaint was brought against the wrong party
because "Saudia Manila," upon which summons was served, was never the
employer of respondents.45
Saudia is vainly splitting hairs in its effort to absolve itself of liability. Other than its
bare allegation, there is no basis for concluding that "Saudia Jeddah" is distinct
from "Saudia Manila."
What is clear is Saudia's statement in its own Petition that what it has is a
"Philippine Office . . . located at 4/F Metro House Building, Sen. Gil J. Puyat
Avenue, Makati City."46 Even in the position paper that Saudia submitted to the
Labor Arbiter,47 what Saudia now refers to as "Saudia Jeddah" was then only
referred to as "Saudia Head Office at Jeddah, KSA," 48 while what Saudia now
refers to as "Saudia Manila" was then only referred to as "Saudia's office in
Manila."49
By its own admission, Saudia, while a foreign corporation, has a Philippine office.
Section 3(d) of Republic Act No.. 7042, otherwise known as the Foreign
Investments Act of 1991, provides the following:chanroblesvirtuallawlibrary
The phrase "doing business" shall include . . . opening offices, whether
called "liaison" offices or branches; . . . and any other act or acts that imply a
continuity of commercial dealings or arrangements and contemplate to that extent
the performance of acts or works, or the exercise of some of the functions normally
incident to, and in progressive prosecution of commercial gain or of the purpose
and object of the business organization. (Emphasis supplied)
A plain application of Section 3(d) of the Foreign Investments Act leads to no other
conclusion than that Saudia is a foreign corporation doing business in the
Philippines. As such, Saudia may be sued in the Philippines and is subject to the
jurisdiction of Philippine tribunals.
Moreover, since there is no real distinction between "Saudia Jeddah" and "Saudia
Manila" — the latter being nothing more than Saudia's local office — service of
summons to Saudia's office in Manila sufficed to vest jurisdiction over Saudia's
person in Philippine tribunals.chanRoblesvirtualLawlibrary
II
Saudia asserts that Philippine courts and/or tribunals are not in a position to make
an intelligent decision as to the law and the facts. This is because respondents'
Cabin Attendant contracts require the application of the laws of Saudi Arabia,
rather than those of the Philippines.50 It claims that the difficulty of ascertaining
foreign law calls into operation the principle of forum non conveniens, thereby
rendering improper the exercise of jurisdiction by Philippine tribunals. 51
A choice of law governing the validity of contracts or the interpretation of its
provisions dees not necessarily imply forum non conveniens. Choice of law and
forum non conveniens are entirely different matters.
Choice of law provisions are an offshoot of the fundamental principle of autonomy
of contracts. Article 1306 of the Civil Code firmly ensconces
this:chanroblesvirtuallawlibrary
Article 1306. The contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not contrary
to law, morals, good customs, public order, or public policy.
In contrast, forum non conveniens is a device akin to the rule against forum
shopping. It is designed to frustrate illicit means for securing advantages and
vexing litigants that would otherwise be possible if the venue of litigation (or
dispute resolution) were left entirely to the whim of either party.
Contractual choice of law provisions factor into transnational litigation and dispute
resolution in one of or in a combination of four ways: (1) procedures for settling
disputes, e.g., arbitration; (2) forum, i.e., venue; (3) governing law; and (4) basis
for interpretation. Forum non conveniens relates to, but is not subsumed by, the
second of these.
Likewise, contractual choice of law is not determinative of jurisdiction. Stipulating
on the laws of a given jurisdiction as the governing law of a contract does not
preclude the exercise of jurisdiction by tribunals elsewhere. The reverse is equally
true: The assumption of jurisdiction by tribunals does not ipso facto mean that it
cannot apply and rule on the basis of the parties' stipulation. In Hasegawa v.
Kitamura:52ChanRoblesVirtualawlibrary
Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction
considers whether it is fair to cause a defendant to travel to this state; choice of
law asks the further question whether the application of a substantive law V'hich
will determine the merits of the case is fair to both parties. The power to exercise
jurisdiction does not automatically give a state constitutional authority to apply
forum law. While jurisdiction and the choice of the lex fori will often, coincide, the
"minimum contacts" for one do not always provide the necessary "significant
contacts" for the other. The question of whether the law of a state can be applied to
a transaction is different from the question of whether the courts of that state have
jurisdiction to enter a judgment.53cralawlawlibrary
As various dealings, commercial or otherwise, are facilitated by the progressive
ease of communication and travel, persons from various jurisdictions find
themselves transacting with each other. Contracts involving foreign elements are,
however, nothing new. Conflict of laws situations precipitated by disputes and
litigation anchored on these contracts are not totally novel.
Transnational transactions entail differing laws on the requirements Q for the
validity of the formalities and substantive provisions of contracts and their
interpretation. These transactions inevitably lend themselves to the possibility of
various fora for litigation and dispute resolution. As observed by an eminent expert stipulations calls into operation the doctrine of forum non conveniens and, in turn,
on transnational law:chanroblesvirtuallawlibrary makes it necessary for Philippine tribunals to refrain from exercising jurisdiction.
