POSSIBLE BAR QUESTIONS IN POLITICAL AND PUBLIC INTERNATIONAL LAW

Atty. Victoria V. Loanzon (January 9, 2022)

1. SEPARATION OF POWERS
Question: KMU instituted an action which called upon the Court to determine the validity
of the Social Security System premium hike. Upon recommendation of the Social Security
Commission, the President approved (1) the Social Security System members' contribution
rate from 10.4% to 11%; and (2) the maximum monthly salary credit from ₱15,000.00 to
₱16,000.00. The employer would pay a contribution rate of 7.37% (from 7.07%); the
employee, 3.63% (from 3.33%). They assailed the actions of the President, the Social
Security Commission, and the Social Security System. The government moved to dismiss on
the following grounds:
(1) The President is immune from suit.
(2) There was valid delegation of power to SSC and SSS.
(3) Petitioner did not exhaust administrative remedies.
Rule on the objections of the government:
Answer: The objections must be sustained.
(1) The president cannot be charged with any suit, civil or criminal in nature, during his
or her incumbency in office. This is in line with the doctrine of the president's
immunity from suit. The president is the head of the executive branch, a co-equal of
the judiciary under the Constitution. His or her prerogative is entitled to respect
from other branches of government. Inter-branch courtesy is but a consequence of
the doctrine of separation of powers.
(2) By putting in issue not only the validity of the exercise of the delegated power, but
the petitioner also collaterally attacks the validity of the Social Security Act's
provisions. Collateral attacks on a presumably valid law are not allowed. Unless a
law, rule, or act is annulled in a direct proceeding, it is presumed valid. what are
needed for a valid delegation are:
(1) the completeness of the statute making the delegation; and
(2) the presence of a sufficient standard.
The Social Security Act is complete in its terms; it also contains a sufficient standard
for the Social Security Commission to fix the monthly contribution rate and the
minimum and maximum monthly salary credits.
(3)A case is ripe for adjudication when the challenged governmental act is a completed
action such that there is a direct, concrete, and adverse effect on the petitioner.
Courts may only take cognizance of a case or controversy if the petitioner has
exhausted all remedies available to it under the law. The doctrine ensures that the
administrative agency exercised its power to its full extent, including its authority to
correct or reconsider its actions. It would, thus, be premature for courts to take
cognizance of the case prior to the exhaustion of remedies, not to mention it would
violate the principle of separation of powers. (KMU v. President Aquino, G.R. No.
210500, April 02, 2019, Leonen, J.)

2. INHERENT POWERS OF THE STATE: POLICE POWER

Question: Claiming that Boracay has become a cesspool, President Duterte first made
public his plan to shut it down during a business forum held in Davao sometime February

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2018.  Proclamation No. 475 called for the total closure of Boracay would be for a
maximum period of six months starting April 26, 2018. 
Petitioners argue that Proclamation No. 475 is an invalid exercise of legislative powers it
partakes of a law the issuance of which is not vested in the President. As such, it must be
struck down for being the product of an invalid exercise of legislative power. Rule on the
claim of the petitioners.
Answer: The claim is not valid. Proclamation No. 475 must be upheld for being in the
nature of a valid police power measure. As defined, it consists of (1) imposition or restraint
upon liberty or property, (2) in order to foster the common good.
Police power is not capable of exact definition but has been purposely, veiled in general
terms to underscore its all-comprehensive embrace.  The assailed governmental measure is
within the scope of police power cannot be disputed. The motivating factor in the issuance
of Proclamation No. 475 is without a doubt the interest of the public in general. Police
power constitutes an implied limitation to the Bill of Rights, and that even liberty itself, the
greatest of all rights, is subject to the far more overriding demands and requirements of the
greater number. (Zabal v. President Duterte, G.R. No. 238467, February 12, 2019)

