PUBLIC INTERNATIONAL LAW

Assignment

(Topic 2)

Case #1

Deutsche Continental Gas-Gesellschaft Case (1929) 5 AD 11

Facts:

Pursuant to the treaty of Versailles, liquidation of property of German

nationals, Poland ordered the liquidation of property owned by the plaintiff
company in Warsaw (former Russian territory acquired by Poland). The
company claimed that Poland could not be considered as possessing de
jure the territory designated as Congress Poland (formerly Russian) as long
as the boundaries of this territory had not been fixed, so that the territory
belonged in law to Russia.

Issue: Whether or not Poland is exist as a State.

Ruling:

There is no doubt that Poland exists as a State exercising

sovereignty over the Russian and Austrian parts of Poland. It is
unnecessary to dwell upon the subtle distinction between recognition de
jure and recognition de facto. The recognition of a State is not a constitutive
element but merely declarative. The state exists by itself (par lui meme)
and the recognition is nothing else than a declaration of existence. In order
to say that a state exists and can be recognised as such … it is enough
that its territory has a sufficient consistency, even though its boundaries
have not yet been accurately defined.
 “Whatever may be the importance of the delamination of boundaries,
one cannot go so far as to maintain that as long as this delamination has
not been legally effected the State in question cannot be considered as
having any territory whatever (…) In order to say that a State exists (…) it is
enough that this territory has a sufficient consistency, even though its
boundaries have not yet been accurately delaminated, and that the State
actually exercises independent public authority over that territory.‟

Thus a border dispute with another country does not cast doubt on
the territorial status of a country. It is only important that a country has a
clear core territory in order to be a state. These island states’ claims to
statehood will be, at best, precarious and represent borderline cases. In
these circumstances, recognition by other states is crucial. While statehood
is not conditioned on recognition.

Case #2

Tinoco Arbitration (1923) 1 RIAA 269

Facts:
The Tinoco regime that had seized power in Costa Rica by coup was
not recognized by Great Britain and the United States. When the regime
was removed, the new government nullified all Tinoco’c contract including
an oil concession to a British company. The claim of Great Britain (P) was
that the contract could not be repudiated because the Tinoco government
was the only government in existence at the time of the contract was
signed. This view was not shared by Costa Rica (D) who claimed that
Great Britain (P) was estopped from enforcing the contract by its non-
recognition of the Tinoco regime. The matter was sent for arbitration.

Issue: Whether or not a government need to conform to a previous

constitution if the government had established itself and maintained a
peaceful de facto administration and does non-recognition of the
government by other government destroy the de facto status of the
government?

Ruling:

No. A government need not conform to a previous constitution if the

government had established itself and maintained a peaceful de facto
administration and non-recognition of the government by other government
does not destroy the de facto status of the government. The non-
recognition of the Tinoco regime by Great Britain did not dispute the de
facto existence of that regime. There is no estoppel since the successor
government had not been led by British non-recognition to change its
position.

Estoppel was not found by the arbitrator. The evidence of the de facto
status of the Tinoco’s regime was not outweighed by the evidence of non-
recognition. This implies that valid contracts may be formed by
unrecognized government.

Case #3

Republic v. Sandiganbayan (2003) G.R. No. 104768

Facts:
The PCGG (Presidential Commission on Good Government) created
an AFP Anti-Graft Board tasked to Scrutinize the reports of unexplained
wealth and corrupt practices by any AFP personnel, active or retired. The
AFP Board investigated various reports of alleged “ill-gotten” wealth of
respondent Maj. Gen. Josephus Ramas. Along with this, the constabulary
raiding team served a search and seizure warrant on the premises of
Ramas’ alleged mistress, Elizabeth Dimaano. The Board then concluded
that Ramas be prosecuted for violating the “Anti- Graft and Corrupt
Practices Act ( RA 3019)” and “Forfeiture of unlawfully Acquired Property
(RA 1379)”. Thereafter, they filed a petition for forfeiture against him before
the Sandiganbayan. The Sandiganbayan dimissed the case on several
grounds one of which is that there was an illegal search and seizure of the
items confiscated.
Issue: Whether or not the search of Dimaano’s home was legal.
Ruling:
NO. the Bill of Rights under the 1973 Constitution was not operative
during the interregnum. However, The Court rule that the protection
accorded to individuals under the Covenant and the Declaration remained
in effect during the interregnum. to rule that the Bill of Rights of the 1973
Constitution remained in force during the interregnum, absent a
constitutional provision excepting sequestration orders from such Bill of
Rights, would clearly render all sequestration orders void during the
interregnum.
Nevertheless, even during the interregnum the Filipino people continued to
enjoy, under the Covenant and the Declaration, almost the same rights
found in the Bill of Rights of the 1973 Constitution.
The revolutionary government, after installing itself as the de jure
government, assumed responsibility for the State's good faith compliance
with the Covenant to which the Philippines is a signatory. Article 2(1) of the
Covenant requires each signatory State "to respect... and to ensure to all
individuals within its territory and subject to its jurisdiction the rights[45]
recognized in the present Covenant." Under Article 17(1) of the Covenant,
the revolutionary government had the duty to insure that "[n]o one shall
be... subjected to arbitrary or unlawful interference with his privacy, family,
home or correspondence."
The Declaration, to which the Philippines is also a signatory, provides in its
Article 17(2) that "[n]o one shall be arbitrarily deprived of his property."
The revolutionary government did not repudiate the Covenant or the
Declaration during the interregnum. Whether the revolutionary government
could have repudiated all its obligations under the Covenant or the
Declaration is another matter and is not the issue here.
Suffice it to... say that the Court considers the Declaration as part of
customary international law, and that Filipinos as human beings are proper
subjects of the rules of international law laid down in the Covenant. The
fact is the revolutionary government did not repudiate the Covenant or the
Declaration in the same way it repudiated the 1973 Constitution. As the de
jure government, the revolutionary government could not escape
responsibility for the State's good faith compliance with its treaty obligations
under international law.

Case #4

Lawyers League for a Better Philippines v. Corazon Aquino, G.R. No.

73748, May 22, 1986

FACTS:

On February 25, 1986, President Corazon Aquino issued Proclamation No.

1 announcing that she and Vice President Laurel were taking power.
On March 25, 1986, proclamation No.3 was issued providing the basis of
the Aquino government assumption of power by stating that the “new
government was installed through a direct exercise of the power of the
Filipino people assisted by units of the New Armed Forces of the
Philippines.”

Issue:
Whether or not the government of Corazon Aquino is legitimate

Ruling:

Yes. The legitimacy of the Aquino government is not a justiciable matter but
belongs to the realm of politics where only the people are the judge. The
Court further held that the people have accepted the Aquino government
which is in effective control of the entire country. It is not merely a de facto
government but in fact and law a de jure government. The community of
nations has recognized the legitimacy of the new government.

