National Union Fire Insurance v Stolt-Nielsen GR 87958

FACTS:
- United Coconut Chemicals, Inc. (hereinafter referred to as
SHIPPER) shipped 404.774 metric tons of distilled C6-C18 fatty acid
on board MT "Stolt Sceptre," a tanker owned by Stolt-Nielsen
Philippines Inc. from Bauan, Batangas, Philippines, consigned to
"Nieuwe Matex" at Rotterdam, Netherlands, covered by Tanker Bill of
Lading BL No. BAT-1
- The shipment was insured under a marine cargo policy with
Petitioner National Union Fire Insurance Company of Pittsburg, a non-
life American insurance corporation, through its settling agent in the
Philippines, the American International Underwriters (Philippines), Inc.,
the other petitioner herein
- The Bill of Lading issued by the CARRIER contained a general
statement of incorporation of the terms of a Charter Party between the
SHIPPER and Parcel Tankers, Inc., entered into in Greenwich,
Connecticut, U.S.A.
- Upon receipt of the cargo by the CONSIGNEE in the Netherlands,
it was found to be discolored and totally contaminated
- The claim filed by the SHIPPER-ASSURED with the CARRIER
having been denied, the INSURER indemnified the SHIPPER
pursuant to the stipulation in the marine cargo policy covering said
shipment
- The INSURER filed suit against the CARRIER, before the Regional
Trial Court of Makati, Branch 58 (RTC), for recovery of the sum of
P1,619,469.21, with interest, representing the amount the INSURER
had paid the SHIPPER-ASSURED
- The CARRIER moved to dismiss/suspend the proceedings on the
ground that the RTC had no jurisdiction over the claim the same being
an arbitrable one
- RTC denied motion to dismiss
CA reversed RTC: case is suspended pending arbitration as provided
under the Charter Party Agreement between the parties

ISSUE: Are the terms of the Charter Party, particularly the provision
on arbitration, binding on the INSURER?
HELD: Yes, the terms of the Charter Party regarding arbitration is
binding.
- Bill of Lading provides, in part: all the terms whatsoever of the
said Charter except the rate and payment of freight specified therein
apply to and govern the rights of the parties concerned in this
shipment
- The Charter Party provides:
o 4. Arbitration. Any dispute arising from the making,
performance or termination of this Charter Party shall be
settled in New York, Owner and Charterer each appointing an
arbitrator, who shall be a merchant, broker or individual
experienced in the shipping business; the two thus chosen, if
they cannot agree, shall nominate a third arbitrator who shall
be an admiralty lawyer. Such arbitration shall be conducted in
conformity with the provisions and procedure of the United
States arbitration act, and a judgment of the court shall be
entered upon any award made by said arbitrator. Nothing in
this clause shall be deemed to waive Owner's right to lien on
the cargo for freight, deed of freight, or demurrage.
- Clearly, the Bill of Lading incorporates by reference the terms of
the Charter Party. It is settled law that the charter may be made part of
the contract under which the goods are carried by an appropriate
reference in the Bill of Lading
- As the subrogee of the SHIPPER, the INSURER is contractually
bound by the terms of the Charter party. Any claim of inconvenience or
additional expense on its part should not render the arbitration clause
unenforceable
- Arbitration, as an alternative mode of settling disputes, has long
been recognized and accepted in our jurisdiction (Chapter 2, Title XIV,
Book IV, Civil Code). Republic Act No. 876 (The Arbitration Law) also
expressly authorizes arbitration of domestic disputes. Foreign
arbitration as a system of settling commercial disputes of an
international character was likewise recognized when the Philippines
adhered to the United Nations "Convention on the Recognition and
the Enforcement of Foreign Arbitral Awards of 1958," under the 10
May 1965 Resolution No. 71 of the Philippine Senate, giving
reciprocal recognition and allowing enforcement of international
arbitration agreements between parties of different nationalities within
a contracting state
- It has not been shown that the arbitral clause in question is null and
void, inoperative, or incapable of being performed. Nor has any
conflict been pointed out between the Charter Party and the Bill of
Lading

DOCTRINE:
Arbitration, as an alternative mode of settling disputes, has long been
recognized and accepted in our jurisdiction (Chapter 2, Title XIV, Book
IV, Civil Code). Republic Act No. 876 (The Arbitration Law) also
expressly authorizes arbitration of domestic disputes

Foreign arbitration as a system of settling commercial disputes of an

international character was likewise recognized when the Philippines
adhered to the United Nations "Convention on the Recognition and
the Enforcement of Foreign Arbitral Awards of 1958

Querubin v Querubin GR L-3693

FACTS:
Silvestre Querubin is born to Filipino parents(In Ilocos)
He left for the US to study. He eventually earned the
Masters of Arts and Scieneces from University of Southern
California
Later on, he married Margaret in
Albuquerque, New Mexico and had a daughter
Then he applied for divorce, based on mental
cruelty
It was granted based on his wifes infidelity
The LA court, however, granted the custody of the
child to a third party, and held that each party is restrained from
removing the child from the California without first securing the
permission of the court
It was not awarded to the wife at first because she
then living with a man whos not his husband
 After the issuance of this interim order, Silvestre
brought the child to Ilocos because he wants the child to be
educated in an environment of high morality
And then the court awarded the custody
to the wife because shes now married to man and
they have a well-equipped home and stable
income
This was an interlocutory order
Thereafter, Margaret filed a petition for habeas corpus
in CFI Ilocos based on the interlocutory decree of the court of
California which gave her the custody
CFI: denied the petition for habeas corpus
Hence, this appeal

ISSUE: WON an interlocutory order may be recognized in the

Philippines?
HELD:
An interlocutory decree on the custody of a child is not a
final decision
It is subject to change as circumstances change
It is not a definitive judgment based on merits
Moreover, there was no evidence that Margaret had
sufficient funds to finance the trip from Ilocos to LA and to
answer for their food, care and education
There is no evidence that she is able to pay the travel
expenses
Also, judgements rendered by foreign courts will not
be given effect in PH if they are contrary to the laws, customs
and public order
The argument of Margaret regarding theory of comity
must also fail
The doctrine of reciprocity, or comity, is adopted when
the foreign court has jurisdiction to hear the case, the parties
have appeared and discussed the matter in the background
Sometimes it is granted as a privilege only.
The interlocutory order giving custody of the child to
 Margaret is in conflict with the express provisions of the
legislation of PH
Custody cannot be granted to the guilty spouse, even
if when she already married him. She was the unfaithful one

DECISION: Margaret Lost. Silvestre wins.