The more jurisdictions having an interest in, or merely even a point of contact with,
a transaction or relationship, the greater the number of potential fora for the As mentioned, contractual choice of laws factors into transnational litigation in any
resolution of disputes arising out of or related to that transaction or relationship. In or a combination of four (4) ways. Moreover, forum non conveniens relates to one
a world of increased mobility, where business and personal transactions transcend of these: choosing between multiple possible fora.
national boundaries, the jurisdiction of a number of different fora may easily be
invoked in a single or a set of related disputes. 54cralawlawlibrary Nevertheless, the possibility of parallel litigation in multiple fora — along with the
host of difficulties it poses — is not unique to transnational litigation. It is a difficulty
Philippine law is definite as to what governs the formal or extrinsic validity of
that similarly arises in disputes well within the bounds of a singe jurisdiction.
contracts. The first paragraph of Article 17 of the Civil Code provides that "[t]he
forms and solemnities of contracts . . . shall be governed by the laws of the country
When parallel litigation arises strictly within the context of a single jurisdiction, such
in which they are executed"55 (i.e., lex loci celebrationis).
rules as those on forum shopping, litis pendentia, and res judicata come into
operation. Thus, in the Philippines, the 1997 Rules on Civil Procedure provide for
In contrast, there is no statutorily established mode of settling conflict of laws
willful and deliberate forum shopping as a ground not only for summary dismissal
situations on matters pertaining to substantive content of contracts. It has been
with prejudice but also for citing parties and counsels in direct contempt, as well as
noted that three (3) modes have emerged: (1) lex loci contractus or the law of the
for the imposition of administrative sanctions.60 Likewise, the same rules expressly
place of the making; (2) lex loci solutionis or the law of the place of performance;
provide that a party may seek the dismissal of a Complaint or another pleading
and (3) lex loci intentionis or the law intended by the parties.56
asserting a claim on the ground "[t]hat there is another action pending between the
same parties for the same cause," i.e., litis pendentia, or "[t]hat the cause of action
Given Saudia's assertions, of particular relevance to resolving the present dispute
is barred by a prior judgment,"61 i.e., res judicata.
is lex loci intentionis.
Forum non conveniens, like the rules of forum shopping, litis pendentia, and res
An author observed that Spanish jurists and commentators "favor lex loci
judicata, is a means of addressing the problem of parallel litigation. While the rules
intentionis."57 These jurists and commentators proceed from the Civil Code of
of forum shopping, litis pendentia, and res judicata are designed to address the
Spain, which, like our Civil Code, is silent on what governs the intrinsic validity of
problem of parallel litigation within a single jurisdiction, forum non conveniens is a
contracts, and the same civil law traditions from which we draw ours.
means devised to address parallel litigation arising in multiple jurisdictions.
In this jurisdiction, this court, in Philippine Export and Foreign Loan Guarantee v.
Forum non conveniens literally translates to "the forum is inconvenient." 62 It is a
V.P. Eusebio Construction, Inc.,58 manifested preference for allowing the parties to
concept in private international law and was devised to combat the "less than
select the law applicable to their contract":chanroblesvirtuallawlibrary
honorable" reasons and excuses that litigants use to secure procedural
No conflicts rule on essential validity of contracts is expressly provided for in our
advantages, annoy and harass defendants, avoid overcrowded dockets, and select
laws. The rule followed by most legal systems, however, is that the intrinsic validity
a "friendlier" venue.63 Thus, the doctrine of forum non conveniens addresses the
of a contract must be governed by the lex contractus or "proper law of the
same rationale that the rule against forum shopping does, albeit on a
contract." This is the law voluntarily agreed upon by the parties (the lex loci
multijurisdictional scale.
voluntatis) or the law intended by them either expressly or implicitly (the lex loci
intentionis). The law selected may be implied from such factors as substantial
Forum non conveniens, like res judicata,64 is a concept originating in common
connection with the transaction, or the nationality or domicile of the parties.
law.65 However, unlike the rule on res judicata, as well as those on litis pendentia
Philippine courts would do well to adopt the first and most basic rule in most legal
and forum shopping, forum non conveniens finds no textual anchor, whether in
systems, namely, to allow the parties to select the law applicable to their contract,
statute or in procedural rules, in our civil law system. Nevertheless, jurisprudence
subject to the limitation that it is not against the law, morals, or public policy of the
has applied forum non conveniens as basis for a court to decline its exercise of
forum and that the chosen law must bear a substantive relationship to the
jurisdiction.66
transaction.59 (Emphasis in the original)
Saudia asserts that stipulations set in the Cabin Attendant contracts require the Forum non conveniens is soundly applied not only to address parallel litigation and
application of the laws of Saudi Arabia. It insists that the need to comply with these undermine a litigant's capacity to vex and secure undue advantages by engaging
in forum shopping on an international scale. It is also grounded on principles of
comity and judicial efficiency.