As early as April 10, 1986, this Court* had already voted to dismiss the
petitions for the reasons to be stated below.
On April 17, 1986, Atty. Lozano as counsel for the petitioners in G.R. Nos.
73748 and 73972 withdrew the petitions and manifested that they would
pursue the question by extra-judicial methods. The withdrawal is functus
oficio.
The legitimacy of the Aquino government is not a justiciable matter. It
belongs to the realm of politics where only the people of the Philippines are
the judge. And the people have made the judgment; they have accepted
the government of President Corazon C. Aquino
The community of nations has recognized the legitimacy of the present
government. All the eleven members of this Court, as reorganized, have
sworn to uphold the fundamental law of the Republic under her
government.

Case #5

Banco Nacional de Cuba v. Sabbatino

376 U.S. 398 (1964)
Brief Fact Summary. The bills of lading for a shipment of sugar contracted between
Farr, Whitlock & Co an American commodities broker was assigned by Banco Nacional
de Cuba (P), but another Cuban bank instituted this action alleging conversion of the
bills of lading and sought to recover the proceeds thereof from Farr and to enjoin
Sabbatino (D), a court-appointed receiver from exercising control over such proceeds.

Synopsis of Rule of Law. The judiciary, in line with the Act of State Doctrine will not
examine the validity of a taking of property within its own territory by a foreign sovereign
government recognized by this country in the absence of international agreements to
the contrary, even if the taking violates customary international law.

Facts. A contract to purchase Cuban sugar from a wholly owned subsidaiary of

Compania Azucarera Vertientes-Camaquey de Cuba (CAV) a corporation organized
under Cuban law was made by Farr, Whitlock & Co. (Farr) an American commodities
broker. The CAV stock was principally owned by United States residents. The
agreement was for Farr to pay for the sugar in New York upon the presentation of the
shipping documents. After this deal, a law was enacted in Cuba which empowered the
government to nationalize forcefully, expropriation of property or enterprise in which
American nationals had an interest.

Hence, the sugar which Farr had contracted was expropriated from Compania
Azucarera. Farr however entered into contracts which was similar to the one made with
CAV with the Banco Para el Comercio de Cuba, which was an instrumentality of the
government. This was done by Farr in order to obtain consent from the Cuban
government before a ship carrying sugar could leave Cuba.A bill of lading which was
also an instrumentality of the Cuban government was assigned by the bank to Banco
Para el Comercio de Cuba, who presented the bills and a sight draft as required under
the contract to Farr in New York in return for payment. After CAV notified Farr of its
claim to the proceeds as rightful owner of the sugar, Farr refused the documents.

This action of Farr resulted in a court order which appointed Sabbatino (D) as receiver
of CAV‘s New York assets and enjoined it from removing the payments from the
state. Based on the allegation of the conversion of the bills of lading seeking to recover
the proceeds thereof from Farr and to enjoin Sabbatino (D), the receiver from exercising
dominion over such proceeds, the Banco Nacional (P) instituted this action. A summary
judgment was granted against Banco Nacional (P) by the district court on the grounds
that the Act of State Doctrine does not apply when the foreign act in question is in
violation of international law. The court of appeals also upheld this judgment.

Issue. Does the judiciary have the authority to examine the validity of a taking of
property within its own territory by a foreign sovereign even if the taking violated
international law?

Ruling. (Harlan, J). No. The judiciary, in line with the Act of State Doctrine will not
examine the validity of a taking of property within its own territory by a foreign sovereign
government recognized by this country in the absence of international agreements to
the contrary, even if the taking violates customary international law. Even in a situation
whereby international law has been violated, the clear implication of past cases is that
the Act of State Doctrine is applicable because the Act of State doctrine does not
deprive the courts of jurisdiction once acquire over a case. The damages of adjudicating
the propriety of such expropriation acts, regardless of whether the State Department
has it did in this case, asserted that the act violated international law are too far-
reaching for the judicial branch to attempt. Hence the judgment of the court of appeals
is reverse and the case remanded back to the district court.

Dissent. (White, J). American courts are not required by the Act of State Doctrine to
decide cases in disregard of international law and of the rights of litigants to a full
determination on the merits.

Discussion. Even in the diversity of citizenship cases, the Court concluded that the Act
of State Doctrine must be determined according to federal rather than state law. The
court also made it clear that it is constrained to make it clear that an issue concerned
with a basic choice regarding the competence and function of the judiciary and national
executive in ordering our relationships with other members of the international
community must be treated exclusively as an aspect of federal law.

Case #6

OETJEN VS. CENTRAL LEATHER CO.

246 U.S. 297 (1918)

Facts:

The suits are replevin and involve the title to two large consignments of hides,
which the plaintiff in error claims to own as assignee of Martinez & Co., a partnership
engaged in business in the city of Torreon, Mexico, but which the defendant in error
claims to own by purchase from the Finnegan-Brown Company, a Texas corporation
which it is alleged purchased the hides in Mexico from General Francisco Villa on
January 3, 1914.

Judgments were rendered for the defendants, which were affirmed by the Court
of Errors and Appeals and are brought to the New Jersey Court on the theory that the
claim of title to the hides by the defendant in error is invalid because based upon a
purchase from General Villa, who, it is urged, confiscated them contrary to the
provisions of the Hague Convention of 1907 respecting the laws and customs of war on
land; that the judgment of the state court denied to the plaintiff in error this right which
he 'set up and claimed' under the Hague Convention or treaty; and that this denial gives
him the right of review in this court.

Moreover, these hides were seized by the Carranza government, then engaged
in civil war and sold to an American firm which brought them to New Jersey. The
petitioner claims that the seizure was invalid. However, at the time of the seizure, the
Carranza government controlled about two-thirds of Mexico but there was no
government in that country recognized by the United States. On October 19, 1915,
recognized the Carranza regime as a de facto government and on August 31, 1917 as
de jure government.

Issue:

Whether or not the seizure is valid provided that the government is a de jure
government?

Ruling:

When a government which originates in revolution or revolt is recognized by the political

department of our government as the de jure government of the country in which it is
established, such recognition is retroactive in effect and validates all the actions and
conduct of the government so recognized from the commencement of its existence.

To these principles we must add that: 'Every sovereign state is bound to respect the
independence of every other sovereign state, and the courts of one country will not sit in
judgment on the acts of the government of another done within its own territory.
Redress of grievances by reason of such acts must be obtained through the means
open to be available of by sovereign powers as between themselves.'

'The principle that the conduct of one independent government cannot be successfully
questioned in the courts of another is as applicable to a case involving the title to
property brought within the custody of a court, such as we have here, as it was held to
be to the cases cited, in which claims for damages were based upon acts done in a
foreign country, for it rests at last upon the highest considerations of international comity
and expediency. To permit the validity of the acts of one sovereign state to be
reexamined and perhaps condemned by the courts of another would very certainly
'imperil the amicable relations between governments and vex the peace of nations.

Case #7

People v. Perfecto,

G.R. No. L-18463, October 4, 1922

Facts: The issue started when the Secretary of the Philippine Senate, Fernando
Guerrero, discovered that the documents regarding the testimony of the witnesses in an
investigation of oil companies had disappeared from his office. Then, the day following
the convening of Senate, the newspaper La Nacion – edited by herein respondent
Gregorio Perfecto – published an article against the Philippine Senate. Here, Mr.
Perfecto was alleged to have violated Article 256 of the Spanish Penal Code – provision
that punishes those who insults the Ministers of the Crown. Hence, the issue.

