State Immunity
in favor of the State. Otherwise, and the State is suable at the instance of
- See: Article XVI, Section 3, 1987 Constitution
The immunity of the State from suit, known also as the doctrine of
sovereign immunity or non-suability of the State, is expressly provided in
Article XVI of the 1987 Constitution, viz:
Section 3. The State may not be sued without its consent.
The immunity from suit is based on the political truism that the State, as a
sovereign, can do no wrong. Moreover, as the eminent Justice Holmes said
in Kawananakoa v. Polyblank:[6]
The territory [of Hawaii], of course, could waive its exemption (Smith
v. Reeves, 178 US436, 44 L ed 1140, 20 Sup. Ct. Rep. 919), and it took no
objection to the proceedings in the cases cited if it could have done so. xxx
But in the case at bar it did object, and the question raised is whether the
plaintiffs were bound to yield. Some doubts have been expressed as to the
source of the immunity of a sovereign power from suit without its own
permission, but the answer has been public property since before the days
of Hobbes. Leviathan, chap. 26, 2. A sovereign is exempt from suit, not
because of any formal conception or obsolete theory, but on the logical and
practical ground that there can be no legal right as against the authority that
makes the law on which the right depends. “Car on peut bien recevoir loy
d’autruy, mais il est impossible par nature de se donner loy.” Bodin,
Republique, 1, chap. 8, ed. 1629, p. 132; Sir John Eliot, De Jure Maiestatis,
chap. 3. Nemo suo statuto ligatur necessitative. Baldus, De Leg. et Const.
Digna Vox, 2. ed. 1496, fol. 51b, ed. 1539, fol. 61.[7]
Practical considerations dictate the establishment of an immunity from suit
every other individual, government service may be severely obstructed and
public safety endangered because of the number of suits that the State has
to defend against.[8] Several justifications have been offered to support the
adoption of the doctrine in the Philippines, but that offered in Providence
Washington Insurance Co. v. Republic of the Philippines[9] is “the most
acceptable explanation,” according to Father Bernas, a recognized
commentator on Constitutional Law,[10] to wit:
[A] continued adherence to the doctrine of non-suability is not to be
deplored for as against the inconvenience that may be caused private
parties, the loss of governmental efficiency and the obstacle to the
performance of its multifarious functions are far greater if such a
fundamental principle were abandoned and the availability of judicial
remedy were not thus restricted. With the well-known propensity on the
part of our people to go to court, at the least provocation, the loss of time
and energy required to defend against law suits, in the absence of such a
basic principle that constitutes such an effective obstacle, could very well be
imagined.
An unincorporated government agency without any separate juridical
personality of its own enjoys immunity from suit because it is invested with
an inherent power of sovereignty. Accordingly, a claim for damages against
the agency cannot prosper; otherwise, the doctrine of sovereign immunity is
violated.[11] However, the need to distinguish between an unincorporated
government agency performing governmental function and one performing
proprietary functions has arisen. The immunity has been upheld in favor of
the former because its function is governmental or incidental to such
function;[12] it has not been upheld in favor of the latter whose function
was not in pursuit of a necessary function of government but was essentially
a business.[13]

