XI.

Contracts contract was executed in New York, CFI-Manila has no jurisdiction over
this case.
King Mau Wu v Sycip Issue: W/N CFI Manila has jurisdiction herein, despite the execution of the contract
in New York. (YES)
Doctrine: Contracts executed in foreign country, cognizable by local courts; no
conflict of laws where question involved is to enforce obligation arising from Held:
contract.
(1) Although the contract of agency was executed in New York, CFI Manila
has jurisdiction to try a personal action for the collection of a sum of
Facts:
money arising from such contract, because a non-resident may sue a
resident in the courts of this country where the defendant may be
(1) This claim involves an action filed by King Mau Wu to collect P59,082.92 with
summoned and his property leviable upon execution in case of a
interests, arising out of a shipment of 1,000 tons of coconut oil emulsion sold
favorable, final and executory.
by King, as agent of the Sycip, to Jas. Maxwell Fassett, who in turn assigned it
(2) There is no conflict of laws involved in this case because it is only a
to Fortrade Corporation.
question of enforcing an obligation created by or arising from contract,
(2) Under an agency agreement set forth in a letter in New York addressed to and
and unless the enforcement of the contract be against public policy of the
accepted by Sycip, King was made the executive agent of Sycip in the sale of
forum, it must be enforced.
Philippine coconut oil and its derivatives outside the Philippines, and was to be
(3) As to the merits of the case, there can be no doubt that the sale of the
paid 2½% on the total actual sale price of sales obtained through his efforts,
1,000 metric tons of coconut oil was not a separate and independent
and in addition thereto, 50% of the difference between the authorized sale
contract from that of the agency agreement.
price and the actual price.
o This is proven by 2 letters and a telegram written by Sycip, wherein
(3) After trial, the Court rendered judgment as prayed for in the complaint in
he himself confirmed the said transaction and King’s commission.
favor of King.
o The letter upon which Sycip relies for his defense is one of the
(4) Sycip filed a motion for new trial based on newly discovered evidence, which
several drafts which led to the execution of the agency agreement.
consists of:
Although such letter does not stipulate on the commission to be paid
a. Duplicate original of a letter covering the sale of 1,000 tons of coconut
to King as agent, yet if he paid King a 2½% commission on the first 3
oil soap emulsion signed by Maxwell to Sycip;
coconut emulsion shipments, there is no reason why he should not
b. L/C of Chemical Bank & Trust Company in favor of Maxwell, and assigned
pay him the same commission on the last shipment.
to Sycip;
Disposition: Hence, King is entitled to collect 7,598.88 for commission and P50,000
c. A letter by the Fortrade Corporation to Maxwell, whereby Fortrade
placed a firm order of 1,000 metric tons of coconut oil soap emulsion for ½ of the overprice or a total of P57,589.88, with lawful interests.
and Maxwell accepted.
(5) However, the motion was denied. Hence, Sycip appealed from the said 2. Pakistan International Airlines Corporation vs. Hon. Blas F. Ople
judgment. G.R. No. 61594, September 28, 1990
(6) Both parties are agreed that the only transaction or sale made by King, as 190 SCRA 90
agent of Sycip, was that of the subject coconut oil. Petition for certiorari to review the order of the Minister of Labor.
a. King still maintains that he is entitled to the claimed commissions.
b. Sycip contends that the coconut oil transaction as aforementioned was
not covered by the agency contract as it formed part of an independent FACTS:
and separate transaction, agreed upon on an earlier date, for which King On 2 December 1978, petitioner Pakistan International Airlines Corporation (PIA), a
has already been compensated. Moreover, he contends that as the foreign corporation licensed to do business in the Philippines, executed in Manila
two (2) separate contracts of employment, one with private respondent Ethelynne
B. Farrales and the other with private respondent Ma. M.C. Mamasig. The contracts
became effective on 9 January 1979 and provided for the duration of employment
and penalty, termination and the applicable law which is of Pakistan’s. They were
trained in Pakistan and worked as flight attendants with base station in Manila and
flying assignments to different parts of the Middle East and Europe.
A year and four (4) months prior to the expiration of the contracts of employment,
they received separate letters informing them that their services would be
terminated.
Private respondents Farrales and Mamasig jointly instituted a complaint for illegal
dismissal and non-payment of company benefits and bonuses, against PIA with the
then Ministry of Labor and Employment. Several attempts at conciliation were not
fruitful.
ISSUES:
1. Whether or not the Regional Director, MOLE, had jurisdiction over the
subject matter of the complaint initiated by private respondents for
illegal dismissal, jurisdiction over the same being lodged in the Arbitration
Branch of the National Labor Relations Commission (“NLRC”).
2. Whether or not the order of the Regional Director had been issued in
violation of petitioner’s right to procedural due process.
3. Whether or not the employment contract is the governing law between
the parties and not the provisions of the Labor Code.
4. ADR ISSUE: WON the provision in the contract that the venue for
settlement of any dispute arising out of or in connection with the
agreement is to be resolved only in courts of Karachi Pakistan is valid.
RULING:
1. At the time the complaint was initiated in September 1980 and at the time the
Orders assailed were rendered on January 1981 (by Regional Director Francisco L.
Estrella) and August 1982 (by Deputy Minister Vicente Leogardo, Jr.), the Regional
Director had jurisdiction over termination cases. Art. 278 of the Labor Code, as it
then existed, forbade the termination of the services of employees with at least
one (1) year of service without prior clearance from the Department of Labor and
Employment.
2. No. Petitioner was given an opportunity to submit its position paper and
evidence they had.
3. The principle of party autonomy in contracts is not an absolute principle. The
rule in Article 1306 of the Civil Code is that the contracting parties may establish
such stipulations as they may deem convenient, “provided they are not contrary to
law, morals, good customs, public order or public policy.” Thus, counter-balancing
the principle of autonomy of contracting parties is the equally general rule that
provisions of applicable law, especially provisions relating to matters affected with
public policy, are deemed written into the contract. The law relating to labor and
employment are impressed with public interest. Paragraph 5 of that employment
contract was inconsistent with Articles 280 and 281 of the Labor Code and thus,
cannot be given effect.
4. These circumstances – the employer-employee relationship between the parties;
the contract being not only executed in the Philippines, but also performed here, at
least partially; private respondents are Philippine citizens and petitioner, although
a foreign corporation, is licensed to do business and actually doing business and
hence resident in the Philippines; lastly, private respondents were based in the
Philippines in between their assigned flights to the Middle East and Europe – show
that the Philippine courts and administrative agencies are the proper fora for the
resolution of contractual disputes between the parties. The employment
agreement cannot be given effect so as to bar Philippine agencies and courts
vested with jurisdiction by Philippine law. Moreover, PIA failed to plead and
proved the contents of Pakistan law on the matter, it is therefore presumed that
the applicable provisions of the law of Pakistan are the same as the applicable
provisions of Philippine law. Hence, the provision in the contract that the venue for
settlement of any dispute arising out of or in connection with the agreement is to
be resolved only in courts of Karachi Pakistan is not valid.
