You are on page 1of 28

G.R. No.

122191 October 8, 1998

SAUDI ARABIAN AIRLINES, petitioner,


vs.
COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity as
Presiding Judge of Branch 89, Regional Trial Court of Quezon City, respondents.

QUISUMBING, J.:

This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul and set aside the
Resolution1dated September 27, 1995 and the Decision2 dated April 10, 1996 of the Court of Appeals3 in CA-
G.R. SP No. 36533,4 and the Orders5 dated August 29, 1994 6 and February 2, 19957 that were issued by the
trial court in Civil Case No. Q-93-18394.8

The pertinent antecedent facts which gave rise to the instant petition, as stated in the questioned Decision 9, are
as follows:

On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for its airlines
based in Jeddah, Saudi Arabia. . . .

On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a disco dance with
fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi nationals. Because
it was almost morning when they returned to their hotels, they agreed to have breakfast together
at the room of Thamer. When they were in te (sic) room, Allah left on some pretext. Shortly after
he did, Thamer attempted to rape plaintiff. Fortunately, a roomboy and several security
personnel heard her cries for help and rescued her. Later, the Indonesian police came and
arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice.

When plaintiff returned to Jeddah a few days later, several SAUDIA officials interrogated her
about the Jakarta incident. They then requested her to go back to Jakarta to help arrange the
release of Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and base manager
Baharini negotiated with the police for the immediate release of the detained crew members but
did not succeed because plaintiff refused to cooperate. She was afraid that she might be tricked
into something she did not want because of her inability to understand the local dialect. She
also declined to sign a blank paper and a document written in the local dialect. Eventually,
SAUDIA allowed plaintiff to return to Jeddah but barred her from the Jakarta flights.

Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian
authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they
were again put in service by defendant SAUDI (sic). In September 1990, defendant SAUDIA
transferred plaintiff to Manila.

On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind
her, her superiors requested her to see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in
Jeddah, Saudi Arabia. When she saw him, he brought her to the police station where the police
took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as
the police put pressure on her to make a statement dropping the case against Thamer and Allah.
Not until she agreed to do so did the police return her passport and allowed her to catch the
afternoon flight out of Jeddah.

One year and a half later or on lune 16, 1993, in Riyadh, Saudi Arabia, a few minutes before the
departure of her flight to Manila, plaintiff was not allowed to board the plane and instead ordered
to take a later flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When she
did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was asked to
sign a document written in Arabic. They told her that this was necessary to close the case
against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before the
court on June 27, 1993. Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and
see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving assurance
from SAUDIA's Manila manager, Aslam Saleemi, that the investigation was routinary and that it
posed no danger to her.

In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993.
Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an
interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the
airport, however, just as her plane was about to take off, a SAUDIA officer told her that the
airline had forbidden her to take flight. At the Inflight Service Office where she was told to go,
the secretary of Mr. Yahya Saddick took away her passport and told her to remain in Jeddah, at
the crew quarters, until further orders.

On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court where the
judge, to her astonishment and shock, rendered a decision, translated to her in English,
sentencing her to five months imprisonment and to 286 lashes. Only then did she realize that
the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta.
The court found plaintiff guilty 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. 10

Facing conviction, private respondent sought the help of her employer, petitioner SAUDIA. Unfortunately, she
was denied any assistance. She then asked the Philippine Embassy in Jeddah to help her while her case is on
appeal. Meanwhile, to pay for her upkeep, she worked on the domestic flight of SAUDIA, while Thamer and
Allah continued to serve in the international
flights. 11

Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to
leave Saudi Arabia. Shortly before her return to Manila, 12 she was terminated from the service by SAUDIA,
without her being informed of the cause.

On November 23, 1993, Morada filed a Complaint 13 for damages against SAUDIA, and Khaled Al-Balawi ("Al-
Balawi"), its country manager.

On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss 14 which raised the following grounds, to wit:
(1) that the Complaint states no cause of action against Saudia; (2) that defendant Al-Balawi is not a real party
in interest; (3) that the claim or demand set forth in the Complaint has been waived, abandoned or otherwise
extinguished; and (4) that the trial court has no jurisdiction to try the case.

On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss) 15. Saudia filed a reply 16 thereto on
March 3, 1994.

On June 23, 1994, Morada filed an Amended Complaint 17 wherein Al-Balawi was dropped as party defendant.
On August 11, 1994, Saudia filed its Manifestation and Motion to Dismiss Amended Complaint 18.

The trial court issued an Order 19 dated August 29, 1994 denying the Motion to Dismiss Amended Complaint
filed by Saudia.

From the Order of respondent Judge 20 denying the Motion to Dismiss, SAUDIA filed on September 20, 1994, its
Motion for Reconsideration 21 of the Order dated August 29, 1994. It alleged that the trial court has no
jurisdiction to hear and try the case on the basis of Article 21 of the Civil Code, since the proper law applicable is
the law of the Kingdom of Saudi Arabia. On October 14, 1994, Morada filed her Opposition 22(To Defendant's
Motion for Reconsideration).

In the Reply 23 filed with the trial court on October 24, 1994, SAUDIA alleged that since its Motion for
Reconsideration raised lack of jurisdiction as its cause of action, the Omnibus Motion Rule does not apply, even
if that ground is raised for the first time on appeal. Additionally, SAUDIA alleged that the Philippines does not
have any substantial interest in the prosecution of the instant case, and hence, without jurisdiction to adjudicate
the same.

Respondent Judge subsequently issued another Order 24 dated February 2, 1995, denying SAUDIA's Motion for
Reconsideration. The pertinent portion of the assailed Order reads as follows:

Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines filed, thru counsel,
on September 20, 1994, and the Opposition thereto of the plaintiff filed, thru counsel, on
October 14, 1994, as well as the Reply therewith of defendant Saudi Arabian Airlines filed, thru
counsel, on October 24, 1994, considering that a perusal of the plaintiffs Amended Complaint,
which is one for the recovery of actual, moral and exemplary damages plus attorney's fees,
upon the basis of the applicable Philippine law, Article 21 of the New Civil Code of the
Philippines, is, clearly, within the jurisdiction of this Court as regards the subject matter, and
there being nothing new of substance which might cause the reversal or modification of the
order sought to be reconsidered, the motion for reconsideration of the defendant, is DENIED.

SO ORDERED. 25

Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for
Issuance of Writ of Preliminary Injunction and/or Temporary Restraining Order 26 with the Court of Appeals.

Respondent Court of Appeals promulgated a Resolution with Temporary Restraining Order 27 dated February 23,
1995, prohibiting the respondent Judge from further conducting any proceeding, unless otherwise directed, in
the interim.

In another Resolution 28 promulgated on September 27, 1995, now assailed, the appellate court denied
SAUDIA's Petition for the Issuance of a Writ of Preliminary Injunction dated February 18, 1995, to wit:

The Petition for the Issuance of a Writ of Preliminary Injunction is hereby DENIED, after
considering the Answer, with Prayer to Deny Writ of Preliminary Injunction (Rollo, p. 135) the
Reply and Rejoinder, it appearing that herein petitioner is not clearly entitled thereto (Unciano
Paramedical College, et. Al., v. Court of Appeals, et. Al., 100335, April 7, 1993, Second
Division).

SO ORDERED.

On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition 29 for Review with Prayer for
Temporary Restraining Order dated October 13, 1995.

However, during the pendency of the instant Petition, respondent Court of Appeals rendered the
Decision 30dated April 10, 1996, now also assailed. It ruled that the Philippines is an appropriate forum
considering that the Amended Complaint's basis for recovery of damages is Article 21 of the Civil Code, and
thus, clearly within the jurisdiction of respondent Court. It further held that certiorari is not the proper remedy in a
denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in case of an
adverse ruling, find recourse in an appeal.

On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary Restraining
Order 31 dated April 30, 1996, given due course by this Court. After both parties submitted their
Memoranda, 32 the instant case is now deemed submitted for decision.

Petitioner SAUDIA raised the following issues:

The trial court has no jurisdiction to hear and try Civil Case No. Q-93-18394 based on Article 21
of the New Civil Code since the proper law applicable is the law of the Kingdom of Saudi Arabia
inasmuch as this case involves what is known in private international law as a "conflicts
problem". Otherwise, the Republic of the Philippines will sit in judgment of the acts done by
another sovereign state which is abhorred.

II

Leave of court before filing a supplemental pleading is not a jurisdictional requirement. Besides,
the matter as to absence of leave of court is now moot and academic when this Honorable
Court required the respondents to comment on petitioner's April 30, 1996 Supplemental Petition
For Review With Prayer For A Temporary Restraining Order Within Ten (10) Days From Notice
Thereof. Further, the Revised Rules of Court should be construed with liberality pursuant to
Section 2, Rule 1 thereof.

III

Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP NO. 36533
entitled "Saudi Arabian Airlines v. Hon. Rodolfo A. Ortiz, et al." and filed its April 30, 1996
Supplemental Petition For Review With Prayer For A Temporary Restraining Order on May 7,
1996 at 10:29 a.m. or within the 15-day reglementary period as provided for under Section 1,
Rule 45 of the Revised Rules of Court. Therefore, the decision in CA-G.R. SP NO. 36533 has
not yet become final and executory and this Honorable Court can take cognizance of this
case. 33

From the foregoing factual and procedural antecedents, the following issues emerge for our resolution:

I.

WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING THAT THE


REGIONAL TRIAL COURT OF QUEZON CITY HAS JURISDICTION TO HEAR AND TRY
CIVIL CASE NO. Q-93-18394 ENTITLED "MILAGROS P. MORADA V. SAUDI ARABIAN
AIRLINES".

II.

WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING THAT IN THIS CASE


PHILIPPINE LAW SHOULD GOVERN.

Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the outset. It maintains that
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. 34

On the other hand, private respondent contends that since her Amended Complaint is based on Articles
19 35 and 21 36 of the Civil Code, then the instant case is properly a matter of domestic law. 37

Under the factual antecedents obtaining in this case, there is no dispute that the interplay of events occurred in
two states, the Philippines and Saudi Arabia.

As stated by private respondent in her Amended Complaint 38 dated June 23, 1994:

2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign airlines corporation doing


business in the Philippines. It may be served with summons and other court processes at Travel
Wide Associated Sales (Phils.). Inc., 3rd Floor, Cougar Building, 114 Valero St., Salcedo Village,
Makati, Metro Manila.

xxx xxx xxx

6. Plaintiff learned that, through the intercession of the Saudi Arabian government, the
Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention.
Eventually, they were again put in service by defendant SAUDIA. In September 1990, defendant
SAUDIA transferred plaintiff to Manila.

7. On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind
her, her superiors reauested her to see MR. Ali Meniewy, Chief Legal Officer of SAUDIA in
Jeddah, Saudi Arabia. When she saw him, he brought her to the police station where the police
took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as
the police put pressure on her to make a statement dropping the case against Thamer and Allah.
Not until she agreed to do so did the police return her passport and allowed her to catch the
afternoon flight out of Jeddah.

8. One year and a half later or on June 16, 1993, in Riyadh, Saudi Arabia, a few minutes before
the departure of her flight to Manila, plaintiff was not allowed to board the plane and instead
ordered to take a later flight to Jeddah to see Mr. Meniewy, the Chief Legal Officer of SAUDIA.
When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she
was asked to sigh a document written in Arabic. They told her that this was necessary to close
the case against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear
before the court on June 27, 1993. Plaintiff then returned to Manila.

9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again
and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving
assurance from SAUDIA's Manila manger, Aslam Saleemi, that the investigation was routinary
and that it posed no danger to her.

10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993.
Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an
interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the
airport, however, just as her plane was about to take off, a SAUDIA officer told her that the
airline had forbidden her to take that flight. At the Inflight Service Office where she was told to
go, the secretary of Mr. Yahya Saddick took away her passport and told her to remain in Jeddah,
at the crew quarters, until further orders.

11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court where the
judge, to her astonishment and shock, rendered a decision, translated to her in English,
sentencing her to five months imprisonment and to 286 lashes. Only then did she realize that
the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta.
The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing, and listening to the
music in violation of Islamic laws; (3) socializing with the male crew, in contravention of Islamic
tradition.

12. Because SAUDIA refused to lend her a hand in the case, plaintiff sought the help of the
Philippines Embassy in Jeddah. The latter helped her pursue an appeal from the decision of the
court. To pay for her upkeep, she worked on the domestic flights of defendant SAUDIA while,
ironically, Thamer and Allah freely served the international flights. 39

Where the factual antecedents satisfactorily establish the existence of a foreign element, we agree with
petitioner that the problem herein could present a "conflicts" 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. 40

The forms in which this foreign element may appear are many. 41 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. 42
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.

We thus find private respondent's assertion that the case is purely domestic, imprecise. A conflicts problem
presents itself here, and the question of jurisdiction 43 confronts the court a quo.

After a careful study of the private respondent's Amended Complaint, 44 and the Comment thereon, we note that
she aptly predicated her cause of action on Articles 19 and 21 of the New Civil Code.

On one hand, Article 19 of the New Civil Code provides:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act
with justice give everyone his due and observe honesty and good faith.

On the other hand, Article 21 of the New Civil Code provides:

Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for damages.

Thus, in Philippine National Bank (PNB) vs. Court of Appeals, 45 this Court held that:

The aforecited provisions on human relations were intended to expand the concept of torts in
this jurisdiction by granting adequate legal remedy for the untold number of moral wrongs which
is impossible for human foresight to specifically provide in the statutes.

Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions. Thus, we agree
with private respondent's assertion that violations of Articles 19 and 21 are actionable, with judicially enforceable
remedies in the municipal forum.

Based on the allegations 46 in the Amended Complaint, read in the light of the Rules of Court on
jurisdiction 47 we find that the Regional Trial Court (RTC) of Quezon City possesses jurisdiction over the subject
matter of the suit. 48 Its authority to try and hear the case is provided for under Section 1 of Republic Act No.
7691, to wit:

Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary
Reorganization Act of 1980", is hereby amended to read as follows:

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'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

And following 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.

Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor of the RTC
Quezon City assuming jurisdiction. Paramount is the private interest of the litigant. Enforceability of a judgment if
one is obtained is quite obvious. Relative advantages and obstacles to a fair trial are equally important. Plaintiff
may not, by choice of an inconvenient forum, "vex", "harass", or "oppress" the defendant, e.g. by inflicting upon
him needless expense or disturbance. But unless the balance is strongly in favor of the defendant, the plaintiffs
choice of forum should rarely be disturbed. 49

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.

Similarly, the trial court also possesses jurisdiction over the persons of the parties herein. By filing her Complaint
and Amended Complaint with the trial court, private respondent has voluntary submitted herself to the
jurisdiction of the court.

The records show that petitioner SAUDIA has filed several motions 50 praying for the dismissal of Morada's
Amended Complaint. SAUDIA also filed an Answer In Ex Abundante Cautelam dated February 20, 1995. What
is very patent and explicit from the motions filed, is that SAUDIA prayed for other reliefs under the premises.
Undeniably, petitioner SAUDIA has effectively submitted to the trial court's jurisdiction by praying for the
dismissal of the Amended Complaint on grounds other than lack of jurisdiction.

As held by this Court in Republic vs. Ker and Company, Ltd.: 51

We observe that the motion to dismiss filed on April 14, 1962, aside from disputing the lower
court's jurisdiction over defendant's person, prayed for dismissal of the complaint on the ground
that plaintiff's cause of action has prescribed. By interposing such second ground in its motion
to dismiss, Ker and Co., Ltd. availed of an affirmative defense on the basis of which it prayed
the court to resolve controversy in its favor. For the court to validly decide the said plea of
defendant Ker & Co., Ltd., it necessarily had to acquire jurisdiction upon the latter's person, who,
being the proponent of the affirmative defense, should be deemed to have abandoned its
special appearance and voluntarily submitted itself to the jurisdiction of the court.

Similarly, the case of De Midgely vs. Ferandos, held that;

When the appearance is by motion for the purpose of objecting to the jurisdiction of the court
over the person, it must be for the sole and separate purpose of objecting to the jurisdiction of
the court. If his motion is for any other purpose than to object to the jurisdiction of the court over
his person, he thereby submits himself to the jurisdiction of the court. A special appearance by
motion made for the purpose of objecting to the jurisdiction of the court over the person will be
held to be a general appearance, if the party in said motion should, for example, ask for a
dismissal of the action upon the further ground that the court had no jurisdiction over the subject
matter. 52

Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of Quezon City. Thus, we find that
the trial court has jurisdiction over the case and that its exercise thereof, justified.

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. 53
Several theories have been propounded in order to identify the legal system that should ultimately control.
Although ideally, all choice-of-law theories should intrinsically advance both notions of justice and predictability,
they do not always do so. The forum is then faced with the problem of deciding which of these two important
values should be stressed. 54

Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or
rules fall. This process is known as "characterization", or the "doctrine of qualification". It is the "process of
deciding whether or not the facts relate to the kind of question specified in a conflicts rule." 55The purpose of
"characterization" is to enable the forum to select the proper law. 56

Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact. 57An
essential element of conflict rules is the indication of a "test" or "connecting factor" or "point of contact". Choice-
of-law rules invariably consist of a factual relationship (such as property right, contract claim) and a connecting
factor or point of contact, such as the situs of the res, the place of celebration, the place of performance, or the
place of wrongdoing. 58

Note that one or more circumstances may be present to serve as the possible test for the determination of the
applicable law. 59 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,
thelex 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. 60 (Emphasis ours.)

After a careful study of the pleadings on record, including allegations in the Amended Complaint deemed
admitted for purposes of the motion to dismiss, we are convinced that there is reasonable basis for private
respondent's assertion that although she was already working in Manila, petitioner brought her to Jeddah on the
pretense that she would merely testify in an investigation of the charges she made against the two SAUDIA
crew members for the attack on her person while they were in Jakarta. As it turned out, she was the one made
to face trial for very serious charges, including adultery and violation of Islamic laws and tradition.

There is likewise logical basis on record for the claim that the "handing over" or "turning over" of the person of
private respondent to Jeddah officials, petitioner may have acted beyond its duties as employer. Petitioner's
purported act contributed to and amplified or even proximately caused additional humiliation, misery and
suffering of private respondent. Petitioner thereby allegedly facilitated the arrest, detention and prosecution of
private respondent under the guise of petitioner's authority as employer, taking advantage of the trust,
confidence and faith she reposed upon it. As purportedly found by the Prince of Makkah, the alleged conviction
and imprisonment of private respondent was wrongful. But these capped the injury or harm allegedly inflicted
upon her person and reputation, for which petitioner could be liable as claimed, to provide compensation or
redress for the wrongs done, once duly proven.

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.

Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories and
rules on tort liability 61 have been advanced to offer fresh judicial approaches to arrive at just results. In keeping
abreast with the modern theories on tort liability, we find here an occasion to apply the "State of the most
significant relationship" rule, which in our view should be appropriate to apply now, given the factual context of
this case.

In applying said principle 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. 62

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, 63 raised by private respondent as plaintiff below against defendant (herein petitioner), in our view,
has been properly established.

