CONFLICTS CASE DIGESTS

SAUDI ARABIAN AIRLINES (SAUDIA) vs. COURT OF APPEALS,

MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity as
Presiding Judge of Branch 89, RTC of Quezon City
G.R. No. 122191 October 8, 1998
FACTS: Petitioner SAUDIA hired private respondent MORADA as a flight
attendant in 1988, based in Jeddah. On 1990, while on a lay-over in Jakarta,
Indonesia, she went to party with 2 male attendants, and on the following
morning in their hotel, one of the male attendants attempted to rape her. She
was rescued by hotel attendants who heard her cry for help. The Indonesian
police arrested the 2.

MORADA returned to Jeddah, but was asked by the company to go back to

Jakarta and help arrange the release of the 2 male attendants. MORADA did
not cooperate when she got to Jakarta.

What followed was a series of interrogations from the Saudi Courts which she
did not understand as this was in their language. In 1993, she was surprised,
upon being ordered by SAUDIA to go to the Saudi court, that she was being
convicted 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, sentencing her to five months
imprisonment and to 286 lashes. Only then did she realize that the Saudi
court had tried her, together with the 2, for what happened in Jakarta.

SAUDIA denied her the assistance she requested, But because she was
wrongfully convicted, Prince of Makkah dismissed the case against her and
allowed her to leave Saudi Arabia. Shortly before her return to Manila, she was
terminated from the service by SAUDIA, without her being informed of the
cause.

On November 23, 1993, Morada filed a Complaint for damages against

SAUDIA, and Khaled Al-Balawi (“Al-Balawi”), its country manager.
SAUDIA ALLEGES: Private respondent’s 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.
MORADA ALLEGES: Since her Amended Complaint is based on Articles 19
and 21 of the Civil Code, then the instant case is properly a matter of domestic
law.

ISSUE: WON the Philippine courts have jurisdiction to try the case
HELD: YES.
On the presence of a “Foreign Element” in the 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. The
forms in which this foreign element may appear are many. 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.

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.

COURT disagrees with MORADA that his is purely a domestic case. However,
the court finds that the RTC of Quezon City possesses jurisdiction over the
subject matter of the suit. Its authority to try and hear the case is provided for
under Section 1 of Republic Act No. 7691, to wit:

BP129 Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall
exercise exclusive jurisdiction:
xxx xxx xxx
(8) In all other cases in which demand, exclusive of interest, damages of
whatever kind, attorney`y’s fees, litigation expenses, and cots 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 xxx xxx
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) xxx 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.

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.

The trial court also acquired jurisdiction over the parties. MORADA through
her act of filing, and SAUDIA by praying for the dismissal of the Amended
Complaint on grounds other than lack of jurisdiction.

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.

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 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 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 totality 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.

In applying “State of the most significant relationship” rule, 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, raised by private respondent as
plaintiff below against defendant (herein petitioner), in our view, has been
properly established.

NOTE:
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;
(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 forum — is particularly important because,
as we have seen earlier, matters of “procedure” not going to the substance of
the claim involved are governed by it; and because the lex fori applies
whenever the content of the otherwise applicable foreign law is excluded from
application in a given case for the reason that it falls under one of the
exceptions to the applications of foreign law; 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.

FROM ATTY. RENES^^

Kazuhiro Hasegawa vs Minoru

2.

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 court’s 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 RTC’s 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.

3.

In this case, 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 Employment Administration. 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; Montassah B. Sacar-Adiong (Montassah) and
Rouen Ruth A. Cristobal (Rouen Ruth) on May 22, 1993; and Loraine Schneider-Cruz
(Loraine) on August 27, 1995.

Respondents continued their employment with Saudia until they were separated from service
on various dates in 2006. Respondents contended that the termination of their employment
was illegal. They alleged that the termination was made solely because they were pregnant.

Saudia anchored its disapproval of respondents’ maternity leaves and demand for their
resignation on its “Unified Employment Contract for Female Cabin Attendants” (Unified
Contract). Under the Unified Contract, the employment of a Flight Attendant who becomes
pregnant is rendered void. It provides:

(H) Due to the essential nature of the Air Hostess functions to be physically fit on board to
provide various services required in normal or emergency cases on both
domestic/international flights beside her role in maintaining continuous safety and security
of passengers, and since she will not be able to maintain the required medical fitness while
at work in case of pregnancy, accordingly, if the Air Hostess becomes pregnant at
any time during the term of this contract, this shall render her employment
contract as void and she will be terminated due to lack of
medical fitness.(Emphasis supplied)

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.

The issue to be resolved in the instant case is whether or not there was an illegal dismissal of
the respondents?

The Supreme Court's Decision.

Yes, the respondents were illegally dismissed.

The initial issue here was whether or not the Philippine courts have jurisdiction over the case.
Petitioner Saudia states that the Philippine courts have no jurisdiction and that the law that
should be applied in the instant case is Saudi Arabia law. The Court stated that this is
incorrect. The Court has jurisdiction in this case.

The Court stated in the case;

Saudia asserts that stipulations set in the Cabin Attendant contracts require the application
of the laws of Saudi Arabia. It insists that the need to comply with these stipulations calls into
operation the doctrine of forum non conveniens and, in turn, makes it necessary for
Philippine tribunals to refrain from exercising jurisdiction. Forum non conveniens, like the
rules of forum shopping, litispendentia, 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.
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.

It further stated:
Forum non conveniens finds no application and does not operate to divest Philippine
tribunals of jurisdiction and to require the application of foreign law. Saudia invokes forum
non conveniens to supposedly effectuate the stipulations of the Cabin Attendant contracts
that require the application of the laws of Saudi Arabia.

xxx

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 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.

Oddly enough, the petitioner Saudia themselves stated that the Saudi law does not allow the
termination of employment of women who take maternity leaves;

Consistent with lex loci intentionis, to the extent that it is proper and practicable (i.e., “to
make an intelligent decision”), 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 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.)