Contracts; Parties may not contract away applicable provisions of law especially
peremptory provisions dealing with matters heavily impressed with public interest.
The principle of party autonomy in contracts is not absolute. – A contract freely
entered into should, of course, be respected, as PIA argues, since a contract is the
law between the parties. The principle of party autonomy in contracts is not,
however, an absolute principle. The rule in Article 1306, of our Civil Code is that the
contracting parties may establish such stipulations as they may deem convenient,
“provided they are not contrary to law, morals, good customs, public order or
public policy.” Thus, counter-balancing the principle of autonomy of contracting
parties is the equally general rule that provisions of applicable law, especially
provisions relating to matters affected with public policy, are deemed written into
the contract. Put a little differently, the governing principle is that parties may not
contract away applicable provisions of law especially peremptory provisions dealing
with matters heavily impressed with public interest. The law relating to labor and
employment is clearly such an area and parties are not at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations by
simply contracting with each other. It is thus necessary to appraise the contractual
provisions invoked by petitioner PIA in terms of their consistency with applicable
Philippine law and regulations.
3. Continental Micronesia v. Basso
GR No. 178382-83
Labor Relations: Jurisdiction
Facts:
Petitioner Continental Micronesia is a foreign corporation organized and existing
under the laws of and domiciled in the United States of America. It is licensed to do
business in the Philippines. Respondent, a US citizen residing in the Philippines,
accepted an offer to be a General Manager position by Mr. Braden, Managing
Director-Asia of Continental Airlines. On November 7, 1992, CMI took over the
Philippine operations of Continental, with respondent retaining his position as
General Manager. Thereafter, respondent received a letter from Mr. Schulz, who
was then CMI’s Vice President of Marketing and Sales, informing him that he has
agreed to work in CMI as a consultant on an “as needed basis.” Respondent wrote
a counter-proposal that was rejected by CMI.
Respondent then filed a complaint for illegal dismissal against the petitioner
corporation. Alleging the presence of foreign elements, CMI filed a Motion to
Dismiss on the ground of lack of jurisdiction over the person of CMI and the subject
matter of the controversy.
The Labor Arbiter agreed with CMI that the employment contract was executed in
the US “since the letter-offer was under the Texas letterhead and the acceptance of
Complainant was returned there.” Thus, applying the doctrine of lex loci
celebrationis, US laws apply. Also, applying lex loci contractus, the Labor Arbiter
ruled that the parties did not intend to apply Philippine laws.
The NLRC ruled that the Labor Arbiter acquired jurisdiction over the case when CMI
voluntarily submitted to his office’s jurisdiction by presenting evidence, advancing
arguments in support of the legality of its acts, and praying for reliefs on the merits
of the case.
The Court of Appeals ruled that the Labor Arbiter and the NLRC had jurisdiction
over the subject matter of the case and over the parties.
Issue:
Whether labor tribunals have jurisdiction over the case.
Held:
Yes. The Court ruled that the labor tribunals had jurisdiction over the parties and
the subject matter of the case. The employment contract of Basso was replete with
references to US laws, and that it originated from and was returned to the US, do
not automatically preclude our labor tribunals from exercising jurisdiction to hear
and try this case.
On the other hand, jurisdiction over the person of CMI was acquired through the
coercive process of service of summons. CMI never denied that it was served with
summons. CMI has, in fact, voluntarily appeared and participated in the
proceedings before the courts. Though a foreign corporation, CMI is licensed to do
business in the Philippines and has a local business address here. The purpose of
the law in requiring that foreign corporations doing business in the country be
licensed to do so, is to subject the foreign corporations to the jurisdiction of our
courts.
Where the facts establish the existence of foreign elements, the case presents a
conflicts-of-laws issue. Under the doctrine of forum non conveniens, a Philippine
court in a conflict-of-laws case may assume jurisdiction if it chooses to do so,
provided, that the following requisites are met: (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. All these
requisites are present here.
4. LWV Construction Corporation v. Marcelo Dupo
G.R. No. 172342, July 13, 2009
FACTS:
Petitioner LWV, a domestic corporation recruiting Filipino
workers, hired respondent as Civil Structural Superintendent to
work in Saudi Arabia for its principal, Mohammad Al-Mojil
Group/Establishment (MMG). Sometime February 1992, respondent
signed his first overseas employment contract. It was renewed five
times and all were fixed-period, renewable contracts for 1 year. The
6th and last contract stated that respondent's employment starts
upon reporting to work and ends when he leaves the work site.
When respondent left Saudi Arabia for the Philippines on April 30,
1999 and thereby termination his 6th contract, he informed MMG
through LWV that he needs to extend his vacation because his son
was hospitalized. He also sought a promotion with salary
adjustment. In reply, MMG informed him that his promotion is
subject to management's review; that his services are still needed;
that he was issued a plane ticket for his return flight to Saudi Arabia;
and that his decision regarding his employment must be made
within 7 days, otherwise, MMG "will be compelled to cancel his
slot." On July 6, 1999, respondent resigned.
Under the Law of Saudi Arabia, an employee who rendered
at least 5 years in a company within the jurisdiction of Saudi Arabia,
is entitled to the so-called long service award which is known to
others as longevity pay of at least one half month pay for every year
of service. In excess of five years an employee is entitled to one
month pay for every year of service. When he followed up his claim
for long service award and the MMG failed to respond, he filed a
complaint for payment of service award against LWV before the
NLRC. Aside from the allegation that it was already paid by MMG
after his 6th contract ended, LWV argued that the action has
prescribed when respondent filed the compliant 1 year and 7
months after his 6th contract ended, using Article 13 of the Saudi
Labor Law as basis which provides that action to enforce payment of
service award must be filed one year from the termination of the
labor contract for a specific period.
ISSUE:
Whether or not the action against petitioner has prescribed
with Article 13 of the Saudi Labor Law as basis.
