Professional Documents
Culture Documents
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* SECOND DIVISION.
459
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appears that it is not the most convenient forum and the parties
may seek redress in another one. It is a device “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.” Puyat v. Zabarte, 352 SCRA 738 (2001), enumerated
practical rea
460
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461
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462
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apply to the contract, Saudi Labor Laws should govern all matters
relating to the termination of the employment of Gran. In
international law, the party who wants to have a foreign law
applied to a dispute or case has the burden of proving the foreign
law. The foreign law is treated as a question of fact to be properly
pleaded and proved as the judge or labor arbiter cannot take
judicial notice of a foreign law. He is presumed to know only
domestic or forum law. Unfortunately for petitioner, it did not
prove the pertinent Saudi laws on the matter; thus, the
International Law doctrine of presumedidentity approach or
processual presumption comes into play. Where a foreign law is
not pleaded or, even if pleaded, is not proved, the
presumption is that foreign law is the same as ours. Thus,
we apply Philippine labor laws in determining the issues
presented before us. The Philippines does not take judicial
notice of foreign laws, hence, they must not only be alleged;
they must be proven. To prove a foreign law, the party invoking
it must present a copy thereof and comply with Sections 24 and 25
of Rule 132 of the Revised Rules of Court[.]
463
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LEONEN, J.:
This case stemmed from an action for recovery of sum of
money filed before the Regional Trial Court of Pasig by
respondent Malaysian corporation against petitioner
Philippine National Construction Corporation (PNCC),
formerly Construction & Development Corporation of the
Philippines. PNCC is a governmentacquired asset
corporation.
We resolve whether our courts have subject matter
jurisdiction over an action for recovery of sum of money
filed by a Malaysian corporation against a Philippine
corporation involving a contract executed and performed in
Malaysia, and the applicability of the forum non conveniens
principle.
PNCC filed this Petition1 assailing the Court of Appeals
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1 Rollo, pp. 3877. The Petition was filed pursuant to Rule 45 of the
Rules of Court.
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14
3,915,053.54[.]” Consequently, the corporation demanded
indemnity from PNCC by demanding the amount it paid to
the State of Pahang.15
On April 12, 1994, Asiavest Merchant Bankers (M)
Berhad filed a Complaint16 for recovery of sum of money
against PNCC before the Regional Trial Court of Pasig.17 It
based its action on Malaysian laws. Specifically, it invoked
Section 9818 of the Malaysian Contracts Act of 1950 and
Section 1119 of the Malaysian Civil Law Act of 1956.20
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In any proceedings tried in any Court for the recovery of debt or damages,
the Court may, if it thinks fit, order that there shall be included in the
sum for which judgment is given interest at such as it thinks fit on the
whole or any part of the period between the date when the cause of action
arose and the date of judgment.
20 Id., at pp. 104105, Regional Trial Court Decision, and pp. 128130,
Complaint.
21 Id., at p. 82, Court of Appeals Decision.
22 Id.
467
3. Cost of suit.
SO ORDERED.23
The trial court found that Asiavest Merchant Bankers
(M) Berhad complied with the requisites for proof of
written foreign laws.24 The Malaysian laws invoked were
found to be similar with Articles 2066 and 2067 of the Civil
Code:25
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On January 30, 1995, the trial court denied PNCC’s
Motion to Lift Order of Default26 filed on December 12,
1994.27 On August 11, 1995, it also denied PNCC’s Motion
for Reconsid
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39 Id., at p. 64.
40 Id., at p. 66.
41 Id.
42 Id.
43 Id., at p. 70.
44 Id., at p. 71.
45 Id.
46 Id.
47 Id., at p. 223.
470
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I.
On the procedural issue, petitioner submits that the
Court of Appeals erred in finding that only questions of law
were raised.61
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56 Id., at p. 238.
57 Id.
58 Id.
59 Id., at p. 53.
60 Id., at pp. 5354.
61 Id., at p. 56.
472
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A question of law exists “when the doubt or difference
arises as to what the law is on a certain state of facts[,]”62
while a question of fact exists “when the doubt or difference
arises as to the truth or the falsehood of alleged facts[.]”63
Questions of fact require the examination of the probative
value of the parties’ evidence.64
This Petition originated from a default judgment against
petitioner. Petitioner was not able to present evidence
before the trial court. Necessarily, the errors raised from
the trial court involved only questions of law.
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II.
