[G.R. No. 122191.
October 8, 1998] Jakarta to help arrange the
SAUDI ARABIAN AIRLINES,
petitioner, vs. COURT OF APPEALS,
MILAGROS P. MORADA,
respondents.
DECISION
The pertinent antecedent facts which
gave rise to the instant petition, as
stated in the questioned Decisioni[9],
are as follows:
On January 21, 1988 defendant
SAUDIA hired plaintiff as a Flight
Attendant for its airlines based in
Jeddah, Saudi Arabia. x x x
On April 27, 1990, while on a lay-
over in Jakarta, Indonesia,
plaintiff went to a disco dance
with fellow crew members
Thamer Al-Gazzawi and Allah Al-
Gazzawi, both Saudi nationals.
Because it was almost morning
when they returned to their
hotels, they agreed to have
breakfast together at the room of
Thamer. When they were in te
(sic) room, Allah left on some
pretext. Shortly after he did,
Thamer attempted to rape
plaintiff. Fortunately, a roomboy
and several security personnel
heard her cries for help and
rescued her. Later, the
Indonesian police came and
arrested Thamer and Allah Al-
Gazzawi, the latter as an
accomplice.
When plaintiff returned to Jeddah
a few days later, several SAUDIA
officials interrogated her about
the Jakarta incident. They then
requested her to go back to
1
release of Thamer and Allah. In
Jakarta, SAUDIA Legal Officer
Sirah Akkad and base manager
Baharini negotiated with the
police for the immediate release
of the detained crew members
but did not succeed because
plaintiff refused to cooperate. She
was afraid that she might be
tricked into something she did not
want because of her inability to
understand the local dialect. She
also declined to sign a blank
paper and a document written in
the local dialect. Eventually,
SAUDIA allowed plaintiff to return
to Jeddah but barred her from the
Jakarta flights.
Plaintiff learned that, through the
intercession of the Saudi Arabian
government, the Indonesian
authorities agreed to deport
Thamer and Allah after two weeks
of detention. Eventually, they
were again put in service by
defendant SAUDI (sic). In
September 1990, defendant
SAUDIA transferred plaintiff to
Manila.
On January 14, 1992, just when
plaintiff thought that the Jakarta
incident was already behind her,
her superiors requested her to
see Mr. Ali Meniewy, Chief Legal
Officer of SAUDIA, in Jeddah,
Saudi Arabia. When she saw him,
he brought her to the police
station where the police took her
passport and questioned her
about the Jakarta incident.
Miniewy simply stood by as the
police put pressure on her to
make a statement dropping the
case against Thamer and Allah.
Not until she agreed to do so did
the police return her passport and
allowed her to catch the
afternoon flight out of Jeddah.
One year and a half later or on
June 16, 1993, in Riyadh, Saudi
Arabia, a few minutes before the
departure of her flight to Manila,
plaintiff was not allowed to board
the plane and instead ordered to
take a later flight to Jeddah to see
Mr. Miniewy, the Chief Legal
Officer of SAUDIA. When she did,
a certain Khalid of the SAUDIA
office brought her to a Saudi
court where she was asked to
sign a document written in
Arabic. They told her that this
was necessary to close the case
against Thamer and Allah. As it
turned out, plaintiff signed a
notice to her to appear before the
court on June 27, 1993. Plaintiff
then returned to Manila.
Shortly afterwards, defendant
SAUDIA summoned plaintiff to
report to Jeddah once again and
see Miniewy on June 27, 1993 for
further investigation. Plaintiff did
so after receiving assurance from
SAUDIAs Manila manager, Aslam
Saleemi, that the investigation
was routinary and that it posed
no danger to her.
In Jeddah, a SAUDIA legal officer
brought plaintiff to the same
Saudi court on June 27, 1993.
Nothing happened then but on
June 28, 1993, a Saudi judge
interrogated plaintiff through an
interpreter about the Jakarta
incident. After one hour of
interrogation, they let her go. At
the airport, however, just as her
2
plane was about to take off, a
SAUDIA officer told her that the
airline had forbidden her to take
flight. At the Inflight Service
Office where she was told to go,
the secretary of Mr. Yahya
Saddick took away her passport
and told her to remain in Jeddah,
at the crew quarters, until further
orders.
On July 3, 1993 a SAUDIA legal
officer again escorted plaintiff to
the same court where the judge,
to her astonishment and shock,
rendered a decision, translated to
her in English, sentencing her to
five months imprisonment and to
286 lashes. Only then did she
realize that the Saudi court had
tried her, together with Thamer
and Allah, for what happened in
Jakarta. The court found plaintiff
guilty of (1) adultery; (2) going to
a disco, dancing and listening to
the music in violation of Islamic
laws; and (3) socializing with the
male crew, in contravention of
Islamic tradition.ii[10]
Facing conviction, private respondent
sought the help of her employer,
petitioner SAUDIA. Unfortunately, she
was denied any assistance. She then
asked the Philippine Embassy in Jeddah
to help her while her case is on appeal.
Meanwhile, to pay for her upkeep, she
worked on the domestic flight of
SAUDIA, while Thamer and Allah
continued to serve in the international
flights.iii[11]
Because she was wrongfully convicted,
the Prince of Makkah dismissed the case
against her and allowed her to leave
Saudi Arabia. Shortly before her
return to Manila,iv[12] she was
terminated from the service by the motion for reconsideration of
SAUDIA, without her being the defendant, is DENIED.
informed of the cause.
SO ORDERED.xii[25]
On November 23, 1993, Morada filed a
Consequently, on February 20, 1995,
Complaintv[13] for damages against
SAUDIA filed its Petition for Certiorari
SAUDIA, and Khaled Al-Balawi (Al-
and Prohibition with Prayer for Issuance
Balawi), its country manager.
of Writ of Preliminary Injunction and/or
Temporary Restraining Orderxiii[26]
On January 19, 1994, SAUDIA filed an
with the Court of Appeals.
Omnibus Motion To Dismissvi[14] which
raised the following grounds, to wit: (1)
However, during the pendency of the
that the Complaint states no cause of
instant Petition, respondent Court of
action against Saudia; (2) that
Appeals rendered the Decisionxiv[30]
defendant Al-Balawi is not a real party in
dated April 10, 1996, now also assailed.
interest; (3) that the claim or demand
It ruled that the Philippines is an
set forth in the Complaint has been
appropriate forum considering that the
waived, abandoned or otherwise
Amended Complaints basis for recovery
extinguished; and (4) that the trial court
of damages is Article 21 of the Civil
has no jurisdiction to try the case.
Code, and thus, clearly within the
jurisdiction of respondent Court. It
The trial court issued an Ordervii[19]
further held that certiorari is not the
dated August 29, 1994 denying the
proper remedy in a denial of a Motion to
Motion to Dismiss Amended Complaint
Dismiss, inasmuch as the petitioner
filed by Saudia.
should have proceeded to trial, and in
From the Order of respondent case of an adverse ruling, find recourse
Judgeviii[20] denying the Motion to in an appeal.
Dismiss, SAUDIA filed on September 20,
On May 7, 1996, SAUDIA filed its
1994, its Motion for
Supplemental Petition for Review with
Reconsiderationix[21] of the Order
Prayer for Temporary Restraining
dated August 29, 1994. It alleged that
Orderxv[31] dated April 30, 1996, given
the trial court has no jurisdiction to hear
due course by this Court. After both
and try the case on the basis of Article
parties submitted their
21 of the Civil Code, since the proper law
Memoranda,xvi[32] the instant case is
applicable is the law of the Kingdom of
now deemed submitted for decision.
Saudi Arabia. On October 14, 1994,
Morada filed her Oppositionx[22] (To
Petitioner SAUDIA raised the following
Defendants Motion for Reconsideration).
issues:
Respondent Judge subsequently issued
I
another Orderxi[24] dated February 2,
1995, denying SAUDIAs Motion for The trial court has no jurisdiction to hear
Reconsideration. The pertinent portion and try Civil Case No. Q-93-18394
of the assailed Order reads as follows: based on Article 21 of the New Civil Code
since the proper law applicable is the law
3
of the Kingdom of Saudi Arabia
inasmuch as this case involves what is
known in private international law as a
conflicts problem. Otherwise, the
Republic of the Philippines will sit in
judgment of the acts done by another
sovereign state which is abhorred.
II.
Leave of court before filing
supplemental pleading is not
jurisdictional requirement. Besides, the
matter as to absence of leave of court is
now moot and academic when this
Honorable Court required the
respondents to comment on petitioners
April 30, 1996 Supplemental Petition For
Review With Prayer For A Temporary
Restraining Order Within Ten (10) Days
From Notice Thereof. Further, the
Revised Rules of Court should be
construed with liberality pursuant to
Section 2, Rule 1 thereof.
III.
Petitioner received on April 22, 1996 the
April 10, 1996 decision in CA-G.R. SP
NO. 36533 entitled Saudi Arabian
Airlines v. Hon. Rodolfo A. Ortiz, et al.
and filed its April 30, 1996 Supplemental
Petition For Review With Prayer For A
Temporary Restraining Order on May 7,
1996 at 10:29 a.m. or within the 15-day
reglementary period as provided for
under Section 1, Rule 45 of the Revised
Rules of Court. Therefore, the decision
in CA-G.R. SP NO. 36533 has not yet
become final and executory and this
Honorable Court can take cognizance of
this case.xvii[33]
From the foregoing factual and
procedural antecedents, the following
issues emerge for our resolution:
I.
WHETHER RESPONDENT
APPELLATE COURT ERRED IN
HOLDING THAT THE REGIONAL
TRIAL COURT OF QUEZON CITY
HAS JURISDICTION TO HEAR
AND TRY CIVIL CASE NO. Q-93-
18394 ENTITLED MILAGROS P.
MORADA V. SAUDI ARABIAN
a
AIRLINES.
a
II.
WHETHER RESPONDENT
APPELLATE COURT ERRED IN
RULING THAT IN THE CASE
PHILIPPINE LAW SHOULD
GOVERN.
Petitioner SAUDIA claims that before us
is a conflict of laws that must be settled
at the outset. It maintains that private
respondents claim for alleged abuse of
rights occurred in the Kingdom of Saudi
Arabia. It alleges that the existence of a
foreign element qualifies the instant
case for the application of the law of the
Kingdom of Saudi Arabia, by virtue of
the lex loci delicti commissi rule.xviii[34]
On the other hand, private respondent
contends that since her Amended
Complaint is based on Articles 19xix[35]
and 21xx[36] of the Civil Code, then the
instant case is properly a matter of
domestic law.xxi[37]
Under the factual antecedents
obtaining in this case, there is no
dispute that the interplay of events
occurred in two states, the
Philippines and Saudi Arabia.
As stated by private respondent in her
Amended Complaintxxii[38] dated June
23, 1994:
4
 2. Defendant SAUDI ARABIAN
AIRLINES or SAUDIA is a foreign
airlines corporation doing
business in the Philippines. It
may be served with summons
and other court processes at
Travel Wide Associated Sales
(Phils.), Inc., 3rd Floor, Cougar
Building, 114 Valero St., Salcedo
Village, Makati, Metro Manila.
xxx xxx xxx
6. Plaintiff learned that, through
the intercession of the Saudi
Arabian government, the
Indonesian authorities agreed to
deport Thamer and Allah after
two weeks of detention.
Eventually, they were again put
in service by defendant SAUDIA.
In September 1990, defendant
SAUDIA transferred plaintiff to
Manila.
7. On January 14, 1992, just
when plaintiff thought that the
Jakarta incident was already
behind her, her superiors
requested her to see MR. Ali
Meniewy, Chief Legal Officer of
SAUDIA, in Jeddah, Saudi
Arabia.
9. Shortly afterwards, defendant
SAUDIA summoned plaintiff to
report to Jeddah once again and
see Miniewy on June 27, 1993 for
further investigation. Plaintiff did
so after receiving assurance from
SAUDIAs Manila manager, Aslam
Saleemi, that the investigation
was routinary and that it posed
no danger to her.
11. Because SAUDIA refused
to lend her a hand in the case,
plaintiff sought the help of the
5
Philippine Embassy in Jeddah.
The latter helped her pursue an
appeal from the decision of the
court. To pay for her upkeep, she
worked on the domestic flights of
defendant SAUDIA while,
ironically, Thamer and Allah
freely served the international
flights.xxiii[39]
Where the factual antecedents
satisfactorily establish the existence of a
foreign element, we agree with
petitioner that the problem herein could
present a conflicts case.
A factual situation that cuts across
territorial lines and is affected by the
diverse laws of two or more states is
said to contain a foreign element. The
presence of a foreign element is
inevitable since social and economic
affairs of individuals and associations
are rarely confined to the geographic
limits of their birth or
conception.xxiv[40]
The forms in which this foreign element
may appear are many.xxv[41] The
foreign element may simply consist in
the fact that one of the parties to a
contract is an alien or has a foreign
domicile, or that a contract between
nationals of one State involves
properties situated in another State. In
other cases, the foreign element may
assume a complex form.xxvi[42]
In the instant case, the foreign
element consisted in the fact that
private respondent Morada is a
resident Philippine national, and
that petitioner SAUDIA is a resident
foreign corporation. Also, by virtue of
the employment of Morada with the
petitioner Saudia as a flight stewardess,
events did transpire during her many
occasions of travel across national
borders, particularly from Manila,
Philippines to Jeddah, Saudi Arabia, and
vice versa, that caused a conflicts
situation to arise.
We thus find private respondents
assertion that the case is purely
domestic, imprecise. A conflicts problem
presents itself here, and the question of
jurisdictionxxvii[43] confronts the court
a quo.
After a careful study of the private
respondents Amended
Complaint,xxviii[44] and the Comment
thereon, we note that she aptly
predicated her cause of action on
Articles 19 and 21 of the New Civil Code.
On one hand, Article 19 of the New Civil
Code provides;
Art. 19. Every person must, in
the exercise of his rights and in
the performance of his duties,
act with justice give everyone his
due and observe honesty and
good faith.
On the other hand, Article 21 of the New
Civil Code provides:
Art. 21. Any person who willfully
causes loss or injury to another
in a manner that is contrary to
morals, good customs or public
policy shall compensate the
latter for damages.
Thus, in Philippine National Bank (PNB)
vs. Court of Appeals,xxix[45] this Court
held that:
6
The aforecited provisions on
human relations were intended
to expand the concept of torts in
this jurisdiction by granting
adequate legal remedy for the
untold number of moral wrongs
which is impossible for human
foresight to specifically provide
in the statutes.
Although Article 19 merely declares a
principle of law, Article 21 gives flesh to
its provisions. Thus, we agree with
private respondents assertion that
violations of Articles 19 and 21 are
actionable, with judicially
enforceable remedies in the
municipal forum.
Based on the allegationsxxx[46] in the
Amended Complaint, read in the light of
the Rules of Court on
jurisdictionxxxi[47] we find that the
Regional Trial Court (RTC) of Quezon
City possesses jurisdiction over the
subject matter of the suit.xxxii[48] Its
authority to try and hear the case is
provided for under Section 1 of Republic
Act No. 7691, to wit:
Section 1. Section 19 of Batas
Pambansa Blg. 129, otherwise
known as the Judiciary
Reorganization Act of 1980, is
hereby amended to read as
follows:
SEC. 19. Jurisdiction in Civil Cases.
Regional Trial Courts shall exercise
exclusive jurisdiction:
xxx x x
x xxx
(8) In all other cases in which demand,
exclusive of interest, damages of
whatever kind, attorneys fees, litigation
expenses, and costs or the value of the
property in controversy exceeds One
hundred thousand pesos (P100,000.00)
or, in such other cases in Metro Manila,
where the demand, exclusive of the
above-mentioned items exceeds Two
hundred Thousand pesos
(P200,000.00). (Emphasis ours)
xxx x x
x xxx
And following Section 2 (b), Rule 4 of the
Revised Rules of Court the venue,
Quezon City, is appropriate:
SEC. 2 Venue in Courts of First
Instance. [Now Regional Trial Court]
(a) x x x xxx xxx
(b) Personal actions. All other
actions may be commenced and
tried where the defendant or any
of the defendants resides or may
be found, or where the plaintiff
or any of the plaintiff resides, at
the election of the plaintiff.
Pragmatic considerations, including the
convenience of the parties, also weigh
heavily in favor of the RTC Quezon City
assuming jurisdiction. Paramount is the
private interest of the litigant.
Enforceability of a judgment if one is
obtained is quite obvious. Relative
advantages and obstacles to a fair trial
are equally important. Plaintiff may not,
by choice of an inconvenient forum, vex,
harass, or oppress the defendant, e.g.
by inflicting upon him needless expense
or disturbance. But unless the balance is
strongly in favor of the defendant, the
plaintiffs choice of forum should rarely
be disturbed.xxxiii[49]
7
Weighing the relative claims of the
parties, the court a quo found it best
to hear the case in the Philippines.
Had it refused to take cognizance of the
case, it would be forcing plaintiff
(private respondent now) to seek
remedial action elsewhere, i.e. in the
Kingdom of Saudi Arabia where she no
longer maintains substantial
connections. That would have caused a
fundamental unfairness to her.
Moreover, by hearing the case in the
Philippines no unnecessary difficulties
and inconvenience have been shown by
either of the parties. The choice of forum
of the plaintiff (now private respondent)
should be upheld.
Similarly, the trial court also possesses
jurisdiction over the persons of the
parties herein. By filing her Complaint
and Amended Complaint with the trial
court, private respondent has voluntary
submitted herself to the jurisdiction of
the court.
The records show that petitioner
SAUDIA has filed several
motionsxxxiv[50] praying for the
dismissal of Moradas Amended
Complaint. SAUDIA also filed an Answer
In Ex Abundante Cautelam dated
February 20, 1995. What is very
patent and explicit from the motions
filed, is that SAUDIA prayed for
other reliefs under the premises.
Undeniably, petitioner SAUDIA has
effectively submitted to the trial
courts jurisdiction by praying for
the dismissal of the Amended
Complaint on grounds other than
lack of jurisdiction.
As held by this Court in Republic vs. Ker
and Company, Ltd.:xxxv[51]
 We observe that the motion to
dismiss filed on April 14, 1962,
aside from disputing the lower
courts jurisdiction over
defendants person, prayed for
dismissal of the complaint on the
ground that plaintiffs cause of
action has prescribed. By
interposing such second ground
in its motion to dismiss, Ker and
Co., Ltd. availed of an affirmative
defense on the basis of which it
prayed the court to resolve
controversy in its favor. For the
court to validly decide the said
plea of defendant Ker & Co., Ltd.,
it necessarily had to acquire
jurisdiction upon the latters
person, who, being the
proponent of the affirmative
defense, should be deemed to
have abandoned its special
appearance and voluntarily
submitted itself to the
jurisdiction of the court.
Similarly, the case of De Midgely vs.
Ferandos, held that:
When the appearance is by
motion for the purpose of
objecting to the jurisdiction
of the court over the person,
it must be for the sole and
separate purpose of
objecting to the jurisdiction
of the court. If his motion is
for any other purpose than to
object to the jurisdiction of
the court over his person, he
thereby submits himself to
the jurisdiction of the court. A
special appearance by motion
made for the purpose of
objecting to the jurisdiction of
the court over the person will be
8
held to be a general appearance,
if the party in said motion
should, for example, ask for a
dismissal of the action upon the
further ground that the court had
no jurisdiction over the subject
matter.xxxvi[52]
Clearly, petitioner had submitted to the
jurisdiction of the Regional Trial Court of
Quezon City. Thus, we find that the trial
court has jurisdiction over the case and
that its exercise thereof, justified.
As to the choice of applicable law,
we note that choice-of-law
problems seek to answer two
important questions: (1) What legal
system should control a given
situation where some of the
significant facts occurred in two or
more states; and (2) to what extent
should the chosen legal system
regulate the situation.
Several theories have been propounded
in order to identify the legal system that
should ultimately control. Although
ideally, all choice-of-law theories should
intrinsically advance both notions of
justice and predictability, they do not
always do so. The forum is then faced
with the problem of deciding which of
these two important values should be
stressed.xxxvii[54]
Before a choice can be made, it is
necessary for us to determine under
what category a certain set of facts or
rules fall. This process is known as
characterization, or the doctrine of
qualification. It is the process of deciding
whether or not the facts relate to the
kind of question specified in a conflicts
rule.xxxviii[55] The purpose of
characterization is to enable the forum
to select the proper law.xxxix[56]
Our starting point of analysis here is not
a legal relation, but a factual situation,
event, or operative fact.xl[57] An
essential element of conflict rules is
the indication of a test or
connecting factor or point of
contact. Choice-of-law rules invariably
consist of a factual relationship (such as
property right, contract claim) and a
connecting factor or point of contact,
such as the situs of the res, the place of
celebration, the place of performance, or
the place of wrongdoing.xli[58]
Note that one or more circumstances
may be present to serve as the possible
test for the determination of the
applicable law. These test factors or
points of contact or connecting factors
could be any of the following:
(1) The nationality of a person,
his domicile, his residence, his
place of sojourn, or his origin;
(2) the seat of a legal or juridical
person, such as a corporation;
(3) the situs of a thing, that is,
the place where a thing is, or is
deemed to be situated. In
particular, the lex situs is
decisive when real rights are
involved;
(4) the place where an act has
been done, the locus actus,
such as the place where a
contract has been made, a
marriage celebrated, a will
signed or a tort committed.
The lex loci actus is
particularly important in
contracts and torts;
9
(5) the place where an act is
intended to come into effect,
e.g., the place of performance of
contractual duties, or the place
where a power of attorney is to
be exercised;
(6) the intention of the
contracting parties as to the law
that should govern their
agreement, the lex loci
intentionis;
(7) the place where judicial or
administrative proceedings are
instituted or done. The lex fori
the law of the forumis
particularly important because,
as we have seen earlier, matters
of procedure not going to the
substance of the claim involved
are governed by it; and because
the lex fori applies whenever the
content of the otherwise
applicable foreign law is excluded
from application in a given case
for the reason that it falls under
one of the exceptions to the
applications of foreign law; and
(8) the flag of a ship, which in
many cases is decisive of
practically all legal relationships
of the ship and of its master or
owner as such. It also covers
contractual relationships
particularly contracts of
affreightment.xlii[60]
(Underscoring ours.)
After a careful study of the pleadings on
record, including allegations in the
Amended Complaint deemed submitted
for purposes of the motion to dismiss,
we are convinced that there is
reasonable basis for private respondents
assertion that although she was already
working in Manila, petitioner brought
her to Jeddah on the pretense that she
would merely testify in an investigation
of the charges she made against the two
SAUDIA crew members for the attack on
her person while they were in Jakarta.
As it turned out, she was the one made
to face trial for very serious charges,
including adultery and violation of
Islamic laws and tradition.
There is likewise logical basis on record
for the claim that the handing over or
turning over of the person of private
respondent to Jeddah officials,
petitioner may have acted beyond its
duties as employer. Petitioners
purported act contributed to and
amplified or even proximately caused
additional humiliation, misery and
suffering of private respondent.
Petitioner thereby allegedly facilitated
the arrest, detention and prosecution of
private respondent under the guise of
petitioners authority as employer,
taking advantage of the trust,
confidence and faith she reposed upon
it. As purportedly found by the Prince of
Makkah, the alleged conviction and
imprisonment of private respondent was
wrongful. But these capped the injury or
harm allegedly inflicted upon her person
and reputation, for which petitioner
could be liable as claimed, to provide
compensation or redress for the wrongs
done, once duly proven.
Considering that the complaint in the
court a quo is one involving torts, the
connecting factor or point of contact
could be the place or places where
the tortious conduct or lex loci actus
occurred. And applying the torts
principle in a conflicts case, we find that
the Philippines could be said as a situs
of the tort (the place where the alleged
10
tortious conduct took place). This is
because it is in the Philippines where
petitioner allegedly deceived private
respondent, a Filipina residing and
working here. According to her, she had
honestly believed that petitioner would,
in the exercise of its rights and in the
performance of its duties, act with
justice, give her her due and observe
honesty and good faith. Instead,
petitioner failed to protect her, she
claimed. That certain acts or parts of the
injury allegedly occurred in another
country is of no moment. For in our view
what is important here is the place
where the over-all harm or the fatality
of the alleged injury to the person,
reputation, social standing and human
rights of complainant, had lodged,
according to the plaintiff below (herein
private respondent). All told, it is not
without basis to identify the Philippines
as the situs of the alleged tort.
Moreover, with the widespread criticism
of the traditional rule of lex loci delicti
commissi, modern theories and rules on
tort liabilityxliii[61] have been advanced
to offer fresh judicial approaches to
arrive at just results. In keeping abreast
with the modern theories on tort
liability, we find here an occasion to
apply the State of the most significant
relationship rule, which in our view
should be appropriate to apply now,
given the factual context of this case.
In applying said principle to determine
the State which has the most significant
relationship, the following contacts are
to be taken into account and evaluated
according to their relative importance
with respect to the particular issue: (a)
the place where the injury occurred; (b)
the place where the conduct causing the
injury occurred; (c) the domicile,
residence, nationality, place of
incorporation and place of business of
the parties, and (d) the place where the
relationship, if any, between the parties
is centered.
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,xliv[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
complaint 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
petitioners insistence that [s]ince
private respondent instituted this suit,
11
she has the burden of pleading and
proving the applicable Saudi law on the
matter.xlv[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.xlvi[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,
thus the burden was on it [petitioner] to
plead and to establish what the law of
Saudi Arabia is.xlvii[66]
Lastly, no error could be imputed to the
respondent appellate court in upholding
the trial courts denial of defendants
(herein petitioners) motion to dismiss
the case. With these guidelines in mind,
the trial court must proceed to try and
adjudge the case in the light of relevant
Philippine law, with due consideration of
the foreign element or elements
involved. Nothing said herein, of course,
should be construed as prejudging the
results of the case in any manner
whatsoever.
WHEREFORE, the instant petition for
certiorari is hereby DISMISSED. Civil
Case No. Q-93-18394 entitled Milagros
P. Morada vs. Saudi Arabia Airlines is
hereby REMANDED to Regional Trial
Court of Quezon City, Branch 89 for
further proceedings.
SO ORDERED.