HELD:
No, the Supreme Court held that what will apply on this
particular case is not Art. 13 of the Saudi Labor Law but Art. 291 of
the Philippine Labor Code which provides for a 3 year prescription
period for all money claims from employee-employer relationship. A
foreign procedural law shall not be applied even if the action is
based upon a foreign substantive law. The Court did not apply the
Art. 48 of the Code of Civil Procedure which provides that “if the
laws of the state or country where the cause of action arose, the
action is barred, it shall also be barred in the Philippine island
because the Court, in light of the provisions of the 1987
Constitution, Art. 48 cannot be applied ex proprio vigore insofar as
it ordains the application of the provision of the Saudi Law. The
courts of the forum will not enforce any foreign claim obnoxious to
the forum’s public policy. To enforce the one-year prescriptive
period of the Amiri Decree No. 23 of 1976 as regards the claims in
question would contravene the public policy on the protection to
labor. The Court therefore leaned on the constitutional provision of
on protection to labor rather that adopting the provision of the
foreign law.
5. Philippine Export and Foreign Loan Guarantee Corporation v V.P. Eusebio
Construction Inc.
Facts:
1. The State Organization of Buildings (SOB), Ministry of Housing and Construction,
Baghdad, Iraq awarded the construction of the Institute of Physical Therapy-
Medical Rehabilitation Center in Iraq to Ayjal Trading and Contracting Company for
a total contract price of about $18M.
2. Spouses Santos, in behalf of 3-Plex International, Inc., a local contractor engaged
in construction business, entered into a joint venture agreement with Ayjal wherein
the former undertook the execution of the entire a project, while the latter would
be entitled to a commission of 4%.
3. 3-Plex not accredited by the Philippine Overseas Construction Board (POCB)
assigned and transferred all its rights and interests to VPECI.
4. The SOB required the contractors to submit a performance bond representing
5% of the total contract price, an advance payment bond representing 10% of the
advance payment to be released upon signing of the contract. To comply with
these requirements 3-Plex and VPECI applied for a guarantee with Philguarantee, a
government financial institution empowered to issue guarantees for qualified
Filipino contractors.
5. But what SOB required was a guarantee from the Rafidain Bank of Baghdad so
Rafidain Bank issued a performance bond in favor of SOB on the condition that
another foreign bank (not Phil Guarantee) would issue the counter-guarantee.
Hence, Al Ahli Bank of Kuwait was chosen to provide the counter guarantee.
6.Afterwards, SOB and the joint venture of VPECI and Ayjal executed the service
contract. Under the contract, the joint venture would supply manpower and
materials, SOB would refund 25% of the project cost in Iraqi Dinar and 75% in US
dollars at an exchange rate of 1 Dinar to $3.37.
7.The project was not completed. Upon seeing the impossibility of meeting the
deadline, the joint venture worked for the renewal or extension (12x) of the
performance bond up to December 1986.
8. In October 1986, Al Ahli Bank sent a telex call demanding full payment of its
performance bond counter-guarantee. Upon receipt, VPECI requested Iraq Trade
and Economic Development Minister Fadhi Hussein to recall the telex for being in
contravention of its mutual agreement that the penalty will be held in abeyance
until completion of the project. It also wrote SOB protesting the telex since the
Iraqi government lacks foreign exchange to pay VPECI and the non-compliance with
the 75% billings in US dollars.
9. Philguarantee received another telex from Al Ahli stating that it already paid to
Rafidain Bank. The Central Bank authorized the remittance to Al Ahli Bank
representing the full payment of the performance counter-guarantee for VPECI's
project in Iraq.
10. Philguarantee sent letters to respondents demanding the full payment of the
surety bond. Respondents failed to pay so petitioner filed a civil case for collection
of sum of money.
11. Trial Court ruling: Dismissed. Philguarantee had no valid cause of action against
the respondents. The joint venture incurred no delay in the execution of the
project considering that SOB's violations of the contract rendered impossible the
performance of its undertaking.
12. CA: Affirmed.
Issue:
What law should be applied in determining whether or not contractor (joint
venture) has defaulted?
Held:
The question of whether there is a breach of the agreement which includes default
pertains to the INTRINSIC validity of the contract.
 No conflicts rule on essential validity of contracts is expressly provided for in our submitted her application for a quality control job in Taiwan, and signed with a
laws. The rule followed by most legal systems is that the intrinsic validity of a one-year employment contract for a monthly salary of NT$15,360.00.
contract must be governed by lex contractus (proper law of the contract). This may
be the law voluntarily agreed upon by the parties (lex loci voluntatis) or the law The agency required her to pay a placement fee of 70,000.00 when she signed the
intended by them either expressly or implicitly (lex loci intentionis). The law employment contract.
selected may be implied from factors such as substantial connection with the
She was deployed to work in Taiwan for Wacoal, but was given a position as a
transaction, or the nationality or domicile of the parties. Philippine courts adopt
cutter.
this: to allow the parties to select the law applicable to their contract, SUBJECT to
the limitation that it is not against the law, morals, public policy of the forum and
Sameer Overseas Placement Agency claims that on July 14, 1997, a certain Mr.
that the chosen law must bear a substantive relationship to the transaction.
Huwang from Wacoal informed Joy, without prior notice, that she was terminated
and that “she should immediately report to their office to get her salary and
In the case, the service contract between SOB and VPECI contains no express
passport.” She was asked to “prepare for immediate repatriation.”
choice of law. The laws of Iraq bear substantial connection to the transaction and
one of the parties is the Iraqi government. The place of performance is also in Iraq.
Joy claims that she was told that from June 26 to July 14, 1997, she only earned a
Hence, the issue of whether VPECI defaulted may be determined by the laws of
total of NT$9,000. According to her, Wacoal deducted NT$3,000 to cover her plane
Iraq.
ticket to Manila.
BUT! Since foreign law was not properly pleaded or proved, processual
She filed a filed a complaint with the National Labor Relations Commission against
presumption will apply.
petitioner and Wacoal for illegal dismissal.
According to Art 1169 of the Civil Code: In reciprocal obligations, neither party
Sameer’s Defense:
incurs in delay if the other party does not comply or is not ready to comply in a
proper manner what is incumbent upon him. o Respondent’s termination was due to her inefficiency, negligence in her
duties, and her “failure to comply with the work requirements [of] her foreign
As found by the lower courts: the delay or non-completion of the project was
[employer];
caused by factors not imputable to the Joint Venture, it was rather due to the
persistent violations of SOB, particularly it's failure to pay 75% of the accomplished o The agency also claimed that it did not ask for a placement fee of
work in US dollars. Hence, the joint venture does not incur in delay if the other NT$70,000.00 (evidenced by an OR bearing NT% 20,360.00);
party(SOB) fails to perform the obligation incumbent upon him.
o Petitioner added that Wacoal’s accreditation with petitioner had already
6. SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner, v. JOY C. been transferred to the Pacific Manpower & Management Services, Inc. (Aug. 06,
CABILES, Respondent. 1997) thus, obligation is substituted with Pacific, which the latter denied

FACTS OF THE CASE: Labor Arbiter Ruling:

Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and o Case is dismissed – Rationale: Complaint is based on mere allegations.