Consistent with the principle of comity, a tribunal's desistance in exercising
jurisdiction on account of forum non conveniens is a deferential gesture to the
tribunals of another sovereign. It is a measure that prevents the former's having to
interfere in affairs which are better and more competently addressed by the latter.
Further, forum non conveniens entails a recognition not only that tribunals
elsewhere are better suited to rule on and resolve a controversy, but also, that
these tribunals are better positioned to enforce judgments and, ultimately, to
dispense justice. Forum non conveniens prevents the embarrassment of an
awkward situation where a tribunal is rendered incompetent in the face of the
greater capability — both analytical and practical — of a tribunal in another
jurisdiction.
The wisdom of avoiding conflicting and unenforceable judgments is as much a
matter of efficiency and economy as it is a matter of international courtesy. A court
would effectively be neutering itself if it insists on adjudicating a controversy when
it knows full well that it is in no position to enforce its judgment. Doing so is not
only an exercise in futility; it is an act of frivolity. It clogs the dockets of a.tribunal
and leaves it to waste its efforts on affairs, which, given transnational exigencies,
will be reduced to mere academic, if not trivial, exercises.
Accordingly, under the doctrine of forum non conveniens, "a court, in conflicts of
law cases, may refuse impositions on its jurisdiction where it is not the most
'convenient' or available forum and the parties are not precluded from seeking
remedies elsewhere."67 In Puyat v. Zabarte,68 this court recognized the following
situations as among those that may warrant a court's desistance from exercising
jurisdiction:chanroblesvirtuallawlibrary
1) The belief that the matter can be better tried and decided elsewhere, either
because the main aspects of the case transpired in a foreign jurisdiction or the
material witnesses have their residence there;
2) The belief that the non-resident plaintiff sought the forum[,] a practice known
as forum shopping[,] merely to secure procedural advantages or to convey or
harass the defendant;
3) The unwillingness to extend local judicial facilities to non residents or aliens
when the docket may already be overcrowded;
4) The inadequacy of the local judicial machinery for effectuating the right sought
to be maintained; and
5) The difficulty of ascertaining foreign law.69
In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of
Appeals,70 this court underscored that a Philippine court may properly assume
jurisdiction over a case if it chooses to do so to the extent: "(1) that the Philippine
Court is one to which the parties may conveniently resort to; (2) that the Philippine
Court is in a position to make an intelligent decision as to the law and the facts;
and (3) that the Philippine Court has or is likely to have power to enforce its
decision."71
The use of the word "may" (i.e., "may refuse impositions on its jurisdiction"72) in the
decisions shows that the matter of jurisdiction rests on the sound discretion of a
court. Neither the mere invocation of forum non conveniens nor the averment of
foreign elements operates to automatically divest a court of jurisdiction. Rather, a
court should renounce jurisdiction only "after 'vital facts are established, to
determine whether special circumstances' require the court's desistance." 73 As the
propriety of applying forum non conveniens is contingent on a factual
determination, it is, therefore, a matter of defense. 74
The second sentence of Rule 9, Section 1 of the 1997 Rules of Civil Procedure is
exclusive in its recital of the grounds for dismissal that are exempt from the
omnibus motion rule: (1) lack of jurisdiction over the subject matter; (2) litis
pendentia; (3) res judicata; and (4) prescription. Moreover, dismissal on account
offorum non conveniens is a fundamentally discretionary matter. It is, therefore, not
a matter for a defendant to foist upon the court at his or her own convenience;
rather, it must be pleaded at the earliest possible opportunity.
On the matter of pleading forum non conveniens, we state the rule, thus: Forum
non conveniens must not only be clearly pleaded as a ground for dismissal; it must
be pleaded as such at the earliest possible opportunity. Otherwise, it shall be
deemed waived.
This court notes that in Hasegawa,76 this court stated that forum non conveniens is
not a ground for a motion to dismiss. The factual ambience of this case however
does not squarely raise the viability of this doctrine. Until the opportunity comes to
review the use of motions to dismiss for parallel litigation, Hasegawa remains
existing doctrine.
Consistent with forum non conveniens as fundamentally a factual matter, it is
imperative that it proceed from & factually established basis. It would be improper
to dismiss an action pursuant to forum non conveniens based merely on a
perceived, likely, or hypothetical multiplicity of fora. Thus, a defendant must also
plead and show that a prior suit has, in fact, been brought in another jurisdiction.
The existence of a prior suit makes real the vexation engendered by duplicitous
litigation, the embarrassment of intruding into the affairs of another sovereign, and
the squandering of judicial efforts in resolving a dispute already lodged and better
resolved elsewhere. As has been noted:chanroblesvirtuallawlibrary
A case will not be stayed o dismissed on [forum] non conveniens grounds unless
the plaintiff is shown to have an available alternative forum elsewhere. On this, the
moving party bears the burden of proof.
