Hasegawa Vs Kitamura Digest PDF

Kazuhiro Hasegawa vs Minoru Kitamura
In March 1999, Nippon Engineering Consultants Co., Ltd, a Japanese firm, was
contracted by the Department of Public Works and Highways (DPWH) to supervise
the construction of the Southern Tagalog Access Road. In April 1999, Nippon
entered into an independent contractor agreement (ICA) with Minoru Kitamura for
the latter to head the said project. The ICA was entered into in Japan and is
effective for a period of 1 year (so until April 2000). In January 2000, DPWH
awarded the Bongabon-Baler Road project to Nippon. Nippon subsequently
assigned Kitamura to head the road project. But in February 2000, Kazuhiro
Hasegawa, the general manager of Nippon informed Kitamura that they are pre-
terminating his contract. Kitamura sought Nippon to reconsider but Nippon
refused to negotiate. Kitamura then filed a complaint for specific performance and
damages against Nippon in the RTC of Lipa.
Hasegawa filed a motion to dismiss on the ground that the contract was entered in
Japan hence, applying the principle of lex loci celebracionis, cases arising from the
contract should be cognizable only by Japanese courts. The trial court denied the
motion. Eventually, Nippon filed a petition for certiorari with the Supreme Court.
Hasegawa, on appeal significantly changed its theory, this time invoking forum non
conveniens; that the RTC is an inconvenient forum because the parties are
Japanese nationals who entered into a contract in Japan. Kitamura on the other
hand invokes the trial court’s ruling which states that matters connected with the
performance of contracts are regulated by the law prevailing at the place of
performance, so since the obligations in the ICA are executed in the Philippines,
courts here have jurisdiction.
ISSUE: Whether or not the complaint against Nippon should be dismissed.
HELD: No. The trial court did the proper thing in taking cognizance of it.
In the first place, the case filed by Kitamura is a complaint for specific performance
and damages. Such case is incapable of pecuniary estimation; such cases are
within the jurisdiction of the regional trial court.
Hasegawa filed his motion to dismiss on the ground of forum non conveniens.
However, such ground is not one of those provided for by the Rules as a ground
for dismissing a civil case.
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The Supreme Court also emphasized that the contention that Japanese laws
should apply is premature. In conflicts cases, there are three phases and each next
phase commences when one is settled, to wit:
1. Jurisdiction – Where should litigation be initiated? Court must have jurisdiction

over the subject matter, the parties, the issues, the property, the res. Also
considers, whether it is fair to cause a defendant to travel to this state; choice of
law asks the further question whether the application of a substantive law which
will determine the merits of the case is fair to both parties.
2. Choice of Law – Which law will the court apply? Once a local court takes
cognizance, it does not mean that the local laws must automatically apply. The
court must determine which substantive law when applied to the merits will be
fair to both parties.
3. Recognition and Enforcement of Judgment – Where can the resulting judgment be

enforced?
This case is not yet in the second phase because upon the RTC’s taking cognizance
of the case, Hasegawa immediately filed a motion to dismiss, which was denied.
He filed a motion for reconsideration, which was also denied. Then he bypassed
the proper procedure by immediately filing a petition for certiorari. The question
of which law should be applied should have been settled in the trial court had
Hasegawa not improperly appealed the interlocutory order denying his MFR.
KAZUHIRO HASEGAWA vs MINORU KITAMURA
G.R. No. 149177
November 23, 2007
FACTS:
Nippon Engineering Consultants (Nippon), a Japanese consultancy firm providing

technical and management support in the infrastructure projects national
permanently residing in the Philippines. The agreement provides that Kitamaru
was to extend professional services to Nippon for a year. Nippon assigned
Kitamaru to work as the project manager of the Southern Tagalog Access Road
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(STAR) project. When the STAR project was near completion, DPWH engaged the
consultancy services of Nippon, this time for the detailed engineering &
construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project.
Kitamaru was named as the project manger in the contract.
Hasegawa, Nippon’s general manager for its International Division, informed

Kitamaru that the company had no more intention of automatically renewing his
ICA. His services would be engaged by the company only up to the substantial
completion of the STAR Project.
Kitamaru demanded that he be assigned to the BBRI project. Nippon insisted that
Kitamaru’s contract was for a fixed term that had expired. Kitamaru then filed for
specific performance & damages w/ the RTC of Lipa City. Nippon filed a MTD.
Nippon’s contention: The ICA had been perfected in Japan & executed by &
between Japanese nationals. Thus, the RTC of Lipa City has no jurisdiction. The
claim for improper pre-termination of Kitamaru’s ICA could only be heard &
ventilated in the proper courts of Japan following the principles of lex loci
celebrationis & lex contractus.
The RTC denied the motion to dismiss. The CA ruled hat the principle of lex loci
celebrationis was not applicable to the case, because nowhere in the pleadings
was the validity of the written agreement put in issue. It held that the RTC was
correct in applying the principle of lex loci solutionis.
ISSUE:
Whether or not the subject matter jurisdiction of Philippine courts in civil cases for
specific performance & damages involving contracts executed outside the country
by foreign nationals may be assailed on the principles of lex loci celebrationis, lex
contractus, “the state of the most significant relationship rule,” or forum non
conveniens.
HELD:
NO. In the judicial resolution of conflicts problems, 3 consecutive phases are