KAZUHIRO HASEGAWA and
NIPPON ENGINEERING
CONSULTANTS CO., LTD vs.
MINORU KITAMURA,
G.R. No. 149177, November 23,
2007
On March 30, 1999, petitioner Nippon
Engineering Consultants Co., Ltd.
(Nippon), a Japanese consultancy firm
providing technical and management
support in the infrastructure projects of
foreign governments,iii[3] entered into
an Independent Contractor Agreement
(ICA) with respondent Minoru Kitamura,
a Japanese national permanently
residing in the Philippines.iii[4] The
agreement provides that respondent
was to extend professional services to
Nippon for a year starting on April 1,
1999.iii[5] Nippon then assigned
respondent to work as the project
manager of the Southern Tagalog
Access Road (STAR) Project in the
Philippines, following the company's
consultancy contract with the Philippine
Government.iii[6]
When the STAR Project was near
completion, the Department of Public
Works and Highways (DPWH) engaged
the consultancy services of Nippon, on
January 28, 2000, this time for the
detailed engineering and construction
supervision of the Bongabon-Baler Road
Improvement (BBRI) Project.iii[7]
Respondent was named as the project
manager in the contract's Appendix
3.1.iii[8]
On February 28, 2000, petitioner
Kazuhiro Hasegawa, Nippon's general
manager for its International Division,
informed respondent that the company
12
had no more intention of automatically
renewing his ICA. His services would be
engaged by the company only up to the
substantial completion of the STAR
Project on March 31, 2000, just in time
for the ICA's expiry.iii[9]
Threatened with impending
unemployment, respondent, through his
lawyer, requested a negotiation
conference and demanded that he be
assigned to the BBRI project. Nippon
insisted that respondents contract was
for a fixed term that had already expired
and refused to negotiate for the renewal
of the ICA.iii[10]
As he was not able to generate a
positive response from the petitioners,
respondent consequently initiated on
June 1, 2000 Civil Case No. 00-0264 for
specific performance and damages with
the Regional Trial Court of Lipa
City.iii[11]
For their part, petitioners,
contending that the ICA had been
perfected in Japan and executed by and
between Japanese nationals, moved to
dismiss the complaint for lack of
jurisdiction. They asserted that the
claim for improper pre-termination of
respondent's ICA could only be heard
and ventilated in the proper courts of
Japan following the principles of lex loci
celebrationis and lex contractus.iii[12]
In the meantime, on June 20,
2000, the DPWH approved Nippon's
request for the replacement of Kitamura
by a certain Y. Kotake as project
manager of the BBRI Project.iii[13]
On June 29, 2000, the RTC,
invoking our ruling in Insular
Government v. Frankiii[14] that matters
 FACT THAT THE CONTRACT SUBJECT
connected with the performance of MATTER OF THE PROCEEDINGS A QUO
contracts are regulated by the law WAS ENTERED INTO BY AND BETWEEN
prevailing at the place of TWO JAPANESE NATIONALS, WRITTEN
performance,iii[15] denied the motion WHOLLY IN THE JAPANESE LANGUAGE
to dismiss.iii[16] The trial court AND EXECUTED IN TOKYO, JAPAN.
subsequently denied petitioners' motion
for reconsideration,iii[17] prompting B. THE HONORABLE
them to file with the appellate court, on COURT OF APPEALS
August 14, 2000, their first Petition for GRAVELY ERRED IN
Certiorari under Rule 65 [docketed as OVERLOOKING THE NEED
CA-G.R. SP No. 60205].iii[18] On TO REVIEW OUR
August 23, 2000, the CA resolved to ADHERENCE TO THE
dismiss the petition on procedural PRINCIPLE OF LEX LOCI
groundsfor lack of statement of material SOLUTIONIS IN THE LIGHT
dates and for insufficient verification and OF RECENT
certification against forum DEVELOPMENT[S] IN
shopping.iii[19] An Entry of Judgment PRIVATE INTERNATIONAL
was later issued by the appellate court LAWS.iii[26]
on September 20, 2000.iii[20]

