G.R. No. 172301 , August 19, 2015.
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, Petitioner, vs. ASIAVEST MERCHANT BANKERS (M) BERHAD, Respondent.

FACTS

This case stemmed from an action for recovery of sum of money filed by respondent Asiavest Merchant Bankers (M) Berhad, a Malaysian corporation, against petitioner Philippine National Construction Corporation (PNCC) before the Regional Trial Court of Pasig. PNCC and Asiavest Holdings (M) Sdn. Bhd. incorporated Asiavest-CDCP Sdn. Bhd., through which they entered into construction contracts with the State of Pahang, Malaysia. PNCC obtained performance guarantees from respondent to secure its obligations under these contracts. Due to PNCC’s alleged failure to perform, the State of Pahang demanded payment against the bonds. Respondent paid the State of Pahang MYR 3,915,053.54 under a compromise agreement and then demanded indemnity from PNCC. Upon PNCC’s failure to pay, respondent filed the complaint, invoking Malaysian laws. The RTC granted PNCC several extensions to file an Answer but eventually denied a further motion for extension, declared PNCC in default, and allowed respondent to present evidence ex parte. The RTC ruled in favor of respondent, ordering PNCC to pay the sum. PNCC’s motions to lift the order of default were denied. The Court of Appeals dismissed PNCC’s appeal, stating it raised pure questions of law. Hence, PNCC filed this Petition.

ISSUE

The main issues are: (1) whether the Court of Appeals erred in dismissing the appeal for raising pure questions of law; (2) whether the trial court should have impleaded the two Malaysian corporations; (3) whether the trial court should have refused jurisdiction on the ground of forum non conveniens; (4) whether PNCC was deprived of due process when declared in default; (5) whether respondent’s claim prescribed under Malaysian laws; and (6) whether the case should be dismissed as respondent is allegedly no longer an existing corporation.

RULING

The Supreme Court denied the Petition. On the procedural issue, it held that the Court of Appeals correctly dismissed the appeal as the core issues—including jurisdiction, forum non conveniens, prescription under foreign law, and corporate existence—were questions of law. On the merits, the Court ruled that Philippine courts have jurisdiction over the case as PNCC is a domestic corporation. The principle of forum non conveniens is not a ground for dismissing an action for lack of jurisdiction but a discretionary doctrine, which PNCC failed to timely invoke. PNCC was not deprived of due process as it was granted multiple extensions and was able to file motions for reconsideration. PNCC failed to properly plead and prove the Malaysian law on prescription. Finally, the claim that respondent had ceased to exist was not proven; even if it were in liquidation, it retained the capacity to sue for the purpose of its liquidation. The trial court’s decision was affirmed.