placement agency. Responding to an ad it published, respondent, Joy C. Cabiles,
o No excess payment of placement fees, based on the official receipt
presented by petitioner
o Transfer of obligation to Pacific is immaterial
NLRC Ruling:
o Joy is illegally dismissed
o Reiterated the doctrine that the burden of proof to show that the
dismissal was based on a just or valid cause belongs to the employer
o It found that Sameer Overseas Placement Agency failed to prove that
there were just causes for termination.
o There was no sufficient proof to show that respondent was inefficient in
her work and that she failed to comply with company requirements.41
Furthermore, procedural due process was not observed in terminating respondent.
o Did not rule on the issue of reimbursement of placement fees for lack of
jurisdiction
o It refused to entertain the issue of the alleged transfer of obligations to
Pacific.
o It did not acquire jurisdiction over that issue because Sameer Overseas
Placement Agency failed to appeal the Labor Arbiter’s decision not to rule on the
matter.
Sameer filed for MR but NLRC dismissed; filed for petition for certiorari at CA
CA Ruling:
o Affirmed NLRC with respect to the finding of illegal dismissal, Joy’s
entitlement to the equivalent of three months worth of salary, reimbursement of
withheld repatriation expense, and attorney’s fees.
o Remanded case to NLRC to address the validity of petitioner’s allegations
against Pacific.
ISSUE OF THE CASE:
o WON the Court of Appeals erred when it affirmed the ruling of the
National Labor Relations Commission finding respondent illegally dismissed and
awarding her three months’ worth of salary, the reimbursement of the cost of her
repatriation, and attorney’s fees despite the alleged existence of just causes of
termination;
o WON there was a just cause for termination because there was a finding
of Wacoal that respondent was inefficient in her work;
o WON Pacific that should now assume responsibility for Wacoal’s
contractual obligations to the workers originally recruited by petitioner
SC RULING/RATIONALE:
1.) JUST CAUSE:
o Sameer Overseas Placement Agency’s petition is without merit. SC find
for respondent.
o Sameer Overseas Placement Agency failed to show that there was just
cause for causing Joy’s dismissal. The employer, Wacoal, also failed to accord her
due process of law.
o Indeed, employers have the prerogative to impose productivity and
quality standards at work. They may also impose reasonable rules to ensure that
the employees comply with these standards.59 Failure to comply may be a just
cause for their dismissal. Certainly, employers cannot be compelled to retain the
services of an employee who is guilty of acts that are inimical to the interest of the
employer. While the law acknowledges the plight and vulnerability of workers, it
does not “authorize the oppression or self-destruction of the employer.”
Management prerogative is recognized in law and in our jurisprudence.This
prerogative, however, should not be abused. It is “tempered with the employee’s
right to security of tenure. Workers are entitled to substantive and procedural due
process before termination. They may not be removed from employment without a
valid or just cause as determined by law and without going through the proper
procedure.Security of tenure for labor is guaranteed by our Constitution
o With respect to the rights of overseas Filipino workers, follow the
principle of lex loci contractus.
o Pinned - Triple Eight Integrated Services, Inc. v. NLRC
o Article 282 of the Labor Code enumerates the just causes of termination
by the employer. Thus:
o Art. 282. Termination by employer.
o An employer may terminate an employment for any of the following
causes: (a) Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his work;(b)
Gross and habitual neglect by the employee of his duties;(c) Fraud or willful breach
by the employee of the trust reposed in him by his employer or duly authorized
representative;(d) Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or his duly
authorized representatives;(e) Other causes analogous to the foregoing.
o Petitioner’s allegation that respondent was inefficient in her work and
negligent in her duties may, therefore, constitute a just cause for termination
under Article 282(b), but only if petitioner was able to prove it.
o The burden of proving that there is just cause for termination is on the
employer. “The employer must affirmatively show rationally adequate evidence
that the dismissal was for a justifiable cause.” Failure to show that there was valid
or just cause for termination would necessarily mean that the dismissal was illegal.
o To show that dismissal resulting from inefficiency in work is valid, it must
be shown that:
o 1) the employer has set standards of conduct and workmanship against
which the employee will be judged;
o 2) the standards of conduct and workmanship must have been
communicated to the employee; and
o 3) the communication was made at a reasonable time prior to the
employee’s performance assessment.
o The regular employee must constantly attempt to prove to his or her
employer that he or she meets all the standards for employment. Courts should
remain vigilant on allegations of the employer’s failure to communicate work
standards that would govern one’s employment “if [these are] to discharge in good
faith [their] duty to adjudicate.”
2.) DUE PROCESS REQUIREMENT
o Petitioner failed to comply with the due process requirement
o A valid dismissal requires both a valid cause and adherence to the valid
procedure of dismissal.The employer is required to give the charged employee at
least two written notices before termination.
o One of the written notices must inform the employee of the particular
acts that may cause his or her dismissal.77 The other notice must “[inform] the
employee of the employer’s decision.” Aside from the notice requirement, the
employee must also be given “an opportunity to be heard.”
3.) Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995
o Respondent Joy Cabiles, having been illegally dismissed, is entitled to her
salary for the unexpired portion of the employment contract that was violated
together with attorney’s fees and reimbursement of amounts withheld from her
salary.
o Sec 10 of RA 1082 – MONEY CLAIMS
o SEC. 15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND
o The reinstatement of the clause in Republic Act No. 8042 was not yet in
effect at the time of respondent’s termination from work in 1997. Republic Act No.
8042 before it was amended by Republic Act No. 10022 governs this case.
o Republic Act. No. 10022, violates the constitutional rights to equal
protection and due process.
o SC reiterate their finding in Serrano v. Gallant Maritime that limiting
wages that should be recovered by an illegally dismissed overseas worker to three
months is both a violation of due process and the equal protection clauses of the
Constitution.
o Respondent Joy Cabiles is entitled to her salary for the unexpired portion
of her contract, in accordance with Section 10 of Republic Act No. 8042. The award
of the three-month equivalence of respondent’s salary must be modified
accordingly. Since she started working on June 26, 1997 and was terminated on July
14, 1997, respondent is entitled to her salary from July 15, 1997 to June 25, 1998.
“To rule otherwise would be iniquitous to petitioner and other OFWs, and would, in
effect, send a wrong signal that principals/employers and recruitment/manning
agencies may violate an OFW’s security of tenure which an employment contract
embodies and actually profit from such violation based on an unconstitutional
provision of law.”
o Respondent is also entitled to an interest of 6% per annum on her money
claims from the finality of this judgment.
