G.R No.
187167 August 16, 2011 islands" whose islands generate their own applicable maritime
PROF. MERLIN M. MAGALLONA, AKBAYAN PARTY-LIST REP.
RISA HONTIVEROS, PROF. HARRY C. ROQUE, JR., AND
UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW
STUDENTS, ALITHEA BARBARA ACAS, VOLTAIRE ALFERES,
CZARINA MAY ALTEZ, FRANCIS ALVIN ASILO, SHERYL BALOT,
RUBY AMOR BARRACA, JOSE JAVIER BAUTISTA, ROMINA
BERNARDO, VALERIE PAGASA BUENAVENTURA, EDAN MARRI
CAÑETE, VANN ALLEN DELA CRUZ, RENE DELORINO, PAULYN
MAY DUMAN, SHARON ESCOTO, RODRIGO FAJARDO III,
GIRLIE FERRER, RAOULLE OSEN FERRER, CARLA REGINA
GREPO, ANNA MARIE CECILIA GO, IRISH KAY KALAW, MARY
ANN JOY LEE, MARIA LUISA MANALAYSAY, MIGUEL RAFAEL
MUSNGI, MICHAEL OCAMPO, JAKLYN HANNA PINEDA, WILLIAM
RAGAMAT, MARICAR RAMOS, ENRIK FORT REVILLAS, JAMES
MARK TERRY RIDON, JOHANN FRANTZ RIVERA IV, CHRISTIAN
RIVERO, DIANNE MARIE ROA, NICHOLAS SANTIZO, MELISSA
CHRISTINA SANTOS, CRISTINE MAE TABING, VANESSA ANNE
TORNO, MARIA ESTER VANGUARDIA, and MARCELINO
VELOSO III, Petitioners,
vs.
HON. EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE
SECRETARY, HON. ALBERTO ROMULO, IN HIS CAPACITY AS
SECRETARY OF THE DEPARTMENT OF FOREIGN AFFAIRS,
HON. ROLANDO ANDAYA, IN HIS CAPACITY AS SECRETARY
OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, HON.
DIONY VENTURA, IN HIS CAPACITY AS ADMINISTRATOR OF
THE NATIONAL MAPPING & RESOURCE INFORMATION
AUTHORITY, and HON. HILARIO DAVIDE, JR., IN HIS CAPACITY
AS REPRESENTATIVE OF THE PERMANENT MISSION OF THE
REPUBLIC OF THE PHILIPPINES TO THE UNITED NATIONS,
Respondents.
DECISION
CARPIO, J.:
The Case
This original action for the writs of certiorari and prohibition assails
the constitutionality of Republic Act No. 95221 (RA 9522) adjusting
the country’s archipelagic baselines and classifying the baseline
regime of nearby territories.
The Antecedents
In 1961, Congress passed Republic Act No. 3046 (RA 3046)2
demarcating the maritime baselines of the Philippines as an
archipelagic State.3 This law followed the framing of the Convention
on the Territorial Sea and the Contiguous Zone in 1958 (UNCLOS
I),4 codifying, among others, the sovereign right of States parties
over their "territorial sea," the breadth of which, however, was left
undetermined. Attempts to fill this void during the second round of
negotiations in Geneva in 1960 (UNCLOS II) proved futile. Thus,
domestically, RA 3046 remained unchanged for nearly five decades,
save for legislation passed in 1968 (Republic Act No. 5446 [RA
5446]) correcting typographical errors and reserving the drawing of
baselines around Sabah in North Borneo.
In March 2009, Congress amended RA 3046 by enacting RA 9522,
the statute now under scrutiny. The change was prompted by the
need to make RA 3046 compliant with the terms of the United
Nations Convention on the Law of the Sea (UNCLOS III),5 which the
Philippines ratified on 27 February 1984.6 Among others, UNCLOS
III prescribes the water-land ratio, length, and contour of baselines of
archipelagic States like the Philippines7 and sets the deadline for the
filing of application for the extended continental shelf.8 Complying
with these requirements, RA 9522 shortened one baseline,
optimized the location of some basepoints around the Philippine
archipelago and classified adjacent territories, namely, the Kalayaan
Island Group (KIG) and the Scarborough Shoal, as "regimes of
zones.
Petitioners, professors of law, law students and a legislator, in their
respective capacities as "citizens, taxpayers or x x x legislators,"9 as
the case may be, assail the constitutionality of RA 9522 on two
principal grounds, namely: (1) RA 9522 reduces Philippine maritime
territory, and logically, the reach of the Philippine state’s sovereign
power, in violation of Article 1 of the 1987 Constitution,10 embodying
the terms of the Treaty of Paris11 and ancillary treaties,12 and (2)
RA 9522 opens the country’s waters landward of the baselines to
maritime passage by all vessels and aircrafts, undermining
Philippine sovereignty and national security, contravening the
country’s nuclear-free policy, and damaging marine resources, in
violation of relevant constitutional provisions.13
In addition, petitioners contend that RA 9522’s treatment of the KIG
as "regime of islands" not only results in the loss of a large maritime
area but also prejudices the livelihood of subsistence fishermen.14
To buttress their argument of territorial diminution, petitioners facially
attack RA 9522 for what it excluded and included – its failure to
reference either the Treaty of Paris or Sabah and its use of UNCLOS
III’s framework of regime of islands to determine the maritime zones
of the KIG and the Scarborough Shoal.
Commenting on the petition, respondent officials raised threshold
issues questioning (1) the petition’s compliance with the case or
controversy requirement for judicial review grounded on petitioners’
alleged lack of locus standi and (2) the propriety of the writs of
certiorari and prohibition to assail the constitutionality of RA 9522.
On the merits, respondents defended RA 9522 as the country’s
compliance with the terms of UNCLOS III, preserving Philippine
territory over the KIG or Scarborough Shoal. Respondents add that
RA 9522 does not undermine the country’s security, environment
and economic interests or relinquish the Philippines’ claim over
Sabah.
Respondents also question the normative force, under international
law, of petitioners’ assertion that what Spain ceded to the United
States under the Treaty of Paris were the islands and all the waters
found within the boundaries of the rectangular area drawn under the
Treaty of Paris.
We left unacted petitioners’ prayer for an injunctive writ.
The Issues
The petition raises the following issues:
1. Preliminarily –
1. Whether petitioners possess locus standi to bring this suit; and
2. Whether the writs of certiorari and prohibition are the proper
remedies to assail the constitutionality of RA 9522.
2. On the merits, whether RA 9522 is unconstitutional.
The Ruling of the Court
On the threshold issues, we hold that (1) petitioners possess locus
standi to bring this suit as citizens and (2) the writs of certiorari and
prohibition are proper remedies to test the constitutionality of RA
9522. On the merits, we find no basis to declare RA 9522
unconstitutional.
On the Threshold Issues
Petitioners Possess Locus
Standi as Citizens
Petitioners themselves undermine their assertion of locus standi as
legislators and taxpayers because the petition alleges neither
infringement of legislative prerogative15 nor misuse of public
funds,16 occasioned by the passage and implementation of RA
9522. Nonetheless, we recognize petitioners’ locus standi as citizens
with constitutionally sufficient interest in the resolution of the merits
of the case which undoubtedly raises issues of national significance
necessitating urgent resolution. Indeed, owing to the peculiar nature
of RA 9522, it is understandably difficult to find other litigants
possessing "a more direct and specific interest" to bring the suit, thus
satisfying one of the requirements for granting citizenship
standing.17
The Writs of Certiorari and Prohibition
Are Proper Remedies to Test
the Constitutionality of Statutes
In praying for the dismissal of the petition on preliminary grounds,
respondents seek a strict observance of the offices of the writs of
certiorari and prohibition, noting that the writs cannot issue absent
any showing of grave abuse of discretion in the exercise of judicial,
quasi-judicial or ministerial powers on the part of respondents and
resulting prejudice on the part of petitioners.18
Respondents’ submission holds true in ordinary civil proceedings.
When this Court exercises its constitutional power of judicial review,
however, we have, by tradition, viewed the writs of certiorari and
prohibition as proper remedial vehicles to test the constitutionality of
statutes,19 and indeed, of acts of other branches of government.20
Issues of constitutional import are sometimes crafted out of statutes
which, while having no bearing on the personal interests of the
petitioners, carry such relevance in the life of this nation that the
Court inevitably finds itself constrained to take cognizance of the
case and pass upon the issues raised, non-compliance with the
letter of procedural rules notwithstanding. The statute sought to be
reviewed here is one such law.
RA 9522 is Not Unconstitutional
RA 9522 is a Statutory Tool
to Demarcate the Country’s
Maritime Zones and Continental
Shelf Under UNCLOS III, not to
Delineate Philippine Territory
Petitioners submit that RA 9522 "dismembers a large portion of the
national territory"21 because it discards the pre-UNCLOS III
demarcation of Philippine territory under the Treaty of Paris and
related treaties, successively encoded in the definition of national
territory under the 1935, 1973 and 1987 Constitutions. Petitioners
theorize that this constitutional definition trumps any treaty or
statutory provision denying the Philippines sovereign control over
waters, beyond the territorial sea recognized at the time of the Treaty
of Paris, that Spain supposedly ceded to the United States.
Petitioners argue that from the Treaty of Paris’ technical description,
Philippine sovereignty over territorial waters extends hundreds of
nautical miles around the Philippine archipelago, embracing the
rectangular area delineated in the Treaty of Paris.22
Petitioners’ theory fails to persuade us.
UNCLOS III has nothing to do with the acquisition (or loss) of
territory. It is a multilateral treaty regulating, among others, sea-use
rights over maritime zones (i.e., the territorial waters [12 nautical
miles from the baselines], contiguous zone [24 nautical miles from
the baselines], exclusive economic zone [200 nautical miles from the
baselines]), and continental shelves that UNCLOS III delimits.23
UNCLOS III was the culmination of decades-long negotiations
among United Nations members to codify norms regulating the
conduct of States in the world’s oceans and submarine areas,
recognizing coastal and archipelagic States’ graduated authority
over a limited span of waters and submarine lands along their
coasts.
On the other hand, baselines laws such as RA 9522 are enacted by
UNCLOS III States parties to mark-out specific basepoints along
their coasts from which baselines are drawn, either straight or
contoured, to serve as geographic starting points to measure the
breadth of the maritime zones and continental shelf. Article 48 of
UNCLOS III on archipelagic States like ours could not be any
clearer:
Article 48. Measurement of the breadth of the territorial sea, the
contiguous zone, the exclusive economic zone and the continental
shelf. – The breadth of the territorial sea, the contiguous zone, the
exclusive economic zone and the continental shelf shall be
measured from archipelagic baselines drawn in accordance with
article 47. (Emphasis supplied)
Thus, baselines laws are nothing but statutory mechanisms for
UNCLOS III States parties to delimit with precision the extent of their
maritime zones and continental shelves. In turn, this gives notice to
the rest of the international community of the scope of the maritime
space and submarine areas within which States parties exercise
treaty-based rights, namely, the exercise of sovereignty over
territorial waters (Article 2), the jurisdiction to enforce customs, fiscal,
immigration, and sanitation laws in the contiguous zone (Article 33),
and the right to exploit the living and non-living resources in the
exclusive economic zone (Article 56) and continental shelf (Article
77).
Even under petitioners’ theory that the Philippine territory embraces
the islands and all the waters within the rectangular area delimited in
the Treaty of Paris, the baselines of the Philippines would still have
to be drawn in accordance with RA 9522 because this is the only
way to draw the baselines in conformity with UNCLOS III. The
baselines cannot be drawn from the boundaries or other portions of
the rectangular area delineated in the Treaty of Paris, but from the
"outermost islands and drying reefs of the archipelago."24
UNCLOS III and its ancillary baselines laws play no role in the
acquisition, enlargement or, as petitioners claim, diminution of
territory. Under traditional international law typology, States acquire
(or conversely, lose) territory through occupation, accretion, cession
and prescription,25 not by executing multilateral treaties on the
regulations of sea-use rights or enacting statutes to comply with the
treaty’s terms to delimit maritime zones and continental shelves.