DOCTRINE: an interlocutory order cannot be recognized in the
Philippines, especially when that is contrary to public morals

Borthwick v Castro Bartolome 152 SCRA 229

FACTS:
Petitioner Borthwick is an American citizen living in the
Philippines, owned real property in Hawaii. In his business dealings
with private respondent, Joseph Scallon, Borthwick issued the
promissory notes. Borthwick failed to pay the sums owing upon
maturity and despite demands. The promissory notes provided that
upon default, action may be brought for collection in Los Angeles,
California, or at Scallon's option, in Manila or Honolulu.
Borthwick was served with summons when he was in California,
pursuant to Hawaiian law allowing service of process on a person
outside the territorial confines of the State. Because Borthwick
ignored the summons, a judgment by default was entered against
him.
However, Scallon's attempt to have the judgment executed in
Hawaii and California failed because Borthwick had no assets in
those states. Scallon then came to the Philippines and
brought suit against Borthwick seeking enforcement of
the default judgment of the Hawaii court. Again, after due
proceedings, judgment by default was rendered against him,
ordering Borthwick to pay Scallon the amount prayed for.
Borthwick moved for a new trial. He contended that the judgment of
the court of Hawaii is unenforceable in the Philippines because it
was invalid for want of jurisdiction over the cause of
action and over his person.
ISSUE:
WON the foreign judgment against the defendant enforceable is
enforceable the Philippines
HELD:
Yes.
"It is true that a foreign judgment against a person is merely
"presumptive evidence of a right as between the parties," and
rejection thereof may be justified, among others, by "evidence of a
want of jurisdiction" of the issuing authority, under Rule 39 of the
Rules of Court. In the case at bar, the jurisdiction of the Circuit
Court of Hawaii hinged entirely on the existence of either of two
facts in accordance with its State laws, i.e., either Borthwick owned
real property in Hawaii, or the promissory notes' sued upon resulted
from his business transactions therein. Scallon's complaint clearly
alleged both facts. Borthwick was accorded opportunity to
answer the complaint and impugn those facts, but he
failed to appear and was in consequence declared in
default. There thus exists no evidence in the record of the Hawaii
case upon which to lay a conclusion of lack of jurisdiction, as
Borthwick now urges.
And in the default judgment subsequently promulgated by the court
of Makati, the Court a quo decreed enforcement of die judgment
affirming among others the jurisdictional facts, that Borthwick
owned real property in Hawaii and transacted business therein.
The court also deemed that the summons was properly served when
it was received by Borthwick's resident domestic houseboy.
DOCTRINE:
A foreign judgment against a person is merely "presumptive
evidence of a right as between the parties," and rejection thereof
may be justified, among others, by "evidence of a want of
jurisdiction" of the issuing authority.
Phil Int'l Shipping v CA 172 SCRA 810
FACTS:

leased
In 1979 to 1981, Philippine International Shipping Corporation (PISC)
from Interpool Ltd. and its wholly owned subsidiary, the
Container Trading Corporation, several containers pursuant
to the Membership Agreement and Hiring Conditions and the Master
Equipment Leasing Agreement both dated June 8, 1979. The other petitioners
Philippine Construction Consortium Corporation, Pacific Mills Inc. and Universal
Steel Smelting Company, guaranteed to pay the obligation due and any liability of
the PISC arising out of the leasing or purchasing of equipment.

In 1979 to 1981, PISC incurred outstanding and unpaid obligations with Interpool,
in the amount of $94,456.28, representing unpaid per diems, drop-off charges,
interest and other agreed charges, resulting in a case before the US
District Court, Southern District of New York wherein a
default judgment against petitioners was rendered
ordering the corp. to pay in the amount of $80,779.33, as liquidated
damages, together with interest in the amount of $13,676.95 and costs in the
amount of $80.00. or for a total judgment of $94,456.28. To enforce the default
judgment of the US District Court, a complaint was instituted against PISC and
other guarantors before the QC RTC. PISC failed to answer the complaint and
they were declared in default. The RTC ruled in favor of Interpool and which was
affirmed by the CA.

In the first instance, petitioners contend that the U.S. District Court never
acquired jurisdiction over their persons as they had not been served with
summons and a copy of the Complaint in 83 Civil 290 (EW). In the second
instance, petitioners contend that such jurisdictional infirmity effectively
prevented the Regional Trial Court of Quezon City from taking cognizance of the
Complaint in Civil Case No. Q-39927 and from enforcing the U.S. District Court's
Default Judgment against them. Petitioners contend, finally, that assuming the
validity of the disputed Default Judgment, the same may be enforced only
against petitioner PISC the 9 petitioners not having been
impleaded originally in the case filed in New York, U.S.A .

ISSUE:
W/N theUS District Court default judgment can be enforced
and against the 9 other petitioners?
HELD:
Yes

To begin with, the evidence of record clearly shows that the U.S. District Court
had validly acquired jurisdiction over PISC under the procedural
law applicable in that forum i.e., the U.S. Federal Rules on Civil
Procedure. Copies of the Summons and Complaint which were in
fact attached to the Petition for Review filed with the SC, were
stamped "Received, 18 Jan 1983, PISC Manil a." indicating that service
thereof had been made upon and acknowledged by the PISC office in Manila on,
18 January 1983 That foreign judgment-which had become final and executory,
no appeal having been taken therefrom and perfected by petitioner PISC-is thus
"presumptive evidence of a right as between the parties and their successors in
interest by a subsequent title." The SC note, further that there has been
in this case no showing by petitioners that the Default Judgment
rendered by the U.S. District Court was vitiated by "want of
notice to the party, collusion, fraud, or clear mistake of law or
fact. " In other words, the Default Judgment imposing upon petitioner PISC a
liability of U.S.$94,456.28 in favor of respondent Interpool, is valid and may be
enforced in this jurisdiction.

The existence of liability on the part of petitioner PISC having been duly
established in the U.S. case, it was not improper for respondent Interpool, in
seeking enforcement in this jurisdiction of the foreign judgment imposing such
liability, to have included the other 9 petitioners herein (i.e., George Lim, Marcos
Bautista, Carlos Laude,Tan Sing Lim, Antonio Liu Lao, Ong Teh Philippine
Consortium Construction Corporation, Pacific Mills, Inc. and Universal Steel
Smelting Co., Inc.) as defendants in Civil Case No. Q- 39927, filed with Branch
93 of the Regional Trial Court of Quezon City. The record shows that said
9 petitioners had executed continuing guarantees" to secure
performance by petitioner PISC of its contractual obligation s. As
guarantors, they had held themselves out as liable. "whether jointly, severally, or
in the alternative," to respondent Interpool under their separate "continuing
guarantees" executed in the Philippines. The New York award of U.S.$94,456.28
is precisely premised upon a breach by PISC of its own obligations under those
Agreements. The SC consider the 9 other petitioners as persons
against whom [a] right to relief in respect to or arising out of
the same transaction or series of transactions [has been]
alleged to exist" and, consequently, properly impleaded as
defendants in Civil Case No. Q-39927. There was, in other words, no
need at all, in order that Civil Case No. Q-39927 would prosper, for respondent
Interpool to have first impleaded the 9 other petitioners in the New York case and
there obtain judgment against all 10 petitioners

DOCTRINE:

Northwest Orient Airlines v CA 241 SCRA 192

FACTS:
Northwest US corporation
CF Sharp Ph corporation
An International Passenger Sales agency
agreement was entered into by the parties wherein CF
Sharp was authorized to sell Northwests air
transportation tickets
CF Sharp failed to remit the proceeds of sale.
Northwest filed a case for collection of proceeds with
damages before Tokyo District Court
Two attempts of service of summons failed. 1 attempt st

person authorized to receive summons was in Mnl. 2 attempt: nd

same person no longer an employee. After the second

attempt, the summons were coursed through the
diplomatic channels. Summons were received from the sheriff
of Manila. Still, no appearance from Cf Sharp. Hence, it
proceed to trial.
Tokyo Court: ordered to pay with damages
Because the judgment cannot be enforced in Japan,
Northwest filed case in Manila to ENFORCE judgment
DEFENSE: want of jurisdiction; against
 public policy; without due process
TC: granted the motion to dismiss; Foreign courts
cannot acquire jurisdiction over the person by serving beyond its
jurisdiction.
CA: affirmed; the process of the court has no
extraterritorial effect and no jurisdiction is acquired over the
person when it served beyond the boundaries of the State.

