San Beda College of Alabang

School of Law

Chapter 2: Choice of Law

&
Chapter 12: Transboundary Pollution

Conflicts of Law
Section SPL
Dean Ulpiano Sarmiento III

Submitted by:
Costelo, Jaime Jr. Limpo
De Guzman, Jain Louis Eliver
Garcia, Franz Louis
Lacson, Jeric De Perio
Macabulos, Lexter Rom
Sy, Jezreel Joseph De Leon
Chapter 2 - Choice of Law

Introduction:
A very common problem in conflicts of law involve disputes with international elements.
There are instances when treaties or agreements amongst nations are met with conflicting
provisions with municipal law which require harmonization between the two laws by way of
social legislation. At times, there are also directives expressly stated in these treaties specifically
stating the law that will govern any existing or pre-existing disputes. Case in point would be the
controversial loan agreements with exorbitant interest rates entered into by B Country with A
Country containing provisions specifically stating that any dispute arising from the interpretation
and implementation of said loan agreements would be governed by the laws and courts of A
Country much to the prejudice of B Country. Thus, the concept and principles of Choice of Law
gives direction to parties as to which law is applicable or as to which tribunal has jurisdiction to
hear, try and decide such dispute.

Choice of Law has been defined as a concept in conflicts of law wherein:

A court subject to constitutional restrictions will follow a statutory directive of its own
state on choice of law. When there is no such directive, the factors relevant to the choice of the
applicable rule of law include the following principles:
 The needs of the interstate and international systems
 The relevant policies of the forum
 The relevant policies of other interested states and the relative interests of those states in
the determination of the particular issue
 The protection of justified expectations
 The basic policies underlying the particular field of law
 Certainty, predictability and uniformity of result
 Ease in the determination and application of the law to be applied

Principle 1: Local Law

Prior to the discussion on the needs of the interstate and international systems, local law
should first be elaborated. The reason being that generally, local law is the default law in
governing the dispute. Statutory directives of the state should first be analyzed if any are present
in the given circumstance. Examples under the Philippine Civil Code mainly on family rights
and succession rights:
Art. 15 Laws on family rights bind citizens living abroad
Art. 16 National law governing successions of the deceased depending on location of the
property

A common problem under choice of law is that there are instances wherein the law of the
forum state refers the dispute to be resolved under the terms of the treaty. The treaty on the other
hand reverts back or returns the dispute back to the law of the forum state. The result would be a
never ending referral from law of the forum back to international law and vice versa resulting to
endless litigation of the dispute. There is no clear cut rule or hard and fast rule in preventing such
back and forth method.
The situation where foreign law reverts back or reverts to law of the forum is often referred to as
Renvoi. Renvoi is defined as:
A Jural matter is presented which the ‘conflict of laws rule’ of the forum refer to a
foreign law which in turn refers the matter back again to the law of the forum. This is Renvoi in
its narrower sense.
Forum determining the dispute must take into account the whole law and rules of the
other country’s jurisdiction. This is also known as the doctrine of renvoi.
Law of the forum state does not generally prevail over law of the other country’s jurisdiction and
vice versa. Fortunately, both local and international jurisprudence demonstrate how Philippine
courts resolved the disputes in considering both international and local laws.

In the case of Aznar v. Garcia, the estate of Edward Christensen, a U.S. Citizen who died
in the Philippines while domiciled therein, was under dispute. The deceased bequeathed P 3,600
to Helen C. Garcia and left the rest to Mary Lucy C. Daney. Helen assails the provision of the
will since under Philippine laws, she is entitled to a higher amount in her legitime than the
amount stipulated under the will. Helen opposed the partition and insists that Philippine law
governs the distribution of the estate. The lower court upheld that the will is to be governed by
California law. The issue to be resolved here is the law that will govern the testamentary
succession of Edward Christensen. The Supreme Court held that in this case that Philippine law
governs and that Renvoi is applicable. Under our Civil Code, Art. 16 provides that the “…
national law of country as to where (real property) it is situated” as well as that the “national law
of the person whose succession is in consideration” in the second paragraph of the same
provision. As for real property, its location is controlling. In succession, the “national law”
prevails. Since in the US each state has its own law, the “national law” referred to would be the
private law of California. The Californian Civil Code under Art. 946 provides that “If there is no
law to the contrary, in the place where personal property is situated, it is deemed to follow its
owner and is governed by the law of his domicile.” It is clearly provided that the conflict of law
rules applies to citizens residing abroad. Decedent was a citizen and domiciled in the Philippines.
Art. 946 precisely refer back the case, if decedent is not domiciled in California, to the law of its
domicile. Hence, renvoi is applicable.