The CA ruled, among others, that

the principle of lex loci celebrationis was
not applicable to the case, because
nowhere in the pleadings was the
validity of the written agreement put in
issue. The CA thus declared that the trial
court was correct in applying instead the
principle of lex loci solutionis.iii[23]
Petitioners' motion for
reconsideration was subsequently
denied by the CA in the assailed July 25,
2001 Resolution.iii[24]
Remaining steadfast in their
stance despite the series of denials,
petitioners instituted the instant Petition
for Review on Certiorariiii[25] imputing
the following errors to the appellate
court:
A. THE HONORABLE COURT OF
APPEALS GRAVELY ERRED IN FINDING
THAT THE TRIAL COURT VALIDLY
EXERCISED JURISDICTION OVER THE
INSTANT CONTROVERSY, DESPITE THE
13
The pivotal question that this
Court is called upon to resolve is
whether the subject matter
jurisdiction of Philippine courts in
civil cases for specific performance
and damages involving contracts
executed outside the country by
foreign nationals may be assailed
on the principles of lex loci
celebrationis, lex contractus, the
state of the most significant
relationship rule, or forum non
conveniens.
However, before ruling on this
issue, we must first dispose of the
procedural matters raised by the
respondent.
The dismissal of a case without
prejudice signifies the absence of a
decision on the merits and leaves the
parties free to litigate the matter in a
subsequent action as though the

dismissed action had not been
commenced. In other words, the
termination of a case not on the merits
does not bar another action involving
the same parties, on the same subject
matter and theory.iii[32]
Necessarily, because the said
dismissal is without prejudice and has
no res judicata effect, and even if
petitioners still indicated in the
verification and certification of the
second certiorari petition that the first
had already been dismissed on
procedural grounds,iii[33] petitioners
are no longer required by the Rules to
indicate in their certification of non-
forum shopping in the instant petition
for review of the second certiorari
petition, the status of the aforesaid first
petition before the CA. In any case, an
omission in the certificate of non-forum
shopping about any event that will not
constitute res judicata and litis
pendentia, as in the present case, is not
a fatal defect. It will not warrant the
dismissal and nullification of the entire
proceedings, considering that the evils
sought to be prevented by the said
certificate are no longer present.iii[34]
Further, the Court has observed that
petitioners incorrectly filed a Rule 65
petition to question the trial court's
denial of their motion to dismiss. It is a
well-established rule that an order
denying a motion to dismiss is
interlocutory, and cannot be the subject
of the extraordinary petition for
certiorari or mandamus. The
appropriate recourse is to file an answer
and to interpose as defenses the
objections raised in the motion, to
proceed to trial, and, in case of an
adverse decision, to elevate the entire
case by appeal in due course.iii[44]
14
While there are recognized exceptions to
this rule,iii[45] petitioners' case does
not fall among them.
This brings us to the discussion of
the substantive issue of the case.
Asserting that the RTC of Lipa City
is an inconvenient forum, petitioners
question its jurisdiction to hear and
resolve the civil case for specific
performance and damages filed by the
respondent. The ICA subject of the
litigation was entered into and perfected
in Tokyo, Japan, by Japanese nationals,
and written wholly in the Japanese
language. Thus, petitioners posit that
local courts have no substantial
relationship to the partiesiii[46]
following the [state of the] most
significant relationship rule in Private
International Law.iii[47]
The Court notes that petitioners
adopted an additional but different
theory when they elevated the case to
the appellate court. In the Motion to
Dismissiii[48] filed with the trial court,
petitioners never contended that the
RTC is an inconvenient forum. They
merely argued that the applicable law
which will determine the validity or
invalidity of respondent's claim is that of
Japan, following the principles of lex loci
celebrationis and lex contractus.iii[49]
While not abandoning this stance in their
petition before the appellate court,
petitioners on certiorari significantly
invoked the defense of forum non
conveniens.iii[50] On petition for review
before this Court, petitioners dropped
their other arguments, maintained the
forum non conveniens defense, and
introduced their new argument that the
applicable principle is the [state of the]
most significant relationship rule.iii[51]

