When parties enter into an agreement, their relationship is usually governed by a particular law.

The default law is almost always the local law since the minds of the parties are set on the local law upon entering into the agreement.
This is especially true in cases when there is no foreign element involved.

There are instances, however, when this is not the case, as when the parties stipulate a foreign law to govern their relationship.

Parties are free to stipulate their choice of law that will govern their relationship.

There are also instances when the law of the domicile of a person applies, as are instances when a foreign law offers more benefits to a person.
In these instances, the foreign law shall be applied except when there are compelling reasons not to apply the same.

These instances usually involve a foreign element necessitating the application of several principles to determine the law applicable to the case.

Choice of Law Principles

Choice of Law is governed by several principles.

These principles are the underlying reasons why a particular law is made to apply to a certain case.

Section 6 of the U.S. Restatement (Second) of Laws provides the underlying principles in determining the law applicable to a conflicts case.
Section 6 of the U.S. Restatement (Second) of Laws states:

§ 6. Choice-Of-Law Principles SF

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: NRR-PBCE

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, and
ease in the determination and application of the law to be applied.

Principle 1: Local Law

This principle looks to the statutory directive of the state on choice of law.
This is the general rule and it provides the local law to be the default law that will govern the relationship of the parties to a dispute.
Most states have conflicts of law rules specified in their civil codes, and they must be applied before one even considers the application of foreign law.
When there is such a specification, and provided these directives comply with the constitution of the state, the statutory directive must be followed.
Example:

Article 15 of the Civil Code:

Art. 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad.

This article specifies that national law governs family rights, duties, status, and condition of Filipinos, even if they are not in the Philippines.
This statutory directive is implicit and mandatory for Philippine citizens and reveals the legislative intent of extraterritorial application of the law.

Article 16 of the Civil Code:

Art. 16. Real property as well as personal property is subject to the law of the country where it is situated.

However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found.

Article 16 directs the application of the lex rei sitae or the law of the place where the property is situated for real or personal properties.
This article also specifies that intestate and testamentary successions are governed by the national law of the deceased.

The problem of renvoi.

While a state has to follow its statutory directive as to choice of law, there are times when the statutory directive, instead of applying local law, actually directs the application of a foreign law on the matter.
When this happens, a local court must look to the totality of the foreign law under consideration.

Here, foreign law refers to all the laws of the foreign state and not merely the law closely related to the case in dispute.

In this case, the most important laws to be looked into are the conflict-of-law rules of the foreign state.

Do the conflict-of-law rules require the application of its laws or the law of some other country? If the directive is the application of another country's laws, this must be followed.
This is precisely the problem of renvoi.
A local law requires the forum court to apply a foreign law to the case in dispute. The foreign law, in tum, directs the application of the laws of the forum court to the case under consideration.
Thus, there is a reference back to the local laws of the forum court.
This situation, if strictly followed, will result in an endless reference to two laws, breeding a situation where the reference never stops.

To solve this problem, the local court must, after looking at the conflicts of-law rules of the foreign state, apply the directive of the latter's laws. Thus, if the directive is the application of the forum court's laws, the court must then follow this to put an end to the endless throwing back of the case.

Cases:

Aznar vs. Garcia, GR No. L-16749, January 31, 1963

In 1951, Edward E. Christensen, a U.S. citizen domiciled in the Philippines, made a will naming his daughter, Maria Lucy Christensen, as his only heir and leaving a P3,600 legacy to Helen Christensen Garcia. Upon his death in 1953, the will was probated, and Maria Lucy was declared the primary heir.
CFI-Davao: Approved the executor's partition, which adhered to California law, allowing the testator to dispose of his property freely.
Whether California or Philippine law should govern the will.

The court ruled that while Christensen was a citizen of California, his domicile in the Philippines meant that Philippine law applied.
California’s conflict-of-laws rule, Article 946 of its Civil Code, refers cases of citizens domiciled abroad to the law of their domicile.

If there is no law to the contrary, in the place where personal property is situated, it is deemed to follow the person of its owner, and is governed by the law of his domicile.

Therefore, under Philippine law, acknowledged natural children are entitled to their legitime, and the provisions of the will depriving Helen were invalid.
Reversed and returned to the lower court with instructions that the partition be made as the Philippine law on succession provides.

