Escolar Documentos
Profissional Documentos
Cultura Documentos
(2007)
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 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, Nippons 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 Kitamarus 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.
Nippons 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 Kitamarus 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 agreement put in issue. It held that
the RTC was correct in applying the principle of lex loci solutionis.
ISSUE: Whether or not the subject matter jurisdiction of Philippine courts
in civil cases for specific performance & 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.
HELD: NO. In the judicial resolution of conflicts problems, 3 consecutive
phases are involved: jurisdiction, choice of law, and recognition and
enforcement of judgments. Jurisdiction & choice of law are 2 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 w/c 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. 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.
In this case, only the 1st phase is at issuejurisdiction. Jurisdiction,
however, has various aspects. For a court to validly exercise its power to
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 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.
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.
3.
COMMUNICATION MATERIALS AND DESIGN, INC et al
vs.CA et al.G. R . N o. 1 0 2 2 2 3 August 22, 1996
FACTS petitioners COMMUNICATION MATERIALS AND DESIGN,
INC., (CMDI) and ASPAC MULTI-TRADE INC., (ASPAC) a r e b o t h
domestic
corporations..
Private
R e s p o n d e n t s I T E C,
I N C.
a n d / o r I T E C, I N T E R N AT I O N A L , I N C. ( I T E C ) a r e c o r p o r a t i o n s
duly organized and existing under the laws of the State
of Alabama, USA. There is no dispute that ITEC is a
foreign corporation not licensed to do business in the
P h i l i p p i n e s . I T E C e n t e r e d i n t o a c o n t r a c t w i t h A S PA C
referred to as Representative Agreement. Pursuant to
t h e c o n t r a c t , I T E C e n g a g e d A S PA C a s i t s e x c l u s i v e
representative in the Philippines for the sale of ITECs
p r o d u c t s , i n c o n s i d e r a t i o n o f w h i c h , A S PA C w a s p a i d
a stipulated commission.
Through
a License Agreement entered into by the same parties
l a t e r o n , A S PA C w a s a b l e t o i n c o r p o r a t e a n d u s e t h e n a m e
I T E C i n i t s o w n n a m e . T h u s , A S PA C M u l t i -T r a d e , I n c .
became
legally
and
publicly known
as
A S PA C - I T E C
(Philippines).O n e
year
into
the
second term
of
the
parties Representative Agreement, ITEC decided to
t e r m i n a t e t h e s a m e , b e c a u s e p e t i t i o n e r A S PA C a l l e g e d l y
violated its contractual commitment as stipulated in their
agreements.
ITEC
charges the
petitioners and another
P h i l i p p i n e C o r p o r a t i o n , D I G I TA L B A S E C O M M U N I C AT I O N S,
I N C. ( D I G I TA L ) , t h e P r e s i d e n t o f w h i c h i s l i k e w i s e p e t i t i o n e r
Aguirre, of using knowledge and information of ITECs
products
s p e c i fi c a t i o n s
to
develop
their
own
line
of
e q u i p m e n t a n d p r o d u c t s u p p o r t , w h i c h a r e s i m i l a r, i f n o t
i d e n t i c a l t o I T E C s o w n , a n d o ff e r i n g t h e m t o I T E C s f o r m e r
c u s t o m e r. T h e c o m p l a i n t w a s fi l e d w i t h t h e RT C - M a k a t i b y
I T E C, I N C. D e f e n d a n t s fi l e d a M T D t h e c o m p l a i n t o n t h e
f o l l o w i n g g r o u n d s : ( 1 ) T h a t p l a i n t i ff h a s n o l e g a l c a p a c i t y t o
sue as it is a foreign corporation doing business in the
Philippines without the required BOI authority and SEC
l i c e n s e , a n d ( 2 ) t h a t p l a i n t i ff i s s i m p l y e n g a g e d i n f o r u m
s h o p p i n g w h i c h justifies the application against it of the principle of
forum non conveniens. The MTD was denied. P e t i t i o n e r s e l e v a t e d
the
case to
the
respondent CA
on
a Pet i t i on
for
C e r t i o r a r i a n d P r o h i b i t i o n u n d e r R u l e 6 5 o f t h e Revised
R O C. I t w a s d i s m i s s e d a s w e l l . M R d e n i e d , h e n c e t h i s Pe t i t i o n
for Review on Certiorari under Rule 45.
