Philippine National Construction Corp. v. Asiavest Merchant Bankers (M) Berhad

Philippine National Construction Corp. v.
Asiavest Merchant Bankers (M) Berhad,

G.R. No. 172301, Aug. 19, 2015
DOCTRINE:
whether our courts have subject matter jurisdiction over an action for recovery of sum of money filed by a Malaysian corporation
against a Philippine corporation involving a contract executed and performed in Malaysia, and the applicability of the forum non
conveniens principle.
RULING:
YES. The trial court properly assumed jurisdiction of the case.
A mere invocation of the doctrine of forum non conveniens or an easy averment that foreign elements exist cannot operate to
automatically divest a court of its jurisdiction. It is crucial for courts to determine first if facts were established such that
special circumstances exist to warrant its desistance from assuming jurisdiction.
To try the case in the Philippines, it is believed, would be more convenient to defendant corporation as its principal office
is located in the Philippines, its records will be more accessible, witnesses would be readily available and
entail less expenses in terms of legal services. It is unexpected that a Philippine corporation would rather engage this
civil suit before Malaysian courts.
Our courts would be “better positioned to enforce [the] judgment and, ultimately, to dispense” in this case against petitioner
SYNOPSIS:
FACTS:
Petitioner, (PNCC) and Asiavest Holdings (M) Sdn. Bhd. (Asiavest Holdings) caused the incorporation of an associate company
known as Asiavest-CDCP Sdn. Bhd. (Asiavest-CDCP), through which they entered into contracts to construct rural roads and
bridges for the State of Pahang, Malaysia.
In connection with this construction contract, PNCC obtained various guarantees and bonds from Asiavest Merchant Bankers (M)
Berhad to guarantee the due performance of its obligations.
These contracts were understood to be governed by the laws of Malaysia.
There was failure to perform the obligations under the construction contract, prompting the State of Pahang to demand payment
against Asiavest Merchant Bankers (M) Berhad’s performance bonds.
Respondent, Asiavest Merchant Bankers (M) Berhad filed a Complaint for recovery of sum of money against PNCC
before the Regional Trial Court of Pasig. It based its action on Malaysian laws.
Specifically, it invoked Section 9818 of the Malaysian Contracts Act of 1950 and Section 1119 of the Malaysian Civil Law Act
of 1956.
RTC declared PNCC in default for failure to file any responsive pleading and allowed Asiavest Merchant Bankers (M) Berhad to
present its evidence ex parte.
CA: dismissed PNCC’s appeal for raising pure questions of law exclusively cognizable by this court. It likewise denied
reconsideration.
Hence, PNCC filed this Petition.
PCC’S ARGUMENTS:
 invoked the principle of forum non conveniens and RTC should have refused to take cognizance of the case considering
the difficulty in acquiring jurisdiction over the two Malaysian corporations and in determining PNCC's exact liability.
 Invoked Malayasian Law, Malaysian Limitation Act of 1953 (Act 254), "actions founded on contract or to recover any sum
by virtue of any written law shall not be brought after the expiration of six years from [accrual of] cause of action[.]"
o It contends that the Complaint was filed on April 13, 1994. Thus, six years already elapsed from 1988.
 It was deprived of its day in court when its Motion for another five-day extension to file an Answer was denied, and it was
subsequently declared in default.40 "[T]he transactions involved originated from and occurred in a foreign country[.]" 41 This
constrained PNCC to request several extensions in order to collate the records in preparation for its defense. 42
ISSUE:
whether our courts have subject matter jurisdiction over an action for recovery of sum of money filed by a Malaysian corporation
against a Philippine corporation involving a contract executed and performed in Malaysia, and the applicability of the forum non
conveniens principle.
RULING:
YES. The trial court properly assumed jurisdiction of the case.
A mere invocation of the doctrine of forum non conveniens or an easy averment that foreign elements exist cannot operate to
automatically divest a court of its jurisdiction. It is crucial for courts to determine first if facts were established such that
special circumstances exist to warrant its desistance from assuming jurisdiction.
To try the case in the Philippines, it is believed, would be more convenient to defendant corporation as its principal office
is located in the Philippines, its records will be more accessible, witnesses would be readily available and
entail less expenses in terms of legal services. It is unexpected that a Philippine corporation would rather engage this
civil suit before Malaysian courts.
Our courts would be “better positioned to enforce [the] judgment and, ultimately, to dispense” in this case against petitioner. Also,
petitioner failed to plead and show real and present danger that another jurisdiction commenced litigation and the foreign tribunal
chose to exercise jurisdiction.

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Philippine National Construction Corp. v.

Asiavest Merchant Bankers (M) Berhad,

These contracts were understood to be governed by the laws of Malaysia.

Hence, PNCC filed this Petition.

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