Choosing which laws apply to your international dispute Courts cannot exercise authority or

proceedings over an individual if he or she is not within their jurisdiction. Most nations have a
set of rules to determine their jurisdiction in the event of an international dispute. The questions
then become:
Which law should be applied?
Which court should hear the case?
What is the effect of the national jurisdiction in the foreign country?

The choice of what law governs a contract does not usually become an issue unless there is an
international dispute between contracting parties. The rules come into play only when a question
cannot be decided by examining the contract or by reviewing the conduct or practices of the
parties or their industry.

However, it is best to make the choice during contract negotiations to understand the rights and
obligations of each party. This can limit surprises or additional costs in the event of dispute
resolution. When courts must decide on a choice of law issue, they usually have two choices:

Employ the law of the forum (lex fori). When the issue of what law to apply is procedural, courts
usually choose this law.

Employ the law of the site of the transaction or occurrence that resulted in the legal action (lex
loci). When the issue of what law to apply is substantive, courts usually choose this controlling
law.

The traditional way to approach choice of law dictates that courts must defer to the territorial
sovereignty of states. When an incident occurs in a state that leads to a legal action, the state
where the incident took place provides the people involved with “vested rights”.

Selected examples of vested rights include the right of a plaintiff to file a legal action; enforcing
a statute of limitations; limitations on how much money can be won in a legal action; and
particular burdens of evidence. Each state promotes the application of its own vested rights.
Saudi Arabian Airlines v. CA

Facts:
Saudi Arabian Airlines (SAUDIA) hired Milagros Morada as a Flight Attendant for its airlines
based in Jeddah, Saudi Arabia. While on a lay-over in Jakarta, Morada went to a disco with
fellow crew members Thamer & Allah, 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.
In which Allah left on some pretext. Thamer attempted to rape Morada but she was rescued by
hotel personnel when they heard her cries for help. Indonesian police came and arrested Thamer
and Allah, the latter as an accomplice.

Morada refused to cooperate when SAUDIA’s Legal Officer and its base manager tried to
negotiate the immediate release of the detained crew members with Jakarta police.
Through the intercession of Saudi Arabian government, Thamer and Allah were deported and,
eventually, again put in service by SAUDIA. But Morada was transferred to Manila.

One year and a half year later, Morada was again ordered to see SAUDIA’s Chief Legal Officer.
Instead, she was brought to a Saudi court where she was asked to sign a blank document, which
turned out to be a notice to her to appear in court. Monada returned to Manila.

The next time she was escorted by SAUDIA’s legal officer to court, the judge rendered a
decision against her sentencing her to five months imprisonment and to 286 lashes. Apparently,
she was tried by the court which 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.

After denial by SAUDIA, Morada sought help from Philippine Embassy during the
appeal. Prince of Makkah dismissed the case against her. SAUDIA fired her without notice.

Morada filed a complaint for damages against SAUDIA, with the RTC of QC.  SAUDIA filed
Omnibus Motion to Dismiss which raised the ground that the court has no jurisdiction, among
others which was denied

ISSUE: Whether RTC of QC has jurisdiction to hear and try the case

HELD: YES. The RTC of QC has jurisdiction and Philippine law should govern.Its jurisdiction
has basis on Sec. 1 of RA 7691 and Rules of Court on venue. Pragmatic considerations,
including the convenience of the parties, also weigh heavily in favor of the RTC QC assuming
jurisdiction. Paramount is the private interest of the litigant. 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 Morada 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.

By filing a complaint, Morada has voluntarily submitted to the jurisdiction of the court. By filing
several motions and praying for reliefs (such as dismissal), SAUDIA has effectively submitted to
the trial court’s jurisdiction.

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.

(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; 

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.

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.

SAUDI ARABIAN AIRLINES VS. COURT OF APPEALS,

297 SCRA 4691998FACTS:Herein private respondent Milagros P. Morada is a flight
attendant for petitioner SAUDIA airlines, where the former was tried to be raped by
Thamer and
Allah AlGazzawi, both Sauidi nationals and fellow crew member, after a night of dancing 
in their hotel while in Jakarta, Indonesia. She was rescued. After twoweeks of
detention the accused were both deported to Saudi and they were reinstated by
Saudia. She was pressured by police officers to make a statementand to drop the case against
the accused; in return she will then be allowed toreturn to Manila and retrieved her
passport. For the second time, she was askedb y h e r s u p e r i o r s t o a g a i n a p p e a r
b e f o r e t h e S a u d i c o u r t .   W i t h o u t h e r   knowledge, she was already tried by
Saudi court together with the accused andwas sentenced to five months imprisonment and to
286 lashes in connection withJakarta rape incident. The court found her guilty of (1)
adultery; (2) going to adisco, dancing and listening to the music in violation of
Islamic laws; and (3)socializing with the male crew, in contravention of Islamic tradition.

ISSUE/S:

WHETHER OR NOT the QC Regional Trial  Court has jurisdiction

tohear and try the civil case based on Article 21 of the New Civil
C o d e o r t h e Kingdom of Saudi Arabia court though there is the existence of foreign element.

RULING:The forms in which a foreign element may appear are many, such as the fact thatone party
is a resident Philippine national, and that the other is a resident foreigncorporation. The
forms in which this foreign element may appear are many. Theforeign element may simply
consist in the fact that one of the parties to a contractis an alien or has a foreign domicile, or
that a contract between nationals of oneState involves properties situated in another
State. In other cases, the foreignelement may assume a complex form. In the instant
case, the foreign elementconsisted in the
fact that private respondent Morada is a resident Philippinenational, and that
petitioner SAUDIA is a resident foreign corporation. Also,
byv i r t u e   o f   t h e   e m p l o y m e n t   o f   M o r a d a   w i t h   t h e
p e t i t i o n e r   S A U D I A   a s   a   f l i g h t stewardess, events did transpire during her 
many occasions of travel acrossnational borders, particularly from Manila,
Philippines to Jeddah, Saudi Arabia,and vice versa, that caused a “conflicts” situation to arise.
The forms in which a foreign element may appear are many, such as the fact thatone party is
a resident Philippine national, and that the other is a resident foreigncorporation. The
forms in which this foreign element may appear are many. Theforeign element may simply
consist in the fact that one of the parties to a contractis an alien or has a foreign domicile, or
that a contract between nationals of one

Phil. Export v. V.P. Eusebio

FACTS: Respondent entered into contract with SOB for construction of Therapy Bldg. SOB
demanded bonds to secure performance. Project was delayed DOCTRINE: By guaranty a person,
called the guarantor, binds himself to the creditor to fulfill the obligation of the principal debtor
in case the latter should fail to do so; if the person binds himself solidarily with the principal
debtor, the contract is called suretyship. That the guarantee issued by the petitioner is
unconditional and irrevocable does not make the petitioner a surety. As a guaranty, it is still
characterized by its subsidiary and conditional quality because it does not take effect until the
fulfillment of the condition. Unconditional guarantee is still subject to the condition that the
principal debtor should default in his obligation first before resort to the guarantor could be
had.