A number of factors affect the assessment of an alternative forum's adequacy. The
statute of limitations abroad may have run, of the foreign court may lack either
subject matter or personal jurisdiction over the defendant. . . . Occasionally, doubts
will be raised as to the integrity or impartiality of the foreign court (based, for
example, on suspicions of corruption or bias in favor of local nationals), as to the
fairness of its judicial procedures, or as to is operational efficiency (due, for
example, to lack of resources, congestion and delay, or interfering circumstances
such as a civil unrest). In one noted case, [it was found] that delays of 'up to a
quarter of a century' rendered the foreign forum... inadequate for these
purposes.77cralawlawlibrary
We deem it more appropriate and in the greater interest of prudence that a
defendant not only allege supposed dangerous tendencies in litigating in this
jurisdiction; the defendant must also show that such danger is real and present in
that litigation or dispute resolution has commenced in another jurisdiction and that
a foreign tribunal has chosen to exercise jurisdiction.
III
Forum non conveniens finds no application and does not operate to divest
Philippine tribunals of jurisdiction and to require the application of foreign law.
Saudia invokes forum non conveniens to supposedly effectuate the stipulations of
the Cabin Attendant contracts that require the application of the laws of Saudi
Arabia.
Forum non conveniens relates to forum, not to the choice of governing law. Thai
forum non conveniens may ultimately result in the application of foreign law is
merely an incident of its application. In this strict sense, forum non conveniens is
not applicable. It is not the primarily pivotal consideration in this case.
In any case, even a further consideration of the applicability of forum non
conveniens on the incidental matter of the law governing respondents' relation with
Saudia leads to the conclusion that it is improper for Philippine tribunals to divest
themselves of jurisdiction.
Any evaluation of the propriety of contracting parties' choice of a forum and'its
incidents must grapple with two (2) considerations: first, the availability and
adequacy of recourse to a foreign tribunal; and second, the question of where, as
between the forum court and a foreign court, the balance of interests inhering in a
dispute weighs more heavily.
The first is a pragmatic matter. It relates to the viability of ceding jurisdiction to a
foreign tribunal and can be resolved by juxtaposing the competencies and practical
circumstances of the tribunals in alternative fora. Exigencies, like the statute of
limitations, capacity to enforce orders and judgments, access to records,
requirements for the acquisition of jurisdiction, and even questions relating to the
integrity of foreign courts, may render undesirable or even totally unfeasible
recourse to a foreign court. As mentioned, we consider it in the greater interest of
prudence that a defendant show, in pleading forum non conveniens, that litigation
has commenced in another jurisdiction and that a foieign tribunal has, in fact,
chosen to exercise jurisdiction.
Two (2) factors weigh into a court's appraisal of the balance of interests inhering in
a dispute: first, the vinculum which the parties and their relation have to a given
jurisdiction; and second, the public interest that must animate a tribunal, in its
capacity as an agent of the sovereign, in choosing to assume or decline
jurisdiction. The first is more concerned with the parties, their personal
circumstances, and private interests; the second concerns itself with the state and
the greater social order.
In considering the vinculum, a court must look into the preponderance of linkages
which the parties and their transaction may have to either jurisdiction. In this
respect, factors, such as the parties' respective nationalities and places of
negotiation, execution, performance, engagement or deployment, come into play.
In considering public interest, a court proceeds with a consciousness that it is an
organ of the state. It must, thus, determine if the interests of the sovereign (which
acts through it) are outweighed by those of the alternative jurisdiction. In this
respect, the court delves into a consideration of public policy. Should it find that
public interest weighs more heavily in favor of its assumption of jurisdiction, it
should proceed in adjudicating the dispute, any doubt or .contrary view arising
from the preponderance of linkages notwithstanding.
Our law on contracts recognizes the validity of contractual choice of law provisions.
Where such provisions exist, Philippine tribunals, acting as the forum court,
generally defer to the parties' articulated choice.
This is consistent with the fundamental principle of autonomy of contracts. Article
1306 of the Civ:l Code expressly provides that "[t]he contracting parties may
establish 'such stipulations, clauses, terms and conditions as they may deem
convenient."78 Nevertheless, while a Philippine tribunal (acting as the forum court)
is called upon to respect the parties' choice of governing law, such respect must
not be so permissive as to lose sight of considerations of law, morals, good
customs, public order, or public policy that underlie the contract central to the
controversy. obvious, pregnancy is an occurrence that pertains specifically to women. Saudia's
policy excludes from and restricts employment on the basis of no other
Specifically with respect to public policy, in Pakistan International Airlines consideration but sex.