Should the doctrine of sovereignty immunity or non-suability of the State be
extended to the ATO?
In its challenged decision,[14] the CA answered in the negative, holding:
On the first assignment of error, appellants seek to impress upon Us that
the subject contract of sale partook of a governmental character. Apropos,
the lower court erred in applying the High Court’s ruling in National Airports
Corporation vs. Teodoro (91 Phil. 203 [1952]), arguing that in Teodoro, the
matter involved the collection of landing and parking fees which is a
proprietary function, while the case at bar involves the maintenance and
operation of aircraft and air navigational facilities and services which are
governmental functions.
We are not persuaded.
Contrary to appellants’ conclusions, it was not merely the collection of
landing and parking fees which was declared as proprietary in nature by the
High Court in Teodoro, but management and maintenance of airport
operations as a whole, as well. Thus, in the much later case of Civil
Aeronautics Administration vs. Court of Appeals (167 SCRA 28 [1988]), the
Supreme Court, reiterating the pronouncements laid down in Teodoro,
declared that the CAA (predecessor of ATO) is an agency not immune from
suit, it being engaged in functions pertaining to a private entity. It went on
to explain in this wise:
xxx
The Civil Aeronautics Administration comes under the category of a private
entity. Although not a body corporate it was created, like the National
Airports Corporation, not to maintain a necessary function of government,
but to run what is essentially a business, even if revenues be not its prime
objective but rather the promotion of travel and the convenience of the
travelling public. It is engaged in an enterprise which, far from being the
exclusive prerogative of state, may, more than the construction of public
roads, be undertaken by private concerns. [National Airports Corp. v.
Teodoro, supra, p. 207.]
xxx
True, the law prevailing in 1952 when the Teodoro case was promulgated
was Exec. Order 365 (Reorganizing the Civil Aeronautics Administration and
Abolishing the National Airports Corporation). Republic Act No. 776 (Civil
Aeronautics Act of the Philippines), subsequently enacted on June 20, 1952,
did not alter the character of the CAA’s objectives under Exec. Order 365.
The pertinent provisions cited in the Teodoro case, particularly Secs. 3 and 4
of Exec. Order 365, which led the Court to consider the CAA in the category
of a private entity were retained substantially in Republic Act 776, Sec.
32(24) and (25). Said Act provides:
Sec. 32. Powers and Duties of the Administrator. – Subject to the general
control and supervision of the Department Head, the Administrator shall
have among others, the following powers and duties:
xxx
(24) To administer, operate, manage, control, maintain and develop the
Manila International Airport and all government-owned aerodromes except
those controlled or operated by the Armed Forces of the Philippines
including such powers and duties as: (a) to plan, design, construct, equip,
expand, improve, repair or alter aerodromes or such structures,
improvement or air navigation facilities; (b) to enter into, make and execute
contracts of any kind with any person, firm, or public or private corporation
or entity; …
(25) To determine, fix, impose, collect and receive landing fees, parking
space fees, royalties on sales or deliveries, direct or indirect, to any aircraft
for its use of aviation gasoline, oil and lubricants, spare parts, accessories
and supplies, tools, other royalties, fees or rentals for the use of any of the
property under its management and control.
xxx
From the foregoing, it can be seen that the CAA is tasked with private or
non-governmental functions which operate to remove it from the purview
of the rule on State immunity from suit. For the correct rule as set forth in
the Teodoro case states:
xxx
Not all government entities, whether corporate or non-corporate, are
immune from suits. Immunity from suits is determined by the character of
the objects for which the entity was organized. The rule is thus stated in
Corpus Juris:
Suits against State agencies with relation to matters in which they have
assumed to act in private or non-governmental capacity, and various suits
against certain corporations created by the state for public purposes, but to
engage in matters partaking more of the nature of ordinary business rather
than functions of a governmental or political character, are not regarded as
suits against the state. The latter is true, although the state may own stock
or property of such a corporation for by engaging in business operations
through a corporation, the state divests itself so far of its sovereign
character, and by implication consents to suits against the corporation. (59
C.J., 313) [National Airports Corporation v. Teodoro, supra, pp. 206-207;
Italics supplied.]
This doctrine has been reaffirmed in the recent case of Malong v. Philippine
National Railways [G.R. No. L-49930, August 7, 1985, 138 SCRA 63], where it
was held that the Philippine National Railways, although owned and
operated by the government, was not immune from suit as it does not
exercise sovereign but purely proprietary and business functions.
Accordingly, as the CAA was created to undertake the management of
airport operations which primarily involve proprietary functions, it cannot
avail of the immunity from suit accorded to government agencies
performing strictly governmental functions.[15]
In our view, the CA thereby correctly appreciated the juridical character of
the ATO as an agency of the Government not performing a purely
governmental or sovereign function, but was instead involved in the
management and maintenance of theLoakanAirport, an activity that was not
the exclusive prerogative of the State in its sovereign capacity. Hence, the
ATO had no claim to the State’s immunity from suit. We uphold the CA’s
aforequoted holding.
- Cases:
1. Sanders v. Veridiano, G.R. No. L-46930, June 10, 1988.
Petitioner Sanders was the special services director of the U.S. Naval Station.
Petitioner Moreau was thecommanding officer of the Subic Naval Base. Private
respondent Rossi is an American citizen with permanent residence inthe
Philippines.
Private respondent Rossi and Wyer were both employed as game room
attendants in the special servicesdepartment of the NAVSTA.On October 3,
1975, the private respondents were advised that their employment had been
converted from permanentfull-time to permanent part-time. They instituted
grievance proceedings to the rules and regulations of the U.S.Department of
Defense. The hearing officer recommended for reinstatement of their
permanent full-time status.However, in a letter addressed to petitioner Moreau,
Sanders disagreed with the hearing officer's report. The lettercontained the
statements that: a ) "Mr. Rossi tends to alienate most co-workers and
supervisors;" b) "Messrs. Rossi andWyers have proven, according to their
immediate supervisors, to be difficult employees to supervise;" and c)
"eventhough the grievants were under oath not to discuss the case with anyone,
(they) placed the records in public placeswhere others not involved in the case
could hear."Before the start of the grievance hearings, a-letter from petitioner
Moreau was sent to the Chief of Naval Personnelexplaining the change of the
private respondent's employment status. So, private respondent filed for
damages allegingthat the letters contained libelous imputations and that the
prejudgment of the grievance proceedings was an invasion of their personal and
proprietary rights.However, petitioners argued that the acts complained of
were performed by them in the discharge of their official dutiesand that,
consequently, the court had no jurisdiction over them under the doctrine of
state immunity. However, the motionwas denied on the main ground that the
petitioners had not presented any evidence that their acts were official in
nature.
ISSUE:
Whether or not the petitioners were performing their official duties?
RULING:
Yes. Sanders, as director of the special services department of NAVSTA,
undoubtedly had supervision over itspersonnel, including the private
respondents. Given the official character of the letters, the petitioners were
being sued asofficers of the United States government because they have acted
on behalf of that government and within the scope of their authority. Thus, it is
that government and not the petitioners personally that is responsible for their
acts.It is stressed at the outset that the mere allegation that a government
functionary is being sued in his personal capacitywill not automatically remove
him from the protection of the law of public officers and, if appropriate, the
doctrine of stateimmunity. By the same token, the mere invocation of official
character will not suffice to insulate him from suability andliability for an act
imputed to him as a personal tort committed without or in excess of his
authority. These well-settledprinciples are applicable not only to the officers of
the local state but also where the person sued in its courts pertains tothe
government of a foreign state, as in the present case.Assuming that the trial can
proceed and it is proved that the claimants have a right to the payment of
damages, suchaward will have to be satisfied not by the petitioners in their
personal capacities but by the United States government astheir principal. This
will require that government to perform an affirmative act to satisfy the
judgment,
viz,
theappropriation of the necessary amount to cover the damages awarded, thus
making the action a suit against thatgovernment without its consent
2. United States v. Guinto, G.R. No. 76607, February 26, 1990.