I S S U E :1. Di d t h e P h i l i p p i n e c o u r t a c q u i r e j u r i s d i c t i o n o v e r
the person of the petitioner corp, despite allegations of
l a c k o f capacity to s u e b e c a u s e o f n o n - r e g i s t r a t i o n ?
2. Can the Philippine court give due course to the suit or
dismiss it, on the principle of forum non convenience?
HELD pe t i t i o n
dismissed.1 .
YES;
We
are
persuaded
to conclude that ITEC had been engaged in or doing
b u s i n e s s i n t h e P h i l i p p i n e s f o r s o m e t i m e n o w. T h i s i s t h e
i n e v i t a b l e r e s u l t a f t e r a s c r u t i n y o f t h e d i ff e r e n t c o n t r a c t s
and agreements entered in toby ITEC with its various
b u s i n e s s c o n t a c t s i n t h e c o u n t r y. I t s a r r a n g e m e n t s , w i t h
these entities indicate convincingly that ITEC is actively
e n g a g i n g i n b u s i n e s s i n t h e c o u n t r y. A f o r e i g n c o r p o r a t i o n
doing business in the Philippines may sue in Philippine
Courts although not authorized to do business here
against
a Philippine
citizen or
entity
who
had
c o n t r a c t e d w i t h a n d b e n e fi t e d b y s a i d c o r p o r a t i o n . T o
put
it
in
another
w a y,
a
party
is
estopped to
challenge the personality of a corporation after having
acknowledged the same by entering into a contract with
it. And the doctrine of estoppel to deny corporate
existence applies to a foreign as well as to domestic
corporations. One who has dealt with a corporation of
foreign origin as a corporate entity is estopped to deny
its
corporate
existence
and
c a p a c i t y.
In
Antam
Consolidated Inc. vs. CA et al. we expressed our chagrin over
this commonly used scheme of defaulting l o c a l c o m p a n i e s
which are being sued by unlicensed foreign companies
n o t e n g a g e d i n b u s i n e s s i n t h e P h i l i p p i n e s t o invoke the
l a c k o f c a p a c i t y t o s u e o f s u c h f o r e i g n c o m p a n i e s . O b v i o u s l y,
t h e s a m e p l o y i s r e s o r t e d t o b y A S PA C t o p r e v e n t t h e
i n j u n c t i v e a c t i o n fi l e d b y I T E C t o e n j o i n p e t i t i o n e r f r o m u s i n g
knowledge
possibly
acquired
in
violation
o f fi d u c i a r y
a r r a n g e m e n t s b e t w e e n t h e p a r t i e s . 2 . Y E S ; Pe t i t i o n e r s
insistence on the dismissal of this
action due to the
application, or non application, of the private international
l a w r u l e o f f o r u m n o n c o n v e n i e n s d e fi e s w e l l - s e t t l e d r u l e s o f
f a i r p l a y. A c c o r d i n g t o p e t i t i o n e r, t h e P h i l i p p i n e C o u r t
has no venue to apply its discretion whether to give
c o g n i z a n c e o r n o t t o t h e p r e s e n t a c t i o n , because it has
n o t a c q u i r e d j u r i s d i c t i o n o v e r t h e p e r s o n o f t h e p l a i n t i ff i n
the case, the latter allegedly having no p e r s o n a l i t y t o
sue before
Philippine
Courts.
This
argument
is
misplaced
because the
court
has already
a c q u i r e d jurisdiction over the plaintiff in the suit, by virtue of his
filing the original
complaint.
And as we
have already
observed,
petitioner
is
not at
liberty
to
question
p l a i n t i ff s
standing to sue, having already acceded to the same by
virtue of its entry into the Representative Agreement
r e f e r r e d t o e a r l i e r. T h u s , h a v i n g a c q u i r e d j u r i s d i c t i o n , i t i s
now for the Philippine Court, based on the facts of the case,
whether to give due course to the suit or dismiss it, on the
principle of forum non convenience. Hence, the Philippine
Court mayrefuse to assume jurisdiction in spite of its having
a c q u i r e d j u r i s d i c t i o n . C o n v e r s e l y, t h e c o u r t m a y a s s u m e
jurisdiction over the case if it choses to do so provided that
the following requisites are met: (a) that the Philippine
The District Courts orders in issue violated this principal. In order to obtain
assets from the Philippine National Bank, or to hold the Bank in contempt
for the transfer of those assets to the Republic of the Philippines, the
District court necessarily (and expressly) held invalid the forfeiture
judgment of the Philippine Supreme Court.