In the case of Bellis v Bellis, renvoi was not applied by the Supreme Court. This case
tackled the estate in controversy of Amos G. Bellis, a U.S. Citizen from the state of Texas who
had three children with the first wife and three children from the second wife. The will was
executed in the Philippines. Only P 120, 000 was bequeathed to the Illegitimate children while P
240, 000 was bequeathed to the legitimate children. Two of the illegitimate children, Maria
Cristina and Miriam Palma Bellis, assailed the proposed partition claiming that they were
deprived of their legitimes. The lower court denied the opposition and approved the partition on
ground that Texas law is the applicable law since it was the national law of the decedent and
which did not provide for legitimes, governed the successional rights of the deceased. The issue
in this case was whether the application of Texas Law would result to Renvoi. The Supreme
Court ruled in the negative and that reference of laws is the Law of Texas. The Court goes on in
rationalizing that since the decedent was both citizen and domiciled in Texas at the time of his
death, it was justifiable that renvoi will not apply. Despite that there were some properties in the
Philippines, no application of the law of the place where property is situated was provided under
Texas law. Texas law contained no conflict of law rule. As to the application of Texas law being
violative of public policy, the Court ruled in the negative. The new provision on under Art. 1039
decrees the capacity to succeed is governed by the national law of the decedent. Legislative
intent shows that the law is not intended to extend the same to succession of foreign nationals.
The amount of successional rights is to be governed by the decedents’s national law.

Principle 2: Needs of the interstate and international Systems

There lies a need to address the ever changing business systems on an international and
interstate level. Such disputes arising from ever progressive advances in free trade and mainly
differences in business practices amongst states. Such advances give rise to disputes that cut
across national borders. The problem lies in the fact that application of laws of the forum state
stifles growth of free trade and discourages trading with other countries. The solutions here is
that the Courts must consider needs of the interstate and international systems in determining
applicable laws to disputes. Principles must be developed to reconcile multi-state laws.

Under the second principle, the international system of taxation which is present in both
Philippines and Canada and applicable to both yet conflict as to which law is applicable. In the
case of Air Canada v CIR, Air Canada being a duly registered offline carrier permitted to operate
in the Philippines by the Civil Aviation and Aeronautics Board. Air Canada entered in agreement
with Aerotel, the latter being the former’s sales agent in the Philippines. Air Canada is claiming
refunds for erroneously paid taxes under enforcement of the PH-Canada Tax treaty. The
Commissioner charges Air Canada with the rate of that of a foreign corporation doing business
in the Philippines. Air Canada assails the assessment claiming that it is an offline carrier not
owning planes nor operating runways in the Philippines and is subject only to the 2 ½ % rate
provided under the PH-Canada Tax Treaty. The Court resolves the issue by stating that Air
Canada is liable to pay the CIR assessment and not the rate under the treaty. NIRC applies as
provided under the PH-Canada tax treaty. Aerotel extends to the Philippines the transportation
business of petitioner as a conduit or outlet through which petitioner’s airline tickets are sold.
Article VII of the Republic of the Philippines-Canada Tax Treaty, the “business profits” of an
enterprise of a Contracting State is “taxable only in that State, unless the enterprise carries on
business in the other Contracting State through a permanent establishment.” Thus, income
attributable to Aerotel or from business activities effected by petitioner through Aerotel, deemed
a permanent establishment may be taxed in the Philippines.

Principle 3: Relevant Policies of the forum

Policies of the forum take primordial consideration
Principle 3 dictates that when a forum considers the applicable law to a case at issue, the
forum takes into account its state policies.
Each Forum considers certain values or principles to be of highest import:
In the United States, it considers fairness and due process to be the cornerstone of their Judicial
System. Thus, if the Forum is in the U.S. Jurisdiction, it shall rule on the non-applicability of a
law which contradicts its principle of fairness and due process.
In the Philippines, the relevant policies are:
Philippine courts consider protection of Labor as the highest import.
Should a foreign law be prejudicial to the interest of Labor, courts shall strike down its
applicability in favor of local laws
The family is principled as the basic social unit
Divorce is not recognized in Philippine jurisdiction
Thus, if a foreign law is involved which tends to weaken the Filipino family, the courts will
strike down such law as against public policy.

To give justice is the most important function of law.

A foreign law shall not be applied when its application would work undeniable injustice to the
citizens or residents of the forum.
Illustrative Cases:

Cadalin et. al. v. POEA Administrator

G.R. Nos. L-104776, 104911, and 105029-32, December 5, 1994

Doctrine:
GENERAL RULE: A foreign procedural law will not be applied in the forum.
EXCEPTION: When the country of the forum has a "borrowing statute," the country of the
forum will apply the foreign statute of limitations.
EXCEPTION TO THE EXCEPTION: The court of the forum will not enforce any foreign
claim obnoxious to the forum's public policy.

FACTS:

Cadalin et al. are overseas contract workers recruited by respondent-appellant AIBC for its
accredited foreign principal, Brown & Root, on various dates from 1975 to 1983. As such, they
were all deployed at various projects in several countries in the Middle East as well as in
Southeast Asia, in Indonesia and Malaysia. The case arose when their overseas employment
contracts were terminated even before their expiration. Under Bahrain law, where some of the
complainants were deployed, the prescriptive period for claims arising out of a contract of
employment is one year.

