THE CASE OF SAUDI ARABIAN AIRLINES V. COURT OF APPEALS (1998) - 33 PJP 21

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This is the case of Saudi Arabian Airlines v. Court of Appeals (1998).[1]

In the case of Saudi Arabian Airlines v. Court of Appeals, plaintiff Morada, a Filipino flight attendant for Saudi Arabian Airlines (“SAUDIA”), experienced attempted rape by a fellow crew member in Jakarta. Despite reporting the incident, SAUDIA exerted pressure on her to drop the charges. This pressure included interrogation, passport confiscation, and, ultimately, a false accusation leading to her conviction and imprisonment. She was sentenced for adultery for allegedly violating Islamic laws by going to a disco and by socializing with male crew members. Plaintiff alleged that SAUDIA not only failed to protect her after the attempted rape but actively participated in the cover-up thereof and in her subsequent persecution.

Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia for the Philippines. Shortly before her return to Manila, she was terminated from service by SAUDIA, without her being informed of the cause. Later, in the Philippines, Morada filed a complaint against SAUDIA.

Up in the Supreme Court, SAUDIA claimed that the dispute involved conflict of laws. It maintained that Morada’s claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia. It alleged that the existence of a foreign element qualified the instant case for the application of the laws of the Kingdom of Saudi Arabia by virtue of the lex loci delicti commissi rule. On the other hand, Morada contended that, since her claim was based on Articles 19 and 21 of the NCC, the instant case should properly be considered a matter of domestic law.

Under the factual antecedents obtaining in the case, there was no dispute that the interplay of events occurred in two states, the Philippines and Saudi Arabia. Considering the connecting factors involved in this case, i.e., Morada’s nationality, the nationality of the tortfeasor/s, the place of occurrence of the alleged tort, etc., SAUDIA was correct that conflicts rules should apply. Thus, the foreign element consisted in the fact that Morada was a resident Philippine national and that SAUDIA was a resident foreign corporation. Also, by virtue of the employment of Morada with the Saudia as a flight stewardess, events did transpire during her many occasions of travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, thus justifying the conclusion that there existed in this case a “conflicts” situation.

Pragmatic considerations, including the convenience of the parties, weigh heavily in favor of the Philippine court assuming jurisdiction. Paramount is the private interest of Morada. Enforceability of a judgment if one is obtained is quite obvious, either against SAUDIA or against Morada. Relative advantages and obstacles to a fair trial are equally important. Morada may not, by choice of an inconvenient forum, validly vex, harass, or oppress defendants by, for example, inflicting upon them needless expense or disturbance. However, unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed.[2]

Weighing the relative claims of the parties, the court a quo found it best to hear the case in the Philippines. Had it refused to take cognizance of the case, it would be forcing Morada to seek remedial action elsewhere, i.e., in the Kingdom of Saudi Arabia where she no longer maintained substantial connections. That would have caused a fundamental unfairness to her. Moreover, by hearing the case in the Philippines, no unnecessary difficulties, inconvenience, or vexation would be suffered by either of the parties. The choice of forum of Morada should be upheld.

As to the choice of applicable law, choice-of-law problems seek to answer two important questions:

  1. What legal system should control a given situation where some of the significant facts occurred in two or more states; and
  1. To what extent should the chosen legal system regulate the situation.[3]

According to the Supreme Court, there exist several theories proposed to identify the legal system that should ultimately control. Although, ideally, all choice-of-law theories should intrinsically advance both notions of justice and predictability, they do not always do so. As a result, the forum is faced with the problem of deciding which of these two important values should be prioritized.

Before a choice can be made, it is necessary for the court to determine under what category a certain set of facts or rules fall. This process is known as “characterization” or the “doctrine of qualification.” It is the “process of deciding whether or not the facts relate to the kind of question specified in a conflicts rule.”[4]

The purpose of “characterization” is to enable the forum to select the proper law. The court’s starting point of analysis is not a legal relation, but a factual situation, event, or operative fact.[5] An essential element of conflict rules is the indication of a “test” or “connecting factor” or “point of contact.”

Choice-of-law rules invariably consist of a factual relationship and a connecting factor or point of contact. The point of contact may be such as the situs of the res, the place of celebration, the place of performance, or the place of wrongdoing.[6] In doing this analysis, the court must take note that one or more circumstances may be present to serve as the possible test for the determination of the applicable law.