Prescinding from this premise that the Philippines is the situs of the tort complained of and the place "having the
most interest in the problem", we find, by way of recapitulation, that the Philippine law on tort liability should
have paramount application to and control in the resolution of the legal issues arising out of this case. Further,
we hold that the respondent Regional Trial Court has jurisdiction over the parties and the subject matter of the
complaint; the appropriate venue is in Quezon City, which could properly apply Philippine law. Moreover, we find
untenable petitioner's insistence that "[s]ince private respondent instituted this suit, she has the burden of
pleading and proving the applicable Saudi law on the matter." 64As aptly said by private respondent, she has "no
obligation to plead and prove the law of the Kingdom of Saudi Arabia since her cause of action is based on
Articles 19 and 21" of the Civil Code of the Philippines. In her Amended Complaint and subsequent pleadings,
she never alleged that Saudi law should govern this case. 65 And as correctly held by the respondent appellate
court, "considering that it was the petitioner who was invoking the applicability of the law of Saudi Arabia, then
the burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is". 66

Lastly, no error could be imputed to the respondent appellate court in upholding the trial court's denial of
defendant's (herein petitioner's) motion to dismiss the case. Not only was jurisdiction in order and venue
properly laid, but appeal after trial was obviously available, and expeditious trial itself indicated by the nature of
the case at hand. Indubitably, the Philippines is the state intimately concerned with the ultimate outcome of the
case below, not just for the benefit of all the litigants, but also for the vindication of the country's system of law
and justice in a transnational setting. With these guidelines in mind, the trial court must proceed to try and
adjudge the case in the light of relevant Philippine law, with due consideration of the foreign element or
elements involved. Nothing said herein, of course, should be construed as prejudging the results of the case in
any manner whatsoever.

WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No. Q-93-18394 entitled
"Milagros P. Morada vs. Saudi Arabia Airlines" is hereby REMANDED to Regional Trial Court of Quezon City,
Branch 89 for further proceedings.

SO ORDERED.

KAZUHIRO HASEGAWA and NIPPON ENGINEERING G.R. No. 149177


CONSULTANTS CO., LTD.,
Petitioners, Present:

YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

MINORU KITAMURA, Promulgated:


Respondent.
November 23, 2007

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the April 18,
2001 Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July 25, 2001
Resolution[2] denying the motion for reconsideration thereof.

On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese consultancy firm
providing technical and management support in the infrastructure projects of foreign governments,[3] entered into
an Independent Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese national
permanently residing in the Philippines.[4] The agreement provides that respondent was to extend professional
services to Nippon for a year starting on April 1, 1999.[5] Nippon then assigned respondent to work as the project
manager of the Southern Tagalog Access Road (STAR) Project in the Philippines, following the company's
consultancy contract with the Philippine Government.[6]

When the STAR Project was near completion, the Department of Public Works and Highways (DPWH) engaged
the consultancy services of Nippon, on January 28, 2000, this time for the detailed engineering and construction
supervision of the Bongabon-Baler Road Improvement (BBRI) Project.[7] Respondent was named as the project
manager in the contract's Appendix 3.1.[8]

On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its International Division,
informed respondent 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 on March 31, 2000,
just in time for the ICA's expiry.[9]
Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation conference
and demanded that he be assigned to the BBRI project. Nippon insisted that respondents contract was for a
fixed term that had already expired, and refused to negotiate for the renewal of the ICA.[10]

As he was not able to generate a positive response from the petitioners, respondent consequently initiated
on June 1, 2000 Civil Case No. 00-0264 for specific performance and damages with
the Regional TrialCourt of Lipa City.[11]

For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and between
Japanese nationals, moved to dismiss the complaint for lack of jurisdiction. They asserted that the claim for
improper pre-termination of respondent's ICA could only be heard and ventilated in the proper courts
of Japan following the principles of lex loci celebrationis and lex contractus.[12]

In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement of Kitamura by a
certain Y. Kotake as project manager of the BBRI Project.[13]

On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank [14] that matters connected with
the performance of contracts are regulated by the law prevailing at the place of performance,[15] denied the
motion to dismiss.[16] The trial court subsequently denied petitioners' motion for reconsideration, [17] prompting
them to file with the appellate court, on August 14, 2000, their first Petition for Certiorari under Rule 65
[docketed as CA-G.R. SP No. 60205].[18] On August 23, 2000, the CA resolved to dismiss the petition on
procedural groundsfor lack of statement of material dates and for insufficient verification and certification against
forum shopping.[19] An Entry of Judgment was later issued by the appellate court on September 20, 2000.[20]

Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within the
reglementary period, a second Petition for Certiorari under Rule 65 already stating therein the material dates
and attaching thereto the proper verification and certification. This second petition, which substantially raised the
same issues as those in the first, was docketed as CA-G.R. SP No. 60827.[21]

Ruling on the merits of the second petition, the appellate court rendered the assailed April 18,
2001 Decision[22] finding no grave abuse of discretion in the trial court's denial of the motion to dismiss. The CA
ruled, among others, that 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. The CA thus declared that the trial court
was correct in applying instead the principle of lex loci solutionis.[23]

Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July 25,
2001 Resolution.[24]

Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant Petition for
Review on Certiorari[25] imputing the following errors to the appellate court:

A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE


TRIAL COURT VALIDLY EXERCISED JURISDICTION OVER THE INSTANT CONTROVERSY,
DESPITE THE FACT THAT THE CONTRACT SUBJECT MATTER OF THE PROCEEDINGS A
QUO WAS ENTERED INTO BY AND BETWEEN TWO JAPANESE NATIONALS, WRITTEN
WHOLLY IN THE JAPANESE LANGUAGE AND EXECUTED IN TOKYO, JAPAN.

B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE


NEED TO REVIEW OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN
THE LIGHT OF RECENT DEVELOPMENT[S] IN PRIVATE INTERNATIONAL LAWS.[26]

The pivotal question that this Court is called upon to resolve is whether the subject matter jurisdiction of
Philippine courts in civil cases for specific performance and 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.
However, before ruling on this issue, we must first dispose of the procedural matters raised by the respondent.

Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No. 60205 has already barred
the filing of the second petition docketed as CA-G.R. SP No. 60827 (fundamentally raising the same issues as
those in the first one) and the instant petition for review thereof.

We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's defective
certification of non-forum shopping, it was a dismissal without prejudice.[27] The same holds true in the CA's
dismissal of the said case due to defects in the formal requirement of verification[28] and in the other requirement
in Rule 46 of the Rules of Court on the statement of the material dates. [29] The dismissal being without prejudice,
petitioners can re-file the petition, or file a second petition attaching thereto the appropriate verification and
certificationas they, in fact didand stating therein the material dates, within the prescribed period [30] in Section 4,
Rule 65 of the said Rules.[31]

The dismissal of a case without prejudice signifies the absence of a decision on the merits and leaves the
parties free to litigate the matter in a subsequent action as though the dismissed action had not been
commenced. In other words, the termination of a case not on the merits does not bar another action involving
the same parties, on the same subject matter and theory.[32]

Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and even if
petitioners still indicated in the verification and certification of the second certiorari petition that the first had
already been dismissed on procedural grounds,[33] petitioners are no longer required by the Rules to indicate in
their certification of non-forum shopping in the instant petition for review of the second certiorari petition, the
status of the aforesaid first petition before the CA. In any case, an omission in the certificate of non-forum
shopping about any event that will not constitute res judicata and litispendentia, as in the present case, is not a
fatal defect. It will not warrant the dismissal and nullification of the entire proceedings, considering that the evils
sought to be prevented by the said certificate are no longer present.[34]

The Court also finds no merit in respondent's contention that petitioner Hasegawa is only authorized to verify
and certify, on behalf of Nippon, the certiorari petition filed with the CA and not the instant petition. True, the
Authorization[35] dated September 4, 2000, which is attached to the second certiorari petition and which is also
attached to the instant petition for review, is limited in scopeits wordings indicate that Hasegawa is given the
authority to sign for and act on behalf of the company only in the petition filed with the appellate court, and that
authority cannot extend to the instant petition for review. [36] In a plethora of cases, however, this Court has
liberally applied the Rules or even suspended its application whenever a satisfactory explanation and a
subsequent fulfillment of the requirements have been made.[37] Given that petitioners herein sufficiently
explained their misgivings on this point and appended to their Reply[38] an updated Authorization[39] for
Hasegawa to act on behalf of the company in the instant petition, the Court finds the same as sufficient
compliance with the Rules.

However, the Court cannot extend the same liberal treatment to the defect in the verification and certification. As
respondent pointed out, and to which we agree, Hasegawa is truly not authorized to act on behalf of Nippon in
this case. The aforesaid September 4, 2000 Authorization and even the subsequent August 17, 2001
Authorization were issued only by Nippon's president and chief executive officer, not by the company's board of
directors. In not a few cases, we have ruled that corporate powers are exercised by the board of directors; thus,
no person, not even its officers, can bind the corporation, in the absence of authority from the
board.[40] Considering that Hasegawa verified and certified the petition only on his behalf and not on behalf of the
other petitioner, the petition has to be denied pursuant to Loquias v. Office of the Ombudsman.[41] Substantial
compliance will not suffice in a matter that demands strict observance of the Rules. [42] While technical rules of
procedure are designed not to frustrate the ends of justice, nonetheless, they are intended to effect the proper
and orderly disposition of cases and effectively prevent the clogging of court dockets. [43]

Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question the trial court's
denial of their motion to dismiss. It is a well-established rule that an order denying a motion to dismiss is
interlocutory, and cannot be the subject of the extraordinary petition for certiorari or mandamus. The
appropriate recourse is to file an answer and to interpose as defenses the objections raised in the motion, to
proceed to trial, and, in case of an adverse decision, to elevate the entire case by appeal in due course. [44] While
there are recognized exceptions to this rule,[45] petitioners' case does not fall among them.
This brings us to the discussion of the substantive issue of the case.

Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to hear and
resolve the civil case for specific performance and damages filed by the respondent. The ICAsubject of the
litigation was entered into and perfected in Tokyo, Japan, by Japanese nationals, and written wholly in the
Japanese language. Thus, petitioners posit that local courts have no substantial relationship to the
parties[46] following the [state of the] most significant relationship rule in Private International Law. [47]

The Court notes that petitioners adopted an additional but different theory when they elevated the case to the
appellate court. In the Motion to Dismiss[48] filed with the trial court, petitioners never contended that the RTC is
an inconvenient forum. They merely argued that the applicable law which will determine the validity or invalidity
of respondent's claim is that of Japan, following the principles of lex loci celebrationis and lex
contractus.[49] While not abandoning this stance in their petition before the appellate court, petitioners
on certiorari significantly invoked the defense of forum non conveniens.[50] On petition for review before this
Court, petitioners dropped their other arguments, maintained the forum non conveniens defense, and introduced
their new argument that the applicable principle is the [state of the] most significant relationship rule. [51]

Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in theory, as
explained in Philippine Ports Authority v. City of Iloilo.[52] We only pointed out petitioners' inconstancy in their
arguments to emphasize their incorrect assertion of conflict of laws principles.

To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction,
choice of law, and recognition and enforcement of judgments. Corresponding to these phases are the following
questions: (1) Where can or should litigation be initiated? (2) Which law will the court apply? and (3) Where can
the resulting judgment be enforced?[53]

Analytically, jurisdiction and choice of law are two distinct concepts. [54] 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 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.[55] 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. [56]

In this case, only the first phase is at issuejurisdiction. Jurisdiction, however, has various aspects. For a court to
validly exercise its power to adjudicate a controversy, it must have jurisdiction over the plaintiff or the petitioner,
over the defendant or the respondent, over the subject matter, over the issues of the case and, in cases
involving property, over the res or the thing which is the subject of the litigation. [57] In assailing the trial court's
jurisdiction herein, petitioners are actually referring to subject matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which
establishes and organizes the court. It is given only by law and in the manner prescribed by law. [58] It is further
determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the
claims asserted therein.[59] To succeed in its motion for the dismissal of an action for lack of jurisdiction over the
subject matter of the claim,[60] the movant must show that the court or tribunal cannot act on the matter
submitted to it because no law grants it the power to adjudicate the claims. [61]

In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly vested
by law with jurisdiction to hear the subject controversy for, indeed, Civil Case No. 00-0264 for specific
performance and damages is one not capable of pecuniary estimation and is properly cognizable by the RTC of
Lipa City.[62] What they rather raise as grounds to question subject matter jurisdiction are the principles of lex loci
celebrationis and lex contractus, and the state of the most significant relationship rule.

The Court finds the invocation of these grounds unsound.


Lex loci celebrationis relates to the law of the place of the ceremony[63] or the law of the place where a contract
is made.[64] The doctrine of lex contractus or lex loci contractus means the law of the place where a contract is
executed or to be performed.[65] It controls the nature, construction, and validity of the contract[66] and it may
pertain to the law voluntarily agreed upon by the parties or the law intended by them either expressly or
implicitly.[67] Under the state of the most significant relationship rule, to ascertain what state law to apply to a
dispute, the court should determine which state has the most substantial connection to the occurrence and the
parties. In a case involving a contract, the court should consider where the contract was made, was negotiated,
was to be performed, and the domicile, place of business, or place of incorporation of the parties.[68] This rule
takes into account several contacts and evaluates them according to their relative importance with respect to the
particular issue to be resolved.[69]

Since these three principles in conflict of laws make reference to the law applicable to a dispute, they are rules
proper for the second phase, the choice of law.[70] They determine which state's law is to be applied in resolving
the substantive issues of a conflicts problem.[71] Necessarily, as the only issue in this case is that of jurisdiction,
choice-of-law rules are not only inapplicable but also not yet called for.

Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they have not yet
pointed out any conflict between the laws of Japan and ours. Before determining which law should apply, first
there should exist a conflict of laws situation requiring the application of the conflict of laws rules. [72] Also, when
the law of a foreign country is invoked to provide the proper rules for the solution of a case, the existence of
such law must be pleaded and proved.[73]

It should be noted that when a conflicts case, one involving a foreign element, is brought before a court or
administrative agency, there are three alternatives open to the latter in disposing of it: (1) dismiss the case,
either because of lack of jurisdiction or refusal to assume jurisdiction over the 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.[74] 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.[75]

Neither can the other ground raised, forum non conveniens,[76] be used to deprive the trial court of its
jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of the Rules
of Court does not include it as a ground.[77] Second, 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 trial court.[78] In this case, the RTC decided to assume jurisdiction. Third, 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.[79]

Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed by
respondent and the grounds raised by petitioners to assail that jurisdiction are inappropriate, the trial and
appellate courts correctly denied the petitioners motion to dismiss.

WHEREFORE, premises considered, the petition for review on certiorari is DENIED.

SO ORDERED.
G.R. No. 198587, January 14, 2015

SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA J. BETIA, Petitioners, v. MA. JOPETTE M.
REBESENCIO, MONTASSAH B. SACAR-ADIONG, ROUEN RUTH A. CRISTOBAL AND LORAINE S.
SCHNEIDER-CRUZ, Respondents.

DECISION

LEONEN, J.:

All Filipinos are entitled to the protection of the rights guaranteed in the Constitution.

This is a Petition for Review on Certiorari with application for the issuance of a temporary restraining order
and/or writ of preliminary injunction under Rule 45 of the 1997 Rules of Civil Procedure praying that judgment be
rendered reversing and setting aside the June 16, 2011 Decision1 and September 13, 2011 Resolution2 of the
Court of Appeals in CA-G.R. SP. No. 113006.

Petitioner Saudi Arabian Airlines (Saudia) is a foreign corporation established and existing under the laws of
Jeddah, Kingdom of Saudi Arabia. It has a Philippine office located at 4/F, Metro House Building, Sen. Gil J.
Puyat Avenue, Makati City. 3 In its Petition filed with this court, Saudia identified itself as
follows:chanroblesvirtuallawlibrary

1. Petitioner SAUDIA is a foreign corporation established and existing under the Royal Decree No. M/24 of
18.07.1385H (10.02.1962G) in Jeddah, Kingdom of Saudi Arabia ("KSA"). Its Philippine Office is located at 4/F
Metro House Building, Sen, Gil J. Puyat Avenue, Makati City (Philippine Office). It may be served with orders of
this Honorable Court through undersigned counsel at 4th and 6th Floors, Citibank Center Bldg., 8741 Paseo de
Roxas, Makati City.4 (Emphasis supplied)
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. 5 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;6 Montassah B. Sacar-Adiong (Montassah) and Rouen Ruth A. Cristobal (Rouen Ruth) on May 22,
1993;7 and Loraine Schneider-Cruz (Loraine) on August 27, 1995.8

Respondents continued their employment with Saudia until they were separated from service on various dates
in 2006.9

Respondents contended that the termination of their employment was illegal. They alleged that the termination
was made solely because they were pregnant. 10

As respondents alleged, they had informed Saudia of their respective pregnancies and had gone through the
necessary procedures to process their maternity leaves. Initially, Saudia had given its approval but later on
informed respondents that its management in Jeddah, Saudi Arabia had disapproved their maternity leaves. In
addition, it required respondents to file their resignation letters. 11

Respondents were told that if they did not resign, Saudia would terminate them all the same. The threat of
termination entailed the loss of benefits, such as separation pay and ticket discount entitlements. 12

Specifically, Ma. Jopette received a call on October 16, 2006 from Saudia's Base Manager, Abdulmalik Saddik
(Abdulmalik).13 Montassah was informed personally by Abdulmalik and a certain Faisal Hussein on October 20,
2006 after being required to report to the office one (1) month into her maternity leave.14Rouen Ruth was also
personally informed by Abdulmalik on October 17, 2006 after being required to report to the office by her Group
Supervisor.15 Loraine received a call on October 12, 2006 from her Group Supervisor, Dakila Salvador. 16

Saudia anchored its disapproval of respondents' maternity leaves and demand for their resignation on its
"Unified Employment Contract for Female Cabin Attendants" (Unified Contract). 17 Under the Unified Contract,
the employment of a Flight Attendant who becomes pregnant is rendered void.

It provides:c

(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.18 (Emphasis supplied)
In their Comment on the present Petition,19 respondents emphasized that the Unified Contract took effect on
September 23, 2006 (the first day of Ramadan),20 well after they had filed and had their maternity leaves
approved. Ma. Jopette filed her maternity leave application on September 5, 2006. 21 Montassah filed her
maternity leave application on August 29, 2006, and its approval was already indicated in Saudia's computer
system by August 30, 2006.22 Rouen Ruth filed her maternity leave application on September 13, 2006, 23 and
Loraine filed her maternity leave application on August 22, 2006.24

Rather than comply and tender resignation letters, respondents filed separate appeal letters that were all
rejected.25

Despite these initial rejections, respondents each received calls on the morning of November 6, 2006 from
Saudia's office secretary informing them that their maternity leaves had been approved. Saudia, however, was
quick to renege on its approval. On the evening of November 6, 2006, respondents again received calls
informing them that it had received notification from Jeddah, Saudi Arabia that their maternity leaves had been
disapproved.26

Faced with the dilemma of resigning or totally losing their benefits, respondents executed handwritten
resignation letters. In Montassah's and Rouen Ruth's cases, their resignations were executed on Saudia's blank
letterheads that Saudia had provided. These letterheads already had the word "RESIGNATION" typed on the
subject portions of their headings when these were handed to respondents. 27

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. 28 The
case was initially assigned to Labor Arbiter Hermino V. Suelo and docketed as NLRC NCR Case No. 00-11-
12342-07.