Be that as it may, this Court is not
inclined to deny this petition merely on
the basis of the change in theory, as
explained in Philippine Ports Authority v.
City of Iloilo.iii[52] We only pointed out
petitioners' inconstancy in their
arguments to emphasize their incorrect
assertion of conflict of laws principles.
To elucidate, in the judicial
resolution of conflicts problems, three
consecutive phases are involved:
jurisdiction, choice of law, and
recognition and enforcement of
judgments. Corresponding to these
phases are the following questions: (1)
Where can or should litigation be
initiated? (2) Which law will the court
apply? and (3) Where can the resulting
judgment be enforced?iii[53]
Analytically, jurisdiction and
choice of law are two distinct
concepts.iii[54] Jurisdiction considers
whether it is fair to cause a defendant to
travel to this state; choice of law asks
the further question whether the
application of a substantive law which
will determine the merits of the case is
fair to both parties. The power to
exercise jurisdiction does not
automatically give a state constitutional
authority to apply forum law. While
jurisdiction and the choice of the lex fori
will often coincide, the minimum
contacts for one do not always provide
the necessary significant contacts for
the other.iii[55] The question of whether
the law of a state can be applied to a
transaction is different from the
question of whether the courts of that
state have jurisdiction to enter a
judgment.iii[56]
In this case, only the first phase is
at issue jurisdiction. Jurisdiction,
15
however, has various aspects. For a
court to validly exercise its power to
adjudicate a controversy, it must have
jurisdiction over the plaintiff or the
petitioner, over the defendant or the
respondent, over the subject matter,
over the issues of the case and, in cases
involving property, over the res or the
thing which is the subject of the
litigation.iii[57] In assailing the trial
court's jurisdiction herein, petitioners
are actually referring to subject matter
jurisdiction.
Jurisdiction over the subject
matter in a judicial proceeding is
conferred by the sovereign authority
which establishes and organizes the
court. It is given only by law and in the
manner prescribed by law.iii[58] It is
further determined by the allegations of
the complaint irrespective of whether
the plaintiff is entitled to all or some of
the claims asserted therein.iii[59] To
succeed in its motion for the dismissal of
an action for lack of jurisdiction over the
subject matter of the claim,iii[60] the
movant must show that the court or
tribunal cannot act on the matter
submitted to it because no law grants it
the power to adjudicate the
claims.iii[61]
In the instant case, petitioners, in
their motion to dismiss, do not claim
that the trial court is not properly vested
by law with jurisdiction to hear the
subject controversy for, indeed, Civil
Case No. 00-0264 for specific
performance and damages is one not
capable of pecuniary estimation and is
properly cognizable by the RTC of Lipa
City.iii[62] What they rather raise as
grounds to question subject matter
jurisdiction are the principles of lex loci
celebrationis and lex contractus, and the

state of the most significant relationship
rule.
The Court finds the invocation of
these grounds unsound.
Lex loci celebrationis relates to the
law of the place of the ceremonyiii[63]
or the law of the place where a contract
is made.iii[64] The doctrine of lex
contractus or lex loci contractus means
the law of the place where a contract is
executed or to be performed.iii[65] It
controls the nature, construction, and
validity of the contractiii[66] and it may
pertain to the law voluntarily agreed
upon by the parties or the law intended
by them either expressly or
implicitly.iii[67] Under the state of the
most significant relationship rule, to
ascertain what state law to apply to a
dispute, the court should determine
which state has the most substantial
connection to the occurrence and the
parties. In a case involving a contract,
the court should consider where the
contract was made, was negotiated, was
to be performed, and the domicile, place
of business, or place of incorporation of
the parties.iii[68] This rule takes into
account several contacts and evaluates
them according to their relative
importance with respect to the particular
issue to be resolved.iii[69]
Since these three principles in
conflict of laws make reference to the
law applicable to a dispute, they are
rules proper for the second phase, the
choice of law.iii[70] They determine
which state's law is to be applied in
resolving the substantive issues of a
conflicts problem.iii[71] Necessarily, as
the only issue in this case is that of
jurisdiction, choice-of-law rules are not
16
only inapplicable but also not yet called
for.
Further, petitioners' premature
invocation of choice-of-law rules is
exposed by the fact that they have not
yet pointed out any conflict between the
laws of Japan and ours. Before
determining which law should apply,
first there should exist a conflict of laws
situation requiring the application of the
conflict of laws rules.iii[72] Also, when
the law of a foreign country is invoked
to provide the proper rules for the
solution of a case, the existence of such
law must be pleaded and proved.iii[73]
It should be noted that when a
conflicts case, one involving a foreign
element, is brought before a court or
administrative agency, there are three
alternatives open to the latter in
disposing of it: (1) dismiss the case,
either because of lack of jurisdiction or
refusal to assume jurisdiction over the
case; (2) assume jurisdiction over the
case and apply the internal law of the
forum; or (3) assume jurisdiction over
the case and take into account or apply
the law of some other State or
States.iii[74] The courts power to hear
cases and controversies is derived from
the Constitution and the laws. While it
may choose to recognize laws of foreign
nations, the court is not limited by
foreign sovereign law short of treaties or
other formal agreements, even in
matters regarding rights provided by
foreign sovereigns.iii[75]
Neither can the other ground
raised, forum non conveniens,iii[76] be
used to deprive the trial court of its
jurisdiction herein. First, it is not a
proper basis for a motion to dismiss
because Section 1, Rule 16 of the Rules

of Court does not include it as a
ground.iii[77] Second, whether a suit
should be entertained or dismissed on
the basis of the said doctrine depends
largely upon the facts of the particular
case and is addressed to the sound
discretion of the trial court.iii[78] In this
case, the RTC decided to assume
jurisdiction. Third, the propriety of
dismissing a case based on this principle
requires a factual determination; hence,
this conflicts principle is more properly
considered a matter of defense.iii[79]
Accordingly, since the RTC is
vested by law with the power to
entertain and hear the civil case filed by
respondent and the grounds raised by
petitioners to assail that jurisdiction are
inappropriate, the trial and appellate
courts correctly denied the petitioners
motion to dismiss.
WHEREFORE, premises
considered, the petition for review on
certiorari is DENIED.
SO ORDERED.
KAZUHIRO HASEGAWA and
NIPPON ENGINEERING
CONSULTANTS CO., LTD.,
vs
MINORU KITAMURA
G.R. No. 149177
November 23, 2007
FACTS:
Nippon Engineering Consultants
(Nippon), a Japanese consultancy firm
providing technical and management
support in the infrastructure projects
17
national permanently residing in the
Philippines. The agreement provides
that Kitamaru was to extend
professional services to Nippon for a
year. Nippon assigned Kitamaru to work
as the project manager of the Southern
Tagalog Access Road (STAR) project.
When the STAR project was near
completion, DPWH engaged the
consultancy services of Nippon, this
time for the detailed engineering &
construction supervision of the
Bongabon-Baler Road Improvement
(BBRI) Project. Kitamaru was named as
the project manger in the contract.
Hasegawa, Nippon’s general manager
for its International Division, informed
Kitamaru that the company had no more
intention of automatically renewing his
ICA. His services would be engaged by
the company only up to the substantial
completion of the STAR Project.
Kitamaru demanded that he be assigned
to the BBRI project. Nippon insisted that
Kitamaru’s contract was for a fixed term
that had expired. Kitamaru then filed for
specific performance & damages w/ the
RTC of Lipa City. Nippon filed a MTD.
Nippon’s contention: The ICA had been
perfected in Japan & executed by &
between Japanese nationals. Thus, the
RTC of Lipa City has no jurisdiction. The
claim for improper pre-termination of
Kitamaru’s ICA could only be heard &
ventilated in the proper courts of Japan
following the principles of lex loci
celebrationis & lex contractus.
The RTC denied the motion to dismiss.
The CA ruled hat the principle of lex loci
celebrationis was not applicable to the
case, because nowhere in the pleadings
was the validity of the written
 In this case, only the 1st phase is at
agreement put in issue. It held that the issue—jurisdiction. Jurisdiction,
RTC was correct in applying the principle however, has various aspects. For a
of lex loci solutionis. court to validly exercise its power to
adjudicate a controversy, it must
ISSUE: have jurisdiction over the
plaintiff/petitioner, over the
Whether or not the subject matter defendant/respondent, over the
jurisdiction of Philippine courts in civil subject matter, over the issues of
cases for specific performance & the case and, in cases involving
damages involving contracts executed property, over the res or the thing
outside the country by foreign nationals w/c is the subject of the litigation.
may be assailed on the principles of lex In assailing the trial court's
loci celebrationis, lex contractus, “the jurisdiction herein, Nippon is
state of the most significant relationship actually referring to subject matter
rule,” or forum non conveniens. jurisdiction.

HELD: Jurisdiction over the subject matter in a

judicial proceeding is conferred by the
NO. In the judicial resolution of conflicts sovereign authority w/c establishes and
problems, 3 consecutive phases are organizes the court. It is given only by
involved: jurisdiction, choice of law, and law and in the manner prescribed by
recognition and enforcement of law. It is further determined by the
judgments. Jurisdiction & choice of allegations of the complaint irrespective
law are 2 distinct concepts. of whether the plaintiff is entitled to all
Jurisdiction considers whether it is or some of the claims asserted therein.
fair to cause a defendant to travel to To succeed in its motion for the
this state; choice of law asks the dismissal of an action for lack of
further question whether the jurisdiction over the subject matter
application of a substantive law w/c of the claim, the movant must show
will determine the merits of the that the court or tribunal cannot act
case is fair to both parties. The on the matter submitted to it
power to exercise jurisdiction does because no law grants it the power
not automatically give a state to adjudicate the claims.
constitutional authority to apply
forum law. While jurisdiction and the In the instant case, Nippon, in its MTD,
choice of the lex fori will often coincide, does not claim that the RTC is not
the “minimum contacts” for one do not properly vested by law w/ jurisdiction to
always provide the necessary hear the subject controversy for a civil
“significant contacts” for the other. The case for specific performance &
question of whether the law of a damages is one not capable of pecuniary
state can be applied to a transaction estimation & is properly cognizable by
is different from the question of the RTC of Lipa City. What they rather
whether the courts of that state raise as grounds to question subject
have jurisdiction to enter a matter jurisdiction are the principles of
judgment. lex loci celebrationis and lex contractus,
18

and the “state of the most significant
relationship rule.” The Court finds the
invocation of these grounds unsound.
Lex loci celebrationis relates to the “law
of the place of the ceremony” or the law
of the place where a contract is made.
The doctrine of lex contractus or lex loci
contractus means the “law of the place
where a contract is executed or to be
performed.” It controls the nature,
construction, and validity of the contract
and it may pertain to the law voluntarily
agreed upon by the parties or the law
intended by them either expressly or
implicitly. Under the “state of the most
significant relationship rule,” to
ascertain what state law to apply to a
dispute, the court should determine
which state has the most substantial
connection to the occurrence and the
parties. In a case involving a contract,
the court should consider where the
contract was made, was negotiated, was
to be performed, and the domicile, place
of business, or place of incorporation of
the parties. This rule takes into account
several contacts and evaluates them
according to their relative importance
with respect to the particular issue to be
resolved.
Since these 3 principles in conflict of
laws make reference to the law
applicable to a dispute, they are rules
proper for the 2nd phase, the choice of
law. They determine which state's law is
to be applied in resolving the
substantive issues of a conflicts
problem. Necessarily, as the only issue
in this case is that of jurisdiction, choice-
of-law rules are not only inapplicable but
also not yet called for.
Further, Nippon’s premature invocation
of choice-of-law rules is exposed by the 19
fact that they have not yet pointed out
any conflict between the laws of Japan
and ours. Before determining which law
should apply, 1st there should exist a
conflict of laws situation requiring the
application of the conflict of laws rules.
Also, when the law of a foreign country
is invoked to provide the proper rules for
the solution of a case, the existence of
such law must be pleaded and proved.
It should be noted that when a conflicts
case, one involving a foreign element, is
brought before a court or administrative
agency, there are 3 alternatives open to
the latter in disposing of it: (1) dismiss
the case, either because of lack of
jurisdiction or refusal to assume
jurisdiction over the case; (2) assume
jurisdiction over the case and apply the
internal law of the forum; or (3) assume
jurisdiction over the case and take into
account or apply the law of some other
State or States. The court’s power to
hear cases and controversies is derived
from the Constitution and the laws.
While it may choose to recognize laws of
foreign nations, the court is not limited
by foreign sovereign law short of
treaties or other formal agreements,
even in matters regarding rights
provided by foreign sovereigns.
Neither can the other ground raised,
forum non conveniens, be used to
deprive the RTC of its jurisdiction. 1st, it
is not a proper basis for a motion to
dismiss because Sec. 1, Rule 16 of the
Rules of Court does not include it as a
ground. 2nd, whether a suit should be
entertained or dismissed on the basis of
the said doctrine depends largely upon
the facts of the particular case and is
addressed to the sound discretion of the
RTC. In this case, the RTC decided to
assume jurisdiction. 3rd, the propriety