Territorial claims to land features are outside UNCLOS III, and are
instead governed by the rules on general international law.26
RA 9522’s Use of the Framework
of Regime of Islands to Determine the
Maritime Zones of the KIG and the
Scarborough Shoal, not Inconsistent
with the Philippines’ Claim of Sovereignty
Over these Areas
Petitioners next submit that RA 9522’s use of UNCLOS III’s regime
of islands framework to draw the baselines, and to measure the
breadth of the applicable maritime zones of the KIG, "weakens our
territorial claim" over that area.27 Petitioners add that the KIG’s (and
Scarborough Shoal’s) exclusion from the Philippine archipelagic
baselines results in the loss of "about 15,000 square nautical miles
of territorial waters," prejudicing the livelihood of subsistence
fishermen.28 A comparison of the configuration of the baselines
drawn under RA 3046 and RA 9522 and the extent of maritime
space encompassed by each law, coupled with a reading of the text
of RA 9522 and its congressional deliberations, vis-à-vis the
Philippines’ obligations under UNCLOS III, belie this view.1avvphi1
The configuration of the baselines drawn under RA 3046 and RA
9522 shows that RA 9522 merely followed the basepoints mapped
by RA 3046, save for at least nine basepoints that RA 9522 skipped
to optimize the location of basepoints and adjust the length of one
baseline (and thus comply with UNCLOS III’s limitation on the
maximum length of baselines). Under RA 3046, as under RA 9522,
the KIG and the Scarborough Shoal lie outside of the baselines
drawn around the Philippine archipelago. This undeniable
cartographic fact takes the wind out of petitioners’ argument
branding RA 9522 as a statutory renunciation of the Philippines’
claim over the KIG, assuming that baselines are relevant for this
purpose.
Petitioners’ assertion of loss of "about 15,000 square nautical miles
of territorial waters" under RA 9522 is similarly unfounded both in
fact and law. On the contrary, RA 9522, by optimizing the location of
basepoints, increased the Philippines’ total maritime space (covering
its internal waters, territorial sea and exclusive economic zone) by
145,216 square nautical miles, as shown in the table below:29
Extent of maritime area using RA 3046, as amended, taking into
account the Treaty of Paris’ delimitation (in square nautical miles)
Extent of maritime area using RA 9522, taking into account UNCLOS
III (in square nautical miles)
Internal or archipelagic waters 166,858 171,435
Territorial Sea 274,136 32,106
Exclusive Economic Zone 382,669
TOTAL 440,994 586,210
Thus, as the map below shows, the reach of the exclusive economic
zone drawn under RA 9522 even extends way beyond the waters
covered by the rectangular demarcation under the Treaty of Paris. Of
course, where there are overlapping exclusive economic zones of
opposite or adjacent States, there will have to be a delineation of
maritime boundaries in accordance with UNCLOS III.30
Further, petitioners’ argument that the KIG now lies outside
Philippine territory because the baselines that RA 9522 draws do not
enclose the KIG is negated by RA 9522 itself. Section 2 of the law
commits to text the Philippines’ continued claim of sovereignty and
jurisdiction over the KIG and the Scarborough Shoal:
SEC. 2. The baselines in the following areas over which the
Philippines likewise exercises sovereignty and jurisdiction shall be
determined as "Regime of Islands" under the Republic of the
Philippines consistent with Article 121 of the United Nations
Convention on the Law of the Sea (UNCLOS):
a) The Kalayaan Island Group as constituted under Presidential
Decree No. 1596 and
b) Bajo de Masinloc, also known as Scarborough Shoal. (Emphasis
supplied)
Had Congress in RA 9522 enclosed the KIG and the Scarborough
Shoal as part of the Philippine archipelago, adverse legal effects
would have ensued. The Philippines would have committed a breach
of two provisions of UNCLOS III. First, Article 47 (3) of UNCLOS III
requires that "[t]he drawing of such baselines shall not depart to any
appreciable extent from the general configuration of the
archipelago." Second, Article 47 (2) of UNCLOS III requires that "the
length of the baselines shall not exceed 100 nautical miles," save for
three per cent (3%) of the total number of baselines which can reach
up to 125 nautical miles.31
Although the Philippines has consistently claimed sovereignty over
the KIG32 and the Scarborough Shoal for several decades, these
outlying areas are located at an appreciable distance from the
nearest shoreline of the Philippine archipelago,33 such that any
straight baseline loped around them from the nearest basepoint will
inevitably "depart to an appreciable extent from the general
configuration of the archipelago."
The principal sponsor of RA 9522 in the Senate, Senator Miriam
Defensor-Santiago, took pains to emphasize the foregoing during
the Senate deliberations:
What we call the Kalayaan Island Group or what the rest of the world
call[] the Spratlys and the Scarborough Shoal are outside our
archipelagic baseline because if we put them inside our baselines
we might be accused of violating the provision of international law
which states: "The drawing of such baseline shall not depart to any
appreciable extent from the general configuration of the
archipelago." So sa loob ng ating baseline, dapat magkalapit ang
mga islands. Dahil malayo ang Scarborough Shoal, hindi natin
masasabing malapit sila sa atin although we are still allowed by
international law to claim them as our own.
This is called contested islands outside our configuration. We see
that our archipelago is defined by the orange line which [we] call[]
archipelagic baseline. Ngayon, tingnan ninyo ang maliit na circle
doon sa itaas, that is Scarborough Shoal, itong malaking circle sa
ibaba, that is Kalayaan Group or the Spratlys. Malayo na sila sa
ating archipelago kaya kung ilihis pa natin ang dating archipelagic
baselines para lamang masama itong dalawang circles, hindi na sila
magkalapit at baka hindi na tatanggapin ng United Nations because
of the rule that it should follow the natural configuration of the
archipelago.34 (Emphasis supplied)
Similarly, the length of one baseline that RA 3046 drew exceeded
UNCLOS III’s limits.1avvphi1 The need to shorten this baseline, and
in addition, to optimize the location of basepoints using current
maps, became imperative as discussed by respondents:
[T]he amendment of the baselines law was necessary to enable the
Philippines to draw the outer limits of its maritime zones including the
extended continental shelf in the manner provided by Article 47 of
[UNCLOS III]. As defined by R.A. 3046, as amended by R.A. 5446,
the baselines suffer from some technical deficiencies, to wit:
1. The length of the baseline across Moro Gulf (from Middle of 3
Rock Awash to Tongquil Point) is 140.06 nautical miles x x x. This
exceeds the maximum length allowed under Article 47(2) of the
[UNCLOS III], which states that "The length of such baselines shall
not exceed 100 nautical miles, except that up to 3 per cent of the
total number of baselines enclosing any archipelago may exceed
that length, up to a maximum length of 125 nautical miles."
2. The selection of basepoints is not optimal. At least 9 basepoints
can be skipped or deleted from the baselines system. This will
enclose an additional 2,195 nautical miles of water.
3. Finally, the basepoints were drawn from maps existing in 1968,
and not established by geodetic survey methods. Accordingly, some
of the points, particularly along the west coasts of Luzon down to
Palawan were later found to be located either inland or on water, not
on low-water line and drying reefs as prescribed by Article 47.35
Hence, far from surrendering the Philippines’ claim over the KIG and
the Scarborough Shoal, Congress’ decision to classify the KIG and
the Scarborough Shoal as "‘Regime[s] of Islands’ under the Republic
of the Philippines consistent with Article 121"36 of UNCLOS III
manifests the Philippine State’s responsible observance of its pacta
sunt servanda obligation under UNCLOS III. Under Article 121 of
UNCLOS III, any "naturally formed area of land, surrounded by
water, which is above water at high tide," such as portions of the
KIG, qualifies under the category of "regime of islands," whose
islands generate their own applicable maritime zones.37
Statutory Claim Over Sabah under
RA 5446 Retained
Petitioners’ argument for the invalidity of RA 9522 for its failure to
textualize the Philippines’ claim over Sabah in North Borneo is also
untenable. Section 2 of RA 5446, which RA 9522 did not repeal,
keeps open the door for drawing the baselines of Sabah:
Section 2. The definition of the baselines of the territorial sea of the
Philippine Archipelago as provided in this Act is without prejudice to
the delineation of the baselines of the territorial sea around the
territory of Sabah, situated in North Borneo, over which the Republic
of the Philippines has acquired dominion and sovereignty.
(Emphasis supplied)
UNCLOS III and RA 9522 not
Incompatible with the Constitution’s
Delineation of Internal Waters
As their final argument against the validity of RA 9522, petitioners
contend that the law unconstitutionally "converts" internal waters into
archipelagic waters, hence subjecting these waters to the right of
innocent and sea lanes passage under UNCLOS III, including
overflight. Petitioners extrapolate that these passage rights
indubitably expose Philippine internal waters to nuclear and maritime
pollution hazards, in violation of the Constitution.38
Whether referred to as Philippine "internal waters" under Article I of
the Constitution39 or as "archipelagic waters" under UNCLOS III
(Article 49 [1]), the Philippines exercises sovereignty over the body
of water lying landward of the baselines, including the air space over
it and the submarine areas underneath. UNCLOS III affirms this:
Article 49. Legal status of archipelagic waters, of the air space over
archipelagic waters and of their bed and subsoil. –
1. The sovereignty of an archipelagic State extends to the waters
enclosed by the archipelagic baselines drawn in accordance with
article 47, described as archipelagic waters, regardless of their depth
or distance from the coast.
2. This sovereignty extends to the air space over the archipelagic
waters, as well as to their bed and subsoil, and the resources
contained therein.
xxxx
4. The regime of archipelagic sea lanes passage established in this
Part shall not in other respects affect the status of the archipelagic
waters, including the sea lanes, or the exercise by the archipelagic
State of its sovereignty over such waters and their air space, bed
and subsoil, and the resources contained therein. (Emphasis
supplied)
The fact of sovereignty, however, does not preclude the operation of
municipal and international law norms subjecting the territorial sea or
archipelagic waters to necessary, if not marginal, burdens in the
interest of maintaining unimpeded, expeditious international
navigation, consistent with the international law principle of freedom
of navigation. Thus, domestically, the political branches of the
Philippine government, in the competent discharge of their
constitutional powers, may pass legislation designating routes within
the archipelagic waters to regulate innocent and sea lanes
passage.40 Indeed, bills drawing nautical highways for sea lanes
passage are now pending in Congress.41
In the absence of municipal legislation, international law norms, now
codified in UNCLOS III, operate to grant innocent passage rights
over the territorial sea or archipelagic waters, subject to the treaty’s
limitations and conditions for their exercise.42 Significantly, the right
of innocent passage is a customary international law,43 thus
automatically incorporated in the corpus of Philippine law.44 No
modern State can validly invoke its sovereignty to absolutely forbid
innocent passage that is exercised in accordance with customary
international law without risking retaliatory measures from the
international community.
The fact that for archipelagic States, their archipelagic waters are
subject to both the right of innocent passage and sea lanes
passage45 does not place them in lesser footing vis-à-vis
continental coastal States which are subject, in their territorial sea, to
the right of innocent passage and the right of transit passage through
international straits. The imposition of these passage rights through
archipelagic waters under UNCLOS III was a concession by
archipelagic States, in exchange for their right to claim all the waters
landward of their baselines, regardless of their depth or distance
from the coast, as archipelagic waters subject to their territorial
sovereignty. More importantly, the recognition of archipelagic States’
archipelago and the waters enclosed by their baselines as one
cohesive entity prevents the treatment of their islands as separate
islands under UNCLOS III.46 Separate islands generate their own
maritime zones, placing the waters between islands separated by
more than 24 nautical miles beyond the States’ territorial
sovereignty, subjecting these waters to the rights of other States
under UNCLOS III.47
Petitioners’ invocation of non-executory constitutional provisions in
Article II (Declaration of Principles and State Policies)48 must also
fail. Our present state of jurisprudence considers the provisions in
Article II as mere legislative guides, which, absent enabling
legislation, "do not embody judicially enforceable constitutional rights
x x x."49 Article II provisions serve as guides in formulating and
interpreting implementing legislation, as well as in interpreting
executory provisions of the Constitution. Although Oposa v.
Factoran50 treated the right to a healthful and balanced ecology
under Section 16 of Article II as an exception, the present petition
lacks factual basis to substantiate the claimed constitutional
violation. The other provisions petitioners cite, relating to the
protection of marine wealth (Article XII, Section 2, paragraph 251 )
and subsistence fishermen (Article XIII, Section 752 ), are not
violated by RA 9522.
In fact, the demarcation of the baselines enables the Philippines to
delimit its exclusive economic zone, reserving solely to the
Philippines the exploitation of all living and non-living resources
within such zone. Such a maritime delineation binds the international
community since the delineation is in strict observance of UNCLOS
III. If the maritime delineation is contrary to UNCLOS III, the
international community will of course reject it and will refuse to be
bound by it.
UNCLOS III favors States with a long coastline like the Philippines.
UNCLOS III creates a sui generis maritime space – the exclusive
economic zone – in waters previously part of the high seas.
UNCLOS III grants new rights to coastal States to exclusively exploit
the resources found within this zone up to 200 nautical miles.53
UNCLOS III, however, preserves the traditional freedom of
navigation of other States that attached to this zone beyond the
territorial sea before UNCLOS III.
RA 9522 and the Philippines’ Maritime Zones
Petitioners hold the view that, based on the permissive text of
UNCLOS III, Congress was not bound to pass RA 9522.54 We have
looked at the relevant provision of UNCLOS III55 and we find
petitioners’ reading plausible. Nevertheless, the prerogative of
choosing this option belongs to Congress, not to this Court.