Saudia assailed the jurisdiction of the Labor Arbiter.29 It claimed that all the determining points of contact
referred to foreign law and insisted that the Complaint ought to be dismissed on the ground of forum non
conveniens.30 It added that respondents had no cause of action as they resigned voluntarily. 31

On December 12, 2008, Executive Labor Arbiter Fatima Jambaro-Franco rendered the Decision32dismissing
respondents' Complaint. The dispositive portion of this Decision reads:

WHEREFORE, premises' considered, judgment is hereby rendered DISMISSING the instant complaint for lack
of jurisdiction/merit.33cra
lawlawlibrary
On respondents' appeal, the National Labor Relations Commission's Sixth Division reversed the ruling of
Executive Labor Arbiter Jambaro-Franco. It explained that "[considering that complainants-appellants are OFWs,
the Labor Arbiters and the NLRC has [sic] jurisdiction to hear and decide their complaint for illegal
termination."34 On the matter of forum non conveniens, it noted that there were no special circumstances that
warranted its abstention from exercising jurisdiction.35 On the issue of whether respondents were validly
dismissed, it held that there was nothing on record to support Saudia's claim that respondents resigned
voluntarily.

The dispositive portion of the November 19, 2009 National Labor Relations Commission Decision 36reads:c
WHEREFORE, premises considered, judgment is hereby rendered finding the appeal impressed with merit. The
respondents-appellees are hereby directed to pay complainants-appellants the aggregate amount of
SR614,001.24 corresponding to their backwages and separation pay plus ten (10%) percent thereof as
attorney's fees. The decision of the Labor Arbiter dated December 12, 2008 is hereby VACATED and SET
ASIDE. Attached is the computation prepared by this Commission and made an integral part of this
Decision.37cralawla

In the Resolution dated February 11, 2010,38 the National Labor Relations Commission denied petitioners'
Motion for Reconsideration.

In the June 16, 2011 Decision,39 the Court of Appeals denied petitioners' Rule 65 Petition and modified the
Decision of the National Labor Relations Commission with respect to the award of separation pay and
backwages.

The dispositive portion of the Court of Appeals Decision reads:

WHEREFORE, the instant petition is hereby DENIED. The Decision dated November 19, 2009 issued by public
respondent, Sixth Division of the National Labor Relations Commission - National Capital Region
is MODIFIED only insofar as the computation of the award of separation pay and backwages. For greater clarity,
petitioners are ordered to pay private respondents separation pay which shall be computed from private
respondents' first day of employment up to the finality of this decision, at the rate of one month per year of
service and backwages which shall be computed from the date the private respondents were illegally terminated
until finality of this decision. Consequently, the ten percent (10%) attorney's fees shall be based on the total
amount of the award. The assailed Decision is affirmed in all other respects.

The labor arbiter is hereby DIRECTED to make a recomputation based on the foregoing. 40cralawlawlibrary
In the Resolution dated September 13, 2011,41 the Court of Appeals denied petitioners' Motion for
Reconsideration.

Hence, this Appeal was filed.

The issues for resolution are the following:

First, whether the Labor Arbiter and the National Labor Relations Commission may exercise jurisdiction over
Saudi Arabian Airlines and apply Philippine law in adjudicating the present dispute;

Second, whether respondents' voluntarily resigned or were illegally terminated; and

Lastly, whether Brenda J. Betia may be held personally liable along with Saudi Arabian Airlines.

Summons were validly served on Saudia and jurisdiction over it validly acquired.

There is no doubt that the pleadings and summons were served on Saudia through its counsel. 42 Saudia,
however, claims that the Labor Arbiter and the National Labor Relations Commission had no jurisdiction over it
because summons were never served on it but on "Saudia Manila."43 Referring to itself as "Saudia Jeddah," it
claims that "Saudia Jeddah" and not "Saudia Manila" was the employer of respondents because:

First, "Saudia Manila" was never a party to the Cabin Attendant contracts entered into by respondents;

Second, it was "Saudia Jeddah" that provided the funds to pay for respondents' salaries and benefits; and

Lastly, it was with "Saudia Jeddah" that respondents filed their resignations. 44

Saudia posits that respondents' Complaint was brought against the wrong party because "Saudia Manila," upon
which summons was served, was never the employer of respondents. 45
Saudia is vainly splitting hairs in its effort to absolve itself of liability. Other than its bare allegation, there is no
basis for concluding that "Saudia Jeddah" is distinct from "Saudia Manila."

What is clear is Saudia's statement in its own Petition that what it has is a "Philippine Office . . . located at 4/F
Metro House Building, Sen. Gil J. Puyat Avenue, Makati City."46 Even in the position paper that Saudia
submitted to the Labor Arbiter,47 what Saudia now refers to as "Saudia Jeddah" was then only referred to as
"Saudia Head Office at Jeddah, KSA,"48 while what Saudia now refers to as "Saudia Manila" was then only
referred to as "Saudia's office in Manila."49

By its own admission, Saudia, while a foreign corporation, has a Philippine office.

Section 3(d) of Republic Act No.. 7042, otherwise known as the Foreign Investments Act of 1991, provides the
following:chanroblesvirtuallawlibrary
The phrase "doing business" shall include . . . opening offices, whether called "liaison" offices or
branches; . . . and any other act or acts that imply a continuity of commercial dealings or arrangements and
contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally
incident to, and in progressive prosecution of commercial gain or of the purpose and object of the business
organization. (Emphasis supplied)
A plain application of Section 3(d) of the Foreign Investments Act leads to no other conclusion than that Saudia
is a foreign corporation doing business in the Philippines. As such, Saudia may be sued in the Philippines and is
subject to the jurisdiction of Philippine tribunals.

Moreover, since there is no real distinction between "Saudia Jeddah" and "Saudia Manila" � the latter being
nothing more than Saudia's local office � service of summons to Saudia's office in Manila sufficed to vest
jurisdiction over Saudia's person in Philippine tribunals.

II

Saudia asserts that Philippine courts and/or tribunals are not in a position to make an intelligent decision as to
the law and the facts. This is because respondents' Cabin Attendant contracts require the application of the laws
of Saudi Arabia, rather than those of the Philippines.50 It claims that the difficulty of ascertaining foreign law calls
into operation the principle of forum non conveniens, thereby rendering improper the exercise of jurisdiction by
Philippine tribunals.51

A choice of law governing the validity of contracts or the interpretation of its provisions dees not necessarily
imply forum non conveniens. Choice of law and forum non conveniens are entirely different matters.

Choice of law provisions are an offshoot of the fundamental principle of autonomy of contracts. Article 1306 of
the Civil Code firmly ensconces this:

Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may
deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.
In contrast, forum non conveniens is a device akin to the rule against forum shopping. It is 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.

Contractual choice of law provisions factor into transnational litigation and dispute resolution in one of or in a
combination of four ways: (1) procedures for settling disputes, e.g., arbitration; (2) forum, i.e., venue; (3)
governing law; and (4) basis for interpretation. Forum non conveniens relates to, but is not subsumed by, the
second of these.

Likewise, contractual choice of law is not determinative of jurisdiction. Stipulating on the laws of a given
jurisdiction as the governing law of a contract does not preclude the exercise of jurisdiction by tribunals
elsewhere. The reverse is equally true: The assumption of jurisdiction by tribunals does not ipso factomean that
it cannot apply and rule on the basis of the parties' stipulation. In Hasegawa v. Kitamura:52

Analytically, 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 V'hich 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.53

As various dealings, commercial or otherwise, are facilitated by the progressive ease of communication and
travel, persons from various jurisdictions find themselves transacting with each other. Contracts involving foreign
elements are, however, nothing new. Conflict of laws situations precipitated by disputes and litigation anchored
on these contracts are not totally novel.

Transnational transactions entail differing laws on the requirements Q for the validity of the formalities and
substantive provisions of contracts and their interpretation. These transactions inevitably lend themselves to the
possibility of various fora for litigation and dispute resolution. As observed by an eminent expert on transnational
law:

The more jurisdictions having an interest in, or merely even a point of contact with, a transaction or relationship,
the greater the number of potential fora for the resolution of disputes arising out of or related to that transaction
or relationship. In a world of increased mobility, where business and personal transactions transcend national
boundaries, the jurisdiction of a number of different fora may easily be invoked in a single or a set of related
disputes.54cra
lawlawlibrary
Philippine law is definite as to what governs the formal or extrinsic validity of contracts. The first paragraph of
Article 17 of the Civil Code provides that "[t]he forms and solemnities of contracts . . . shall be governed by the
laws of the country in which they are executed"55 (i.e., lex loci celebrationis).

In contrast, there is no statutorily established mode of settling conflict of laws situations on matters pertaining to
substantive content of contracts. It has been noted that three (3) modes have emerged: (1) lex loci contractus or
the law of the place of the making; (2) lex loci solutionis or the law of the place of performance; and (3) lex loci
intentionis or the law intended by the parties.56

Given Saudia's assertions, of particular relevance to resolving the present dispute is lex loci intentionis.

An author observed that Spanish jurists and commentators "favor lex loci intentionis."57 These jurists and
commentators proceed from the Civil Code of Spain, which, like our Civil Code, is silent on what governs the
intrinsic validity of contracts, and the same civil law traditions from which we draw ours.

In this jurisdiction, this court, in Philippine Export and Foreign Loan Guarantee v. V.P. Eusebio Construction,
Inc.,58 manifested preference for allowing the parties to select the law applicable to their contract":

No conflicts rule on essential validity of contracts is expressly provided for in our laws. The rule followed by most
legal systems, however, is that the intrinsic validity of a contract must be governed by the lex contractus or
"proper law of the contract." This is the law voluntarily agreed upon by the parties (the lex loci voluntatis) or the
law intended by them either expressly or implicitly (the lex loci intentionis). The law selected may be implied from
such factors as substantial connection with the transaction, or the nationality or domicile of the parties.
Philippine courts would do well to adopt the first and most basic rule in most legal systems, namely, to allow the
parties to select the law applicable to their contract, subject to the limitation that it is not against the law, morals,
or public policy of the forum and that the chosen law must bear a substantive relationship to the
transaction.59 (Emphasis in the original)

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.