FACTS:
In the first case, the private respondents are suing several officers of the U.S. Air
Force stationed in Clark Air Base in connection with the bidding conducted by
them for contracts for barber services in the base.
In the second case, private respondents filed a complaint for damages against
private petitioners for his dismissal as cook in the U.S. Air Force Recreation
Center at the John Hay Air Station.
In the third case, private respondent, who was employed as a barracks boy in a
U.S. Base, was arrested following a buy-bust operation conducted by the
individual petitioners, officers of the U.S. Air Force and special agents of the Air
Force Office of Special Investigators. He then filed a complaint for damages
against the individual petitioners claiming that it was because of their acts that
he was removed.
In the fourth case, a complaint for damages was filed by the private respondents
against the private petitioners, for injuries allegedly sustained by the plaintiffs
as a result of the acts of the defendants. According to the plaintiffs, the
defendants beat them up, handcuffed them and unleashed dogs on them which
bit them in several parts of their bodies and caused extensive injuries to them.
These cases have been consolidated because they all involve the doctrine of
state immunity. The United States of America was not impleaded in the
complaints below but has moved to dismiss on the ground that they are in effect
suits against it to which it has not consented. It is now contesting the denial of
its motions by the respondent judges.
ISSUE:
WON the Doctrine of State Immunity is not applicable thereby making the State
liable.
HELD:
NO. While suable, the petitioners are nevertheless not liable. It is obvious that
the claim for damages cannot be allowed on the strength of the evidence, which
have been carefully examined.
The traditional rule of immunity exempts a State from being sued in the courts
of another State without its consent or waiver. This rule is a necessary
consequence of the principles of independence and equality of States. However,
the rules of International Law are not petrified; they are constantly developing
and evolving. In addition, because the activities of states have multiplied, it has
been necessary to distinguish them – between sovereign and governmental acts
(jure imperii) and private, commercial and proprietary acts (jure gestionis). The
result is that State immunity now extends only to acts jure imperii. The
restrictive application of State immunity is now the rule in the United States, the
United Kingdom and other states in Western Europe
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 business contracts.
It does not apply where the contract relates to the exercise of its sovereign
functions. In this case, the projects are an integral part of the naval base, which
is devoted to the defense of both the United States and the Philippines,
indisputably a function of the government of the highest order; they are not
utilized for nor dedicated to commercial or business purposes.
There is no question that the United States of America, 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, as in the cases at bar. It is only
when the contract involves its sovereign or governmental capacity that no such
waiver may be implied. 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 business contracts.
The private respondents invokes Article 2180 of the Civil Code, which holds the
government liable if it acts through a special agent. The argument, it would
seem, is premised on the ground that since the officers are designated “special
agents,” the United States government should be liable for their torts.
There seems to be a failure to distinguish between suability and liability and a
misconception that the two terms are synonymous. Suability depends on the
consent of the state to be sued, liability on the applicable law and the
established facts. The circumstance that a state is suable does not necessarily
mean that it is liable; on the other hand, it can never be held liable if it does not
first consent to be sued. Liability is not conceded by the mere fact that the state
has allowed itself to be sued. When the state does waive its sovereign immunity,
it is only giving the plaintiff the chance to prove, if it can, that the defendant is
liable.
The said article establishes a rule of liability, not suability. The government may
be held liable under this rule only if it first allows itself to be sued through any
of the accepted forms of consent. Moreover, the agent performing his regular
functions is not a special agent even if he is so denominated, as in the case at
bar. No less important, the said provision appears to regulate only the relations
of the local state with its inhabitants and, hence, applies only to the Philippine
government and not to foreign governments impleaded in our courts.
The complaints against the petitioners in the court below were aptly dismissed.
3. Chuidian v. Sandiganbayan, G.R. No. 139941, January 19, 2001.
FACTS:
In September 1980, Chuidian allegedly a dummy of Ferdinand and Imelda
Marcos, was able to obtain, allegedly under false pretenses, a loan guarantee
from Philguarantee Corp., the BOI and the Central Bank, in favor of the Asian
Reliability Co. Inc. (ARCI). ARCI, 98% of which was allegedly owned by Chuidian,
was granted a loan guarantee of US $25M for the establishment of 5 inter-
related projects in the country.
However, Chuidian used the same in investing in corporations operating in the
US. ARCI then defaulted in the payments of the loan, compelling Philguarantee
to undertake payments for the same. Philguarantee sued Chuidian before a
Californian court, charging him of violating the terms of the loan, defaulting in
payments and misusing the proceeds for his personal benefit. Chuidian claimed
that he himself was a victim of the systematic plunder perpetrated by the
Marcoses.
On November 1985, Philguarantee entered into a compromise agreement with
Chuidian whereby Chuidian shall assign and surrender title to all his companies
in favor of the Phil. Gov’t. In return, Philguarantee shall absolve Chuidian from
all civil and criminal liability concerning the payments Philguarantee had made
on Chuidian’s defaulted loans. It was further stipulated that the Phil.
government shall pay Chuidian the amount of US $5.3M. Chuidian received the
1st two installments of the payment. The remaining balance of US $4.6M was to
be paid through an irrevocable Letter of Credit (L/C) from which Chuidian
would draw US $100k monthly.
With the advent of the Aquino administration, the newly-established PCGG
exerted earnest efforts to search and recover properties and assets suspected as
having been illegally acquired by the Marcoses, their relatives and cronies.
Chuidian was among those whose assets were sequestered by the PCGG. The
PNB was directed to place the letters of credit under its custody, in behalf of the
PCGG.
In the meantime, Philguarantee filed a motion before the Superior Court of
California, seeking to vacate the stipulated judgment containing the settlement
between Philguarantee and Chuidian on the grounds that: (a) Philguarantee was
compelled by the Marcos administration to agree to the terms of the settlement;
(b) Chuidian blackmailed Marcos into pursuing the settlement agreement by
threatening to expose the fact that the Marcoses made investments in
Chuidian’s American enterprises; and (c) the Aquino administration had
ordered Philguarantee not to make further payments on the L/C to Chuidian.
However, the Californian court concluded that Philguarantee was not able to
sufficiently show that the settlement should be set aside. On appeal, the CA of
the State of California affirmed the judgment of the Superior Court denying
Philguarantee’s motion.
Chuidian filed before the California Central District Court, an action against PNB
seeking to compel the latter to pay the proceeds of the L/C. Philguarantee
intervened in said action, raising the same issues and arguments it had earlier
raised in the action before the Santa Clara Superior Court, alleging that PNB was
excused from making payments on the L/C since the settlement was void due to
illegality, duress and fraud.
The Federal Court rendered judgment ruling: (1) in favor of PNB excusing the
said bank from making payment on the L/C; and (2) in Chuidian’s favor by
denying intervenor Philguarantee’s action to set aside the settlement
agreement.
Meanwhile a Deed of Transfer was executed between then Sec. of Finance and
then PNB President Edgardo Espiritu, to facilitate the rehabilitation of PNB.
Thus, the gov’t assumed all liabilities of PNB including the L/C listed in favor of
Chuidian in the amount of US $4.4M
On July 1987, the gov’t filed before the Sandiganbayan a civil case against the
Marcos spouses, several gov’t officials, and a number of individuals known to be
cronies of the Marcoses, including Chuidian, seeking the reconveyance,
accounting and restitution of all forms of wealth allegedly procured illegally by
the defendants.
While the case was pending, the Republic filed a motion for issuance of a writ of
attachment over the L/C in the name of Chuidian, citing as grounds therefor the
following:
(1) Chuidian embezzled or fraudulently misapplied the funds of ARCI acting in a
fiduciary capacity, justifying issuance of the writ under Section 1(b), Rule 57 of
the Rules of Court;
(2) The writ is justified under Section 1(d) of the same rule as Chuidian is guilty
of fraud in contracting the debt or incurring the obligation upon which the
action was brought, or that he concealed or disposed of the property that is the
subject of the action;
(3) Chuidian has removed or disposed of his property with the intent of
defrauding the plaintiff as justified under Section 1(c) of Rule 57; and