Moreover, the luxury of choosing this option comes at a very steep
price. Absent an UNCLOS III compliant baselines law, an
archipelagic State like the Philippines will find itself devoid of
internationally acceptable baselines from where the breadth of its
maritime zones and continental shelf is measured. This is recipe for
a two-fronted disaster: first, it sends an open invitation to the
seafaring powers to freely enter and exploit the resources in the
waters and submarine areas around our archipelago; and second, it
weakens the country’s case in any international dispute over
Philippine maritime space. These are consequences Congress
wisely avoided.
The enactment of UNCLOS III compliant baselines law for the
Philippine archipelago and adjacent areas, as embodied in RA 9522,
allows an internationally-recognized delimitation of the breadth of the
Philippines’ maritime zones and continental shelf. RA 9522 is
therefore a most vital step on the part of the Philippines in
safeguarding its maritime zones, consistent with the Constitution and
our national interest.
WHEREFORE, we DISMISS the petition.

SO ORDERED.
G.R. No. 111709. August 30, 2001
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. ROGER P.
TULIN, VIRGILIO I. LOYOLA, CECILIO O. CHANGCO, ANDRES C.
INFANTE, CHEONG SAN HIONG, and JOHN DOES, accused-
appellants.
DECISION
MELO, J.:
This is one of the older cases which unfortunately has remained in
docket of the Court for sometime. It was reassigned, together with
other similar cases, to undersigned ponente in pursuance of A.M.
No. 00-9-03-SC dated February 27, 2001.
In the evening of March 2, 1991, M/T Tabangao, a cargo vessel
owned by the PNOC Shipping and Transport Corporation, loaded
with 2,000 barrels of kerosene, 2,600 barrels of regular gasoline,
and 40,000 barrels of diesel oil, with a total value of P40,426,793,87.
was sailing off the coast of Mindoro near Silonay Island.
The vessel, manned by 21 crew members, including Captain
Edilberto Libo-on, Second Mate Christian Torralba, and Operator
Isaias Ervas, was suddenly boarded, with the use of an aluminum
ladder, by seven fully armed pirates led by Emilio Changco, older
brother of accused-appellant Cecilio Changco. The pirates, including
accused-appellants Tulin, Loyola, and Infante, Jr. were armed with
M-16 rifles, .45 and .38 caliber handguns, and bolos. They detained
the crew and took complete control of the vessel. Thereafter,
accused-appellant Loyola ordered three crew members to paint
over, using black paint, the name "M/T Tabangao" on the front and
rear portions of the vessel, as well as the PNOC logo on the chimney
of the vessel. The vessel was then painted with the name "Galilee,"
with registry at San Lorenzo, Honduras. The crew was forced to sail
to Singapore, all the while sending misleading radio messages to
PNOC that the ship was undergoing repairs.
PNOC, after losing radio contact with the vessel, reported the
disappearance of the vessel to the Philippine Coast Guard and
secured the assistance of the Philippine Air Force and the Philippine
Navy. However, search and rescue operations yielded negative
results. On March 9, 1991, the ship arrived in the vicinity of
Singapore and cruised around the area presumably to await another
vessel which, however, failed to arrive. The pirates were thus forced
to return to the Philippines on March 14, 1991, arriving at Calatagan,
Batangas on March 20, 1991 where it remained at sea.
On March 28, 1991, the "M/T Tabangao" again sailed to and
anchored about 10 to 18 nautical miles from Singapore's shoreline
where another vessel called "Navi Pride" anchored beside it. Emilio
Changco ordered the crew of "M/T Tabangao" to transfer the
vessel's cargo to the hold of "Navi Pride". Accused-appellant
Cheong San Hiong supervised the crew of "Navi Pride" in receiving
the cargo. The transfer, after an interruption, with both vessels
leaving the area, was completed on March 30,1991.
On March 30, 1991, "M/T Tabangao" returned to the same area and
completed the transfer of cargo to "Navi Pride."
On April 8, 1991, "M/T Tabangao" arrived at Calatagan, Batangas,
but the vessel remained at sea. On April 10, 1991, the members of
the crew were released in three batches with the stern warning not to
report the incident to government authorities for a period of two days
or until April 12, 1991, otherwise they would be killed. The first batch
was fetched from the shoreline by a newly painted passenger jeep
driven by accused-appellant Cecilio Changco, brother of Emilio
Changco, who brought them to Imus, Cavite and gave P20,000.00 to
Captain Libo-on for fare of the crew in proceeding to their respective
homes. The second batch was fetched by accused-appellant
Changco at midnight of April 10, 1991 and were brought to different
places in Metro Manila.
On April 12, 1991, the Chief Engineer, accompanied by the
members of the crew, called the PNOC Shipping and Transport
Corporation office to report the incident. The crew members were
brought to the Coast Guard Office for investigation. The incident was
also reported to the National Bureau of Investigation where the
officers and members of the crew executed sworn statements
regarding the incident.
A series of arrests was thereafter effected as follows:
a. On May 19, 1991, the NBI received verified information that the
pirates were present at U.K. Beach, Balibago, Calatagan, Batangas.
After three days of surveillance, accused-appellant Tulin was
arrested and brought to the NBI headquarters in Manila.
b. Accused-appellants Infante, Jr. and Loyola were arrested by
chance at Aguinaldo Hi-way by NBI agents as the latter were
pursuing the mastermind, who managed to evade arrest.
c. On May 20, 1991, accused-appellants Hiong and Changco were
arrested at the lobby of Alpha Hotel in Batangas City.
On October 24 1991, an Information charging qualified piracy or
violation of Presidential Decree No. 532 (piracy in Philippine Waters)
was filed against accused-appellants, as follows:
The undersigned State Prosecutor accuses ROGER P. TULIN,
VIRGILIO I. LOYOLA, CECILIO O. CHANGCO, ANDRES C.
INFANTE, and CHEONG SAN HIONG, and nine (9) other JOHN
DOES of qualified piracy (Violation of P.D. No. 532), committed as
follows:
That on or about and during the period from March 2 to April 10,
1991, both dates inclusive, and for sometime prior and subsequent
thereto, and within the jurisdiction of this Honorable Court, the said
accused, then manning a motor launch and armed with high
powered guns, conspiring and confederating together and mutually
helping one another, did then and there, wilfully, unlawfully and
feloniously fire upon, board and seize while in the Philippine waters
M/T PNOC TABANGCO loaded with petroleum products, together
with the complement and crew members, employing violence against
or intimidation of persons or force upon things, then direct the vessel
to proceed to Singapore where the cargoes were unloaded and
thereafter returned to the Philippines on April 10, 1991, in violation of
the aforesaid law.
CONTRARY TO LAW.
(pp. 119-20, Rollo.)
This was docketed as Criminal Case No. 91-94896 before Branch 49
of the Regional Trial Court of the National Capital Judicial Region
stationed in Manila. Upon arraignment, accused-appellants pleaded
not guilty to the charge. Trial thereupon ensued.
Accused-appellants Tulin, Infante, Jr., and Loyola, notwithstanding
some inconsistencies in their testimony as to where they were on
March 1, 1991, maintained the defense of denial, and disputed the
charge, as well as the transfer of any cargo from "M/T Tabangao" to
the "Navi Pride." All of them claimed having their own respective
sources of livelihood. Their story is to the effect that on March 2,
1991, while they were conversing by the beach, a red speedboat
with Captain Edilberto Liboon and Second Mate Christian Torralba
on board, approached the seashore. Captain Liboon inquired from
the three if they wanted to work in a vessel. They were told that the
work was light and that each worker was to be paid P3,000.00 a
month with additional compensation if they worked beyond that
period. They agreed even though they had no sea-going experience.
On board, they cooked, cleaned the vessel, prepared coffee, and ran
errands for the officers. They denied having gone to Singapore,
claiming that the vessel only went to Batangas. Upon arrival thereat
in the morning of March 21, 1991, they were paid P1,000.00 each as
salary for nineteen days of work, and were told that the balance
would be remitted to their addresses. There was neither receipt nor
contracts of employment signed by the parties.
Accused-appellant Changco categorically denied the charge,
averring that he was at home sleeping on April 10, 1991. He testified
that he is the younger brother of Emilio Changco, Jr.
Accused-appellant Cheong San Hiong, also known as Ramzan Ali,
adduced evidence that he studied in Sydney, Australia, obtaining the
"Certificate" as Chief Officer, and later completed the course as a
"Master" of a vessel, working as such for two years on board a
vessel. He was employed at Navi Marine Services, Pte., Ltd. as Port
Captain. The company was engaged in the business of trading
petroleum, including shipoil, bunker lube oil, and petroleum to
domestic and international markets. It owned four vessels, one of
which was "Navi Pride."
On March 2, 1991, the day before "M/T Tabangao" was seized by
Emilio Changco and his cohorts, Hiong's name was listed in the
company's letter to the Mercantile Section of the Maritime
Department of the Singapore government as the radio telephone
operator on board the vessel "Ching Ma."
The company was then dealing for the first time with Paul Gan, a
Singaporean broker, who offered to sell to the former bunker oil for
the amount of 300,000.00 Singapore dollars. After the company paid
over one-half of the aforesaid amount to Paul Gan, the latter,
together with Joseph Ng, Operations Superintendent of the firm,
proceeded to the high seas on board "Navi Pride" but failed to locate
the contact vessel.
The transaction with Paul Gan finally pushed through on March 27,
1991. Hiong, upon his return on board the vessel "Ching Ma," was
assigned to supervise a ship-to-ship transfer of diesel oil off the port
of Singapore, the contact vessel to be designated by Paul Gan.
Hiong was ordered to ascertain the quantity and quality of the oil and
was given the amount of 300,000.00 Singapore Dollars for the
purchase. Hiong, together with Paul Gan, and the surveyor William
Yao, on board "Navi Pride" sailed toward a vessel called "M/T
Galilee". Hiong was told that "M/T Galilee" would be making the
transfer. Although no inspection of "Navi Pride" was made by the
port authorities before departure, Navi Marine Services, Pte., Ltd.
was able to procure a port clearance upon submission of General
Declaration and crew list. Hiong, Paul Gan, and the brokers were not
in the crew list submitted and did not pass through the immigration.
The General Declaration falsely reflected that the vessel carried
11,900 tons.
On March 28, 1991, "Navi Pride" reached the location of "M/T
Galilee". The brokers then told the Captain of the vessel to ship-side
with "M/T Galilee" and then transfer of the oil transpired. Hiong and
the surveyor William Yao met the Captain of "M/T Galilee," called
"Captain Bobby" (who later turned out to be Emilio Changco). Hiong
claimed that he did not ask for the full name of Changco nor did he
ask for the latter's personal card.
Upon completion of the transfer, Hiong took the soundings of the
tanks in the "Navi Pride" and took samples of the cargo. The
surveyor prepared the survey report which "Captain Bobby" signed
under the name "Roberto Castillo." Hiong then handed the payment
to Paul Gan and William Yao. Upon arrival at Singapore in the
morning of March 29, 1991, Hiong reported the quantity and quality
of the cargo to the company.
Thereafter, Hiong was again asked to supervise another transfer of
oil purchased by the firm " from "M/T Galilee" to "Navi Pride." The
same procedure as in the first transfer was observed. This time,
Hiong was told that that there were food and drinks, including beer,
purchased by the company for the crew of "M/T Galilee. The transfer
took ten hours and was completed on March 30, 1991. Paul Gan
was paid in full for the transfer.
On April 29 or 30, 1991, Emilio Changco intimated to Hiong that he
had four vessels and wanted to offer its cargo to cargo operators.
Hiong was asked to act as a broker or ship agent for the sale of the
cargo in Singapore. Hiong went to the Philippines to discuss the
matter with Emilio Changco, who laid out the details of the new
transfer, this time with "M/T Polaris" as contact vessel. Hiong was
told that the vessel was scheduled to arrive at the port of Batangas
that weekend. After being billeted at Alpha Hotel in Batangas City,
where Hiong checked in under the name "SONNY CSH." A person
by the name of "KEVIN OCAMPO," who later turned out to be Emilio
Changco himself, also checked in at Alpha Hotel. From accused-
appellant Cecilio Changco, Hiong found out that the vessel was not
arriving. Hiong was thereafter arrested by NBI agents.
After trial, a 95-page decision was rendered convicting accused-
appellants of the crime charged. The dispositive portion of said
decision reads:
WHEREFORE, in the light of the foregoing considerations, judgment
is hereby rendered by this Court finding the accused Roger Tulin,
Virgilio Loyola, Andres Infante, Jr. and Cecilio Changco guilty
beyond reasonable doubt, as principals, of the crime of piracy in
Philippine Waters defined in Section 2(d) of Presidential Decree No.
