HSBC vs Sherman (Conflict of Laws)

G.R. No. 72494 August 11, 1989
HONGKONG AND SHANGHAI BANKING CORPORATION, petitioner,
vs.
JACK ROBERT SHERMAN, DEODATO RELOJ and THE INTERMEDIATE APPELLATE COURT, respondents.
Quiason, Makalintal, Barot & Torres for petitioner.
Alejandro, Aranzaso & Associates for private respondents.

FACTS:

A complaint for collection of a sum of money was filed by Hongkong and Shanghai Banking Corporation against private respondents Jack Robert Sherman and Deodato Reloj before the RTC. The action was rooted from granted overdraft facility of HSBC Singaporean branch to Eastern Book Supply Service PTE, Ltd. as a security for the repayment by the COMPANY of sums advanced by BANK to it through the aforesaid overdraft facility, on October 7, 1982, both private respondents and a certain Robin de Clive Lowe, all of whom were directors of the COMPANY at such time, executed a Joint and Several Guarantee in favor of petitioner BANK whereby private respondents and Lowe agreed to pay, jointly and severally, on demand all sums owed by the COMPANY to petitioner BANK under the aforestated overdraft facility. In regard to this is the stipulation that the guarantee and all rights, obligations and liabilities arising thereunder shall be construed and determined under and may be enforced in accordance with the laws of the Republic of Singapore with agreement that the Courts of Singapore shall have jurisdiction over all disputes arising under this guarantee.
The COMPANY failed to pay its obligation.

BANK demanded payment of the obligation from private respondents, conformably with the provisions of the Joint and Several Guarantee. Inasmuch as the private respondents still failed to pay, petitioner BANK filed the above-mentioned complaint.
Respondent filed motion to dismissed alleging that the court has no jurisdiction over the subject matter of the complaint; and that the court has no jurisdiction over the persons of the defendants.

In the light of the Opposition thereto filed by plaintiff, the RTC finds no merit in the motion.

The Court has no jurisdiction over the subject matter of the case. The Court finds and concludes otherwise. There is nothing in the Guarantee which says that the courts of Singapore shall have jurisdiction to the exclusion of the courts of other countries or nations. Also, it has long been established in law and jurisprudence that jurisdiction of courts is fixed by law; it cannot be conferred by the will, submission or consent of the parties.

On the second ground, it is asserted that defendant Robert' , Sherman is not a citizen nor a resident of the Philippines. This argument holds no water. Jurisdiction over the persons of defendants is acquired by service of summons and copy of the complaint on them. There has been a valid service of summons on both defendants and in fact the same is admitted when said defendants filed a 'Motion for Extension of Time to File Responsive Pleading.

WHEREFORE, the Motion to Dismiss is hereby DENIED.

Respondents then filed before the respondent Intermediate Appellate Court (now Court of Appeals) a petition for prohibition with preliminary injunction and/or prayer for a restraining order.

The IAC rendered a decision enjoining the RTC Quezon City from taking further cognizance of the case and to dismiss the same for filing with the proper court of Singapore which is the proper forum. MR denied, hence this petition.

ISSUE:
The main issue is whether or not Philippine courts have jurisdiction over the suit.

RULING:
Yes 

The parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction.

In a conflict problem, a court will simply refuse to entertain the case if it is not authorized by law to exercise jurisdiction. And even if it is so authorized, it may still refuse to entertain the case by applying the principle of forum non conveniens.

However, whether a suit should be entertained or dismissed on the basis of the principle of forum non conveniens depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court

Accordingly, decision of the Regional Trial Court is REINSTATED.