Bellis vs. Bellis, GR No. L-23678, June 6, 1967

Amos G. Bellis, a citizen of Texas, had two wives and children from both marriages. He executed a will in the Philippines, specifying the distribution of his estate.
After his death in Texas, his will was probated in the Philippines. Two illegitimate children, Maria Cristina Bellis and Miriam Palma Bellis, claimed deprivation of legitimes as they were only given P40,000.00 each.
Whether the doctrine of renvoi applies in this case. NO

Renvoi is relevant when a decedent is a national of one country but domiciled in another. Here, however, the decedent was both a national and domiciliary of Texas at the time of death, so even if Texas law included a conflict rule favoring the law of the domicile, it would still point to Texas law, not refer back to Philippine law.
Renvoi could apply only if Texas law followed the situs theory (lex rei sitae), which calls for the law of the location of the properties (in this case, the Philippines) to apply.
However, since no evidence was provided regarding Texas's conflict of law rules, it is presumed similar to Philippine law (processual presumption). The appellants did not base their argument on renvoi but rather on Articles 16 and 17 of the Civil Code.

Whether Philippine law on legitimes should apply in the partition of dividing the remaining estate. NO

Philippine law on legitimes could not be applied as his national law determined the validity of his will and the extent of succession rights.
Even if a foreigner expresses a desire for Philippine law to govern their estate, this would be illegal and void. The decedent’s national law must apply as mandated by Article 16.
Since Amos G. Bellis was a U.S. citizen from Texas, where there are no forced heirs or legitimes, Texas law must govern the distribution of his estate.

When there is no local law applicable, or when the parties specify a foreign law in their agreement, or when the foreign law is held inapplicable, the U.S. Restatement (Second) of Laws provides other principles in determining the applicable law to a particular case.
These principles are considered in no particular order with each other.

Principle 2: Needs of the Interstate and International Systems

Courts must consider the needs of the interstate and international systems in determining the applicable law.
Technological advances and free trade have brought about numerous international commercial transactions spawning disputes that cut across national borders.
Where we apply only local laws that favor the interest of the forum state, this would unduly stifle the growth of free trade and discourage people from trading with their counterparts in other countries.
To prevent this from happening, courts must formulate principles and reconcile multistate laws with the end in view of encouraging international trade among people.

Example:

Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Act)
Retail Trade Liberalization Act of 2000 (Republic Act No. 8762

Reciprocity Requirement: The foreign retailer’s home country must allow Filipino retailers to operate within its territory.

Principle 3: Relevant Policies of the Forum

The policies of the forum take primordial consideration when considering the applicable law to a case.
Each forum considers certain values to be of highest import to them.
Example:

The United States may take fairness and due process to be the cornerstone of their judicial system. In considering a foreign law, U.S. courts may look at the fundamental fairness of a law before recognizing its validity.
In the Philippines, courts consider protection for labor to be of highest import. If a case implicates a foreign law which is prejudicial to the interest of labor, courts are quick to strike down the foreign law in favor of the applicability of local law. Also, state policy does not recognize divorce in our jurisdiction. When a foreign law is involved which will weaken the fan,ily as a social unit, courts will strike this down as against public policy.

But what is public policy? Public policy is a term often used by our local courts but which has never been defined with precision. So that when a foreign law or foreign custom conflicts with local law, courts are quick to set them aside as against public policy. But what exactly does the term "public policy" mean?
In one case, the California Supreme Court had occasion to delineate the elements of fundamental public policy. Hence, it stated that policies are fundamental public policies when: WIP

they cannot be contractually waived;
they protect against otherwise inequitable results; and
they promote the public interest.

Pitzer College vs. Indian Harbor Insurance Company, 447 P.3d 669(2019)

Pitzer College had an insurance policy with Indian Harbor Insurance Company. The policy covered legal and remediation expenses due to pollution. New York law was designated as the governing law.
Pitzer discovered contaminated soil at a construction site. Without Indian Harbor's consent, Pitzer began remediation work. Pitzer informed Indian Harbor about the work three months later. Indian Harbor denied coverage due to late notice and lack of consent.
The Court held that New York law contravenes California's fundamental public policy.

California's notice-prejudice rule requires the insurer to prove substantial prejudice caused by late notice.

Non-waivability: The rule restricts freedom of contract by preventing insurers from enforcing a contract term that leads to forfeiture of benefits due to late notice, unless the insurer proves it was prejudiced by the delay.
Protection against inequitable results: The rule safeguards insureds from unfair outcomes that may arise from the insurer's superior bargaining position in insurance contracts, which are often unbalanced in favor of the insurer.
Public interest: The rule serves the public by ensuring insurance coverage is not denied due to technicalities, protecting the public from bearing costs for harm that the policy was meant to cover.

The core principle behind the notice-prejudice rule is that the contract's main purpose is insurance coverage, not strict adherence to procedural requirements.
The insurer must prove substantial prejudice resulting from the delay, which involves more than simply late notice—it requires showing that timely notice would have led to a better outcome for the insurer, such as settling for less or reducing the insured's liability.