ISSUE:

Whether it is the Bahrain law on prescription of action based on the Amiri Decree No. 23 of
1976 or a Philippine law on prescription that shall be the governing law

HELD:

As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters,
such as service of process, joinder of actions, period and requisites for appeal, and so forth, are
governed by the laws of the forum. This is true even if the action is based upon a foreign
substantive law.

A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be
viewed either as procedural or substantive, depending on the characterization given such a law.
However, the characterization of a statute into a procedural or substantive law becomes
irrelevant when the country of the forum has a “borrowing statute.” Said statute has the practical
effect of treating the foreign statute of limitation as one of substance. A “borrowing statute”
directs the state of the forum to apply the foreign statute of limitations to the pending claims
based on a foreign law. While there are several kinds of “borrowing statutes,” one form provides
that an action barred by the laws of the place where it accrued, will not be enforced in the forum
even though the local statute has not run against it. Section 48 of our Code of Civil Procedure is
of this kind. Said Section provides:

“If by the laws of the state or country where the cause of action arose, the action is barred, it is
also barred in the Philippine Islands.”

In the light of the 1987 Constitution, however, Section 48 cannot be enforced ex propio vigore
insofar as it ordains the application in this jurisdiction of Section 156 of the Amiri Decree No. 23
of 1976.

The courts of the forum will not enforce any foreign claims obnoxious to the forum’s public
policy. To enforce the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as
regards the claims in question would contravene the public policy on the protection to labor.

Bank of America NT & Asia v. American Realty Corp.

G.R. No. 133876, December 29, 1999

Doctrine:
The public policy sought to be protected in the instant case is the principle imbedded in our
jurisdiction proscribing the splitting up of a single cause of action. Foreign law should not be
applied when its application would work undeniable injustice to the citizens or residents of the
forum. To give justice is the most important function of law;

Facts:

Petitioner granted loans to 3 foreign corporations. As security, the latter mortgaged a property
located in the Philippines owned by herein respondent ARC. ARC is a third party mortgagor who
pledged its own property in favor of the 3 debtor-foreign corporations.

The debtors failed to pay. Thus, petitioner filed collection suits in foreign courts to enforce the
loan. Subsequently, it filed a petition in the Sheriff to extra-judicially foreclose the said
mortgage, which was granted.

On 12 February 1993, private respondent filed before the Pasig RTC, Branch 159, an action for
damages against the petitioner, for the latter’s act of foreclosing extra-judicially the real estate
mortgages despite the pendency of civil suits before foreign courts for the collection of the
principal loan.

Issue:
WON petitioner’s act of filing a collection suit against the principal debtors for the recovery of
the loan before foreign courts constituted a waiver of the remedy of foreclosure.

Held:

Yes. Incidentally, petitioner alleges that under English Law, which according to petitioner is the
governing law with regard to the principal agreements, the mortgagee does not lose its security
interest by simply filing civil actions for sums of money.

We rule in the negative.

In a long line of decisions, this Court adopted the well-imbedded principle in our jurisdiction that
there is no judicial notice of any foreign law. A foreign law must be properly pleaded and proved
as a fact. Thus, if the foreign law involved is not properly pleaded and proved, our courts will
presume that the foreign law is the same as our local or domestic or internal
law. This is what we refer to as the doctrine of processual presumption.

In the instant case, assuming arguendo that the English Law on the matter were properly pleaded
and proved in said foreign law would still not find applicability.

Thus, when the foreign law, judgment or contract is contrary to a sound and established public
policy of the forum, the said foreign law, judgment or order shall not be applied.

Additionally, prohibitive laws concerning persons, their acts or property, and those which have
for their object public order, public policy and good customs shall not be rendered ineffective by
laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign
country.

The public policy sought to be protected in the instant case is the principle imbedded in our
jurisdiction proscribing the splitting up of a single cause of action.

Moreover, foreign law should not be applied when its application would work undeniable
injustice to the citizens or residents of the forum. To give justice is the most important function
of law; hence, a law, or judgment or contract that is obviously unjust negates the fundamental
principles of Conflict of Laws.

Clearly then, English Law is not applicable.

Dacasin v. Dacasin
G.R. No. 168785, February 5, 2010

Doctrine:
Upon separation of the spouses, the mother takes sole custody under the law if the child is below
seven years old and any agreement to the contrary is void. Thus, the law suspends the joint
custody regime for (1) children under seven of (2) separated or divorced spouses. Simply put, for
a child within this age bracket (and for commonsensical reasons), the law decides for the
separated or divorced parents how best to take care of the child and that is to give custody to the
separated mother. Indeed, the separated parents cannot contract away the provision in the
Family Code on the maternal custody of children below seven years anymore than they can
privately agree that a mother who is unemployed, immoral, habitually drunk, drug addict,
insane or afflicted with a communicable disease will have sole custody of a child under seven as
these are reasons deemed compelling to preclude the application of the exclusive maternal
custody regime under the second paragraph of Article 213.