532 and the accused Cheong San Hiong, as accomplice, to said
crime. Under Section 3(a) of the said law, the penalty for the
principals of said crime is mandatory death. However, considering
that, under the 1987 Constitution, the Court cannot impose the death
penalty, the accused Roger Tulin, Virgilio Loyola, Andres Infante, ]r.,
and Cecilio Changco are hereby each meted the penalty of
RECLUSION PERPETUA, with all the accessory penalties of the
law. The accused Cheong San Hiong is hereby meted the penalty of
RECLUSION PERPETUA, pursuant to Article 52 of the Revised
Penal Code in relation to Section 5 of PD 532. The accused Roger
Tulin, Virgilio Loyola, Andres Infante, Jr. and Cecilio Changco are
hereby ordered to return to the PNOC Shipping and Transport
Corporation the "M/T Tabangao" or if the accused can no longer
return the same, the said accused are hereby ordered to remit,
jointly and severally, to said corporation the value thereof in the
amount of P11,240,000.00 Philippine Currency, with interests
thereon, at the rate of 6% per annum from March 2, 1991 until the
said amount is paid in full. All the accused including Cheong San
Hiong are hereby ordered to return to the Caltex Philippines, Inc. the
cargo of the "M/T Tabangao", or if the accused can no longer return
the said cargo to said corporation, all the accused are hereby
condemned to pay, jointly and severally, to the Caltex Refinery, Inc.,
the value of said cargo in the amount of P40,426,793.87, Philippine
Currency plus interests until said amount is paid in full. After the
accused Cheong San Hiong has served his sentence, he shall be
deported to Singapore.
All the accused shall be credited for the full period of their detention
at the National Bureau of Investigation and the City Jail of Manila
during the pendency of this case provided that they agreed in writing
to abide by and comply strictly with the rules and regulations of the
City Jail of Manila and the National Bureau of Investigation. With
costs against all the accused.
SO ORDERED.
(pp. 149-150, Rollo.)
The matter was then elevated to this Court. The arguments of
accused-appellants may be summarized as follows:
Roger P. Tulin Virgilio Loyola Andres C. Infante Jr., and Cecilio O.
Changco
Accused-appellants Tulin, Loyola, Infante, Jr., and Cecilio Changco
assert that the trial court erred in allowing them to adopt the
proceedings taken during the time they were being represented by
Mr. Tomas Posadas, a non-lawyer, thereby depriving them of their
constitutional right to procedural due process.
In this regard, said accused-appellants narrate that Mr. Posadas
entered his appearance as counsel for all of them. However, in the
course of the proceedings, or on February 11, 1992, the trial court
discovered that Mr. Posadas was not a member of the Philippine
Bar. This was after Mr. Posadas had presented and examined seven
witnesses for the accused.
Further, accused-appellants Tulin, Loyola, Infante, Cecilio, Changco
uniformly contend that during the custodial investigation, they were
subjected to physical violence; were forced to sign statements
without being given the opportunity to read the contents of the same;
were denied assistance of counsel, and were not informed of their
rights, in violation of their constitutional rights,
Said accused-appellants also argue that the trial court erred in
finding that the prosecution proved beyond reasonable doubt that
they committed the crime of qualified piracy. They allege that the
pirates were outnumbered by the crew who totaled 22 and who were
not guarded at all times. The crew, so these accused-appellants
conclude, could have overpowered the alleged pirates.
Cheong San Hiong
In his brief, Cheong argues that: (1) Republic Act No. 7659 in effect
obliterated the crime committed by him; (2) the trial court erred in
declaring that the burden is lodged on him to prove by clear and
convincing evidence that he had no knowledge that Emilio Changco
and his cohorts attacked and seized the "M/T Tabangao" and/or that
the cargo of the vessel was stolen or the subject of theft or robbery
or piracy; (3) the trial court erred in finding him guilty as an
accomplice to the crime of qualified piracy under Section 4 of
Presidential Decree No. 532 (Anti-Piracy and Anti-Robbery Law of
1974); (4) the trial court erred in convicting and punishing him as an
accomplice when the acts allegedly committed by him were done or
executed outside of Philippine waters and territory, stripping the
Philippine courts of jurisdiction to hold him for trial, to convict, and
sentence; (5) the trial court erred in making factual conclusions
without evidence on record to prove the same and which in fact are
contrary to the evidence adduced during trial; (6) the trial court erred
in convicting him as an accomplice under Section 4 of Presidential
Decree No. 532 when he was charged as a principal by direct
participation under said decree, thus violating his constitutional right
to be informed of the nature and cause of the accusation against
him.
Cheong also posits that the evidence against the other accused-
appellants do not prove any participation on his part in the
commission of the crime of qualified piracy. He further argues that he
had not in any way participated in the seajacking of "M/T Tabangao"
and in committing the crime of qualified piracy, and that he was not
aware that the vessel and its cargo were pirated.
As legal basis for his appeal, he explains that he was charged under
the information with qualified piracy as principal under Section 2 of
Presidential Decree No. 532 which refers to Philippine waters. In the
case at bar, he argues that he was convicted for acts done outside
Philippine waters or territory. For the State to have criminal
jurisdiction, the act must have been committed within its territory.
We affirm the conviction of all the accused-appellants.
The issues of the instant case may be summarized as follows: (1)
what are the legal effects and implications of the fact that a non-
lawyer represented accused-appellants during the trial?; (2) what are
the legal effects and implications of the absence of counsel during
the custodial investigation?; (3) did the trial court err in finding that
the prosecution was able to prove beyond reasonable doubt that
accused-appellants committed the crime of qualified piracy?; (4) did
Republic Act No. 7659 obliterate the crime committed by accused-
appellant Cheong?; and (5) can accused-appellant Cheong be
convicted as accomplice when he was not charged as such and
when the acts allegedly committed by him were done or executed
outside Philippine waters and territory?
On the first issue, the record reveals that a manifestation (Exhibit
"20", Record) was executed by accused-appellants Tulin, Loyola,
Changco, and Infante, Jr. on February 11, 1991, stating that they
were adopting the evidence adduced when they were represented
by a non-lawyer. Such waiver of the right to sufficient representation
during the trial as covered by the due process clause shall only be
valid if made with the full assistance of a bona fide lawyer. During
the trial, accused-appellants, as represented by Atty. Abdul Basar,
made a categorical manifestation that said accused-appellants were
apprised of the nature and legal consequences of the subject
manifestation, and that they voluntarily and intelligently executed the
same. They also affirmed the truthfulness of its contents when asked
in open court (tsn, February 11, 1992, pp. 7-59). It is true that an
accused person shall be entitled to be present and to defend himself
in person and by counsel at every stage of the proceedings, from
arraignment to promulgation of judgment (Section 1, Rule 115,
Revised Rules of Criminal Procedure). This is hinged on the fact that
a layman is not versed on the technicalities of trial. However, it is
also provided by law that "[r]ights may be waived, unless the waiver
is contrary to law, public order, public policy, morals, or good
customs or prejudicial to a third person with right recognized by law."
(Article 6, Civil Code of the Philippines). Thus, the same section of
Rule 115 adds that "[u]pon motion, the accused may be allowed to
defend himself in person when it sufficiently appears to the court that
he can properly protect his rights without the assistance of counsel."
By analogy , but without prejudice to the sanctions imposed by law
for the illegal practice of law, it is amply shown that the rights of
accused-appellants were sufficiently and properly protected by the
appearance of Mr. Tomas Posadas. An examination of the record
will show that he knew the technical rules of procedure. Hence, we
rule that there was a valid waiver of the right to sufficient
representation during the trial, considering that it was unequivocally,
knowingly, and intelligently made and with the full assistance of a
bona fide lawyer, Atty. Abdul Basar. Accordingly, denial of due
process cannot be successfully invoked where a valid waiver of
rights has been made (People vs. Serzo, 274 SCRA 553 [1997];
Sayson vs. People, 166 SCRA 680 [1988]).
However, we must quickly add that the right to counsel during
custodial investigation may not be waived except in writing and in the
presence of counsel.
Section 12, Article III of the Constitution reads:
SEC. 12. (1) Any person under investigation for the commission of
an offense shall have the right to be informed of his right to remain
silent and to have competent and independent counsel preferably of
his own choice. If the person cannot afford the services of counsel,
he must be provided with one. These rights cannot be waived except
in writing and in the presence of counsel.
(2) No torture, force, violence, threat, intimidation, or any other
means which vitiate the free will shall be used against him. Secret
detention places, solitary, incommunicado, or other similar forms of
detention are prohibited.
(3) Any confession or admission obtained in violation of this or
Section 17 hereof shall be inadmissible in evidence against him.
(4) The law shall provide for penal and civil sanctions for violations of
this section as well as compensation to and rehabilitation of victims
of torture or similar practices, and their families.
Such rights originated from Miranda v. Arizona (384 U. S. 436
[1966]) which gave birth to the so-called Miranda doctrine which is to
the effect that prior to any questioning during custodial investigation,
the person must be warned that he has a right to remain silent, that
any statement he gives may be used as evidence against him, and
that he has the right to the presence of an attorney, either retained or
appointed. The defendant may waive effectuation of these rights,
provided the waiver is made voluntarily, knowingly, and intelligently.
The Constitution even adds the more stringent requirement that the
waiver must be in writing and made in the presence of counsel.
Saliently, the absence of counsel during the execution of the so-
called confessions of the accused-appellants make them invalid. In
fact, the very basic reading of the Miranda rights was not even
shown in the case at bar. Paragraph [3] of the aforestated Section 12
sets forth the so-called "fruit from the poisonous tree doctrine," a
phrase minted by Mr. Justice Felix Frankfurter in the celebrated case
of Nardone vs. United States (308 U.S. 388 [1939]). According to
this rule, once the primary source (the "tree") is shown to have been
unlawfully obtained, any secondary or derivative evidence (the
"fruit") derived from it is also inadmissible. The rule is based on the
principle that evidence illegally obtained by the State should not be
used to gain other evidence because the originally illegally obtained
evidence taints all evidence subsequently obtained (People vs.
Alicando, 251 SCRA 293 [1995]). Thus, in this case, the
uncounselled extrajudicial confessions of accused-appellants,
without a valid waiver of the right to counsel, are inadmissible and
whatever information is derived therefrom shall be regarded as
likewise inadmissible in evidence against them.
However, regardless of the inadmissibility of the subject confessions,
there is sufficient evidence to convict accused-appellants with moral
certainty. We agree with the sound deduction of the trial court that
indeed, Emilio Changco (Exhibits "U" and "UU") and accused-
appellants Tulin, Loyola, .and Infante, Jr. did conspire and
confederate to commit the crime charged. In the words of then trial
judge, now Justice Romeo J. Callejo of the Court of Appeals -
...The Prosecution presented to the Court an array of witnesses,
officers and members of the crew of the "M/T Tabangao" no less,
who identified and pointed to the said Accused as among those who
attacked and seized, the "M/T Tabangao" on March 2, 1991, at
about 6:30 o'clock in the afternoon, off Lubang Island, Mindoro, with
its cargo, and brought the said vessel, with its cargo, and the officers
and crew of the vessel, in the vicinity of Horsebough Lighthouse,
about sixty-six nautical miles off the shoreline of Singapore and sold
its cargo to the Accused Cheong San Hiong upon which the cargo
was discharged from the "M/T Tabangao" to the "Navi Pride" for the
price of about $500,000.00 (American Dollars) on March 29, and 30,
1991...
xxx
xxx
xxx
The Master, the officers and members of the crew of the "M/T
Tabangao" were on board the vessel with the Accused and their
cohorts from March 2, 1991 up to April 10, 1991 or for more than one
(1) month. There can be no scintilla of doubt in the mind of the Court
that the officers and crew of the vessel could and did see and
identify the seajackers and their leader. In fact, immediately after the
Accused were taken into custody by the operatives of the National
Bureau of Investigation, Benjamin Suyo, Norberto Senosa, Christian
Torralba and Isaias Wervas executed their "Joint Affidavit" (Exhibit
"B") and pointed to and identified the said Accused as some of the
pirates.
xxx
xxx
xxx
Indeed, when they testified before this Court on their defense, the
three (3) Accused admitted to the Court that they, in fact, boarded
the said vessel in the evening of March 2 1991 and remained on
board when the vessel sailed to its, destination, which turned out to
be off the port of Singapore.
(pp. 106-112, Rollo.)
We also agree with the trial court's finding that accused-appellants'
defense of denial is not supported by any hard evidence but their
bare testimony. Greater weight is given to the categorical
identification of the accused by the prosecution witnesses than to the
accused's plain denial of participation in the commission of the crime
(People v. Baccay, 284 SCRA 296 [1998]). Instead, accused-
appellants Tulin, Loyola, and Infante, Jr. narrated a patently
desperate tale that they were hired by three complete strangers
(allegedly Captain Edilberto Liboon, Second Mate Christian Torralba,
and their companion) while said accused-appellants were conversing
with one another along the seashore at Apkaya, Balibago,
Calatagan, Batangas, to work on board the "M/T Tabangao" which
was then anchored off-shore. And readily, said accused-appellants
agreed to work as cooks and handymen for an indefinite period of
time without even saying goodbye to their families, without even
knowing their destination or the details of their voyage, without the
personal effects needed for a long voyage at sea. Such evidence is
incredible and clearly not in accord with human experience. As
pointed out by the trial court, it is incredible that Captain Liboon,
Second Mate Torralba, and their companion "had to leave the vessel
at 9:30 o'clock in the evening and venture in a completely unfamiliar
place merely to recruit five (5) cooks or handymen (p. 113, Rollo)."