Issue: Whether or not Article 256 of the Spanish Penal Code (SPC) is still in force and
can be applied in the case at bar?

Ruling: No.

REASONING: The Court stated that during the Spanish Government, Article 256 of the
SPC was enacted to protect Spanish officials as representatives of the King. However,
the Court explains that in the present case, we no longer have Kings nor its
representatives for the provision to protect. Also, with the change of sovereignty over
the Philippines from Spanish to American, it means that the invoked provision of the
SPC had been automatically abrogated. The Court determined Article 256 of the SPC to
be ‘political’ in nature for it is about the relation of the State to its inhabitants, thus, the
Court emphasized that ‘it is a general principle of the public law that on acquisition of
territory, the previous political relations of the ceded region are totally abrogated.’
Hence, Article 256 of the SPC is considered no longer in force and cannot be applied to
the present case. Therefore, respondent was acquitted.

Case #8

VILAS v. CITY OF MANILA

229 US 345

FACTS: Prior to the incorporation of the City of Manila under the Republic Act No. 183,
petitioner Vilas is the creditor of the City. After the incorporation, Vilas brought an action
to recover the sum of money owed to him by the city. The City of Manila that incurred
the debts has changed its sovereignty after the cession of the Philippines to the US by
the Treaty of Paris and its contention now is founded on the theory that by virtue of the
Act No. 183 its liability has been extinguished.

Issue:

Whether or not the change of the sovereignty extinguishes the previous liability of the
City of Manila to its creditor?

Ruling:

No. The mere change of sovereignty of a country does not necessarily dissolve the
municipal corporation organized under the former sovereign. The new City of Manila is
in a legal sense the successor of the old city. Thus, the new city is entitled to all
property and property rights of the predecessor corporation including its liabilities. The
court held that only the governmental functions that are not compatible with the present
sovereignty are suspended. Because the new City of Manila retains its character as the
predecessor of the old city it is still liable to the creditors of the old City of Manila.
Case #9
Haile Selassie vs. Cable Wireless (1938)
Facts:
In this case, it raises questions relating to both to the impleading of a
foreign sovereign and to the legal status of sovereigns de facto and de
jure. In this case the excited Emperor of Ethiopia, who at the time was still
recognized by the British Government as de jure sovereign of Ethiopia,
claimed from the defendant company a balance due under a concessionary
contract entered into in 1934 with a department of the Ethiopian
Government representing the plaintiff in his capacity of sovereign of
Ethiopia. The defendant company admitted the sum due from them, but
produced letters from the Italian Ambassador in London in which the Italian
Government claimed the money and also refused to have its claim
determined in the English Court. The defendants argued that the King of
Italy, by virtue of recognition as de facto sovereign of Ethiopia, had
acquired the right to the money, and that therefore payment to Haile
Selassie would not discharged the debt. Bennet J. declined to express an
opinion on the question of law thus raised. He held that the action must be
stayed because “the right of the plaintiff to recover judgment cannot be
determined without determining whether the claim put forward by or on
behalf of His Majesty the King of Italy is well founded.”
The plaintiff appealed against this decision, contending that property
in regard to which a foreign sovereign was entitled to claim immunity must
be actually or notionally in his possession. The authorities upon the
question of impleading a foreign sovereign had recently been considered
by the House of Lords in The Cristina. As Green M.R. expressed it, “where
the property which is not proved or admitted to belong to or to be in the
possession of a foreign sovereign or his agent is in the possession of a
third party, and the plaintiff claims it from that third party belongs to the
plaintiff or the foreign sovereign, the very question to be decided is one
which requires to be answered in favour of the sovereign’s title before it can
be asserted that the title is being questioned.” In other words a foreign
sovereign must establish his title to a chose in action before he can claim
immunity. The action was therefore remitted to Bennett J. for a decision on
the merits.

Issue:
Does the fact that the Italian Government has been and is recognized
by the British Government as a de facto government of Ethiopia vest in the
Italian Government the right to sue for and obtain judgment in an English
Court for a debt formerly due to and recoverable by the plaintiff as the
sovereign authority of Ethiopia, the debt being due to the plaintiff as
Emperor of Ethiopia, and the British Government recognizing the plaintiff as
the de jure Emperor of Ethiopia?

Held:
The recognition of a de facto government extends to all acts in
relation to persons or property in the territory which the authority is
recognized as governing in fact. But there is was the validity of acts
committed within the territory of the de facto jurisdiction which were in
question, whereas this case was concerned with the title to a chose in
action, a debt recoverable in England.
 The limitation of recognition to recognition de facto deprives the de
facto sovereign of none of the legal attributes of sovereignty. It seems to
follow that the continued recognition of a de jure sovereign as well must be
regarded as merely political act, without juridical consequences. In this
view, the recognition by His Majesty’s Government that the King of Italy
had in fact become sovereign of Ethiopia would of itself operate to preclude
Haile Selassie from maintaining in the English courts a claim as sovereign.
Case #10
Holy See vs. Del Rosario
238 SCRA 524
Facts:
Petitioner is the Holy See who exercises sovereignty over the Vatican
City in Rome, Italy, and is represented in the Philippines by the Papal
Nuncio; Private respondent, Starbright Sales Enterprises, Inc., is a
domestic corporation engaged in the real estate business.
This petition arose from a controversy over a parcel of land consisting of
6,000 square meters located in the Municipality of Paranaque registered in
the name of petitioner. Said lot was contiguous with two other lots
registered in the name of the Philippine Realty Corporation (PRC).
The three lots were sold to Ramon Licup, through Msgr. Domingo A.
Cirilos, Jr., acting as agent to the sellers. Later, Licup assigned his rights to
the sale to private respondent.
In view of the refusal of the squatters to vacate the lots sold to private
respondent, a dispute arose as to who of the parties has the responsibility
of evicting and clearing the land of squatters. Complicating the relations of
the parties was the sale by petitioner of Lot 5-A to Tropicana Properties
and Development Corporation (Tropicana).
Private respondent filed a complaint with the Regional Trial Court,
Branch 61, Makati, Metro Manila for annulment of the sale of the three
parcels of land, and specific performance and damages against petitioner,
represented by the Papal Nuncio, and three other defendants: namely,
Msgr. Domingo A. Cirilos, Jr., the PRC and Tropicana petitioner and Msgr.
Cirilos separately moved to dismiss the complaint for lack of jurisdiction
based on sovereign immunity from suit, and Msgr. Cirilos for being an
improper party. An opposition to the motion was filed by private
respondent.
The trial court issued an order denying, among others, petitioner’s motion
to dismiss after finding that petitioner “shed off its sovereign immunity by
entering into the business contract in question” Petitioner forthwith elevated
the matter to us. In its petition, petitioner invokes the privilege of sovereign
immunity only on its own behalf and on behalf of its official representative,
the Papal Nuncio.

