UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
CFL – Atty. Ismael Sarangaya
Raytheon International, Inc. vs. Stockton W. Rouzie, Jr.
G.R. No. 162894, 26 February 2008
Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its
jurisdiction where it is not the most “convenient” or available forum and the parties are not precluded from seeking
remedies elsewhere.
FACTS:
Sometime in 1990, Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under the laws
of Connecticut, United States of America, and respondent Stockton W. Rouzie, Jr., an American citizen, entered
into a contract whereby BMSI hired respondent as its representative to negotiate the sale of services in several
government projects in the Philippines for an agreed remuneration of 10% of the gross receipts. Then,
respondent secured a service contract with the Republic of the Philippines on behalf of BMSI for the dredging of
rivers affected by the Mt. Pinatubo eruption and mudflows.
Four years thereafter, respondent filed before the Arbitration branch of the National Labor Relations
Commission (NLRC) a suit against BMSI and Rust International, Inc. (RUST) for alleged nonpayment of
commissions, illegal termination and breach of employment contract. The Labor Arbiter rendered judgment
ordering BMSI and RUST to pay respondent’s money claims. Upon appeal by BMSI, the NLRC reversed the
decision of the Labor Arbiter and dismissed respondent’s complaint on the ground of lack of jurisdiction.
Respondent elevated the case to the Supreme Court but was dismissed.
Later, respondent, then a resident of La Union, instituted an action for damages before the Regional Trial Court
(RTC) of Bauang, La Union. The Complaint named as defendants here in petitioner as well as BMSI and RUST, the
two corporations impleaded in the earlier labor case. The complaint essentially reiterated the allegations in the
labor case that respondent was not paid for his services. The complaint also averred that BMSI and RUST as well
as petitioner itself had combined and functioned as one company.
In its Answer, petitioner alleged that contrary to respondent’s claim, it was a foreign corporation duly licensed
to do business in the Philippines and denied entering into any arrangement with respondent or paying the latter
any sum of money. Petitioner also referred to the NLRC decision which disclosed that per the written agreement
between respondent and BMSI and RUST, denominated as “Special Sales Representative Agreement,” the rights
and obligations of the parties shall be governed by the laws of the State of Connecticut. Petitioner sought the
dismissal of the complaint on grounds of failure to state a cause of action and forum non conveniens and prayed
for damages. However, the same was denied.
ISSUE:
Whether or not the Philippine court can acquire jurisdiction over the case notwithstanding the stipulation that
the same shall be governed by a foreign law.
RULING:
YES. That the subject contract included a stipulation that the same shall be governed by the laws of the State of
Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter, are
precluded from hearing the civil action. 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 which will determine the merits of the case is fair to both parties.
The choice of law stipulation will become relevant only when the substantive issues of the instant case develop,
that is, after hearing on the merits proceeds before the trial court.
Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its
jurisdiction where it is not the most “convenient” or available forum and the parties are not precluded from
seeking remedies elsewhere.
Petitioner averred foreign elements present in this case which include: (1) BMSI and RUST are foreign
corporations and respondent Stockton W. Rouzie, Jr. is an American citizen; and (2) The evidence to be presented
is located outside the Philippines.
Petitioner mainly asserts that the written contract between respondent and BMSI included a valid choice of law
clause, that is, that the contract shall be governed by the laws of the State of Connecticut. It also mentions the
presence of foreign elements in the dispute – namely, the parties and witnesses involved are American
corporations and citizens and the evidence to be presented is located outside the Philippines – that renders our
local courts inconvenient forums. Petitioner theorizes that the foreign elements of the dispute necessitate the
immediate application of the doctrine of forum non conveniens.
The Court held that these averments are not sufficient to oust the trial court of its jurisdiction over the case
and the parties involved.
DISPOSITION:
WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision and Resolution of the Court
of Appeals in CA-G.R. SP No. 67001 are hereby AFFIRMED. Costs against petitioner.