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 laws.
The rule followed by most legal systems is that the intrinsic validity of a 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 intended by them either
expressly or implicitly (lex loci intentionis). The law selected may be implied from factors
such as substantial connection with the transaction, or the nationality or domicile of the
parties. Philippine courts adopt 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 that the chosen law must bear a substantive relationship to the
transaction.

In the case, the service contract between SOB and VPECI contains no express 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. Hence, the
issue of whether VPECI defaulted may be determined by the laws of Iraq.

BUT! Since foreign law was not properly pleaded or proved, processual presumption will
apply.

According to Art 1169 of the Civil Code: In reciprocal obligations, neither party 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.

As found by the lower courts: the delay or non-completion of the project was 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 work in US dollars.
Hence, the joint venture does not incur in delay if the other party(SOB) fails to perform
the obligation incumbent upon him.

It must be noted that the service contract between SOB and VPECI contains no express
choice of the law that would govern it. In the United States and Europe, the two rules
that now seem to have emerged as "kings of the hill" are (1) the parties may choose the
governing law; and (2) in the absence of such a choice, the applicable law is that of the
State that "has the most significant relationship to the transaction and the
parties.Another authority proposed that all matters relating to the time, place, and
manner of performance and valid excuses for non-performance are determined by the
law of the place of performance or lex loci solutionis, which is useful because it is
undoubtedly always connected to the contract in a significant way.
 CRESCENT PETROLEUM, LTD., Petitioner, vs. M/V "LOK MAHESHWARI," THE
SHIPPING CORPORATION OF INDIA, and PORTSERV LIMITED
G.R. No. 155014 November 11, 2005
FACTS:
Respondent M/V "Lok Maheshwari" (Vessel) is an oceangoing vessel of
Indian registry that is owned by respondent Shipping Corporation of India (SCI), a
corporation organized and existing under the laws of India and principally owned
by the Government of India. It was time-chartered by respondent SCI to Halla
Merchant Marine Co. Ltd. (Halla), a South Korean company. Halla, in turn, sub-
chartered the Vessel through a time charter to Transmar Shipping, Inc.
(Transmar). Transmar further sub-chartered the Vessel to Portserv Limited
(Portserv). Both Transmar and Portserv are corporations organized and existing
under the laws of Canada.
On or about November 1, 1995, Portserv requested petitioner Crescent
Petroleum, Ltd. (Crescent), a corporation organized and existing under the laws
of Canada that is engaged in the business of selling petroleum and oil products
for the use and operation of oceangoing vessels, to deliver marine fuel oils
(bunker fuels) to the Vessel. Petitioner Crescent granted and confirmed the
request through an advice via facsimile dated November 2, 1995. As security for
the payment of the bunker fuels and related services, petitioner Crescent
received two (2) checks in the amounts of US$100,000.00 and US$200,000.00.
Thus, petitioner Crescent contracted with its supplier, Marine Petrobulk Limited
(Marine Petrobulk), another Canadian corporation, for the physical delivery of the
bunker fuels to the Vessel.
On or about November 4, 1995, Marine Petrobulk delivered the bunker fuels
amounting to US$103,544 inclusive of barging and demurrage charges to the
Vessel at the port of Pioneer Grain, Vancouver, Canada. The Chief Engineer
Officer of the Vessel duly acknowledged and received the delivery receipt. Marine
Petrobulk issued an invoice to petitioner Crescent for the US$101,400.00 worth of
the bunker fuels. Petitioner Crescent issued a check for the same amount in favor
of Marine Petrobulk, which check was duly encashed.
Having paid Marine Petrobulk, petitioner Crescent issued a revised invoice
dated November 21, 1995 to "Portserv Limited, and/or the Master, and/or Owners,
and/or Operators, and/or Charterers of M/V ‘Lok Maheshwari’" in the amount of
US$103,544.00 with instruction to remit the amount on or before December 1,
1995. The period lapsed and several demands were made but no payment was
received. Also, the checks issued to petitioner Crescent as security for the
payment of the bunker fuels were dishonored for insufficiency of funds. As a
consequence, petitioner Crescent incurred additional expenses of US$8,572.61
for interest, tracking fees, and legal fees.
On May 2, 1996, while the Vessel was docked at the port of Cebu City,
petitioner Crescent instituted before the RTC of Cebu City an action "for a sum of
money with prayer for temporary restraining order and writ of preliminary
attachment" against respondents Vessel and SCI, Portserv and/or Transmar.
 On May 3, 1996, the trial court issued a writ of attachment against the
Vessel with bond at P2,710,000.00. Petitioner Crescent withdrew its prayer for a
temporary restraining order and posted the required bond.
On May 18, 1996, summonses were served to respondents Vessel and SCI,
and Portserv and/or Transmar through the Master of the Vessel. On May 28, 1996,
respondents Vessel and SCI, through Pioneer Insurance and Surety Corporation
(Pioneer), filed an urgent ex-parte motion to approve Pioneer’s letter of
undertaking, to consider it as counter-bond and to discharge the attachment. On
May 29, 1996, the trial court granted the motion; thus, the letter of undertaking
was approved as counter-bond to discharge the attachment.
ISSUE:
Whether the Philippine court has or will exercise jurisdiction and entitled to
maritime lien under our laws on foreign vessel docked on Philippine port and
supplies furnished to a vessel in a foreign port?
RULING:
In a suit to establish and enforce a maritime lien for supplies furnished to a
vessel in a foreign port, whether such lien exists, or whether the court has or will
exercise jurisdiction, depends on the law of the country where the supplies were
furnished, which must be pleaded and proved.
The Lauritzen-Romero-Rhoditis trilogy of cases, which replaced such
single-factor methodologies as the law of the place of supply. The multiple-
contact test to determine, in the absence of a specific Congressional directive as
to the statute’s reach, which jurisdiction’s law should be applied. The following
factors were considered: (1) place of the wrongful act; (2) law of the flag; (3)
allegiance or domicile of the injured; (4) allegiance of the defendant shipowner;
(5) place of contract; (6) inaccessibility of foreign forum; and (7) law of the forum.
This is applicable not only to personal injury claims arising under the Jones Act
but to all matters arising under maritime law in general
The Court cannot sustain petitioner Crescent’s insistence on the
application of P.D. No. 1521 or the Ship Mortgage Decree of 1978 and hold that a
maritime lien exists. Out of the seven basic factors listed in the case of Lauritzen,
Philippine law only falls under one – the law of the forum. All other elements are
foreign – Canada is the place of the wrongful act, of the allegiance or domicile of
the injured and the place of contract; India is the law of the flag and the allegiance
of the defendant shipowner. Applying P.D. No. 1521,a maritime lien exists would
not promote the public policy behind the enactment of the law to develop the
domestic shipping industry. Opening up our courts to foreign suppliers by
granting them a maritime lien under our laws even if they are not entitled to a
maritime lien under their laws will encourage forum shopping. In light of the
interests of the various foreign elements involved, it is clear that Canada has the
most significant interest in this dispute. The injured party is a Canadian
corporation, the sub-charterer which placed the orders for the supplies is also
Canadian, the entity which physically delivered the bunker fuels is in Canada, the
place of contracting and negotiation is in Canada, and the supplies were
delivered in Canada.
LWV Construction Corporation v. Marcelo DupoG.R. No. 172342, Jul 13, 2!!"
 