As mentioned, contractual choice of laws factors into transnational litigation in any or a combination of four (4)
ways. Moreover, forum non conveniens relates to one of these: choosing between multiple possible fora.
Nevertheless, the possibility of parallel litigation in multiple fora � along with the host of difficulties it poses � is
not unique to transnational litigation. It is a difficulty that similarly arises in disputes well within the bounds of a
singe jurisdiction.

When parallel litigation arises strictly within the context of a single jurisdiction, such rules as those on forum
shopping, litis pendentia, and res judicata come into operation. Thus, in the Philippines, the 1997 Rules on Civil
Procedure provide for willful and deliberate forum shopping as a ground not only for summary dismissal with
prejudice but also for citing parties and counsels in direct contempt, as well as for the imposition of
administrative sanctions.60 Likewise, the same rules expressly provide that a party may seek the dismissal of a
Complaint or another pleading asserting a claim on the ground "[t]hat there is another action pending between
the same parties for the same cause," i.e., litis pendentia, or "[t]hat the cause of action is barred by a prior
judgment,"61 i.e., res judicata.

Forum non conveniens, like the rules of forum shopping, litis pendentia, 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.

Forum non conveniens literally translates to "the forum is inconvenient."62 It is a concept in private international
law and was devised to combat the "less than honorable" reasons and excuses that litigants use to secure
procedural advantages, annoy and harass defendants, avoid overcrowded dockets, and select a "friendlier"
venue.63 Thus, the doctrine of forum non conveniens addresses the same rationale that the rule against forum
shopping does, albeit on a multijurisdictional scale.

Forum non conveniens, like res judicata,64 is a concept originating in common law. 65 However, unlike the rule
on res judicata, as well as those on litis pendentia and forum shopping, forum non conveniens finds no textual
anchor, whether in statute or in procedural rules, in our civil law system. Nevertheless, jurisprudence has
applied forum non conveniens as basis for a court to decline its exercise of jurisdiction.66

Forum non conveniens is soundly applied not only to address parallel litigation and undermine a litigant's
capacity to vex and secure undue advantages by engaging in forum shopping on an international scale. It is also
grounded on principles of comity and judicial efficiency.

Consistent with the principle of comity, a tribunal's desistance in exercising jurisdiction on account of forum non
conveniens is a deferential gesture to the tribunals of another sovereign. It is a measure that prevents the
former's having to interfere in affairs which are better and more competently addressed by the latter.
Further, forum non conveniens entails a recognition not only that tribunals elsewhere are better suited to rule on
and resolve a controversy, but also, that these tribunals are better positioned to enforce judgments and,
ultimately, to dispense justice. Forum non conveniens prevents the embarrassment of an awkward situation
where a tribunal is rendered incompetent in the face of the greater capability � both analytical and practical �
of a tribunal in another jurisdiction.

The wisdom of avoiding conflicting and unenforceable judgments is as much a matter of efficiency and economy
as it is a matter of international courtesy. A court would effectively be neutering itself if it insists on adjudicating a
controversy when it knows full well that it is in no position to enforce its judgment. Doing so is not only an
exercise in futility; it is an act of frivolity. It clogs the dockets of a.tribunal and leaves it to waste its efforts on
affairs, which, given transnational exigencies, will be reduced to mere academic, if not trivial, exercises.

Accordingly, under the doctrine of forum non conveniens, "a court, in conflicts of law 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."67 In Puyat v. Zabarte,68 this court recognized the following
situations as among those that may warrant a court's desistance from exercising jurisdiction:

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 non-resident 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 non� residents 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.69

In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of Appeals,70 this court underscored
that a Philippine court may properly assume jurisdiction over a case if it chooses to do so to the extent: "(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."71

The use of the word "may" (i.e., "may refuse impositions on its jurisdiction"72) in the decisions shows that the
matter of jurisdiction rests on the sound discretion of a court. Neither the mere invocation of forum non
conveniens nor the averment of foreign elements operates to automatically divest a court of jurisdiction. Rather,
a court should renounce jurisdiction only "after 'vital facts are established, to determine whether special
circumstances' require the court's desistance."73 As the propriety of applying forum non conveniens is contingent
on a factual determination, it is, therefore, a matter of defense.74

The second sentence of Rule 9, Section 1 of the 1997 Rules of Civil Procedure is exclusive in its recital of the
grounds for dismissal that are exempt from the omnibus motion rule: (1) lack of jurisdiction over the subject
matter; (2) litis pendentia; (3) res judicata; and (4) prescription. Moreover, dismissal on account offorum non
conveniens is a fundamentally discretionary matter. It is, therefore, not a matter for a defendant to foist upon the
court at his or her own convenience; rather, it must be pleaded at the earliest possible opportunity.

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.

This court notes that in Hasegawa,76 this court stated that forum non conveniens is not a ground for a motion to
dismiss. The factual ambience of this case however does not squarely raise the viability of this doctrine. Until the
opportunity comes to review the use of motions to dismiss for parallel litigation, Hasegawa remains existing
doctrine.

Consistent with forum non conveniens as fundamentally a factual matter, it is imperative that it proceed from
& factually established basis. It would be improper to dismiss an action pursuant to forum non conveniens based
merely on a perceived, likely, or hypothetical multiplicity of fora. Thus, a defendant must also plead and show
that a prior suit has, in fact, been brought in another jurisdiction.

The existence of a prior suit makes real the vexation engendered by duplicitous litigation, the embarrassment of
intruding into the affairs of another sovereign, and the squandering of judicial efforts in resolving a dispute
already lodged and better resolved elsewhere. As has been noted:chanroblesvirtuallawlibrary
A case will not be stayed o dismissed on [forum] non conveniens grounds unless the plaintiff is shown to have
an available alternative forum elsewhere. On this, the moving party bears the burden of proof.

A number of factors affect the assessment of an alternative forum's adequacy. The statute of limitations abroad
may have run, of the foreign court may lack either subject matter or personal jurisdiction over the defendant. . . .
Occasionally, doubts will be raised as to the integrity or impartiality of the foreign court (based, for example, on
suspicions of corruption or bias in favor of local nationals), as to the fairness of its judicial procedures, or as to is
operational efficiency (due, for example, to lack of resources, congestion and delay, or interfering circumstances
such as a civil unrest). In one noted case, [it was found] that delays of 'up to a quarter of a century' rendered the
foreign forum... inadequate for these purposes.77cralawlawlibrary
We deem it more appropriate and in the greater interest of prudence that a defendant not only allege supposed
dangerous tendencies in litigating in this jurisdiction; the defendant must also show that such danger is real and
present in that litigation or dispute resolution has commenced in another jurisdiction and that a foreign tribunal
has chosen to exercise jurisdiction.
III

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.

Forum non conveniens relates to forum, not to the choice of governing law. Thai forum non conveniensmay
ultimately result in the application of foreign law is merely an incident of its application. In this strict sense, forum
non conveniens is not applicable. It is not the primarily pivotal consideration in this case.

In any case, even a further consideration of the applicability of forum non conveniens on the incidental matter of
the law governing respondents' relation with Saudia leads to the conclusion that it is improper for Philippine
tribunals to divest themselves of jurisdiction.

Any evaluation of the propriety of contracting parties' choice of a forum and'its incidents must grapple with two (2)
considerations: first, the availability and adequacy of recourse to a foreign tribunal; and second, the question of
where, as between the forum court and a foreign court, the balance of interests inhering in a dispute weighs
more heavily.

The first is a pragmatic matter. It relates to the viability of ceding jurisdiction to a foreign tribunal and can be
resolved by juxtaposing the competencies and practical circumstances of the tribunals in alternative fora.
Exigencies, like the statute of limitations, capacity to enforce orders and judgments, access to records,
requirements for the acquisition of jurisdiction, and even questions relating to the integrity of foreign courts, may
render undesirable or even totally unfeasible recourse to a foreign court. As mentioned, we consider it in the
greater interest of prudence that a defendant show, in pleading forum non conveniens, that litigation has
commenced in another jurisdiction and that a foieign tribunal has, in fact, chosen to exercise jurisdiction.

Two (2) factors weigh into a court's appraisal of the balance of interests inhering in a dispute: first, the vinculum
which the parties and their relation have to a given jurisdiction; and second, the public interest that must animate
a tribunal, in its capacity as an agent of the sovereign, in choosing to assume or decline jurisdiction. The first is
more concerned with the parties, their personal circumstances, and private interests; the second concerns itself
with the state and the greater social order.

In considering the vinculum, a court must look into the preponderance of linkages which the parties and their
transaction may have to either jurisdiction. In this respect, factors, such as the parties' respective nationalities
and places of negotiation, execution, performance, engagement or deployment, come into play.

In considering public interest, a court proceeds with a consciousness that it is an organ of the state. It must, thus,
determine if the interests of the sovereign (which acts through it) are outweighed by those of the alternative
jurisdiction. In this respect, the court delves into a consideration of public policy. Should it find that public interest
weighs more heavily in favor of its assumption of jurisdiction, it should proceed in adjudicating the dispute, any
doubt or .contrary view arising from the preponderance of linkages notwithstanding.

Our law on contracts recognizes the validity of contractual choice of law provisions. Where such provisions exist,
Philippine tribunals, acting as the forum court, generally defer to the parties' articulated choice.