Issue:
Whether the Holy See is immune from suit insofar as its business
relations regarding selling a lot to a private entity

Held:
The Republic of the Philippines has accorded the Holy See the status
of a foreign sovereign. The Holy See, through its Ambassador, the Papal
Nuncio, has had diplomatic representations with the Philippine government
since 1957. This appears to be the universal practice in international
relations.
There are two conflicting concepts of sovereign immunity, each widely held
and firmly established. According to the classical or absolute theory, a
sovereign cannot, without its consent, be made a respondent in the courts
of another sovereign. According to the newer or restrictive theory, the
immunity of the sovereign is recognized only with regard to public acts or
acts jure imperii of a state, but not with regard to private acts or acts jure
gestionis
If the act is in pursuit of a sovereign activity, or an incident thereof, then it is
an act jure imperii, especially when it is not undertaken for gain or profit.
In the case at bench, if petitioner has bought and sold lands in the
ordinary course of a real estate business, surely the said transaction can
be categorized as an act jure gestionis. However, petitioner has denied that
the acquisition and subsequent disposal of Lot 5-A were made for profit but
claimed that it acquired said property for the site of its mission or the
Apostolic Nunciature in the Philippines. Private respondent failed to dispute
said claim.
Lot 5-A was acquired by petitioner as a donation from the Archdiocese of
Manila. The donation was made not for commercial purpose, but for the
use of petitioner to construct thereon the official place of residence of the
Papal Nuncio. The right of a foreign sovereign to acquire property, real or
personal, in a receiving state, necessary for the creation and maintenance
of its diplomatic mission, is recognized in the 1961 Vienna Convention on
Diplomatic Relations (Arts. 20-22). This treaty was concurred in by the
Philippine Senate and entered into force in the Philippines on November
15, 1965.
The decision to transfer the property and the subsequent disposal thereof
are likewise clothed with a governmental character. Petitioner did not sell
Lot 5-A for profit or gain. It merely wanted to dispose off the same because
the squatters living thereon made it almost impossible for petitioner to use it
for the purpose of the donation. The fact that squatters have occupied and
are still occupying the lot, and that they stubbornly refuse to leave the
premises, has been admitted by private respondent in its complaint
Private respondent is not left without any legal remedy for the redress of its
grievances. Under both Public International Law and Transnational Law, a
person who feels aggrieved by the acts of a foreign sovereign can ask his
own government to espouse his cause through diplomatic channels.
Private respondent can ask the Philippine government, through the Foreign
Office, to espouse its claims against the Holy See. Its first task is to
persuade the Philippine government to take up with the Holy See the
validity of its claims. Of course, the Foreign Office shall first make a
determination of the impact of its espousal on the relations between the
Philippine government and the Holy See (Young, Remedies of Private
Claimants Against Foreign States, Selected Readings on Protection by Law
of Private Foreign Investments 905, 919 [1964]). Once the Philippine
government decides to espouse the claim, the latter ceases to be a private
cause.

Case#11
The Republic of Nicaragua vs. The United States of America (1986)
ICJ Rep 14
Facts:
The United States challenged the jurisdiction of the I.C.J when it was held
responsible for illegal military and paramilitary activities in and against
Nicaragua in the suit the plaintiff brought against the defendant in 1984.
Though a declaration accepting the mandatory jurisdiction of the Court was
deposited by the United States in a 1946, it tried to justify the declaration in
a 1984 notification by referring to the 1946 declaration and stating in part
that the declaration “shall not apply to disputes with any Central American
State….”
Apart from maintaining the ground that the I.C.J lacked jurisdiction, the
States also argued that Nicaragua failed to deposit a similar declaration to
the Court. On the other hand, Nicaragua based its argument on its reliance
on the 1946 declaration made by the United states due to the fact that it
was a “state accepting the same obligation” as the United States when it
filed charges in the I.C.J. against the United States. Also, the plaintiff intent
to submit to the compulsory jurisdiction of the I.C.J. was pointed out by the
valid declaration it made in 1929 with the I.C.J’s predecessor, which was
the Permanent Court of International Justice, even though Nicaragua had
failed to deposit it with that court. The admissibility of Nicaragua’s
application to the I.C.J. was also challenged by the United States.

Issues:
(1) Is the jurisdiction to entertain a dispute between two states, if
they both accept the Court’s jurisdiction, within the jurisdiction of the
International Court of Justice?
(2) Where no grounds exist to exclude the application of a state, is
the application of such a state to the International Court of Justice
admissible?

Held:
(1) Yes. The jurisdiction of the Court to entertain a dispute between
two states if each of the States accepted the Court’s jurisdiction is within
the jurisdiction of the International Court of Justice. Even though Nicaragua
declaration of 1929 was not deposited with the Permanent Court, because
of the potential effect it had that it would last for many years, it was valid.
Thus, it maintained its effect when Nicaragua became a party to the Statute
of the I.C.J because the declaration was made unconditionally and was
valid for an unlimited period. The intention of the current drafters of the
current Statute was to maintain the greatest possible continuity between it
and the Permanent Court. Thus, when Nicaragua accepted the Statute, this
would have been deemed that the plaintiff had given its consent to the
transfer of its declaration to the I.C.J.
(2) Yes. When no grounds exist to exclude the application of a state,
the application of such a state to the International Court of Justice is
admissible. The five grounds upon which the United States challenged the
admissibility of Nicaragua’s application were that the plaintiff failed because
there is no “indispensable parties” rule when it could not bring forth
necessary parties, Nicaragua’s request of the Court to consider the
possibility of a threat to peace which is the exclusive province of the
Security Council, failed due to the fact that I.C.J. can exercise jurisdiction
which is concurrent with that of the Security Council, that the I.C.J. is
unable to deal with situations involving ongoing armed conflict and that
there is nothing compelling the I.C.J. to decline to consider one aspect of a
dispute just because the dispute has other aspects due to the fact that the
case is incompatible with the Contadora process to which Nicaragua is a
party.

Case #12
Underhill vs. Hernandez
168 U.S. 250; November 29, 1897

Facts:
 George F. Underhill was a citizen of the United States, who had
constructed a waterworks system for the City of Bolivar, under a contract
with the government, and was engaged in supplying the place with water,
and he also carried on a machinery repair business. Sometime after the
entry of Gen. Hernandez, Underhill applied to him, as the officer in
command, for a passport to leave the City. Hernandez refused this request,
and requests made by others in Underhill’s behalf, until October 18 th, when
a passport was given, and Underhill left the country.
This action was brought to recover damages for the detention caused
by reason of the refusal to grant the passport, for the alleged confinement
of Underhill to his own house, and for certain alleged assaults and affronts
by the soldiers of Hernandez’s army.
The cause was tried in the circuit of the united States for the Eastern
district of New York, and on the conclusion of plaintiff’s case the circuit
court ruled that upon the facts plaintiff was not entitled to recover, and
directed a verdict for defendant, on the ground that because the acts of
defendant were those of military commander, representing a de facto
government in the prosecution of a war, he was not civilly responsible
therefore. Judgment having been rendered for defendant, the case was
taken to the circuit court of appeals, and by the court affirmed, upon the
ground that the acts of the defendant were acts of the government of
Venezuela, and as such are not properly the subject of adjudication in the
courts of another government.
Issue:
Whether or not the acts of the defendant were the acts of the
government of Venezuela and as such are not properly the subject of
adjudication in the courts of another government?
Held:
Every sovereign state is bound to respect the independence of every
other sovereign state, and the courts of one country will not sit in judgment
on the acts of the government of another, done within its own territory.
Redress of grievances by reason of such acts must be obtained through
the means open to be availed of by sovereign powers as between
themselves.
The immunity of individuals from suits brought in foreign tribunals for
acts done within their own states, in the exercise of governmental authority,
whether as civil officers or as a military commanders, must necessarily
extend to the agents of governments ruling by paramount force as matter of
fact.
Gen. Hernandez was carrying on military operations in support of the
revolutionary party. It may be that adherents of that side of the controversy
in the particular locality where Hernandez was the leader of the movement
entertained a preference for him as the future executive head of the nation,
but that is beside the question. The acts complained of where the acts of
military commander representing the authority of the revolutionary party as
a government, which afterwards succeeded, and was recognized by the
United States. The circuit court of appeals was justified in concluding that
the acts of the defendant were the acts of the government of Venezuela,
and as such are not properly the subject of adjudication in the courts of
another government.