Cadalin, et al vs. POEA Administrator, GR Nos. L-104776, 104911-14 and 105029-32, December 5, 1994

Cadalin et al. were recruited by Asia International Builders Corporation (AIBC) and employed by Brown & Root International, Inc. (BRII) to work in various countries, including Bahrain. They were terminated early and filed a lawsuit upon their return to the Philippines.
Bahrain’s Labor Law Amiri Decree No. 23 of 1976 sets a one-year prescriptive period for claims arising from employment contracts. The POEA Administrator ruled for a 10-year period, while the NLRC favored a 3-year period under the Labor Code.
The Court held that Amiri Decree No. 23 is contrary to Philippine public policy on labor protection.

Philippine courts will not enforce foreign claims that violate Philippine public policy.
The 1987 Philippine Constitution emphasizes social justice, labor protection, and full employment. Enforcing the one-year prescriptive period would contradict these constitutional principles.
The three-year prescriptive period under the Labor Code applies. In this case, the claims arise from employer-employee relations, which is broader than claims under a specific law or contract. The Labor Code's prescriptive period applies to all money claims arising from employer-employee relations, regardless of whether they are specifically recoverable under the Code.

Bank of America Nr. & Asia vs. American realty Corporation, GR No. 133876 December 29, 1999

BANTSA and BAIL provided multi-million dollar loans to three Panamanian companies affiliated with ARC. When these companies defaulted, restructuring agreements were established. ARC offered additional security through real estate mortgages in Bulacan. Despite the restructuring, the corporate borrowers defaulted again, leading BANTSA to file collection suits in England and Hong Kong. However, ARC, as a third-party mortgagor, was not part of these foreign suits. Subsequently, BANTSA initiated an extrajudicial foreclosure in the Philippines. ARC filed a damages suit, arguing that the foreclosure was improper due to pending foreign lawsuits.
The Supreme Court ruled against BANTSA, holding that the act of filing collection suits in foreign courts constituted a waiver of the foreclosure remedy.

The Court emphasized that in Philippine jurisdiction, remedies for mortgage creditors are considered alternative, not cumulative, and the filing of a collection suit waives the right to foreclosure.
Foreign law could not override established Philippine legal principles, especially regarding the prohibition against splitting causes of action.

Actual Damage: P99,000,000
Exemplary damages: P5,000,000.

Dacasin vs. Dacasin, GR. No. 168785, February 5, 2010

In 1994, Herald Black Dacasin and Sharon Del Mundo Dacasin were married in Manila, and in 1995, they had a daughter named Stephanie. Sharon later obtained a divorce decree in 1999 from an Illinois court, which granted her sole custody of Stephanie. In 2002, Herald and Sharon signed a joint custody agreement in Manila. In 2004, Herald filed a case in the Philippines to enforce the agreement, claiming Sharon had violated it by continuing to exercise sole custody of their daughter.
The trial court has jurisdiction to entertain petitioner’s suit but not to enforce the Agreement which is void.

Under Philippine law, children under the age of seven cannot be separated from their mothers, even in cases of divorce or separation.
This rule, stipulated in the Family Code, rendered the joint custody agreement void since Stephanie was under seven at the time the agreement was executed.
However, the Court remanded the case to the trial court to settle Stephanie's custody, as she is now 15 years old and no longer subject to the mandatory maternal custody regime.
The court will determine the best interest of the child, considering the parents' initial inclination to share custody.

This decision in Dacasin is controversial insofar as it sanctions the Philippine law that awards custody of a child under seven years to the mother. No such law or similar law exists in foreign countries, and this law may be unique in the Philippine setting.
However, if ever there is a dispute between a foreigner father and a Filipino mother over the custody of a child below seven years old, what law will apply?
If the case is decided in the United States, there will be no automatic custody in favor of the mother. It will be another matter if the case is decided in the Phllippines.
The problem with such automatic custody is that there is gender discrimination written all over the face of the law. It operates upon the stereotype that mothers are kind, soft, and caring while fathers are hard, unfeeling, and irresponsible. Of course, this is not all true, as fathers are also capable of raising children with the same love and compassion of a mother.
Culturally, it is justifiable since the mother is always the center of a Filipino family. However, to say that joint custody of a child below seven years to be against public policy may be a bit of a stretch.
This policy of the Philippines with respect to the custody of minors may also violate international conventions and agreements. In one of the well-publicized cases in the United States where a Fil-American mother brought her minor child, below seven years old, to the Philippines, without the permission of the American father and the court where divorce proceedings were pending.

Philippine authorities when requested, refused to give assistance to California authorities for the repatriation of the child. Said refusal was based on public policy since our laws mandated automatic custody for the mother if the child was below seven years old.
In the United States, they have no such policy and the mother may even be liable for kidnapping under their laws. California authorities even went to the extent of characterizing Philippine law on custody to be barbaric and uncivilized.

