CADALIN VS.

POEA ADMINISTRATOR

FACTS:
Cadalin et al. are Filipino workers recruited by Asia Int’l Builders Co. (AIBC), a
domestic recruitment corporation for employment in Bahrain on behalf of its foreign
principals, and to work for Brown & Root Int’l Inc. (BRII) that is engaged in
construction and a foreign corporation with headquarters in Texas. Plaintiff instituted
a class suit with the POEA for money claims arising from the unexpired portion of
their employment contract which was prematurely terminated. They worked in
Bahrain for BRII and they filed the suit after 1 yr. from the termination of their
employment contract.

As provided by Art. 156 of the Amiri Decree aka as the Labor Law of the Private
Sector of Bahrain: “a claim arising out of a contract of employment shall not be
actionable after the lapse of 1 year from the date of the expiry of the contract,” it
appears that their suit has prescribed.

Plaintiff contends that the prescription period should be 10 years as provided by Art.
1144 of the Civil Code as their claim arise from a violation of a contract.

NLRC promulgated resolution dismissing the claim for having prescribed.

The POEA Administrator holds that the 10 year period of prescription should be
applied applying 1144 of the Civil Code, but the NLRC provides a different view
asserting that Art 291 of the Labor Code of the Phils with a 3 years prescription
period should be applied. The Solicitor General expressed his personal point of view
that the 1 yr period provided by the Amiri Decree should be applied. But he deferred to
the ruling of NLRC that Art. 291 was the operative law.

ISSUE: Whether it is the Bahrain law on prescription of action based on the Amiri
Decree No. 23 of 1976 or a Philippine law on prescription that shall be the governing
law

HELD: As a general rule, a foreign procedural law will not be applied in the forum.
Procedural matters, such as service of process, joinder of actions, period and
requisites for appeal, and so forth, are governed by the laws of the forum. This is true
even if the action is based upon a foreign substantive law.

A law on prescription of actions is sui generis (unique) in Conflict of Laws in the sense
that it may be viewed either as procedural or substantive, depending on the
characterization given to such law. Example is when certain statutes of limitations
have been classified as substantive for conflicts purposes if they provide a shorter
period for certain types of claims that fall within a wider classification covered by a
general statute of limitations.

However, the characterization of a statute into a procedural or substantive law

becomes irrelevant when the country of the forum has a “borrowing statute.” Said
statute has the practical effect of treating the foreign statute of limitation as one of

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 substance. A “borrowing statute” directs the state of the forum to apply the foreign
statute of limitations to the pending claims based on a foreign law. While there are
several kinds of “borrowing statutes,” one form provides that an action barred by the
laws of the place where it accrued, will not be enforced in the forum even though the
local statute has not run against it. Section 48 of our Code of Civil Procedure is of this
kind. Said Section provides:

“If by the laws of the state or country where the cause of action arose, the action is
barred, it is also barred in the Philippine Islands.”

In the light of the 1987 Constitution (and the 1 yr. rule on prescription is against
public policy on labor as enshrined in the Phils. Constitution) , however, Section 48
cannot be enforced ex propio vigore insofar as it ordains the application in this
jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976.

The courts of the forum will not enforce any foreign claims obnoxious to the forum’s
public policy. To enforce the one-year prescriptive period of the Amiri Decree No. 23 of
1976 as regards the claims in question would contravene the public policy on the
protection to labor provided under Philippine laws).

The court ruled that the prescription period applicable to the case should be Art 291
of the Labor Code of the Phils with a 3 years prescription period since the claim
arose from labor employment.

Borrowing Doctrine

- Philippines may adopt foreign procedural law under the Borrowing Statute
such as Sec. 48 of the Civil Procedure Rule stating “if by the laws of the State or
country where the cause of action arose the action is barred, it is also barred in the
Philippines.” (CADALIN vs POEA ADMINISTRATOR, 238 SCRA 721)

- In order to eliminate forum shopping, Philippines have passed borrowing

statues which bar the filing of a suit in the forum if it is already barred by the
statute of limitations in the place where cause of action arose.

What is the foreign element involved?

-The cause of action arose from their employment termination in Bahrain and BRII
being a foreign corporation.

Substance vs. Procedural Principle

- General rule: All procedural rules shall follow the law of the forum where the case
is filed. Substantive laws shall be governed by the law of the country where the cause
of action arose.

Doctrine of Characterization or Doctrine of Qualification

- Court determines the character of the action filed in court in order to determine
which law would be applicable (choice of law to apply) when trying the case.

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- Analysis of the factual situation, event or operative fact to determine the “POINT
OF CONTACT” or “CONNECTING FACTOR” (such as situs of the res, place of
celebration, place of performance, and place of delict or wrong doing.

Procedural law consists of the set of rules that govern the proceedings of the court in
criminal lawsuits as well as civil and administrative proceedings. The court needs to
conform to the standards setup by procedural law, while during the proceedings.
These rules ensure fair practice and consistency in the "due process".

Substantive law is a statutory law that deals with the legal relationship between
people or the people and the state. Therefore, substantive law defines the rights and
duties of the people, but procedural law lays down the rules with the help of which
they are enforced. The differences between the two need to be studied in greater detail,
for better understanding.

Procedural Law Substantive Law

Deals with and lays down the ways Deals with those areas of law which establish
and means by which substantive the rights and obligations of individuals , what
law can be enforced individuals may or may not do

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