of dismissing a case based on this
principle requires a factual
determination; hence, this conflicts
principle is more properly considered a
matter of defense.
[ GR No. 198587, Jan 14, 2015 ]
SAUDI ARABIAN AIRLINES v.
MA. JOPETTE M. REBESENCIO
LEONEN, J.:
All Filipinos are entitled to the protection
of the rights guaranteed in the
Constitution.
Petitioner Saudi Arabian Airlines
(Saudia) is a foreign corporation
established and existing under the laws
of Jeddah, Kingdom of Saudi Arabia. It
has a Philippine office located at 4/F,
Metro House Building, Sen. Gil J. Puyat
Avenue, Makati City.[3] In its Petition
filed with this court, Saudia identified
itself as follows:
1. Petitioner SAUDIA is a foreign
corporation established and existing
under the Royal Decree No. M/24 of
18.07.1385H (10.02.1962G) in Jeddah,
Kingdom of Saudi Arabia ("KSA"). Its
Philippine Office is located at 4/F Metro
House Building, Sen, Gil J. Puyat
Avenue, Makati City (Philippine Office).
It may be served with orders of this
Honorable Court through undersigned
counsel at 4th and 6th Floors, Citibank
Center Bldg., 8741 Paseo de Roxas,
Makati City.[4] (Emphasis supplied)
Respondents (complainants before the
Labor Arbiter) were recruited and hired
by Saudia as Temporary Flight
Attendants with the accreditation and
approval of the Philippine Overseas 20
Employment Administration.[5] After
undergoing seminars required by the
Philippine Overseas Employment
Administration for deployment
overseas, as well as training modules
offered by Saudia (e.g., initial flight
attendant/training course and transition
training), and after working as
Temporary Flight Attendants,
respondents became Permanent Flight
Attendants. They then entered into
Cabin Attendant contracts with Saudia:
Ma. Jopette M. Rebesencio (Ma. Jopette)
on May 16, 1990;[6] Montassah B. Sacar-
Adiong (Montassah) and Rouen Ruth A.
Cristobal (Rouen Ruth) on May 22,
1993;[7] and Loraine Schneider-Cruz
(Loraine) on August 27, 1995.[8]
Respondents continued their
employment with Saudia until they were
separated from service on various dates
in 2006.[9]
Respondents contended that the
termination of their employment was
illegal. They alleged that the termination
was made solely because they were
pregnant.[10]
As respondents alleged, they had
informed Saudia of their respective
pregnancies and had gone through the
necessary procedures to process their
maternity leaves. Initially, Saudia had
given its approval but later on informed
respondents that its management in
Jeddah, Saudi Arabia had disapproved
their maternity leaves. In addition, it
required respondents to file their
resignation letters.[11]
Respondents were told that if they did
not resign, Saudia would terminate
them all the same. The threat of
termination entailed the loss of benefits,
 In their Comment on the present
such as separation pay and ticket Petition,[19] respondents emphasized
discount entitlements.[12] that the Unified Contract took effect on
September 23, 2006 (the first day of
Specifically, Ma. Jopette received a call Ramadan),[20] well after they had filed
on October 16, 2006 from Saudia's Base and had their maternity leaves
Manager, Abdulmalik Saddik approved. Ma. Jopette filed her
[13]
(Abdulmalik). Montassah was maternity leave application on
informed personally by Abdulmalik and September 5, 2006. [21]
Montassah filed
a certain Faisal Hussein on October 20, her maternity leave application on
2006 after being required to report to August 29, 2006, and its approval was
the office one (1) month into her already indicated in Saudia's computer
maternity leave.[14] Rouen Ruth was also system by August 30, 2006.[22] Rouen
personally informed by Abdulmalik on Ruth filed her maternity leave
October 17, 2006 after being required to application on September 13, 2006,[23]
report to the office by her Group and Loraine filed her maternity leave
Supervisor.[15] Loraine received a call on application on August 22, 2006.[24]
October 12, 2006 from her Group
Supervisor, Dakila Salvador.[16] Rather than comply and tender
resignation letters, respondents filed
Saudia anchored its disapproval of separate appeal letters that were all
respondents' maternity leaves and rejected.[25]
demand for their resignation on its
"Unified Employment Contract for Despite these initial rejections,
Female Cabin Attendants" (Unified respondents each received calls on the
Contract).[17] Under the Unified morning of November 6, 2006 from
Contract, the employment of a Flight Saudia's office secretary informing them
Attendant who becomes pregnant is that their maternity leaves had been
rendered void. It provides: approved. Saudia, however, was quick
(H) Due to the essential nature of the Air to renege on its approval. On the
Hostess functions to be physically fit on evening of November 6, 2006,
board to provide various services respondents again received calls
required in normal or emergency cases informing them that it had received
on both domestic/international flights notification from Jeddah, Saudi Arabia
beside her role in maintaining that their maternity leaves had been
continuous safety and security of disapproved.[26]
passengers, and since she will not be
able to maintain the required medical Faced with the dilemma of resigning or
fitness while at work in case of totally losing their benefits, respondents
pregnancy, accordingly, if the Air executed handwritten resignation
Hostess becomes pregnant at any letters. In Montassah's and Rouen
time during the term of this Ruth's cases, their resignations were
contract, this shall render her executed on Saudia's blank letterheads
employment contract as void and that Saudia had provided. These
she will be terminated due to lack of letterheads already had the word
medical fitness.[18] (Emphasis "RESIGNATION" typed on the subject
supplied) 21

portions of their headings when these
were handed to respondents.[27]
On November 8, 2007, respondents filed
a Complaint against Saudia and its
officers for illegal dismissal and for
underpayment of salary, overtime pay,
premium pay for holiday, rest day,
premium, service incentive leave pay,
13th month pay, separation pay, night
shift differentials, medical expense
reimbursements, retirement benefits,
illegal deduction, lay-over expense and
allowances, moral and exemplary
damages, and attorney's fees.[28] The
case was initially assigned to Labor
Arbiter Hermino V. Suelo and docketed
as NLRC NCR Case No. 00-11-12342-07.
Saudia assailed the jurisdiction of the
Labor Arbiter.[29] It claimed that all the
determining points of contact referred to
foreign law and insisted that the
Complaint ought to be dismissed on the
ground of forum non conveniens.[30] It
added that respondents had no cause of
action as they resigned voluntarily.[31]
On December 12, 2008, Executive Labor
Arbiter Fatima Jambaro-Franco
rendered the Decision[32] dismissing
respondents' Complaint. The dispositive
portion of this Decision reads:
WHEREFORE, premises' considered,
judgment is hereby rendered
DISMISSING the instant complaint for
lack of jurisdiction/merit.[33]
On respondents' appeal, the National
Labor Relations Commission's Sixth
Division reversed the ruling of Executive
Labor Arbiter Jambaro-Franco. It
explained that "[considering that
complainants-appellants are OFWs, the
Labor Arbiters and the NLRC has [sic]
jurisdiction to hear and decide their
22
complaint for illegal termination."[34] On
the matter of forum non conveniens, it
noted that there were no special
circumstances that warranted its
abstention from exercising
jurisdiction. [35]
On the issue of whether
respondents were validly dismissed, it
held that there was nothing on record to
support Saudia's claim that respondents
resigned voluntarily.
The dispositive portion of the November
19, 2009 National Labor Relations
Commission Decision[36] reads:
WHEREFORE, premises considered,
judgment is hereby rendered finding the
appeal impressed with merit. The
respondents-appellees are hereby
directed to pay complainants-appellants
the aggregate amount of SR614,001.24
corresponding to their backwages and
separation pay plus ten (10%) percent
thereof as attorney's fees. The decision
of the Labor Arbiter dated December 12,
2008 is hereby VACATED and SET
ASIDE. Attached is the computation
prepared by this Commission and made
an integral part of this Decision.[37]
In the Resolution dated February 11,
2010,[38] the National Labor Relations
Commission denied petitioners' Motion
for Reconsideration.
In the June 16, 2011 Decision,[39] the
Court of Appeals denied petitioners' Rule
65 Petition and modified the Decision of
the National Labor Relations
Commission with respect to the award of
separation pay and backwages.
The dispositive portion of the Court of
Appeals Decision reads:
WHEREFORE, the instant petition is
hereby DENIED. The Decision dated
November 19, 2009 issued by public

respondent, Sixth Division of the
National Labor Relations Commission -
National Capital Region is MODIFIED
only insofar as the computation of the
award of separation pay and backwages.
For greater clarity, petitioners are
ordered to pay private respondents
separation pay which shall be computed
from private respondents' first day of
employment up to the finality of this
decision, at the rate of one month per
year of service and backwages which
shall be computed from the date the
private respondents were illegally
terminated until finality of this decision.
Consequently, the ten percent (10%)
attorney's fees shall be based on the
total amount of the award. The assailed
Decision is affirmed in all other respects.
The labor arbiter is hereby DIRECTED
to make a recomputation based on the
foregoing.[40]
In the Resolution dated September 13,
2011,[41] the Court of Appeals denied
petitioners' Motion for Reconsideration.
Hence, this Appeal was filed.
The issues for resolution are the
following:
First, whether the Labor Arbiter and
the National Labor Relations
Commission may exercise
jurisdiction over Saudi Arabian
Airlines and apply Philippine law in
adjudicating the present dispute;
Second, whether respondents'
voluntarily resigned or were illegally
terminated; and
Lastly, whether Brenda J. Betia may be
held personally liable along with Saudi
Arabian Airlines.
23
I
Summons were validly served on Saudia
and jurisdiction over it validly acquired.
There is no doubt that the pleadings and
summons were served on Saudia
through its counsel.[42] Saudia, however,
claims that the Labor Arbiter and the
National Labor Relations Commission
had no jurisdiction over it because
summons were never served on it but on
"Saudia Manila."[43] Referring to itself as
"Saudia Jeddah," it claims that "Saudia
Jeddah" and not "Saudia Manila" was the
employer of respondents because:
First, "Saudia Manila" was never a party
to the Cabin Attendant contracts
entered into by respondents;
Second, it was "Saudia Jeddah" that
provided the funds to pay for
respondents' salaries and benefits; and
Lastly, it was with "Saudia Jeddah" that
respondents filed their resignations.[44]
Saudia posits that respondents'
Complaint was brought against the
wrong party because "Saudia Manila,"
upon which summons was served, was
never the employer of respondents.[45]
Saudia is vainly splitting hairs in its
effort to absolve itself of liability. Other
than its bare allegation, there is no basis
for concluding that "Saudia Jeddah" is
distinct from "Saudia Manila."
What is clear is Saudia's statement in its
own Petition that what it has is a
"Philippine Office . . . located at 4/F
Metro House Building, Sen. Gil J. Puyat
Avenue, Makati City."[46] Even in the
position paper that Saudia submitted to

the Labor Arbiter,[47] what Saudia now
refers to as "Saudia Jeddah" was then
only referred to as "Saudia Head Office
at Jeddah, KSA,"[48] while what Saudia
now refers to as "Saudia Manila" was
then only referred to as "Saudia's office
in Manila."[49]
By its own admission, Saudia, while a
foreign corporation, has a Philippine
office.
Section 3(d) of Republic Act No.. 7042,
otherwise known as the Foreign
Investments Act of 1991, provides the
following:
The phrase "doing business" shall
include . . . opening offices, whether
called "liaison" offices or branches;
. . . and any other act or acts that imply
a continuity of commercial dealings or
arrangements and contemplate to that
extent the performance of acts or works,
or the exercise of some of the functions
normally incident to, and in progressive
prosecution of commercial gain or of the
purpose and object of the business
organization. (Emphasis supplied)
A plain application of Section 3(d) of
the Foreign Investments Act leads
to no other conclusion than that
Saudia is a foreign corporation
doing business in the Philippines. As
such, Saudia may be sued in the
Philippines and is subject to the
jurisdiction of Philippine tribunals.
Moreover, since there is no real
distinction between "Saudia Jeddah" and
"Saudia Manila" — the latter being
nothing more than Saudia's local office
— service of summons to Saudia's office
in Manila sufficed to vest jurisdiction
24
over Saudia's person in Philippine
tribunals.
II
Saudia asserts that Philippine courts
and/or tribunals are not in a position to
make an intelligent decision as to the
law and the facts. This is because
respondents' Cabin Attendant contracts
require the application of the laws of
Saudi Arabia, rather than those of the
Philippines.[50] It claims that the
difficulty of ascertaining foreign law calls
into operation the principle of forum non
conveniens, thereby rendering improper
the exercise of jurisdiction by Philippine
tribunals.[51]
A choice of law governing the validity of
contracts or the interpretation of its
provisions does 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:
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.
 whether the courts of that state
have jurisdiction to enter a
Contractual choice of law provisions judgment. [53]

