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.)

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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 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)

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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 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
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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 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)

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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 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.
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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.)

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.)

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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)

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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 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)
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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, 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:
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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

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
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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
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?

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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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