(4) Chuidian is residing out of the country or one on whom summons may be
served by publication, which justifies the writ of attachment prayed for under
Section 1(e) of the same rule.
The Republic also averred that should the action brought by Chuidian before the
U.S. District Court of California to compel payment of the L/C prosper, inspite of
the sequestration of the said L/C, Chuidian can ask the said foreign court to
compel the PNB Los Angeles branch to pay the proceeds of the L/C. Eventually,
Philguarantee will be made to shoulder the expense resulting in further damage
to the government. Thus, there was an urgent need for the writ of attachment
to place the L/C under the custody of the Sandiganbayan so the same may be
preserved as security for the satisfaction of judgment in the case before said
court.
Chuidian opposed the motion for issuance of the writ of attachment, contending
that:
(1) The plaintiff’s affidavit appended to the motion was in form and substance
fatally defective;
(2) Section 1(b) of Rule 57 does not apply since there was no fiduciary
relationship between the plaintiff and Chuidian;
(3) While Chuidian does not admit fraud on his part, if ever there was breach of
contract, such fraud must be present at the time the contract is entered into;
(4) Chuidian has not removed or disposed of his property in the absence of any
intent to defraud plaintiff;
(5) Chuidian’s absence from the country does not necessarily make him a non-
resident; and
(6) Service of summons by publication cannot be used to justify the issuance of
the writ since Chuidian had already submitted to the jurisdiction of the Court by
way of a motion to lift the freeze order filed through his counsel.
On July 1993, the Sandiganbayan ordered the issuance of a writ of attachment
against the L/C as security for the satisfaction of judgment. The Sandiganbayan
ruled:
1) Although there was no separate was attached to the motion, the motion itself
contained all the requisites of an affidavit, and the verification thereof is
deemed a substantial compliance of Rule 57, Section 3.
2) Fiduciary relationship exists between Chuidian and ARCI but not with the
Republic. Hence, the Republic cannot invoke Sec. 1(b) of Rule 57.
3) There was a prima facie case of fraud committed by Chuidian, justifying the
issuance of the writ of attachment.
4) The Sandiganbayan also adopted the Republic’s position that since it was
compelled to pay, through Philguarantee, the bank loans taken out by Chuidian,
the proceeds of which were fraudulently diverted, it is entitled to the issuance
of the writ of attachment to protect its rights as creditor.
5) Chuidian’s absence from the country was considered by the Sandiganbayan
to be the most compelling ground for the issuance of the writ.
Almost four (4) years after the issuance of the order of attachment, Chuidian
filed a motion to lift the attachment based on the following grounds:
1) He had returned to the Philippines, and considering that his absence was the
most compelling ground for the issuance of the writ, the latter should be lifted.
2) There was no evidence at all of initial fraud or subsequent concealment
except for the affidavit submitted by the PCGG Chairman whose statement is
hearsay since he was not a witness to the litigated incidents, was never
presented as a witness by the Republic and thus was not subject to cross-
examination.
3) He denies that he ever disposed of his assets to defraud the Republic, and
there is nothing in the records that support the Sandiganbayan’s erroneous
conclusion on the matter.
4) He was never a defendant in any other pending criminal action.
5) He was not guilty of fraud in contracting the debt or incurring the obligation.
L/C was not a product of fraudulent transactions but the result of court-
approved settlement.
6) Should the attachment be allowed to continue, he will be deprived of his
property without due process. The L/C was payment to Chuidian in exchange
for the assets he turned over to the Republic. Said assets had already been sold
by the Republic and cannot be returned to Chuidian should the government
succeed in depriving him of the proceeds of the L/C.
7) Finally, throughout the 4 years that the preliminary attachment had been in
effect, the gov’t had not set the case for hearing. The case itself should be
dismissed for laches owing to the Republic’s failure to prosecute its action for
an unreasonable length of time. Accordingly, the preliminary attachment, being
only a temporary or ancillary remedy, must be lifted and the PNB ordered to
immediately pay the proceeds of the L/C to Chuidian.
The Republic opposed e motion and contended that allowing the foreign
judgment as a basis for the lifting of the attachment would essentially amount to
an abdication of the jurisdiction of the Sandiganbayan to hear and decide the ill
gotten wealth cases lodged before it in deference to the judgment of foreign
courts.
The Sandganbayan denied petitioner’s motion and also the latter’s subsequent
MR.
ISSUE:
WON the writ of preliminary attachment should be lifted as a result of
petitioner’s return to the country and his averments that there was no fraud in
incurring the obligation
HELD: No
*Preliminary attachment issued upon a ground which is at the same time the
applicant’s cause of action. When the preliminary attachment is issued upon a
ground which is at the same time the applicant’s cause of action, the defendant
is not allowed to file a motion to dissolve the attachment under Section 13 of
Rule 57 by offering to show the falsity of the factual averments in the plaintiff’s
application and affidavits on which the writ was based – and consequently that
the writ based thereon had been improperly or irregularly issued – the reason
being that the hearing on such a motion for dissolution of the writ would be
tantamount to a trial of the merits of the action. In other words, the merits of
the action would be ventilated at a mere hearing of a motion, instead of at the
regular trial.
The merits of the action in which a writ of preliminary attachment has been
issued are not triable on a motion for dissolution of the attachment; otherwise
an applicant for the lifting of the writ could force a trial of the merits of the case
on a mere motion.
There are only two ways of quashing a writ of attachment: (a) by filing a
counterbound immediately; or (b) by moving to quash on the ground of
improper and irregular issuance. These grounds for the dissolution of an
attachment are fixed in Rule 57 of the Rules of Court and the power of the Court
to dissolve an attachment is circumscribed by the grounds specified therein.
Petitioner’s motion to lift attachment failed to demonstrate any infirmity or
defect in the issuance of the writ of attachment; neither did he file a
counterbond.
4. Republic of Indonesia v. Vinzon, G.R. No. 154705, June 26, 2003.
FACTS:
Petitioner, Republic of Indonesia entered into a Maintenance Agreement in
August 1995 with respondent James Vinzon, sole proprietor of Vinzon Trade
and Services. The Maintenance Agreement stated that respondent shall, for a
consideration, maintain specified equipment at the Embassy Main Building,
Embassy Annex Building and the Wisma Duta, the official residence of
petitioner Ambassador Soeratmin. The equipments covered by the Maintenance
Agreement are air conditioning units, generator sets, electrical facilities, water
heaters, and water motor pumps. It is likewise stated therein that the
agreement shall be effective for a period of four years and will renew itself
automatically unless cancelled by either party by giving thirty days prior
written notice from the date of expiry.
Petitioners claim that sometime prior to the date of expiration of the said
agreement, or before August 1999, they informed respondent that the renewal
of the agreement shall be at the discretion of the incoming Chief of
Administration, Minister Counsellor Azhari Kasim, who was expected to arrive
in February 2000. When Minister Counsellor Kasim assumed the position of
Chief of Administration in March 2000, he allegedly found respondents work
and services unsatisfactory and not in compliance with the standards set in the
Maintenance Agreement. Hence, the Indonesian Embassy terminated the
agreement in a letter dated August 31, 2000. Petitioners claim, moreover, that
they had earlier verbally informed respondent of their decision to terminate the
agreement. On the other hand, respondent claims that the aforesaid termination
was arbitrary and unlawful. Respondent filed a complaint against petitioners
(RTC) of Makati, petitioners filed a Motion to Dismiss, alleging that the Republic
of Indonesia, as a foreign sovereign State, has sovereign immunity from suit and
cannot be sued as a party-defendant in the Philippines. The said motion further
alleged that Ambassador Soeratmin and Minister Counsellor Kasim are
diplomatic agents as defined under the Vienna Convention on Diplomatic
Relations and therefore enjoy diplomatic immunity. In turn, respondent filed on
March 20, 2001, an Opposition to the said motion alleging that the Republic of
Indonesia has expressly waived its immunity from suit. He based this claim
upon the following provision in the Maintenance Agreement.
ISSUE:
Whether or not the Republic of Indonesia can be sued.
the second class referred to, has by erroneous interpretation infringed the
provisions of Articles 1902 and 1903 of the Civil Code.
It is, therefore, evidence that the State (GPI) is only liable, according to the
above quoted decisions of the Supreme Court of Spain, for the acts of its agents,
officers and employees when they act as special agents within the meaning of
paragraph 5 of Article 1903, supra, and that the chauffeur of the ambulance of
the General Hospital was not such an agent.