3. INHERENT POWERS OF THE STATE: POWER TO TAX

Question: The Quezon City government assessed real property taxes on MWSS. The MWSS
challenged the assessment arguing that as a government-owned and controlled-
corporation it is exempt from payment of real property taxes. Is the legal argument of
MWSS correct?
Answer: The legal argument of MWSS is subject to qualification. In MWSS v. Quezon City
(G.R. No. 194388, November 7. 2018, Leonen, J.), the Court held that a government
instrumentality exercising corporate powers is not liable for the payment of real property
taxes on its properties unless it is alleged and proven that the beneficial use of its properties
been extended to a taxable person.
Under Section 234(a), the general rule is that any real property owned by the Republic, or
its political subdivisions is exempt from the payment of real property tax "except when the
beneficial use thereof has been granted, for consideration or otherwise, to a taxable
person."
Under the beneficial use doctrine, it is the lessee of the government which has the burden
of paying the real property taxes assessed by the local government on the subject property.
(GSIS v. City Treasurer Acevedo of Manila, G.R. No. 180291, July 27, 2010)

4. INHERENT POWERS OF THE STATE: POWER OF EMINENT DOMAIN

Question: On August 9, 2005, after a series of negotiations, Jose Gamir-Consuelo Diaz
Heirs, Association, Inc. (“JG-CD Heirs”) and the Republic of the Philippines, through the
Department of Public Works and Highways (‘DPWH”), executed a Deed of Absolute
Sale where it was agreed that JG-CD Heirs would sell its 1,836 square meter property to
petitioner in consideration of P275,099.24. The property was eventually registered in
petitioner's name under TCT No. T-390639 after respondent's receipt of the full
consideration. The said parcel of land forms part of Sta. Ana Avenue, a national road, in
Davao City. After the perfection of the transaction, JG-CD Heirs demanded payment of
interest because the DPWH occupied the property since 1957. DPWH refused to pay the

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interest as demanded by JG-CD Heirs. Is JG-CD Heirs entitled to payment of interest from
1957 up to 2005?
Answer: Jose Gamir-Consuelo Diaz Heirs, Association, Inc. is not entitled to payment of
interest. The government did not exercise its power of eminent domain. In order for the
State to exercise its power of eminent domain, the following requirements must be present:
(a) that it is for a particular purpose; and (b) that just compensation is paid to the property
owner. Essentially, expropriation is an involuntary sale where the landowner is practically
an unwilling seller. The parties are bound by their sale contract transferring the property
without the condition applicable in expropriation cases. In choosing to reduce their
agreement into writing, they are deemed to have done so meticulously and carefully,
employing specific - frequently, even technical - language as are appropriate to their
context. (Republic v. Jose Gamir-Consuelo Diaz Heirs, Association, Inc., G.R. No. 218732,
November 12, 2018)

5. DUE PROCESS
Question: A criminal complaint was filed by the Office of the Ombudsman before the
Sandiganbayan against Atty. Labay for two counts of violation of Article 217 of the Revised
Penal Code. Accused Labay moved for reconsideration since he was not aware of the fact-
finding investigation conducted by the Office of the Ombudsman because he never received
a copy of the affidavit of complaint and its attachments. The same was, however, denied.
He then instituted an action before the Supreme Court to enjoin the Sandiganbayan the
criminal proceedings and remand the matter to the Office of the Ombudsman for
reinvestigation. Decide with reason.
Answer: The petition of Atty. Labay should be granted because his constitutional right to
due process was violated when he was not furnished a copy of the complaint affidavit and
its attachments during the preliminary investigation.
Section 1, Article III of the 1987 Constitution guarantees the right of every person to due
process before they are deprived of their life, liberty, or property. Due process in criminal
prosecutions is further emphasized under Section 14, Article III which provides that no
person shall be held to answer for a criminal offense without due process of law. The same
provision also states that the accused shall be presumed innocent until the contrary is
proved and shall enjoy the right to be informed of the nature and cause of the accusation
against him.
Criminal due process requires that the procedure established by law, or the rules be
followed to assure that the State makes no mistake in taking the life or liberty except that of
the guilty. All the necessary measures must be taken to guarantee procedural due process
throughout all stages of a criminal prosecution until rendition of judgment. (Labay v.
Sandiganbayan, G.R. No. 235937, July 23, 2018)