factor into transnational litigation and

As various dealings, commercial or
dispute resolution in one of or in a
otherwise, are facilitated by the
combination of four ways: (1)
progressive ease of communication and
procedures for settling disputes, e.g.,
travel, persons from various
arbitration; (2) forum, i.e., venue; (3)
jurisdictions find themselves transacting
governing law; and (4) basis for
with each other. Contracts involving
interpretation. Forum non conveniens
foreign elements are, however, nothing
relates to, but is not subsumed by, the
new. Conflict of laws situations
second of these.
precipitated by disputes and litigation
anchored on these contracts are not
Likewise, contractual choice of law
totally novel.
is not determinative of jurisdiction.
Stipulating on the laws of a given
Transnational transactions entail
jurisdiction as the governing law of
differing laws on the requirements for
a contract does not preclude the
the validity of the formalities and
exercise of jurisdiction by tribunals
substantive provisions of contracts and
elsewhere. The reverse is equally
their interpretation. These transactions
true: The assumption of jurisdiction
inevitably lend themselves to the
by tribunals does not ipso facto
possibility of various fora for litigation
mean that it cannot apply and rule
and dispute resolution. As observed by
on the basis of the parties'
an eminent expert on transnational law:
stipulation. In Hasegawa v.
[52]
Kitamura:
The more jurisdictions having an
interest in, or merely even a point of
Analytically, jurisdiction and choice
contact with, a transaction or
of law are two distinct concepts.
relationship, the greater the number of
Jurisdiction considers whether it is
potential fora for the resolution of
fair to cause a defendant to travel to
disputes arising out of or related to that
this state; choice of law asks the
transaction or relationship. In a world of
further question whether the
increased mobility, where business and
application of a substantive law
personal transactions transcend national
which will determine the merits of
boundaries, the jurisdiction of a number
the case is fair to both parties. The
of different fora may easily be invoked
power to exercise jurisdiction does
in a single or a set of related disputes.[54]
not automatically give a state
constitutional authority to apply Philippine law is definite as to what
forum law. While jurisdiction and the governs the formal or extrinsic validity
choice of the lex fori will often, coincide, of contracts. The first paragraph of
the "minimum contacts" for one do not Article 17 of the Civil Code provides that
always provide the necessary "[t]he forms and solemnities of
"significant contacts" for the other. The contracts . . . shall be governed by the
question of whether the law of a laws of the country in which they are
state can be applied to a transaction executed"[55] (i.e., lex loci celebrationis).
is different from the question of 25
 connection with the transaction, or
the nationality or domicile of the
In contrast, there is no statutorily parties. Philippine courts would do
established mode of settling conflict of well to adopt the first and most
laws situations on matters pertaining to basic rule in most legal systems,
substantive content of contracts. It has namely, to allow the parties to
been noted that three (3) modes have select the law applicable to their
emerged: (1) lex loci contractus or the contract, subject to the limitation
law of the place of the making; (2) lex that it is not against the law,
loci solutionis or the law of the place of morals, or public policy of the forum
performance; and (3) lex loci intentionis and that the chosen law must bear
or the law intended by the parties.[56] a substantive relationship to the
transaction.[59] (Emphasis in the
Given Saudia's assertions, of original)
particular relevance to resolving the
Saudia asserts that stipulations set in
present dispute is lex loci
the Cabin Attendant contracts require
intentionis.
the application of the laws of Saudi
Arabia. It insists that the need to comply
An author observed that Spanish jurists
with these stipulations calls into
and commentators "favor lex loci
operation the doctrine of forum non
intentionis."[57] These jurists and
conveniens and, in turn, makes it
commentators proceed from the Civil
necessary for Philippine tribunals to
Code of Spain, which, like our Civil Code,
refrain from exercising jurisdiction.
is silent on what governs the intrinsic
validity of contracts, and the same civil
As mentioned, contractual choice of laws
law traditions from which we draw ours.
factors into transnational litigation in
any or a combination of four (4) ways.
In this jurisdiction, this court, in
Moreover, forum non conveniens relates
Philippine Export and Foreign Loan
to one of these: choosing between
Guarantee v. V.P. Eusebio Construction,
multiple possible fora.
Inc.,[58] manifested preference for
allowing the parties to select the law
Nevertheless, the possibility of parallel
applicable to their contract":
litigation in multiple fora — along with
the host of difficulties it poses — is not
No conflicts rule on essential validity of
unique to transnational litigation. It is a
contracts is expressly provided for in our
difficulty that similarly arises in disputes
laws. The rule followed by most legal
well within the bounds of a single
systems, however, is that the
jurisdiction.
intrinsic validity of a contract must
be governed by the lex contractus or
When parallel litigation arises strictly
"proper law of the contract." This is
within the context of a single
the law voluntarily agreed upon by the
jurisdiction, such rules as those on
parties (the lex loci voluntatis) or the
forum shopping, litis pendentia, and res
law intended by them either expressly or
judicata come into operation. Thus, in
implicitly (the lex loci intentionis). The
the Philippines, the 1997 Rules on Civil
law selected may be implied from
such factors as substantial 26

Procedure provide for willful and
deliberate forum shopping as a ground
not only for summary dismissal with
prejudice but also for citing parties and
counsels in direct contempt, as well as
for the imposition of administrative
sanctions.[60] Likewise, the same rules
expressly provide that a party may seek
the dismissal of a Complaint or another
pleading asserting a claim on the ground
"[t]hat there is another action pending
between the same parties for the same
cause," i.e., litis pendentia, or "[t]hat
the cause of action is barred by a prior
judgment,"[61] i.e., res judicata.
Forum non conveniens, like the rules of
forum shopping, litis pendentia, and res
judicata, is a means of addressing the
problem of parallel litigation. While the
rules of forum shopping, litis pendentia,
and res judicata are designed to address
the problem of parallel litigation within a
single jurisdiction, forum non
conveniens is a means devised to
address parallel litigation arising in
multiple jurisdictions.
Forum non conveniens literally
translates to "the forum is
[62]
inconvenient." It is a concept in
private international law and was
devised to combat the "less than
honorable" reasons and excuses that
litigants use to secure procedural
advantages, annoy and harass
defendants, avoid overcrowded dockets,
and select a "friendlier" venue.[63] Thus,
the doctrine of forum non conveniens
addresses the same rationale that the
rule against forum shopping does, albeit
on a multijurisdictional scale.
Forum non conveniens, like res The wisdom of avoiding conflicting and
judicata,[64] is a concept originating in unenforceable judgments is as much a
common law.[65] However, unlike the 27
rule on res judicata, as well as those on
litis pendentia and forum shopping,
forum non conveniens finds no textual
anchor, whether in statute or in
procedural rules, in our civil law system.
Nevertheless, jurisprudence has
applied forum non conveniens as
basis for a court to decline its
exercise of jurisdiction.[66]
Forum non conveniens is soundly
applied not only to address parallel
litigation and undermine a litigant's
capacity to vex and secure undue
advantages by engaging in forum
shopping on an international scale.
It is also grounded on principles of
comity and judicial efficiency.
Consistent with the principle of
comity, a tribunal's desistance in
exercising jurisdiction on account of
forum non conveniens is a
deferential gesture to the tribunals
of another sovereign. It is a
measure that prevents the former's
having to interfere in affairs which
are better and more competently
addressed by the latter. Further, forum
non conveniens entails a
recognition not only that tribunals
elsewhere are better suited to rule
on and resolve a controversy, but
also, that these tribunals are better
positioned to enforce judgments
and, ultimately, to dispense justice.
Forum non conveniens prevents the
embarrassment of an awkward situation
where a tribunal is rendered
incompetent in the face of the greater
capability — both analytical and
practical — of a tribunal in another
jurisdiction.

matter of efficiency and economy as it is
a matter of international courtesy. A
court would effectively be neutering
itself if it insists on adjudicating a
controversy when it knows full well that
it is in no position to enforce its
judgment. Doing so is not only an
exercise in futility; it is an act of frivolity.
It clogs the dockets of a.tribunal and
leaves it to waste its efforts on affairs,
which, given transnational exigencies,
will be reduced to mere academic, if not
trivial, exercises.
Accordingly, under the doctrine of forum
non conveniens, "a court, in conflicts of
law cases, may refuse impositions on its
jurisdiction where it is not the most
'convenient' or available forum and the
parties are not precluded from seeking
remedies elsewhere."[67] In Puyat v.
Zabarte,[68] this court recognized
the following situations as among
those that may warrant a court's
desistance from exercising
jurisdiction:
The belief that the matter can be
better tried and decided elsewhere,
either because the main aspects of
1)
the case transpired in a foreign
jurisdiction or the material witnesses
have their residence there;
The belief that the non-resident
plaintiff sought the forum[,] a
practice known as forum shopping[,]
2)
merely to secure procedural
advantages or to convey or harass the
defendant;
The unwillingness to extend local
judicial facilities to non residents or
3)
aliens when the docket may already
be overcrowded;
28
The inadequacy of the local judicial
4)machinery for effectuating the right
sought to be maintained; and
The difficulty of ascertaining foreign
5)law.[69]
In Bank of America, NT&SA, Bank of
America International, Ltd. v. Court of
Appeals,[70] this court underscored that
a Philippine court may properly
assume jurisdiction over a case if it
chooses to do so to the extent: "(1)
that the Philippine Court is one to
which the parties may conveniently
resort to; (2) that the Philippine
Court is in a position to make an
intelligent decision as to the law
and the facts; and (3) that the
Philippine Court has or is likely to
have power to enforce its
decision."[71]
The use of the word "may" (i.e., "may
refuse impositions on its jurisdiction"[72])
in the decisions shows that the matter of
jurisdiction rests on the sound discretion
of a court. Neither the mere invocation
of forum non conveniens nor the
averment of foreign elements operates
to automatically divest a court of
jurisdiction. Rather, a court should
renounce jurisdiction only "after 'vital
facts are established, to determine
whether special circumstances' require
the court's desistance."[73] As the
propriety of applying forum non
conveniens is contingent on a factual
determination, it is, therefore, a matter
of defense.[74]
The second sentence of Rule 9, Section
1 of the 1997 Rules of Civil Procedure is
exclusive in its recital of the grounds for
dismissal that are exempt from the
omnibus motion rule: (1) lack of