Anent accused-appellant Changco's defense of denial with the alibi
that on May 14 and 17, he was at his place of work and that on April
10, 1991, he was in his house in Bacoor, Cavite, sleeping, suffice it
to state that alibi is fundamentally and inherently a weak defense,
much more so when uncorroborated by other witnesses (People v.
Adora, 275 SCRA 441 [1997]) considering that it is easy to fabricate
and concoct, and difficult to disprove. Accused-appellant must
adduce clear and convincing evidence that, at about midnight on
April 10, 1991, it was physically impossible for him to have been in
Calatagan, Batangas. Changco not only failed to do this, he was
likewise unable to prove that he was in his place of work on the
dates aforestated.
It is doctrinal that the trial court's evaluation of the credibility of a
testimony is accorded the highest respect, for trial courts have an
untrammeled opportunity to observe directly the demeanor of
witnesses and, thus, to determine whether a certain witness is telling
the truth (People v. Obello, 284 SCRA 79 [1998]).
We likewise uphold the trial court's finding of conspiracy. A
conspiracy exists when two or more persons come to an agreement
concerning the commission of a felony and decide to commit it
(Article 8, Revised Penal Code). To be a conspirator, one need not
participate in every detail of execution; he need not even take part in
every act or need not even know the exact part to be performed by
the others in the execution of the conspiracy. As noted by the trial
court, there are times when conspirators are assigned separate and
different tasks which may appear unrelated to one another, but in
fact, constitute a whole and collective effort to achieve a common
criminal design.
We affirm the trial court's finding that Emilio Changco, accused-
appellants Tulin, Loyola, and Infante, Jr. and others, were the ones
assigned to attack and seize the "M/T Tabangao" off Lubang,
Mindoro, while accused-appellant Cecilio Changco was to fetch the
master and the members of the crew from the shoreline of
Calatagan, Batangas after the transfer, and bring them to Imus,
Cavite, and to provide the crew and the officers of the vessel with
money for their fare and food provisions on their way home. These
acts had to be well-coordinated. Accused-appellant Cecilio Changco
need not be present at the time of the attack and seizure of "M/T
Tabangao" since he performed his task in view of an objective
common to all other accused- appellants.
Of notable importance is the connection of accused-appellants to
one another. Accused-appellant Cecilio Changco is the younger
brother of Emilio Changco (aka Captain Bobby/Captain Roberto
Castillo/Kevin Ocampo), owner of Phil-Asia Shipping Lines. Cecilio
worked for his brother in said corporation. Their residences are
approximately six or seven kilometers away from each other. Their
families are close. Accused-appellant Tulin, on the other hand, has
known Cecilio since their parents were neighbors in Aplaya,
Balibago, Calatagan, Batangas. Accused-appellant Loyola's wife is a
relative of the Changco brothers by affinity .Besides, Loyola and
Emilio Changco had both been accused in a seajacking case
regarding "M/T Isla Luzon" and its cargo of steel coils and plates off
Cebu and Bohol in 1989. Emilio Changco (aka Kevin Ocampo) was
convicted of the crime while Loyola at that time remained at large.
As for accused-appellant Hiong, he ratiocinates that he can no
longer be convicted of piracy in Philippine waters as defined and
penalized in Sections 2[d] and 3[a], respectively of Presidential
Decree No. 532 because Republic Act No. 7659 (effective January
1, 1994) which amended Article 122 of the Revised Penal Code, has
impliedly superseded Presidential Decree No. 532. He reasons out
that Presidential Decree No. 532 has been rendered "superfluous or
duplicitous" because both Article 122 of the Revised Penal Code, as
amended, and Presidential Decree No. 532 punish piracy committed
in Philippine waters. He maintains that in order to reconcile the two
laws, the word "any person" mentioned in Section 1 [d]of Presidential
Decree No. 532 must be omitted such that Presidential Decree No.
532 shall only apply to offenders who are members of the
complement or to passengers of the vessel, whereas Republic Act
No. 7659 shall apply to offenders who are neither members of the
complement or passengers of the vessel, hence, excluding him from
the coverage of the law.
Article 122 of the Revised Penal Code, used to provide:
Article 122. Piracy in general and mutiny on the high seas. -The
penalty of reclusion temporal shall be inflicted upon any person who,
on the high seas, shall attack or seize a vessel or, not being a
member of its complement nor a passenger, shall seize the whole or
part of the cargo of said vessel, its equipment, or personal
belongings of its complement or passengers.
(Underscoring supplied.)
Article 122, as amended by Republic Act No. 7659 January 1, 1994),
reads:
Article 122. Piracy in general and mutiny on the high seas or in
Philippine waters. -The penalty of reclusion perpetua shall be
inflicted upon any person who, on the high seas, or in Philippine
waters, shall attack or seize a vessel or, being a member of its
complement nor a passenger, shall seize the whole or part of the
cargo of said vessel, its equipment, or personal belongings of its
complement or passengers.
(Underscoring ours)
On the other hand, Section 2 of Presidential Decree No. 532
provides:
SEC. 2. Definition of Terms. - The following shall mean and be
understood, as follows:
d. Piracy. -Any attack upon or seizure of any vessel, or the taking
away of the whole or part thereof or its cargo, equipment, or the
personal belongings of its complement or passengers, irrespective of
the value thereof, by means of violence against or intimidation of
persons or force upon things, committed by any person. including a
passenger or member of the complement of said vessel in Philippine
waters, shall be considered as piracy. The offenders shall be
considered as pirates and punished as hereinafter provided
(underscoring supplied).
To summarize, Article 122 of the Revised Penal Code, before its
amendment, provided that piracy must be committed on the high
seas by any person not a member of its complement nor a
passenger thereof. Upon its amendment by Republic Act No. 7659,
the coverage of the pertinent provision was widened to include
offenses committed "in Philippine waters." On the other hand, under
Presidential Decree No. 532 (issued in 1974), the coverage of the
law on piracy embraces any person including "a passenger or
member of the complement of said vessel in Philippine waters."
Hence, passenger or not, a member of the complement or not, any
person is covered by the law.
Republic Act No. 7659 neither superseded nor amended the
provisions on piracy under Presidential Decree No. 532. There is no
contradiction between the two laws. There is likewise no ambiguity
and hence, there is no need to construe or interpret the law. All the
presidential decree did was to widen the coverage of the law, in
keeping with the intent to protect the citizenry as well as neighboring
states from crimes against the law of nations. As expressed in one of
the "whereas" clauses of Presidential Decree No. 532, piracy is
"among the highest forms of lawlessness condemned by the penal
statutes of all countries." For this reason, piracy under the Article
122, as amended, and piracy under Presidential Decree No. 532
exist harmoniously as separate laws.
As regards the contention that the trial court did not acquire
jurisdiction over the person of accused-appellant Hiong since the
crime was committed outside Philippine waters, suffice it to state that
unquestionably, the attack on and seizure of "M/T Tabangao"
(renamed "M/T Galilee" by the pirates) and its cargo were committed
in Philippine waters, although the captive vessel was later brought by
the pirates to Singapore where its cargo was off-loaded, transferred,
and sold. And such transfer was done under accused-appellant
Hiong's direct supervision. Although Presidential Decree No. 532
requires that the attack and seizure of the vessel and its cargo be
committed in Philippine waters, the disposition by the pirates of the
vessel and its cargo is still deemed part of the act of piracy, hence,
the same need not be committed in Philippine waters.
Moreover, piracy falls under Title One of Book Two of the Revised
Penal Code. As such, it is an exception to the rule on territoriality in
criminal law. The same principle applies even if Hiong, in the instant
case, were charged, not with a violation of qualified piracy under the
penal code but under a special law, Presidential Decree No. 532
which penalizes piracy in Philippine waters. Verily, Presidential
Decree No. 532 should be applied with more force here since its
purpose is precisely to discourage and prevent piracy in Philippine
waters (People v. Catantan, 278 SCRA 761 [1997]). It is likewise,
well-settled that regardless of the law penalizing the same, piracy is
a reprehensible crime against the whole world (People v. Lol-lo, 43
Phil. 19 [1922]).
However, does this constitute a violation of accused-appellant's
constitutional right to be informed of the nature and cause of the
accusation against him on the ground that he was convicted as an
accomplice under Section 4 of Presidential Decree No. 532 even
though he was charged as a principal by direct participation under
Section 2 of said law?
The trial court found that there was insufficiency of evidence
showing:
(a) that accused-appellant Hiong directly participated in the attack
and seizure of "M/T Tabangao" and its cargo; (b) that he induced
Emilio Changco and his group in the attack and seizure of "M/T
Tabangao" and its cargo; ( c) and that his act was indispensable in
the attack on and seizure of "M/T Tabangao" and its cargo.
Nevertheless, the trial court found that accused-appellant Hiong's
participation was indisputably one which aided or abetted Emilio
Changco and his band of pirates in the disposition of the stolen
cargo under Section 4 of Presidential Decree No. 532 which
provides:
SEC. 4. Aiding pirates or highway robbers/brigands or abetting
piracy or highway robbery brigandage. -Any person who knowingly
and in any manner aids or protects pirates or highway
robbers/brigands, such as giving them information about the
movement of police or other peace officers of the government, or
acquires or receives property taken by such pirates or brigands or in
any manner derives any benefit therefrom; or any person who
directly or indirectly abets the commission of piracy or highway
robbery or brigandage, shall be considered as an accomplice of the
principal officers and be punished in accordance with Rules
prescribed by the Revised Penal Code.
It shall be presumed that any person who does any of the acts
provided in this Section has performed them knowingly, unless the
contrary is proven.
The ruling of the trial court is Within well-settle jurisprudence that if
there is lack of complete evidence of conspiracy, the liability is that of
an accomplice and not as principal (People v. Tolentino, 40 SCRA
514 [1971]). Any doubt as to the participation of an individual in the
commission of the crime is always resolved in favor of lesser
responsibility (People v. Corbes, 270 SCRA 465 [1997]; People vs.
Elfano, Jr., 125 SCRA 792 [1983]; People v. Pastores, 40 SCRA 498
[1971]).
Emphasis must also be placed on the last paragraph of Section 4 of
Presidential Decree No 532 which presumes that any person who
does any of the acts provided in said section has performed them
knowingly, unless the contrary is proven. In the case at bar,
accused-appellant Hiong had failed to overcome the legal
presumption that he knowingly abetted or aided in the commission of
piracy, received property taken by such pirates and derived benefit
therefrom.
The record discloses that accused-appellant Hiong aided the pirates
in disposing of the stolen cargo by personally directing its transfer
from "M/T Galilee" to "M/T Navi Pride". He profited therefrom by
buying the hijacked cargo for Navi Marine Services, Pte., Ltd. (tsn,
June 3, 1992, pp. 15-23). He even tested the quality and verified the
quantity of the petroleum products, connived with Navi Marine
Services personnel in falsifying the General Declarations and Crew
List to ensure that the illegal transfer went through, undetected by
Singapore Port Authorities, and supplied the pirates with food, beer,
and other provisions for their maintenance while in port (tsn, June 3,
1992, pp. 133-134).
We believe that the falsification of the General Declaration (Arrival
and Departure) and Crew List was accomplished and utilized by
accused-appellant Hiong and Navi Marine Services personnel in the
execution of their scheme to avert detection by Singapore Port
Authorities. Hence, had accused-appellant Hiong not falsified said
entries, the Singapore Port Authorities could have easily discovered
the illegal activities that took place and this would have resulted in
his arrest and prosecution in Singapore. Moreover, the transfer of
the stolen cargo from "M/T Galilee" to "Navi Pride" could not have
been effected.
We completely uphold the factual findings of the trial court showing
in detail accused-appellant Hiong's role in the disposition of the
pirated goods summarized as follows: that on March 27, 1991, Hiong
with Captain Biddy Santos boarded the "Navi Pride," one of the
vessels of the Navi Marine, to rendezvous with the "M/T Galilee";
that the firm submitted the crew list of the vessel (Exhibit "8-CSH",
Record) to the port authorities, excluding the name of Hiong; that the
"General Declaration" (for departure) of the "Navi Pride" for its
voyage off port of Singapore (Exhibits "HH" and "8-A CSH", Record)
falsely stated that the vessel was scheduled to depart at 2200 (10
o'clock in the evening), that there were no passengers on board, and
the purpose of the voyage was for "cargo operation" and that the
vessel was to unload and transfer 1,900 tons of cargo; that after the
transfer of the fuel from "M/T Galilee" with' Emilio Changco a. k. a.
