Z.

Gerilla

DEPARTMENT OF FOREIGN AFFAIRS vs. NATIONAL LABOR

RELATIONS COMMISSION
G.R. NO. 113191 SPETEMBER 18, 1996
FACTS
1. Private respondent, Jose Magnayi filed an illegal dismissal case against
Asian Development Bank and ADB’s violation of the "labor-only"
contracting law;
2. Two summons were served and sent to ADB and DFA;
3. ADB and the DFA notified respondent Labor Arbiter that the ADB, as well
as its President and Office, were covered by an immunity from legal process
except for borrowings, guaranties or the sale of securities pursuant to Article
50(1) and Article 55 of the Agreement Establishing the Asian Development
Bank (the "Charter") in relation to Section 5 and Section 44 of the
Agreement Between The Bank And The Government Of The Philippines
Regarding The Bank's Headquarters (the "Headquarters Agreement");
4. Thinking that ADB waived its diplomatic immunity from suit, the Labor
Arbiter decided in favor of the private respondent declaring him as regular
employee and his termination was illegal;
5. ADB did not appeal, instead, DFA referred the matter to the National Labor
Relations Commission ("NLRC") seeking a "formal vacation of the void
judgment.";
6. NLRC Chairman sided with the Labor Arbiter and referred DFA to Office of
the Ombudsman for any dispute;
7. DFA lodged the instant petition for certiorari

ISSUE
WON ADB is correct in invoking immunity from suit

RULING
The Court ruled in the affirmative. The Court held that ADB is correct in invoking
immunity from suit under the Charter and the Headquarters Agreement.

Article 50 (1) of the Charter provides that except in the specified cases of
borrowing and guarantee operations, as well as the purchase, sale and underwriting
of securities, the ADB enjoys immunity from legal process of every form. Under
Art. 55, ADB’s officers enjoy immunity in respect of all acts performed by them in
their official capacity. The Charter and the Headquarters Agreement granting these
Z. Gerilla

immunities and privileges are treaty covenants and commitments voluntarily

assumed by the Philippines government which must be respected.

Citing WHO v. Aquino, the Court declared that under the principle of international
law and the system of separation of powers, 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 . . . 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.