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While it is true that the second phase in the resolution of a conflicts problem is choice of law, it is practical to discuss the principle of forum non conveniens after a review of principles involving jurisdiction because the forum’s inconvenience, being a factual matter, may be raised as an affirmative defense in the responsive pleading and may also be taken up during the pre-trial of a case.


Under the Rules of Court, an affirmative defense is an allegation of a new matter which, while hypothetically admitting the material allegations in the pleading of the claimant, would nevertheless prevent or bar recovery by him. The affirmative defenses include but are not limited to fraud, statute of limitations, release, payment, illegality, statute of frauds, estoppel, former recovery, discharge in bankruptcy, and any other matter by way of confession and avoidance.[1] Hence, assuming hypothetically that the material allegations in a complaint or action are all true, the plaintiff may still be prevented from recovery in the case against defendant if the latter successfully pleads and proves that the forum is suffering from what is known to be “non conveniens.” This may be set up in the defendant’s responsive pleading, also known as an “answer.”


Under the old and now-collapsed Rule 16, if no motion to dismiss has been filed, any of the grounds for dismissal then-provided by the Rules of Court, may be pleaded as an affirmative defense in the answer and, in the discretion of the court, a preliminary hearing may be had thereon as if a motion to dismiss had been filed.[2]


If the court exercises it discretion to hold a summary hearing on the affirmative defense of forum non conveniens and finds that there are proper and reasonable grounds to rule in favor of said defense, the court may refuse to exercise its jurisdiction and issue an order to that effect. It is humbly submitted that it would not be proper for the court to issue an order of dismissal because forum non conveniens is not a ground to dismiss a case. Likewise, it is the author’s humble submission that the proper and more prudent recourse is to archive the case although this ground is not mentioned under Office of the Court Administrator (OCA) Circular No. 89-2004, August 12, 2004.


If, however, the court does not grant the affirmative defense of inconvenience at this stage, pre-trial will proceed if there are no other reasons to dismiss the case or to prevent the case from proceeding. During the pre-trial of the case, the defendant may raise as one of the issues the matter of whether the court suffers from forum non conveniens. Being a factual question, the defendant has the burden to prove this.


Under the doctrine of forum non conveniens, a Philippine court in a conflict-of-laws case may assume jurisdiction if it chooses to do so, provided, that the following requisites are met: (a) that the Philippine Court is one to which the parties may conveniently resort to; (b) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and (c) that the Philippine Court has or is likely to have power to enforce its decision.[3] Another requisite is the fact that the dispute, prior to filing with the present forum, had been raised in a foreign court and the existence of an available alternative forum elsewhere.[4]


In Saudia v. Rebesencio,[5] the Supreme Court held: “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.


In the same Saudia case, the High Court continued to explain: “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. 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.”[6]


During the trial of the case, as long as the issue of forum non conveniens has been squarely stated or raised in the records of the case, the defedant may present documentary, object and testimonial evidence relevant to the question of convenience. If the court finds that it has received sufficient evidence to show the existence of forum non conveniens, it is the author’s humble submission that it, even during the trial of the case, may issue an order refusing to exercise jurisdiction. However, it is likewise submitted that the most prudent course of action is for the court to await the termination of trial and to refuse to issue judgment on the ground of inconvenience.


Considering that forum non conveniens is a factual question, the student of law’s next question is anent the level or quantum of proof required to substantiate the movant’s claim. Again, considering that it is the Supreme Court which has the last say on this matter, the author can only humbly submit that the quantum of proof should be clear and convincing evidence[7] because a claim of forum non conveniens is an attempt to overthrow a presumption that a court, or judge acting as such, whether in the Philippines or elsewhere, is acting in the lawful exercise of jurisdiction.[8]


Heine v. New York Life


            In the case of Heine v. New York Life,[9] decided by the United States District Court for the District of Oregon, a suit was filed against the New York Life Insurance Company and the Guardian Insurance Company, both New York corporations, to recover on some 240 life insurance policies made and issued by the defendants in Germany, in favor of German citizens and subjects, and payable in German money. The policies of the New York Life Insurance Company were issued prior to August 1, 1914, and those of the Guardian prior to May 1, 1918. As a condition to their right to do business in Germany, the New York insurance companies were required to and did submit to the supervision and control of the German insurance officials, to invest the reserves arising from German policies in German securities, and to establish an office in that country with a resident representative or agent upon whom service of processes could be made.


