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Raytheon International vs.

Rouzie
Facts:
Brand Marine Services, Inc. (BMSI), a foreign corporation duly organized and existing
under the laws of the State of Connecticut, and respondent Stockton W. Rouzie, Jr., an
American citizen, entered into a contract whereby BMSI hired respondent as its
representative to negotiate the sale of services in several government projects in the
Philippines for an agreed remuneration of 10% of the gross receipts. Then, respondent
secured a service contract with the Republic of the Philippines on behalf of BMSI. After
4 years, respondent filed before the Arbitration branch of the NLRC a suit against BMSI
and Rust International, Inc. (RUST) for alleged nonpayment of commissions, illegal
termination and breach of employment contract. Labor Arbiter rendered judgment
ordering BMSI and RUST to pay respondent's money claims. Upon appeal by BMSI, the
NLRC reversed the decision of the Labor Arbiter and dismissed respondent's complaint
on the ground of lack of jurisdiction. Respondent elevated the case to the SC but was
dismissed. After that, respondent, then a resident of La Union, instituted an action for
damages before the RTC of La Union. The Complaint named as defendants herein
petitioner as well as BMSI and RUST, the two corporations impleaded in the earlier
labor case. The complaint essentially reiterated the allegations in the labor case that
respondent was not paid for his services. The complaint also averred that BMSI and
RUST as well as petitioner itself had combined and functioned as one company. In its
Answer, petitioner alleged that contrary to respondent's claim, it was a foreign
corporation duly licensed to do business in the Philippines and denied entering into any
arrangement with respondent or paying the latter any sum of money. Petitioner also
referred to the NLRC decision which disclosed that per the written agreement between
respondent and BMSI and RUST, denominated as "Special Sales Representative
Agreement," the rights and obligations of the parties shall be governed by the laws of
the State of Connecticut. Petitioner sought the dismissal of the complaint on grounds of
failure to state a cause of action and forum non conveniens. It was denied.
Issue:
Whether or not the Philippine court can acquire jurisdiction over the case
notwithstanding the stipulation that the same shall be governed by a foreign law
Held:
Yes. That the subject contract included a stipulation that the same shall be governed by
the laws of the State of Connecticut does not suggest that the Philippine courts, or any
other foreign tribunal for that matter, are precluded from hearing the civil action.
Jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it
is fair to cause a defendant to travel to this state; choice of law asks the further question

whether the application of a substantive law which will determine the merits of the case
is fair to both parties. The choice of law stipulation will become relevant only when the
substantive issues of the instant case develop, that is, after hearing on the merits
proceeds before the trial court.
Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may
refuse impositions on its jurisdiction where it is not the most "convenient" or available
forum and the parties are not precluded from seeking remedies elsewhere. Petitioner
averred foreign elements present in this case which include 1. BRII and RUST are
foreign corporations and respondent Rouzie is an American citizen, and 2. The
evidence to be presented is located outside the Philippines. The Court held that these
are not sufficient to oust the trial court of its jurisdiction over the case and the parties
involved. Moreover, the propriety of dismissing a case based on the principle of forum
non conveniens requires a factual determination; hence, it is more properly considered
as a matter of defense. While it is within the discretion of the trial court to abstain from
assuming jurisdiction on this ground, it should do so only after vital facts are
established, to determine whether special circumstances require the court's desistance.