✓ Veterans Manpower v. CA, 214 SCRA 286

✓ Tan v. Director of Forestry, 125 SCRA 302

Case #13

Republic of the Philippines vs. Marcos, 806 Fd. 344, US Court of Appeals

Doctrine: Act of State

Facts:

In 1986 the Republic of the Philippines filed suit to enjoin and restrain the transfer, conveyance, or
encumbrance of five properties in and around New York City. The complaint alleged that the properties
had been purchased with assets stolen from the people and Government of the Philippines, and named
the former President of the Philippines, Ferdinand Marcos, and his wife as the principal defendants. Also
named as defendants were the record holders of the properties and their principals and managers, who
were allegedly the nominees for President and Mrs. Marcos.' A temporary restraining order was issued
when the action was brought barring defendants from taking certain actions with respect to the
properties." Before a preliminary injunction could be granted, the defendants, without President and
Mrs. Marcos who had failed to appear, moved to vacate the order. Defendants submitted no proofs in
opposition to the preliminary injunction but relied on the act of state doctrine as a defense.

Issue:

Whether or not President Marcos can claim the act of state doctrine as a defense in this case?

Ruling:

The district court conceded that the act of state doctrine might eventually bar the suit, but concluded
that in this instance it could not block the issuance of an otherwise appropriate injunction. Personal acts
of a sovereign, the court noted, were not protected by the act of state doctrine and defendants had not
shown that their acts were public acts. The court further stated that it had received no indication from
the Department of State that the adjudicattion of the suit would embarrass the Executive in its conduct
of foreign policy." The preliminary injunction was granted."The Second Circuit affirmed the decision on
the grounds that appellants had not met their burden of proof and had failed to show that the acts of
Marcos were public acts, which could be protected under the act of state doctrine. The court stated that
even if this burden was met at a later date, the defense may still prove ineffectual because Marcos no
longer held power and the potential for interference in the conduct of foreign policy was appreciably
less than might otherwise have existed. The court also noted that the act of state doctrine rested on the
respect for foreign state because the Government of the Philippines sought to try the suit in United
States courts, respect for foreign states in this instance appeared to require the court to proceed with
the adjudication, not prohibit the action as the doctrine would require.

Case #14
Trendtex Trading v Bank of Nigeria [1977] 1 QB 529

Facts:

The Central Bank of issued an irrevocable letter of credit to pay for quantities of cement ordered by the
Nigerian Ministry of Defence. The credit was, properly, transferred to the plaintiffs who shipped the
cement to Nigeria. Because of complications at port caused by substantial over-ordering of cement, the
plaintiffs' vessels were delayed prior to discharge; the Bank refused to make payments under the letter
of credit upon the plaintiffs applying for the7 same in respect of demurrage. Upon the plaintiffs issuing
proceedings for breach and repudiation of the letter of credit, the Bank contended successfully before
Donaldson J. that it was entitled to sovereign immunity.

Issue:

Whether or not the Central Bank of Nigeria was entitled to immunity from suit?

Ruling:

The Court of Appeal, in allowing the plaintiffs' appeal, held that the Bank was not entitled to
governmental status, as it could not be described as an “alter ego” of the state; Moreover, and in line
with contemporary trends in international law, sovereign immunity should not extend to commercial
transactions, and in that context no distinction could be drawn between commercial and
“governmental” transactions until the law was altered by act of Parliament or by decision of the House
of Lord's.

Case #15

Kuwait Airways Corporation vs. Iraqi Airways Corp (2002) UKHL19

Facts:

On 2 August 1990 military forces of Iraq forcibly invaded and occupied Kuwait. They completed the
occupation in the space of two or three days. The Revolutionary Command Council of Iraq then adopted
resolutions proclaiming the sovereignty of Iraq over Kuwait and its annexation to Iraq. Kuwait was
designated a 'governate' within Iraq. When the Iraqi forces took over the airport at Kuwait they seized
ten commercial aircraft belonging to Kuwait Airways Corporation (KAC): two Boeing 767s, three A300
Airbuses, and five A310 Airbuses. They lost no time in removing these aircraft to Iraq. By 9 August nine
of the aircraft had been flown back to Basra, in Iraq. The tenth aircraft, undergoing repair at the time of
the invasion, was flown direct to Baghdad a fortnight later. On 9 September the Revolutionary
Command Council of Iraq adopted a resolution dissolving KAC and transferring all its property
worldwide, including the ten aircraft, to the state-owned Iraqi Airways Co (IAC). This resolution,
resolution 369, came into force upon publication in the official gazette on 17 September. On the same
day IAC's board passed resolutions implementing RCC resolution 369. On 11 January 1991 KAC
commenced these proceedings against the Republic of Iraq and IAC, claiming the return of its ten
aircraft or payment of their value, and damages. The aircraft were valued by KAC at US$630 million. The
damages claimed at the trial exceeded $800 million.. The UN Security Council's deadline for Iraq's
withdrawal from Kuwait expired at midnight on 15 January 1991. Military action by coalition air forces
began twentyfour hours later. The airfield at Mosul, in the north of Iraq, suffered several attacks from
the air. In late January and early February 1991 four of the ten aircraft seized from KAC, moved to Mosul
for safety reasons, were destroyed by coalition bombing. The aircraft destroyed were the two Boeing
767s and two A300 Airbuses. In these proceedings these four aircraft have become known as 'the Mosul
four'. The other six aircraft, known as 'the Iran six', were evacuated by IAC to Iran at much the same
time. Following negotiations with the government of Iran these six aircraft were flown back eventually
to Kuwait in July and August 1992. KAC later paid Iran a substantial amount, US$20 million, for the cost
of keeping, sheltering and maintaining them.

Issue:

Whether or not Iraqi national airline entitled to claim state immunity in respect of subsequent use of
aircraft as part of its own fleet?