            None of the parties in the case were residents or inhabitants of Oregon, the plaintiffs being residents of Germany and the defendant corporations, as mentioned, being juridical entities registered under the laws of New York. None of the causes of action arose in Oregon; neither did any of the material witnesses resided in said state. None of the records of the defendant companies pertaining to the policies in suit were present in Oregon; rather, such records were either at their office in New York or at their offices in Germany. Also, at the time of the filing of the Heine case, the courts of Germany and New York were open and functioning, not to mention competent to take jurisdiction of the controversies, and service of processes could also be made upon the defendants in either of such jurisdictions.


The Oregon District Court said that to require the defendants to defend the actions in Oregon would impose upon them great and unnecessary inconvenience and expense, and probably compel them to produce in that state, 3,000 miles away from their home office, numerous records, books, and papers, all of which were in daily use by it in taking care of current business. Under these circumstances, the defendants, while conceding that the court had jurisdiction of the person and subject-matter, urged that the Court should refuse, in its discretion, to exercise such jurisdiction. Resolving the case, the said Court wrote:


“Circumstances often exist which render it inexpedient for the court to take jurisdiction of controversies between foreigners in cases not arising in the country of the forum; as, where they are governed by the laws of the country to which the parties belong, and there is no difficulty in a resort to its courts; or where they have agreed to resort to no other tribunals not on the ground that it has not jurisdiction, but that, from motives of convenience, or international comity, it will use its discretion whether to exercise jurisdiction or not."


“These, in my judgment, are cases of that kind. They are actions brought on causes of action arising in Germany. The contract of insurance was made and to be paid there and in German currency. It is to be construed and given effect according to the laws of the place where it was made. The courts of this country are established and maintained primarily to determine controversies between its own citizens and those having business there, and manifestly the court may protect itself against a flood of litigation over contracts made and to be performed in a foreign country, where the parties and witnesses are nonresidents of the forum, and no reason exists why the liability, if any, cannot be enforced in the courts of the country where the cause of action arose, or in the state where the defendant was organized and has its principal offices. True, the courts of New York have declined to exercise jurisdiction over actions brought on insurance policies similar to those in suit. But that affords no reason why this court should do so. It is to me unthinkable that residents and citizens of Germany may import bodily into this court numerous actions against a nonresident defendant, on contracts made and payable in Germany, and insist as a matter of right that, because it has obtained jurisdiction of the defendant by service of its statutory agent, the taxpayers, citizens, and residents of the district having business in the court should stand aside and wait the conclusion of the case, where, as here, the courts of Germany and of the home state of the defendant are open and functioning.”




            The case of Manila Hotel v. National Labor Relations Commission (NLRC)[10] was a labor dispute involving petitioners Manila Hotel Corporation (MHC) and Manila Hotel International Company (MHIC). When the case was filed in 1990, MHC was still a government-owned and controlled corporation duly organized and existing under the laws of the Philippines. MHIC, on the other hand, was a corporation duly organized and existing under the laws of Hong Kong. MHC was an incorporator of MHICL, owning 50% of its capital stock.


            By virtue of a management agreement with the Palace Hotel, MHICL trained the personnel and staff of the Palace Hotel at Beijing, China. It must be noted that, prior to this, private respondent Santos was working in Oman. It was there where Santos was recruited to work for Palace Hotel in China.


            Santos, the private respondent, was hired under an employment agreement with Palace Hotel. A certain Mr. Shmidt represented the Palace Hotel. The Vice President of petitioner MHIC Miguel D. Cergueda signed the employment agreement under the word “noted.” Santos resigned from his work in Oman, came back to the Philippine for a short vacation and flew to China to assume his post.