#$C%&'
Petitioner LWV, a domestic corporation recruiting Filipino workers, hired respondent
asCivil Structural Superintendent to work in Saudi Arabia for its principal, ohammad
Al!o"il#roup$%stablishment &#'( Sometime Februar) *++, respondent
signed his first overseasemplo)ment contract( -t was renewed five times and all were
fi.ed!period, renewable contractsfor * )ear( /he 0
th
 and last contract stated that respondent1s emplo)ment starts upon reporting towork
and ends when he leaves the work site( When respondent left Saudi
Arabia for thePhilippines on April 23, *+++ and thereb) termination his 0
th
 contract, he informed #through LWV that he needs to e.tend his vacation
because his son was hospitali4ed( 5e alsosought a promotion with salar)
ad"ustment( -n repl), # informed him that his promotion issub"ect to
management1s review6 that his services are still needed6 that he was issued a
planeticket for his return flight to Saudi Arabia6 and that his decision regarding his
emplo)ment must be made within 7 da)s, otherwise, # 8will be compelled to cancel
his slot(8
 
9n :ul) 0, *+++,respondent resigned(;nder the Law of Saudi Arabia, an emplo)ee who
rendered at least < )ears in a compan)within the "urisdiction of Saudi Arabia,
is entitled to the so!called
long service award which isknown to others as longevity pay
 of at least one half month pa) for ever) )ear of service( -ne.cess of five )ears an
emplo)ee is entitled to one month pa) for ever) )ear of service( When hefollowed up
his claim for long service award and the # failed to respond, he filed
acomplaint for pa)ment of service award  against LWV before the
=L>C(  Aside from theallegation that it was alread) paid b) # after his 0
th
 contract ended, LWV argued that theaction has prescribed when respondent
filed the compliant * )ear and 7 months after his 0
th
contract ended, using Article *2 of the Saudi Labor Law as basis which provides
that action toenforce pa)ment of service award must be filed one )ear from
the termination of the labor contract for a specific period(
(&&)*'
Whether or not the action against petitioner has prescribed with Article *2 of
the SaudiLabor Law as basis(
+*LD'
 =o, the Supreme Court held that what will appl) on this particular case is
not Art( *2 of the Saudi Labor Law but Art( +* of the Philippine Labor Code
which provides for a 2 )ear  prescription period for all mone) claims from emplo)ee!
emplo)er relationship( A foreign procedural law shall not be applied even if the action is 
based upon a foreign substantive law(/he Court did not appl) the Art( ?@ of the
 Code of Civil Procedure which provides that if thelaws of the state or countr)
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 *+
@7Constitution, Art( ?@ cannot be applied e. proprio vigore insofar as it ordains the
application of the provision of the Saudi Law( /he courts of the forum will not
enforce an) foreign claimobno.ious to the forumBs public polic)( /o enforce the
one!)ear prescriptive period of the Amiriecree =o( 2 of *+70 as regards the
claims in Duestion would contravene the public polic)
onthe protection  to labor(  /he Court therefore leaned on the constitutiona
l provision  of on protection to labor rather that adopting the provision of the foreign
law.

LWV CONSTRUCTION CORPORATION, PETITIONER, VS. MARCELO B.

DUPO, RESPONDENT.

FACTS:
Petitioner, a domestic corporation which recruits Filipino workers, hired respondent as Civil
Structural Superintendent to work in Saudi Arabia for its principal, Mohammad Al-Mojil
Group/Establishment (MMG). On February 26, 1992, respondent signed his first overseas
employment contract, renewable after one year. It was renewed five times on the following
dates: May 10, 1993, November 16, 1994, January 22, 1996, April 14, 1997, and March 26,
1998. All were fixed-period contracts for one year. The sixth and last contract stated that
respondent's employment starts upon reporting to work and ends when he leaves the work site.
Respondent left Saudi Arabia on April 30, 1999 and arrived in the Philippines on May 1, 1999.
On May 28, 1999, respondent informed MMG, through the petitioner, that he needs to extend his
vacation because his son was hospitalized. He also sought a promotion with salary adjustment.
[3]
 In reply, MMG informed respondent 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 on May 31, 1999; and that his decision regarding his employment must be made within
seven 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 five (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. In both
cases inclusive of all benefits and allowances.

ISSUE:
1.      WON  respondent is entitled to a service award or longevity pay of US$12,640.33 under the
provisions of the Saudi Labor Law; and
2.      WON prescription barred respondent's claim for service award as the complaint was filed one
year and seven months after the sixth contract ended.
RULING:
1.      Respondent's service award under Article 87 of the Saudi Labor Law has already been paid.
Article 87 clearly grants a service award. It reads:
 Article 87

Where the term of a labor contract concluded for a specified period comes to an end or
where the employer cancels a contract of unspecified period, the employer shall pay to the
workman an award for the period of his service to be computed on the basis of half a month's
pay for each of the first five years and one month's pay for each of the subsequent years. The last
rate of pay shall be taken as basis for the computation of the award. For fractions of a year, the
workman shall be entitled to an award which is proportionate to his service period during that
year. Furthermore, the workman shall be entitled to the service award provided for at the
beginning of this article in the following cases:

A. If he is called to military service.

B. If a workman resigns because of marriage or childbirth.

C. If the workman is leaving the work as a result of a force majeure beyond his control.
(Emphasis supplied.)
2.      On the matter of prescription, however, we cannot agree with petitioner that respondent's action
has prescribed under Article 13 of the Saudi Labor Law. What applies is Article 291 of our
Labor Code which reads:
ART. 291. Money claims. -- All money claims arising from employer-employee relations
accruing during the effectivity of this Code shall be filed within three (3) years from the time the
cause of action accrued; otherwise they shall be forever barred.

xxxx

In Cadalin v. POEA's Administrator,[27] we held that Article 291 covers all money claims from
employer-employee relationship and is broader in scope than claims arising from a specific law.
It is not limited to money claims recoverable under the Labor Code, but applies also to claims of
overseas contract workers.
Thus, in our considered view, respondent's complaint was filed well within the three-year
prescriptive period under Article 291 of our Labor Code. This point, however, has already been
mooted by our finding that respondent's service award had been paid, albeit the payroll termed
such payment as severance pay.