The ultimate test of what constituted an act jure imperii which attracted state immunity was whether
the act in question was of its own character a governmental act, as opposed to an act which any private
citizen could perform. It followed that, in the case of acts done by a separate entity, it was not enough
that the entity acted on the directions of the state, since such an act need not possess the character of a
governmental act. To attract immunity under s 14(2) of the 1978 Act, therefore, the act done by the
separate entity had to be something which possessed the character of a governmental act and where an
act done by a separate entity of the state on the directions of the state did not possess that character,
the entity was not entitled to state immunity. Likewise, in the absence of such character, the mere fact
that the purpose or motive of the act was to serve the purposes of the state was not sufficient to enable
the separate entity to claim immunity under s 14(2). Applying that principle, the taking of the aircraft
and their removal from Kuwait airport to Iraq constituted an exercise of governmental power by the
state of Iraq and, in so acting, IAC was acting in the exercise of sovereign authority and was entitled to
state immunity. However (Lord Mustill and Lord Slynn of Hadley dissenting), after RCC Resolution 369
came into effect IAC's retention and use of the aircraft as its own were not acts done in the exercise of
sovereign authority but were done pursuant to the Iraqi legislation which vested the aircraft in IAC.
Accordingly, IAC was not entitled to claim state immunity in respect of the acts alleged to have been
performed by IAC after the coming into effect of RCC Resolution 369.

Case #16
Mighell v. Sultan of Johore, [1894] 1 q.b.

Principle: Foreign sovereign shall be treated as independent sovereign and therefore have immunity
form local jurisdiction.

Doctrine: Diplomatic Immunity

Facts: The Sultan’ s sovereign status was an issue in a court case in England. When Miss Mighell sued a
certain Albert Baker (Sultan of Johor), travelling incognito in the United Kingdom) for breach of promise
of marriage, the Court granted the Sultan as an “independent sovereign” immunity from jurisdiction.
The decision was based on a letter from the Secretary of State for the Colonies stating that “generally
speaking, the Sultan exercises without question the usual attributes of a sovereign ruler.” This further
demonstrates the British recognition of the Sultanate of Johor as an independent State.

Issue: Whether or not Sultan Johor will get diplomatic immunity or not?

Ruling: Sultan Johor will get the diplomatic immunity as an “independent sovereign" because the Court
granted the Sultan as an “independent sovereign” immunity from jurisdiction. The Sultan was entitled to
immunity even though up to the time of suit ‘he has perfectly concealed the fact that he is a sovereign,
and has acted as a private individual. When once there is the authoritative certificate of the Queen
through her minister of state as to the status of another sovereign, that in the courts of this country is
decisive.

Case #17

United States v. Noriega (1990)

746 F. Supp. 1506

FACTS:

Manuel Antonio Noriega appealed his multiple convictions stemming from

his involvement in cocaine trafficking; and the district court's denial of his
motion for a new trial based on newly discovered evidence. In attacking his
convictions, Noriega asserted that the district court should have dismissed
the indictment against him due to his status as a head of state and the
manner in which the United States brought him to justice. Noriega also
contended that the district court committed two reversible evidentiary
errors. Alternatively, he sought new trial based on his discovery of: (1) the
government's suppression of its pact with a non-witness; and/or (2) certain
allegations, lodged after his conviction, that a group associated with the
undisclosed, cooperating non-witness bribed a prosecution witness.

ISSUE:

Whether or not the indictment be dismissed due to the defendant’s status

as a head of state?

HELD:

No. The court rejected defendant's contention that the indictment should
have been dismissed due to his status as a head of state and the manner
in which the United States brought him to justice, because he was denied
head-of-state immunity. The court also rejected defendant's alternative
contentions that he was entitled to a new trial based on his discovery of the
government's suppression of its pact with a non-witness, and certain
allegations, lodged after his conviction, that a group associated with the
undisclosed, cooperating non-witness bribed a prosecution witness.

Case #18

USA vs. GUINTO

182 SCRA 644

These are cases that have been consolidated because they all involve the
doctrine of state immunity. The United States of America was not
impleaded in the case at bar but has moved to dismiss on the ground that
they are in effect suits against it to which it has not consented.

FACTS:

1. USA vs GUINTO (GR No. 76607)

The private respondents are suing several officers of the US Air Force in
Clark Air Base in connection with the bidding conducted by them for
contracts for barber services in the said base, which was won by Dizon.
The respondents wanted to cancel the award because they claimed that
Dizon had included in his bid an area not included in the invitation to bid,
and also, to conduct a rebidding.

2. USA vs RODRIGO (GR No. 79470)

Genove filed a complaint for damages for his dismissal as cook in the US
Air Force Recreation Center at Camp John Hay Air Station. It had been
ascertained after investigation that Genove had poured urine into the soup
stock used in cooking the vegetables served to the club customers. The
club manager suspended him and thereafter referred the case to a board of
arbitrators, which unanimously found him guilty and recommended his
dismissal.

3. USA vs CEBALLOS (GR No. 80018)

Bautista, a barracks boy in Camp O’ Donnell, was arrested following a buy-

bust operation conducted by petitioners, who were USAF officers and
special agents of the Air Force Office. An information was filed against
Bautista and at the trial, petitioners testified against him. As a result of the
charge, Bautista was dismissed from his employment. He then filed for
damages against petitioners claiming that it was because of the latter’s acts
that he lost his job.

4. USA vs VERGARA (GR No. 80258)

A complaint for damages was filed by private respondents against

petitioners (US military officers) for injuries allegedly sustained by the
former when defendants beat them up, handcuffed them and unleashed
dogs on them. The petitioners deny this and claim that respondents were
arrested for theft but resisted arrest, thus incurring the injuries.

ISSUE:

Whether or not the defendants were immune from suit under the RP-US
Bases Treaty for acts done by them in the performance of their official
duties.

HELD:

The rule that a State may not be sued without its consent is one of the
generally accepted principles of international law that were have adopted
as part of the law of our land. Even without such affirmation, we would still
be bound by the generally accepted principles of international law under
the doctrine of incorporation. Under this doctrine, as accepted by the
majority of the states, such principles are deemed incorporated in the law
of every civilized state as a condition and consequence of its membership
in the society of nations. All states are sovereign equals and cannot assert
jurisdiction over one another. While the doctrine appears to prohibit only
suits against the state without its consent, it is also applicable to complaints
filed against officials of the states for acts allegedly performed by them in
the discharge of their duties. The rule is that if the judgment against such
officials will require the state itself to perform an affirmative act to satisfy
the same, the suit must be regarded as against the state although it has not
been formally impleaded. When the government enters into a contract, it is
deemed to have descended to the level of the other contracting party and
divested of its sovereign immunity from suit with its implied consent.

It bears stressing at this point that the aforesaid principle do not confer on
the USA a blanket immunity for all acts done by it or its agents in the
Philippines. Neither may the other petitioners claim that they are also
insulated from suit in this country merely because they have acted as
agents of the United States in the discharge of their official functions.

There is no question that the USA, like any other state, will be deemed to
have impliedly waived its non-suability if it has entered into a contract in its
proprietary or private capacity (commercial acts/jure gestionis). It is only
when the contract involves its sovereign or governmental capacity
(governmental acts/jure imperii) that no such waiver may be implied.

In US vs GUINTO, the court finds the barbershops subject to the

concessions granted by the US government to be commercial enterprises
operated by private persons. The Court would have directly resolved the
claims against the defendants as in USA vs RODRIGO, except for the
paucity of the record as the evidence of the alleged irregularity in the grant
of the barbershop concessions were not available. Accordingly, this case
was remanded to the court below for further proceedings.