Corporation v. Ople,79 this court explained that:chanroblesvirtuallawlibrary
counter-balancing the principle of autonomy of contracting parties is the equally We do not lose sight of the reality that pregnancy does present physical limitations
general rule that provisions of applicable law, especially provisions relating to that may render difficult the performance of functions associated with being a flight
matters affected with public policy, are deemed written inta the contract. Put a little attendant. Nevertheless, it would be the height of iniquity to view pregnancy as a
differently, the governing principle is that parties may not contract away applicable disability so permanent and immutable that, it must entail the termination of one's
provisions of law especially peremptory provisions dealing with matters heavily employment. It is clear to us that any individual, regardless of gender, may be
impressed with public interest.80 (Emphasis supplied) subject to exigencies that limit the performance of functions. However, we fail to
appreciate how pregnancy could be such an impairing occurrence that it leaves no
Article II, Section 14 of the 1987 Constitution provides that "[t]he State ... shall
other recourse but the complete termination of the means through which a woman
ensure the fundamental equality before the law of women and men." Contrasted
earns a living.
with Article II, Section 1 of the 1987 Constitution's statement that "[n]o person
shall ... be denied the equal protection of the laws," Article II, Section 14 exhorts
Apart from the constitutional policy on the fundamental equality before the law of
the State to "ensure." This does not only mean that the Philippines shall not
men and women, it is settled that contracts relating to labor and employment are
countenance nor lend legal recognition and approbation to measures that
impressed with public interest. Article 1700 of the Civil Code provides that "[t]he
discriminate on the basis of one's being male or female. It imposes an obligation to
relation between capital and labor are not merely contractual. They are so
actively engage in securing the fundamental equality of men and women.
impressed with public interest that labor contracts must yield to the common good."
The Convention on the Elimination of all Forms of Discrimination against Women
Consistent with this, this court's pronouncements in Pakistan International Airlines
(CEDAW), signed and ratified by the Philippines on July 15, 1980, and on August
Corporation83 are clear and unmistakable:chanroblesvirtuallawlibrary
5, 1981, respectively,81 is part of the law of the land. In view of the widespread
Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement
signing and ratification of, as well as adherence (in practice) to it by states, it may
which specifies, firstly, the law of Pakistan as the applicable law of the agreement,
even be said that many provisions of the CEDAW may have become customary
and, secondly, lays the venue for settlement of any dispute arising out of or in
international law. The CEDAW gives effect to the Constitution's policy statement in
connection with the agreement "only [in] courts of Karachi, Pakistan". The first
Article II, Section 14. Article I of the CEDAW defines "discrimination against
clause of paragraph 10 cannot be invoked to prevent the application of Philippine
women" as:chanroblesvirtuallawlibrary
labor laws and'regulations to the subject matter of this case, i.e., the employer-
any distinction, exclusion or restriction made on the basis of sex which has the
employee relationship between petitioner PIA and private respondents. We have
effect or purpose of impairing or nullifying the recognition, enjoyment or exercise
already pointed out that the relationship is much affected with public interest and
by women, irrespective of their marital status, on a basis of equality of men and
that the otherwise applicable Philippine laws and regulations cannot be rendered
women, of human rights and fundamental freedoms in the political, economic,
illusory by the parties agreeing upon some other law to govern their relationship. . .
social, cultural, civil or any other field.82cralawlawlibrary
. Under these circumstances, paragraph 10 of the employment agreement cannot
The constitutional exhortation to ensure fundamental equality, as illumined by its be given effect so as to oust Philippine agencies and courts of the jurisdiction
enabling law, the CEDAW, must inform and animate all the actions of all vested upon them by Philippine law.84 (Emphasis supplied)
personalities acting on behalf of the State. It is, therefore, the bounden duty of this
As the present dispute relates to (what the respondents allege to be) the illegal
court, in rendering judgment on the disputes brought before it, to ensure that no
termination of respondents' employment, this case is immutably a matter of public
discrimination is heaped upon women on the mere basis of their being women.
interest and public policy. Consistent with clear pronouncements in law and
This is a point so basic and central that all our discussions and pronouncements —
jurisprudence, Philippine laws properly find application in and govern this case.
regardless of whatever averments there may be of foreign law — must proceed
'Moreover, as this premise for Saudia's insistence on the application forum non
from this premise.
conveniens has been shattered, it follows that Philippine tribunals may properly
assume jurisdiction over the present controversy. Philippine jurisprudence provides
So informed and animated, we emphasize the glaringly discriminatory nature of
ample illustrations of when a court's renunciation of jurisdiction on account of
Saudia's policy. As argued by respondents, Saudia's policy entails the termination
forum non conveniens is proper or improper.'
of employment of flight attendants who become pregnant. At the risk of stating the
In Philsec Investment Corporation v. Court of Appeals,85 this court noted that the
trial court failed to consider that one of the plaintiffs was a domestic corporation,
that one of the defendants was a Filipino, and that it was the extinguishment of the
latter's debt that was the object of the transaction subject of the litigation. Thus,
this court held, among others, that the trial court's refusal to assume jurisdiction
was not justified by forum non conveniens and remanded the case to the trial
court.
In Raytheon International, Inc. v. Rouzie, Jr.,86 this court sustained the trial court's
assumption of jurisdiction considering that the trial court could properly enforce
judgment on the petitioner which was a foreign corporation licensed to do business
in the Philippines.