4.) LIABILITIES OF EMPLOYER
o SC clarify the liabilities of Wacoal as principal and petitioner as the
employment agency that facilitated respondent’s overseas employment.
o Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995
provides that the foreign employer and the local employment agency are jointly
and severally liable for money claims including claims arising out of an employer-
employee relationship and/or damages. This section also provides that the
performance bond filed by the local agency shall be answerable for such money
claims or damages if they were awarded to the employee.
o This provision is in line with the state’s policy of affording protection to
labor and alleviating workers’ plight.
o The Migrant Workers and Overseas Filipinos Act of 1995 ensures that
overseas workers have recourse in law despite the circumstances of their
employment. By providing that the liability of the foreign employer may be
“enforced to the full extent” against the local agent, the overseas worker is assured
of immediate and sufficient payment of what is due them.
o Pinned – Prieto vs NLRC
o The Court is not unaware of the many abuses suffered by our overseas
workers in the foreign land where they have ventured, usually with heavy hearts, in
pursuit of a more fulfilling future. Breach of contract, maltreatment, rape,
insufficient nourishment, sub-human lodgings, insults and other forms of
debasement, are only a few of the inhumane acts to which they are subjected by
their foreign employers, who probably feel they can do as they please in their own
country. While these workers may indeed have relatively little defense against
exploitation while they are abroad, that disadvantage must not continue to burden
them when they return to their own territory to voice their muted complaint. There
is no reason why, in their very own land, the protection of our own laws cannot be
extended to them in full measure for the redress of their grievances.
The decision of the Court of Appeals is AFFIRMED with modification. Petitioner
Sameer Overseas Placement Agency is ORDERED to pay respondent Joy C. Cabiles
the amount equivalent to her salary for the unexpired portion of her employment
contract at an interest of 6% per annum from the finality of this judgment.
Petitioner is also ORDERED to reimburse respondent the withheld NT$3,000.00
salary and pay respondent attorney’s fees of NT$300.00 at an interest of 6% per
annum from the finality of this judgment.
The clause, “or for three (3) months for every year of the unexpired term,
whichever is less” in Section 7 of Republic Act No. 10022 amending Section 10 of
Republic Act No. 8042 is declared unconstitutional and, therefore, null and void.
XII. Tort and Crimes
1. Filartiga v. Pena-Irala
Brief Fact Summary. A suit against Pena-Irala (D) on
the premise that he had tortured to death the decedent of
Filartiga (P), was filed by Filartiga (P).
Synopsis of Rule of Law. For purpose of the Allen Tort
Statute, torture may be considered to violate law of
nations.
Facts. A suit claiming that Pena-Irala (D) had tortured
Filartiga’s (P) decedent to death while he was a police
Inspector General, was brought by Filartiga (P). All
parties were Paraguayan citizens. Jurisdiction was based
on the Allen Tort Statute, 28 U.S.C. S 1350, which
provided jurisdiction for tort committed in violation of
“the law of nations.― The case was dismissed by
the district court for lack of jurisdiction to which Filartiga
(P) appealed.
Issue. For purpose of the Allen Tort Statute, may torture
be considered as a violation of the law of nations?
Held. (Judge not stated in casebook excerpt). Yes. For
purpose of the Allen Tort Statute, torture may be
considered to violate law of nations. The prohibition
against torture has become part of customary
international law. Various United Nations declarations
such as the Universal Declaration of Human Rights and
the 1975 Declaration on the Protection of All Persons
from Torture further portrays the fact that prohibition
against torture has become part of customary
international law. Torture has been officially renounced in
the vast majority of nations and this is the reason why
this court concluded that torture violates the law of
nations.
Discussion. It is not new for many members of the
United Nations to make pronouncements and not be
pronouncements into action. It is no secret that torture is
still widely practiced if not by a majority of countries then
in a significant manner. Actual practice, and not U.N.
declarations have been argued by commentators as what
constitute international law.
2. Saudi Arabian Airlines V. CA
Laws Applicable: Art 19 and 21 of Civil Code
Lessons Applicable: Conflict of Laws, factual situation, connecting factor,
characterization, choice of law, State of the most significant relationship
FACTS:
 Saudi Arabian Airlines (SAUDIA), foreign airlines corporation doing
business in the Philippines and may be served summons in agent in
Makati, hired Milagros P. Morada as a flight attendant for its airlines
based in Jeddah, Saudi Arabia.
 April 27, 1990: While on a lay-over in Jakarta, Indonesia, Morada went to
a disco dance with fellow crew members Thamer Al-Gazzawi and Allah Al-
Gazzawi, both Saudi nationals. It was almost morning when they
returned to their hotels so they agreed to have breakfast together at the
room of Thamer. Shortly after Allah left the room, Thamer attempted to
rape Morada. Fortunately, a roomboy and several security personnel
heard her cries for help and rescued her. Indonesian police arrested
Thamer and Allah Al-Gazzawi, the latter as an accomplice.
 When Morada returned to Jeddah, SAUDIA officials interrogated her
about the Jakarta incident and requested her to go back to Jakarta to
help arrange the release of Thamer and Allah. In Jakarta, SAUDIA Legal
Officers negotiated with the police for the immediate release of the
detained crew members but did not succeed. Afraid that she might be
tricked into something she did not want because of her inability to
understand the local dialect, Morado refused to cooperate and declined
to sign a blank paper and a document written in the local
dialect. Eventually, SAUDIA allowed Morada to return to Jeddah but
barred her from the Jakarta flights.
 Indonesian authorities agreed to deport Thamer and Allah and they were
again put in service. While, Morada was transferred to Manila.
 January 14, 1992: Morada was asked to see Mr. Ali Meniewy, Chief Legal
Officer of SAUDIA, in Jeddah, Saudi Arabia. He brought her to the police
station where the police took her passport and questioned her about the
Jakarta incident. The police pressured her to drop the case against
Thamer and Allah. Not until she agreed to do so did the police return her
passport and allowed her to catch the afternoon flight out of Jeddah.
 June 16, 1993: Morada, while in Riyadh Saudi Arabia, was not allowed to
board the plane to Manila and instead ordered to take a later flight to
Jeddah to see Mr. Miniewy. Khalid of the SAUDIA office brought her to a
Saudi court where she was asked to sign a document written in Arabic.
They told her that this was necessary to close the case against Thamer
and Allah but it was actually a notice for her to appear before the court
on June 27, 1993. Plaintiff then returned to Manila.