ISSUE: W/N the Japan courts acquired jurisdiction over CF

sharp?

HELD: YES.
Under the processual presumption: In the
absence of proof regarding the Japanese law, the foreign law is
presumed to be similar with PH law on service of summons on a
private foreign corporation doing business in the Philippines
Section 14 Rule 14 of Rules of Court provides:
that if the defendant is a foreign
corporation doing business in the Philippines ,
service may be made: (1) on its resident agent
designated in accordance with law for that purpose, or,
(2) if there is no such resident agent, on the
government official designated by law to that effect, or
(3) on any of its officers or agents within the Philippines.
In this case, the rule was fully complied
with. The service of summons made is equivalent to service on
the proper government official. SHARP
was admittedly
doing business in Japan through its four duly
registered branches at the time the collection suit
against it was filed, then in the light of the
processual presumption, SHARP may be deemed
a resident of Japan.
The court of japan sent the summons to the
Ministry of Affairs of Japan to Japanese Embassy in
 Manila to Ministry of Affairs of PH to Executive Judge of Mnl to
Deputy Sheriff to CF Sharp in the Phils.
CF sharp was afforded every opportunity to present its
case. No unfair prejudice. No denial of due process.Therefore, it
validly acquired jurisdiction over the CF Sharp.

DOCTRINE:

For failure to prove want of jurisdiction, the foreign judgment can be

validly enforced.

PHILSEC v CA GR 103493
FACTS:

Ducat obtained separate loans from Ayala and

PhilSec $US2.5M, secured by shares of stock.

1488 Inc. assumed Ducats obligation.

To facilitate the payment of the loan, it. sold
a parcel of land in Texas, USA to Athona for $2.8M.
Athona paid it by means of the loan from PhilSec and Ayala
$2.5M and promissory note of $307k.
1488, Inc. paid PhilSec and Ayala of $2.5M. Ducat
was released from obligation.
Later, Athona failed to pay the interest due to 1488
Inc.

As a result, the entire obligation became due and
demandable.

Drago Daic, president of 1488 Inc., filed case against
Philsec, Ayala and Athona for the recovery of the balance $307k
and for damages for breach of contract and for fraud
in misrepresenting the marketability of the shares of
 stock before the US District Court of Texas.
Athona filed counterclaim seeking for the recovery of
damages and excess
payment made to 1488 Inc for the alleged overpricing
of land and in alternative, rescission of the sale of property.
On the other hand, Philsec and Ayala filed motion to
dismiss for lack of jurisdiction over their person. The motion was
denied. Hence, they filed a joint answer for the rescission of sale.
US court: dismiss counterclaim by Athona and
ordered Philsec & Ayala to pay damages (favor respondents
Ducat)
While case was pending in US Court, PhilSec, Ayala &
Anthona filed complaint for sum of money against Ducat before
RTC of Makati for latters fraudulent misrepresentation which
induced to enter into agreement.
Initially RTC Makati: Favored PhilSec, Ayala &
Anthona; issued writ of attachment against property of Ducat.
Later, it favored Ducat. It dismiss the case and lifted
the writ of attachment. The extraterritorial service of summons by
publication was ineffectual considering that 1488 Inc is a non-
resident foreign corporation and Daic is a non-resident alien.
CA: affirmed; case for recovery of sum is an action in
personam. Thus, service of summons by publication did not vest
TC with jurisdiction.
Pending the civil case before CA, respondents Ducat
moved for the enforcement of foreign judgment which ordered
Philsec & Ayala to pay. It pleaded the foreign judgment as res
judicata.
Defense: the foreign judgment cannot be enforced
without giving them opportunity to impeach it on grounds of want
of jurisdiction, want of notice to the party, collusion, fraud, or
clear mistake of law.

ISSUE:

W/N the foreign judgment will bar the civil case in

Philippines?
HELD:
NO. The civil case was allowed to proceed. In case of judgment
against a person, the judgment is presumptive evidence of
right as between the parties and their successors in interest by a
subsequent title but the judgment may be repelled by evidence of
want of jurisdiction, want of notice to the party, collusion, fraud, or
clear mistake of law or fact.

A foreign judgment is subject to challenge if the foreign

judgment is sought to be enforced against him in a separate
proceeding

. However, it is not subject to challenge when it is pleaded

to resist a claim.
In this case, US judgment in favor of respondents were sought to
be enforced against the Philsec & Ayala in Phil. courts .
However, no opportunity were given to petitioners to challenge the US
court judgment. The proceedings in the TC were summary.
Neither the TC nor CA was even furnished with the copies of the
pleadings in the US court or apprised of the evidence presented
thereat, to assure a proper determination of whether the issues
litigated in the US were exactly the issues raised in this case such that
judgment would constitute res judicata.

DOCTRINE:
The foreign judgment did not bar the civil case from proceeding. The
judgment was repelled by not giving the petitioners an opportunity to
challenge the foreign judgment.

Philippine Aluminum Wheels v FASGI GR 137378

FACTS:
On 01 June 1978, FASGI Enterprises Incorporated
(FASGI), a corporation organized and existing under and by
virtue of the laws of the State of California, United States of
America, entered into a distributorship arrangement with
Philippine Aluminum Wheels, Incorporated (PAWI), a
Philippine corporation, and Fratelli Pedrini Sarezzo S.P.A.
(FPS), an Italian corporation.
The agreement provided for the purchase,
importation and distributorship in the United States of
aluminium wheels manufactured by PAWI. FASGI then paid
PAWI the FOB value of the wheels.
Unfortunately, FASGI later found the shipment to be
defective and in non-compliance with the contract.
On 21 September 1979, FASGI instituted an action
against PAWI and FPS for breach of contract and recovery
of damages in the amount of US$2,316,591.00 before the United
States District Court for the Central District of California.
In the interim, realizing the protracted
process of litigation, two agreements were entered by
the parties but PAWI kept on failing to discharge its
obligations therein.
Irked by PAWIs persistent default, FASGI filed with
the US District Court of the Central District of California the
agreements for judgment against PAWI.
On 24 August 1982, FASGI filed a notice of entry of
judgment.
Unable to obtain satisfaction of the final
judgment within the United States, FASGI filed a
complaint for enforcement of foreign judgment,
before RTC Makati.
The Makati court, however, dismissed the case, on
the ground that the decree was tainted with collusion, fraud, and
clear mistake of law and fact.
The lower court ruled that the foreign judgment
ignored the reciprocal obligations of the parties. While the
assailed foreign judgment ordered the return by PAWI of
the purchase amount, no similar order was made requiring
FASGI to return to PAWI the third and fourth containers of
wheels. This situation amounted to an unjust enrichment on
the part of FASGI. Furthermore, the RTC said, agreements
 which the California court had based its judgment were a
nullity for having been entered into by Mr. Thomas Ready,
counsel for PAWI, without the latters authorization.
However, the Court of Appeals reversed this decision.
ISSUE:
WON the Philippine Court may enforce the said
foreign judgment.
HELD:
In this jurisdiction, a valid judgment rendered by a
foreign tribunal may be recognized insofar as the immediate
parties and the underlying cause of action are concerned so long
as it is convincingly shown that there has been an opportunity for
a full and fair hearing before a court of competent jurisdiction;
that trial upon regular proceedings has been conducted,
following due citation or voluntary appearance of the defendant
and under a system of jurisprudence likely to secure an impartial
administration of justice; and that there is nothing to indicate
either a prejudice in court and in the system of laws under which
it is sitting or fraud in procuring the judgment. A foreign
judgment is presumed to be valid and binding in the
country from which it comes, until a contrary showing,
on the basis of a presumption of regularity of
proceedings and the giving of due notice in the foreign
forum