LWV CONSTRUCTION CORPORATION vs MARCELO B. DUPO

GR No. 172342 July 13, 2009
FACTS: LWV Construction Corporation(LWV), a domestic corporation which recruits Filipino
workers, hired Dupo as
Civil Structural Superintendent to work in Saudi Arabia for its principal, Mohammad Al-Mojil
Group/Establishment
(MMG). On February 26, 1992, Dupo signed his first overseas employment contract, renewable
after one year. It was
renewed five times (1993-1998). The sixth and last contract stated that Dupo's employment starts
upon reporting to
work and ends when he leaves the work site. Dupo left Saudi Arabia on April 30, 1999 and
arrived in the Philippines
on May 1, 1999.
On May 28, 1999, Dupo 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 on May 31, 1999.
On July 6, 1999, Dupo resigned. In his letter to MMG, he also stated that he hoped that during
his more than seven
(7) [years] services, as the Saudi Law stated, he is entitled for a long service award.
On December 7, 2000, when Dupo followed up his claim, LWV informed him that MMG did
not respond.
On December 11, 2000, Dupo filed a complaint for payment of service award against LWV
before the National Labor
Relations Commission (NLRC). He averred that under the Law of Saudi Arabia, he is entitled to
long service award or
longevity pay of US$12,640.33, exactly the same with the amount he was previously offered to
him before he went on
vacation.
LWV offered payment and prescription as defenses. Pursuant to Article 87 of the Saudi Labor
Law "payment of the
award is at the end or termination of the Labor Contract concluded for a specific period." Based
on the payroll, Dupo
was already paid his service award or severance pay for his latest (sixth) employment contract.
LWV claimed that the
service award is the same as severance pay.
LWV added that under Article 1310 of the Saudi Labor Law, the action to enforce payment of
the service award must
be filed within one year from the termination of a labor contract for a specific period. LWV
concluded that the one-
year prescriptive period had lapsed because Dupo filed his complaint on December 11, 2000 or
one year and seven
months after his sixth contract ended.
ISSUE: WON Dupo is entitled to a service award or longevity pay of US$12,640.33 under the
provisions of the Saudi
Labor Law. If yes, WON Dupo's claim has prescribed.
HELD: Dupo is only entitled to a Service Award but only SR2,786.04.
Applicable law: Article 87 Saudi Labor Code.
Where the term of a labor contract concluded for a specified period comes to an end or where the
employer
cancels a contract of unspecified period, the employer shall pay to the workman an award for the
period of
his service to be computed on the basis of half a month's pay for each of the first five years and
one month's
pay for each of the subsequent years. xxx
The payroll submitted by Dupo showed that he received severance pay of SR2,786 for his sixth
employment contract
covering the period April 21, 1998 to April 29, 1999.19 The severance pay of SR2,786 was
already his service award
under Article 87.
Dupo's employment contracts expressly stated that his employment ended upon his departure
from work. Each year
he departed from work and successively new contracts were executed before he reported for
work anew. His service
was not cumulative.
On prescription: action has not prescribed.
Applicable law: Article 291 of our Labor Code.
Money claims. — All money claims arising from employer-employee relations accruing during
the effectivity
of this Code shall be filed within three (3) years from the time the cause of action accrued;
otherwise they
shall be forever barred.
In Cadalin v. POEA's Administrator, we held that Article 291 covers all money claims
from employer-employee
relationship and is broader in scope than claims arising from a specific law. It is not
limited to money claims
recoverable under the Labor Code, but applies also to claims of overseas contract workers
LWV CONSTRUCTION CORPORATION vs MARCELO B. DUPO
GR No. 172342 July 13, 2009
FACTS: LWV Construction Corporation(LWV), a domestic corporation which recruits Filipino
workers, hired Dupo as
Civil Structural Superintendent to work in Saudi Arabia for its principal, Mohammad Al-Mojil
Group/Establishment
(MMG). On February 26, 1992, Dupo signed his first overseas employment contract, renewable
after one year. It was
renewed five times (1993-1998). The sixth and last contract stated that Dupo's employment starts
upon reporting to
work and ends when he leaves the work site. Dupo left Saudi Arabia on April 30, 1999 and
arrived in the Philippines
on May 1, 1999.
On May 28, 1999, Dupo 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 on May 31, 1999.
On July 6, 1999, Dupo resigned. In his letter to MMG, he also stated that he hoped that during
his more than seven
(7) [years] services, as the Saudi Law stated, he is entitled for a long service award.
On December 7, 2000, when Dupo followed up his claim, LWV informed him that MMG did
not respond.
On December 11, 2000, Dupo filed a complaint for payment of service award against LWV
before the National Labor
Relations Commission (NLRC). He averred that under the Law of Saudi Arabia, he is entitled to
long service award or
longevity pay of US$12,640.33, exactly the same with the amount he was previously offered to
him before he went on
vacation.
LWV offered payment and prescription as defenses. Pursuant to Article 87 of the Saudi Labor
Law "payment of the
award is at the end or termination of the Labor Contract concluded for a specific period." Based
on the payroll, Dupo
was already paid his service award or severance pay for his latest (sixth) employment contract.
LWV claimed that the
service award is the same as severance pay.
LWV added that under Article 1310 of the Saudi Labor Law, the action to enforce payment of
the service award must
be filed within one year from the termination of a labor contract for a specific period. LWV
concluded that the one-
year prescriptive period had lapsed because Dupo filed his complaint on December 11, 2000 or
one year and seven
months after his sixth contract ended.
ISSUE: WON Dupo is entitled to a service award or longevity pay of US$12,640.33 under the
provisions of the Saudi
Labor Law. If yes, WON Dupo's claim has prescribed.
HELD: Dupo is only entitled to a Service Award but only SR2,786.04.
Applicable law: Article 87 Saudi Labor Code.
Where the term of a labor contract concluded for a specified period comes to an end or where the
employer
cancels a contract of unspecified period, the employer shall pay to the workman an award for the
period of
his service to be computed on the basis of half a month's pay for each of the first five years and
one month's
pay for each of the subsequent years. xxx
The payroll submitted by Dupo showed that he received severance pay of SR2,786 for his sixth
employment contract
covering the period April 21, 1998 to April 29, 1999.19 The severance pay of SR2,786 was
already his service award
under Article 87.
Dupo's employment contracts expressly stated that his employment ended upon his departure
from work. Each year
he departed from work and successively new contracts were executed before he reported for
work anew. His service
was not cumulative.
On prescription: action has not prescribed.
Applicable law: Article 291 of our Labor Code.
Money claims. — All money claims arising from employer-employee relations accruing during
the effectivity
of this Code shall be filed within three (3) years from the time the cause of action accrued;
otherwise they
shall be forever barred.
In Cadalin v. POEA's Administrator, we held that Article 291 covers all money claims
from employer-employee
relationship and is broader in scope than claims arising from a specific law. It is not
limited to money claims
recoverable under the Labor Code, but applies also to claims of overseas contract workers
LWV CONSTRUCTION CORPORATION vs MARCELO B. DUPO
GR No. 172342 July 13, 2009
FACTS: LWV Construction Corporation(LWV), a domestic corporation which recruits Filipino
workers, hired Dupo as
Civil Structural Superintendent to work in Saudi Arabia for its principal, Mohammad Al-Mojil
Group/Establishment
(MMG). On February 26, 1992, Dupo signed his first overseas employment contract, renewable
after one year. It was
renewed five times (1993-1998). The sixth and last contract stated that Dupo's employment starts
upon reporting to
work and ends when he leaves the work site. Dupo left Saudi Arabia on April 30, 1999 and
arrived in the Philippines
on May 1, 1999.
On May 28, 1999, Dupo 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 on May 31, 1999.
On July 6, 1999, Dupo resigned. In his letter to MMG, he also stated that he hoped that during
his more than seven
(7) [years] services, as the Saudi Law stated, he is entitled for a long service award.
On December 7, 2000, when Dupo followed up his claim, LWV informed him that MMG did
not respond.
On December 11, 2000, Dupo filed a complaint for payment of service award against LWV
before the National Labor
Relations Commission (NLRC). He averred that under the Law of Saudi Arabia, he is entitled to
long service award or
longevity pay of US$12,640.33, exactly the same with the amount he was previously offered to
him before he went on
vacation.
LWV offered payment and prescription as defenses. Pursuant to Article 87 of the Saudi Labor
Law "payment of the
award is at the end or termination of the Labor Contract concluded for a specific period." Based
on the payroll, Dupo
was already paid his service award or severance pay for his latest (sixth) employment contract.
LWV claimed that the
service award is the same as severance pay.
LWV added that under Article 1310 of the Saudi Labor Law, the action to enforce payment of
the service award must
be filed within one year from the termination of a labor contract for a specific period. LWV
concluded that the one-
year prescriptive period had lapsed because Dupo filed his complaint on December 11, 2000 or
one year and seven
months after his sixth contract ended.
ISSUE: WON Dupo is entitled to a service award or longevity pay of US$12,640.33 under the
provisions of the Saudi
Labor Law. If yes, WON Dupo's claim has prescribed.
HELD: Dupo is only entitled to a Service Award but only SR2,786.04.
Applicable law: Article 87 Saudi Labor Code.
Where the term of a labor contract concluded for a specified period comes to an end or where the
employer
cancels a contract of unspecified period, the employer shall pay to the workman an award for the
period of
his service to be computed on the basis of half a month's pay for each of the first five years and
one month's
pay for each of the subsequent years. xxx
The payroll submitted by Dupo showed that he received severance pay of SR2,786 for his sixth
employment contract
covering the period April 21, 1998 to April 29, 1999.19 The severance pay of SR2,786 was
already his service award
under Article 87.
Dupo's employment contracts expressly stated that his employment ended upon his departure
from work. Each year
he departed from work and successively new contracts were executed before he reported for
work anew. His service
was not cumulative.
On prescription: action has not prescribed.
Applicable law: Article 291 of our Labor Code.
Money claims. — All money claims arising from employer-employee relations accruing during
the effectivity
of this Code shall be filed within three (3) years from the time the cause of action accrued;
otherwise they
shall be forever barred.
In Cadalin v. POEA's Administrator, we held that Article 291 covers all money claims
from employer-employee
relationship and is broader in scope than claims arising from a specific law. It is not
limited to money claims
recoverable under the Labor Code, but applies also to claims of overseas contract workers