In this respect, Article I of the Convention on the Civil Aspects International Child Abduction mandates member states

"to secure the prompt return of children wrongfully removed to or retained in any Contracting State" and
"to ensure that rights of custody and of access under the law of one Contracting State are effectively respected in the other Contracting States."
Article 4 thereof provided that "[t]he Convention shall apply to any child who was habitually resident in a Contracting State immediately before any breach of custody or access rights."

The Philippines is not a signatory to the Convention for obvious reasons: it could not comply with the obligations of member countries It is obviously based on our public policy that mothers should never be separated from their young children, seven years and below, to "avoid a tragedy where a mother has seen her baby torn away from her."
Dacasin stated that this is a matter of wisdom, not a matter of enforceability or validity. To the contrary, however, it is believed that this is a matter of substantive due process and equal protection, matters which are within the competence of the court to resolve. For if the U.S. Supreme Court can validly adjudge same-sex unions to be valid, what more with respect to law that implicates gender discrimination?
With respect to labor cases, the trend now is to favor Philippine law over foreign labor laws. Filipino laborers enjoy more protection under our laws than foreign laws.
With respect to divorce cases, the Supreme Court has expressed a disfavor for laws that dignify the separation of families, or that sanction divorce. There is a tilt toward protecting the family as a social unit which means keeping the family members together.
With respect to other cases, the decision will depend on the facts of the case. There are times when foreign law is applied, but there are more times that Philippine law is applied. There is always that bias for local law and residents. In sports, this is called the "home" advantage.

Principle 4: Relevant Policies of Other Interested States

Principle 4 indulges courts to engage in a governmental interest analysis when two 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 important to consider the interest of other states since commercial transactions involve people located in several jurisdictions which have conflicting interests in a 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 its laws over those of another state.

Kearney vs. Salomon Smith Barney, 137 P.3d 914 (2006)

Kelly Kearney and Mark Levy, California residents, working for WorldCom/ They had stock options that could only be exercised through Salomon Smith Barney (SSB). They communicated with SSB's brokers in Atlanta, Georgia, from California, and later discovered that SSB recorded these calls without their knowledge. They filed a class action lawsuit under California's privacy and unfair competition laws, seeking damages for the secret recordings.
Whether California law or Georgia law governs.
The California Supreme Court ruled that California law governs the case. The court applied the "governmental interest analysis" to resolve the choice-of-law issue, determining that California's interest in protecting the privacy of its residents would be severely impaired if Georgia law were applied.

Different Laws: California requires all parties' consent to record conversations, while Georgia allows recording with one party’s consent.
True Conflict: Both states have a legitimate interest—California to protect the privacy of its residents and Georgia to maintain its legal framework for businesses operating within its state.
Which Law Should Apply? California law was favored because failing to apply it would severely undermine its privacy protections, especially for interstate businesses operating in California. Applying California law to Georgia businesses in dealings with California clients would only cause minimal disruption, as disclosure of recording is still possible under Georgia law.

Butler vs. Adoption Media, LLC, 486 F. Supp 2d 1022 (2007)

Dale R. Gwilliam and Nathan W. Gwilliam, Arizona residents, operated ParentProfiles.com, a website allowing prospective adoptive parents to post profiles for a fee. In 2002, Michael and Richard Butler, a same-sex couple from California, were denied the opportunity to post on the site due to the company’s policy restricting profiles to opposite-sex married couples. The Butlers filed a lawsuit under California’s Unruh Civil Rights Act, along with claims for unfair competition and false advertising, arguing that the site’s policy discriminated against them based on sexual orientation.

The court determined that a true conflict existed between the laws of the two states, with California’s Unruh Act offering broader anti-discrimination protections than Arizona’s Civil Rights Act, which did not address sexual orientation or marital status discrimination.
The court held that California law would govern the case, emphasizing California’s strong public policy against discrimination and the broader protections it offers.
Allowing businesses to circumvent California’s anti-discrimination laws by operating from another state would undermine the Unruh Act’s protections.
Arizona’s interest in protecting businesses from unexpected liabilities was deemed less significant than California’s interest in enforcing its anti-discrimination statutes.

Steps in Governmental Interest Analysis Test

The governmental interest 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 the other state.

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.

Thus, if Kearney and Butler were decided here, our courts would have held the foreign laws to be violative of our public policy.
Incidentally, our jurisdiction follows the California practice that recording of conversations must be with the consent of all parties to the conversation.

Criticism of Governmental Interest Analysis Approach

A fundamental defect of the governmental interest analysis approach is that it tends to favor the laws and interests of the forum court.

There is inherent bias for forum courts to favor their own laws over that of others. This could be a matter of training, upbringing, or even culture as judges are apt to apply what they have been taught in law school promoting their state's values and interests.
For example, it is highly possible that the Kearney and Butler cases would have been decided differently had the cases been filed before Georgia or Arizona courts.

Thus, there is a tendency to lean towards directives provided by local laws and even customs.

