Hasegawa and Nippon vs.

Kitamura
G.R. No. 149177
November 23, 2007

Facts:
Nippon Engineering Consultants Co. (Nippon) is a Japanese consultancy firm entered into
an Independent Contractor Agreement (ICA) with Kitamura, a Japanese national permanently
residing in the Philippines. The agreement provides that Kitamura was to extend professional
services to Nippon for a year starting on April 1, 1999. Nippon then assigned Kitamura to work as
the project manager of the Southern Tagalog Access Road (STAR) Project in the Philippines. In
2000, Kitamura was informed that the company had no more intention of automatically renewing
his ICA.

Thus, Kitamura filed a civil case for specific performance and damages before the RTC of
Lipa. Nippon moved to dismiss the complaint for lack of jurisdiction asserting that the claim for
improper pre-termination of Kitamura’s ICA could only be heard and ventilated in the proper
courts of Japan since the ICA had been perfected in Japan and executed by and between Japanese
nationals.

Issue:

Whether or not the RTC of Lipa has jurisdiction over the subject matter of the case

Ruling:

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. 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. To succeed in its
motion for the dismissal of an action for lack of jurisdiction over the subject matter of the claim,
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.

In the instant case, Nippon, in its motion to dismiss, do not claim that the trial court is not
properly vested by law with jurisdiction to hear the subject controversy. What it rather raises 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 Supreme Court finds the invocation of these grounds unsound. The only issue is the
jurisdiction, hence, choice-of-law rules as raised by the petitioner is inapplicable and not yet called
for (reference to lex loci, lex contractus, or state of most significant rule). Nippon prematurely
invoked the said rules before pointing out any conflict between the laws of Japan and the
Philippines.