As a general rule, a foreign procedural law will not be applied in the

forum.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

Procedural matters, such as service of process, joinder of actions, period and

requisites for appeal, and so forth, are governed by the laws of the forum.
This is true even if the action is based upon a foreign substantive law
(Restatement of the Conflict of Laws, Sec. 685; Salonga, Private
International Law, 131 [1979]).

However, the characterization of a statute into a procedural or substantive

law becomes irrelevant when the country of the forum has a "borrowing
statute." Said statute has the practical effect of treating the foreign statute
of limitation as one of substance (Goodrich, Conflict of Laws, 152-153
[1938]). A "borrowing statute" directs the state of the forum to apply the
foreign statute of limitations to the pending claims based on a foreign law
(Siegel, Conflicts, 183 [1975]). While there are several kinds of "borrowing
statutes," one form provides that an action barred by the laws of the place
where it accrued, will not be enforced in the forum even though the local
statute has not run against it (Goodrich and Scoles, Conflict of Laws, 152-
153 [1938]). Section 48 of our Code of Civil Procedure is of this kind. Said
Section provides:

"If by the laws of the state or country where the cause of action arose, the
action is barred, it is also barred in the Philippine Islands."

The courts of the forum will not enforce any foreign claim obnoxious to the
forum's public policy x x x. 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. 29
As a general rule, a foreign procedural law will not be applied in the forum. Ï

Procedural matters, such as service of process, joinder of actions, period and requisites for appeal, and so forth, are
governed by the laws of the forum. This is true even if the action is based upon a foreign substantive law (Restatement of
the Conflict of Laws, Sec. 685; Salonga, Private International Law, 131 [1979]).

A law on prescription of actions is sui generis  in Conflict of Laws in the sense that it may be viewed either as procedural or
substantive, depending on the characterization given such a 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.
Thus, in our considered view, respondent's complaint was filed well within the three-year prescriptive period under Article
291 of our Labor Code. This point, however, has already been mooted by our finding that respondent's service award had
been paid, albeit the payroll termed such payment as severance pay.

WHEREFORE, the petition is GRANTED. The assailed Decision dated December 6, 2005 and Resolution dated April 12,
2006, of the Court of Appeals in CA-G.R. SP No. 76843, as well as the Decision dated June 18, 2001 of the Labor Arbiter in
NLRC Case No. RAB-CAR-12-0649-00 and the Decision dated November 29, 2002 and Resolution dated January 31, 2003
of the NLRC in NLRC CA No. 028994-01 (NLRC RAB-CAR-12-0649-00) are REVERSED and SET ASIDE. The Complaint of
respondent is hereby DISMISSED.

DEUTSCHE GESELLSCHAFT TECHNISCHE ZUSAMMENARBEIT (GTZ) v. HON.