FACTS:

On April 1994, petitioner and respondent got married here in the Philippines. The following year
respondent got pregnant and gave birth to a baby girl whom they named Stephanie. In June of
1999 respondent sought and obtained from the Illinois Court a divorce decree against petitioner.
In its ruling, the Illinois court dissolved the marriage of petitioner and respondent, awarded to
respondent sole custody of Stephanie and retained jurisdiction over the case for enforcement
purposes. On 28th of January 2002, petitioner and respondent executed in Manila a contract
(Agreement) for the joint custody of Stephanie. Two years after, petitioner sued respondent in
the Regional Trial Court of Makati City. Petitioner claimed that respondent exercised sole
custody over Stephanie. Respondent sought the dismissal of the complaint due to lack of
jurisdiction, since Illinois Court hold the jurisdiction in enforcing the divorce decree.

ISSUE:

Whether the Trial Court have the jurisdiction over the case. Whether the agreement or contract is
valid.

HELD:
Case was dismissed dated March 1, 2005.
Court’s Rationale: It is precluded from taking cognizance over suit considering the Illinois
Court’s retention of jurisdiction to enforce its divorce decree, including its order awarding sole
custody of Stephanie to respondent The divorce decree is binding on petitioner following the
“nationality rule” prevailing in this jurisdiction Agreement is void The agreement is void for
contravening Article 2035 paragraph 5 of the Civil Code prohibiting compromise agreements on
jurisdiction.

The Agreement is still void but the court calls for the remand of the case to settle Stephanie’s
custody. (Article 213 of the Family Code lost its coverage over Stephanie. Stephanie was already
almost 15 during this time thus, she is entitled to choose to whom she want to be) Instead of
dismissing the case, court chose to remand the case in order to settle Stephanie’s custody. Court
decided to REVERSE the orders dated March 1, 2005 and June 23, 2005. The case is
REMANDED for further proceedings consistent with its ruling.

Principle 4: Relevant policies of the other interested states

This principle indulges courts to engage in a governmental interest analysis when two
states have conflicting laws and interests. In this approach, the courts compare the laws and
interests of two states, determine if there is a real conflict, and if real conflict exists, apply the
law of the state whose interest is more impaired. It is important to consider the interest of the
other states since commercial transactions involve people located in several jurisdictions which
have conflicting interests in a transaction. In torts cases, a state may have an interest in the
dispute due to its closer connection to the parties. Hence, the need to favor its laws over those of
another state.

The governmental analysis test approach involves the following steps:

The court determines whether the relevant law of the affected jurisdictions with regard to the
issue in question is the same or different;
If there is a difference, the court examines each jurisdiction’s interest in the application of its
own law to determine whether a true conflict exists;
If the court finds that there is a true conflict, it carefully evaluates and compares the nature and
strength of the interest of each jurisdiction to determine which state’s interest would be more
impaired if its policy were subordinated to the policy of another.

The governmental interest analysis is the approach applied in most Western countries in
determining the applicable law where a true conflict exists. However, in the Philippine setting,
rarely is this approach employed. The standard practice of local courts, especially the Supreme
Court, is to declare the foreign law to be against public policy where the foreign law conflicts
with a Philippine law.

On one hand, the governmental analysis approach is the easier, if not the easiest,
approach in settling interstate dispute in application of laws and determination of jurisdiction. On
the other hand, this approach has its fundamental defect of inherent bias. It tends to favor the
laws of the forum court. There is an immanent partiality for forum courts to favor their own laws
over that of the others. This could be a matter of training, upbringing or even culture as judges
apt to apply what they have been taught in school promoting their state’s values and interests.
Quite simply, this is comparable to the home advantage in sports competition where the home
state has a specific advantage over visiting teams due to their familiarity with the venue and their
support from the local fans.

Kearney v. Salomon Smith Barney

137 P.3d 914 (2006)
Facts: This is a case concerning California residents Kearney and Levy who were employees of
WorldCom. They were granted stock options which could only be exercised through Salomon
Smith Barney, they filed claims against SSB with the National Association of Securities Dealers
for malfeasance, fraud, and breach of fiduciary duties. During the hearing of their claims, they
learned that SSB employees recorded their telephone conversations without their consent. They
then filed a complaint with the district court of California seeking injunctive relief, damages and
restitution. SSB filed a demurrer to the complaint, which demurrer was sustained on the ground
that “under both Georgia and federal law recordings may lawfully be made in Georgia with one
party’s consent. The Court of Appeals affirmed the lower court’s decision, holding that “Georgia
has the greater interest in having its law applied.”
Issue: Whether California law or Georgia law governs Kearney and Levy’s claims.