RULING: For the foregoing reasons, the judgment appealed from must be reversed,
without costs in this instance. Whether the Government intends to make itself
The Supreme Court on the matter ruled that the republic of Indonesia cannot be
legally liable for the amount of damages above set forth, which the plaintiff has
deemed to have waived its immunity to suit. The existence alone of a paragraph
sustained by reason of the negligent acts of one of its employees, be legislative
in a contract stating that any legal action arising out of the agreement shall be
enactment and by appropriating sufficient funds therefore, we are not called
settled according to the laws of the Philippines and by a specified court of the
upon to determine. This matter rests solely with the Legislature and not with
Philippines is not necessarily a waiver of sovereign immunity from suit. The
the courts.
aforesaid provision contains language not necessarily inconsistent with
sovereign immunity. On the other hand, such provision may also be meant to
apply where the sovereign party elects to sue in the local courts, or otherwise
waives its immunity by any subsequent act. The applicability of Philippine laws
must be deemed to include Philippine laws in its totality, including the principle
recognizing sovereign immunity. Hence, the proper court may have no proper
action, by way of settling the case, except to dismiss it.

The Court stated that the upkeep of its furnishings and equipment is still part
sovereign function of the State. A sovereign State does not merely establish a
diplomatic mission and leave it at that; the establishment of a diplomatic
mission encompasses its maintenance and upkeep. Hence, the State may enter
into contracts with private entities to maintain the premises, furnishings and
equipment of the embassy and the living quarters of its agents and officials. It is
therefore clear that petitioner Republic of Indonesia was acting in pursuit of a
sovereign activity when it entered into a contract with respondent for the
upkeep or maintenance of the air conditioning units, generator sets, electrical
facilities, water heaters, and water motor pumps of the Indonesian Embassy and
the official residence of the Indonesian ambassador. The Supreme Court grants
the petition and reversed the decision of the Court of Appeals.

` u a public official charged with some administrative or technical office who

can be held to the proper responsibility in the manner laid down by the law of
civil responsibility. Consequently, the trial court in not so deciding and in
sentencing the said entity to the payment of damages, caused by an official of

5. Department of Health v. Phil. Pharmawealth, G.R. No. 169304, March 13,
2007.
Facts: Phil. Pharmawealth, Inc. (respondent) is a domestic corporation engaged
in the business of manufacturing and supplying pharmaceutical products to
government hospitals in the Philippines.
On December 22, 1998, then Secretary of Health Alberto G. Romualdez, Jr.
issued Administrative Order (A.O.) No. 27, Series of 1998, outlining the
guidelines and procedures on the accreditation of government suppliers for
pharmaceutical products.
respondent submitted to petitioner DOH a request for the inclusion of
additional items in its list of accredited drug products. petitioner DOH, through
petitioner Antonio M. Lopez, chairperson of the pre-qualifications, bids and
awards committee, issued an Invitation for Bids for the procurement of 1.2
million units vials of Penicillin G Benzathine (Penicillin G Benzathine contract).
Despite the lack of response from petitioner DOH regarding respondent's
request for inclusion of additional items in its list of accredited products,
respondent submitted its bid for the Penicillin G Benzathine contract.
Respondent thus filed a complaint.
Petitioners subsequently filed a Manifestation and Motion (motion to dismiss)
praying for the outright dismissal of the complaint based on the doctrine of
state immunity.
Issue: Whether or not motion to dismiss based on the doctrine of state
immunity will prosper.
Ruling: The suability of a government official depends on whether the official
concerned was acting within his official or jurisdictional capacity, and whether
the acts done in the performance of official functions will result in a charge or
financial liability against the government. In the first case, the Constitution itself
assures the availability of judicial review, and it is the official concerned who
should be impleaded as the proper party.
In its complaint, respondent sufficiently imputes grave abuse of discretion
against petitioners in their official capacity. Since judicial review of acts alleged
to have been tainted with grave abuse of discretion is guaranteed by the
Constitution, it necessarily follows that it is the official concerned who should
be impleaded as defendant or respondent in an appropriate suit.
Moreover, part of the reliefs prayed for by respondent is the enjoinment of the
implementation, as well as the nullification of the award to YSS, the grant of
which may not be enforced against individual petitioners and their successors
except in their official capacities as officials of the DOH.
As regards petitioner DOH, the defense of immunity from suit will not avail
despite its being an unincorporated agency of the government, for the only
causes of action directed against it are preliminary injunction and mandamus .
Under Section 1, Rule 58 of the Rules of Court, preliminary injunction may be
directed against a party or a court, agency or a person. Moreover, the defense of
state immunity from suit does not apply in causes of action which do not seek to
impose a charge or financial liability against the State.
The rule that a state may not be sued without its consent, now embodied in
Section 3, Article XVI of the 1987 Constitution, is one of the generally accepted
principles of international law, which we have now adopted as part of the law of
the land.
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 suit is regarded as one against the state where satisfaction of the
judgment against the officials will require the state itself to perform a positive
act, such as the appropriation of the amount necessary to pay the damages
awarded against them
The rule, however, is not so all-encompassing as to be applicable under all
circumstances. Shauf v. Court of Appeals elucidates:
It is a different matter where the public official is made to account in his
capacity as such for acts contrary to law and injurious to the rights of plaintiff.
As was clearly set forth by Justice Zaldivar in Director of the Bureau of
Telecommunications, et al. v. Aligaen, etc., et al.,- Inasmuch as the State
authorizes only legal acts by its officers, unauthorized acts of government
officials or officers are not acts of the State, and an action against the officials or
officers by one whose rights have been invaded or violated by such acts, for the
protection of his rights, is not a suit against the State within the rule of
immunity of the State from suit. In the same tenor, it has been said that an
action at law or suit in equity against a State officer or the director of a State
department on the ground that, while claiming to act for the State, he violates or
invades the personal and property rights of the plaintiff, under an
unconstitutional act or under an assumption of authority which he does not
have, is not a suit against the State within the constitutional provision that the
State may not be sued without its consent.' The rationale for this ruling is that
the doctrine of state immunity cannot be used as an instrument for perpetrating
an injustice. (Emphasis and underscoring supplied)
Hence, the rule does not apply where the public official is charged in his official
capacity for acts that are unauthorized or unlawful and injurious to the rights of
others. Neither does it apply where the public official is clearly being sued not in
his official capacity but in his personal capacity, although the acts complained of
may have been committed while he occupied a public position
6. Professional Video v. TESDA, G.R. No. 155504, June 26, 2009.
FACTS:
In 1999, TESDA, an instrumentality of the government established under R.A.
No. 7796 (the TESDA Act of 1994) and attached to the DOLE to develop and
establish a national system of skills standardization, testing, and certification in
the country.
To fulfill this mandate, it sought to issue security-printed certification and/or
identification polyvinyl (PVC) cards to trainees who have passed the
certification process.
Professional Video Inc. (PROVI) signed and executed the “Contract Agreement
Project PVC ID Card issuance” for the provision of goods and services in the
printing and encoding of the PVC cards. PROVI was to provide TESDA with the
system and equipment compliant with the specifications defined in the
proposal. In return, TESDA would pay PROVI a specified sum of money after
TESDA’s acceptance of the contracted goods and services. PPOVI alleged that
TESDA has still an outstanding balance and still remains unpaid.
TESDA claims that it entered the Contract Agreement and Addendum in the
performance of its governmental function to develop and establish a national
system of skills standardization, testing, and certification; in the performance of
this governmental function, TESDA is immune from suit.
ISSUE:
Can TESDA be sued without its consent?
RULING:

TESDA, as an agency of the State, cannot be sued without its consent. The rule
that a state may not be sued without its consent is embodied in Section 3,
Article XVI of the 1987 Constitution and has been an established principle that
antedates this Constitution. It is as well a universally recognized principle of
international law that exempts a state and its organs from the jurisdiction of
another state.