COURT OF APPEALS
G.R. No. 152318, April 16, 2009
FACTS
The Federal Republic of Germany and the Republic of the Philippines ratified and
agreement which lead to the Social Health Insurance—Networking and Empowerment (SHINE)
program wherein the program seeks to provide health care to Filipino families, especially the
poor. The Republic of Germany assigned the GTZ as the implementing corporation for the
program, while the Philippines designated the Department of Health and the Philippine Health
Insurance Corporation. Private respondents, as employed by GTZ for the implementation of the
SHINE, had a misunderstanding with the Project Manager of SHINE. This lead to an exchange
of letters which was interpreted to be the resignation of the private respondents.
Private
respondents then filed a complaint for illegal dismissal to the labor arbiter. GTZ contends that it
is immune from suit as it is the accredited agency of the Federal Republic of Germany

ISSUE: 1. WON GTZ can invoke State immunity from suit. HELD: NO, GTZ cannot
invoke State immunity from suit even if their activities performed pertaining to SHINE
project are government in nature. The principle of state immunity from suit, whether a
local state or a foreign state, is reflected in Section 9, Article XVI of the Constitution,
which states that the State may not be sued without its consent. In this case, GTZ’s
counsel described GTZ as the implementing agency of the Government of the Federal
Republic of Germany, however it does not automatically mean that it has the ability to
invoke State immunity from suit. They had failed to adduce evidence, a certification
from Department of Foreign Affairs which could have been their factual basis for its
claim of immunity.

The nature of the acts performed by the entity invoking immunity remains the most
important barometer for testing whether the privilege of State immunity from suit
should apply. At the same time, our Constitution stipulates that a State immunity from
suit is conditional on its withholding of consent; hence, the laws and circumstances
pertaining to the creation and legal personality of an instrumentality or agency invoking
immunity remain relevant. Consent to be sued, as exhibited in this decision, is often
conferred by the very same statute or general law creating the instrumentality or agency
ATCI Overseas Corporation vs. CA (August 9, 2001)
Wednesday, January 28, 2009 Posted by Coffeeholic Writes
Labels: Case Digests, Labor Law

FACTS: ATCI and the Ministry of Public Health of Kuwait entered into an

agreement. ATCI would recruit medical professionals for the latter.
Respondents were hired for the Ministry. They underwent physical
and medical exams in a POEA accredited clinic and were declared fit. In
Kuwait, they were subjected another examination and after 2 months they
were dismissed for being physically unfit for their jobs and were repatriated
so they filed a complaint in the POEA for illegal dismissal alleging that they
weren’t given by their foreign employer copies the results of
their medical exam and written notice of termination. ATCI claims that the
Minister has the right to dismiss them because they were found to be
physically unfit to work. It appears on record that they were just not allowed
to work anymore. There was no notice nor was there any opportunity given
to allow them to defend themselves. The POEA ruled that there was illegal
dismissal. The NLRC they may use all reasonable means to ascertain facts
and they cannot simply disregard the certification of the Ministry of Health of
Kuwait, however this was only presented in the appeal to the NLRC. The CA
reversed the NLRC. ATCI claims that respondents were merely
probationary dismissed for failure to qualify since they were physically unfit.

ISSUE: W/N there was illegal dismissal.

HELD: The SC ruled that there was illegal dismissal. There was no proof that
they were probationary. Being regular employees, the dismissal must meet
the requirements of Art 284 of the labor code. An employee may be
terminated if found to be suffering from a disease and the continued
employment is prohibited by law or is prejudicial to his health as well as to
the health of his co-employees but the dismissal may not be summarily
carried out. The employer must meet certain prerequisites contained in Sec.
8 Rule 1 Book VI of the Omnibus Rules Implementing the Labor Code. There
must be certification by a competent public health authority that the disease
is of such nature or at such a stage that cannot be cured within the period
of 6 months even with proper medical treatment. If the disease
or ailment can be cured within the period, the employees can’t be
terminated but must take a leave land he will be reinstated immediately
upon the restoration of his normal health. The letter from the Ministry falls
short of the demands of the Omnibus Rules. There is no finding that the
disease is of such nature or at such a stage that it cannot be cured within a
period of six months a with proper medical treatment. Also ATCI has not
proven that the same was presented prior to the termination. Private
employment or recruitment agencies are jointly and several liable with its
principal ;the foreign based employer for all claims filed by recruited workers
which may arise in connection with the service agreements or employment
contracts.
ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL and MINISTRY OF PUBLIC
HEALTH
-
KUWAIT
Petitioners,
vs.
MA. JOSEFA ECHIN, Respondent.
G.R. No. 178551
October 11, 2010
FACTS:
Respondent Echin
was hired by petitioner ATCI in behalf of its principal co
-
petitioner, Ministry of Public
Health of Kuwait, for the
position of medical technologist under a two
-
year contract with a monthly
salary of US$1,200.00.Within a year, Respondent was terminated fo
r
not passing the probationary
period which was under the Memorandum of Agreement.
Ministry deni
ed respondent‘s request and she
returned to the Philippines shouldering her own fair.
Respondent filed with the National Labor Relations Commission (NLRC) a com
plaint against ATCI for
illegal dismissal. Labor
Arbiter rendered judgment in favor of respondent and ordered ATCI to pay her
$3,600.00, her salary for the three months unexpired portion of the contract.
ATCI appealed Labor Arbiter‘s decision, however, NLR
C affirmed the latter‘s decision and denie
d
petitioner ATCI‘s motion for
reconsideration. Petitioner appealed to the Court Appeals contending that
their principal being a foreign government agency is immune from suit,
and as such, immunity extended
to them
.
Appellate Court affirmed NLRC‘s decision. It noted that under the law, a private
employment
agency
shall assume all respons
ibilities
for the implementation of the contract of employment of an overseas
worker; hence, it can be sued jointly and severally w
ith the foreign principal
for any violation of the
recruitment agreement or contract of employment.
Petitioner‘s motion for r
econsideration was denied; hence, this present petition.
Issue:
Whether or not petitioners be held liable considering that the contract specifically
stipulates that respondent‘s employment shall be governed by the Civil Service Law and
Regulations of Kuwait.

Ruling:
Court denied the petition. According to RA 8042: “The obligations covenanted in
the recruitment agreement entered into by and between the local agent and its
foreign principal are not coterminous with the term of such agreement so that if
either or both of the parties decide to end the agreement, the responsibilities of such
parties towards the contracted employees under the agreement do not at all end, but
the same extends up to and until the expiration of the employment contracts of the
employees recruited and employed pursuant to the said recruitment agreement. In
international law, the party who wants to have a foreign law applied to a dispute
or case has the burden of proving the foreign law. Where a foreign law is not
pleaded or, even if pleaded, is not proved, the presumption is that foreign law is
the same as ours. Thus, we apply Philippine labor laws in determining the issues
presented before us.
.
ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL and MINISTRY OF PUBLIC
HEALTH-KUWAIT Petitioners,vs. MA. JOSEFA ECHIN, Respondent.G.R. No.
178551 October 11, 2010

FACTS:

Josefina Echin was hired by petitioner ATCI Overseas Corporation in behalf of its principal-co-
petitioner, the Ministry of Public Health of Kuwait, for the position of medical technologist
under a two-year contract, denominated as a MOA.

Under the MOA, all newly-hired employees undergo a probationary period of one year.

Respondent was deployed on February 17, 2000 but was terminated from employment on
February 11, 2001, she not having allegedly passed the probationary period.

