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Conflicts HSBC V Sherman

The Hongkong and Shanghai Banking Corporation filed a case against Sherman, Reloj and Lowe in the RTC of Quezon City to recover unpaid obligations of Eastern Book Supply Service Co. The defendants claimed Philippine courts lacked jurisdiction due to a clause in their guarantee stating disputes would be handled in Singapore courts. The Supreme Court ruled the clause did not divest Philippine courts of jurisdiction or make Singapore courts exclusively responsible. Jurisdiction refers to a state's authority over people and matters within its borders, and a state is competent to assume jurisdiction over cases brought before its courts.

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98 views1 page

Conflicts HSBC V Sherman

The Hongkong and Shanghai Banking Corporation filed a case against Sherman, Reloj and Lowe in the RTC of Quezon City to recover unpaid obligations of Eastern Book Supply Service Co. The defendants claimed Philippine courts lacked jurisdiction due to a clause in their guarantee stating disputes would be handled in Singapore courts. The Supreme Court ruled the clause did not divest Philippine courts of jurisdiction or make Singapore courts exclusively responsible. Jurisdiction refers to a state's authority over people and matters within its borders, and a state is competent to assume jurisdiction over cases brought before its courts.

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Hongkong and Shanghai Banking Corporation v. Sherman et al.

G.R. No. 72494, August 11, 1989

Facts:

Eastern Book Supply Service Co., a company incorporated in Singapore was granted
by petitioner bank an overdraft facility of Singapore $200,000. As a security for the
repayment, both private respondent Sherman, Reloj and a certain Lowe executed a
Joint and Several Guarantee in favor or petitioner bank. The company failed to pay its
obligation even after demand was made. Petitioner bank filed a case in the RTC of
Quezon City. Private respondents claim that Philippine courts have no jurisdiction over
the case because a stipulation in their guarantee which states that “we hereby agree
that the courts of Republic of Singapore shall have jurisdiction over all disputes arising
under this guarantee“.

Issue:

Whether or not the venue stipulation divested the Philippine courts of jurisdiction

Held:

No. 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
international law, jurisdiction is defined as the right of a State to exercise authority over persons and
things within its boundaries, subject to certain exceptions. A State is competent to take hold of any judicial
matter it sees fit by making its courts and agencies assume jurisdiction over all kinds of cases brought
before them

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