 June 27, 1993: SAUDIA's Manila manager, Aslam Saleemi, assured
Morada that the investigation was routinary and that it posed no danger
to her so she reported to Miniewy in Jeddah for further
investigation. She was brought to the Saudi court.
 June 28, 1993: Saudi judge interrogated Morada through an interpreter
about the Jakarta incident for an hour and let her go. SAUDIA officers
forbidden her to take flight. She was told to go the Inflight Service
Office where her passport was taken and they told her to remain in
Jeddah, at the crew quarters, until further orders.
 July 3, 1993: She was brought to court again and to her astonishment and
shock, rendered a decision, translated to her in English, sentencing her to
five months imprisonment and to 286 lashes. The court tried her,
together with Thamer and Allah, and found her guilty of (1) adultery (2)
going to a disco, dancing and listening to the music in violation of Islamic
laws and (3) socializing with the male crew, in contravention of Islamic
tradition.
 Failing to seek the assistance of her employer, SAUDIA, she asked the
Philippine Embassy in Jeddah to help her while her case is on appeal. She
continued to workon the domestic flight of SAUDIA, while Thamer and
Allah continued to serve in the international flights.
 Because she was wrongfully convicted, the Prince of Makkah dismissed
the case against her and allowed her to leave Saudi Arabia. Before her
return to Manila, she was terminated from the service by SAUDIA,
without her being informed of the cause.
 November 23, 1993: Morada filed a Complaint for damages against
SAUDIA, and Khaled Al-Balawi, its country manager.
 January 19, 1994: SAUDIA filed an Omnibus Motion To Dismiss on
following grounds: (1) that the Complaint states no cause of action
against SAUDIA (2) that defendant Al-Balawi is not a real party in interest
(3) that the claim or demand set forth in the Complaint has been waived,
abandoned or otherwise extinguished and (4) that the trial court has no
jurisdiction to try the case.
 After opposition to the motion to dismiss by Morada and reply by
SAUDIA, Morada filed an Amended Complaint dropping Al-
Balawi. SAUDIA filed its Manifestation, Motion to Dismiss Amended
Complaint, subsequently motion for reconsideration which were all
denied.
 SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for
Issuance of Writ of Preliminary Injunction and/or Temporary Restraining
Order with the Court of Appeals. TRO was granted but Writ of
Preliminary Injunction was denied.
 CA: Philippines is an appropriate forum considering that the Amended
Complaint's basis for recovery of damages is Article 21 of the Civil Code,
and thus, clearly within the jurisdiction of respondent Court. It further
held that certiorari is not the proper remedy in a denial of a Motion to
Dismiss, inasmuch as the petitioner should have proceeded to trial, and in
case of an adverse ruling, find recourse in an appeal.
 SAUDIA filed its Supplemental Petition for Review with Prayer for
Temporary Restraining Order:
o It is a conflict of laws that must be settled at the outset:
Morada's claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia.
Existence of a foreign element qualifies the instant case for the application of the law
of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule.
 Morada: Amended Complaint is based on Articles 19 and 21 of the Civil
Code which is a matter of domestic law
ISSUE: W/N the RTC of Quezon City has jurisdiction over the case and it is the
proper forum for recovery of damages under Art. 21 of the Civil Code which should
govern.
HELD: YES.
On the presence of a “Foreign Element” in the 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. The forms in which this foreign
element may appear are many. The foreign element may simply consist in the fact
that one of the parties to a contract is an alien or has a foreign domicile, or that a
contract between nationals of one State involves properties situated in another
State. In other cases, the foreign element may assume a complex form.
In the instant case, the foreign element consisted in the fact that private
respondent Morada is a resident Philippine national, and that petitioner SAUDIA is
a resident foreign corporation. Also, by virtue of the employment of Morada with
the petitioner Saudia as a flight stewardess, events did transpire during her many
occasions of travel across national borders, particularly from Manila, Philippines to
Jeddah, Saudi Arabia, and vice versa, that caused a “conflicts” situation to arise.
COURT disagrees with MORADA that his is purely a domestic case. However, the
court finds that the RTC of Quezon City possesses jurisdiction over the subject
matter of the suit. Its authority to try and hear the case is provided for under
Section 1 of Republic Act No. 7691, to wit:
BP129 Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise
exclusive jurisdiction:
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.
The trial court also acquired jurisdiction over the parties. MORADA through her act
of filing, and SAUDIA by praying for the dismissal of the Amended Complaint on
grounds other than lack of jurisdiction.
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.
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.
In applying “State of the most significant relationship” rule, 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.
As already discussed, there is basis for the claim that over-all injury occurred and
lodged in the Philippines. There is likewise no question that private respondent is a
resident Filipina national, working with petitioner, a resident foreign corporation
engaged here in the business of international air carriage. Thus, the “relationship”
between the parties was centered here, although it should be stressed that this suit
is not based on mere labor law violations. From the record, the claim that the
Philippines has the most significant contact with the matter in this dispute, raised
by private respondent as plaintiff below against defendant (herein petitioner), in
our view, has been properly established.
NOTE:
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.
3. United States v. Noriega - 117 F.3d 1206 (11th Cir.
1997)
RULE:
A criminal defendant, abducted to the United States from a
nation with which it has an extradition treaty, does not thereby
acquire a defense to the jurisdiction of the United State's
courts. He may be tried in federal district court for violations of
the criminal law of the United States.
FACTS:
Manuel Antonio Noriega appealed his multiple convictions
stemming from his involvement in cocaine trafficking; and the
district court's denial of his motion for a new trial based on
newly discovered evidence. In attacking his convictions,
Noriega asserted that the district court should have dismissed
the indictment against him due to his status as a head of state
and the manner in which the United States brought him to
justice. Noriega also contended that the district court
committed two reversible evidentiary errors. Alternatively, he
sought new trial based on his discovery of: (1) the
government's suppression of its pact with a non-witness; and/or
(2) certain allegations, lodged after his conviction, that a group
associated with the undisclosed, cooperating non-witness
bribed a prosecution witness.
ISSUE:
Should the indictment be dismissed due to the defendant’s
status as a head of state?
ANSWER:
No.
CONCLUSION:
The court affirmed. The court rejected defendant's contention
that the indictment should have been dismissed due to his
status as a head of state and the manner in which the United
States brought him to justice, because he was denied head-of-
state immunity. The court also rejected defendant's alternative
contentions that he was entitled to a new trial based on his
discovery of the government's suppression of its pact with a
non-witness, and certain allegations, lodged after his
conviction, that a group associated with the undisclosed,
cooperating non-witness bribed a prosecution witness.
