Civil Law

THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD. vs. NLRC GR. No. 120077 October 13, 2000 Forum Non Conveniens, Conflicts of Law, Lex Loci Contractus


Private respondent Marcelo Santos was an overseas worker, while petitioners are the Manila Hotel Corporation (MHC) and the Manila Hotel International Company, Limited (MHICL).

During his employment with the Mazoon Printing Press in the Sultanate of Oman, respondent Santos received a letter from Mr. Gerhard R. Shmidt, General Manager, Palace Hotel, Beijing, China, to offer him the same position as printer, but with a higher monthly salary and increased benefits. 

Santos started to work at the Palace Hotel on November 5, 1988.

Santos signed an amended “employment agreement” with the Palace Hotel, effective November 5, 1988. Mr. Shmidt represented the Palace Hotel. While the Vice President of petitioner MHICL Miguel D. Cergueda signed the employment agreement under the word “noted”.

However, due to business reverses brought about by the political upheaval in China, the Palace Hotel terminated the employment of Santos on September 5, 1989.

Santos and paid all benefits due him, including his plane fare back to the Philippines.

Hence, Santos filed a complaint for illegal dismissal with the Arbitration Branch, NCR, NLRC. 

The complaint named MHC, MHICL, the Palace Hotel and Mr. Shmidt as respondents.

The Palace Hotel and Mr. Shmidt were not served with summons and neither participated in the proceedings before the Labor Arbiter.

Ultimately, the NLRC ruled in favor of private respondent Santos.

Hence, this petition filed by MHC and MHICL.


Whether or not the NLRC is a convenient forum to hear the case.


Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction over the case if it chooses to do so provided: 

(1) that the Philippine court is one to which the parties may conveniently resort to;

(2) that the Philippine court is in a position to make an intelligent decision as to the law and the facts; and 

(3) that the Philippine court has or is likely to have power to enforce its decision. 

The conditions are unavailing in the case at bar. The NLRC was a seriously inconvenient forum given that all the incidents of the case

 —  from the time of recruitment, to employment to dismissal occurred outside the Philippines. 

The inconvenience is compounded by the fact that the proper defendants, the Palace Hotel and MHICL are not nationals of the Philippines. Neither are they”doing business in the Philippines.” Likewise, the main witnesses, Mr. Shmidt and Mr. Henkare are non-residents of the Philippines.

Principle of effectiveness, no power to execute decision. — 

Even assuming that a proper decision could be reached by the NLRC, such would not have any binding effect against the employer, the Palace Hotel. The Palace Hotel is a corporation incorporated under the laws of China and was not even served with summons. Jurisdiction over its person was not acquired.

Neither can an intelligent decision be made as to the law governing the employment contract as such was perfected in foreign soil. This calls for the application of the principle of lex loci contractus (the law of the place where the contract was made).

The employment contract was not perfected in the Philippines. Respondent Santos signified his acceptance by writing a letter while he was in the Republic of Oman. This letter was sent to the Palace Hotel in the People’s Republic of China.

The petition for certiorari is GRANTED and the orders and resolutions of the NLRC are ANNULLED.

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