PAWI claims that its counsel, Mr. Ready, has acted

without its authority. Verily, in this jurisdiction, it is clear that an
attorney cannot, without a clients authorization, settle the action
or subject matter of the litigation even when he honestly believes
that such a settlement will best serve his clients interest.
However, PAWI failed to substantiate this
complain with sufficient evidence. Hence, the
foreign judgment must be enforced.

Even if PAWI assailed that fraud tainted the
 agreements which the US Court based its judgment, this cannot
prevent the enforcement of said judgment.

PAWI claimed that there was collusion and fraud in
the signing of the agreements. Although the US Court already
adjudicated on this matter, PAWI insisted on raising it again in
this Court.
Fraud, to hinder the enforcement within
this jurisdiction of a foreign judgment, must be
extrinsic, i.e., fraud based on facts not controverted or
resolved in the case where judgment is rendered, or that
which would go to the jurisdiction of the court or would
deprive the party against whom judgment is rendered a
chance to defend the action to which he has a meritorious
case or defense.
In fine, intrinsic fraud, that is, fraud
which goes to the very existence of the cause of
action such as fraud in obtaining the consent
to a contract is deemed already adjudged, and
it, therefore, cannot militate against the
recognition or enforcement of the foreign
judgment.
DOCTRINE:

Mijares v Hon. Ranada GR 139325

Facts:
Complaint in US district court of Hawaii against estate of Marcos
brought by ten Filipino citizens for a class of people, around 10,000,
alleging human rights abuses against them during the Marcos regime.
Alien Tort Act was invoked to give jurisdiction. Award in their favor
was One Billion Nine Hundred Sixty Four Million Five Thousand Eight
Hundred Fifty Nine Dollars and Ninety Cents ($1,964,005,859.90).
Petitioners tried to have a foreign courts award enforced against the
estate of Marcos but the trial court asked for a filing fee of over Four
Hundred Seventy-Two Million Pesos (P472,000,000.00). motion to
dismiss alleged by estate, one ground was the non-payment of filing
fees the petitioners only having paid P410.00. Complaint dismissed by
trial court without prejudice. Subject matter deemed capable of
pecuniary estimation even if it involved a foreign judgment.

Petitioners submit that their action is incapable of pecuniary

estimation as the subject matter of the suit is the enforcement of a
foreign judgment, and not an action for the collection of a sum of
money or recovery of damages. Petitioners invoke Section 11, Article
III of the Bill of Rights of the Constitution, which provides that Free
access to the courts and quasi-judicial bodies and adequate legal
assistance shall not be denied to any person by reason of poverty, a
mandate which is essentially defeated by the required exorbitant filing
fee. The adjudicated amount of the filing fee, as arrived at by the RTC,
was characterized as indisputably unfair, inequitable, and unjust.

The Commission on Human Rights (CHR) was permitted to intervene

in this case. It urged that the petition be granted and a judgment
rendered, ordering the enforcement and execution of the District Court
judgment. For the CHR, the Makati RTC erred in interpreting
the action for the execution of a foreign judgment as a
new case, in violation of the principle that once a case
has been decided between the same parties in one
country on the same issue with finality, it can no longer
be relitigated again in another country . The CHR likewise
invokes the principle of comity, and of vested rights. Hence this
appeal.

Issue: Whether the action filed with the lower court in dismissing the
case?

Held:
Petitioners complaint may have been lodged against an estate, but it
is clearly based on a judgment, the Final Judgment of the US District
Court. The provision does not make any distinction between a local
judgment and a foreign judgment, and where the law does not
distinguish, we shall not distinguish.
This is not a real action, as it involves no real property or
title or possession nor does the foreign award pertain to
any real property.
The rules of comity, utility and convenience of nations have
established a usage among civilized states by which final judgments
of foreign courts of competent jurisdiction are reciprocally respected
and rendered efficacious under certain conditions that may vary in
different countries. The court then cites the relevant provision in our
rules of court concerning the effect of foreign judgments. There is
an evident distinction between a foreign judgment in an
action in rem and one in personam. For an action in rem,
the foreign judgment is deemed conclusive upon the title
to the thing, while in an action in personam, the foreign
judgment is presumptive, and not conclusive, of a right
as between the parties and their successors in interest by
a subsequent title
. However, in both cases, the foreign judgment is susceptible to
impeachment in our local courts on the grounds of want of
jurisdiction or notice to the party, collusion, fraud, or clear
mistake of law or fact.

Thus, the party aggrieved by the foreign judgment is entitled to defend

against the enforcement of such decision in the local forum. It is
essential that there should be an opportunity to challenge the foreign
judgment, in order for the court in this jurisdiction to properly
determine its efficacy. It is clear then that it is usually necessary for an
action to be filed in order to enforce a foreign judgment, even if such
judgment has conclusive effect as in the case of in rem actions, if only
for the purpose of allowing the losing party an opportunity to challenge
the foreign judgment, and in order for the court to properly determine
its efficacy.

Consequently, the party attacking a foreign judgment has the burden

of overcoming the presumption of its validity. The rules are silent as to
what initiatory procedure must be undertaken in order to enforce a
foreign judgment in the Philippines. But there is no question that the
filing of a civil complaint is an appropriate measure for such purpose.

Complaint is capable of pecuniary estimation.

More importantly, the matters for proof are different. Using the above
example, the complainant will have to establish before the court the
tortious act or omission committed by the tortfeasor, who in turn is
allowed to rebut these factual allegations or prove extenuating
circumstances. Extensive litigation is thus conducted on the facts, and
from there the right to and amount of damages are assessed. On the
other hand, in an action to enforce a foreign judgment,
the matter left for proof is the foreign judgment itself, and
not the facts from which it
prescinds.

The actionable issues are generally restricted to a review of

jurisdiction of the foreign court, the service of personal notice,
collusion, fraud, or mistake of fact or law. The limitations on review is
in consonance with a strong and pervasive policy in all legal systems
to limit repetitive litigation on claims and issues. Otherwise known

as the policy of preclusion , it seeks to

protect party expectations resulting from previous litigation,
to safeguard against the harassment of defendants, to insure
that the task of courts not be increased by never-ending
litigation of the same disputes.