In Pioneer International, Ltd. v. Guadiz, Jr.,87 this court found no reason to disturb
the trial court's assumption of jurisdiction over a case in which, as noted by the trial
court, "it is more convenient to hear and decide the case in the Philippines
because Todaro [the plaintiff] resides in the Philippines and the contract allegedly
breached involve[d] employment in the Philippines." 88
In Pacific Consultants International Asia, Inc. v. Schonfeld,89 this court held that the
fact that the complainant in an illegal dismissal case was a Canadian citizen and a
repatriate did not warrant the application of forum non conveniens considering that:
(1) the Labor Code does not include forum non conveniens as a ground for the
dismissal of a complaint for illegal dismissal; (2) the propriety of dismissing a case
based on forum non conveniens requires a factual determination; and (3) the
requisites for assumption of jurisdiction as laid out in Bank of America, NT&SA90
were all satisfied.
In contrast, this court ruled in The Manila Hotel Corp. v. National Labor Relations
Commission91 that the National Labor Relations Q Commission was a seriously
inconvenient forum. In that case, private respondent Marcelo G. Santos was
working in the Sultanate of Oman when he received a letter from Palace Hotel
recruiting him for employment in Beijing, China. Santos accepted the offer.
Subsequently, however, he was released from employment supposedly due to
business reverses arising from political upheavals in China (i.e., the Tiananmen
Square incidents of 1989). Santos later filed a Complaint for illegal dismissal
impleading Palace Hotel's General Manager, Mr. Gerhard Schmidt, the Manila
Hotel International Company Ltd. (which was, responsible for training Palace
Hotel's personnel and staff), and the Manila Hotel Corporation (which owned 50%
of Manila Hotel International Company Ltd.'s capital stock).
In ruling against the National Labor Relations Commission's exercise of
jurisdiction, this court noted that the main aspects of the case transpired in two (2)
foreign jurisdictions, Oman and China, and that the case involved purely foreign
elements. Specifically, Santos was directly hired by a foreign employer through
correspondence sent to Oman. Also, the proper defendants were neither Philippine
nationals nor engaged in business in the Philippines, while the main witnesses
were not residents of the Philippines. Likewise, this court noted that the National
Labor Relations Commission was in no position to conduct the following: first,
determine the law governing the employment contract, as it was entered into in
foreign soil; second, determine the facts, as Santos' employment was terminated in
Beijing; and third, enforce its judgment, since Santos' employer, Palace Hotel, was
incorporated under the laws of China and was not even served with summons.
Contrary to Manila Hotel, the case now before us does not entail a preponderance
of linkages that favor a foreign jurisdiction.
Here, the circumstances of the parties and their relation do not approximate the
circumstances enumerated in Puyat,92 which this court recognized as possibly
justifying the desistance of Philippine tribunals from exercising jurisdiction.
First, there is no basis for concluding that the case can be more conveniently tried
elsewhere. As established earlier, Saudia is doing business in the Philippines. For
their part, all four (4) respondents are Filipino citizens maintaining residence in the
Philippines and, apart from their previous employment with Saudia, have no other
connection to the Kingdom of Saudi Arabia. It would even be to respondents'
inconvenience if this case were to be tried elsewhere.
Second, the records are bereft of any indication that respondents filed their
Complaint in an effort to engage in forum shopping or to vex and inconvenience
Saudia.
Third, there is no indication of "unwillingness to extend local judicial facilities to
non-residents or aliens."93 That Saudia has managed to bring the present
controversy all the way to this court proves this.
Fourth, it cannot be said that the local judicial machinery is inadequate for
effectuating the right sought to be maintained. Summons was properly served on
Saudia and jurisdiction over its person was validly acquired.
Lastly, there is not even room for considering foreign law. Philippine law properly
governs the present dispute.
As the question of applicable law has been settled, the supposed difficulty of
ascertaining foreign law (which requires the application of forum non conveniens)
provides no insurmountable inconvenience or special circumstance that will justify
depriving Philippine tribunals of jurisdiction.
Even if we were to assume, for the sake of discussion, that it is the laws of Saudi
Arabia which should apply, it does not follow that Philippine tribunals should refrain
from exercising jurisdiction. To. recall our pronouncements in Puyat, 94 as well as in
Bank of America, NT&SA,95 it is not so much the mere applicability of foreign law
which calls into operation forum non conveniens. Rather, what justifies a court's
desistance from exercising jurisdiction is "[t]he difficulty of ascertaining foreign
law"96 or the inability of a "Philippine Court to make an intelligent decision as to the
law[.]"97
Consistent with lex loci intentionis, to the extent that it is proper and practicable
(i.e., "to make an intelligent decision"98), Philippine tribunals may apply the foreign
law selected by the parties. In fact, (albeit without meaning to make a
pronouncement on the accuracy and reliability of respondents' citation) in this
case, respondents themselves have made averments as to the laws of Saudi
Arabia. In their Comment, respondents write:chanroblesvirtuallawlibrary
Under the Labor Laws of Saudi Arabia and the Philippines[,] it is illegal and
unlawful to terminate the employment of any woman by virtue of pregnancy. The
law in Saudi Arabia is even more harsh and strict [sic] in that no employer can
terminate the employment of a female worker or give her a warning of the same
while on Maternity Leave, the specific provision of Saudi Labor Laws on the matter
is hereto quoted as follows:chanroblesvirtuallawlibrary
"An employer may not terminate the employment of a female worker or give her a
warning of the same while on maternity leave." (Article 155, Labor Law of the
Kingdom of Saudi Arabia, Royal Decree No. M/51.)99cralawlawlibrary
All told, the considerations for assumption of jurisdiction by Philippine tribunals as
outlined in Bank of America, NT&SA100 have been satisfied. First, all the parties are
based in the Philippines and all the material incidents transpired in this jurisdiction.