The principle is based on the very essence of sovereignty, and on the practical
ground that there can be no legal right as against the authority that makes the
law on which the right depends. It also rests on reasons of public policy. That
public service would be hindered, and the public endangered, if the sovereign
authority could be subjected to law suits at the instance of every citizen and, 7. ATCI v. Echin, G.R. No. 178551, October 11, 2010.
consequently, controlled in the uses and dispositions of the means required for
ATCI v. Echin October 11, 2010 G.R. No. 178551 Liability of the
the proper administration of the government.
principal/employer and the recruitment/placement agency, Probationary
The proscribed suit that the state immunity principle covers takes on various employment
forms, namely: a suit against the Republic by name; a suit against an
SEPTEMBER 4, 2018
unincorporated government agency; a suit against a government agency
covered by a charter with respect to the agencys performance of governmental FACTS:
functions; and a suit that on its face is against a government officer, but where
the ultimate liability will fall on the government. In the present case, the writ of Josefina Echin was hired by petitioner ATCI Overseas Corporation in behalf of
attachment was issued against a government agency covered by its own charter. its principal-co-petitioner, the Ministry of Public Health of Kuwait, for the
position of medical technologist under a two-year contract, denominated as a
As discussed above, TESDA performs governmental functions, and the issuance MOA.
of certifications is a task within its function of developing and establishing a
system of skills standardization, testing, and certification in the country. From Under the MOA, all newly-hired employees undergo a probationary period of
the perspective of this function, the core reason for the existence of state one year.
immunity applies i.e., the public policy reason that the performance of
governmental function cannot be hindered or delayed by suits, nor can these Respondent was deployed on February 17, 2000 but was terminated from
suits control the use and disposition of the means for the performance of employment on February 11, 2001, she not having allegedly passed the
governmental functions. probationary period.

Respondent filed with the NLRC a complaint for illegal dismissal against ATCI as
the local recruitment agency, represented by Amalia Ikdal, and the Ministry, as
the foreign principal.

The Labor Arbiter held that respondent was illegally dismissed and accordingly
ordered petitioners to pay her US$3,600.00, representing her salary for the
three months unexpired portion of her contract.
The NLRC affirmed the Labor Arbiter’s decision.
Petitioners appealed to the CA, contending that their principal, the Ministry,
being a foreign government agency, is immune from suit and, as such, the
immunity extended to them; and that respondent was validly dismissed for her
failure to meet the performance rating within the one-year period as required
under Kuwaits Civil Service Laws.
The Philippines does not take judicial notice of foreign laws, hence, they must
not only be alleged; they must be proven. To prove a foreign law, the party
invoking it must present a copy thereof and comply with the Rules of Court.
These documents submitted by petitioners do not sufficiently prove that
respondent was validly terminated as a probationary employee under Kuwaiti
civil service laws.

The CA affirmed the NLRC Resolution
ISSUE:
Whether or not petitioner is liable for the illegal dismissal of respondent.
RULING:
Petitioner ATCI, as a private recruitment agency, cannot evade responsibility for
the money claims of OFWs which it deploys abroad by the mere expediency of
claiming that its foreign principal is a government agency clothed with
immunity from suit, or that such foreign principals liability must first be
established before it, as agent, can be held jointly and solidarily liable.
The imposition of joint and solidary liability is in line with the policy of the state
to protect and alleviate the plight of the working class. Verily, to allow
petitioners to simply invoke the immunity from suit of its foreign principal or to
wait for the judicial determination of the foreign principals liability before
petitioner can be held liable renders the law on joint and solidary liability
inutile.
Respecting Ikdal’s joint and solidary liability as a corporate officer, the same is
in order too following the express provision of R.A. 8042:
The liability of the principal/employer and the recruitment/placement agency
for any and all claims under this section shall be joint and several. This
provision shall be incorporated in the contract for overseas employment and
shall be a condition precedent for its approval. The performance bond to be
filed by the recruitment/placement agency, as provided by law, shall be
answerable for all money claims or damages that may be awarded to the
workers. If the recruitment/placement agency is a juridical being, the corporate
officers and directors and partners as the case may be, shall themselves be
jointly and solidarily liable with the corporation or partnership for the aforesaid
claims and damages.
The petition is DENIED

As to petitioners contentions that Philippine labor laws on probationary

employment are not applicable since it was expressly provided in respondents
employment contract, which she voluntarily entered into, that the terms of her
engagement shall be governed by prevailing Kuwaiti Civil Service Laws and
Regulations as in fact POEA Rules accord respect to such rules, customs and
practices of the host country, the same was not substantiated.

It is hornbook principle, however, that the party invoking the application of a

foreign law has the burden of proving the law, under the doctrine of processual
presumption which, in this case, petitioners failed to discharge.