In US vs RODRIGO, the restaurant services offered at the John Hay Air

Station partake of the nature of a business enterprise undertaken by the
US government in its proprietary capacity, as they were operated for profit,
as a commercial and not a governmental activity. Not even the US
government can claim such immunity because by entering into the
employment contract with Genove in the discharge of its proprietary
functions, it impliedly divested itself of its sovereign immunity from suit. But,
the court still dismissed the complaint against petitioners on the ground that
there was nothing arbitrary about the proceedings in the dismissal of
Genove, as the petitioners acted quite properly in terminating Genove’s
employment for his unbelievably nauseating act.

In US vs CEBALLOS, it was clear that the petitioners were acting in the

exercise of their official functions when they conducted the buy-bust
operation and thereafter testified against the complainant. For discharging
their duties as agents of the United States, they cannot be directly
impleaded for acts imputable to their principal, which has not given its
consent to be sued.

In US vs VERGARA, the contradictory factual allegations in this case need

a closer study of what actually happened. The record was too meager to
indicate if the defendants were really discharging their official duties or had
actually exceeded their authority when the incident occurred. The needed
inquiry must first be made by the lower court so it may assess and resolve
the conflicting claims of the parties.

Case #19

JUSMAG V. NLRC

239 SCRA 224

FACTS:

Private respondent was one of the seventy-four (74) security assistance

support personnel (SASP) working at JUSMAG-Philippines. When
dismissed, he held the position of Illustrator 2 and was the incumbent
President of JUSMAG PHILIPPINES-FILIPINO CIVILIAN EMPLOYEES
ASSOCIATION (JPFCEA), a labor organization duly registered with the
Department of Labor and Employment. His services were terminated
allegedly due to the abolition of his position. Private respondent filed a
complaint with the Department of Labor and Employment on the ground
that he was illegally suspended and dismissed from service by JUSMAG.
He asked for his reinstatement. JUSMAG then filed a Motion to Dismiss
invoking its immunity from suit as an agency of the United States. It further
alleged lack of employer-employee relationship and that it has no juridical
personality to sue and be sued. Labor Arbiter Daniel C. Cueto dismissed
the subject complaint "for want of jurisdiction." Private respondent appealed
to the National Labor Relations Commission (public respondent), assailing
the ruling that petitioner is immune from suit for alleged violation of our
labor laws. NLRC reversed the ruling of the Labor Arbiter as it held that
petitioner had lost its right not to be sued. The resolution was predicated on
two grounds: (1) the principle of estoppels that JUSMAG failed to refute the
existence of employer-employee relationship under the "control test"; and
(2) JUSMAG has waived its right to immunity from suit when it hired the
services of private respondent

Issue: Whether JUSMAG can claim State Immunity?

Ruling:

In this jurisdiction, we recognize and adopt the generally accepted

principles of international law as part of the law of the land. “Immunity of
State from suit is one of these universally recognized principles.” In
international law, "immunity" is commonly understood as an exemption of
the state and its organs from the judicial jurisdiction of another state. 16
This is anchored on the principle of the sovereign equality of states under
which one state cannot assert jurisdiction over another in violation of the
maxim par in parem non habet
Case #20

SEAFDEC VS. NLRC

241 SCRA 580

FACTS

Two labor cases were filed by the herein private respondents against the
petitioner,Southeast Asian Fisheries Development Center (SEAFDEC),
before the National LaborRelations Commission (NLRC), Regional
Arbitration Branch, Iloilo City. In these cases, the private respondents claim
having been wrongfully terminated from their employment by the
petitioner.The petitioner, who claims to be an international inter-
government organization composed of various Southeast Asian countries,
filed a Motion to Dismiss, challenged the jurisdiction of the public
respondent in taking cognizance of the above cases.The private
respondents, as well as respondent labor arbiter, allege that the petitioner
is not immune from suit and assuming that if, indeed, it is an international
organization, it has,however, impliedly, if not expressly, waived its immunity
by belatedly raising the issue of jurisdiction

ISSUE: Whether or not the petitioner is immune from suit

HELD:

The court ruled for the petitioner. It is beyond question that the petitioner
SEAFDEC is an international agency enjoying diplomatic immunity. It was
already been held in Southeast Asian Fisheries Development Center-
Aquaculture Department vs NLRC. Petitioner SEAFDEC-AQD is an
international agency beyond the jurisdiction of public respondent NLRC.

Being an intergovernmental organization, SEAFDEC including its

departments (AQD), enjoys functional independence and freedom from the
control of state in whose territory its office is located. One of the basic
immunities of an international organization is immunity from local
jurisdiction, i.e., that is immune from legal writs and processes issued by
the tribunals of the country where it is found. The obvious reason for this is
that the subjection of such an organization to the authority of the local
courts would afford a convenient medium thru which the host government
may interfere in their operations or even influence or control its policies and
decisions of organization; besides, such objection to local jurisdiction would
impair the capacity of such body to discharge its responsibilities impartially
on behalf of its member-states.

Case #21

Callado v. International Rice Research Institute, 244 SCRA 210

Facts:

Ernesto Callado, petitioner, was employed as a driver at the IRRI. One day
while driving an IRRI vehicle on an official trip to the NAIA and back to the
IRRI, petitioner figured in an accident.

Petitioner was informed of the findings of a preliminary investigation

conducted by the IRRI's Human Resource Development Department
Manager. In view of the findings, he was charged with:

(1) Driving an institute vehicle while on official duty under the influence of
liquor;

(2) Serious misconduct consisting of failure to report to supervisors the

failure of the vehicle to start because of a problem with the car battery, and

(3) Gross and habitual neglect of duties.

Petitioner submitted his answer and defenses to the charges against him.
However, IRRI issued a Notice of Termination to petitioner.

Thereafter, petitioner filed a complaint before the Labor Arbiter for illegal
dismissal, illegal suspension and indemnity pay with moral and exemplary
damages and attorney's fees.

IRRI wrote the Labor Arbiter to inform him that the Institute enjoys immunity
from legal process by virtue of Article 3 of Presidential Decree No. 1620, 5
and that it invokes such diplomatic immunity and privileges as an
international organization in the instant case filed by petitioner, not having
waived the same.

While admitting IRRI's defense of immunity, the Labor Arbiter, nonetheless,

cited an Order issued by the Institute to the effect that "in all cases of
termination, respondent IRRI waives its immunity," and, accordingly,
considered the defense of immunity no longer a legal obstacle in resolving
the case.

The NLRC found merit in private respondent's appeal and, finding that IRRI
did not waive its immunity, ordered the aforesaid decision of the Labor
Arbiter set aside and the complaint dismissed.

In this petition petitioner contends that the immunity of the IRRI as an

international organization granted by Article 3 of Presidential Decree No.
1620 may not be invoked in the case at bench inasmuch as it waived the
same by virtue of its Memorandum on "Guidelines on the handling of
dismissed employees in relation to P.D. 1620."