Petitioner insists that the issue on “the propriety of
impleading the two Malaysian corporations as well as their
participant liability . . . involves a question of fact.”65
According to petitioner, AsiavestCDCP undertook to
hold petitioner free and harmless from all its obligations
under the construction agreement, while Asiavest Holdings
agreed in the guaranty agreement to share with PNCC the
guarantee liability on a 51% (Asiavest Holdings) – 49%
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The argument on the two Malaysian corporations was
raised by petitioner for the first time in its Motion to Lift
Order of Default with Affidavit of Merit dated December 9,
1994:
7. If the Defendant be given the chance to present its
evidence, it will prove the following:
....
b. Per subcontract agreement entered into by and
between defendant and a third party, Asiavest
CDCP Sdn. Bhd., the liability of defendant
(CDCP) in the event of default regarding the
performance bonds and guarantees alleged in
the complaint which were posted in the name of
the defendant shall be borne by Asiavest CDCP
Sdn. Bhd. Hence, the need for impleading
Asiavest CDCP Sdn. Bhd.
c. Assuming that Defendant is liable to the
plaintiff, its liability is joint with Asiavest
Holdings Company and only to the ex
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79
Motion, and there is no showing whether petitioner
questioned this trial court Order.
In any event, this court has held that “[i]t is essential, to
boot, that that party demonstrate that he has a meritorious
cause of action or defense; otherwise, nothing would be
gained by setting the default order aside.”80
Petitioner’s bare allegations fail to convince. The bases
of its argument to implead and hold the two Malaysian
corporations liable are the subcontract agreement and
guaranty agreement. Copies of these agreements were not
submitted with any of its pleadings. Thus, the lower courts
could not have determined for certain whether the two
Malaysian corporations did enter into the alleged
agreements, the subject of the agreements, or the extent of
their liabilities, if any.
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476
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However, there was no factual finding on the connection
between the “financing facilities” received by Asiavest
CDCP from respondent, and the performance bond
transactions respondent now claims from. This was argued
by respondent in its Brief before the Court of Appeals as
follows:
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477
and the bonds and other contracts on which they were based,
were clearly identified in the complaint as follows:....83
Also, since petitioner mentioned its argument on the two
Malaysian corporations in its Motion to Lift Order of
Default84 and Motion for Reconsideration Ad Cautelam85
filed before the trial court, these were already considered
by the lower court when it ruled on both Motions.
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83 Id., at p. 219.
84 Id., at p. 135.
85 Id., at pp. 145146.
86 Id., at p. 162, PNCC’s Brief.
87 Id., at p. 163.
88 Id., at p. 165.
89 Id., at pp. 133 and 139.
90 Id., at pp. 144145.
91 Id., at pp. 163165.
478
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These jurisdictional amounts were adjusted to
P300,000.00, and P400,000.00 in the case of Metro
Manila.94 Thus, the
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92 Magno v. People, 662 Phil. 726, 735; 647 SCRA 362, 371 (2011) [Per
J. Brion, Third Division], citing Machado v. Gatdula, 626 Phil. 457, 468;
612 SCRA 546, 559 (2010) [Per J. Brion, Second Division], citing in turn
Vargas v. Caminas, 577 Phil. 185, 197198; 554 SCRA 305, 317 (2008) [Per
J. Carpio, First Division], Metromedia Times Corporation v. Pastorin, 503
Phil. 288, 303; 465 SCRA 320, 325 (2005) [Per J. Tinga, Second Division],
and Dy v. National Labor Relations Commission, 229 Phil. 234, 242243;
145 SCRA 211, 221 (1986) [Per J. Narvasa, First Division].
93 As amended by Rep. Act No. 7691 (1994), Sec. 1.
94 Rep. Act No. 7691 (1994), Sec. 5 provides:
SEC. 5. After five (5) years from the effectivity of this Act, the
jurisdictional amounts mentioned in Sec. 19(3), (4), and (8); and Sec. 33(1)
of Batas Pambansa Blg. 129 as amended by this Act, shall be adjusted to
Two hundred thousand pesos (P200,000.00). Five (5) years thereafter,
such jurisdictional
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1) The belief that the matter can be better tried and decided
elsewhere, either because the main aspects of the case transpired
in a foreign jurisdiction or the material witnesses have their
residence there;
2) The belief that the nonresident plaintiff sought the
forum[,] a practice known as forum shopping[,] merely to secure
procedural advantages or to convey or harass the defendant;
3) The unwillingness to extend local judicial facilities to
nonresidents or aliens when the docket may already be
overcrowded;
4) The inadequacy of the local judicial machinery for
effectuating the right sought to be maintained; and
5) The difficulty of ascertaining foreign law.100 (Emphasis in
the original)
On the other hand, courts may choose to assume
jurisdiction subject to the following requisites: “(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.”101
The determination of whether to entertain a case is
addressed to the sound discretion of the court, which must
care
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99 405 Phil. 413; 352 SCRA 738 (2001) [Per J. Panganiban, Third
Division].