involved: jurisdiction, choice of law, and recognition and enforcement of
judgments. Jurisdiction & choice of law are 2 distinct concepts.Jurisdiction
considers whether it is fair to cause a defendant to travel to this state; choice of
law asks the further question whether the application of a substantive law w/c will
determine the merits of the case is fair to both parties. The power to exercise
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jurisdiction does not automatically give a state constitutional authority to apply
forum law. While jurisdiction and the choice of the lex foriwill often coincide, the
“minimum contacts” for one do not always provide the necessary “significant
contacts” for the other. The question of whether the law of a state can be applied
to a transaction is different from the question of whether the courts of that state
have jurisdiction to enter a judgment.
In this case, only the 1st phase is at issue—jurisdiction. Jurisdiction, however, has
various aspects. For a court to validly exercise its power to adjudicate a
controversy, it must have jurisdiction over the plaintiff/petitioner, over the
defendant/respondent, over the subject matter, over the issues of the case and, in
cases involving property, over the res or the thing w/c is the subject of the
litigation. In assailing the trial court's jurisdiction herein, Nippon is actually
referring to subject matter jurisdiction.
Jurisdiction over the subject matter in a judicial proceeding is conferred by the

sovereign authority w/c establishes and organizes the court. It is given only by law
and in the manner prescribed by law. It is further determined by the allegations of
the complaint irrespective of whether the plaintiff is entitled to all or some of the
claims asserted therein. To succeed in its motion for the dismissal of an action for
lack of jurisdiction over the subject matter of the claim, the movant must show
that the court or tribunal cannot act on the matter submitted to it because no law
grants it the power to adjudicate the claims.
In the instant case, Nippon, in its MTD, does not claim that the RTC is not properly
vested by law w/ jurisdiction to hear the subject controversy for a civil case for
specific performance & damages is one not capable of pecuniary estimation & is
properly cognizable by the RTC of Lipa City. What they rather raise as grounds to
question subject matter jurisdiction are the principles of lex loci
celebrationis and lex contractus, and the “state of the most significant relationship
rule.” The Court finds the invocation of these grounds unsound.
Lex loci celebrationis relates to the “law of the place of the ceremony” or the law
of the place where a contract is made. The doctrine of lex contractus or lex loci
contractus means the “law of the place where a contract is executed or to be
performed.” It controls the nature, construction, and validity of the contract and it
may pertain to the law voluntarily agreed upon by the parties or the law intended
by them either expressly or implicitly.Under the “state of the most significant
relationship rule,” to ascertain what state law to apply to a dispute, the court
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should determine which state has the most substantial connection to the
occurrence and the parties. In a case involving a contract, the court should
consider where the contract was made, was negotiated, was to be performed, and
the domicile, place of business, or place of incorporation of the parties. This rule
takes into account several contacts and evaluates them according to their relative
importance with respect to the particular issue to be resolved.
Since these 3 principles in conflict of laws make reference to the law applicable to
a dispute, they are rules proper for the 2nd phase, the choice of law. They
determine which state's law is to be applied in resolving the substantive issues of a
conflicts problem. Necessarily, as the only issue in this case is that of jurisdiction,
choice-of-law rules are not only inapplicable but also not yet called for.
Further, Nippon’s premature invocation of choice-of-law rules is exposed by the

fact that they have not yet pointed out any conflict between the laws of Japan and
ours. Before determining which law should apply, 1st there should exist a conflict
of laws situation requiring the application of the conflict of laws rules. Also, when
the law of a foreign country is invoked to provide the proper rules for the solution
of a case, the existence of such law must be pleaded and proved.
It should be noted that when a conflicts case, one involving a foreign element, is
brought before a court or administrative agency, there are 3 alternatives open to
the latter in disposing of it: (1) dismiss the case, either because of lack of
jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction
over the case and apply the internal law of the forum; or (3) assume jurisdiction
over the case and take into account or apply the law of some other State or
States. The court’s power to hear cases and controversies is derived from the
Constitution and the laws. While it may choose to recognize laws of foreign
nations, the court is not limited by foreign sovereign law short of treaties or other
formal agreements, even in matters regarding rights provided by foreign
sovereigns.
Neither can the other ground raised, forum non conveniens, be used to deprive the
RTC of its jurisdiction. 1st, it is not a proper basis for a motion to dismiss because
Sec. 1, Rule 16 of the Rules of Court does not include it as a ground. 2nd, whether
a suit should be entertained or dismissed on the basis of the said doctrine depends
largely upon the facts of the particular case and is addressed to the sound
discretion of the RTC. In this case, the RTC decided to assume jurisdiction. 3rd, the
propriety of dismissing a case based on this principle requires a factual
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determination; hence, this conflicts principle is more properly considered a matter
of defense.
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Kazuhiro Hasegawa vs Minoru Kitamura

ISSUE: Whether or not the complaint against Nippon should be dismissed.

1. Jurisdiction – Where should litigation be initiated? Court must have jurisdiction

3. Recognition and Enforcement of Judgment – Where can the resulting judgment be

KAZUHIRO HASEGAWA vs MINORU KITAMURA

G.R. No. 149177

November 23, 2007

Nippon Engineering Consultants (Nippon), a Japanese consultancy firm providing

Hasegawa, Nippon’s general manager for its International Division, informed

NO. In the judicial resolution of conflicts problems, 3 consecutive phases are

Jurisdiction over the subject matter in a judicial proceeding is conferred by the

Further, Nippon’s premature invocation of choice-of-law rules is exposed by the

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