Issue: Did the (IRRI) waive its immunity from suit in this dispute which
arose from an employer-employee relationship?

Ruling: No.

P.D. No. 1620, Article 3 provides:

Art. 3. Immunity from Legal Process. The Institute shall enjoy immunity
from any penal, civil and administrative proceedings, except insofar as that
immunity has been expressly waived by the Director-General of the
Institute or his authorized representatives.

The SC upholds the constitutionality of the aforequoted law. There is in this

case "a categorical recognition by the Executive Branch of the Government
that IRRI enjoys immunities accorded to international organizations, which
determination has been held to be a political question conclusive upon the
Courts in order not to embarass a political department of Government.

It is a recognized principle of international law and under our system of

separation of powers that diplomatic immunity is essentially a political
question and courts should refuse to look beyond a determination by the
executive branch of the government, and where the plea of diplomatic
immunity is recognized and affirmed by the executive branch of the
government as in the case at bar, it is then the duty of the courts to accept
the claim of immunity upon appropriate suggestion by the principal law
officer of the government or other officer acting under his direction.

The raison d'etre for these immunities is the assurance of unimpeded

performance of their functions by the agencies concerned.

The grant of immunity to IRRI is clear and unequivocal and an express

waiver by its Director-General is the only way by which it may relinquish or
abandon this immunity.

In cases involving dismissed employees, the Institute may waive its

immunity, signifying that such waiver is discretionary on its part.

Case #22

Veterans Manpower and Protective Services, Inc. v. CA

214 SCRA 286

Facts:

The constitutionality of the following provisions of R.A.

5487(otherwise known as the “Private Security Agency Law”), particularly
Sec 4, and Sec 17, as amended, is questioned by VMPSI in its complaint:

VMPSI alleges that the above provisions of R.A. No. 5487 violate the
provisions of the 1987 Constitution against monopolies, unfair competition
and combinations in restraint of trade, and tend to favor and institutionalize
the Philippine Association of Detective and Protective Agency Operators,
Inc. (PADPAO) which is monopolistic because it has an interest in more
than one security agency.

Respondent VMPSI likewise questions the validity of paragraph 3,

subparagraph (g) of the Modifying Regulations on the Issuance of License
to Operate and Private Security Licenses and Specifying Regulations for
the Operation of PADPAO issued by then PC Chief Lt. Gen. Fidel V.
Ramos, through Col. Sabas V. Edades, requiring that “all private security
agencies/company security forces must register as members of any
PADPAO Chapter organized within the Region where their main offices are
located...”. As such membership requirement in PADPAO is compulsory in
nature, it allegedly violates legal and constitutional provisions against
monopolies, unfair competition and combinations in restraint of trade.

On May 12, 1986, a Memorandum of Agreement was executed by

PADPAO and the PC Chief, which fixed the minimum monthly contract rate
per guard for eight (8) hours of security service per day at P2,255.00 within
Metro Manila and P2,215.00 outside of Metro Manila.

On June 29, 1987, Odin Security Agency (Odin) filed a complaint with
PADPAO accusing VMPSI of cut-throat competition by undercutting its
contract rate for security services rendered to the Metropolitan Waterworks
and Sewerage System (MWSS), charging said customer lower than the
standard minimum rates provided in the Memorandum of Agreement dated
May 12, 1986.

PADPAO found VMPSI guilty of cut-throat competition, hence, the

PADPAO Committee on Discipline recommended the expulsion of VMPSI
from PADPAO and the cancellation of its license to operate a security
agency (Annex D, Petition).

The PC-SUSIA made similar findings and likewise recommended the

cancellation of VMPSI’s license.

As a result, PADPAO refused to issue a clearance/certificate of

membership to VMPSI when it requested one.

VMPSI wrote the PC Chief on March 10, 1988, requesting him to set aside
or disregard the findings of PADPAO and consider VMPSI’s application for
renewal of its license, even without a certificate of membership from
PADPAO

Issue:

Whether or not VMPSI’s complaint against the PC Chief and PC-SUSIA is

a suit against the State without its consent

Held:
 Yes. The State may not be sued without its consent (Article XVI,
Section 3, of the 1987 Constitution). Invoking this rule, the PC Chief and
PC-SUSIA contend that, being instrumentalities of the national government
exercising a primarily governmental function of regulating the organization
and operation of private detective, watchmen, or security guard agencies,
said official (the PC Chief) and agency (PC-SUSIA) may not be sued
without the Government’s consent, especially in this case because
VMPSI’s complaint seeks not only to compel the public respondents to act
in a certain way, but worse, because VMPSI seeks actual and
compensatory damages in the sum of P1,000,000.00, exemplary damages
in the same amount, and P200,000.00 as attorney’s fees from said public
respondents. Even if its action prospers, the payment of its monetary
claims may not be enforced because the State did not consent to
appropriate the necessary funds for that purpose.

While the doctrine of state immunity appears to prohibit only suits against
the state without its consent, it is also applicable to complaints filed against
officials of the state for acts allegedly performed by them in the discharge
of their duties. The rule is that if the judgment against such officials will
require the state itself to perform an affirmative act to satisfy the same,
such as the appropriation of the amount needed to pay the damages
awarded against them, the suit must be regarded as against the state itself
although it has not been formally impleaded.

A public official may sometimes be held liable in his personal or private

capacity if he acts in bad faith, or beyond the scope of his authority or
jurisdiction, however, since the acts for which the PC Chief and PC¬-
SUSIA are being called to account in this case, were performed by them as
part of their official duties, without malice, gross negligence, or bad faith, no
recovery may be had against them in their private capacities.

The correct test for the application of state immunity is not the conclusion of
a contract by the State but the legal nature of the act.

The restrictive application of State immunity is proper only when the

proceedings arise out of commercial transactions of the foreign sovereign,
its commercial activities or economic affairs. Stated differently, a State may
be said to have descended to the level of an individual and can thus be
deemed to have tacitly given its consent to be sued only when it enters into
a business contract. It does not apply where the contract relates to the
exercise of its sovereign functions.

In the instant case, the Memorandum of Agreement entered into by the PC

Chief and PADPAO was intended to professionalize the industry and to
standardize the salaries of security guards as well as the current rates of
security services, clearly, a governmental function. The execution of the
said agreement is incidental to the purpose of R.A.5487, as amended,
which is to regulate the organization and operation of private detective,
watchmen or security guard agencies.

Case #23

Tan vs. Director of Forestry, 125 SCRA 302

Facts:

The Bureau of Forestry issued Notice 2807 advertising for public hearing a certain tract of public forest
land. Petitioner submitted his application in due form after paying the necessary fees and posting the
required bond. Later that year, President Carlos Garcia issued a directive to the Director of the Bureau of
Forestry to convert the land into a forest reserve for watershed purposes. The Agriculture and Natural
Resources issued General Memorandum No. 46 granting ordinary timber license where the area is not
more than 3,000 hectares. This was subsequently revoked by General Memorandum No. 60.

Issue:

Whether or not the doctrine of State immunity applies in this case?

Ruling:

Yes. Petitioners not only failed to exhaust his administrative remedies, but also failed to note that his
action is a suit against the State which cannot prosper unless the State give its consent.