Captain Bobby a. k. a. Roberto Castillo at the helm, the surveyor
prepared the "Quantity Certificate" (Exhibit "11-C CSH, Record)
stating that the cargo transferred to the "Navi Pride" was 2,406 gross
cubic meters; that although Hiong was not the Master of the vessel,
he affixed his signature on the "Certificate" above the word "Master"
(Exhibit "11-C-2 CSH", Record); that he then paid $150,000.00 but
did not require any receipt for the amount; that Emilio Changco also
did not issue one; and that in the requisite "General Declaration"
upon its arrival at Singapore on March 29, 1991, at 7 o'clock in the
evening, (Exhibits "JJ" and "13-A CSH", Record), it was made to
falsely appear that the "Navi Pride" unloaded 1,700 tons of cargo on
the high seas during said voyage when in fact it acquired from the
"M/T Galilee" 2,000 metric tons of diesel oil. The second transfer
transpired with the same irregularities as discussed above. It was
likewise supervised by accused- appellant Cheong from his end
while Emilio Changco supervised the transfer from his end.
Accused-appellant Hiong maintains that he was merely following the
orders of his superiors and that he has no knowledge of the illegality
of the source of the cargo.
First and foremost, accused-appellant Hiong cannot deny knowledge
of the source and nature of the cargo since he himself received the
same from "M/T Tabangao". Second, considering that he is a highly
educated mariner, he should have avoided any participation in the
cargo transfer given the very suspicious circumstances under which
it was acquired. He failed to show a single piece of deed or bill of
sale or even a purchase order or any contract of sale for the
purchase by the firm; he never bothered to ask for and scrutinize the
papers and documentation relative to the "M/T Galilee"; he did not
even verify the identity of Captain Robert Castillo whom he met for
the first time nor did he check the source of the cargo; he knew that
the transfer took place 66 nautical miles off Singapore in the dead of
the night which a marine vessel of his firm did not ordinarily do; it
was also the first time Navi Marine transacted with Paul Gan
involving a large sum of money without any receipt issued therefor;
he was not even aware if Paul Gan was a Singaporean national and
thus safe to deal with. It should also be noted that the value of the
cargo was P40,426,793.87 or roughly more than US$l,000,000.00
(computed at P30.00 to $1, the exchange rate at that time).
Manifestly, the cargo was sold for less than one-half of its value.
Accused-appellant Hiong should have been aware of this irregularity.
Nobody in his right mind would go to far away Singapore, spend
much time and money for transportation -only to sell at the
aforestated price if it were legitimate sale involved. This, in addition
to the act of falsifying records, clearly shows that accused-appellant
Hiong was well aware that the cargo that his firm was acquiring was
purloined.
Lastly, it cannot be correctly said that accused-appellant was
"merely following the orders of his superiors." An individual is
justified in performing an act in obedience to an order issued by a
superior if such order, is for some lawful purpose and that the means
used by the subordinate to carry out said order is lawful (Reyes,
Revised Penal Code, Vol. 1, 1981 ed., p. 212). Notably, the alleged
order of Hiong's superior Chua Kim Leng Timothy, is a patent
violation not only of Philippine, but of international law. Such violation
was committed on board a Philippine-operated vessel. Moreover, the
means used by Hiong in carrying out said order was equally
unlawful. He misled port and immigration authorities, falsified
records, using a mere clerk, Frankie Loh, to consummate said acts.
During the trial, Hiong presented himself, and the trial court was
convinced, that he was an intelligent and articulate Port Captain.
These circumstances show that he must have realized the nature
and the implications of the order of Chua Kim Leng Timothy.
Thereafter, he could have refused to follow orders to conclude the
deal and to effect the transfer of the cargo to the Navi Pride. He did
not do so, for which reason, he must now suffer the consequences of
his actions.
WHEREFORE , finding the conviction of accused-appellants justified
by the evidence on record, the Court hereby AFFIRMS the judgment
of the trial court in toto.
SO ORDERED.
G.R. No. L-2662 March 26, 1949
SHIGENORI KURODA, petitioner,
vs.
Major General RAFAEL JALANDONI, Brigadier General CALIXTO
DUQUE, Colonel MARGARITO TORALBA, Colonel IRENEO
BUENCONSEJO, Colonel PEDRO TABUENA, Major FEDERICO
ARANAS, MELVILLE S. HUSSEY and ROBERT PORT,
respondents.
Pedro Serran, Jose G. Lukban, and Liberato B. Cinco for petitioner.
Fred Ruiz Castro Federico Arenas Mariano Yengco, Jr., Ricardo A.
Arcilla and S. Melville Hussey for respondents.
MORAN, C.J.:
Shigenori Kuroda, formerly a Lieutenant-General of the Japanese
Imperial Army and Commanding General of the Japanese Imperial
Forces in The Philippines during a period covering 19433 and 19444
who is now charged before a military Commission convened by the
Chief of Staff of the Armed forces of the Philippines with having
unlawfully disregarded and failed "to discharge his duties as such
command, permitting them to commit brutal atrocities and other high
crimes against noncombatant civilians and prisoners of the Imperial
Japanese Forces in violation of the laws and customs of war" —
comes before this Court seeking to establish the illegality of
Executive Order No. 68 of the President of the Philippines: to enjoin
and prohibit respondents Melville S. Hussey and Robert Port from
participating in the prosecution of petitioner's case before the Military
Commission and to permanently prohibit respondents from
proceeding with the case of petitioners.
In support of his case petitioner tenders the following principal
arguments.
First. — "That Executive Order No. 68 is illegal on the ground that it
violates not only the provision of our constitutional law but also our
local laws to say nothing of the fact (that) the Philippines is not a
signatory nor an adherent to the Hague Convention on Rules and
Regulations covering Land Warfare and therefore petitioners is
charged of 'crimes' not based on law, national and international."
Hence petitioner argues — "That in view off the fact that this
commission has been empanelled by virtue of an unconstitutional
law an illegal order this commission is without jurisdiction to try
herein petitioner."
Second. — That the participation in the prosecution of the case
against petitioner before the Commission in behalf of the United
State of America of attorneys Melville Hussey and Robert Port who
are not attorneys authorized by the Supreme Court to practice law in
the Philippines is a diminution of our personality as an independent
state and their appointment as prosecutor are a violation of our
Constitution for the reason that they are not qualified to practice law
in the Philippines.
Third. — That Attorneys Hussey and Port have no personality as
prosecution the United State not being a party in interest in the case.
Executive Order No. 68, establishing a National War Crimes Office
prescribing rule and regulation governing the trial of accused war
criminals, was issued by the President of the Philippines on the 29th
days of July, 1947 This Court holds that this order is valid and
constitutional. Article 2 of our Constitution provides in its section 3,
that —
The Philippines renounces war as an instrument of national policy
and adopts the generally accepted principles of international law as
part of the of the nation.
In accordance with the generally accepted principle of international
law of the present day including the Hague Convention the Geneva
Convention and significant precedents of international jurisprudence
established by the United Nation all those person military or civilian
who have been guilty of planning preparing or waging a war of
aggression and of the commission of crimes and offenses
consequential and incidental thereto in violation of the laws and
customs of war, of humanity and civilization are held accountable
therefor. Consequently in the promulgation and enforcement of
Execution Order No. 68 the President of the Philippines has acted in
conformity with the generally accepted and policies of international
law which are part of the our Constitution.
The promulgation of said executive order is an exercise by the
President of his power as Commander in chief of all our armed
forces as upheld by this Court in the case of Yamashita vs. Styer (L-
129, 42 Off. Gaz., 664) 1 when we said —
War is not ended simply because hostilities have ceased. After
cessation of armed hostilities incident of war may remain pending
which should be disposed of as in time of war. An importance
incident to a conduct of war is the adoption of measure by the
military command not only to repel and defeat the enemies but to
seize and subject to disciplinary measure those enemies who in their
attempt to thwart or impede our military effort have violated the law
of war. (Ex parte Quirin 317 U.S., 1; 63 Sup. Ct., 2.) Indeed the
power to create a military commission for the trial and punishment of
war criminals is an aspect of waging war. And in the language of a
writer a military commission has jurisdiction so long as a technical
state of war continues. This includes the period of an armistice or
military occupation up to the effective of a treaty of peace and may
extend beyond by treaty agreement. (Cowles Trial of War Criminals
by Military Tribunals, America Bar Association Journal June, 1944.)
Consequently, the President as Commander in Chief is fully
empowered to consummate this unfinished aspect of war namely the
trial and punishment of war criminal through the issuance and
enforcement of Executive Order No. 68.
Petitioner argues that respondent Military Commission has no
Jurisdiction to try petitioner for acts committed in violation of the
Hague Convention and the Geneva Convention because the
Philippines is not a signatory to the first and signed the second only
in 1947. It cannot be denied that the rules and regulation of the
Hague and Geneva conventions form, part of and are wholly based
on the generally accepted principals of international law. In facts
these rules and principles were accepted by the two belligerent
nation the United State and Japan who were signatories to the two
Convention, Such rule and principles therefore form part of the law of
our nation even if the Philippines was not a signatory to the
conventions embodying them for our Constitution has been
deliberately general and extensive in its scope and is not confined to
the recognition of rule and principle of international law as continued
inn treaties to which our government may have been or shall be a
signatory.
Furthermore when the crimes charged against petitioner were
allegedly committed the Philippines was under the sovereignty of
United States and thus we were equally bound together with the
United States and with Japan to the right and obligation contained in
the treaties between the belligerent countries. These rights and
obligation were not erased by our assumption of full sovereignty. If at
all our emergency as a free state entitles us to enforce the right on
our own of trying and punishing those who committed crimes against
crimes against our people. In this connection it is well to remember
what we have said in the case of Laurel vs. Misa (76 Phil., 372):
. . . The change of our form government from Commonwealth to
Republic does not affect the prosecution of those charged with the
crime of treason committed during then Commonwealth because it is
an offense against the same sovereign people. . . .
By the same token war crimes committed against our people and our
government while we were a Commonwealth are triable and
punishable by our present Republic.

Petitioner challenges the participation of two American attorneys

namely Melville S. Hussey and Robert Port in the prosecution of his
case on the ground that said attorney's are not qualified to practice
law in Philippines in accordance with our Rules of court and the
appointment of said attorneys as prosecutors is violative of our
national sovereignty.

In the first place respondent Military Commission is a special military

tribunal governed by a special law and not by the Rules of court
which govern ordinary civil court. It has already been shown that
Executive Order No. 68 which provides for the organization of such
military commission is a valid and constitutional law. There is nothing
in said executive order which requires that counsel appearing before
said commission must be attorneys qualified to practice law in the
Philippines in accordance with the Rules of Court. In facts it is
common in military tribunals that counsel for the parties are usually
military personnel who are neither attorneys nor even possessed of
legal training.

Secondly the appointment of the two American attorneys is not

violative of our nation sovereignty. It is only fair and proper that
United States, which has submitted the vindication of crimes against
her government and her people to a tribunal of our nation should be
allowed representation in the trial of those very crimes. If there has
been any relinquishment of sovereignty it has not been by our
government but by the United State Government which has yielded
to us the trial and punishment of her enemies. The least that we
could do in the spirit of comity is to allow them representation in said
trials.

Alleging that the United State is not a party in interest in the case
petitioner challenges the personality of attorneys Hussey and Port as
prosecutors. It is of common knowledge that the United State and its
people have been equally if not more greatly aggrieved by the
crimes with which petitioner stands charged before the Military
Commission. It can be considered a privilege for our Republic that a
leader nation should submit the vindication of the honor of its
citizens and its government to a military tribunal of our country.

The Military Commission having been convened by virtue of a valid

law with jurisdiction over the crimes charged which fall under the
provisions of Executive Order No. 68, and having said petitioner in
its custody, this Court will not interfere with the due process of such
Military commission.

For all the foregoing the petition is denied with costs de oficio.

G.R. No. 139465 January 18, 2000
SECRETARY OF JUSTICE, petitioner,
vs.
HON. RALPH C. LANTION, Presiding Judge, Regional Trial Court of
Manila, Branch 25, and MARK B. JIMENEZ, respondents.
MELO, J.:
The individual citizen is but a speck of particle or molecule vis-à-vis
the vast and overwhelming powers of government. His only
guarantee against oppression and tyranny are his fundamental
liberties under the Bill of Rights which shield him in times of need.
The Court is now called to decide whether to uphold a citizen's basic
due process rights, or the government's ironclad duties under a
treaty. The bugle sounds and this Court must once again act as the
faithful guardian of the fundamental writ.
