Saudi Arabian Airlines vs. Court of Appeals

In tort claims involving foreign elements, the State of the most significant relationship rule determines the applicable law; when the overall harm or fatality of the injury lodges in the Philippines and the Philippines has the most significant contacts (residence of the injured party, place where the relationship is centered), Philippine law applies notwithstanding that some tortious acts occurred abroad.

Morada was employed by SAUDIA as a flight attendant based in Jeddah, Saudi Arabia. In April 1990, while on lay-over in Jakarta, she was allegedly the victim of an attempted rape by fellow Saudi crew members. In 1992-1993, SAUDIA allegedly summoned her to Jeddah and Riyadh under false pretenses, subjected her to police interrogation, and facilitated her prosecution in a Saudi court where she was convicted of adultery and sentenced to imprisonment and lashes. She was later pardoned by the Prince of Makkah but terminated by SAUDIA.

• Filed in RTC Quezon City (Civil Case No. Q-93-18394) on November 23, 1993
• SAUDIA filed Omnibus Motion to Dismiss on January 19, 1994 (grounds: failure to state cause of action, lack of jurisdiction, etc.)
• Morada filed Amended Complaint on June 23, 1994 (dropping defendant Al-Balawi)
• RTC denied Motion to Dismiss in Order dated August 29, 1994
• SAUDIA filed Motion for Reconsideration on September 20, 1994 (raising lack of jurisdiction based on conflict of laws)
• RTC denied MR in Order dated February 2, 1995
• SAUDIA filed Petition for Certiorari with CA (CA-G.R. SP No. 36533) on February 20, 1995
• CA issued Resolution with TRO on February 23, 1995
• CA denied Writ of Preliminary Injunction in Resolution dated September 27, 1995
• SAUDIA filed Petition for Review with SC on October 20, 1995
• CA rendered Decision dated April 10, 1996 (denying certiorari)
• SAUDIA filed Supplemental Petition with SC on May 7, 1996 (questioning CA Decision)

• Parties: Milagros P. Morada (Filipina flight attendant, plaintiff/ private respondent) vs. Saudi Arabian Airlines (foreign airline, defendant/ petitioner)
• Employment: Morada hired January 21, 1988; based in Jeddah but residing in the Philippines
• Jakarta Incident (April 27, 1990): Morada allegedly almost raped by crew members Thamer and Allah Al-Gazzawi in Jakarta; Indonesian police arrested them
• Manila Transfer: SAUDIA transferred Morada to Manila base in September 1990
• Jeddah Summons (January 14, 1992): Morada summoned to Jeddah to see Chief Legal Officer Ali Meniewy; taken to police station, pressured to drop charges against her attackers
• Riyadh/Jeddah Events (June 1993):
  • Prevented from boarding flight in Riyadh; taken to Saudi court and made to sign Arabic documents
  • Interrogated June 28, 1993; passport confiscated
  • July 3, 1993: Saudi judge convicted her of adultery, going to a disco, and socializing with male crew; sentenced to 5 months imprisonment and 286 lashes
  • Resolution: Prince of Makkah dismissed the case; Morada was terminated by SAUDIA without cause stated
  • Complaint: Morada sued for actual damages (P250,000), moral damages (P4M), exemplary damages (P500,000), and attorney's fees (P500,000) based on Articles 19 and 21 of the Civil Code

• Conflict of Laws: The case presents a conflicts problem where the proper applicable law is the law of the Kingdom of Saudi Arabia under the lex loci delicti commissi rule (place of the wrong), as the alleged acts occurred in Saudi territory
• Lack of Jurisdiction: The RTC has no jurisdiction to try the case; the Philippines has no substantial interest in the prosecution of the case involving acts done by another sovereign state
• Burden of Proof: Private respondent has the burden to plead and prove Saudi law since she instituted the suit
• Procedural Technicalities: Leave of court is required for supplemental pleadings (though rendered moot by SC action); supplemental petition was filed within the 15-day reglementary period under Rule 45

• Domestic Law Applicable: The cause of action is based on Articles 19 and 21 of the Civil Code (human relations/ torts), not on labor law or foreign law; the complaint alleges abuse of rights and acts contrary to morals and good customs committed by a foreign corporation doing business in the Philippines
• Jurisdiction: The RTC has jurisdiction under RA 7691 (as amended) because the demand exceeds P200,000 (exclusive of interest, damages, attorney's fees); venue is proper in Quezon City where the plaintiff resides
• Service: SAUDIA is a foreign corporation doing business in the Philippines and may be served summons at its Makati office
• Submission to Jurisdiction: SAUDIA submitted to the RTC's jurisdiction by filing motions seeking dismissal on grounds other than lack of jurisdiction (e.g., failure to state cause of action, prescription, waiver)
• Burden of Proof: Since petitioner is the one invoking the applicability of Saudi law, the burden is on SAUDIA to plead and establish what that law is