These “test factors,” also known as “points of contact” or “connecting factors,” could be any of the following:

  1. The nationality of a person (lex nationalii);
  1. His/her domicile (lex domicilii);
  1. His/her residence;
  1. His/her place of sojourn;
  1. His/her place of origin;
  1. The seat of a legal or juridical person, such as a corporation or a partnership;
  1. The place of incorporation of a legal or juridical person such as a corporation or a partnership (internal business rule);
  1. The situs of a thing, i.e., the place where it is, or is deemed to be situated (lex loci rei sitae);
  1. The place where an act has been done, the locus actus, such as the place where a contract has been made (lex loci celebrationis);
  1. Where a marriage has been celebrated (lex loci celebrationis);
  1. Where a last will has been signed (lex loci celebrationis);
  1. Where a tort has been committed (lex loci actus);
  1. The place where an act is intended to come into effect, e.g., the place of performance of contractual duties (lex loci voluntatis, lex loci solutionis, and lex loci contractus);
  1. The place where a power of attorney is to be exercised (lex loci solutionis);
  1. The intention of the contracting parties as to the law that should govern their agreement (lex loci intentionis);
  1. The place where judicial or administrative proceedings are instituted or done (lex fori); or
  1. The flag of a ship or airship.[7]

Considering that Morada’s complaint in the court a quo is one involving torts, the “connecting factor” or “point of contact” could be the place or places where the tortious conduct occurred (lex loci actus). Thus, the Supreme Court found that the Philippines could be said as a situs of the tort because it was the place where the alleged tortious conduct took place as SAUDIA allegedly deceived private respondent, a Filipina residing and working in the Philippines. That certain acts or parts of the injury allegedly occurred in another country should be considered of no moment. Considering that the over-all harm or the fatality of the alleged injury to the person, reputation, social standing, and human rights of Morada all occurred in the Philippines, Philippine jurisdiction’s laws should apply.

With the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories and rules on tort liability have been advanced to offer fresh judicial approaches to arrive at just results. These modern theories include: (1) the German rule of elective concurrence; (2) the SMSR rule;[8] (3) the state-interest analysis rule; and (4) Caver’s Principle of Preference.

In keeping abreast with the modern theories on tort liability, in the case of Morada, the Supreme Court applied the SMSR rule. Taking into account the following factors, evaluated according to their relative importance with respect to the particular issue, the application of said rule was found proper:

  1. The place where the injury occurred as the over-all harm was produced in the Philippines;
  1. The place where the conduct causing the injury occurred as the humiliation and deception were also committed in the Philippines;
  1. The domicile, residence, nationality, place of incorporation and place of business of the parties as SAUDIA was a resident foreign corporation; and
  1. The place where the relationship, if any, between the parties is centered as Morada was hired in the Philippines.

Finally, Morada had no obligation to plead and prove the laws of the Kingdom of Saudi Arabia since her cause of action was based on Articles 19 and 21 of the NCC. In fact, she never alleged that Saudi law should govern the case. Considering that it was the SAUDIA who was invoking the applicability of the law of Saudi Arabia, the burden was on it to plead and to establish what the law of Saudi Arabia contained.

Notice that the Supreme Court held in this case that Morada had no “substantial connection,” also known as “substantial contact,” with Saudi Arabia. The substantial connection doctrine is also relevant in discussions concerning forum non conveniens and in personam jurisdiction.

[1] 358 Phil. 105 FIRST DIVISION [ G.R. No. 122191, October 08, 1998 ] SAUDI ARABIAN AIRLINES, PETITIONER, VS. COURT OF APPEALS, MILAGROS P. MORADA AND HON. RODOLFO A. ORTIZ, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 89, REGIONAL TRIAL COURT OF QUEZON CITY, RESPONDENTS.

[2] Gulf Oil Corporation v. Gilbert, 350 U.S. 501, 67 Sup. Ct. 839 (1947).

[3] Coquia and Pangalangan, Conflict of Laws, 1995 edition, p. 65, citing Von Mehren, Recent Trends in Choice-of-Law Methodology, 60 Cornell L. Rev. 927 (1975).

[4] Salonga, Private International Law, 1995 edition, p. 94, citing Falconbridge, Essays on the Conflict of Laws, p. 50.

[5] Mussbaum, Principle of Private International Law, p. 173; and Rabel, The Conflict of Laws: A Comparative Study, pp. 51-52.

[6] Mussbaum, Principle of Private International Law, p. 173; and Rabel, The Conflict of Laws: A Comparative Study, p. 137.

[7] Mussbaum, Principle of Private International Law, p. 173; and Rabel, The Conflict of Laws: A Comparative Study,pp. 138-139.

[8] The Second Restatement of 1969.