jurisdiction over the subject matter; (2)
litis pendentia; (3) res judicata; and (4)
prescription. Moreover, dismissal on
account of forum non conveniens is a
fundamentally discretionary matter. It
is, therefore, not a matter for a
defendant to foist upon the court at his
or her own convenience; rather, it must
be pleaded at the earliest possible
opportunity.
On the matter of pleading forum non
conveniens, we state the rule, thus:
Forum non conveniens must not
only be clearly pleaded as a ground
for dismissal; it must be pleaded as
such at the earliest possible
opportunity. Otherwise, it shall be
deemed waived.
This court notes that in Hasegawa,[76]
this court stated that forum non
conveniens is not a ground for a motion
to dismiss. The factual ambience of this
case however does not squarely raise
the viability of this doctrine. Until the
opportunity comes to review the use of
motions to dismiss for parallel litigation,
Hasegawa remains existing doctrine.
Consistent with forum non conveniens
as fundamentally a factual matter, it is
imperative that it proceed from &
factually established basis. It would be
improper to dismiss an action pursuant
to forum non conveniens based merely
on a perceived, likely, or hypothetical
multiplicity of fora. Thus, a defendant
must also plead and show that a prior
suit has, in fact, been brought in another
jurisdiction.
The existence of a prior suit makes real
the vexation engendered by duplicitous
litigation, the embarrassment of III
intruding into the affairs of another 29
sovereign, and the squandering of
judicial efforts in resolving a dispute
already lodged and better resolved
elsewhere. As has been noted:
A case will not be stayed o
dismissed on [forum] non
conveniens grounds unless the
plaintiff is shown to have an
available alternative forum
elsewhere. On this, the moving
party bears the burden of proof.
A number of factors affect the
assessment of an alternative forum's
adequacy. The statute of limitations
abroad may have run, of the foreign
court may lack either subject matter or
personal jurisdiction over the defendant.
Occasionally, doubts will be raised as to
the integrity or impartiality of the
foreign court (based, for example, on
suspicions of corruption or bias in favor
of local nationals), as to the fairness of
its judicial procedures, or as to is
operational efficiency (due, for example,
to lack of resources, congestion and
delay, or interfering circumstances such
as a civil unrest). In one noted case, [it
was found] that delays of 'up to a
quarter of a century' rendered the
foreign forum... inadequate for these
purposes.
We deem it more appropriate and in the
greater interest of prudence that a
defendant not only allege supposed
dangerous tendencies in litigating in this
jurisdiction; the defendant must also
show that such danger is real and
present in that litigation or dispute
resolution has commenced in
another jurisdiction and that a
foreign tribunal has chosen to
exercise jurisdiction.
 foreign tribunal and can be resolved by
juxtaposing the competencies and
Forum non conveniens finds no practical circumstances of the tribunals
application and does not operate to in alternative fora. Exigencies, like the
divest Philippine tribunals of statute of limitations, capacity to
jurisdiction and to require the enforce orders and judgments, access to
application of foreign law. records, requirements for the
acquisition of jurisdiction, and even
Saudia invokes forum non conveniens to questions relating to the integrity of
supposedly effectuate the stipulations of foreign courts, may render undesirable
the Cabin Attendant contracts that or even totally unfeasible recourse to a
require the application of the laws of foreign court. As mentioned, we
Saudi Arabia. consider it in the greater interest of
prudence that a defendant show, in
Forum non conveniens relates to pleading forum non conveniens,
forum, not to the choice of that litigation has commenced in
governing law. Thai forum non another jurisdiction and that a
conveniens may ultimately result in the foieign tribunal has, in fact, chosen
application of foreign law is merely an to exercise jurisdiction.
incident of its application. In this strict
sense, forum non conveniens is not Two (2) factors weigh into a court's
applicable. It is not the primarily pivotal appraisal of the balance of interests
consideration in this case. inhering in a dispute: first, the vinculum
which the parties and their relation have
In any case, even a further to a given jurisdiction; and second, the
consideration of the applicability of public interest that must animate a
forum non conveniens on the incidental tribunal, in its capacity as an agent of
matter of the law governing the sovereign, in choosing to assume or
respondents' relation with Saudia leads decline jurisdiction. The first is more
to the conclusion that it is improper for concerned with the parties, their
Philippine tribunals to divest themselves personal circumstances, and private
of jurisdiction. interests; the second concerns itself
with the state and the greater social
Any evaluation of the propriety of order.
contracting parties' choice of a
forum and its incidents must In considering the vinculum, a court
grapple with two (2) must look into the preponderance of
considerations: first, the availability linkages which the parties and their
and adequacy of recourse to a transaction may have to either
foreign tribunal; and second, the jurisdiction. In this respect, factors,
question of where, as between the such as the parties' respective
forum court and a foreign court, the nationalities and places of negotiation,
balance of interests inhering in a execution, performance, engagement or
dispute weighs more heavily. deployment, come into play.

The first is a pragmatic matter. It relates In considering public interest, a court

to the viability of ceding jurisdiction to a 30
 equally general rule that provisions of
proceeds with a consciousness that it is applicable law, especially provisions
an organ of the state. It must, thus, relating to matters affected with public
determine if the interests of the policy, are deemed written into the
sovereign (which acts through it) are contract. Put a little differently, the
outweighed by those of the alternative governing principle is that parties may
jurisdiction. In this respect, the court not contract away applicable provisions
delves into a consideration of public of law especially peremptory provisions
policy. Should it find that public interest dealing with matters heavily impressed
weighs more heavily in favor of its with public interest.[80] (Emphasis
assumption of jurisdiction, it should supplied)
proceed in adjudicating the dispute, any
Article II, Section 14 of the 1987
doubt or .contrary view arising from the
Constitution provides that "[t]he State
preponderance of linkages
... shall ensure the fundamental equality
notwithstanding.
before the law of women and men."
Contrasted with Article II, Section 1 of
Our law on contracts recognizes the
the 1987 Constitution's statement that
validity of contractual choice of law
"[n]o person shall ... be denied the equal
provisions. Where such provisions exist,
protection of the laws," Article II,
Philippine tribunals, acting as the forum
Section 14 exhorts the State to
court, generally defer to the parties'
"ensure." This does not only mean that
articulated choice.
the Philippines shall not countenance
nor lend legal recognition and
This is consistent with the fundamental
approbation to measures that
principle of autonomy of contracts.
discriminate on the basis of one's being
Article 1306 of the Civil Code expressly
male or female. It imposes an obligation
provides that "[t]he contracting parties
to actively engage in securing the
may establish 'such stipulations,
fundamental equality of men and
clauses, terms and conditions as they
women.
may deem convenient."[78]
Nevertheless, while a Philippine tribunal
The Convention on the Elimination of all
(acting as the forum court) is called
Forms of Discrimination against Women
upon to respect the parties' choice of
(CEDAW), signed and ratified by the
governing law, such respect must not be
Philippines on July 15, 1980, and on
so permissive as to lose sight of
August 5, 1981, respectively,[81] is part
considerations of law, morals, good
of the law of the land. In view of the
customs, public order, or public policy
widespread signing and ratification of,
that underlie the contract central to the
as well as adherence (in practice) to it
controversy.
by states, it may even be said that many
provisions of the CEDAW may have
Specifically with respect to public policy,
become customary international law.
in Pakistan International Airlines
[79] The CEDAW gives effect to the
Corporation v. Ople, this court
Constitution's policy statement in Article
explained that:
II, Section 14. Article I of the CEDAW
counter-balancing the principle of
autonomy of contracting parties is the 31

defines "discrimination against women"
as:
any distinction, exclusion or restriction
made on the basis of sex which has the
effect or purpose of impairing or
nullifying the recognition, enjoyment or
exercise by women, irrespective of their
marital status, on a basis of equality of
men and women, of human rights and
fundamental freedoms in the political,
economic, social, cultural, civil or any
other field.[82]
The constitutional exhortation to ensure
fundamental equality, as illumined by its
enabling law, the CEDAW, must inform
and animate all the actions of all
personalities acting on behalf of the
State. It is, therefore, the bounden duty
of this court, in rendering judgment on
the disputes brought before it, to ensure
that no discrimination is heaped upon
women on the mere basis of their being
women. This is a point so basic and
central that all our discussions and
pronouncements — regardless of
whatever averments there may be of
foreign law — must proceed from this
premise.
So informed and animated, 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
32
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.
Apart from the constitutional policy on
the fundamental equality before the law
of men and women, it is settled that
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."
Consistent with this, this court's
pronouncements in Pakistan
International Airlines Corporation[83] are
clear and unmistakable:
Petitioner PIA cannot take refuge in
paragraph 10 of its employment
agreement which specifies, firstly, the
law of Pakistan as the applicable law of
the agreement, and, secondly, lays the
venue for settlement of any dispute
arising out of or in connection with the
agreement "only [in] courts of Karachi,
Pakistan". The first clause of paragraph
10 cannot be invoked to prevent the
application of Philippine labor laws and
regulations to the subject matter of this

case, i.e., the employer-employee
relationship between petitioner PIA and
private respondents. We have already
pointed out that the 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. Under
these circumstances, paragraph 10 of
the employment agreement cannot be
given effect so as to oust Philippine
agencies and courts of the jurisdiction
vested upon them by Philippine law.[84]
(Emphasis supplied)
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.
Moreover, as this premise for Saudia's
insistence on the application forum non
conveniens has been shattered, it follows
that Philippine tribunals may properly
assume jurisdiction over the present
controversy. Philippine jurisprudence
provides ample illustrations of when a
court's renunciation of jurisdiction on
account of forum non conveniens is proper
or improper.'
In Philsec Investment Corporation v. Court
of Appeals, [85] this court noted that the trial
court failed to consider that one of the
plaintiffs was a domestic corporation, that
one of the defendants was a Filipino, and
that it was the extinguishment of the
latter's debt that was the object of the
transaction subject of the litigation. Thus,
33
this court held, among others, that the trial
court's refusal to assume jurisdiction was
not justified by forum non conveniens and
remanded the case to the trial court.
In Raytheon International, Inc. v. Rouzie,
Jr., [86] this court sustained the trial court's
assumption of jurisdiction considering that
the trial court could properly enforce
judgment on the petitioner which was a
foreign corporation licensed to do business
in the Philippines.
In Pioneer International, Ltd. v. Guadiz,
Jr., [87] this court found no reason to disturb
the trial court's assumption of jurisdiction
over a case in which, as noted by the trial
court, "it is more convenient to hear and
decide the case in the Philippines because
Todaro [the plaintiff] resides in the
Philippines and the contract allegedly
breached involve[d] employment in the
Philippines." [88]
In Pacific Consultants International Asia,
Inc. v. Schonfeld, [89] this court held that the
fact that the complainant in an illegal
dismissal case was a Canadian citizen and a
repatriate did not warrant the application
of forum non conveniens considering that:
(1) the Labor Code does not include forum
non conveniens as a ground for the
dismissal of a complaint for illegal
dismissal; (2) the propriety of dismissing a
case based on forum non conveniens
requires a factual determination; and (3)
the requisites for assumption of juris diction
as laid out in Bank of America, NT&SA [90]
were all satisfied.
In contrast, this court ruled in The Manila
Hotel Corp. v. National Labor Relations

[91]
Commission that the National Labor
Relations Q Commission was a seriously
inconvenient forum. In that case, private
respondent Marcelo G. Santos was working
in the Sultanate of Oman when he received
a letter from Palace Hotel recruiting him for
employment in Beijing, China. Santos
accepted the offer. Subsequently, however,
he was released from employment
supposedly due to business reverses arising
from political upheavals in China (i.e., the
Tiananmen Square incidents of 1989).
Santos later filed a Complaint for illegal
dismissal impleading Palace Hotel's General
Manager, Mr. Gerhard Schmidt, the Manila
Hotel International Company Ltd. (which
was, responsible for training Palace Hotel's
personnel and staff), and the Manila Hotel
Corporation (which owned 50% of Manila
Hotel International Company Ltd.'s capital
stock).
In ruling against the National Labor
Relations Commission's exercise of
jurisdiction, this court noted that the main
aspects of the case transpired in two (2)
foreign jurisdictions, Oman and China, and
that the case involved purely foreign
elements. Specifically, Santos was directly
hired by a foreign employer through
correspondence sent to Oman. Also, the
proper defendants were neither Philippine
nationals nor engaged in business in the
Philippines, while the main witnesses were
not residents of the Philippines. Likewise,
this court noted that the National Labor
Relations Commission was in no position to
conduct the following: first, determine the
law governing the employment contract, as
it was entered into in foreign soil; second,
determine the facts, as Santos' employment
was terminated in Beijing; and third,
34
enforce its judgment, since Santos'
employer, Palace Hotel, was incorporated
under the laws of China and was not even
served with summons.
Contrary to Manila Hotel, the case now
before us does not entail a preponderance
of linkages that favor a foreign jurisdiction.
Here, the circumstances of the parties and
their relation do not approximate the
circumstances enumerated in Puyat, [92]
which this court recognized as possibly
justifying the desistance of Philippine
tribunals from exercising jurisdiction.
First, there is no basis for concluding that
the case can be more conveniently tried
elsewhere. As established earlier, Saudia is
doing business in the Philippines. For their
part, all four (4) respondents are Filipino
citizens maintaining residence in the
Philippines and, apart from their previous
employment with Saudia, have no other
connection to the Kingdom of Saudi Arabia.
It would even be to respondents'
inconvenience if this case were to be tried
elsewhere.
Second, the records are bereft of any
indication that respondents filed their
Complaint in an effort to engage in forum
shopping or to vex and inconvenience
Saudia.
Third, there is no indication of
"unwillingness to extend local judicial
facilities to non-residents or aliens." [93]
That Saudia has managed to bring the
present controversy all the way to this
court proves this.
Fourth, it cannot be said that the local

judicial machinery is inadequate for
effectuating the right sought to be
maintained. Summons was properly served
on Saudia and jurisdiction over its person
was validly acquired.
Lastly, there is not even room for
considering foreign law. Philippine law
properly governs the present dispute.
As the question of applicable law has been
settled, the supposed difficulty of
ascertaining foreign law (which requires the
application of forum non conveniens)
provides no insurmountable inconvenience
or special circumstance that will justify
depriving Philippine tribunals of
jurisdiction.
Even if we were to assume, for the sake of
discussion, that it is the laws of Saudi
Arabia which should apply, it does not
follow that Philippine tribunals should
refrain from exercising jurisdiction. To.
recall our pronouncements in Puyat, [94] as
well as in Bank of America, NT&SA, [95] it is
not so much the mere applicability of
foreign law which calls into operation forum
non conveniens. Rather, what justifies a
court's desistance from exercising
jurisdiction is "[t]he difficulty of
ascertaining foreign law" [96]
or the inability
of a "Philippine Court to make an intelligent
decision as to the law[.]" [97]
Consistent with lex loci intentionis, to the
extent that it is proper and practicable (i.e.,
"to make an intelligent decision" [98] ),
Philippine tribunals may apply the foreign
law selected by the parties. In fact, (albeit
without meaning to make a pronouncement
on the accuracy and reliability of
35
respondents' citation) in this case,
respondents themselves have made
averments as to the laws of Saudi Arabia. In
their Comment, respondents write:
Under the Labor Laws of Saudi
Arabia and the Philippines[,] it is
illegal and unlawful to terminate the
employment of any woman by
virtue of pregnancy. The law in
Saudi Arabia is even more harsh and
strict [sic] in that no employer can
terminate the employment of a
female worker or give her a warning
of the same while on Maternity
Leave, the specific provision of
Saudi Labor Laws on the matter is
hereto quoted as follows:
"An employer may not terminate the
employment of a female worker or give
her a warning of the same while on
maternity leave." (Article 155, Labor
Law of the Kingdom of Saudi Arabia,
Royal Decree No. M/51.)[99]
All told, the considerations for
assumption of jurisdiction by
Philippine tribunals as outlined in
Bank of America, NT&SA[100] 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.

IV
Respondents were illegally
terminated.
In Bilbao v. Saudi Arabian Airlines,[101]
this court defined voluntary resignation
as "the voluntary act of an employee
who is in a situation where one believes
that personal reasons cannot be
sacrificed in favor of the exigency of the
service, and one has no other choice but
to dissociate oneself from employment.
It is a formal pronouncement or
relinquishment of an office, with the
intention of relinquishing the office
accompanied by the act of
[102]
relinquishment." Thus, essential to
the act of resignation is voluntariness. It
must be the result of an employee's
exercise of his or her own will.
In the same case of Bilbao, this court
advanced a means for determining
whether an employee resigned
voluntarily:
As the intent to relinquish must concur
with the overt act of relinquishment, the
acts of the employee before and after
the alleged resignation must be
considered in determining whether he or
she, in fact, intended, to sever his or her
employment.[103] (Emphasis supplied)
On the other hand, constructive
dismissal has been defined as "cessation
of work because 'continued employment
is rendered impossible, unreasonable or
unlikely, as an offer involving a
demotion in rank or a diminution in pay'
and other benefits."[104]
In Penaflor v. Outdoor Clothing
Manufacturing Corporation,[105]
constructive dismissal has been
36
described as tantamount to
"involuntarily [sic] resignation due to
the harsh, hostile, and unfavorable
conditions set by the employer."[106] In
the same case, it was noted that "[t]he
gauge for constructive dismissal is
whether a reasonable person in the
employee's position would feel
compelled to give up his employment
under the prevailing circumstances."[107]
Applying the cited standards on
resignation and constructive dismissal,
it is clear that respondents were
constructively dismissed. Hence, their
termination was illegal.
The termination of respondents'
employment happened when they were
pregnant and expecting to incur costs on
account of child delivery and infant
rearing. As noted by the Court of
Appeals, pregnancy is a time when they
need employment to sustain their
families.[108] Indeed, it goes against
normal and reasonable human behavior
to abandon one's livelihood in a time of
great financial need.
It is clear that respondents
intended to remain employed with
Saudia. All they did was avail of
their maternity leaves. Evidently, the
very nature of a maternity leave
means that a pregnant employee
will not report for work only
temporarily and that she will
resume the performance of her
duties as soon as the leave
allowance expires.
It is also clear that respondents exerted
all efforts to' remain employed with
Saudia. Each of them repeatedly filed
appeal letters (as much as five [5]
letters in the case of Rebesencio[109])
 more than a year to file their
asking Saudia to reconsider the Complaint.[115] If at all, however, these
ultimatum that they resign or be circumstances prove only the fact of
terminated along with the forfeiture of their occurrence, nothing more. The
their benefits. Some of them even went voluntariness of respondents' departure
to Saudia's office to personally seek from Saudia is non sequitur.
reconsideration.[110]
Mere compliance with standard
Respondents also adduced a copy of the procedures or processes, such as the
"Unified Employment Contract for completion of their exit interviews,
Female Cabin Attendants."[111] This neither negates compulsion nor
contract deemed void the employment indicates voluntariness.
of a flight attendant who becomes
pregnant and threatened termination As with respondent's resignation letters,
due to lack of medical fitness.[112] The their exit interview forms even support
threat of termination (and the forfeiture their claim of illegal dismissal and
of benefits that it entailed) is enough to militates against Saudia's arguments.
compel a reasonable person in These exit interview forms, as
respondents' position to give up his or reproduced by Saudia in its own Petition,
her employment. confirms the unfavorable conditions as
regards respondents' maternity leaves.
Saudia draws attention to how Ma. Jopette's and Loraine's exit
respondents' resignation letters were interview forms are particularly telling:
supposedly made in their own a. From Ma. Jopette's exit interview
handwriting. This minutia fails to form:
surmount all the other indications
negating any voluntariness on 3. In what respects has the job met
respondents' part. If at all, these same or failed to meet your expectations?
resignation letters are proof of how any
supposed resignation did not arise from THE SUDDEN TWIST OF DECISION
respondents' own initiative. As earlier REGARDING THE MATERNITY
pointed out, respondents' resignations LEAVE.[116]
were executed on Saudia's blank
letterheads that Saudia had provided. b. From Loraine's exit interview form:
These letterheads already had the word
"RESIGNATION" typed on the subject 1. What are your main reasons for
portion of their respective headings leaving Saudia? What company are you
when these were handed to joining?
[113]
respondents.
xxx xxx xxx
"In termination cases, the burden of
Others
proving just or valid cause for dismissing
an employee rests on the employer."[114] CHANGING POLICIES REGARDING
In this case, Saudia makes much of how MATERNITY LEAVE (PREGNANCY)[117]
respondents supposedly completed their
exit interviews, executed quitclaims,
received their separation pay, and took 37

As to respondents' quitclaims, in Phil.
Employ Services and Resources, Inc. v.
Paramio,[118] this court noted that "[i]f
(a) there is clear proof that the waiver
was wangled from an unsuspecting or
gullible person; or (b) the terms of the
settlement are unconscionable, and on
their face invalid, such quitclaims must
be struck down as invalid or illegal."[119]
Respondents executed their quitclaims
after having been unfairly given an
ultimatum to resign or be terminated
(and forfeit their benefits).
V medical condition due to the employer's
Having been illegally and unjustly
dismissed, respondents are entitled to
full backwages and benefits from the
time of their termination until the finality
of this Decision. They are likewise
entitled to separation pay in the amount
of one (1) month's salary for every year
of service until the fmality of this
Decision, with a fraction of a year of at
least six (6) months being counted as
one (1) whole year.
Moreover, "[m]oral damages are
awarded in termination cases where the
employee's dismissal was attended by
bad faith, malice or fraud, or where it
constitutes an act oppressive to labor, or
where it was done in a manner contrary
to morals, good customs or public
policy."[120] In this case, Saudia
terminated respondents' employment in
a manner that is patently discriminatory
and running afoul of the public interest
that underlies employer-employee
relationships. As such, respondents are
entitled to moral damages.
To provide an "example or correction for
the public good"[121] as against such
discriminatory and callous schemes,
38
respondents are likewise entitled to
exemplary damages.
In a long line of cases, this court
awarded exemplary damages to illegally
dismissed employees whose
"dismissal[s were] effected in a wanton,
oppressive or malevolent manner."[122]
This court has awarded exemplary
damages to employees who were
terminated on such frivolous, arbitrary,
and unjust grounds as membership in or
involvement with labor unions,[123]
injuries sustained in the course of
employment,[124] development of a
own violation of the employment
contract,[125] and lodging of a Complaint
against the employer.[126] Exemplary
damages were also awarded to
employees who were deemed illegally
dismissed by an employer in an attempt
to evade compliance with statutorily
established employee benefits.[127]
Likewise, employees dismissed for
supposedly just causes, but in violation
of due process requirements, were
awarded exemplary damages.[128]
These examples pale in comparison to
the present controversy. Stripped of all
unnecessary complexities,
respondents were dismissed for no
other reason than simply that they
were pregnant. This is as wanton,
oppressive, and tainted with bad
faith as any reason for termination
of employment can be. This is no
ordinary case of illegal dismissal. This is
a case of manifest gender
discrimination. It is an affront not only
to our statutes and policies on
employees' security of tenure, but more
so, to the Constitution's dictum of
fundamental equality between men and
women.[129]

The award of exemplary damages is,
therefore, warranted, not only to remind
employers of the need to adhere to the
requirements of procedural and
substantive due process in termination
of employment, but more importantly,
to demonstrate that gender
discrimination should in no case be
countenanced.
Having been compelled to litigate to
seek reliefs for their illegal and unjust
dismissal, respondents are likewise
entitled to attorney's fees in the amount
of 10% of the total monetary award.[130]
VI
Petitioner Brenda J. Betia may not be
held liable.
A corporation has a personality separate
and distinct from those of the persons
composing it. Thus, as a rule, corporate
directors and officers are not liable for
the illegal termination of a corporation's
employees. It is only when they acted in
bad faith or with malice that they
become solidarity liable with the
corporation.[131]
In Ever Electrical Manufacturing, Inc.
(EEMI) v. Samahang Manggagawa ng
Ever Electrical,[132] this court clarified
that "[b]ad faith does not connote bad
judgment or negligence; it imports a
dishonest purpose or some moral
obliquity and conscious doing of wrong;
it means breach of a known duty
through some motive or interest or ill
will; it partakes of the nature of
fraud."[133]
Respondents have not produced proof to
show that Brenda J. Betia acted in bad
39
faith or with malice as regards their
termination. Thus, she may not be held
solidarity liable with Saudia.
WHEREFORE, with the
MODIFICATIONS that first, petitioner
Brenda J. Betia is not solidarity liable
with petitioner Saudi Arabian Airlines,
and second, that petitioner Saudi
Arabian Airlines is liable for moral and
exemplary damages. The June 16, 2011
Decision and the September 13, 2011
Resolution of the Court of Appeals in CA-
G.R. SP. No. 113006 are hereby
AFFIRMED in all other respects.
Accordingly, petitioner Saudi Arabian
Airlines is ordered to pay respondents:
Full backwages and all other benefits
computed from the respective dates
(1)in which each of the respondents
were illegally terminated until the
finality of this Decision;
Separation pay computed from the
respective dates in which each of the
respondents commenced
employment until the finality of this
(2)Decision at the rate of one (1)
month's salary for every year of
service, with a fraction of a year of at
least six (6) months being counted as
one (1) whole year;
Moral damages in the amount of
(3)
P100,000.00 per respondent;
Exemplary damages in the amount of
(4)
P200,000.00 per respondent; and
Attorney's fees equivalent to 10% of
(5)
the total award.
Interest of 6% per annum shall likewise
be imposed on the total judgment award
from the finality of this Decision until full
satisfaction thereof.

This case is REMANDED to the Labor

Arbiter to make a detailed computation
of the amounts due to respondents
which petitioner Saudi Arabian Airlines
should pay without delay.

SO ORDERED.

40
41