4. Del Socorro vs. Van Wilsem (alam mo nay an)
5. Attorney General v. Adolf Eichmann
Summary
The crimes perpetrated by the Nazis during Hitler’s reign against
Jewish citizens were some of the worst recorded in history. Although
accurate figures may never be known, it is estimated that some 6
million Jewish individuals died – men, women, and children from all
over Europe. They were deported from their homes in large freight
trains in appalling conditions, others starved or froze to death, others
still were taken away to concentration camps where the fit were
forced to perform manual labour whilst the weak were shot to death
or later, gassed to death in their thousands.
The Accused, Adolf Eichmann, was an Austrian by birth who
volunteered to work for the Security Service (SD) in Berlin. He rose
through the ranks and eventually occupied the position of Head of
Section (Referant) for Jewish Affairs charged with all matters related
to the implementation of the Final Solution to the Jewish Question. In
this capacity, he oversaw the transport and deportation of Jewish
persons, set up and personally ran an operations centre in Hungary
in order to implement the Final Solution there, organised the transfer
of money from evacuated Jews to the State and was responsible for
the administration of the camps at Terezin and Bergen-Belsen.
He was captured by Israeli Security Forces in Argentina and handed
over to the District Court of Jerusalem to stand trial for war crimes,
crimes against humanity and crimes against the Jewish people. He
was convicted of all 15 counts and sentenced to death. He was
unsuccessful in contesting the jurisdiction of the Court or defending
his actions by relying on superior orders.
Legally relevant facts
Prior to the outbreak of World War II, the Accused was a member of
the Austrian SS and later volunteered for a position with the Head
Office of the Security Service (SD) in Berlin (para. 59). When the SD
merged with the State Secret Police (Gestapo) to form the Head
Office for Reich Security (RSHA), the Accused occupied the role of
Special Officer of Zionist Affairs (para. 61). He was transferred to
Vienna in 1938 to administer the Central Office for the Emigration of
Austrian Jews (para. 64). His success was such that approximately
150,000 Austrian Jews were forced to emigrate and he was
appointed head of the new Reich Central Office for Jewish
Emigration in October 1939 (para. 65).
From the outbreak of the War to mid-1941, the Accused devised and
carried out the mass deportation of Jewish persons from his role as
the Special Referent for Emigration and Evacuation within the RSHA
(paras. 71-75) and explored the possibility of setting up a slave
Jewish state in Madagascar (para. 76).
In early 1942, the Accused was appointed the Referant of the RSHA
in matters connected to the Final Solution (para. 88). In implementing
the Final Solution, the Accused received information as to the
number of persons to be expelled (para. 90), organised the transfer
of money from evacuated Jews for the disposal of the SS (para. 91),
and oversaw the handling of the transport of Jews (para. 93), not
only in the Reich but also in other countries (para. 98). In particular,
he headed the Eichmann Special Operations Unit in Hungary and did
his utmost to carry out the Final Solution (para. 111). These
"Transport Jews" were taken to concentration camps and those who
were unfit for hard labour were exterminated immediately (para.
145).
In autumn 1942, a cover up effort was begun as bodies in mass
graves were burned in an effort to hide the slaughter (para. 148). The
concentration camps were evacuated (para. 149) – the Accused in
particular was responsible for all administrative matters connected
with the Terezin Ghetto (para. 152) and the camp at Bergen-Belsen
(para. 153).
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Core legal questions
 Does the District Court of Jerusalem have jurisdiction to try the
case in light of the fact that Eichmann is a foreign national and
crimes were committed on foreign territory?
 In the affirmative, is jurisdiction negated by the abduction of the
Accused from a foreign country?
 Is obeying superior orders a defence excluding criminal
responsibility?
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Specific legal rules and provisions
 Section 19 of the Criminal Code Ordinance of 1936.
 Sections 1(a)(1),(2),(3), 1(b) and 8 of the the Nazis and Nazi
Collaborators (Punishment) Law.
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Court's holding and analysis
The Court’s jurisdiction is founded upon it by the Nazis and Nazi
Collaborators (Punishment) Law 5710-1950. This law does not
violate the principles of international law (para. 10). Israel’s “right to
punish” is founded on two elements. First, the universal character of
the crimes in question, which are grave offences against the law of
nations itself and, in the absence of an international court, grant
jurisdiction to any domestic court (para. 12). Second, the specific
character of the crimes, which was the extermination of the Jewish
people, provides the necessary linking point between the Accused
and the newly-founded State of Israel, a State established and
recognised as the State of the Jews (para. 34). The crimes
committed by the Accused concern the vital interests of the State,
thus it has a right to punish the Accused pursuant to the protective
principle (para. 35).
This jurisdiction is not negated by the manner in which the Accused
was brought before the Court. It is an established rule of law that a
person standing trial for an offence against the laws of a State may
not oppose his being tried by reason of the illegality of his arrest or
the means by which he was brought to the jurisdiction of the court
(para. 41). This rule applies equally in cases where the accused is
relying on violations of international, rather than domestic, law (para.
47). Such a violation of international law constitutes an international
tort, which may be “cured” by waiver. In the present instance, the
joint decision of the Governments of Argentina and Israel of 3 August
1960 “cured” the international tort committed by Israel when it
entered Argentinian territory to abduct the Accused (para. 50).
Having examined the command structure in place at the SS and the
scope of the Accused’s authority, the Court concluded that the latter
acted in accordance with general directives from his superiors but he
retained wide powers of discretion (para. 180). Under Section 8 of
the Punishment Law, the defence of superior orders (contained in
Section 19(b) of the Criminal Code Ordinance of 1936) is not
available in case of offences enumerated by the afore-mentioned
Law but may be taken into account as a factor at sentencing (para.
218).
The Accused was convicted on all fifteen counts and sentenced to
death (para. 244).
United States v.
6.
Yunis
Brief Fact Summary
Yunis (Defendant) argued that the Government (Plaintiff)
could not prosecute him for a hijacking that he
perpetrated when its only connection to the United States
was that several Americans were on board the plane.
Synopsis of Rule of Law
The federal government may prosecute an airline hijacker
even if the hijacking’s only connection with the United
States was the presence of Americans on board the
plane.
Facts
Yunis (Defendant) and several accomplices hijacked a
Jordanian airliner while it was on the ground in Beirut.
The plane flew to several locations around the
Mediterranean Sea, and eventually flew back to Beirut,
where the hijackers blew up the plane and then escaped
into the hills. The only connection between the whole
event and the United States was that several Americans
were on board the whole time. Yunis (Defendant) was
indicted for violating the Hostage Taking Act, 18 U.S.C.
§ 1203. He was apprehended, and later indicted under
the Destruction of Aircraft Act, 18 U.S.C. § 32. He
moved to dismiss on grounds of jurisdiction.