• Procedural Issues:
  • Whether the RTC has jurisdiction over the subject matter and the parties
  • Whether SAUDIA submitted to the jurisdiction of the RTC by filing motions to dismiss on grounds other than lack of jurisdiction
• Substantive Issues:
  • Whether Philippine law or Saudi law governs the dispute
  • Whether the Philippines is the appropriate forum for the case

• Procedural:
  • The RTC has jurisdiction over the subject matter under Section 1 of RA 7691 (demand exceeds P200,000 in Metro Manila) and over the persons of the parties; venue in Quezon City is proper under Rule 4, Section 2(b)
  • SAUDIA submitted to the jurisdiction of the RTC by filing an Omnibus Motion to Dismiss that prayed for relief on grounds other than lack of jurisdiction (e.g., failure to state cause of action, prescription), thereby constituting a general appearance under Republic v. Ker and Company, Ltd. and De Midgely v. Ferandos
• Substantive:
  • The State of the most significant relationship rule applies, not the traditional lex loci delicti commissi; the Philippines is the situs of the tort because the "over-all harm or the fatality of the alleged injury to the person, reputation, social standing and human rights" lodged in the Philippines where Morada resides
  • The Philippines has the most significant contacts: (a) Morada is a resident Filipina national; (b) the employment relationship was centered in the Philippines; (c) SAUDIA is engaged in business in the Philippines; (d) the place of the overall injury is the Philippines
  • Philippine law governs the tort liability aspects of the case
  • Petitioner had the burden to plead and prove Saudi law because it was the party invoking its applicability

• Characterization (Doctrine of Qualification) — The process of deciding whether the facts relate to the kind of question specified in a conflicts rule to enable the forum to select the proper law; here, the SC characterized the issue as a torts problem
• State of the Most Significant Relationship Rule — Applied to determine the state with the most significant relationship to the dispute by evaluating:
  • (a) the place where the injury occurred
  • (b) the place where the conduct causing the injury occurred
  • (c) the domicile, residence, nationality, place of incorporation and place of business of the parties
  • (d) the place where the relationship between the parties is centered
  • Connecting Factors / Points of Contact — Includes: (1) nationality; (2) seat of legal person; (3) situs of thing; (4) lex loci actus (place where act done); (5) place where act intended to come into effect; (6) intention of parties; (7) lex fori (law of the forum); (8) flag of ship
  • General vs. Special Appearance — A party makes a general appearance and submits to jurisdiction when its motion to dismiss is based on grounds other than lack of jurisdiction over the person; a special appearance must be solely to object to jurisdiction
  • Abuse of Rights (Article 19, Civil Code) — Every person must act with justice, give everyone his due, and observe honesty and good faith; violation gives rise to an action for damages under Article 21
  • Lex Loci Delicti Commissi — The traditional rule that the law of the place where the wrong was committed governs; criticized as too rigid and replaced by the significant relationship rule in this case

• "Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damages."
• "The place where the over-all harm or the fatality of the alleged injury to the person, reputation, social standing and human rights of complainant, had lodged..."
• "The burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is."
• "Matters of ‘procedure’ not going to the substance of the claim involved are governed by [the lex fori]."

• Philippine National Bank (PNB) vs. Court of Appeals — Cited for the proposition that Articles 19 and 21 were intended to expand the concept of torts in this jurisdiction by granting adequate legal remedy for moral wrongs
• Republic vs. Ker and Company, Ltd. — Controlling precedent that filing a motion to dismiss on grounds other than lack of jurisdiction (e.g., prescription) constitutes voluntary submission to the court's jurisdiction
• De Midgely vs. Ferandos — Cited for the rule that a motion for dismissal based on grounds other than jurisdiction over the person constitutes a general appearance
• Gulf Oil Corporation vs. Gilbert — Cited regarding forum non conveniens; the plaintiff's choice of forum should rarely be disturbed unless the balance strongly favors the defendant

• Article 19, New Civil Code — Principle of abuse of rights; requires acting with justice, giving everyone his due, and observing honesty and good faith
• Article 21, New Civil Code — Liability for willfully causing loss or injury contrary to morals, good customs or public policy
• Section 1, RA 7691 (amending BP 129, Section 19) — Conferring jurisdiction on RTC over civil cases where the demand, exclusive of interest, damages, etc., exceeds P200,000 in Metro Manila
• Section 2(b), Rule 4, Revised Rules of Court — Venue for personal actions may be commenced where the plaintiff or defendant resides
• Rule 45, Revised Rules of Court — Procedure for petition for review to the SC

N/A (Davide, Jr., Bellosillo, Vitug, and Panganiban, JJ., concurred without separate opinions)