6. EQUAL PROTECTION CLAUSE

Question: When Zomer Development failed to pay its indebtedness, International
Exchange Bank foreclosed on the properties. A Notice of Extra-judicial Foreclosure Sale
was posted and published on October 18, 2001, informing the public that the properties
would be sold at an auction. When the auction was conducted, International Exchange Bank
emerged as the highest bidder. Thus, the Sheriff issued to it Certificates of Sale on

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November 19, 2001. The Certificates of Sale provided for a period of redemption of twelve
months from registration, "or sooner and/or later, as provided for under applicable laws.
Zomer Development filed a complaint for Declaration of Nullity of Notice of Sale, Certificate
of Sale  and   TCT because Section 47, R.A. No. 8791 is unconstitutional. It argued that the
subject provision violated its right to equal protection since the law provides a shorter
period for redemption of three (3) months or earlier to juridical entities compared to the
one (1) year redemption period given to natural persons. This discrimination, it argued,
gave "undue advantage to lenders who are non-banks."  Is the argument of Zomer
Development tenable?
Answer: The argument of Zomer Development is untenable. The difference in the
treatment of juridical persons and natural persons was based on the nature of the
properties foreclosed — whether these are used as residence, for which the more liberal
one-year redemption period is retained, or used for industrial or commercial purposes, in
which case a shorter term is deemed necessary to reduce the period of uncertainty in the
ownership of property and enable mortgagee banks to dispose sooner of these acquired
assets. (Zomer Development Company, Inc. v. Court of Appeals, G.R. 194461, January 7, 2020,
Leonen, J.)

7. THE STATE AND THE BILL OF RIGHTS

Question: May the constitutional guaranty of the equal protection clause be invoked
against a private entity?
Answer: No, the constitutional guaranty of the equal protection clause may not be invoked
against a private entity in the absence of governmental interference, the liberties
guaranteed by the Constitution cannot be invoked. Put differently, the Bill of Rights is not
meant to be invoked against acts of private individuals. Indeed, the United States Supreme
Court, in interpreting the Fourteenth Amendment, which is the source of our equal
protection guarantee, is consistent in saying that the equal protection erects no shield
against private conduct, however discriminatory or wrongful. Private actions, no matter
how egregious, cannot violate the equal protection guarantee. (cited in Yrasequi v. NLEC,
G.R. No. 168081, October 17, 2008)

8. RIGHTS DURING EXPROPRIATION

Question: Upon request of the Department of Public Works and Highways (“DPWH”),
Ortigas and Company reserved certain portions of its subdivision for road expansion of the
government. When asked to pay, DPWH refused to pay by invoking Section 50 of
Presidential Decree No. 1529 or the Property Registration Decree insisting that the portion
used for the road widening for the C-5 flyover project is construed as a donation. Ortigas
and Company argued that the portion of its property taken by DPWH has ceased to be
private in nature and government has allowed the public to use the same. It therefore filed
a civil suit against DPWH seeking compensation over its property. Will the case filed by
Ortigas and Company prosper? Why?
Answer: Yes, the case filed by Ortigas and Company against DPWH will prosper. As held in
Republic v. Castellvi, a property owner is entitled to just compensation when government
takes his property for a public purpose.
The intention to take the property for public use was obvious from the completion of the
road widening for the C-5 flyover project and from the fact that the general public was

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already taking advantage of the thoroughfare. The right to compensation under Article III,
Section 9 of the Constitution was put in place to protect the individual from and restrain
the State’s sovereign power of eminent domain, which is the government’s power to
condemn private properties within its territory for public use or purpose. (Republic v.
Ortigas and Company, G.R. No. 171496, March 03, 2014, Leonen, J.)