Respondent filed with the NLRC a complaint for illegal dismissal against ATCI as the local
recruitment agency, represented by Amalia Ikdal, and the Ministry, as the foreign principal.

The Labor Arbiter held that respondent was illegally dismissed and accordingly
ordered petitioners to pay her US$3,600.00, representing her salary for the three
months unexpired portion of her contract.

The NLRC affirmed the Labor Arbiter’s decision.

Petitioners appealed to the CA, contending that their principal, the Ministry, being a foreign
government agency, is immune from suit and, as such, the immunity extended to them; and that
respondent was validly dismissed for her failure to meet the performance rating within the one-
year period as required under Kuwaits Civil Service Laws.

The CA affirmed the NLRC Resolution

ISSUE:

Whether or not petitioner is liable for the illegal dismissal of respondent.

 
RULING:

Petitioner ATCI, as a private recruitment agency, cannot evade responsibility for the money
claims of OFWs which it deploys abroad by the mere expediency of claiming that its foreign
principal is a government agency clothed with immunity from suit, or that such foreign
principals liability must first be established before it, as agent, can be held jointly and solidarily
liable.

The imposition of joint and solidary liability is in line with the policy of the state to protect and
alleviate the plight of the working class. Verily, to allow petitioners to simply invoke the
immunity from suit of its foreign principal or to wait for the judicial determination of the foreign
principals liability before petitioner can be held liable renders the law on joint and solidary
liability inutile.

As to petitioners contentions that Philippine labor laws on probationary employment are not
applicable since it was expressly provided in respondents employment contract, which she
voluntarily entered into, that the terms of her engagement shall be governed by prevailing
Kuwaiti Civil Service Laws and Regulations as in fact POEA Rules accord respect to such rules,
customs and practices of the host country, the same was not substantiated.

It is hornbook principle, however, that the party invoking the application of a foreign law has the
burden of proving the law, under the doctrine of processual presumption which, in this case,
petitioners failed to discharge.

The Philippines does not take judicial notice of foreign laws, hence, they must not only be
alleged; they must be proven. To prove a foreign law, the party invoking it must present a copy
thereof and comply with the Rules of Court.

These documents submitted by petitioners do not sufficiently prove that respondent was validly
terminated as a probationary employee under Kuwaiti civil service laws.

Respecting Ikdal’s joint and solidary liability as a corporate officer, the same is in order too
following the express provision of R.A. 8042:

The liability of the principal/employer and the recruitment/placement agency for any and all
claims under this section shall be joint and several. This provision shall be incorporated in the
contract for overseas employment and shall be a condition precedent for its approval. The
performance bond to be filed by the recruitment/placement agency, as provided by law, shall be
answerable for all money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and directors and
partners as the case may be, shall themselves be jointly and solidarily liable with the
corporation or partnership for the aforesaid claims and damages.
The petition is DENIED

In the present case, the employment contract signed by Gran specifically states that
Saudi Labor Laws will govern matters not provided for in the contract (e.g. specific
causes for termination, termination procedures, etc.). Being the law intended by the
parties (lex loci intentiones) to apply to the contract, Saudi Labor Laws should govern all
matters relating to the termination of the employment of Gran.

In international law, the party who wants to have a foreign law applied to a dispute or
case has the burden of proving the foreign law. The foreign law is treated as a question
of fact to be properly pleaded and proved as the judge or labor arbiter cannot take
judicial notice of a foreign law. He is presumed to know only domestic or forum law.

Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the matter; thus,
the International Law doctrine of presumed-identity approach or processual
presumption comes into play. Where a foreign law is not pleaded or, even if pleaded, is
not proved, the presumption is that foreign law is the same as ours. Thus, we apply
Philippine labor laws in determining the issues presented before us. (emphasis and
underscoring supplied)

The Philippines does not take judicial notice of foreign laws, hence, they must not only
be alleged; they must be proven. To prove a foreign law, the party invoking it must
present a copy thereof and comply with Sections 24 and 25 of Rule 132 of the Revised
Rules of Court which reads:

SEC. 24. Proof of official record. — The record of public documents referred to in

paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an
official publication thereof or by a copy attested by the officer having the legal custody of
the record, or by his deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the custody. If the office in which the
record is kept is in a foreign country, the certificate may be made by a secretary of the
embassy or legation, consul general, consul, vice consul, or consular agent or by any
officer in the foreign service of the Philippines stationed in the foreign country in which
the record is kept, and authenticated by the seal of his office. (emphasis supplied)

FACTS:
1) Petitioner Saudi Arabian Airlines is a foreign
corporation established and existing under the
Royal Decree No. M/24 of Jeddah, who hired
Respondents as flight attendants. After
undergoing seminars required by the Philippine
Overseas Employment Administration for
deployment overseas, as well as training modules
offered by Saudia, Respondents became
Temporary and then eventually Permanent Flight
Attendants; they entered into the necessary Cabin
Attendant Contracts with Saudi.
2) Respondents were released from service on
separate dates in 2006; claimed that such release
was illegal since the basis of termination of
contract was solely because they were pregnant.
They claim that they had informed Saudia of their
respective pregnancies and had gone through the
necessary procedures to process their maternity
leaves and while initially, Saudia had given its
approval, they ultimately reneged and rather
required them to file for resignation.
3) Respondents claim that Petitioner Airlines
threatened that if they would not resign, they
would be terminated along with loss of benefits,
separation pay, and ticket discount entitlements;
they anchored such on its “Unified Employment
Contract for Female Cabin Attendants" which
provides that “ 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