The petitioners thus paid the correct amount of filing fees, and it was a
grave abuse of discretion for respondent judge to have
applied instead a clearly inapplicable rule and dismissed the
complaint. However, generally accepted principles of international
law, by virtue of the incorporation clause of the Constitution, form part
of the laws of the land even if they do not derive from treaty
obligations. This along with the principles of comity and others calls for
the recognition and enforcement of foreign judgments. Thus, relative
to the enforcement of foreign judgments in the Philippines, it emerges
that there is a general right recognized within our body of laws, and
affirmed by the Constitution, to seek recognition and enforcement of
foreign judgments, as well as a right to defend against such
enforcement on the grounds of want of jurisdiction, want of notice to
the party, collusion, fraud, or clear mistake of law or fact.

The preclusion of an action for enforcement of a foreign

judgment in this country merely due to an exhorbitant
assessment of docket fees is alien to generally accepted
practices and principles in international law.
Indeed, there are grave concerns in conditioning the amount of the
filing fee on the pecuniary award or the value of the property subject of
the foreign decision. Such pecuniary award will almost certainly be in
foreign denomination, computed in accordance with the applicable
laws and standards of the forum. The vagaries of inflation, as well as
the relative low-income capacity of the Filipino, to date may very well
translate into an award virtually unenforceable in this country, despite
its integral validity, if the docket fees for the enforcement thereof were
predicated on the amount of the award sought to be enforced.

One more word. It bears noting that Section 48, Rule 39

acknowledges that the Final Judgment is not conclusive yet, but
presumptive evidence of a right of the petitioners against the Marcos
Estate. Moreover, the Marcos Estate is not precluded to present
evidence, if any, of want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact. This ruling, decisive
as it is on the question of filing fees and no other, does not
render verdict on the enforceability of the Final Judgment
before the courts under the jurisdiction of the Philippines, or
for that matter any other issue which may legitimately be presented
before the trial court. Such issues are to be litigated before the trial
court, but within the confines of the matters for proof as laid down in
Section 48, Rule 39. On the other hand, the speedy resolution of this
claim by the trial court is encouraged, and contumacious delay of the
decision on the merits will not be brooked by this Court.

Asiavest Merchant Bankers v CA GR 110263

FACTS:
In 1985, the High Court of Malaysia ordered the Philippine National
Construction Corporation (PNCC) to pay $5.1 million to Asiavest
Merchant Bankers (M) Berhad. This was the result of a recovery suit
filed by Asiavest against PNCC in Malaysia for PNCCs failure to
complete a construction project there despite due
payment from Asiavest. Despite demand, PNCC failed to comply
with the judgment in Malaysia hence Asiavest filed a complaint for the
enforcement of the Malaysian ruling against PNCC in the Philippines.

The case was filed with the Pasig RTC which eventually
denied the complaint. The Court of Appeals affirmed the decision
of the RTC.

Asiavest appealed. In its defense, PNCC alleged that the foreign

judgment cannot be enforced here because of want of
jurisdiction, want of notice to PNCC, collusion and/or fraud,
and there is a clear mistake of law or fact. Asiavest assailed the
arguments of PNCC on the ground that PNCCs counsel participated
in all the proceedings in the Malaysian Court.

ISSUE:
Whether or not the Malaysian Court judgment should be enforced
against PNCC in the Philippines.

HELD:
Yes.
PNCC failed to prove and substantiate its bare allegations
of want of jurisdiction, want of notice, collusion and/or fraud, and
mistake of fact. On the contrary, Asiavest was able to present
evidence as to the validity of the proceedings that took place in
Malaysia. Asiavest presented the certified and authenticated
copies of the judgment and the order issued by the
Malaysian Court. It also presented correspondences between
Asiavests lawyers and PNCCs lawyers in and out of court which
belied PNCCs allegation that the Malaysian court never acquired
jurisdiction over it. PNCCs allegation of fraud is not sufficient too,
further, it never invoked the same in the Malaysian Court.

The Supreme Court notes, to assail a foreign judgment the party

must present evidence of want of jurisdiction, want of notice to
the party, collusion, fraud, or clear mistake of law or fact.

Otherwise, the judgment enjoys the presumption of validity

so long as it was duly certified and authenticated . In this
case, PNCC failed to present the required evidence.

DOCTRINE:

Republic v Gingoyon GR 166429 GOVT v PIATCO

FACTS:
This case is a MR for a previous decision of the SC in a case
which involves the Concession Agreement for the Build-
Operate-and-Transfer Arrangement of the NAIA3
entered into between the Philippine Government (Government) and
the Philippine International Air Terminals Co., Inc. (PIATCO)
.
The said decision ruled that PIATCO should be justly
compensated before the Government can take over the
NAIA Terminal 3.

In the present case, Government argues that PIATCO

should not be paid because it has pending obligations
with Takenaka and Asahikosan corporations for services
they rendered in building the NAIA 3.
That the said corporations still has pending liens on the Terminal.

Therefore, the Republic may end up having expropriated

 a terminal with liens and claims and that PIATCO ends up
with the Php3,0002,125,000 payment gratuitously.

ISSUE:
WON Takenaka and Asahikosan have liens on the NAIA3.
HELD:
NO

The Court is wont to reverse its previous rulings based on factual

premises that are not yet conclusive or judicially established.
Whatever claims or purported liens Takenaka and Asahikosan
against PIATCO or over the NAIA 3 have not been judicially
established.
Neither Takenaka nor Asahikosan are parties to the present action,
and thus have not presented any claim which could be acted upon
by this Court.
The earlier adjudications in Agan v. PIATCO made no mention of
either Takenaka or Asahikosan, and certainly made no declaration
as to their rights to any form of compensation.
While the Government refers to a judgment rendered by
a London court in favor of Takenaka and Asahikosan
against PIATCO in the amount of US$82 Million.
It should be noted that this foreign judgment is not yet
binding on Philippine courts.

It is entrenched in the Rules of Civil Procedure that a foreign

judgment is not yet conclusive, as it
can be annulled on the grounds of want of
jurisdiction, want of notice to the party, collusion,
fraud, clear mistake of law or fact and if it runs
counter to public policy.
Assuming that PIATCO indeed has corresponding obligations to
 other parties relating to NAIA 3, the Court does not see how such
obligations, yet unproven, could serve to overturn the Decision
mandating that the Government first pay PIATCO the amount of 3.02
Billion Pesos before it may acquire physical possession over the
facilities.

DOCTRINE:
While the Government refers to a judgment rendered by a London
court in favor of Takenaka and Asahikosan against PIATCO in the
amount of US$82 Million.
It should be noted that this foreign judgment is not yet binding on
Philippine courts.
It is entrenched in the Rules of Civil Procedure that a foreign
judgment is not yet conclusive, as it can be annulled on the grounds
of want of jurisdiction, want of notice to the party, collusion, fraud,
clear mistake of law or fact and if it runs counter to public policy.