9. RIGHT AGAINST UNREASONABLE SEARCHES AND SEIZURES

Question: The trial court found Gilbert Sebilleno guilty beyond reasonable doubt of
violating Article 11, Section 5 of Republic Act No. 9165, otherwise known as the
Comprehensive Dangerous Drugs Act of 2002. The conviction was affirmed by the Court of
Appeals. Sebilleno moved for his acquittal. He argued that the prosecution failed to prove
an unbroken chain of custody because the inventory was done in the Police station, and the
copy was neither signed by accused-appellant nor his representative or counsel. Likewise,
there were no signatures from representatives from the media and the Department of
Justice (DOJ), or any elected public official.
Is Sebilleno entitled to acquittal?
Answer: Yes, Sebilleno is entitled to acquittal. The elements to sustain convictions for
violation of Section 5 of the Comprehensive Dangerous Drugs Act, or the illegal sale of
dangerous drugs are "(1) proof that the transaction or sale took place and (2) the
presentation in court of the corpus delicti or the illicit drug as evidence." The prosecution
must prove with moral certainty the corpus delicti. Sadly, the prosecutor failed to discharge
this burden.
This requires the performance of two (2) actions: physical inventory and photographing.
Section 21(l) is specific as to when and where these actions must be done. As to when, it
must be "immediately after seizure and confiscation." As to where, it depends on whether
the seizure was supported by a search warrant. If a search warrant was served, the
physical inventory and photographing must be done at the exact same place that the
search warrant is served. In case or warrantless seizures, these actions must be done
at the nearest police station or at the nearest office of the apprehending officer/team.
whichever is practicable. (People v. Sebilleno, G.R. No. 221457, January 13, 2020, Leonen,
J.)

10. WARRANTLESS SEARCH

Question: Does the mere reception of a text message from an anonymous person
suffice to create probable cause that enables the authorities to conduct an extensive
and intrusive search without a search warrant?
Answer: A tip is considered hearsay “no matter how reliable it may be. (People v. Sapla,
G.R. No. 244045, June 16, 2020)
Question: May the police officers justify a search of a moving vehicle based on a tip to
apprehend a suspect?
Answer: A search conducted based on a tip, being hearsay, does not fall under search of a
moving vehicle because the target of the search was not the jeepney boarded by the accused
but rather the target was the accused himself. Based on the testimony of the police officers,
their actual target was the person fitting the description provided by the tip which
corresponded to the accused and not the vehicle. (ibid.)

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Question: Can police officers justify the search on the accused as consented search
under the foregoing facts?
Answer: The for the reason that based on the testimony of the police officers, the accused
hesitated when he was requested to open the blue sack. This only means that he did not
give his consent and that his compliance was vitiated by the presence of the police.
In deciding to acquit the accused, the Supreme Court emphasized the need to adhere to
strict standards set by the Constitution otherwise “A battle waged against illegal drugs that
tramples on the rights of the people is not a war on drugs; it is a war against the people.”
(ibid.)

11. CONGRESSIONAL INQUIRY

Question: May a foreign bank enjoin the Senate from conducting a congressional inquiry in
aid of legislation due to a pending criminal case instituted against its officers for the same
subject matter of the inquiry and may result in a recommendation for their prosecution by
the appropriate government agencies?
Answer: No, the Court may not enjoin the Senate from proceeding with its congressional
inquiry. In a congressional hearing, the officers of the foreign bank neither stand as accused
in a criminal case nor will they be subjected by the Senate Committee to any penalty by
reason of their testimonies. Hence, they cannot altogether decline appearing before the
Senate Committee, although they may invoke the right against self-incrimination when a
question calling for an incriminating answer is propounded. Except only when it exercises
the power to punish for contempt, the Senate Committee cannot penalize violators even if
there is overwhelming evidence of criminal culpability. Other than proposing or initiating
amendatory or remedial legislation, the Senate Committee can only recommend measures
to address or remedy whatever irregularities may be unearthed during the investigation,
although it may include in its Report a recommendation for the criminal indictment of
persons who may appear liable. At best, the recommendation, along with the evidence,
contained in the Committee Report would be persuasive, but it is still up to the
prosecutorial agencies and the courts to determine the liabilities of the offender. (Standard
Chartered Bank (Philippine Branch) v. Senate Committee on Banks, Financial Institutions and
Currencies, G.R. NO. 167173, December 27, 2007)