100 Id., at p. 432; p. 751, citing Salonga, Jovito R., Private
International Law, p. 47 (1979).
101 Bank of America NT&SA v. Court of Appeals, supra note 97 at p.
196; p. 169, citing Communication Materials and Design, Inc. v. Court of
Appeals, 329 Phil. 487, 510511; 260 SCRA 673, 695 (1996) [Per J. Torres,
Jr., Second Division].
481
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482
Saudi Arabian Airlines also discussed the need to raise
forum non conveniens at the earliest possible time, and to
show that a prior suit has been brought in another
jurisdiction:
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107 Id.
108 Id., at pp. 167168.
483
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109 Rollo, p. 211, Asiavest Merchant’s Brief, quoting the trial court
Order dated August 11, 1995, Annex B of appellant’s Brief, pp. 34.
110 Saudi Arabian Airlines (Saudia) v. Rebesencio, supra note 96 at p.
164.
111 Id., at p. 168.
484
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112 See Pasiona, Jr. v. Court of Appeals, 581 Phil. 124, 135136; 559
SCRA 137, 148 (2008) [Per J. AustriaMartinez, Third Division], Dela
Cruz v. Andres, 550 Phil. 679, 684; 522 SCRA 585, 590 (2007) [Per J.
Quisumbing, Second Division], and Arroyo v. Rosal Homeowners
Association, Inc., G.R. No. 175155, October 22, 2012, 684 SCRA 297, 303
304 [Per J. Mendoza, Third Division].
113 National Association of Electricity Consumers for Reforms, Inc.
(NASECORE) v. Energy Regulatory Commission (ERC), 669 Phil. 93, 105;
653 SCRA 642, 654655 (2011) [Per J. Sereno (now CJ.), Second Division],
citing Samalio v. Court of Appeals, 494 Phil. 456, 466; 454 SCRA 462, 473
(2005) [Per J. Corona, En Banc].
114 Rollo, p. 82, Court of Appeals Decision.
115 Id., at p. 133.
485
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116 Magtoto v. Court of Appeals, G.R. No. 175792, November 21, 2012,
686 SCRA 88, 101 [Per J. Del Castillo, Second Division], citing Gold Line
Transit, Inc. v. Ramos, 415 Phil. 492, 503; 363 SCRA 262, 271 (2001) [Per
J. Bellosillo, Second Division].
117 Rollo, p. 74.
118 Rules of Court, Rule 16, Sec. 1(b) provides:
SECTION 1. Grounds.—...
....
(b) That the court has no jurisdiction over the subject matter of the
claim[.]
119 Rollo, pp. 139140, Motion to Lift Order of Default with Affidavit
of Merit.
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V.
Petitioner contends that under Item 6 of the Malaysian
Limitation Act of 1953 (Act 254), “actions founded on
contract or to recover any sum . . . by virtue of any written
law . . . shall not be brought after the expiration of six
years from [accrual of] cause of action[.]”120 It contends that
the Complaint was filed on April 13, 1994. Thus, six years
already elapsed from 1988.121
Prescription is one of the grounds for a motion to
dismiss,122 but petitioner did not avail itself of this remedy.
Prescription was also not raised as an error before the
Court of Appeals. Nevertheless, we have ruled that
prescription may be raised for the first time before this
court.123
Petitioner invokes Malaysian laws on prescription, but it
was not able to prove these foreign law provisions. Our
courts follow the doctrine of processual presumption:
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487
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124 ATCI Overseas Corporation v. Echin, 647 Phil. 43, 4950; 632
SCRA 528, 534535 (2010) [Per J. CarpioMorales, Third Division],
quoting EDIStaffbuilders International, Inc. v. National Labor Relations
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Commission, 563 Phil. 1, 22; 537 SCRA 409, 430 (2007) [Per J. Velasco,
Jr., Second Division].
488
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489
Petition denied.
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129 See Reburiano v. Court of Appeals, 361 Phil. 294, 304; 301 SCRA
342, 351 (1999) [Per J. Mendoza, Second Division].
** Designated additional member per S.O. No. 2146 dated August 10,
2015.
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