Tuesday, July 28, 2009

US Vs. Ruiz 136 SCRA 487

FACTS:
USA had a naval base established here in the Philippines as provided for in the
military bases agreement between the United States of America and the Philippines.
Respondent Ruiz alleged that it won the bidding for the construction of wharves
however it was awarded to another group. Hence, the filing of this case.
Issue: Whether or not the US naval base exercised governmental functions to be able to
invoke state immunity in bidding for said contracts.
HELD:

The court ruled that the state is immune from suit. State immunity exempts a state from
being sued in the courts of another state without its consent or waiver in accordance with
the principles and independence and equality of states.
However, the rules of international law are not petrified; they are continually and evolving
and because the activities of states have multiplied. It has been necessary to distinguish
them between sovereign and governmental acts and private, commercial and proprietary
acts. The result is that state immunity now extends only to sovereign and governmental
acts. It does not apply in commercial transactions of the foreign sovereign. It means when it
enter into business contracts that a state descended to the level of an individual and can be
deemed to have given its consent to be sued. In this case, the project are integral part of the
naval base which is devoted to the defense of both states which is a function of the
government of highest order, they are not utilized for, nor dedicated to business or
commercial purposes.