The petition at our doorstep is cast against the following factual
backdrop:
On January 13, 1977, then President Ferdinand E. Marcos issued
Presidential Decree No. 1069 "Prescribing the Procedure for the
Extradition of Persons Who Have Committed Crimes in a Foreign
Country". The Decree is founded on: the doctrine of incorporation
under the Constitution; the mutual concern for the suppression of
crime both in the state where it was committed and the state where
the criminal may have escaped; the extradition treaty with the
Republic of Indonesia and the intention of the Philippines to enter
into similar treaties with other interested countries; and the need for
rules to guide the executive department and the courts in the proper
implementation of said treaties.
On November 13, 1994, then Secretary of Justice Franklin M. Drilon,
representing the Government of the Republic of the Philippines,
signed in Manila the "Extradition Treaty Between the Government of
the Republic of the Philippines and the Government of the United
States of America" (hereinafter referred to as the RP-US Extradition
Treaty). The Senate, by way of Resolution No. 11, expressed its
concurrence in the ratification of said treaty. It also expressed its
concurrence in the Diplomatic Notes correcting Paragraph (5)(a),
Article 7 thereof (on the admissibility of the documents
accompanying an extradition request upon certification by the
principal diplomatic or consular officer of the requested state
resident in the Requesting State).
On June 18, 1999, the Department of Justice received from the
Department of Foreign Affairs U.S. Note Verbale No. 0522
containing a request for the extradition of private respondent Mark
Jimenez to the United States. Attached to the Note Verbale were the
Grand Jury Indictment, the warrant of arrest issued by the U.S.
District Court, Southern District of Florida, and other supporting
documents for said extradition. Based on the papers submitted,
private respondent appears to be charged in the United States with
violation of the following provisions of the United States Code (USC):
A) 18 USC 371 (Conspiracy to commit offense or to defraud the
United States; two [2] counts; Maximum Penalty — 5 years on each
count);
B) 26 USC 7201 (Attempt to evade or defeat tax; four [4] counts;
Maximum Penalty — 5 years on each count);
C) 18 USC 1343 (Fraud by wire, radio, or television; two [2] counts;
Maximum Penalty — 5 years on each count);
D) 18 USC 1001 (False statement or entries; six [6] counts;
Maximum Penalty — 5 years on each count);
E) 2 USC 441f (Election contributions in name of another; thirty-three
[33] counts; Maximum Penalty — less than one year).
(p. 14, Rollo.)
On the same day, petitioner issued Department Order No. 249
designating and authorizing a panel of attorneys to take charge of
and to handle the case pursuant to Section 5(1) of Presidential
Decree No. 1069. Accordingly, the panel began with the "technical
evaluation and assessment" of the extradition request and the
documents in support thereof. The panel found that the "official
English translation of some documents in Spanish were not attached
to the request and that there are some other matters that needed to
be addressed" (p. 15, Rollo).
Pending evaluation of the aforestated extradition documents, private
respondent, through counsel, wrote a letter dated July 1, 1999
addressed to petitioner requesting copies of the official extradition
request from the U.S. Government, as well as all documents and
papers submitted therewith; and that he be given ample time to
comment on the request after he shall have received copies of the
requested papers. Private respondent also requested that the
proceedings on the matter be held in abeyance in the meantime.
Later, private respondent requested that preliminary, he be given at
least a copy of, or access to, the request of the United States
Government, and after receiving a copy of the Diplomatic Note, a
period of time to amplify on his request.
In response to private respondent's July 1, 1999 letter, petitioner, in
a reply-letter dated July 13, 1999 (but received by private respondent
only on August 4, 1999), denied the foregoing requests for the
following reasons:
1. We find it premature to furnish you with copies of the extradition
request and supporting documents from the United States
Government, pending evaluation by this Department of the
sufficiency of the extradition documents submitted in accordance
with the provisions of the extradition treaty and our extradition law.
Article 7 of the Extradition Treaty between the Philippines and the
United States enumerates the documentary requirements and
establishes the procedures under which the documents submitted
shall be received and admitted as evidence. Evidentiary
requirements under our domestic law are also set forth in Section 4
of P.D. No. 1069.
Evaluation by this Department of the aforementioned documents is
not a preliminary investigation nor akin to preliminary investigation of
criminal cases. We merely determine whether the procedures and
requirements under the relevant law and treaty have been complied
with by the Requesting Government. The constitutionally guaranteed
rights of the accused in all criminal prosecutions are therefore not
available.
It is only after the filing of the petition for extradition when the person
sought to be extradited will be furnished by the court with copies of
the petition, request and extradition documents and this Department
will not pose any objection to a request for ample time to evaluate
said documents.
2. The formal request for extradition of the United States contains
grand jury information and documents obtained through grand jury
process covered by strict secrecy rules under United States law. The
United States had to secure orders from the concerned District
Courts authorizing the United States to disclose certain grand jury
information to Philippine government and law enforcement personnel
for the purpose of extradition of Mr. Jimenez. Any further disclosure
of the said information is not authorized by the United States District
Courts. In this particular extradition request the United States
Government requested the Philippine Government to prevent
unauthorized disclosure of the subject information. This
Department's denial of your request is consistent with Article 7 of the
RP-US Extradition Treaty which provides that the Philippine
Government must represent the interests of the United States in any
proceedings arising out of a request for extradition. The Department
of Justice under P.D. No. 1069 is the counsel of the foreign
governments in all extradition requests.
3. This Department is not in a position to hold in abeyance
proceedings in connection with an extradition request. Article 26 of
the Vienna Convention on the Law of Treaties, to which we are a
party provides that "[E]very treaty in force is binding upon the parties
to it and must be performed by them in good faith". Extradition is a
tool of criminal law enforcement and to be effective, requests for
extradition or surrender of accused or convicted persons must be
processed expeditiously.
(pp. 77-78, Rollo.)
Such was the state of affairs when, on August 6, 1999, private
respondent filed with the Regional Trial Court of the National Capital
Judicial Region a petition against the Secretary of Justice, the
Secretary of Foreign Affairs, and the Director of the National Bureau
of Investigation, for mandamus (to compel herein petitioner to furnish
private respondent the extradition documents, to give him access
thereto, and to afford him an opportunity to comment on, or oppose,
the extradition request, and thereafter to evaluate the request
impartially, fairly and objectively); certiorari (to set aside herein
petitioner's letter dated July 13, 1999); and prohibition (to restrain
petitioner from considering the extradition request and from filing an
extradition petition in court; and to enjoin the Secretary of Foreign
Affairs and the Director of the NBI from performing any act directed
to the extradition of private respondent to the United States), with an
application for the issuance of a temporary restraining order and a
writ of preliminary injunction (pp. 104-105, Rollo).
The aforementioned petition was docketed as Civil Case No. 99-
94684 and thereafter raffled to Branch 25 of said regional trial court
stationed in Manila which is presided over by the Honorable Ralph
C. Lantion.
After due notice to the parties, the case was heard on August 9,
1999. Petitioner, who appeared in his own behalf, moved that he be
given ample time to file a memorandum, but the same was denied.
On August 10, 1999, respondent judge issued an order dated the
previous day, disposing:
WHEREFORE, this Court hereby Orders the respondents, namely:
the Secretary of Justice, the Secretary of Foreign Affairs and the
Director of the National Bureau of Investigation, their agents and/or
representatives to maintain the status quo by refraining from
committing the acts complained of; from conducting further
proceedings in connection with the request of the United States
Government for the extradition of the petitioner; from filing the
corresponding Petition with a Regional Trial court; and from
performing any act directed to the extradition of the petitioner to the
United States, for a period of twenty (20) days from service on
respondents of this Order, pursuant to Section 5, Rule 58 of the
1997 Rules of Court.
The hearing as to whether or not this Court shall issue the
preliminary injunction, as agreed upon by the counsels for the
parties herein, is set on August 17, 1999 at 9:00 o'clock in the
morning. The respondents are, likewise, ordered to file their written
comment and/or opposition to the issuance of a Preliminary
Injunction on or before said date.
SO ORDERED.
(pp. 110-111, Rollo.)
Forthwith, petitioner initiated the instant proceedings, arguing that:
PUBLIC RESPONDENT ACTED WITHOUT OR IN EXCESS OF
JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN
ISSUING THE TEMPORARY RESTRAINING ORDER BECAUSE:
I.
BY ORDERING HEREIN PETITIONER TO REFRAIN FROM
COMMITTING THE ACTS COMPLAINED OF, I.E., TO DESIST
FROM REFUSING PRIVATE RESPONDENT ACCESS TO THE
OFFICIAL EXTRADITION REQUEST AND DOCUMENTS AND
FROM DENYING PRIVATE RESPONDENT AN OPPORTUNITY TO
FILE A COMMENT ON, OR OPPOSITION TO, THE REQUEST,
THE MAIN PRAYER FOR A WRIT OF MANDAMUS IN THE
PETITION FOR MANDAMUS, CERTIORARI AND PROHIBITION
WAS, IN EFFECT, GRANTED SO AS TO CONSTITUTE AN
ADJUDICATION ON THE MERITS OF THE MANDAMUS ISSUES;
II.
PETITIONER WAS UNQUALIFIEDLY PREVENTED FROM
PERFORMING LEGAL DUTIES UNDER THE EXTRADITION
TREATY AND THE PHILIPPINE EXTRADITION LAW;
III.
THE PETITION FOR (MANDAMUS), CERTIORARI AND
PROHIBITION IS, ON ITS FACE, FORMALLY AND
SUBSTANTIALLY DEFICIENT; AND
IV.
PRIVATE RESPONDENT HAS NO RIGHT IN ESSE THAT NEEDS
PROTECTION AND ENFORCEMENT, AND WILL NOT SUFFER
ANY IRREPARABLE INJURY.
(pp. 19-20, Rollo.)
On August 17, 1999, the Court required private respondent to file his
comment. Also issued, as prayed for, was a temporary restraining
order (TRO) providing:
NOW, THEREFORE, effective immediately and continuing until
further orders from this Court, You, Respondent Judge Ralph C.
Lantion, your agents, representatives or any person or persons
acting in your place or stead are hereby ORDERED to CEASE and
DESIST from enforcing the assailed order dated August 9, 1999
issued by public respondent in Civil Case No. 99-94684.
GIVEN by the Honorable HILARIO G. DAVIDE, JR., Chief Justice,
Supreme Court of the Philippines, this 17th day of August 1999.
(pp. 120-121, Rollo.)
The case was heard on oral argument on August 31, 1999, after
which the parties, as directed, filed their respective memoranda.
From the pleadings of the opposing parties, both procedural and
substantive issues are patent. However, a review of these issues as
well as the extensive arguments of both parties, compel us to
delineate the focal point raised by the pleadings: During the
evaluation stage of the extradition proceedings, is private respondent
entitled to the two basic due process rights of notice and hearing?
An affirmative answer would necessarily render the proceedings at
the trial court, moot and academic (the issues of which are
substantially the same as those before us now), while a negative
resolution would call for the immediate lifting of the TRO issued by
this Court dated August 24, 1999, thus allowing petitioner to fast-
track the process leading to the filing of the extradition petition with
the proper regional trial court. Corollarily, in the event that private
respondent is adjudged entitled to basic due process rights at the
evaluation stage of the extradition proceedings, would this
entitlement constitute a breach of the legal commitments and
obligations of the Philippine Government under the RP-US
Extradition Treaty? And assuming that the result would indeed be a
breach, is there any conflict between private respondent's basic due
process rights and the provisions of the RP-US Extradition Treaty?
The issues having transcendental importance, the Court has elected
to go directly into the substantive merits of the case, brushing aside
peripheral procedural matters which concern the proceedings in Civil
Case No. 99-94684, particularly the propriety of the filing of the
petition therein, and of the issuance of the TRO of August 17, 1999
by the trial court.
To be sure, the issues call for a review of the extradition procedure.
The RP-US Extradition Treaty which was executed only on
November 13, 1994, ushered into force the implementing provisions
of Presidential Decree No. 1069, also called as the Philippine
Extradition Law. Section 2(a) thereof defines extradition as "the
removal of an accused from the Philippines with the object of placing
him at the disposal of foreign authorities to enable the requesting
state or government to hold him in connection with any criminal
investigation directed against him or the execution of a penalty
imposed on him under the penal or criminal law of the requesting
state or government." The portions of the Decree relevant to the
instant case which involves a charged and not convicted individual,
are abstracted as follows:
The Extradition Request
The request is made by the Foreign Diplomat of the Requesting
State, addressed to the Secretary of Foreign Affairs, and shall be
accompanied by:
1. The original or an authentic copy of the criminal charge and the
warrant of arrest issued by the authority of the Requesting State
having jurisdiction over the matter, or some other instruments having
equivalent legal force;
2. A recital of the acts for which extradition is requested, with the
fullest particulars as to the name and identity of the accused, his
whereabouts in the Philippines, if known, the acts or omissions
complained of, and the time and place of the commission of these
acts;
3. The text of the applicable law or a statement of the contents of
said law, and the designation or description of the offense by the
law, sufficient for evaluation of the request; and
4. Such other documents or information in support of the request.
(Sec. 4. Presidential Decree No. 1069.)
