G. R. No. 120077 – 397 Phil. 1 – 343 SCRA 1 – Civil Law – Persons – Conflict of Laws – Private International Law – Forum Non Conveniens
In May 1988, Marcelo Santos was an overseas worker in Oman. In June 1988, he was recruited by Palace Hotel in Beijing, China. Due to higher pay and benefits, Santos agreed to the hotel’s job offer and so he started working there in November 1988. The employment contract between him and Palace Hotel was however without the intervention of the Philippine Overseas Employment Administration (POEA). In August 1989, Palace Hotel notified Santos that he will be laid off due to business reverses. In September 1989, he was officially terminated.
In February 1990, Santos filed a complaint for illegal dismissal against Manila Hotel Corporation (MHC) and Manila Hotel International, Ltd. (MHIL). The Palace Hotel was impleaded but no summons were served upon it. MHC is a government owned and controlled corporation. It owns 50% of MHIL, a foreign corporation (Hong Kong). MHIL manages the affair of the Palace Hotel. The labor arbiter who handled the case ruled in favor of Santos. The National Labor Relations Commission (NLRC) affirmed the labor arbiter.
ISSUE: Whether or not the NLRC has jurisdiction over the case.
HELD: No. The NLRC is a very inconvenient forum for the following reasons:
- The only link that the Philippines has in this case is the fact that Santos is a Filipino;
- However, the Palace Hotel and MHIL are foreign corporations – MHC cannot be held liable because it merely owns 50% of MHIL, it has no direct business in the affairs of the Palace Hotel. The veil of corporate fiction can’t be pierced because it was not shown that MHC is directly managing the affairs of MHIL. Hence, they are separate entities.
- Santos’ contract with the Palace Hotel was not entered into in the Philippines;
- Santos’ contract was entered into without the intervention of the POEA (had POEA intervened, NLRC still does not have jurisdiction because it will be the POEA which will hear the case);
- MHIL and the Palace Hotel are not doing business in the Philippines; their agents/officers are not residents of the Philippines;
Due to the foregoing, the NLRC cannot possibly determine all the relevant facts pertaining to the case. It is not competent to determine the facts because the acts complained of happened outside our jurisdiction. It cannot determine which law is applicable. And in case a judgment is rendered, it cannot be enforced against the Palace Hotel (in the first place, it was not served any summons).
The Supreme Court emphasized that 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:
(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.
None of the above conditions are apparent in the case at bar.