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.

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 legal 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 terms and conditions of their agreement, which terms and conditions become part of the law of the contract.

Francisco v. Stolt Achievement MT, 293 F.3d 270 (2002)

Ernesto Francisco, a Philippine national, was employed aboard the M/T STOLT ACHIEVEMENT and was injured while the ship was on the Mississippi River. He filed a lawsuit in Louisiana state court seeking damages under the Jones Act and maritime law. The defendants removed the case to federal court and sought to compel arbitration based on Francisco’s employment contract, which incorporated the arbitration provisions of the Philippine Overseas Employment Administration (POEA). The employment contract allowed disputes to be resolved through either the National Labor Relations Commission (NLRC) or voluntary arbitration if no collective bargaining agreement (CBA) applied.
The court ruled that Francisco was bound to arbitrate his claims.

as the contract's arbitration clause covered all employment-related disputes, including tort claims.
The court also dismissed Francisco’s argument that non-CBA employees were exempt from arbitration, stating that both options available required arbitration.
Thus, the court ordered the dispute to be arbitrated in the Philippines.

Courts must look at justified expectations in adjudicating a case.
Parties have reasons why they choose a particular law as their choice of law or \why they choose a particular forum in litigating their case.
For example, parties usually sue a national of another state in their home countries for reasons of convenience, fairness, and justice.

Justice may also be easier to get in countries with democratic systems or where judges are free from corruption and pressure.
Sometimes, a party may have more rights in his home country than in another so this must be looked into when deciding the case.

Principle 6: Basic Policies Underlying the Particular Field of Law

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

If it is contracts law, what are the rights intended to be protected?
If it is torts law, what are the damages available to the parties? Where did the tort happen?

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

Hancock v. Watson 962 So. 2d 627 (2007)

David and Lori Watson, married in Tennessee in 1989, had two children before Lori allegedly began an affair with Roger Hancock in 1999. David discovered the affair in 2003 while Lori was pregnant with their fourth child and filed for divorce, which was granted in 2004. Despite the divorce, the couple continued to live together and co-parent their children. In 2004, David filed an alienation of affection lawsuit against Hancock in Mississippi.
Hancock sought dismissal, arguing insufficient facts and that Tennessee law should apply as the tort of alienation of affection had already been abolished and the statute of limitations had expired. Watson maintained that Mississippi law applies, as the tort was committed in Mississippi, and where alienation of affection remains a tort. He also filed his claim within one year of discovering the affair.
The law that is applicable is the law of the place where the tort occurred.

The Court finds that it is unable to complete the conflict of law analysis due to the lack of factual information available from the record.
Although the amended complaint alleged that Lori Watson conducted her affair with Hancock in the State of Mississippi, those allegations do not end the inquiry as to the place where the injury or the conduct causing the injury occurred.
The Court remanded the case for further discovery to determine the key facts necessary to complete the conflict of law analysis, including the location of the events in the affair.

Principle 7: Certainty, Predictability and Uniformity of Result

Most judicial systems favor stability in judicial decisions; that is why they have formulated principles like res judicata and stare decisis.

When the facts of a case fall squarely with the facts of a previously decided case, the doctrine in the latter case is usually applied to the case in dispute.

In the area of torts, courts usually choose between lex loci delicti and most significant relationship.

Once they choose between either of the two, they usually follow this approach in deciding future cases. This approach usually becomes the applicable doctrine in the jurisdiction concerned.
The rationale behind this is to provide stability in judicial decisions so judges will stick to their functions of interpreting the laws instead of setting policies.

In Dowis v. Mud Slinger, the Supreme Court of Georgia decided to stick with the doctrine of lex loci delicti on the basis of "stability and certainty in the law."

The Court found stare decisis to be "a valid and compelling argument for maintaining the doctrine."
In rejecting the approach of most significant relationship, the Dowis Court found the latter approach to be problematic, characterizing it as merely a tool for "contact counting" resulting in erratic applications due to the difficulty of predicting what a court will do in other similar cases.
The Court concluded that a change in its approach would result in judges becoming "judicial policymakers."

Principle 8: Ease in the Determination and Application of the Law to be Applied

Simplicity is always a virtue in determining which law to apply.

If a court is bound by a particular doctrine by virtue of stare decisis, it is usually simpler for the court to apply the same doctrine in future cases.
There is no need to adopt new and more complicated analyses, for all that needs to be done is to apply the law which has been applied before.
Some legal approaches also involve more complicated analyses than others.
For example, in torts cases, the lex loci delicti approach is much simpler than most significant relationship, as the latter requires a more elaborate analysis of each state's connection to a particular case.

Dowis was precisely concerned with this principle.