The U.S. 9th Circuit Court of Appeals concluded that this action of the
District Court violated the act of state doctrine.
The class plaintiffs in the district court argued that the act of state doctrine
is directed at the executive and legislative branches of foreign governments
and did not apply to judicial decisions.
Although the act of state doctrine is normally inapplicable to court
judgments arising from private litigation, there is no inflexible rule
preventing a judgment sought by a foreign government from qualifying as
an act of state. (Liu v. Republic of China, 892 F.2d 1419, 1433-34 & n.2 (9th
Cir. 1989), citing RESTATEMENT [SECOND] OF FOREIGN RELATIONS OF
THE UNITED STATES 41 cmt. d [1965])
A judgment of a court may be an act of state. (Id.).
There was no question that the judgment of the Philippine Supreme Court
gave effect to the public interest of the Philippine Government. The
forfeiture action was not a mere dispute between private parties; it was an
action initiated by the Philippine Government pursuant to its statutory
mandate to recover property allegedly stolen from the treasury. (In re
Estate of Ferdinand Marcos Human Rights Litig., 94 F.3d at 546).
The U.S. 9th Circuit Court of Appeals had earlier characterized the
collection efforts of the Republic of the Philippines to be governmental.
(Id.).
The subject matter of the forfeiture action thus qualified for treatment as an
act of state.
The class plaintiffs next argued that the act of state doctrine was
inapplicable because the judgment of the Philippine Supreme Court did not
concern matters within its own territory.
The U.S. 9th Circuit Court of Appeals held that, generally, the act of state
doctrine applies to official acts of foreign sovereigns performed within
their own territory. (Credit Suisse, 130 F.3d at 1346). The act of the
Philippine Supreme Court was not wholly external, however. Its judgment,
which the district court declared invalid, was issued in the Philippines and
much of its force upon the Philippine National Bank arose from the fact that
the Bank is a Philippine corporation. (Callejo v. Bancomer, S.A, 764 F.2d
1101, 1121-25 (5th Cir. 1985, discussing differing theories of situs of
intangibles).
The Appeals Court further held that even if we assume for purposes of
decision that the assets were located in Singapore, we conclude that this
fact does not preclude treatment of the Philippine judgment as an act of
state in the extraordinary circumstances of this case.
(NOTE: [1] Certain portions of the funds held in another bank in Singapore
were not transferred because the bank refused to release the funds and
instead filed an interpleader action in Singapore. [2] The class plaintiffs
cited Hilao v. Estate of Marcos, 95 F.3d 848, 851 (9th Cir. 1996), for the
proposition that the locus of a bank deposit is the branch where the deposit
is made. Hilao, however, was applying a California statute that specified the
place and manner of levying execution; it did not purport to state a general
rule for determining the locus of bank accounts).
The act of state doctrine is to be applied pragmatically and flexibly, with
reference to its underlying considerations. (Tchacosh Co. v. Rockwell Intl
Corp., 766 F.2d 1333, 1337 (9th Cir. 1985).
Thus, even when an act of a foreign state affects property outside of its
territory, the considerations underlying the act of state doctrine may still
be present. (Callejo, 764 F.2d at 1121 n.29).
Because the Republic of the Philippines interest in the enforcement of its
laws does not end at its borders, the fact that the escrow funds were
deposited in Singapore does not preclude the application of the act of state
doctrine. (Id.).
The underlying governmental interest of the Republic supports treatment of
the judgment as an act of state.
It is important to keep in mind that the Republic of the Philippines did not
simply intrude into Singapore in exercising its forfeiture jurisdiction. The
presence of the assets in Singapore was a direct result of events that were
the subject of the decision in Credit Suisse, supra, where the U.S. 9th
Circuit Court of Appeals upheld as an act of state a freeze order by the
Swiss government, enacted in anticipation of the request of the Philippine
government, to preserve the Philippine governments claims against the
very assets in issue today. (Credit Suisse, 130 F.3d at 1346-47).