12. COMMANDER-IN-CHIEF POWERS OF THE PRESIDENT

Question: The President declared martial law in Mindanao and suspended the privilege of
the writ of habeas corpus for 90 days. Can the Congress revoke the exercise of the
Commander-in-Chief powers of the President?
Answer: Yes, the Congress in a joint session revoke the proclamation of martial law and
the suspension of the privilege of the writ of habeas corpus because the 90-day period is
beyond the 60-day period prescribed in Section 18 of Article VII. (Padilla v. Congress, G.R.
No. 231671, July 25, 2017)

13. POWER OF JUDICIAL REVIEW

Question: Claiming that he was “a concerned Filipino citizen and taxpayer” and he had “not
suffered any personal injury” out of the controversy, Petitioner asked the SC to
“prohibit” the NTC from complying with Speaker Cayetano and Alvarez’ letter urging the
agency to grant ABS-CBN provisional authority to operate while Congress has yet to decide

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on the latter’s franchise renewal. He averred that the letter violated the doctrine of
separation of powers of the state and invoked the high court’s role in the system of checks
and balances. Did the petitioner have legal standing to file the petition?
Answer:  No, Petitioner has no legal standing to sue. The petitioner is too distant, his
interest is too inchoate and speculative for the Court to take cognizance of the case. (Gadon
v. NTC, June 20, 2020)

14. Rule Making Powers of the Supreme Court

Question: Petitioner was sentenced to die by way of lethal injection. He sought the
issuance of a Temporary Restraining Order to move the date of his execution. The
Department of Justice opposed the petition since the Decision had become final and
executory, its execution already entered the exclusive ambit of authority of the executive
authority. The issuance of the TRO may be construed as trenching on that sphere of
executive authority. Did the Supreme Court lose jurisdiction over execution of the decision
against Echegaray? Why?
Answer: The rule on finality of judgment cannot divest Supreme Court of its jurisdiction to
execute and enforce the same judgment. There is a difference between the jurisdiction of
the court to execute its judgment and its jurisdiction to amend, modify or alter the same.
The former continues even after the judgment has become final for the purpose of
enforcement of judgment; the latter terminates when the judgment becomes final.
In accord with this unquestioned jurisdiction, the Court has promulgated rules concerning
pleading, practice, and procedure which, among others, spelled out the rules on
execution of judgments. These rules are all predicated on the assumption that courts
have the inherent, necessary, and incidental power to control and supervise the
process of execution of their decisions. Rule 39 governs execution, satisfaction, and
effects of judgments in civil cases. Rule 120 governs judgments in criminal cases. This is a
constitutional prerogative vested in the Supreme Court to ensure its independence. The
rules should not diminish, increase, or modify substantive rights. (Echegaray v. Secretary of
Justice, G.R. No. 132601, January 19. 1999)