The Court in Dowis applied the doctrine of lex loci delicti because of the relative ease in its application.
Hence, all a court had to do in lex loci delicti was apply the law of the place where the tort occurred, and that ended the inquiry, unlike in most significant relationship where a court still had to do some contact-counting.

This is not to say, however, that the approach in Dowis is necessarily the correct or best approach.

As has been stated in Principles 2 and 4, there is also value in considering the needs of the interstate and international systems as well as the relevant policies of other interested states.
These differences will be discussed in more detail under the chapter on Torts.

Other Principles Affecting Choice of Law

Proof of Foreign Law and Processual Presumption

Foreign laws have to be properly proved before they are admitted into evidence.

Failure to prove foreign law will result in the exclusion of the foreign law, and a presumption will arise that foreign law is the same as local law.
The effect of a failure to prove foreign law is that local law will become the governing law of the contract or dispute of the parties.
This is the doctrine of processual presumption, and it presumes the foreign law to be the same as local law when there is a failure to prove foreign law.

In the same vein, foreign documents also need to be proved before they can be admitted into evidence.

Foreign documents will be excluded if they are not properly proved.
They will be nothing but scraps of paper which the court cannot consider as part of the evidence of the case.

Sections 24 and 25 of Rule 132 of the 2019 Proposed Amendment to the Revised Rules on Evidence (2019 Revised Rules on Evidence) prescribe the rules governing proof of foreign law. They state:

Sec. 24. Proof of official record. – The record of public documents referred to in paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody.

If the office in which the record is kept is in a foreign country, which is a contracting party to a treaty or convention to which the Philippines is also a party, or considered a public document under such treaty or convention pursuant to paragraph (c) of Section 19 hereof, the certificate or its equivalent shall be in the form prescribed by such treaty or convention subject to reciprocity granted to public documents originating from the Philippines.

For documents originating from a foreign country which is not a contracting party to a treaty or convention referred to in the next preceding sentence, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice-consul, or consular agent, or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office.

A document that is accompanied by a certificate or its equivalent may be presented in evidence without further proof, the certificate or its equivalent being prima facie evidence of the due execution and genuineness of the document involved. The certificate shall not be required when a treaty or convention between a foreign country and the Philippines has abolished the requirement, or has exempted the document itself from this formality.

Sec. 25. What attestation of copy must state. – Whenever a copy of a document or record is attested for the purpose of evidence, the attestation must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, as the case may be. The attestation must be under the official seal of the attesting officer, if there be any, or if he or she be the clerk of a court having a seal, under the seal of such court. (26a)

The first paragraph of Section 24 states the general rule concerning proof of official record. The succeeding paragraphs delineate the special rules concerning documents or records coming from foreign countries.
There are two types of foreign records or documents referred to in Section 24.

The first type of documents are those kept or originating from foreign countries which are signatories to the Apostille Convention. These are governed by the second paragraph of Section 24.
The other types are those coming from foreign countries which are not signatories to the Apostille Convention. These are governed by the provisions of the third paragraph of Section 24.

Thus, if a foreign law is involved in a case, it may be evidenced by an official publication thereof, like the Official Gazette.
If only a copy is present, it must be attested by the officer having legal custody thereof. If the record is kept in a foreign country, the copy must be accompanied by a certificate that the officer has custody thereof. The certificate may be made by a secretary of the embassy or legation, consul general, consul, vice-consul, or consular agent, or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office.
The attestation will state that the copy is a correct copy of the original and must contain the official seal of the attesting officer or, if he is the clerk of a court having a seal, then it must be under the seal of such court.
If the foreign documents or record are accompanied with any of the certificates mentioned in paragraphs two and three of Section 24, the documents "may be presented in evidence without further proof, the certificate or its equivalent being prima facie evidence of the due execution and genuineness of the document involved."

This is a new addition to the Rules on Evidence, meant to simplify proceedings in court.
It dispenses with further proof, and the clarity of the provision prevents counsel and even judges from further inquiring on the authenticity of foreign documents.

Wildvalley Shipping vs. Court of Appeals, GR No. 119602 October 6, 2000

In February 1988, the Philippine Roxas, a vessel owned by Philippine President Lines, Inc., was navigating the Orinoco River in Venezuela when it ran aground, blocking passage for other vessels. Wildvalley Shipping Company's vessel, Malandrinon, was delayed, leading them to file an action for damages
Wildvalley Shipping wanted Venezuelan law to apply, under which vessel owners are liable for the negligence of compulsory pilots.

The court ruled that foreign laws must be pleaded and proven as facts in Philippine courts. Since the Venezuelan law was not properly pleaded or proven, the court applied Philippine law, under which vessel owners are not liable for the compulsory pilot's actions.
The court emphasized the requirements for proving foreign laws; official foreign documents must be properly authenticated and certified by foreign officers, which was not done in this case.
As a result, Venezuelan law was not applicable, and the processual presumption—that foreign law is the same as Philippine law—was applied.