This is consistent with the fundamental principle of autonomy of contracts. Article 1306 of the Civ:l Code
expressly provides that "[t]he contracting parties may establish 'such stipulations, clauses, terms and conditions
as they may deem convenient."78 Nevertheless, while a Philippine tribunal (acting as the forum court) is called
upon to respect the parties' choice of governing law, such respect must not be so permissive as to lose sight of
considerations of law, morals, good customs, public order, or public policy that underlie the contract central to
the controversy.

Specifically with respect to public policy, in Pakistan International Airlines Corporation v. Ople,79 this court
explained that:
counter-balancing the principle of autonomy of contracting parties is the equally general rule that provisions of
applicable law, especially provisions relating to matters affected with public policy, are deemed written inta the
contract. Put a little differently, the governing principle is that parties may not contract away applicable
provisions of law especially peremptory provisions dealing with matters heavily impressed with public
interest.80(Emphasis supplied)
Article II, Section 14 of the 1987 Constitution provides that "[t]he State ... shall ensure the fundamental equality
before the law of women and men." Contrasted with Article II, Section 1 of the 1987 Constitution's statement that
"[n]o person shall ... be denied the equal protection of the laws," Article II, Section 14 exhorts the State to
"ensure." This does not only mean that the Philippines shall not countenance nor lend legal recognition and
approbation to measures that discriminate on the basis of one's being male or female. It imposes an obligation
to actively engage in securing the fundamental equality of men and women.

The Convention on the Elimination of all Forms of Discrimination against Women (CEDAW), signed and ratified
by the Philippines on July 15, 1980, and on August 5, 1981, respectively, 81 is part of the law of the land. In view
of the widespread signing and ratification of, as well as adherence (in practice) to it by states, it may even be
said that many provisions of the CEDAW may have become customary international law. The CEDAW gives
effect to the Constitution's policy statement in Article II, Section 14. Article I of the CEDAW defines
"discrimination against women" as:

any distinction, exclusion or restriction made on the basis of sex which has the effect or purpose of impairing or
nullifying the recognition, enjoyment or exercise by women, irrespective of their marital status, on a basis of
equality of men and women, of human rights and fundamental freedoms in the political, economic, social,
cultural, civil or any other field.82cralawlawlibrary
The constitutional exhortation to ensure fundamental equality, as illumined by its enabling law, the CEDAW,
must inform and animate all the actions of all personalities acting on behalf of the State. It is, therefore, the
bounden duty of this court, in rendering judgment on the disputes brought before it, to ensure that no
discrimination is heaped upon women on the mere basis of their being women. This is a point so basic and
central that all our discussions and pronouncements � regardless of whatever averments there may be of
foreign law � must proceed from this premise.

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.

Apart from the constitutional policy on the fundamental equality before the law of men and women, it is settled
that contracts relating to labor and employment are impressed with public interest. Article 1700 of the Civil Code
provides that "[t]he relation between capital and labor are not merely contractual. They are so impressed with
public interest that labor contracts must yield to the common good."

Consistent with this, this court's pronouncements in Pakistan International Airlines Corporation 83 are clear and
unmistakable:

Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which specifies, firstly, the law
of Pakistan as the applicable law of the agreement, and, secondly, lays the venue for settlement of any dispute
arising out of or in connection with the agreement "only [in] courts of Karachi, Pakistan". The first clause of
paragraph 10 cannot be invoked to prevent the application of Philippine labor laws and'regulations to the subject
matter of this case, i.e., the employer-employee relationship between petitioner PIA and private
respondents. We have already pointed out that the relationship is much affected with public interest and that the
otherwise applicable Philippine laws and regulations cannot be rendered illusory by the parties agreeing upon
some other law to govern their relationship. . . . Under these circumstances, paragraph 10 of the employment
agreement cannot be given effect so as to oust Philippine agencies and courts of the jurisdiction vested upon
them by Philippine law.84 (Emphasis supplied)
As the present dispute relates to (what the respondents allege to be) the illegal termination of respondents'
employment, this case is immutably a matter of public interest and public policy. Consistent with clear
pronouncements in law and jurisprudence, Philippine laws properly find application in and govern this case.
'Moreover, as this premise for Saudia's insistence on the application forum non conveniens has been shattered,
it follows that Philippine tribunals may properly assume jurisdiction over the present controversy. Philippine
jurisprudence provides ample illustrations of when a court's renunciation of jurisdiction on account of forum non
conveniens is proper or improper.'

In Philsec Investment Corporation v. Court of Appeals,85 this court noted that the trial court failed to consider that
one of the plaintiffs was a domestic corporation, that one of the defendants was a Filipino, and that it was the
extinguishment of the latter's debt that was the object of the transaction subject of the litigation. Thus, this court
held, among others, that the trial court's refusal to assume jurisdiction was not justified by forum non
conveniens and remanded the case to the trial court.

In Raytheon International, Inc. v. Rouzie, Jr.,86 this court sustained the trial court's assumption of jurisdiction
considering that the trial court could properly enforce judgment on the petitioner which was a foreign corporation
licensed to do business in the Philippines.

In Pioneer International, Ltd. v. Guadiz, Jr.,87 this court found no reason to disturb the trial court's assumption of
jurisdiction over a case in which, as noted by the trial court, "it is more convenient to hear and decide the case in
the Philippines because Todaro [the plaintiff] resides in the Philippines and the contract allegedly breached
involve[d] employment in the Philippines."88

In Pacific Consultants International Asia, Inc. v. Schonfeld,89 this court held that the fact that the complainant in
an illegal dismissal case was a Canadian citizen and a repatriate did not warrant the application of forum non
conveniens considering that: (1) the Labor Code does not include forum non conveniens as a ground for the
dismissal of a complaint for illegal dismissal; (2) the propriety of dismissing a case based on forum non
conveniens requires a factual determination; and (3) the requisites for assumption of jurisdiction as laid out
in Bank of America, NT&SA90 were all satisfied.

In contrast, this court ruled in The Manila Hotel Corp. v. National Labor Relations Commission91 that the
National Labor Relations Q Commission was a seriously inconvenient forum. In that case, private respondent
Marcelo G. Santos was working in the Sultanate of Oman when he received a letter from Palace Hotel recruiting
him for employment in Beijing, China. Santos accepted the offer. Subsequently, however, he was released from
employment supposedly due to business reverses arising from political upheavals in China (i.e., the Tiananmen
Square incidents of 1989). Santos later filed a Complaint for illegal dismissal impleading Palace Hotel's General
Manager, Mr. Gerhard Schmidt, the Manila Hotel International Company Ltd. (which was, responsible for
training Palace Hotel's personnel and staff), and the Manila Hotel Corporation (which owned 50% of Manila
Hotel International Company Ltd.'s capital stock).

In ruling against the National Labor Relations Commission's exercise of jurisdiction, this court noted that the
main aspects of the case transpired in two (2) foreign jurisdictions, Oman and China, and that the case involved
purely foreign elements. Specifically, Santos was directly hired by a foreign employer through correspondence
sent to Oman. Also, the proper defendants were neither Philippine nationals nor engaged in business in the
Philippines, while the main witnesses were not residents of the Philippines. Likewise, this court noted that the
National Labor Relations Commission was in no position to conduct the following: first, determine the law
governing the employment contract, as it was entered into in foreign soil; second, determine the facts, as
Santos' employment was terminated in Beijing; and third, enforce its judgment, since Santos' employer, Palace
Hotel, was incorporated under the laws of China and was not even served with summons.

Contrary to Manila Hotel, the case now before us does not entail a preponderance of linkages that favor a
foreign jurisdiction.

Here, the circumstances of the parties and their relation do not approximate the circumstances enumerated
in Puyat,92 which this court recognized as possibly justifying the desistance of Philippine tribunals from
exercising jurisdiction.
First, there is no basis for concluding that the case can be more conveniently tried elsewhere. As established
earlier, Saudia is doing business in the Philippines. For their part, all four (4) respondents are Filipino citizens
maintaining residence in the Philippines and, apart from their previous employment with Saudia, have no other
connection to the Kingdom of Saudi Arabia. It would even be to respondents' inconvenience if this case were to
be tried elsewhere.

Second, the records are bereft of any indication that respondents filed their Complaint in an effort to engage in
forum shopping or to vex and inconvenience Saudia.

Third, there is no indication of "unwillingness to extend local judicial facilities to non-residents or aliens."93 That
Saudia has managed to bring the present controversy all the way to this court proves this.

Fourth, it cannot be said that the local judicial machinery is inadequate for effectuating the right sought to be
maintained. Summons was properly served on Saudia and jurisdiction over its person was validly acquired.

Lastly, there is not even room for considering foreign law. Philippine law properly governs the present dispute.

As the question of applicable law has been settled, the supposed difficulty of ascertaining foreign law (which
requires the application of forum non conveniens) provides no insurmountable inconvenience or special
circumstance that will justify depriving Philippine tribunals of jurisdiction.

Even if we were to assume, for the sake of discussion, that it is the laws of Saudi Arabia which should apply, it
does not follow that Philippine tribunals should refrain from exercising jurisdiction. To. recall our
pronouncements in Puyat,94 as well as in Bank of America, NT&SA,95 it is not so much the mere applicability of
foreign law which calls into operation forum non conveniens. Rather, what justifies a court's desistance from
exercising jurisdiction is "[t]he difficulty of ascertaining foreign law"96 or the inability of a "Philippine Court to
make an intelligent decision as to the law[.]"97

Consistent with lex loci intentionis, to the extent that it is proper and practicable (i.e., "to make an intelligent
decision"98), 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:chanroblesvirtuallawlibrary
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:chanroblesvirtuallawlibrary
"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.)99cralawlawlibrary
All told, the considerations for assumption of jurisdiction by Philippine tribunals as outlined in Bank of America,
NT&SA100 have been satisfied. First, all the parties are based in the Philippines and all the material incidents
transpired in this jurisdiction. Thus, the parties may conveniently seek relief from Philippine tribunals. Second,
Philippine tribunals are in a position to make an intelligent decision as to the law and the facts. Third, Philippine
tribunals are in a position to enforce their decisions. There is no compelling basis for ceding jurisdiction to a
foreign tribunal. Quite the contrary, the immense public policy considerations attendant to this case behoove
Philippine tribunals to not shy away from their duty to rule on the case.