8. Arigo v. Swift, G.R. No. 206510, September 16, 2014.
Arigo v. Swift
FACTS:
The name “Tubbataha” came from the Samal (seafaring people of southern
Philippines) language which means “long reef exposed at low tide.” Tubbataha
is composed of two huge coral atolls — the north atoll and the south atoll — and
the Jessie Beazley Reef, a smaller coral structure about 20 kilometers north of
the atolls. The reefs of Tubbataha and Jessie Beazley are considered part of
Cagayancillo, a remote island municipality of Palawan.
August 11, 1988 — Tubbataha was declared a National Marine Park
(Proclamation No. 306) issued by President Corazon Aquino.
1993 — Tubbataha was inscribed by UNESCO as a World Heritage Site.
April 6, 2010 — Congress passed Tubbataha Reefs Natural Park (TRNP) Act of
2009 (RA No. 10067) “to ensure the protection and conservation of the globally
significant economic, biological, sociocultural, educational and scientific values
of the Tubbataha Reefs into perpetuity for the enjoyment of present and future
generations.”
Under the “no-take” policy, entry into the waters of TRNP is strictly regulated
and many human activities are prohibited and penalized or fined, including
fishing, gathering, destroying and disturbing the resources within the TRNP.
The law likewise created the Tubbataha Protected Area Management Board
(TPAMB) which shall be the sole policy-making and permit-granting body of the
TRNP.
USS Guardian is an Avenger-class mine countermeasures ship of the US Navy.
December 2012 — the US Embassy in the Philippines requested diplomatic
clearance for the said vessel “to enter and exit the territorial waters of the
Philippines and to arrive at the port of Subic Bay for the purpose of routine ship
replenishment, maintenance, and crew liberty.”
January 6, 2013 — the ship left Sasebo, Japan.
January 13 — arrived in Subic Bay after a brief stop for fuel in Okinawa, Japan.
January 15 — the USS Guardian departed Subic Bay for its next port of call in
Makassar, Indonesia.
January 17 — at 2:20 a.m. while transiting the Sulu Sea, the ship ran aground on
the northwest side of South Shoal of the Tubbataha Reefs, about 80 miles east-
southeast of Palawan. No one was injured in the incident, and there have been
no reports of leaking fuel or oil.
January 20 — U.S. 7th Fleet Commander, Vice Admiral Scott Swift, expressed
regret for the incident in a press statement.
February 4 — US Ambassador to the Philippines Harry K. Thomas, Jr., in a
meeting at the DFA “reiterated his regrets over the grounding incident and
assured Foreign Affairs Secretary Albert F. del Rosario that the United States
will provide appropriate compensation for damage to the reef caused by the
ship.”
March 30, 2013 — the US Navy-led salvage team had finished removing the last
piece of the grounded ship from the coral reef.