15. QUALIFICATIONS, DISQUALIFICATIONS AND SELECTION OF THE PRESIDENT,

SENATOR, MEMBERS OF THE HOUSE OF REPRESENTATIVES, JUSTICES AND JUDGES,
THE OMBUDSMAN AND MEMBERS OF THE CONSTITUTIONAL COMMISSIONS
Question: May Secretary Lopez who was issued an ad interim appointment by the
President continue to discharge her duties after the Commission on Appointments rejected
her nomination?
Answer: No, Secretary Lopez can no longer discharge her duties despite having issued an
ad interim appointment by the President once the Commission on Appointments rejected
her nomination. An ad interim appointment is a permanent appointment because it takes
effect immediately and can no longer be withdrawn by the President once the appointee
has qualified into office. The fact that it is subject to confirmation by the Commission on
Appointments does not alter its permanent character. The second paragraph of Section 16,
Article VII of the Constitution provides as follows: "The President shall have the power to
make appointments during the recess of the Congress, whether voluntary or compulsory,
but such appointments shall be effective only until disapproval by the Commission on
Appointments or until the next adjournment of the Congress." (Emphasis supplied) Thus,

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the ad interim appointment remains effective until such disapproval or next adjournment,
signifying that it can no longer be withdrawn or revoked by the President.  (Matibag v.
Benipayo, G.R. No. 149036. April 2, 2002)

16. PRESIDENTIAL IMMUNITY

Question: Senator De Lima instituted a petition for the issuance of a writ of habeas data to
enjoin President Rodrigo Roa Duterte from committing acts allegedly violative of her right
to life, liberty, and security. De Lima argued that President Duterte is not entitled to
immunity from suit, especially from the petition for the issuance of the writ of habeas
data because his actions and statements were unlawful or made outside of his official
conduct; that based on the pronouncements in Rodriguez v. Macapagal-Arroyo and Clinton
v. Jones, the immunity of the President from suit covers only the official acts of the Chief
Executive; that his statements constituted violations of various laws, particularly Republic
Act No. 6713, and Republic Act No. 9710, 18 and, as such, were not to be considered the
official acts of the President worthy of protection by presidential immunity from suit; and
that because the habeas data proceeding does not involve the determination of civil or
criminal liability, his acts and statements should not be considered as warranting the
protective shield of presidential immunity from suit. May the petition prosper because the
incumbent President of the Philippines has been named herein as the sole respondent?
Answer: The petition must be dismissed even without the President invoking the privilege
of immunity from suit.
A careful study of the development of the doctrine of presidential immunity from suit
shows that the presidential immunity from suit as recognized and applied in the USA
differs from the doctrine recognized in this jurisdiction.
Immunity can be classified either by (a) extent, i.e., absolute, or qualified; or (b)
duration, i.e., permanent, or temporary. Unlike its American counterpart, the concept of
presidential immunity under our governmental and constitutional system does not
distinguish whether or not the suit pertains to an official act of the President. Neither does
immunity hinge on the nature of the suit. The lack of distinctions prevents us from making
any distinctions. Guided by judicial precedents. the concept is clear and allows no
qualifications or restrictions that the President cannot be sued while holding such office.
(De Lima v. President Duterte, G.R. No. 227635, October 15, 2019)

17. EXECUTIVE DEPARTMENT

Question: The Corregidor Foundation, Inc. (CFI) was incorporated with the Securities and
Exchange Commission but was funded by the Office of the President. Is CFI a private or a
public corporation?
Answer: While CFI was registered with the SEC, the funds used to incorporate it came from
the national treasury. Thus, CFI is considered a non-chartered government-owned and
controlled corporation. As such, all its funds are subject to the audit of the Commission on
Audit. All employees of the Philippine Tourism Authority who received honoraria from the
Corregidor Foundation, Inc. must therefore return all amounts received otherwise, they
will violate the double compensation rule. (Oriondo v. COA, G.R. No. 211293, June 4, 2019,
Leonen, J.)