Manufacturers Hanover Trust Co. vs. Guerrero, GR No. 136804 February 19, 2003

In May 1994, Rafael Ma. Guerrero filed a complaint against Manufacturers Hanover Trust Co. and Chemical Bank, seeking damages for illegally withheld taxes, a returned check of $18,000 due to signature verification issues, and unauthorized account conversion. The Bank claimed that Guerrero’s account was governed by New York law, which only permitted claims for actual damages, and sought partial summary judgment to limit the trial to that issue. The Bank supported its motion with an affidavit from New York attorney Alyssa Walden, asserting that New York law barred all other claims.

The court ruled that foreign laws, such as New York law, are not automatically recognized and must be proven in Philippine courts.
The Walden affidavit could not serve as proof of New York law because it was ex parte, and foreign laws must be properly authenticated under Section 24, Rule 132 of the Rules on Evidence.
The court rejected the affidavit as evidence because it did not comply with the necessary legal requirements to prove a foreign law or cite any specific statutes. It only offered the affiant’s personal interpretation without substantiating New York law on damages.

Edi-Staff Builders International vs. NLRC, GR No. 145587, October 26, 2007

Petitioner EDI-Staffbuilders International, Inc. and Expertise Search International (ESI) recruited and deployed Eleazar S. Gran to Omar Ahmed Ali Bin Bechr Est. (OAB) in Saudi Arabia as a Computer Specialist. Gran signed an employment contract with OAB, which stated a monthly salary of USD 850.00, but his POEA Information Sheet listed USD 600.00. Despite questioning the discrepancy, Gran received the agreed USD 850.00 monthly. After five months, OAB terminated Gran’s employment for alleged contract non-compliance and insubordination, leading Gran to file a complaint with the NLRC upon his return to the Philippines.
The issue was whether Saudi Labor laws or Philippine laws should govern Gran's dismissal.

The contract specified Saudi Labor laws for termination matters, but EDI failed to prove these laws in court.
Consequently, the court applied Philippine labor laws by default, following the principle of presumed-identity when foreign laws are not properly established.
Regarding the justification for Gran's dismissal, EDI claimed he was terminated for incompetence and insubordination. However, under Philippine law, the burden of proving a lawful dismissal falls on the employer. EDI's evidence was insufficient to substantiate claims of incompetence and insubordination.
Thus, EDI did not meet the burden of proof required to validate Gran's dismissal under Philippine labor standards.

The Apostille Convention

On October 5, 1961, several states concluded and ratified the Convention Abolishing the Requirement of Legalization for Foreign Documents. Otherwise known as the Apostille Convention, the Philippines ratified it on September 12, 2018, and it entered into force in our country on May 14, 2019.
Article 2 of the Convention states:

"Each Contracting State shall exempt from legalisation documents to which the present Convention applies and which have to be produced in its territory. For the purposes of the present Convention, legalisation means only the formality by which the diplomatic or consular agents of the country in which the document has to be produced certify the authenticity of the signature, the capacity in which the person signing the document has acted and, where appropriate, the identity of the seal or stamp which it bears."

The practical effect of the Apostille Convention is that it eliminates the need for legalization of documents to be used abroad. In the same manner, documents originating from another Apostille country do not need to be authenticated with Philippine consulates before they can be used in the Philippines. An Apostille certificate needs only to be attached, and the public document may then be used in the Philippines.
In a public advisory dated May 7, 2019, the Department of Foreign Affairs advised the public that it will no longer issue Authentication Certificates and that it will just "affix an Apostille to documents for use abroad as proof of authentication for use in Apostille-contracting parties." The Apostille dispenses with the "need for authentication (legalization) by the concerned Foreign Embassies or Consulates General if the country or territory of destination of the authenticated document is already a member of the Apostille Convention."
In addition, public documents executed in Apostille-contracting countries (except Austria, Finland, Germany, and Greece) to be used in the Philippines no longer have to be authenticated by the Philippine Embassy or Consulate General once Apostillized by the foreign country. However, for non-Apostille countries, there is still a need for authentication by the Philippine Embassy/Consulate General or by the concerned Foreign Embassies/Consulates General depending on where the documents will be used.
Apostille Certificates have simplified the process of authenticating documents before they can be used in a foreign jurisdiction. It is also cheaper, with fees pegged at PHP 100 per document for regular processing and PHP 200 per document for expedited processing.

Exceptions to Proof of Foreign Laws

There are certain exceptions to the requirement that foreign laws must be properly pleaded and proved before they can be considered by the court.

One of these exceptions is the presentation of a foreign-licensed attorney who will testify in open court concerning her knowledge of the law in question (see Willamette Iron and Steel Works v. Muzzal, G.R. No. L-42538, May 21, 1935).
Another exception is the case of administrative agencies recognizing foreign laws without proof thereof.