Indeed, the Philippine National Bank argued that the District Courts orders
violated the mandate of the U.S. 9th Circuit Court of Appeals in Credit
Suisse, supra, directing the District Court to refrain from taking any
further action with regard to assets of the Marcos estate held or claimed
to be held by the [Swiss] Banks. (Id. at 1348).
The District Court held that the mandate of the U.S. 9th Circuit Court of
Appeals did not apply to the assets once they left the hands of the Swiss
banks. The Appeals Court side tracked the issue by holding that there was
no necessity to decide the correctness of that ruling because we conclude
that, in these circumstances, the Philippine forfeiture judgment is an act of
state. It noted that the Swiss government did not repudiate its freeze
order, and the Swiss banks did not transfer the funds in the ordinary course
of business.
The Swiss banks delivered the funds into escrow with the approval of the
Swiss courts in order to permit the very adjudication of the Philippine
courts that the district court considered invalid. To permit the District Court
to frustrate the procedure chosen by the Swiss and Philippine Governments
to adjudicate the entitlement of the Republic of the Philippines to these
assets would largely nullify the effect of the decision of the Appeals Court in
Credit Suisse, supra.
In these unusual circumstances, the Appeals Court held that the choice of
a Singapore locus for the escrow of funds (was not) fatal to the treatment of
the Philippine Supreme Courts judgment as an act of state.
B. MANDAMUS
On the issue of the propriety of a writ of mandamus, the U.s. 9th Circuit
Court of Appeals concluded that the District Courts error qualified for
correction by a writ of mandamus. In so ruling, the Appeals Court
considered the factors set forth in Bauman v. U.S. Dist. Ct., 557 F.2d 650
(9th Cir. 1977):
(1) The party seeking the writ has no other adequate means, such as a
direct appeal, to attain the relief he or she desires.
(2) The petitioner will be damaged or prejudiced in a way not correctable on
appeal.
(3) The district courts order is clearly erroneous as a matter of law.
(4) The district courts order is an oft-repeated error, or manifests a
persistent disregard of the federal rules.
(5) The district courts order raises new and important problems, or issues
of law of first impression.
None of these guidelines is determinative and all five guidelines need not be
satisfied at once for a writ to issue. (citing Credit Suisse, 130 F.3d at 1345).
Rarely will all the five guidelines point in the same direction or even be
relevant to the particular inquiry.
With regard to the first two factors, the Appeals Court concluded that the
District Courts error was not sufficiently correctable on appeal. No appeal
would lie unless a contempt order is issued and sanctions have been
imposed. (citing Estate of Domingo v. Republic of the Philippines, 808 F.2d
1349, 1350 (9th Cir. 1987). The Bank had made a sufficient showing that
subjecting its US-based officers to cross-examination and discovery
procedures would place them and the Bank in danger of violating
Philippine bank secrecy laws.
Requiring the Bank to choose between being in contempt of court and
violating Philippine laws clearly constitutes severe prejudice that could not
be remedied on direct appeal. (citing Credit Suisse, 130 F.3d at 1346).
As for the third Bauman factor, the Appeals Court held that its discussion of
the act of state doctrine had made clear that the District Courts orders
were erroneous as a matter of law. In addition, the District Court was
attempting to apply its injunction against transfer of assets to the Philippine
National Bank as an aider and abettor or agent of the estate of Marcos. But
the Bank could hardly have been acting as an aider and abettor or agent of
the estate when it transferred assets to the Republic of the Philippines
pursuant to the forfeiture judgment of the Philippine Supreme Court,
entered over the opposition of the Marcos estate.
In fine, the U.S. 9th Circuit Court of Appeals granted the Philippine National
Banks petition and vacated the orders of the U.S. District Court of Hawaii,
dated February 25, 2004 (to the Philippine National Bank to show cause),
and April 8, 2004 (to the Bank to produce its employee, Rogel L. Zenarosa,
for a deposition). It further directed the District Court to refrain from any
further action against the Philippine National Bank in this action or any
other action involving any of the funds that were the subject of the decision
of the Philippine Supreme Court dated July 15, 2003. The Appeals Court
retained jurisdiction over the District Court litigation to the extent that it
involved any action against the Philippine National Bank.