Conflict of Laws: Application of Foreign Law

HOW FOREIGN LAW IS GIVEN APPLICATION IN THE PHILIPPINES:

1. By statutory directives (consent of the State)
2. By agreement of the parties
3. By treaty or convention
4. By conflict of laws rule

In their absence --

A. Principles governing Conflict of Law Cases

1. Substance vs. Procedural Principles

All matters of procedure are governed by the law of the forum where the case is filed, while matters of substance are governed by the law of the country where the cause of action arose.

• PROBLEM: Some laws may be treated by one country as procedural and by another country as substantive (e.g. statute of limitations)

SOLUTIONS:

• Government Interest Analysis - the law of the country whose interest is most impaired by failure to apply its statute should be applied
• Borrowing Statute - the law of the country has a statute “borrowing” the prescriptive period provided in the foreign statute; EXCEPTION: when contrary to public policy or prohibitive laws

2. Center of Gravity Doctrine (Grouping of Contacts Principle or State of the Most Significant Relationship Theory)

Law of the state which has the most significant relationship with the occurrence and with the parties determines their rights and liabilities in tort or in contract

3. Renvoi Doctrine (Table Tennis Theory)

The conflict of law rule of the forum resorts to the foreign law, which in turn refers back to the law of the forum.




RENVOI DOCTRINE APPLIED


Aznar vs. Garcia, G.R. No. L-16749, Jan. 3, 1963

FACTS:

Edward Christensen, who at his death was a US citizen but domiciled in the Philippines, left a will, devising unto Maria Helen a certain amount of money and giving the rest of his estate to Maria Lucy. Helen opposed the partition on the ground that she is deprived of her legitime. Her contention is that the law of California directs that the law of the domicile (Philippines) should govern the will.

ISSUE: Whether or not the national law or the domiciliary law should apply

HELD:

The intrinsic validity of wills is governed by the national law of the decedent. In the present case, the national law of Edward is the laws of California. However, there were two conflicting California laws regarding succession. One is enunciated in In Re Kaufman (which does not provide for legitimes) and another is Art. 946 of the California Civil Code (which provides that the law of the domicile applies). SC held that the national law is Art. 946, which is the conflict of laws rule of California. The reason is that In Re Kaufman applies only to residents while Art. 946 is specific to non-residents. Thus, since Art. 946 contains a refer-back to Philippine laws (the law of the domicile), then Maria Helen is entitled to her legitime.

4. Lex Fori

The law of the forum governs all matters pertaining to procedural or remedial rights.


B. Applicability of Foreign Laws and its Exceptions

WHEN FOREIGN LAW, EVEN THOUGH APPLICABLE, MAY NOT BE GIVEN APPLICATION:

1. Foreign law contravenes prohibitive law or public policy of the forum
2. Relationship of the parties affects public interest
3. Real property is involved (apply lex rei sitae)
4. Foreign law, judgment or contract is contrary to a sound and established public policy of the forum
5. Foreign law is procedural in nature (lex fori governs procedural matters)
6. Foreign law is penal in nature

EXCEPTION: CONTRARY TO SOUND PUBLIC POLICY


Bank of America, NT vs. American Realty Corporation, .G.R No. 133876, Dec. 29, 1999

FACTS:

Bank of America, duly licensed to do business in the Philippines and existing under the laws of California, USA, granted US Dollar loans to certain foreign corporate borrowers. These loans were secured by two real estate mortgages by American Realty, a domestic corporation. When the borrowers defaulted, Bank of America sued them before English courts. While these cases were pending, Bank of America likewise judicially foreclosed the real estate mortgages in the Philippines. Thus, American Realty sued for damages against Bank of America.

ISSUE: Whether or not Bank of America can judicially foreclose the real estate mortgages despite pendency of the civil suits before English courts

HELD:

English law purportedly allows the filing of judicial foreclosure of mortgage despite pendency of civil suit for collection. But English law was never properly impleaded and proven. Thus, the doctrine of processual presumption applies.

SC further held that even assuming arguendo that English laws were proven, said foreign law would still no find applicability. When the foreign law, judgment or contract is contrary to a sound and established public policy of the forum, the said foreign law, judgment or order shall not be applied.

Additionally, prohibitive laws concerning persons, their acts or property, and those which have for their object public order, public policy and good customs shall not be rendered ineffective b laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country. The public policy sought to be protected in the instant case is the principle imbedded in our jurisdiction proscribing the splitting of a single cause of action.

Moreover, the foreign law should not be applied when its application would work undeniable injustice to the citizens or residents of the forum.

C. Authentication, Electronic Evidence and Judicial Cognizance of Foreign Judgments

**To be recognized by Philippine courts, foreign laws and judgments must be alleged and proved.


HOW FOREIGN PUBLIC DOCUMENTS ARE PROVED:

1. Official publication
2. Certified true copy or one attested by the officer having the legal custody of the record, or by his deputy, and accompanied with a certificate that such officer has custody

• The certificate must 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
• Authenticated by his seal of office

**If the foreign law or judgment does not comply with the above requirements, it will not be recognized and the Doctrine of Processual Presumption will apply (Philippine courts will assume the foreign law is the same as Philippine laws).

• GENERAL RULE: Philippine courts are not authorized to take judicial notice of foreign laws.

EXCEPTIONS:

• Where there are exceptional circumstances when the foreign laws are already within the actual knowledge of the court (generally known or actually ruled upon in a prior case)
• Where the courts are familiar with the specific foreign laws (e.g. Spanish civil law)
• Where the adverse party did not dispute the application of foreign law
• Where the tribunal is a quasi-judicial body which is not bound by strict rules of technicality