18. PROCESS OF LEGISLATION

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Question: CotesCUP filed a petition before the Supreme Court assailing the
constitutionality of the K-12 Education Law because the enrolled bill which the President
signed into law varies significantly from the reconciled version of the bill as approved by
Congress and reported in the Senate Journal on January 30, 2013. Will the challenge of
CotesCUP prosper? Why?
Answer: The challenge will not prosper because the enrolled bill prevails over the entries
in a congressional journal. Under the "enrolled bill doctrine," the signing of a bill by the
Speaker of the House and the Senate President and the certification of the Secretaries of
both Houses of Congress that it was passed is conclusive not only as to its provisions but
also as to its due enactment.
The rationale behind the enrolled bill doctrine rests on the consideration that "[t]he
respect due to coequal and independent departments requires the [Judiciary] to act upon
that assurance, and to accept, as having passed Congress, all bills authenticated in the
manner stated; leaving the court to determine, when the question properly arises, [as in the
instant consolidated cases], whether the Act, so authenticated, is in conformity with the
Constitution." Jurisprudence will show that the Court has consistently adhered to the
enrolled bill doctrine (Arroyo v. De Venecia, 343 Phil. 42, 71 (1997) cited in CotesCUP v.
Secretary of Education and Development, G. R. No. 216930, October 9. 2018)

19. POLICY OF ECONOMIC INDEPENDENCE/ROLE OF PRIVATE SECTOR IN THE

NATIONAL ECONOMY
Question: Petitioners alleged that Board of Investments (“BOI”) committed grave abuse of
discretion when it approved the applications for registration of Charoen Pokphand Foods
Philippines Corporation (“Charoen”), a 100% foreign-owned company from Thailand. It
claimed that the approval of the said applications violated their constitutional right to be
protected against unfair foreign competition and trade practices, and that they would
sustain injury as they do not enjoy similar incentives. Charoen’s presence would drive them
“out of the market due to cut-throat competition.”  Is the legal claim of the petitioners
tenable?
Answer: The claim of the petitioners is not meritorious. Article II, Section 19 of the 1987
Constitution, which embodies the policy of economic independence, is not a self-executing
provision. As a result, non-compliance with it does not give rise to a cause of action and is
not judicially enforceable.
The Philippines adopts a liberal approach in allowing foreign investments to enter the
country since the 1987 Constitution does not proscribe foreign competition. While the
Constitution does not bar foreign investors from setting up shop in the Philippines, neither
does it encourage their unbridled entry. Thus, it has empowered Congress to determine
which areas of investment to reserve to Filipinos and which areas may be opened to
foreign investors.
Thus, BOI did not commit grave abuse of discretion when it granted Charoen pioneer
status. (National Federation of Hog Farmers, Inc., v. Board of Investments, et al., G.R. No.
205835, 23 June 2020, Leonen, J.) 

20. PUBLIC INTERNATIONAL LAW

SOURCES OF PUBLIC INTERNATIONAL LAW

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DECISION OF THE INTERNATIONAL COURT OF JUSTICE AS SOURCE OF PUBLIC
INTERNATIONAL LAW
Question Iberian Energy Corporation (“IEC”) was incorporated in Canada and its shares of
stocks were public listed in the New York Stock Exchange. IEC won a bid to supply power
for the entire Bahamas. A number of Americans bought shares of stocks in the IEC because
the anticipated good returns. However, the government of the Bahamas was not satisfied
with the performance of IEC so it seized all its asset. The American stockholders of IEC
approached its government and sought its assistance to recover their investments in IEC.
The U.S. government instituted the claim on behalf the American stockholders against the
government of Bahamas before the International Court of Justice. Will the action instituted
by the U.S. government on behalf its citizens against the Bahamas before the ICJ prosper?
Why?
Answer: No, the case instituted by the U.S. government against the Bahamas before the ICJ
will not prosper. In the case of Belgium v. Spain (General List No. 50, 5 February 1970) with
similar to facts in the present case, the ICJ ruled that the Belgian government lacked the
standing to exercise diplomatic protection of Belgian shareholders in a Canadian company
with respect to measures taken against that company in Spain. The Court ruled on the side
of the Spanish, holding that only the nationality of the corporation (the Canadians) can sue. 
The case is important as it demonstrates how the concept of diplomatic protection under
international law can apply equally to corporations as to individuals.

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