Phases in Conflict Resolution:

I. What are the phases involved in resolving conflicts problems?

1. Determination of Jurisdiction
The court must determine first whether or not it has jurisdiction over the case according
to the law of the forum or the court where the case was filed.

When a conflicts case that involves a foreign element is brought before a court of
administrative agency, what are the three alternatives open to the latter in disposing of
it?
a. Dismiss the case, either because of lack of jurisdiction or refusal to assume
jurisdiction over the case
b. Assume jurisdiction over the case and apply the internal law of the forum
c. Assume jurisdiction over the case and take into account or apply the law of some
other State.

2. Determine whether to apply internal law or the proper foreign law

The court will determine whether to apply internal law of the forum or the proper
foreign law, considering the attendant circumstances.

3. Enforcement of Judgment

Hasegawa vs. Kitamura

GR No. 149777; November 23, 2007

FACTS:

 Nippon Engineering Consultants Co., Ltd. (Nippon), 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 starting on April 1, 1999. 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.

 When the STAR Project was near completion, DPWH engaged the consultancy services of
Nippon for the detailed engineering and construction supervision of the Bongabon-Baler Road
Improvement (BBRI) Project.

 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 just in time for the ICA's expiry.
  Respondent consequently initiated a civil case for specific performance and damages.

 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.

 RTC denied the motion to dismiss. CA resolved to dismiss the petition on procedural grounds—
for lack of statement of material dates and for insufficient verification and certification against
forum shopping.

ISSUE: 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.

HELD: No.

The court held that 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?

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 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. 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.

In this case, only the first phase is at issue—jurisdiction. 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. 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" 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." 65 It controls the nature, construction, and validity of the
contract66 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.

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. They determine which state's law is to be applied in
resolving the substantive issues of a conflicts problem. 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.

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 court’s 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, 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.

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.

II. According to the case of Hasegawa and Nippon vs. Kitamura, what are the consecutive phases
involved in the judicial resolution of conflicts problems?
1. Jurisdiction
2. Choice of law
3. Recognition and enforcement of judgments

III. What are the following questions to be asked corresponding to these phases?
1. Where should the litigation be initiated?
2. Which law will the court apply?
3. Where can the judgment be enforced?

IV. What is the difference between jurisdiction and choice of law?

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.
 V. Does the power to exercise jurisdiction automatically give a state constitutional authority to apply
forum law?
No. 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

Nature of Conflicts Rules, the Problem of Characterization and Renvoi Doctrine