            Later, Palace Hotel informed respondent Santos by letter signed by Mr. Shmidt that his employment at the Palace Hotel would be terminated due to business reverses brought about by the political upheaval in China. Hence, Palace Hotel terminated the employment of respondent Santos and paid all benefits due him, including his plane fare back to the Philippines. As a result, Santos filed a complaint for illegal dismissal.


Was the Philippine forum an inconvenient forum? The answer given by the Supreme Court was in the affirmative; The NLRC was a seriously inconvenient forum because the main aspects of the case transpired in two foreign jurisdictions and the case involved purely foreign elements. The only link that the Philippines had with the case was that respondent Santos is a Filipino citizen. The Palace Hotel and MHIC were foreign corporations. Not all cases involving our Filipino citizens can be tried in the Philippines.


Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction over the case if it chooses to do so provided: (a) that the Philippine court is one to which the parties may conveniently resort to; (b) that the Philippine court is in a position to make an intelligent decision as to the law and the facts; and (c) that the Philippine court has or is likely to have power to enforce its decision.[11] In this case, the NLRC was an inconvenient forum given that all the incidents of the case – from the time of recruitment, to employment, and to dismissal occurred outside the Philippines. The inconvenience was compounded by the fact that the proper defendants, the Palace Hotel and MHICL, were not nationals of the Philippines and they were not doing business in the Philippines. Likewise, the main witnesses, Mr. Shmidt and Mr. Henk, were non-residents of the Philippines.


Neither could an intelligent decision be made as to the law governing the employment contract as such was perfected in foreign soil. This calls to fore the application of the principle of lex loci contractus (the law of the place where the contract was made). The employment contract was not perfected in the Philippines. Respondent Santos signified his acceptance by writing a letter while he was in the Republic of Oman. This letter was sent to the Palace Hotel in China. Neither could the NLRC determine the facts surrounding the alleged illegal dismissal as all acts complained of took place in China. The NLRC was not in a position to determine whether the political turmoil truly adversely affected operations of the Palace Hotel as to justify the retrenchment.


Even assuming that a proper decision could be reached by the NLRC, such would not have any binding effect against the employer, the Palace Hotel. The Palace Hotel was a corporation incorporated under the laws of China and was not even served with summons. Jurisdiction over its person was not acquired. This is not to say, however, that Philippine courts and agencies have no power to solve controversies involving foreign employers. Neither is it to say that Philippine courts do not have power over an employment contract executed in a foreign country. If Santos were an “overseas contract worker,” a Philippine forum could protect him.[12] He was not an overseas contract worker. 


[1] Section 5 of Rule 6 of the Rules of Court.

[2] Section 6 of Rule 16 (now collapsed) of the Rules of Court. This Rule has been dissolved by A.M. No. 19-10-20-SC, October 15, 2019.

[3] Continental Micronesia v. Basso, G.R. NOS. 178382-83, September 23, 2015. See also Bank of America, NT&SA v. Court of Appeals, G.R. No. 120135, March 31, 2003.

[4] Saudia v. Rebesencio, G.R. No. 198587, January 14, 2015.

[5] G.R. No. 198587, January 14, 2015.

[6] G.R. No. 198587, January 14, 2015.

[7] Yap v. Lagtapon, G.R. No. 196347, January 23, 2017, which declared: “The presumption of regularity in the performance of official duties is an aid to the effective and unhampered administration of government functions. Without such benefit, every official action could be negated with minimal effort from litigants, irrespective of merit or sufficiency of evidence to support such challenge. To this end, our body of jurisprudence has been consistent in requiring nothing short of clear and convincing evidence to the contrary to overthrow such presumption.”

[8] Section 3 of Rule 131 of the Rules of Court.

[9] 45 F.2d 426 (1930).

[10] 397 Phil. 1 [ G. R. No. 120077. October 13, 2000 ].

[11] Communication Materials and Design, Inc. v. Court of Appeals, 260 SCRA 673, 695 (1996).

[12] Eastern Shipping Lines, Inc. v. POEA, 170 SCRA 54, 57 (1989).