Held: California law governs Kearney and Levy’s claims. In the case of Reich v. Purcell (Cal. 2d
551, 63 Cal.Rptr. 31, 432 P .2d 727), California has applied the so called governmental interest
test analysis in resolving choice-of-law issues. In this approach, it involves the determination
whether the laws of the affected jurisdiction are the same or different, and that if there is a
difference, the court will then determine if true conflict exists, and after determination that there
is really a true conflict, the court carefully evaluates and compares the nature and strength of
each jurisdiction’s interest over the matter to determine which state’s interest would be more
impaired if its policy is subordinated to the policy of the other state. In this case, there really is a
difference between the laws of each state because although Georgia allows recording of phone
conversation so long as the person doing the recording is a party to the conversation while
California law requires the consent of all the parties to the conversation before recording can be
made. True conflict exists because both parties asserts that their respective law should be applied
because they have legitimate interest in the matter. The Court applied the California law because
it ruled that Gerogia can follow the laws of California without violating any laws of either state,
while on the other hand, California cannot comply with the law of Gerogia without violating
their own law. California law is more protective of privacy interests than the comparable Georgia
privacy statute.

Butler v. Adoption Media

486 F. Supp.2d 1022 (2007)
Facts: Michael and Richard Butler were registered domestic partners in California. They applied
to have their profile posted in ParentProfiles.com, an internet adoption website operated by
Adoption Media. Their application was denied on the ground that the website’s service was not
available to same-sex partners. The Butlers then sued Adoption Media for violation of the Unruh
Civil Rights Act (California Law).

Issue: Whether the California law or Arizona law govern the claim of the Butlers

Ruling: California law governs the claim of the Butlers. In facing a choice-of-law issues, Courts
should apply the governmental interest analysis. In this approach, courts compare the laws and
interests of two states, determine if there is a real conflict, and if a real conflict exists, apply the
law of the state whose interest is more impaired. In this case, the court is persuaded that the
failure to apply Caifornia law in the present case would undermine the California Civil Rights
Act. The latter act is more protective of consumers than the comparable Arizona law. It merely
provides protections in addition to those specifically enumerated in Arizona.

Criticism of Governmental Interest Analysis Approach

A fundamental defect of the governmental interest analysis approach is that it tends to

favor the laws of the forum court. There is an inherent bias for forum courts to favor their own
laws over that of the others.

Principle 5: Protection of Justified expectations

 Parties enter into contracts or into legal relations with the objective of achieving a desired
result. Parties would usually specify a particular law to govern their relationship with each other.
They may choose the law of one state over another for tax and regulatory benefits.
When the parties specify a particular law to govern their relations, courts must enforce
this choice of law, unless it is contrary to a statutory directive of the forum court or contravenes
public policy. Parties are free to stipulate the term and conditions of their agreement, which the
latter will become part of the contract.

CASE: Francisco vs. Stolt Achievement MT 293 F.3d 270 (2002)

Facts:
Francisco -employed aboard with defendant, injured while working on board the vessel and sued
Stolt before a Louisiana state court.

Stolt -removed the case to federal district court on the ground that Francisco signed an
employment contract with the stipulation that in the event of “claims and disputes arising form
employment”, parties agree to arbitrate the disputes in the Philippines which includes also
unresolved disputes, claim or grievances.

Issue:
Whether or not Francisco was compelled to arbitrate his claims against Stolt?
Held:
Yes, per his employment contract. Francisco was compelled to arbitrate his claims with
Stolt. The contract clearly provides remedies from work-related personal injuries. The arbitration
provision is not by its language limited to contract claims “arising from this employment”.

Principle 6: Basic policies underlying the particular field of law

This simply means that the reason and objectives of the law in question should be given
consideration. Hence, courts should look to the type of law involved.

Contracts have for their purpose the validity of the terms and conditions of the contract.
Torts laws have for their object the redress of damages and reliefs that may be awarded. By
looking at the particular laws involved, courts may be in better position to decide which rights to
uphold and protect.

Case: Hancock vs. Watson 962 So.2d 627 (2007)

Facts:
David and Lori –residents of Tennessee and was married for several years.
Lori -started sexual relations with Hancock in 1999 which lasted until the year 2000.
David -filed a complaint for alienation of affection against Hancock in the circuit court of
Mississippi and asserted that Mississippi law applied because the tort was committed in
Mississippi where alienation of affection remains a tort.
Hancock –claimed that Tennessee law applied under such law, the tort of alienation of affection
was already been abolished and such suit should be dismissed

Issue:
 What law is applicable to suit for alienation of affection filed by David against Hancock?

Held:
The law that is applicable is the law of the place where the tort occurred. Choice of law
analysis is a three step process:

First, the Court must determine whether the conflicting laws are substantive or procedural.
Second, the Court then must classify the substantive area of law applicable to the conflicting
laws as each area of law has its own choice of law provisions.
Finally, the Court must apply the appropriate analytical provisions to the conflict.