5)November 8,2007 - Respondents filed a

Complaint with the Labor Arbiter against Saudia
and its officers for illegal dismissal and for
underpayment, along with moral and exemplary
damages, and attorney's fees. Petitioner Airlines
contests the Labor Arbiter’s jurisdiction, as the
contract’s points referred to foreign law and that
Respondents had no cause of action since they
already voluntarily resigned.
6) Executive Labor Arbiter dismissed the
complaint, but on appeal the NLRC reversed the
Labor Arbiter’s decision and denied Petitioner
Airlines’ Motion for Reconsideration, hence the
current appeal.
RELEVANT ISSUE:
WON the Labor Arbiter and the NLRC has
jurisdiction over Saudi Arabian Airlines and apply
Philippine jurisdiction over the dispute? YES.
Summons were validly served on Saudia and
jurisdiction over it validly acquired.
RATIO:
No doubt that the pleadings were served to
Petitioner Airlines through their counsel, however
they claim that the NLRC and Labor Arbiter had
no jurisdiction since summons were served to
Saudi Airlines Manila and not to them, Saudi
Airlines Jeddah. Saudi Airlines Manila was
neither a party to the Cabin attendant contracts nor
funded the Respondents, and it was to Saudi
Jeddah that they filed their resignations. Court
ruled however that b y its own admission, Saudia,
while a foreign corporation, has a Philippine
office, and that under the Foreign Investments act
of 1991, they are a foreign corporation doing
business in the Phils and therefore are subject to
Philippine jurisdiction.
Petitioner Airlines also asserts that the Cabin
Attendant Contracts require the application of the
laws of Saudi Arabia rather than those of the
Philippines. 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.
Court: Forum non conveniens finds no
application and does not operate to divest
Philippine tribunals of jurisdiction and to require
the application of foreign law. Though Article
1306 of the Civil Code provides that Parties may
stipulate terms they may deem convenient,
Philippine tribunals may not lose sight of
considerations of law, morals, good customs,
public order, or public policy that underlie the
contract.
Article II, Sections 1 and 14 of the 1987
Constitution ensures the equal protection of
persons, and the equality between men and
women. Though pregnancy does present physical
limitations that may render difficult the
performance of functions associated with being a
flight attendant, it would be the height of iniquity
to view pregnancy as a disability so permanent
and immutable that, it must entail the termination
of one's employment
Furthermore, contracts relating to labor and
employment are impressed with public interest.
Article 1700 of the Civil Code provides that "[t]he
relation between capital and labor are not merely
contractual. They are so impressed with public
interest that labor contracts must yield to the
common good.
Pakistan Airlines Ruling: relationship is much
affected with public interest and that the
otherwise applicable Philippine laws and
regulations cannot be rendered illusory by the
parties agreeing upon some other law to govern
their relationship.
As the present dispute relates to (what the
respondents allege to be) the illegal termination of
respondents' employment, this case is immutably a
matter of public interest and public policy.
Consistent with clear pronouncements in law and
jurisprudence, Philippine laws properly find
application in and govern this case.
DISPOSITIVE:
Appealed Decision is Affirmed, case is remanded
for a detailed computation of the amount to be
paid by Saudi Airlines.

SAUDI ARABIAN AIRLINES v. MA. JOPETTE M. REBESENCIO, GR No. 198587, 2015-01-14

Facts:

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).

Respondents... were recruited and hired by Saudia as Temporary Flight Attendants with the accreditation and approval of the
Philippine Overseas Employment Administration.
after working as Temporary Flight Attendants, respondents became Permanent Flight
Attendants.
Respondents continued their employment with Saudia until they were separated from service on various dates in 2006.
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.
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.
Issues:
whether respondents' voluntarily resigned or were illegally terminated
Ruling:
we emphasize the glaringly discriminatory nature of Saudia's policy. As argued by respondents, Saudia's policy entails the
termination of employment of flight attendants who become pregnant. At the risk of stating the obvious, pregnancy is an...
occurrence that pertains specifically to women. Saudia's policy excludes from and restricts employment on the basis of no other
consideration but sex.
We do not lose sight of the reality that pregnancy does present physical limitations that may render difficult the performance of
functions associated with being a flight attendant. Nevertheless, it would be the height of iniquity to view pregnancy as a disability so
permanent... and immutable that, it must entail the termination of one's employment. It is clear to us that any individual, regardless
of gender, may be 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 other recourse but the complete termination of the means through which a
woman earns a living.
As the present dispute relates to (what the respondents allege to be) the illegal termination of respondents' employment, this case is
immutably a matter of public interest and public policy. Consistent with clear pronouncements in law and jurisprudence, Philippine
laws properly... find application in and govern this case.
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.
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 Rebesencio[109]) 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
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.
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

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
50
than those of the Philippines.  It claims that the difficulty of ascertaining foreign law calls into operation the principle
51
of forum non conveniens, thereby rendering improper the exercise of jurisdiction by Philippine tribunals.

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
 52
parties' stipulation. In Hasegawa v. Kitamura: ChanRoblesVirtualawlibrary

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.53 cralawlawlibrary

Here, the circumstances of the parties and their relation do not approximate the circumstances enumerated
92
in Puyat,  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.

93
Third, there is no indication of "unwillingness to extend local judicial facilities to non-residents or aliens."  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.

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

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.

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.

40
In Hasegawa v. Kitamura,  we stated that in the judicial resolution of conflict-of-laws problems, three consecutive phases
are involved: jurisdiction, choice of law, and recognition and enforcement of judgments. In resolving the conflicts problem,
courts should ask the following questions:

Considering that the Labor Arbiter and the NLRC have jurisdiction over the parties and the subject matter of this case,
these tribunals may proceed to try the case even if the rules of conflict-of-laws or the convenience of the parties point to a
foreign forum, this being an exercise of sovereign prerogative of the country where the case is filed.

The next question is whether the local forum is the convenient forum in light of the
facts of the case. CMI contends that a Philippine court is an inconvenient forum.

We disagree.
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.46 All these requisites are present here.

Basso may conveniently resort to our labor tribunals as he and CMI lad physical
presence in the Philippines during the duration of the trial. CMI has a Philippine branch,
while Basso, before his death, was residing here. Thus, it could be reasonably expected
that no extraordinary measures were needed for the parties to make arrangements in
advocating their respective cases.

The labor tribunals can make an intelligent decision as to the law and facts. The
incident subject of this case (i.e. dismissal of Basso) happened in the Philippines, the
surrounding circumstances of which can be ascertained without having to leave the
Philippines. The acts that allegedly led to loss of trust and confidence and Basso's
eventual dismissal were committed in the Philippines. As to the law, we hold that
Philippine law is the proper law of the forum, as we shall discuss shortly. Also, the labor
tribunals have the power to enforce their judgments because they acquired jurisdiction
over the persons of both parties.

Our labor tribunals being the convenient fora, the next question is what law should
apply in resolving this case.

The choice-of-law issue in a conflict-of-laws case seeks to answer the following

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. 47 These questions are entirely
different from the question of jurisdiction that only seeks to answer whether the courts
of a state where the case is initiated have jurisdiction to enter a judgment. 48 As such,
the power to exercise jurisdiction does not automatically give a state constitutional
authority to apply forum law.49

CMI insists that US law is the applicable choice-of-law under the principles of lex loci
celebrationis and lex loci contractus. It argues that the contract of employment
originated from and was returned to the US after Basso signed it, and hence, was
perfected there. CMI further claims that the references to US law in the employment
contract show the parties' intention to apply US law and not ours.

Applying the foregoing in this case, we conclude that Philippine law the applicable law. Basso, though a US citizen, was a
resident here from he time he was hired by CMI until his death during the pendency of the case. CMI, while a foreign
corporation, has a license to do business in the Philippines and maintains a branch here, where Basso was hired to work.
The contract of employment was negotiated in the Philippines. A purely consensual contract, it was also perfected in the
Philippines when Basso accepted the terms and conditions of his employment as offered by CMI. The place of performance
relative to Biasso's contractual duties was in the Philippines. The alleged prohibited acts of Basso that warranted his
dismissal were committed in the Philippines.

Clearly, the Philippines is the state with the most significant relationship to the problem. Thus, we hold that CMI and Basso
intended Philippine law to govern, notwithstanding some references made to US laws and the fact that this intention was
not expressly stated in the contract.