Gonzales v Climax Mining GR 161957

FACTS:
1. NOTE: There appears to be two cases, one is a
consolidated petition with GR 167994, decided on 2007, and a
standalone case of 161957 in a 2005 decision by SC 2nd
Division. This digest is for the 2005 decision in case sir asks.
2. Several agreements were made (in chronological
order):
1. The Addendum Contract, between Gonzales
and Arimco Mining, Geophilippines (GeoPH), Inmex, and
Aumex, which is the resulting contract after several
addendums were made to the original contract between
Gonzalez and GeoPH and Inmex. Originally, the contract
granted to GeoPH and Inmex the exclusive right to explore
and survey, and exploit the mining claims for 36mos. It was
modified to extend the period and added Arimco as a party.
Arimco would apply to the Govt permission to mine the
claims as a Govt contractor under a Financial and
Technical Assistance Agreement (FTAA).
1. Arimco obtained the FTAA
 2. Operating and Financial Accommodation
Contract (OFAC) between respondents Climax-Arimco,
Climax Mining, and Australasian Phil.
3. Assignment, Accession Agreement (AAA)
entered between Climax-Arimco and Australasian Phil.
4. Memorandum of Agreement whereby Climax-
Arimco and Climax Mining transferred its FTAA to
Australasian Phil.
3. Gonzales filed before the Panel of Arbitrators of
DENR seeking the nullity of the Addendum Contract,
FTAA, OFAC, and AAA, and Memorandum on grounds of fraud,
oppression, and/or violation of ArtXII S2 of the Constitution
allegedly perpetrated by the Respondents.
4. DENR initially denied, but reversed its decision after
Gonzales motion for reconsideration. They held that they have
jurisdiction over the case since it involves a mining dispute.
5. CA reversed, saying that the petition alleges fraud and
constitutional violation, which calls for an interpretation of the
law, and as such, should be filed before the courts. CA also
held that the petition should have been settled
through arbitration as stated in the Addendum
Contract.
ISSUE: W/N the dispute between the parties should be brought
for Arbitration
HELD: No.
Petitioner argues that CA erred when it held that the case should be
arbitrated, pointing out that Climax and Australasian Phil are not
parties to the Addendum Contract.

SC agrees with Petitioner that the case should not be brought to

arbitration but for a different reason. The question of validity of a
contract containing the agreement to submit to arbitrate will affect the
applicability of the arbitration clause itself.
NOTE: This decision is effectively reversed in the consolidated
petition of 2007, which may be a motion for reconsideration of this
decision. There, SC held the validity of the arbitration since
Arbitration, as an alternative mode of settling disputes
has long been recognized in our jurisdiction.
SC also held that PH adhered to the 1958 Convention on Recognition
and Enforcement of Foreign Arbitral Awards. This is also reflected in
RA 9285 which further recognized alternative dispute resolutions such
as arbitrations.

IN THIS CASE, Petitioner is assailing the validity of the contract under

a claim of fraud. Petitioner argues that since the contract is invalid, all
of its provisions would be invalid, including the arbitration clause. SC
disagrees, Under the UNCITRAL Arbitration rules, the arbitration
clause is separate. To rule otherwise would give an opportunity to a
party to avoid arbitration by just simply assailing a contracts validity.

DOCTRINE: In a contract where its validity is assailed, and it

contains an arbitration clause, the arbitration clause remains
valid irrespective of w/n the contract is valid or invalid.

Korea Technologies v Lerma GR 143581

FACTS:
- Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean
corporation which is engaged in the supply and installation of
Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while
private respondent Pacific General Steel Manufacturing Corp.
(PGSMC) is a domestic corporation
- PGSMC and KOGIES executed a Contract whereby KOGIES[1]

would set up an LPG Cylinder Manufacturing Plant in Carmona,

Cavite
- The contract was entered into in the Philippines; later on, an
amendment to the contract (terms of payment) was executed in Korea
- PGSMC entered into a Contract of Lease with Worth Properties,
[3]

Inc. (Worth) for use of Worths 5,079-square meter property with a

4,032-square meter warehouse building to house the LPG
manufacturing plant
- PGSMC paid KOGIES after installation of the LPG Cylinder. For
the remaining balance, PGSMC issued 2 postdated checks.
- However, when the checks were deposited by KOGIES, it was
dishonoured for Payment Stopped
- KOGIES demanded payment, threatening to sue for violation of
BP22. On the other hand, PGSMC is claiming that the checks were
fully funded and that the payments were ordered stopped because
KOGIES allegedly delivered a different brand of hydraulic press from
that agreed upon.
- PGSMC informed KOGIES that it was cancelling their contract;
later on, PGSMC filed a complaint for estafa against KOGIES.
- KOGIES wrote PGSMC informing the latter that PGSMC could not
unilaterally rescind their contract nor dismantle and transfer the
machineries and equipment on mere imagined violations by KOGIES.
It also insisted that their disputes should be settled by arbitration as
agreed upon in Article 15, the arbitration clause of their contract
- KOGIES instituted an Application for Arbitration before the Korean
Commercial Arbitration Board (KCAB) in Seoul, Korea pursuant to Art.
15 of the Contract as amended
- KOGIES filed a Complaint for Specific Performance, docketed as
Civil Case No. 98-117 against PGSMC before the Muntinlupa City
[8]

Regional Trial Court (RTC).

- RTC ruled in favour of PGSMC and declared Art. 15 of the Contract
regarding arbitration as invalid being against public policy.
- CA affirmed.

ISSUE: W/N Article 15 regarding arbitration is valid?

HELD: Yes, it is valid.

- Article 15. Arbitration.All disputes, controversies, or differences
which may arise between the parties, out of or in relation to or in
connection with this Contract or for the breach thereof, shall finally be
settled by arbitration in Seoul, Korea in accordance with the
Commercial Arbitration Rules of the Korean Commercial Arbitration
Board. The award rendered by the arbitration(s) shall be final and
binding upon both parties concerned.
- Established in this jurisdiction is the rule that the law of the place
where the contract is made governs. Lex loci contractus. The contract
in this case was perfected here in the Philippines. Therefore, our laws
ought to govern.
- Nonetheless, Art. 2044 of the Civil Code sanctions the validity of
mutually agreed arbitral clause or the finality and binding effect of an
arbitral award.
o Art. 2044 provides, Any stipulation that the arbitrators award
or decision shall be final, is valid, without prejudice to Articles
2038, 2039 and 2040.
o Arts. 2038, 2039, and 2040 abovecited refer to instances
[31] [32] [33]

where a compromise or an arbitral award, as applied to Art.

2044 pursuant to Art. 2043, may be voided, rescinded, or
[34]

annulled, but these would not denigrate the finality of the

arbitral award
- The arbitration clause was mutually and voluntarily agreed upon by
the parties. It has not been shown to be contrary to any law, or against
morals, good customs, public order, or public policy. There has been
no showing that the parties have not dealt with each other on equal
footing. We find no reason why the arbitration clause should not be
respected and complied with by both parties
- Submission to arbitration is a contract and that a clause in a
contract providing that all matters in dispute between the parties shall
be referred to arbitration is a contract
- The arbitration clause which stipulates that
the arbitration must be done in Seoul, Korea in
accordance with the Commercial Arbitration Rules of the KCAB,
and that the arbitral award is final and binding, is not contrary to
public policy
- Aside from unclogging judicial dockets, arbitration also hastens the
resolution of disputes, especially of the commercial kind.
- Consistent with the above-mentioned policy of encouraging
alternative dispute resolution methods, courts should liberally construe
arbitration clauses. Provided such clause is susceptible of an
interpretation that covers the asserted dispute, an order to arbitrate
should be granted. Any doubt should be resolved in favor of
arbitration.
- In case a foreign arbitral body is chosen by the parties, the
arbitration rules of our domestic arbitration bodies would not be
applied. As signatory to the Arbitration Rules of the UNCITRAL Model
Law on International Commercial Arbitration of the United Nations
[41]