Clearly, the conflicting laws are substantive, as the outcome will determine whether David as a
viable cause of action. If Tennessee law applies, the suit must be dismissed as alienation of
affection claim has been abolished in Tennessee. Categorizing the substantive area of law for an
alienation of affection claim is also a simple step. Alienation of affection claims are tort action.

Principle 7: Certainty, predictability and uniformity of result

The principles of res judicata and stare decisis are important in choice of law since they
provide stability in judicial decisions. When the facts of a case are exactly similar to the facts of
a previously decided case, the principles of res judicata and stare decisis will apply, and the
doctrine used in the previous case will also be used in the later case.

Principle 8: Ease in the determination and application of the law to be applied

The purpose for applying the principles of res judicata and stare decisis in choice of law
is due to simplicity. It is usually simpler for the court to apply the same doctrine in future cases.
There is no need to adopt new doctrines in the determination of a case because it is simpler to
apply the law that was applied before

Proof of foreign law and processual presumption

If a foreign law is invoked by a party, such foreign law must first be proven properly
before it can be admitted in evidence. The failure to properly prove the foreign law will give rise
to a presumption that the foreign law is the same as the local law and will have the consequence
of the local law being applied in the determination of the case; this is called processual
presumption. Secs. 24 and 25 of Rule 132 of the Rules of Court govern the procedure for proving
foreign law. Sec. 24 states that records of public documents may be evidenced by official
publication, by attestation of a legal officer having custody of the record, or through a certificate
issued by an officer in the foreign service of the Philippines; while Sec. 25 states that an
attestation must state that the copy is a correct copy of the original.

Exceptions to proof of foreign laws

The requirement of properly proving a foreign law before it can be admitted in evidence
is subject to certain exceptions. These exceptions are: presentation of a foreign-licensed attorney
for testimony; recognition by administrative agencies; lack of objection to the improper
presentation of proof of foreign law; the universal application of law; and laws appearing in
official websites.

Scrivener's error
When there is a failure in an agreement to express the intention of the parties that may be
attributed to missing or wrong terminology, or a simple clerical error, such failure to express the
intention is called scrivener's error. In case of scrivener's error, the chosen law is often
disregarded resulting in a course of action which the parties may not have contemplated. In the
event of a scrivener's error, the agreement is interpreted according to its plain and obvious
meaning.

Windvalley Shipping v. C.A.

Facts:
The Philippine Roxas (Philippine vessel) ran aground while being navigated by an
official pilot through the Orinoco River in Venezuela which resulted in the obstruction of the
river that prevented petitioner’s vessel to pass through. Petitioner wanted Venezuelan law to
apply. A photocopy of the law was presented as evidence.
Issue:
Is Venezuelan law applicable?
Ruling:
No. The Venezuelan law was not properly proven in accordance with Secs. 24 and 25 of
Rule 132 of the Rules of Court. A submission of a photocopy of Venezuelan law is not the
proper way of proving foreign laws under the Rules of Court, making such submission as
inadmissible in evidence. Therefore, Venezuelan law is not applicable.
Manufacturers Hanover Trust Co. v. Guerrero
Facts:
Respondent filed a complaint against petitioner for damages arising from illegally
withheld taxes, returned check, and unauthorized conversion of his account. Petitioner alleged
that the account is governed by New York law, which does not permit any of the claims. An
affidavit of a New York attorney stating that New York law was the governing law was
presented as evidence.
Issue:
Was New York law properly proven?
Ruling:
No. The affidavit failed to prove New York law. The affidavit was not properly proven in
accordance with Secs. 24 and 25 of Rule 132 of the Rules of Court. Furthermore, the affidavit
merely states conclusions from affiant's personal opinion of the facts in relation to alleged laws
and jurisprudence, without citing any particular law. Therefore, the affidavit is inadmissible as
evidence to prove New York law.

Edi-staff Builders International v. NLRC

Facts:
Gran was recruited by petitioner to work for OAB in Saudi Arabia. The employment
contract stated that Saudi labor laws shall govern matters not provided for in the contract. Gran
filed a case for illegal dismissal with petitioner contending that Saudi labor laws should be
applied in the resolution of the complaint.
Issue:
Is Saudi labor law applicable?
Ruling:
No. Petitioner failed to prove the pertinent Saudi labor laws on the matter. In case of
failure to prove a foreign law, the doctrine of processual presumption will apply, resulting in the
presumption that Saudi labor law is the same as Philippine labor law.
Norse Management Co. v. National Seamen Board
Facts:
Abordo was employed by petitioner as second engineer of MT Cherry Earl. Abordo died
during the course of his employment, resulting in his widow filing a complaint for compensation
and benefits. She contended that the law of Singapore should govern the grant of benefits. The
respondent board agreed that Singapore law should govern.
Issue:
Will Singapore law govern?
Ruling:
Yes. The general rule is that foreign laws must be properly proven before it is admitted in
evidence; however, and exception to this is if an administrative agency recognizes a foreign law.
In this case, the respondent recognized Singapore law as the law that will govern the grant of
benefits. Therefore, Singaporean law will apply.

