Hasegawa vs Kitamura G.R. No. 149177 (Case Digest)

 

Hasegawa vs Kitamura

G.R. No. 149177

Facts:

            Nippon Engineering Consultants Co., Ltd., a Japanese consultancy firm providing technical and management support in the infrastructure projects of foreign governments, entered into an Independent Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese national permanently residing in the Philippines.

            The agreement provides that respondent was to extend professional services to Nippon for a year. Nippon then assigned respondent to work as the project manager of STAR Project in the Philippines.  Hasegawa, Nippon's general manager informed respondent that the company had no more intention of automatically renewing his ICA in the BBRI Project. His services would be engaged by the company only up to the substantial completion of the STAR Project.

            Kitamura filed for specific performance and damages with the RTC Lipa City.  Petitioners contended 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.

            RTC, invoking SC's ruling in Insular Government v. Frank that matters connected with the performance of contracts are regulated by the law prevailing at the place of performance, denied the motion to dismiss.  CA declared that the trial court was correct in applying instead the principle of lex loci solutionis.

            The ICA subject 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 following the [state of the] most significant relationship rule in Private International Law.

 

Issue:

            Whether RTC has jurisdiction to try the case.

 

Held:

            YES. 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.

 

Neither can the other ground raised, forum non conveniens, 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. 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. 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.

====

            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?

====

            Lex loci celebrationis relates to the "law of the place of the ceremony" or the law of the place where a contract is made. The doctrine of lex contractus or lex loci contractus means the "law of the place where a contract is executed or to be performed." It controls the nature, construction, and validity of the contract and it may pertain to the law voluntarily agreed upon by the parties or the law intended by them either expressly or implicitly. 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. This rule takes into account several contacts and evaluates them according to their relative importance with respect to the particular issue to be resolved.

 

=============

è Before determining which law should apply, first there should exist a conflict of laws situation requiring the application of the conflict of laws rules. 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.

 

è 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.