Commission on International Trade Law (UNCITRAL) in the New York

Convention on June 21, 1985, the Philippines committed itself to be
bound by the Model Law. We have even incorporated the Model Law
in Republic Act No. (RA) 9285, otherwise known as the Alternative
Dispute Resolution Act of 2004 entitled An Act to Institutionalize the
Use of an Alternative Dispute Resolution System in the Philippines
and to Establish the Office for Alternative Dispute Resolution, and for
Other Purposes
- While RA 9285 was passed only in 2004, it nonetheless applies in
the instant case since it is a procedural law which has a retroactive
effect
o Under Sec. 24, the RTC does not have jurisdiction over
disputes that are properly the subject of arbitration pursuant to
an arbitration clause, and mandates the referral to arbitration in
such cases
o Foreign arbitral awards while mutually stipulated by the
parties in the arbitration clause to be final and binding are not
immediately enforceable or cannot be implemented
immediately; under Sec. 36 of the UNCITRAL Model Law, the
court may refuse recognition or enforcement on the grounds
provided for.
o Foreign arbitral awards when confirmed by the RTC are
deemed not as a judgment of a foreign court but as a foreign
arbitral award, and when confirmed, are enforced as final and
executory decisions of our courts of law.
The concept of a final and binding arbitral award is
similar to judgments or awards given by some of our
quasi-judicial bodies, like the National Labor Relations
Commission and Mines Adjudication Board, whose final
judgments are stipulated to be final and binding, but not
immediately executory in the sense that they may still
be judicially reviewed, upon the instance of any party.
 o Sec. 42 in relation to Sec. 45 of RA 9285 designated and
vested the RTC with specific authority and jurisdiction to set
aside, reject, or vacate a foreign arbitral award on grounds
provided under Art. 34(2) of the UNCITRAL Model Law
o Sec. 46 of RA 9285 provides for an appeal before the CA as
the remedy of an aggrieved party in cases where the RTC sets
aside, rejects, vacates, modifies, or corrects an arbitral award
- Having ruled that the arbitration clause of the subject contract is
valid and binding on the parties, and not contrary to public policy;
consequently, being bound to the contract of arbitration, a party may
not unilaterally rescind or terminate the contract for whatever cause
without first resorting to arbitration.

DOCTRINE:
The arbitration clause was mutually and voluntarily agreed upon by
the parties. It has not been shown to be contrary to any law, or against
morals, good customs, public order, or public policy

In case a foreign arbitral body is chosen by the parties, the arbitration

rules of our domestic arbitration bodies would not be applied.
UNCITRAL Model Law on International Commercial Arbitration of the[41]

United Nations Commission on International Trade Law (UNCITRAL)

in the New York Convention will apply.

Aside from unclogging judicial dockets, arbitration also hastens the

resolution of disputes, especially of the commercial kind. Consistent
with this policy of encouraging alternative dispute resolution methods,
courts should liberally construe arbitration clauses.
 Cyber-Era
Panavision International v Dennis Toeppen, 9th Circuit Court of
Appeals, No. 97-55467
FACTS:
Panavision holds registered trademarks to the names
Panavision and Panaflex in connection with motion picture
camera equipment
Panavision promotes its trademarks through motion
picture and television credits and other media advertising
One day, Panavision attempted to register
a website on the Internet with the domain name
Panavision.com
It failed, because Dennis Toeppen had already
established a website using Panavisions trademark as his
domain name
Toeppens webpage for this site displayed pictures
of the City of Pana, Illinois (TROLLING SINCE 1998!!))
For the Panaflex, the webpage only contained Hello
Panavision demanded from Dennis to
stop using the domain name
Dennis offers a settlement by asking $13k from
Panavision
Panavision accuses Dennis Toeppen as a
cyber pirate who steals valuable trademarks and
establishes domain names on the Internet using these
trademarks to sell the domain names to the rightful trademark
owners
District court of California subjected him to its
jurisdiction and issued a summary judgement against him
Toppen argues that he had no contact in
California because his registration of domain names on the
Internet happened in Illinois
He also argues that the court erred in granting the
 summary judgment because his use of Panavisions trademarks
on the internet was not a commercial use and did not dilute
those marks

ISSUE: WON District Court of California has jurisdiction

HELD: YES
Toppen didconsiderably more than
simply register Panavisions trademarks as his
domain names on the internet
He registered those names as part of a scheme
to obtain money from Panavision
This is a tort case
Toppen purposefully registered Panavisions
trademarks as his domain names on the internet to force
Panavision to pay him money
The brunt of the harm was felt in
California
Toeppen knew Panavision would likely suffer harm
there because the principal place of business of Panavision was
in California
Even though his acts happened in the
cyberspace, his conduct had the effect of injuring
Panavision in California where it has its principal place of
business and where the movie and television industry is centred
Furthermore, Toeppen failed to present a
case that the jurisdiction was unreasonable
And it is costly for Panavision to sue in Illinois, and
Dennis did not show any cogent reason as to why Californias
forum is unreasonable

DECISION: for Panavision

TERMS:
DOMAIN NAME
consists of a persons name or a companys name or
 trademark (Facebook.com)
Domain names with the .com (for commercial
purposes) must be registered on the Internet with Network
Solutions Inc,. for $100, first come first served basis

There are warranties, such as that

(1) the applicants statements are true and the applicant has the right
to use the requested domain name,
(2) the use of the domain name does not interfere with or infringe the
rights of any third party in any jurisdiction with respect to trademark,
company name or any other intellectual property right and;
(3) the applicant is not seeking to use the domain name for any
unlawful purpose, including unfair competition
The domain name is the simplest way of locating a website
GENERAL JURISDICTION:
Exists when a defendant is domiciled in the forum
state or his activities there are substantial or continuous and
systematic
District court of California has NO GENERAL
jurisdiction because Toeppen is domiciled in Illinois and his
activities in California are not substantial or continuous and
systematic
SPECIFIC JURISDICTION
(1) The non-resident defendant must do some act or
consummate some transaction with the forum or perform some
act by which he purposefully avails himself of the privilege
of conducting activities in the forum, thereby invoking the
benefits and protection of its laws
(2) The claim must be one which arises out of or
reults from the defendants forum-related activities
(3) Exercise of jurisdiction must be reasonable
PERSONAL AVAILMENT
Defendant must have taken a deliberate action
toward the forum state; it is not required that a defendant be
physically present or have physical contacts with the forum, so
long as his efforts are directed toward forum residents
EFFECTS DOCTRINE
 In tort cases, jurisdiction may attach if the defendants
conduct is aimed at or has an effect in the forum state
Basis:
(1) Intentional actions
(2) Expressly aimed at the forum state
(3) Causing harm, the brunt of which is suffered and which the
defendant knows is likely to be suffered in the forum state