HSBC v. Sherman
Facts:
Eastern Book Supply obtained a loan from petitioner guaranteed by two directors of the
corporation. The guarantee provides that ‘all rights, obligations and liabilities shall be construed
and determined under and may be enforced in accordance with the laws of the Republic of
Singapore,’ and that ‘the Courts of Singapore shall have jurisdiction over all disputes arising
under this guarantee.’ When Eastern failed to pay, petitioner filed a collection case before the
RTC of Quezon City. The directors-guarantors contend that the RTC lacks jurisdiction.
Issue:
Does the RTC have jurisdiction over the case?
Ruling:
Yes. The provision in the guarantee stating that all rights, obligations and liabilities may
be enforced in accordance with Singaporean law is a permissive provision allowing the parties
discretion to choose which state can exercise jurisdiction. In the absence of exclusionary terms in
the agreement between the parties, the choice of forum is discretionary.
Chapter XII

TRANSBOUNDARY POLLUTION

The problem of pollution

Pollution is a problem that cuts across national boundaries. It knows no bounds. The effects as
well as the impacts thereof are not localized in one place. Sometimes, pollution may originate in
one place and travel to the territorial boundaries of another state so that it is highly possible that
the people in the source state may not feel its harmful effects as pollution could migrate several
hundred miles.

Thus it can be deduced that pollution is a grave concern for everybody. From an international
perspective, it has become a major issue among countries, especially adjoining ones. Take for
instance, haze in one country in Southeast Asia could easily travel to neighboring countries.
More often than not, this will require a joint or concerted effort among affected countries in that
region to contain the pollution.

In addition to international response, the haze could also provide a private cause of action for
affected people and entities, necessitating the need for determining the applicable law which
could be the law from the state of the source of the pollution or the state where the impacts are
felt. It is also possible that an international treaty or convention governs this problem, providing
a remedy for affected parties or a foundation from which the pollution may be abated for the
well-being of member countries and their people.

Climate Change

It seems however that the more pressing problem at the moment is climate change. In the United
Nations Framework Convention on Climate Change (UNFCC), climate change was defined as “a
change of climate that attributed directly or indirectly to human activity that alters the
composition of the global atmosphere and that is in addition to natural climate variability
observed over comparable time periods.” On the other hand, the Intergovernmental Panel on
Climate Change (IPCC), refers to climate change as any change in climate over time, whether
due to natural variability or as a result of human activity.
The IPCC is an international body established by the United Nations Environment Programme
(UNEP) and the World Meteorological Organization (WMO) for the primary purpose of
studying climate change. It regularly publishes Assessment Reports and these reports provide
policymakers concrete options and recommendations concerning climate change in the areas of
science, adaptation and mitigation.

Climate Change is a complex problem that has the entire world scampering for solutions for it
may well be too late if humanity did nothing to stop its progression. Its effects are both universal
and irreversible and could plunge humanity to a severe crisis which the world has not seen for a
long time. It may well upset the ecological balance, resulting in the extinction of several species
and the eradication of smaller countries from the map. Thus, any step towards the reduction of
carbon emissions will ultimately help.

One of the causes of climate change is the use of fossil fuels. Over time, industrialized nations
have used fossil fuels to prop up their economy and to energize industry. Fossil fuels have high
carbon emissions that contribute to global warming which causes weather disturbances, change
in weather patters and strong storms.

Stronger storms cause devastating floods that severely affect small and poor nations, most of
whom could ill afford the impacts climate change. This is unjust as these nations never caused
climate change. They however feel the impacts more than its generators. There is therefore an
element of injustice in this climate dilemma when those suffering huge damages are the innocent
countries and not the guilty ones. This is not in accordance with the polluter pays principle that
penalizes the source or cause of the pollution.

Thus, from a conflict of laws perspective, climate change litigation is a very difficult problem to
resolve. Climate change has public and private international law aspects. With regard to those
involving the relationship of nations, public international law governs. For those involving
citizens of different countries, private international law comes to play. For example, a citizen of a
country devastated by a violent storm could sue and oil company based in another country for
damages to life and property. In this regard, it is made difficult to assess the applicable law since
climate change may be caused in one country but the effects thereof could be felt in another
country.