Thus, the parties may conveniently seek relief from Philippine tribunals. Second,
Philippine tribunals are in a position to make an intelligent decision as to the law
and the facts. Third, Philippine tribunals are in a position to enforce their decisions.
There is no compelling basis for ceding jurisdiction to a foreign tribunal. Quite the
contrary, the immense public policy considerations attendant to this case behoove
Philippine tribunals to not shy away from their duty to rule on the
case.chanRoblesvirtualLawlibrary
IV
Respondents were illegally terminated.
In Bilbao v. Saudi Arabian Airlines,101 this court defined voluntary resignation as
"the voluntary act of an employee who is in a situation where one believes that
personal reasons cannot be sacrificed in favor of the exigency of the service, and
one has no other choice but to dissociate oneself from employment. It is a formal
pronouncement or relinquishment of an office, with the intention of relinquishing
the office accompanied by the act of relinquishment." 102 Thus, essential to the act
of resignation is voluntariness. It must be the result of an employee's exercise of
his or her own will.
In the same case of Bilbao, this court advanced a means for determining whether
an employee resigned voluntarily:chanroblesvirtuallawlibrary
As the intent to relinquish must concur with the overt act of relinquishment, the
acts of the employee before and after the alleged resignation must be considered
in determining whether he or she, in fact, intended, to sever his or her
employment.103 (Emphasis supplied)
On the other hand, constructive dismissal has been defined as "cessation of work
because 'continued employment is rendered impossible, unreasonable or unlikely,
as an offer involving a demotion in rank or a diminution in pay' and other
benefits."104
In Penaflor v. Outdoor Clothing Manufacturing Corporation,105 constructive
dismissal has been described as tantamount to "involuntarily [sic] resignation due
to the harsh, hostile, and unfavorable conditions set by the employer." 106 In the
same case, it was noted that "[t]he gauge for constructive dismissal is whether a
reasonable person in the employee's position would feel compelled to give up his
employment under the prevailing circumstances."107
Applying the cited standards on resignation and constructive dismissal, it is clear
that respondents were constructively dismissed. Hence, their termination was
illegal.
The termination of respondents' employment happened when they were pregnant
and expecting to incur costs on account of child delivery and infant rearing. As
noted by the Court of Appeals, pregnancy is a time when they need employment to
sustain their families.108 Indeed, it goes against normal and reasonable human
behavior to abandon one's livelihood in a time of great financial need.
It is clear that respondents intended to remain employed with Saudia. All they did
was avail of their maternity leaves. Evidently, the very nature of a maternity leave
means that a pregnant employee will not report for work only temporarily and that
she will resume the performance of her duties as soon as the leave allowance
expires.
It is also clear that respondents exerted all efforts to' remain employed with
Saudia. Each of them repeatedly filed appeal letters (as much as five [5] letters in
the case of Rebesencio109) asking Saudia to reconsider the ultimatum that they
resign or be terminated along with the forfeiture of their benefits. Some of them
even went to Saudia's office to personally seek reconsideration. 110
Respondents also adduced a copy of the "Unified Employment Contract for
Female Cabin Attendants."111 This contract deemed void the employment of a flight
attendant who becomes pregnant and threatened termination due to lack of
medical fitness.112 The threat of termination (and the forfeiture of benefits that it
entailed) is enough to compel a reasonable person in respondents' position to give
up his or her employment.
Saudia draws attention to how respondents' resignation letters were supposedly
made in their own handwriting. This minutia fails to surmount all the other
indications negating any voluntariness on respondents' part. If at all, these same
resignation letters are proof of how any supposed resignation did not arise from
respondents' own initiative. As earlier pointed out, respondents' resignations were
executed on Saudia's blank letterheads that Saudia had provided. These
letterheads already had the word "RESIGNATION" typed on the subject portion of
their respective headings when these were handed to
respondents.113ChanRoblesVirtualawlibrary
"In termination cases, the burden of proving just or valid cause for dismissing an
employee rests on the employer."114 In this case, Saudia makes much of how
respondents supposedly completed their exit interviews, executed quitclaims,
received their separation pay, and took more than a year to file their Complaint. 115
If at all, however, these circumstances prove only the fact of their occurrence,
nothing more. The voluntariness of respondents' departure from Saudia is non
sequitur.