April 17 — petitioners on their behalf and in representation of their respective
sector/organization and others, including minors or generations yet unborn,
filed the present petition.
Petitioners claim that the grounding, salvaging and post- salvaging operations of
the USS Guardian cause and continue to cause environmental damage of such
magnitude as to affect the provinces of Palawan, Antique, Aklan, Guimaras,
Iloilo, Negros Occidental, Negros Oriental, Zamboanga del Norte, Basilan, Sulu,
and Tawi-Tawi, which events violate their constitutional rights to a balanced
and healthful ecology. They also seek a directive from the SC for the institution
of civil, administrative and criminal suits for acts committed in violation of
environmental laws and regulations in connection with the grounding incident.
Only the Philippine respondents filed their comment, asserting that (1) the
grounds relied upon for the issuance of a TEPO or writ of Kalikasan have
become fait accompli as the salvage operations on the USS Guardian were
already completed; (2) the petition is defective in form and substance; (3) the
petition improperly raises issues involving the VFA between the Republic of the
Philippines and the United States of America; and (4) the determination of the
extent of responsibility of the US Government as regards the damage to the
Tubbataha Reefs rests exclusively with the executive branch.
ISSUES/RULING:
Petitioner’s Locus Standi
There is no dispute on the legal standing of petitioners to file the present
petition. Locus standi is “a right of appearance in a court of justice on a given
question.” Specifically, it is “a party’s personal and substantial interest in a case
where he has sustained or will sustain direct injury as a result” of the act being
challenged, and “calls for more than just a generalized grievance.
In the landmark case of Oposa v. Factoran, Jr., the “public right” of citizens to “a
balanced and healthful ecology which, for the first time in our constitutional
history, is solemnly incorporated in the fundamental law.” We declared that the
right to a balanced and healthful ecology need not be written in the Constitution
for it is assumed, like other civil and political rights guaranteed in the Bill of
Rights, to exist from the inception of mankind and it is an issue of
transcendental importance with intergenerational implications. Such right
carries with it the correlative duty to refrain from impairing the environment.
On the novel element in the class suit filed by the petitioners minors in Oposa,
this Court ruled that not only do ordinary citizens have legal standing to sue for
the enforcement of environmental rights, they can do so in representation of
their own and future generations.
The liberalization of standing first enunciated in Oposa, insofar as it refers to
minors and generations yet unborn, is now enshrined in the Rules which allows
the filing of a citizen suit in environmental cases. The provision on citizen suits
in the Rules “collapses the traditional rule on personal and direct interest, on
the principle that humans are stewards of nature.”
Jurisdiction of the SC over the US respondents who did not submit any pleading
or manifestation in this cas
The immunity of the State from suit, known also as the doctrine of severeign
immunity or non-suability of the State is expressly provided in the Article XVI of
the 1987 Constitution which states: Sec. 3. The State may not be sued without
its consent.
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 state for
acts allegedly performed by them in the discharge of their duties.
In the case of Minucher v. CA, the precept that a State cannot be sued in the
courts of a foreign state is a long-standing rule of customary international law
then closely identified with the personal immunity of a foreign sovereign from
suit and, with the emergence of democratic states, made to attach not just to the
person of the head of state, or his representative, but also distinctly to the state
itself in its sovereign capacity. If the acts giving rise to a suit are those of a
foreign government done by its foreign agent, although not necessarily a
diplomatic personage, but acting in his official capacity, the complaint could be
barred by the immunity of the foreign sovereign from suit without its consent.
Suing a representative of a state is believed to be, in effect, suing the state itself.
The proscription is not accorded for the benefit of an individual but for the
State, in whose service he is, under the maxim — par in parem, non habet
imperium — that all states are sovereign equals and cannot assert jurisdiction
over one another. The implication, in broad terms, is that if the judgment
against an official would require the state itself to perform an affirmative act to
satisfy the award, such as the appropriation of the amount needed to pay the
damages decreed against him, the suit must be regarded as being against the
state itself, although it has not been formally impleaded.
The privilege is not an immunity from the observance of the law of the
territorial sovereign or from ensuing legal liability; it is, rather, an immunity
from the exercise of territorial jurisdiction.
In USA v. Judge Guinto, this traditional rule of State immunity which exempts a
State from being sued in the courts of another State without the former’s
consent or waiver has evolved into a restrictive doctrine which distinguishes
sovereign and governmental acts (jure imperii) from private, commercial and
proprietary acts (jure gestionis). Under the restrictive rule of State immunity,
State immunity extends only to acts jure imperii. 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.
Limitations of the State immunity principle was discussed in Shauf v. CA. It is a
different matter where the public official is made to account in his capacity as
such for acts contrary to law and injurious to the rights of plaintiff. The doctrine
of immunity from suit will not apply and may not be invoked where the public
official is being sued in his private and personal capacity as an ordinary citizen.
The cloak of protection afforded the officers and agents of the government is
removed the moment they are sued in their individual capacity. This situation
usually arises where the public official acts without authority or in excess of the
powers vested in him. It is a well-settled principle of law that a public official
may be liable in his personal private capacity for whatever damage he may have
caused by his act done with malice and in bad faith, or beyond the scope of his
authority or jurisdiction.
In this case, the US respondents were sued in their official capacity as
commanding officers of the US Navy who had control and supervision over the
USS Guardian and its crew. The alleged act or omission resulting in the
unfortunate grounding of the USS Guardian on the TRNP was committed while
they were performing official military duties. Considering that the satisfaction
of a judgment against said officials will require remedial actions and
appropriation of funds by the US government, the suit is deemed to be one
against the US itself. The principle of State immunity therefore bars the exercise
of jurisdiction by this Court over the persons of respondents Swift, Rice and
Robling.
United Nations Convention on the Law of the Sea
Article 30 — Noncompliance by warships with the laws and regulations of the
coastal State
If any warship does not comply with the laws and regulations of the coastal
State concerning passage through the territorial sea and disregards any request
for compliance therewith which is made to it, the coastal State may require it to
leave the territorial sea immediately.
Article 31 — Responsibility of the flag State for damage caused by a warship or
other government ship operated for noncommercial purposes
The flag State shall bear international responsibility for any loss or damage to
the coastal State resulting from the noncompliance by a warship or other
government ship operated for noncommercial purposes with the laws and
regulations of the coastal State concerning passage through the territorial sea or
with the provisions of this Convention or other rules of international law.
Article 32 — Immunities of warships and other government ships operated for
noncommercial purposes
With such exceptions as are contained in subsection A and in Articles 30 and 31,
nothing in this Convention affects the immunities of warships and other
government ships operated for noncommercial purposes.
A foreign warship’s unauthorized entry into our internal waters with resulting
damage to marine resources is one situation in which the above provisions may
apply. But what if the offending warship is a nonparty to the UNCLOS, as in this
case, the US?
An overwhelming majority — over 80% — of nation states are now members of
UNCLOS, but despite this the US, the world’s leading maritime power, has not
ratified it.
Nonmembership in the UNCLOS does not mean that the US will disregard the
rights of the Philippines as a Coastal State over its internal waters and
territorial sea. We thus expect the US to bear “international responsibility”
under Art. 31 in connection with the USS Guardian grounding which adversely
affected the Tubbataha reefs. Indeed, it is difficult to imagine that our long-time
ally and trading partner, which has been actively supporting the country’s
efforts to preserve our vital marine resources, would shirk from its obligation to
compensate the damage caused by its warship while transiting our internal
waters. Much less can we comprehend a Government exercising leadership in
international affairs, unwilling to comply with the UNCLOS directive for all
nations to cooperate in the global task to protect and preserve the marine
environment as provided in Article 197, viz.:
Article 197— Cooperation on a global or regional basis
States shall cooperate on a global basis and, as appropriate, on a regional basis,
directly or through competent international organizations, in formulating and
elaborating international rules, standards and recommended practices and
procedures consistent with this Convention, for the protection and preservation
of the marine environment, taking into account characteristic regional features.
In fine, the relevance of UNCLOS provisions to the present controversy is
beyond dispute. Although the said treaty upholds the immunity of warships
from the jurisdiction of Coastal States while navigating the latter’s territorial
sea, the flag States shall be required to leave the territorial sea immediately if
they flout the laws and regulations of the Coastal State, and they will be liable
for damages caused by their warships or any other government vessel operated
for noncommercial purposes under Article 31.
Petitioners’ argument — Waiver of immunity from Suit found in the VFA.
The SC is not persuaded. The VFA is an agreement which defines the treatment
of United States troops and personnel visiting the Philippines to promote
“common security interests” between the US and the Philippines in the region. It
provides for the guidelines to govern such visits of military personnel, and
further defines the rights of the United States and the Philippine government in
the matter of criminal jurisdiction, movement of vessel and aircraft, importation
and exportation of equipment, materials and supplies.
As it is, the waiver of State immunity under the VFA pertains only to criminal
jurisdiction and not to special civil actions such as the present petition for
issuance of a writ of Kalikasan.
A ruling on the application or non-application of criminal jurisdiction provisions
of the VFA to US personnel who may be found responsible for the grounding of
the USS Guardian, would be premature and beyond the province of a petition for
a writ of Kalikasan. SC also found it unnecessary at this point to determine
whether such waiver of State immunity is indeed absolute. In the same vein, the
SC cannot grant damages which have resulted from the violation of
environmental laws. The Rules allows the recovery of damages, including the
collection of administrative fines under RA No. 10067, in a separate civil suit or
that deemed instituted with the criminal action charging the same violation of
an environmental law.
The SC agrees with respondents (Philippine officials) in asserting that this
petition has become moot in the sense that the salvage operation sought to be
enjoined or restrained had already been accomplished when petitioners sought
recourse from this Court. But insofar as the directives to Philippine respondents
to protect and rehabilitate the coral reef structure and marine habitat adversely
affected by the grounding incident are concerned, petitioners are entitled to
these reliefs notwithstanding the completion of the removal of the USS Guardian
from the coral reef.
However, the SC is mindful of the fact that the US and Philippine governments
both expressed readiness to negotiate and discuss the matter of compensation
for the damage caused by the USS Guardian. The US Embassy has also declared
it is closely coordinating with local scientists and experts in assessing the extent
of the damage and appropriate methods of rehabilitation.
Exploring avenues for settlement of environmental cases is not proscribed by
the Rules. Mediation and settlement are available for the consideration of the
parties, and which dispute resolution methods are encouraged by the court.
The Court takes judicial notice of a similar incident in 2009 when a guided-
missile cruiser, the USS Port Royal, ran a ground about half a mile off the
Honolulu Airport Reef Runway and remained stuck for four days. After
spending $6.5 million restoring the coral reef, the US government was reported
to have paid the State of Hawaii $8.5 million in settlement over coral reef
damage caused by the grounding.
To underscore that the US government is prepared to pay appropriate
compensation for the damage caused by the USS Guardian grounding, the US
Embassy in the Philippines has announced the formation of a US
interdisciplinary scientific team which will “initiate discussions with the
Government of the Philippines to review coral reef rehabilitation options in
Tubbataha, based on assessments by Philippine-based marine scientists.” The
US team intends to “help assess damage and remediation options, in
coordination with the Tubbataha Management Office, appropriate Philippine
government entities, nongovernmental organizations, and scientific experts
from Philippine universities.”

A rehabilitation or restoration program to be implemented at the cost of the

violator is also a major relief that may be obtained under a judgment rendered
in a citizens’ suit under the Rules.

The Court defers to the Executive Branch on the matter of compensation and
rehabilitation measures through diplomatic channels. Resolution of these issues
impinges on our relations with another State in the context of common security
interests under the VFA. It is settled that “[t]he conduct of the foreign relations
of our government is committed by the Constitution to the executive and
legislative — ‘the political’ — departments of the government, and the propriety
of what may be done in the exercise of this political power is not subject to
judicial inquiry or decision.”

On the other hand, the SC cannot grant the additional reliefs prayed for in the
petition to order a review of the VFA and to nullify certain immunity provisions
thereof.

DISPOSITIVE PORTION:

WHEREFORE, the petition for the issuance of the privilege of the Writ
of Kalikasan is hereby DENIED