Administrative agencies are not bound by technical rules of procedure and may properly recognize the existence of a foreign law by judicial notice.

A third exception is the lack of objection to the improper presentation by one party of proof of foreign law (see Republic v. Manalo, G.R. No. 221029, April 24, 2018; Moraña v. Republic, G.R. No. 227605, December 5, 2019).

If a party starts presenting objectionable proof of foreign law, and the other party does not object, the court may properly consider the foreign law in question as proved.
It is also believed that a tribunal may properly recognize the existence of a universally known law or a law whose existence is known to most due to its universal application.

Lastly, laws appearing on official websites, like those of the Office of the President or the Library of Congress, may be properly recognized since these are official sites of government agencies which have custody of laws.

Norse Management Co. vs. National Seaman Board Scrivener's Error, GR No. L. 54204, Sep 30,1982

Napoleon B. Abordo, a former Second Engineer of the Singaporean vessel M.T. "Cherry Earl," died from an apoplectic stroke while on duty. His widow, Restituta C. Abordo, filed a complaint seeking various benefits, including death compensation, funeral expenses, and attorney's fees. She contended that compensation should be based on Singaporean law, while Norse Management Co. and Pacific Seamen Services argued against this, proposing instead a lesser amount based on the National Seamen Board's circular.

Singaporean law governs the benefits granted to Restituta C. Abordo, as stipulated in the employment agreement, which allows for compensation based on either Philippine law or the law of the vessel’s registry, whichever is greater.
Since the petitioners offered only P30,000, applying Singaporean law was appropriate.
The National Seamen Board is justified in taking judicial notice of Singaporean law despite the absence of formal proof, as administrative agencies are not bound by strict procedural rules.

Scrivener's Error

This means the failure of the agreement to express the intention of the parties.

This failure could be attributed to wrong terminology, missing terminology, or simply clerical error.
Because the agreement does not embody the intention of the parties, the chosen law is often disregarded, resulting in a course of action which the parties may not have contemplated or wanted.

Parties to an agreement often specify a particular law to govern their legal relations.

However, they may not be careful enough in crafting the terms of their agreement, resulting in a different meaning.
It may be due to simple oversight, negligence, or a lack of skill on the part of the person drafting the contract.
Because there is a failure to express the true intent of the parties, the agreement is interpreted according to its plain or obvious meaning.

Hongkong and Shanghai Banking Corporation vs. Sherman, GR No. 72494, August 11, 1989

Hongkong and Shanghai Banking Corporation sued Jack Robert Sherman and Deodato Reloj for debt recovery after Eastern Book Supply Service PTE, Ltd. failed to pay on an overdraft facility. The directors of the COMPANY, including Sherman and Reloj, had signed a Joint and Several Guarantee.After the COMPANY failed to meet its financial obligations, the BANK sought to enforce the guarantee by demanding payment from Sherman and Reloj.
The defendants responded by filing a motion to dismiss, claiming that the Philippine courts lacked jurisdiction over the subject matter and the persons involved. They argued that the guarantee's provision which specified that Singapore law would govern and Singaporean courts would handle disputes.

The court ruled that Philippine courts did have jurisdiction to entertain the case.
Despite the guarantee specifying Singaporean jurisdiction, the principle of due process required a liberal interpretation.
The court noted that jurisdiction must be based on reasonable grounds that align with fair play and justice.
In this instance, since the defendants were residents of the Philippines, it was reasonable and practical for the Philippine courts to handle the matter, avoiding unnecessary complications and expenses for the defendants.
The court concluded that the clause did not exclude Philippine jurisdiction.

Carnival Cruise Lines, Inc. Vs. Shute, 499 U.S 585 (1990)

Eulala and Russel Shute were passengers on a Carnival Cruise Lines ship. The Shutes bought tickets in Washington, which included a forum selection clause requiring lawsuits to be filed in Florida. Mrs. Shute suffered an injury while on the cruise in international waters near Mexico. The Shutes filed a lawsuit in Washington, violating the forum selection clause. Carnival Cruise Lines sought summary judgment based on the forum clause and insufficient connection with Washington.
On whether the forum selection clause is enforceable, the court held that the forum selection clause is valid and binding.

Cruise lines have a legitimate interest in limiting the jurisdictions where they can be sued. The clause reduces confusion about where disputes should be resolved and helps lower ticket prices for passengers by reducing litigation costs.
The Court of Appeals' findings on the Shutes’ inability to sue in Florida were not supported by the record. Florida is not an unreasonably remote forum for this case, and the Shutes had notice of the clause.
No evidence of fraud or bad faith was found in the inclusion of the forum clause.

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Private International Law: Chapter III — Choice of Law