Mere compliance with standard procedures or processes, such as the completion
of their exit interviews, neither negates compulsion nor indicates voluntariness.
As with respondent's resignation letters, their exit interview forms even support
their claim of illegal dismissal and militates against Saudia's arguments. These exit
interview forms, as reproduced by Saudia in its own Petition, confirms the
unfavorable conditions as regards respondents' maternity leaves. Ma. Jopette's
and Loraine's exit interview forms are particularly telling:chanroblesvirtuallawlibrary
a. From Ma. Jopette's exit interview form:
3. In what respects has the job met or failed to meet your expectations?
THE SUDDEN TWIST OF DECISION REGARDING THE MATERNITY LEAVE.116
b. From Loraine's exit interview form:
1. What are your main reasons for leaving Saudia? What company are you
joining?
xxx xxx xxx
Others
CHANGING POLICIES REGARDING MATERNITY LEAVE (PREGNANCY) 117
As to respondents' quitclaims, in Phil. Employ Services and Resources, Inc. v.
Paramio,118 this court noted that "[i]f (a) there is clear proof that the waiver was
wangled from an unsuspecting or gullible person; or (b) the terms of the settlement
are unconscionable, and on their face invalid, such quitclaims must be struck down
as invalid or illegal."119 Respondents executed their quitclaims after having been
unfairly given an ultimatum to resign or be terminated (and forfeit their
benefits).chanRoblesvirtualLawlibrary
V
Having been illegally and unjustly dismissed, respondents are entitled to full
backwages and benefits from the time of their termination until the finality of this
Decision. They are likewise entitled to separation pay in the amount of one (1)
month's salary for every year of service until the fmality of this Decision, with a
fraction of a year of at least six (6) months being counted as one (1) whole year.
Moreover, "[m]oral damages are awarded in termination cases where the
employee's dismissal was attended by bad faith, malice or fraud, or where it
constitutes an act oppressive to labor, or where it was done in a manner contrary
to morals, good customs or public policy."120 In this case, Saudia terminated
respondents' employment in a manner that is patently discriminatory and running
afoul of the public interest that underlies employer-employee relationships. As
such, respondents are entitled to moral damages.
To provide an "example or correction for the public good" 121 as against such
discriminatory and callous schemes, respondents are likewise entitled to
exemplary damages.
In a long line of cases, this court awarded exemplary damages to illegally
dismissed employees whose "dismissal[s were] effected in a wanton, oppressive
or malevolent manner."122 This court has awarded exemplary damages to
employees who were terminated on such frivolous, arbitrary, and unjust grounds as
membership in or involvement with labor unions,123 injuries sustained in the course
of employment,124 development of a medical condition due to the employer's own
violation of the employment contract,125 and lodging of a Complaint against the
employer.126 Exemplary damages were also awarded to employees who were
deemed illegally dismissed by an employer in an attempt to evade compliance with
statutorily established employee benefits.127 Likewise, employees dismissed for
supposedly just causes, but in violation of due process requirements, were
awarded exemplary damages.128
These examples pale in comparison to the present controversy. Stripped of all
unnecessary complexities, respondents were dismissed for no other reason than
simply that they were pregnant. This is as wanton, oppressive, and tainted with
bad faith as any reason for termination of employment can be. This is no ordinary
case of illegal dismissal. This is a case of manifest gender discrimination. It is an
affront not only to our statutes and policies on employees' security of tenure, but
more so, to the Constitution's dictum of fundamental equality between men and
women.129
The award of exemplary damages is, therefore, warranted, not only to remind
employers of the need to adhere to the requirements of procedural and substantive
due process in termination of employment, but more importantly, to demonstrate
that gender discrimination should in no case be countenanced.
respondents commenced employment until the finality of this Decision at the
rate of one (1) month's salary for every year of service, with a fraction of a year
of at least six (6) months being counted as one (1) whole year;
(3) Moral damages in the amount of P100,000.00 per respondent;
(4) Exemplary damages in the amount of P200,000.00 per respondent; and
(5) Attorney's fees equivalent to 10% of the total award.

Having been compelled to litigate to seek reliefs for their illegal and unjust
dismissal, respondents are likewise entitled to attorney's fees in the amount of Interest of 6% per annum shall likewise be imposed on the total judgment award
10% of the total monetary award.130 from the finality of this Decision until full satisfaction thereof.

VI This case is REMANDED to the Labor Arbiter to make a detailed computation of

the amounts due to respondents which petitioner Saudi Arabian Airlines should pay
Petitioner Brenda J. Betia may not be held liable. without delay.

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

In Ever Electrical Manufacturing, Inc. (EEMI) v. Samahang Manggagawa ng Ever

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

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

WHEREFORE, with the MODIFICATIONS that first, petitioner Brenda J. Betia is

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

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

(2) Separation pay computed from the respective dates in which each of the