IV

Respondents were illegally terminated.

In Bilbao v. Saudi Arabian Airlines,101 this court defined voluntary resignation as "the voluntary act of an
employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the
exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal
pronouncement or relinquishment of an office, with the intention of relinquishing the office accompanied by the
act of relinquishment."102 Thus, essential to the act of resignation is voluntariness. It must be the result of an
employee's exercise of his or her own will.

In the same case of Bilbao, this court advanced a means for determining whether an employee resigned
voluntarily:

As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and
after the alleged resignation must be considered in determining whether he or she, in fact, intended, to sever his
or her employment.103 (Emphasis supplied)
On the other hand, constructive dismissal has been defined as "cessation of work because 'continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a
diminution in pay' and other benefits."104

In Penaflor v. Outdoor Clothing Manufacturing Corporation,105 constructive dismissal has been described as
tantamount to "involuntarily [sic] resignation due to the harsh, hostile, and unfavorable conditions set by the
employer."106 In the same case, it was noted that "[t]he gauge for constructive dismissal is whether a reasonable
person in the employee's position would feel compelled to give up his employment under the prevailing
circumstances."107

Applying the cited standards on resignation and constructive dismissal, it is clear that respondents were
constructively dismissed. Hence, their termination was illegal.

The termination of respondents' employment happened when they were pregnant and expecting to incur costs
on account of child delivery and infant rearing. As noted by the Court of Appeals, pregnancy is a time when they
need employment to sustain their families.108 Indeed, it goes against normal and reasonable human behavior to
abandon one's livelihood in a time of great financial need.

It is clear that respondents intended to remain employed with Saudia. All they did was avail of their maternity
leaves. Evidently, the very nature of a maternity leave means that a pregnant employee will not report for
work only temporarily and that she will resume the performance of her duties as soon as the leave allowance
expires.

It is also clear that respondents exerted all efforts to' remain employed with Saudia. Each of them repeatedly
filed appeal letters (as much as five [5] letters in the case of Rebesencio109) asking Saudia to reconsider the
ultimatum that they resign or be terminated along with the forfeiture of their benefits. Some of them even went to
Saudia's office to personally seek reconsideration.110

Respondents also adduced a copy of the "Unified Employment Contract for Female Cabin Attendants." 111This
contract deemed void the employment of a flight attendant who becomes pregnant and threatened termination
due to lack of medical fitness.112 The threat of termination (and the forfeiture of benefits that it entailed) is
enough to compel a reasonable person in respondents' position to give up his or her employment.

Saudia draws attention to how respondents' resignation letters were supposedly made in their own handwriting.
This minutia fails to surmount all the other indications negating any voluntariness on respondents' part. If at all,
these same resignation letters are proof of how any supposed resignation did not arise from respondents' own
initiative. As earlier pointed out, respondents' resignations were executed on Saudia's blank letterheads that
Saudia had provided. These letterheads already had the word "RESIGNATION" typed on the subject portion of
their respective headings when these were handed to respondents. 113ChanRoblesVirtualawlibrary

"In termination cases, the burden of proving just or valid cause for dismissing an employee rests on the
employer."114 In this case, Saudia makes much of how respondents supposedly completed their exit interviews,
executed quitclaims, received their separation pay, and took more than a year to file their Complaint. 115 If at all,
however, these circumstances prove only the fact of their occurrence, nothing more. The voluntariness of
respondents' departure from Saudia is non sequitur.

Mere compliance with standard procedures or processes, such as the completion of their exit interviews, neither
negates compulsion nor indicates voluntariness.
As with respondent's resignation letters, their exit interview forms even support their claim of illegal dismissal
and militates against Saudia's arguments. These exit interview forms, as reproduced by Saudia in its own
Petition, confirms the unfavorable conditions as regards respondents' maternity leaves. Ma. Jopette's and
Loraine's exit interview forms are particularly telling:

a. From Ma. Jopette's exit interview form:

�� �3. In what respects has the job met or failed to meet your expectations?

THE SUDDEN TWIST OF DECISION REGARDING THE MATERNITY LEAVE.116

b. From Loraine's exit interview form:

�� �1. What are your main reasons for leaving Saudia? What company are you joining?

�� ��� �xxx xxx xxx

�� ��� �Others

CHANGING POLICIES REGARDING MATERNITY LEAVE (PREGNANCY)117


As to respondents' quitclaims, in Phil. Employ Services and Resources, Inc. v. Paramio,118 this court noted that
"[i]f (a) there is clear proof that the waiver was wangled from an unsuspecting or gullible person; or (b) the terms
of the settlement are unconscionable, and on their face invalid, such quitclaims must be struck down as invalid
or illegal."119 Respondents executed their quitclaims after having been unfairly given an ultimatum to resign or be
terminated (and forfeit their benefits).

Having been illegally and unjustly dismissed, respondents are entitled to full backwages and benefits from the
time of their termination until the finality of this Decision. They are likewise entitled to separation pay in the
amount of one (1) month's salary for every year of service until the fmality of this Decision, with a fraction of a
year of at least six (6) months being counted as one (1) whole year.

Moreover, "[m]oral damages are awarded in termination cases where the employee's dismissal was attended by
bad faith, malice or fraud, or where it constitutes an act oppressive to labor, or where it was done in a manner
contrary to morals, good customs or public policy."120 In this case, Saudia terminated respondents' employment
in a manner that is patently discriminatory and running afoul of the public interest that underlies employer-
employee relationships. As such, respondents are entitled to moral damages.

To provide an "example or correction for the public good"121 as against such discriminatory and callous schemes,
respondents are likewise entitled to exemplary damages.

In a long line of cases, this court awarded exemplary damages to illegally dismissed employees whose
"dismissal[s were] effected in a wanton, oppressive or malevolent manner." 122 This court has awarded
exemplary damages to employees who were terminated on such frivolous, arbitrary, and unjust grounds as
membership in or involvement with labor unions,123 injuries sustained in the course of
employment,124development of a medical condition due to the employer's own violation of the employment
contract,125and lodging of a Complaint against the employer.126 Exemplary damages were also awarded to
employees who were deemed illegally dismissed by an employer in an attempt to evade compliance with
statutorily established employee benefits.127 Likewise, employees dismissed for supposedly just causes, but in
violation of due process requirements, were awarded exemplary damages. 128

These examples pale in comparison to the present controversy. Stripped of all unnecessary complexities,
respondents were dismissed for no other reason than simply that they were pregnant. This is as wanton,
oppressive, and tainted with bad faith as any reason for termination of employment can be. This is no ordinary
case of illegal dismissal. This is a case of manifest gender discrimination. It is an affront not only to our statutes
and policies on employees' security of tenure, but more so, to the Constitution's dictum of fundamental equality
between men and women.129
The award of exemplary damages is, therefore, warranted, not only to remind employers of the need to adhere
to the requirements of procedural and substantive due process in termination of employment, but more
importantly, to demonstrate that gender discrimination should in no case be countenanced.

Having been compelled to litigate to seek reliefs for their illegal and unjust dismissal, respondents are likewise
entitled to attorney's fees in the amount of 10% of the total monetary award.130

VI

Petitioner Brenda J. Betia may not be held liable.

A corporation has a personality separate and distinct from those of the persons composing it. Thus, as a rule,
corporate directors and officers are not liable for the illegal termination of a corporation's employees. It is only
when they acted in bad faith or with malice that they become solidarity liable with the corporation. 131

In Ever Electrical Manufacturing, Inc. (EEMI) v. Samahang Manggagawa ng Ever Electrical,132 this court clarified
that "[b]ad faith does not connote bad judgment or negligence; it imports a dishonest purpose or some moral
obliquity and conscious doing of wrong; it means breach of a known duty through some motive or interest or ill
will; it partakes of the nature of fraud."133

Respondents have not produced proof to show that Brenda J. Betia acted in bad faith or with malice as regards
their termination. Thus, she may not be held solidarity liable with Saudia.

WHEREFORE, with the MODIFICATIONS that first, petitioner Brenda J. Betia is not solidarity liable with
petitioner Saudi Arabian Airlines, and second, that petitioner Saudi Arabian Airlines is liable for moral and
exemplary damages. The June 16, 2011 Decision and the September 13, 2011 Resolution of the Court of
Appeals in CA-G.R. SP. No. 113006 are hereby AFFIRMED in all other respects. Accordingly, petitioner Saudi
Arabian Airlines is ordered to pay respondents:

(1) Full backwages and all other benefits computed from the respective dates in which each of the
respondents were illegally terminated until the finality of this Decision;
(2) Separation pay computed from the respective dates in which each of the respondents commenced
employment until the finality of this Decision at the rate of one (1) month's salary for every year of service,
with a fraction of a year of at least six (6) months being counted as one (1) whole year;
(3) Moral damages in the amount of P100,000.00 per respondent;
(4) Exemplary damages in the amount of P200,000.00 per respondent; and
(5) Attorney's fees equivalent to 10% of the total award.

Interest of 6% per annum shall likewise be imposed on the total judgment award from the finality of this Decision
until full satisfaction thereof.

This case is REMANDED to the Labor Arbiter to make a detailed computation of the amounts due to
respondents which petitioner Saudi Arabian Airlines should pay without delay.

SO ORDERED.ch