DOCTRINE: A court will have jurisidiction when the acts are

purposefully directed towards an entity in its forum, it is akin to a
tort.
CompuServe v Patterson 89 F. 3d 1257 (1996)
FACTS:
CompuServe is a computer information service
headquartered in Columbus, Ohio.
Defendant, Richard Patterson, is an attorney and a resident of
Houston, Texas who claims never to have visited Ohio.
When he became a shareware "provider," Patterson entered into a
"Shareware Registration Agreement" ("SRA") with CompuServe.
CompuServe began to market a similar product, however,
with markings and names that Patterson took to be too
similar to his own. After Patterson demanded at least $100,000 to
settle his potential claims, CompuServe filed this declaratory
judgment action in the federal district court for the Southern District
of Ohio.
The case was dismissed for lack of jurisdiction.
ISSUE:
WON the court of Ohio has personal jurisdiction over Patterson
considering that his contacts with Ohio have been almost entirely
electronic in nature
HELD:
Yes.
There is less perceived need today for the federal constitution to
protect defendants from "inconvenient litigation," because all but
the most remote forums are easily accessible for the pursuit of
both business and litigation.
This court has repeatedly employed three criteria to make this
determine whether a nonresident defendant has sufficient contacts
with the forum state that the district court's exercise of jurisdiction:
1. First, the defendant must purposefully avail himself of the
privilege of acting in the forum state or causing a consequence in
the forum state.
2. Second, the cause of action must arise from the
defendant's activities there.
3. Finally, the acts of the defendant or consequences caused
by the defendant must have a substantial enough
connection with the forum to make the exercise of jurisdiction
over the defendant reasonable.
In this case, Patterson subscribed to CompuServe, and then he
entered into the Shareware
Registration Agreementthus fulfilling the first requirement. It is
uncontroverted that Patterson placed, marketed, and sold his
software only on Ohio-based CompuServe. Thus, the second
requirement is also present. If the first two elements of a prima facie
case - purposeful availment and a cause of action arising from the
defendant's contacts with the forum state - then an inference arises
that this third factor is also present. It is reasonable to subject
Patterson to suit in Ohio, the state which is home to the computer
network service he chose to employ.
DOCTRINE:
This court has repeatedly employed three criteria to make this
determine whether a nonresident defendant has sufficient contacts
with the forum state that the district court's exercise of jurisdiction:
1. First, the defendant must purposefully avail himself of the
privilege of acting in the forum state or causing a consequence in
the forum state.
2. Second, the cause of action must arise from the defendant's
activities there.
3. Finally, the acts of the defendant or consequences caused by
the defendant must have a substantial enough connection with the
forum to make the exercise of jurisdiction over the defendant
reasonable.

Yahoo! Inc. v La Ligue Contre Le Racisme el L'Antisemitisme

United States District Court for the Northern District of California,
San Jose Division Case No. C-00-21275JF [Docket No. 170]
FACTS:
Yahoo!, Inc. is a multinational corporation engaged in various internet services
which are offered to many people across the world. One of its business models
was through facilitating auction and exchange transactions between parties to a
contract of sale. The sale may be done in through different jurisdictions subject to
the specifications of the parties. The company provides limited regulation to the
items being sold in the website. Defendants La Ligue Contre Le Racisme Et
l'Antisemitisme ("LICRA"), is an organization organized in the laws of the France,
it filed an action suit against Yahoo! for the latters inaction to its request to
remove certain items being sold in its website viewable in if France pertaining to
materials and articles related to Adolf Hitler's Mein Kampf, The Protocol of the
Elders of Zion (an infamous anti-Semitic report produced by the Czarist secret
police in the early 1900's). Yahoo! made minor adjustments so as to indicate
warning advertisements to the purchaser of such items that the product being
sold is prohibited in Frances jurisdiction. LICRA was not satisfied so it continued
its action suit and eventually obtained a favourable judgment in Frances
jurisdiction, it now wants to impose such ruling against the plaintiff in the United
States. Plaintiff alleges that such restriction between the parties violates a
persons constitutional right in the first amendment. The First Amendment does
not permit the government to engage in viewpoint-based regulation of speech
absent a compelling governmental interest, such as averting a clear and present
danger of imminent violence.
ISSUE:
W/N the ruling in France can be imposed in the US

HELD:
GR. Yes, so long as it is not against the constitution or other vested rights in the
jurisdiction in which it is inclined to be imposed.

In this case: No, since it violates the first amendment

No legal judgment has any effect, of its own force, beyond the limits of the
sovereignty from which its authority is derived. 28 U.S.C. 1738. However, the
United States Constitution and implementing legislation require that full faith and
credit be given to judgments of sister states, territories, and possessions of the
United States. U.S. CONST. art. IV, 1, cl. 1; 28 U.S.C. 1738. The extent to
which the United States, or any state, honors the judicial decrees of foreign
nations is a matter of choice, governed by "the comity of nations." Hilton v. Guyot,
159 U.S. 113, 163, 16 S. Ct. 139, 40 L. Ed. 95 (1895). Comity "is neither a matter
of absolute obligation, on the one hand, nor of mere courtesy and good will, upon
the other." Hilton, 159 U.S. at 163-64, 16 S. Ct. 139 (1895). United States courts
generally recognize foreign judgments and decrees unless enforcement would be
prejudicial or contrary to the country's interests. However, ("[T]he court is not
required to give effect to foreign judicial proceedings grounded on policies which
do violence to its own fundamental interests."

As discussed previously, the French order's content and viewpoint-based

regulation of the web pages and auction site on Yahoo.com, while entitled to
great deference as an articulation of French law, clearly would be inconsistent
with the First Amendment if mandated by a court in the United States. The
protection to free speech and the press embodied in [the First] amendment would
be seriously jeopardized by the entry of foreign [] judgments granted pursuant to
standards deemed appropriate in [another country] but considered antithetical to
the protections afforded the press by the U.S. Constitution." Bachchan, 585
N.Y.S.2d at 665. Absent a body of law that establishes international standards
with respect to speech on the Internet and an appropriate treaty or legislation
addressing enforcement of such standards to speech originating within the
United States, the principle of comity is outweighed by the Court's obligation to
uphold the First Amendment.

DOCTRINE:

America Online Inc. v Superior Court, 90 Cal.App.4th 1, 108 Ca.

Rptr. 2d 699
FACTS:

The complainants were former subscribers of AOLs

internet service. Monthly payments were made by allowing AOL
to debit automatically the credit cards of class members.
Later, subscribers terminated their subscription.
Despite the termination, AOL still continue to debit their credit
cards for monthly service fees.
Class action was filed against AOL before California.
American Online Inc (AOL) moved for the dismissal
on the ground Virginia is the proper forum and Virginian law is
the choice of law as stipulated in the contract.
Under the Virginian law, it does not allow consumer
lawsuit to be brought as class actions.
AOL contend that these provisions are valid under
California law being rational, voluntary and conscionable choice
and that its enforcement would not violate any strong public
policy of the State.

TC: denied AOLs motion to dismiss.

W/N the AOLs motion was properly denied?

YES.
1. Enforcement of the contractual forum selection is void for being
contrary to California public policy. The provision constitutes as a
waiver of the rights under the California Consumers Legal Remedies
Act.
2. The circumstances of contract formation did not reflect that
Mendoza exercised free will. The law favors forum selection
agreements only so long as they are procured freely and voluntarily,
with the place chosen having some logical nexus to one of the parties
or the dispute, and so long as California consumers will not find their
substantial legal rights significantly impaired by their enforcement. In
this case,
3. Virginia law limits the available remedies of consumer class
members. Thus, it violates the consumer protection law.

DOCTRINE: