Kazuhiro Hasegawa vs Minoru Kitamura

In March 1999, Nippon Engineering Consultants Co., Ltd, a Japanese firm, was
contracted by the Department of Public Works and Highways (DPWH) to supervise the
construction of the Southern Tagalog Access Road. In April 1999, Nippon entered into
an independent contractor agreement (ICA) with Minoru Kitamura for the latter to head
the said project. The ICA was entered into in Japan and is effective for a period of 1
year (so until April 2000). In January 2000, DPWH awarded the Bongabon-Baler Road
project to Nippon. Nippon subsequently assigned Kitamura to head the road project. But
in February 2000, Kazuhiro Hasegawa, the general manager of Nippon informed
Kitamura that they are pre-terminating his contract. Kitamura sought Nippon to
reconsider but Nippon refused to negotiate. Kitamura then filed a complaint for specific
performance and damages against Nippon in the RTC of Lipa.
Hasegawa filed a motion to dismiss on the ground that the contract was entered in
Japan hence, applying the principle of lex loci celebracionis, cases arising from the
contract should be cognizable only by Japanese courts. The trial court denied the
motion. Eventually, Nippon filed a petition for certiorari with the Supreme Court.
Hasegawa, on appeal significantly changed its theory, this time invoking forum non
conveniens; that the RTC is an inconvenient forum because the parties are Japanese
nationals who entered into a contract in Japan. Kitamura on the other hand invokes the
trial courts ruling which states that matters connected with the performance of contracts
are regulated by the law prevailing at the place of performance, so since the obligations
in the ICA are executed in the Philippines, courts here have jurisdiction.
ISSUE: Whether or not the complaint against Nippon should be dismissed.
HELD: No. The trial court did the proper thing in taking cognizance of it.
In the first place, the case filed by Kitamura is a complaint for specific performance and
damages. Such case is incapable of pecuniary estimation; such cases are within the
jurisdiction of the regional trial court.

Hasegawa filed his motion to dismiss on the ground of forum non conveniens. However,
such ground is not one of those provided for by the Rules as a ground for dismissing a
civil case.
The Supreme Court also emphasized that the contention that Japanese laws should
apply is premature. In conflicts cases, there are three phases and each next phase
commences when one is settled, to wit:
1.

Jurisdiction Where should litigation be initiated? Court must have jurisdiction

over the subject matter, the parties, the issues, the property, the res. Also 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.

2.

Choice of Law Which law will the court apply? Once a local court takes
cognizance, it does not mean that the local laws must automatically apply. The court
must determine which substantive law when applied to the merits will be fair to both
parties.

3.

Recognition and Enforcement of Judgment Where can the resulting

judgment be enforced?
This case is not yet in the second phase because upon the RTCs taking cognizance of
the case, Hasegawa immediately filed a motion to dismiss, which was denied. He filed a
motion for reconsideration, which was also denied. Then he bypassed the proper
procedure by immediately filing a petition for certiorari. The question of which law
should be applied should have been settled in the trial court had Hasegawa not
improperly appealed the interlocutory order denying his MFR.