In the case of Georgia v. Tennessee Copper Co. wherein the state of Georgia sued Tennessee
Copper co for injunction seeking to enjoin defendant company from discharging noxious gases
to its territory, Georgia alleged that the discharge damaged the vegetation in its territory. The
main issue in this case is whether or not Georgia is entitled to injunction. The court in ruling in
the affirmative, stated “that such a suit is a suit by a state for injury to it in its capacity as quasi-
sovereign, in which capacity the state has an interest independent of and behind the titles of its
citizen. It has the last words as to whether its mountains shall be stripped of their forest and its
inhabitants breathe pure air. It is not denied that the defendant generate in their works near the
Georgia line large quantities of sulphur dioxide, which becomes sulphurous acid by its mixture
with the air. It cannot be denied with success, that this gas often is carried by the wind great
distances and over great tracts of Georgia land. On the evidence, the pollution of the air and the
magnitude of that pollution are not open to dispute. Without need to go into details immaterial to
the suit, it is proper to add that we are satisfied, by a preponderance of evidence, that
sulphurous fumes cause and threaten damage on so considerable a scale to the forests and
vegetable life, if not to health, within the plaintiff state…”

Approaches to transboundary Pollution

Governmental interest analysis – This approach indulges courts to consider governmental

interests when two or more states have conflicting laws and interests. In governmental interest
analysis, courts compare the laws and interests of two states, determine if there is a real conflict,
and if a real conflict exists, apply the law of the state whose interest is more impaired. It is
imperative to consider the interest of other states since commercial transactions involve people
located in several jurisdictions which have conflicting interests in transaction. This interest may
have been a motivating factor in the agreement of the parties and so should be properly
considered. In torts cases too, a state may have an interest in the dispute due to its closer
connection to the parties. Hence, the need to favor laws over those of another state.

The Governmental analysis approach involves the following steps:

The court determines whether the relevant law of the affected jurisdictions with regard to the
issue in question is the same or different.
If there is a difference, the court examines each jurisdiction’s interest in the application of its
own law to determine whether a true conflict exists.
If the court finds that there is a true conflict, it carefully evaluates and compares the nature and
strength of the interest of each jurisdiction to determine which state’s interest would be more
impaired if its policy were subordinated to the policy of another state.

Lex Loci Delicti - This calls for the application of the law of the place where damages is
suffered or inflicted. It looks to the domestic law of a state which shall be applied to polluting
activities whose sources are foreign. Hence, so long as the effects are felt locally even if the
source comes from outside the country, domestic law may be applied to giver the act complained
of.

In the case of Pakootas v. Teck Cominco Metals, Ltd. wherein the defendant operated a lead-zinc
smelter in Trail, British Columbia which generated and disposed of hazardous materials into the
Columbia River located in the United States, the Environmental Protection Agency issued an
order directing Tech to conduct a Remedial Investigation/feasibility study under the
comprehensive Environmental Response, Compensation, and Liability Act (CERLA) for site
contamination and of which Teck did not comply. The issue on whether or not the application of
CERCLA to Teck involves an extraterritorial application of a domestic law to the untied states,
the court in ruling in the negative stated that “the location where a party arranged for disposal
or disposed of hazardous substances is not controlling for purposes of assessing whether
CERCLA is being applied extraterritorially, because CERCLA imposes liability for releases of
hazardous substances, and not merely for disposal or arranging for disposal of such substances.
Because the actual or threatened release of hazardous substances triggers CERCLA liability,
amd because the actual or threatened release here, the leaching of hazardous substances from
slag that settled at the site, took place in the United States which calls for a domestic application
of CERCLA. The argument that this case presents an extraterritorial application of CERCLA
fails because CERCLA liability does not attach until there is an actual or threatened releases of
hazardous substances in the environment.

Pakootas stands for the proposition that so long as there is a domestic connection with the act
that was performed or being performed, the same is no longer an extraterritorial application of
domestic law. In deed, the fact that an act which is sought to be regulated has a foreign source
but whose effects are felt locally, extraterritorial application cannot be claimed. There is now a
link that allows domestic law to regulate a polluting activity which is coming from outside the
border. The polluting entity can be held liable because if its operations extend outside a country’s
boundaries, it is reasonable to expect that it will be held liable for its polluting activity. Pakootas
is significant in that it reinforces a state’s resolve to clean up its environment even if the source
of the pollution is from another country. This is a multi state event and not an extraterritorial
application of domestic law.

Most significant relationship approach – An examination is made as to the state that has the most
connection to a case. The law of the state which has the most connection shall be applied in the
resolution of the conflict. The points of contact, as enumerated in the Restatement of conflict of
laws, are:
The place where the injury occurred;
The place where the conduct causing the injury occurred;
The domicile, residence, nationality, place of incorporation, place of business of the parties; and
The place where the relationship, if any, between the parties is centered.

Legal impediments which may have existed in the past with respect to the recovery of damages
are being removed gradually by many jurisdictions in what may be characterized as a more
focused attempt to prevent or curtail polluting activities and to ensure that those responsible bear
the costs associated therewith.

In recent years, there has been a recognition by the global community at large that any hope of
success in the ongoing battle to preserve what is left of a once pristine environment depends
upon increased cooperation among nations and states both developed and developing countries.
This cooperation includes the right of unrestricted access by non residents to the court system
having jurisdiction over the part responsible for the polluting activity, and an effort by all
jurisdictions to both enact and enforce more stringent environmental standards.