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Stipulation on Venue

66. Pacific Consultant & Jens Peter Henrichsen v. Klaus Schonfeld

FACTS:

Respondent Klaus Schonfeld is a Canadian citizen. He had been a consultant in the field of
environmental engineering and water supply and sanitation.
Pacicon Philippines Inc. (PPI) is a corporation duly established and incorporated in accordance
with the Philippines law which engage in the business of providing specialty and technical
services both in and out of the Philippines. It is a subsidiary of Pacific Consultant International of
Japan (PCIJ).
Philippine Consultant International of Japan (PCJI) is a foreign corporation with principal office in
Tokyo.
Jens Peter Henrichsen is the company president of PPI and also one of the directors of PCIJ.
Sometime in 1997, Philippine Consultant (PCIJ) decided to engage in consultancy services of
water supply and sanitation in the Philippines. So they employed respondent Klaus Schonfeld as
the sector manager of Pacicon Philippines Inc. (PPI).
PPI through Jens (President) sent a letter of employment to respondent Klaus in Canada
requesting him to accept and affix his conformity thereto. However, Kluas made some revisions
and signed the contract and sent back to Jens in Tokyo, Japan.

Section 21 of the General Conditions of Employment appended to the letter of employment reads:

21 Arbitration

Any question of interpretation, understanding or fulfilment of the conditions of employment, as


well as any question arising between the Employee and the Company which is in consequence of
or connected with his employment with the Company and which cannot be settled amicably, is to
be finally settled, binding to both parties through written submissions, by the Court of Arbitration
in London.5

Respondent Klaus arrived in the Philippines. He assumed his position in PPI as sector manager
and he accorded the status of a resident alien. In conformity with the Labor Code, PPI applied for
an Alien Employment Permit for the respondent before DOLE and the DOLE granted the
application and issued the permit to respondent Klaus.
On May 5, 1999 respondent received a letter from Jens Henrichsen informing that his
employment has been terminated effective August 4, 1999. He filed a several money claims
against PPI including unpaid salary, leave pay, air fare from Manila to Canada and cost of
shipment of goods to Canada. PPI partially settled some of his claims but refused to pay the rest.
Respondent filed a complaint for Illegal Dismissal against Pacicon Philippines Inc. (PPI) and Jens
with the Labor Arbiter before the NLRC.
Petitioners filed a Motion to dismiss the complaint on the ff grounds (1) The LA has no
jurisdiction over the subject matter (2) Venue was improperly laid because respondents cause of
action was based on his Letter of Employment executed in Tokyo, Japan. Under the Principle of
Lex Loci Contractus, the complaint should have been filed in Tokyo, Japan. Moreover, Petitioner
also raise the issue on stipulation on venue in the employment contract that both parties had
agreed that any employment-related dispute should have brought before the London Court of
Arbitration. Since even the SC had already ruled that such agreement on venue is valid.
Therefore, Philippine courts have no jurisdiction.
Respondent opposed the Motion to dismiss. Klaus contends that he was employed by PPI to
work in the Philippines under a separate contract from the contract of employment of PCIJ. Kalus
insisted that his employer is PPI although PPI is wholly-owned subsidiary of PCIJ. He further
insisted that the principles of forum non-conveniens and lex loci contractus do not apply and
that although he is a Canadian citizen, Philippine Labor laws have jurisdiction over this case.

ISSUE: W/N venue was improperly laid.

HELD:

No.

A mere stipulation on venue of an action is not enough to preclude parties from bringing a case to
other venue. The parties must be able to show that such stipulation is exclusive. In the absence of
qualifying or restrictive words, the stipulation should be considered merely as an agreement on and,
not a limitation on venue to a particular case.

In the instant case, no restrictive words like only Solely exclusively in this court in no other
court save particularly nowhere else but/except were stated in the contract. It cannot be said that
the court of arbitration in London is an exclusive venue to bring forth any complaint arising out of
the employment contract.