Issue
May the federal government prosecute an airline hijacker
even if the hijacking’s only connection with the United
States was the presence of several Americans on board
the plane?
Held
(Parker, J.) Yes. The federal government may prosecute
an airline hijacker even if the hijacking’s only connection
with the United States was the presence of Americans on
board the plane. There must be jurisdiction under both
international and domestic law in order for jurisdiction to
exist in the situation of this case. International law relates
to the power of Congress to have extraterritorial
application of its law; domestic law relates to its intent to
do so. International law recognizes several bases for a
nation to give extraterritorial application to its laws. One is
the “universal principle.― Some acts are
considered to be so heinous and contrary to civilization
that any court may assert jurisdiction. The acts that fall
within this category are mainly defined by international
convention. The universal principle applies because
numerous conventions condemn hijacking and hostage
taking. The “passive personal principle― is also
relevant, which applies to offenses against a nation’s
citizens abroad. The United States has been slow to
recognize this principle, but it is now generally agreed
upon. International law having been disposed of on this
issue, domestic law must now be discussed. The
Hostage Taking Law, at subsection (b)(1)(A), clearly
includes an offender that has seized or detained a U.S.
citizen. The language could not be plainer. With regard to
the Destruction of Aircraft Act and the Federal Aviation
Act, 18 U.S.C. § 31, that the law was intended to apply
only when the aircraft in question either began or ended
its flight in the United States. Since the flight in question
did not do this, the Act does not apply. Motion denied in
part; granted in part.
Discussion
There are three other existing bases for jurisdiction that
are generally accepted. These are territorial (jurisdiction
over territory), national (jurisdiction over a person) and
protective (jurisdiction necessary to protect a state.) Of
the five generally recognized jurisdictional grounds, the
passive personal principle has been met with the most
resistance by U.S. courts and officials.
XIII. Recognition and Enforcement of Foreign Judgment
1. 014 National Union Fire Insurance Company v. Stolt-
Nielsen
GR No. 87958; April 26, 1990
EMERGENCY RECIT: United Coconut Chemicals (SHIPPER)
shipped distilled fatty acid on board MT “StoltSceptre” (CARRIER).
The shipment was insured under a marine cargo policy with National
Union Fire Insurance Co (INSURER). Upon receipt of the cargo by
the consignee in Netherlands, it was totally contaminated. Hence,
claim was made on the INSURER of the cargo. The INSURER as
subrogee filed a claim for damages against the CARRIER with RTC
Manila. The CARRIER invoked that arbitration must be done
pursuant to the Charter. The INSURER opposed, arguing that the
provision on arbitration was not included in the Bill of Lading. SC:
The INSURER cannot avoid the binding effect of the arbitration
clause. By subrogation, it became privy to the Charter Party as fully
as the SHIPPER before the latter was indemnified, because as
subrogee it stepped into the shoes of the SHIPPER and is subrogated
merely to the latter's rights.
FACTS:
 On 9 January 1985, United Coconut Chemicals, Inc.
shipped 404.774 metric tons of distilled C6-C18 fatty
acid on board MT "Stolt Sceptre," a tanker owned by
Stolt-Nielsen Philippines Inc., from Bauan, Batangas,
Philippines, consigned to "Nieuwe Matex" at
Rotterdam, Netherlands, covered by Tanker Bill of
Lading BL No. BAT-1.
 The shipment was insured under a marine cargo policy
with Petitioner National Union Fire Insurance Company
of Pittsburg (hereinafter referred to as INSURER), a
non-life American insurance corporation, through its
settling agent in the Philippines, the American
International Underwriters (Philippines), Inc., the other
petitioner herein.
 Upon receipt of the cargo by the consignee in the
Netherlands, it was found to be discoloured and totally
contaminated. Hence, a claim was made on the Insurer
of the cargo. The insurer as subrogee filed a claim for
damages against the carrier with the RTC of Manila.
 The carrier filed a motion to dismiss on the ground that
the case was arbritrable and pursuant to the charter
party as embodied in the bill of lading, arbitration must
be done. The insurer opposed the motion by arguing
 that the provision on arbitration was not included in the
bill of lading and even if it was included, it was
nevertheless unjust and unreasonable.
 The RTC denied the motion but upon reconsideration,
the resolution on the motion to dismiss was suspended
or deferred.
 The carrier then filed a petition for review on certiorari
with preliminary injunction/TRO which was granted by
the CA.
ISSUE: Are the terms of the Charter Party, particularly the provision
on arbitration, binding on the INSURER?
HELD: Yes. The pertinent portion of the Bill of Lading in issue
provides in part:
xxx [A]ll the terms whatsoever of the said Charter except the
rate and payment of freight specified therein apply to and
govern the rights of the parties concerned in this
shipment.xxx
The provision on arbitration in the Charter Party reads:
4. Arbitration. Any dispute arising from the making,
performance or termination of this Charter Party shall be
settled in New York, Owner and Charterer each appointing
an arbitrator, who shall be a merchant, broker or individual
experienced in the shipping business; the two thus chosen, if
they cannot agree, shall nominate a third arbitrator who shall
be an admiralty lawyer. Such arbitration shall be conducted
in conformity with the provisions and procedure of the
United States arbitration act, and a judgment of the court
shall be entered upon any award made by said arbitrator.
Nothing in this clause shall be deemed to waive Owner's
right to lien on the cargo for freight, deed of freight, or
demurrage.
Clearly, the Bill of Lading incorporates by reference the terms of the
Charter Party. It is settled law that the charter may be made part of
the contract under which the goods are carried by an appropriate
reference in the Bill of Lading. As the respondent Appellate Court
found, the INSURER "cannot feign ignorance of the arbitration
clause since it was already charged with notice of the existence of the
charter party due to an appropriate reference thereof in the bill of
lading and, by the exercise of ordinary diligence, it could have easily
obtained a copy thereof either from the shipper or the charterer.
We hold, therefore, that the INSURER cannot avoid the binding
effect of the arbitration clause. By subrogation, it became privy to
the Charter Party as fully as the SHIPPER before the latter was
indemnified, because as subrogee it stepped into the shoes of the
SHIPPER-ASSURED and is subrogated merely to the latter's rights.
It can recover only the amount that is recoverable by the assured.
And since the right of action of the SHIPPER-ASSURED is
governed by the provisions of the Bill of Lading, which includes by
reference the terms of the Charter Party, necessarily, a suit by the
INSURER is subject to the same agreements. It has not been shown
that the arbitral clause in question is null and void, inoperative, or
incapable of being performed. Nor has any conflict been pointed out
between the Charter Party and the Bill of Lading.
2.