Sec. 5 of the Presidential Decree, which sets forth the duty of the
Secretary of Foreign Affairs, pertinently provides
. . . (1) Unless it appears to the Secretary of Foreign Affairs that the
request fails to meet the requirements of this law and the relevant
treaty or convention, he shall forward the request together with the
related documents to the Secretary of Justice, who shall immediately
designate and authorize an attorney in his office to take charge of
the case.
The above provision shows only too clearly that the executive
authority given the task of evaluating the sufficiency of the request
and the supporting documents is the Secretary of Foreign Affairs.
What then is the coverage of this task?
In accordance with Paragraphs 2 and 3, Article 7 of the RP-US
Extradition Treaty, the executive authority must ascertain whether or
not the request is supported by:
1. Documents, statements, or other types of information which
describe the identity and probable location of the person sought;
2. A statement of the facts of the offense and the procedural history
of the case;
3. A statement of the provisions of the law describing the essential
elements of the offense for which extradition is requested;
4. A statement of the provisions of law describing the punishment for
the offense;
5. A statement of the provisions of the law describing any time limit
on the prosecution or the execution of punishment for the offense;
6. Documents, statements, or other types of information specified in
paragraph 3 or paragraph 4 of said Article, as applicable.
(Paragraph 2, Article 7, Presidential Decree No. 1069.)
7. Such evidence as, according to the law of the Requested State,
would provide probable cause for his arrest and committal for trial if
the offense had been committed there;
8. A copy of the warrant or order of arrest issued by a judge or other
competent authority; and
9. A copy of the charging document.
(Paragraph 3, ibid.)
The executive authority (Secretary of Foreign Affairs) must also see
to it that the accompanying documents received in support of the
request had been certified by the principal diplomatic or consular
officer of the Requested State resident in the Requesting State
(Embassy Note No. 052 from U. S. Embassy; Embassy Note No.
951309 from the Department of Foreign Affairs).
In this light, Paragraph 3, Article 3 of the Treaty provides that
"[e]xtradition shall not be granted if the executive authority of the
Requested State determines that the request is politically motivated,
or that the offense is a military offense which is not punishable under
non-military penal legislation."
The Extradition Petition
Upon a finding made by the Secretary of Foreign Affairs that the
extradition request and its supporting documents are sufficient and
complete in form and substance, he shall deliver the same to the
Secretary of Justice, who shall immediately designate and authorize
an attorney in his office to take charge of the case (Paragraph [1],
Section 5, P.D. No. 1069). The lawyer designated shall then file a
written petition with the proper regional trial court of the province or
city, with a prayer that the court take the extradition request under
consideration (Paragraph [2], ibid.).
The presiding judge of the regional trial court, upon receipt of the
petition for extradition, shall, as soon as practicable, issue an order
summoning the prospective extraditee to appear and to answer the
petition on the day and hour fixed in the order. The judge may issue
a warrant of arrest if it appears that the immediate arrest and
temporary detention of the accused will best serve the ends of
justice (Paragraph [1], Section 6, ibid.), particularly to prevent the
flight of the prospective extraditee.
The Extradition Hearing
The Extradition Law does not specifically indicate whether the
extradition proceeding is criminal, civil, or a special proceeding.
Nevertheless, Paragraph [1], Section 9 thereof provides that in the
hearing of the extradition petition, the provisions of the Rules of
Court, insofar as practicable and not inconsistent with the summary
nature of the proceedings, shall apply. During the hearing, Section 8
of the Decree provides that the attorney having charge of the case
may, upon application by the Requesting State, represent the latter
throughout the proceedings.
Upon conclusion of the hearing, the court shall render a decision
granting the extradition and giving the reasons therefor upon a
showing of the existence of a prima facie case, or dismiss the
petition (Section 10, ibid.). Said decision is appealable to the Court
of Appeals, whose decision shall be final and immediately executory
(Section 12, ibid.). The provisions of the Rules of Court governing
appeal in criminal cases in the Court of Appeals shall apply in the
aforementioned appeal, except for the required 15-day period to file
brief (Section 13, ibid.).
The trial court determines whether or not the offense mentioned in
the petition is extraditable based on the application of the dual
criminality rule and other conditions mentioned in Article 2 of the RP-
US Extradition Treaty. The trial court also determines whether or not
the offense for which extradition is requested is a political one
(Paragraph [1], Article 3, RP-US Extradition Treaty).1âwphi1.nêt
With the foregoing abstract of the extradition proceedings as
backdrop, the following query presents itself: What is the nature of
the role of the Department of Justice at the evaluation stage of the
extradition proceedings?
A strict observance of the Extradition Law indicates that the only duty
of the Secretary of Justice is to file the extradition petition after the
request and all the supporting papers are forwarded to him by the
Secretary of Foreign Affairs. It is the latter official who is authorized
to evaluate the extradition papers, to assure their sufficiency, and
under Paragraph [3], Article 3 of the Treaty, to determine whether or
not the request is politically motivated, or that the offense is a military
offense which is not punishable under non-military penal legislation.
Ipso facto, as expressly provided in Paragraph [1], Section 5 of the
Extradition Law, the Secretary of Justice has the ministerial duty of
filing the extradition papers.
However, looking at the factual milieu of the case before us, it would
appear that there was failure to abide by the provisions of
Presidential Decree No. 1069. For while it is true that the extradition
request was delivered to the Department of Foreign Affairs on June
17, 1999, the following day or less than 24 hours later, the
Department of Justice received the request, apparently without the
Department of Foreign Affairs discharging its duty of thoroughly
evaluating the same and its accompanying documents. The
statement of an assistant secretary at the Department of Foreign
Affairs that his Department, in this regard, is merely acting as a post
office, for which reason he simply forwarded the request to the
Department of Justice, indicates the magnitude of the error of the
Department of Foreign Affairs in taking lightly its responsibilities.
Thereafter, the Department of Justice took it upon itself to determine
the completeness of the documents and to evaluate the same to find
out whether they comply with the requirements laid down in the
Extradition Law and the RP-US Extradition Treaty. Petitioner
ratiocinates in this connection that although the Department of
Justice had no obligation to evaluate the extradition documents, the
Department also had to go over them so as to be able to prepare an
extradition petition (tsn, August 31, 1999, pp. 24-25). Notably, it was
also at this stage where private respondent insisted on the following;
(1) the right to be furnished the request and the supporting papers;
(2) the right to be heard which consists in having a reasonable
period of time to oppose the request, and to present evidence in
support of the opposition; and (3) that the evaluation proceedings be
held in abeyance pending the filing of private respondent's
opposition to the request.
The two Departments seem to have misread the scope of their
duties and authority, one abdicating its powers and the other
enlarging its commission. The Department of Foreign Affairs,
moreover, has, through the Solicitor General, filed a manifestation
that it is adopting the instant petition as its own, indirectly conveying
the message that if it were to evaluate the extradition request, it
would not allow private respondent to participate in the process of
evaluation.
Plainly then, the record cannot support the presumption of regularity
that the Department of Foreign Affairs thoroughly reviewed the
extradition request and supporting documents and that it arrived at a
well-founded judgment that the request and its annexed documents
satisfy the requirements of law. The Secretary of Justice, eminent as
he is in the field of law, could not privately review the papers all by
himself. He had to officially constitute a panel of attorneys. How then
could the DFA Secretary or his undersecretary, in less than one day,
make the more authoritative determination?
The evaluation process, just like the extradition proceedings proper,
belongs to a class by itself. It is sui generis. It is not a criminal
investigation, but it is also erroneous to say that it is purely an
exercise of ministerial functions. At such stage, the executive
authority has the power: (a) to make a technical assessment of the
completeness and sufficiency of the extradition papers; (b) to
outrightly deny the request if on its face and on the face of the
supporting documents the crimes indicated are not extraditable; and
(c) to make a determination whether or not the request is politically
motivated, or that the offense is a military one which is not
punishable under non-military penal legislation (tsn, August 31,
1999, pp. 28-29; Article 2 & and Paragraph [3], Article 3, RP-US
Extradition Treaty). Hence, said process may be characterized as an
investigative or inquisitorial process in contrast to a proceeding
conducted in the exercise of an administrative body's quasi-judicial
power.
In administrative law, a quasi-judicial proceeding involves: (a) taking
and evaluation of evidence; (b) determining facts based upon the
evidence presented; and (c) rendering an order or decision
supported by the facts proved (De Leon, Administrative Law: Text
and Cases, 1993 ed., p. 198, citing Morgan vs. United States, 304
U.S. 1). Inquisitorial power, which is also known as examining or
investigatory power, is one or the determinative powers of an
administrative body which better enables it to exercise its quasi-
judicial authority (Cruz, Phil. Administrative Law, 1996 ed., p. 26).
This power allows the administrative body to inspect the records and
premises, and investigate the activities, of persons or entities coming
under its jurisdiction (Ibid., p. 27), or to require disclosure of
information by means or accounts, records, reports, testimony of
witnesses, production of documents, or otherwise (De Leon, op. cit.,
p. 64).
The power of investigation consists in gathering, organizing, and
analyzing evidence, which is a useful aid or tool in an administrative
agency's performance of its rule-making or quasi-judicial functions.
Notably, investigation is indispensable to prosecution.
In Ruperto v. Torres (100 Phil. 1098 [1957], unreported), the Court
had occasion to rule on the functions of an investigatory body with
the sole power of investigation. It does not exercise judicial functions
and its power is limited to investigating the facts and making findings
in respect thereto. The Court laid down the test of determining
whether an administrative body is exercising judicial functions or
merely investigatory functions: Adjudication signifies the exercise of
power and authority to adjudicate upon the rights and obligations of
the parties before it. Hence, if the only purpose for investigation is to
evaluate evidence submitted before it based on the facts and
circumstances presented to it, and if the agency is not authorized to
make a final pronouncement affecting the parties, then there is an
absence of judicial discretion and judgment.
The above description in Ruperto applies to an administrative body
authorized to evaluate extradition documents. The body has no
power to adjudicate in regard to the rights and obligations of both the
Requesting State and the prospective extraditee. Its only power is to
determine whether the papers comply with the requirements of the
law and the treaty and, therefore, sufficient to be the basis of an
extradition petition. Such finding is thus merely initial and not final.
The body has no power to determine whether or not the extradition
should be effected. That is the role of the court. The body's power is
limited to an initial finding of whether or not the extradition petition
can be filed in court.

It is to be noted, however, that in contrast to ordinary investigations,
the evaluation procedure is characterized by certain peculiarities.
Primarily, it sets into motion the wheels of the extradition process.
Ultimately, it may result in the deprivation of liberty of the prospective
extraditee. This deprivation can be effected at two stages: First, the
provisional arrest of the prospective extraditee pending the
submission of the request. This is so because the Treaty provides
that in case of urgency, a contracting party may request the
provisional arrest of the person sought pending presentation of the
request (Paragraph [1], Article 9, RP-US Extradition Treaty), but he
shall be automatically discharged after 60 days if no request is
submitted (Paragraph 4). Presidential Decree No. 1069 provides for
a shorter period of 20 days after which the arrested person could be
discharged (Section 20[d]). Logically, although the Extradition Law is
silent on this respect, the provisions only mean that once a request
is forwarded to the Requested State, the prospective extraditee may
be continuously detained, or if not, subsequently rearrested
(Paragraph [5], Article 9, RP-US Extradition Treaty), for he will only
be discharged if no request is submitted. Practically, the purpose of
this detention is to prevent his possible flight from the Requested
State. Second, the temporary arrest of the prospective extraditee
during the pendency of the extradition petition in court (Section 6,
Presidential Decree No. 1069).
Clearly, there is an impending threat to a prospective extraditee's
liberty as early as during the evaluation stage. It is not only an
imagined threat to his liberty, but a very imminent one.
Because of these possible consequences, we conclude that the
evaluation process is akin to an administrative agency conducting an
investigative proceeding, the consequences of which are essentially
criminal since such technical assessment sets off or commences the
procedure for, and ultimately, the deprivation of liberty of a
prospective extraditee. As described by petitioner himself, this is a
"tool" for criminal law enforcement (p. 78, Rollo). In essence,
therefore, the evaluation process partakes of the nature of a criminal
investigation. In a number of cases, we had occasion to make
available to a respondent in an administrative case or investigation
certain constitutional rights that are ordinarily available only in
criminal prosecutions. Further, as pointed out by Mr. Justice
Mendoza during the oral arguments, there are rights formerly
available only at the trial stage that had been advanced to an earlier
stage in the proceedings, such as the right to counsel and the right
against self-incrimination (tsn, August 31, 1999, p. 135; Escobedo
vs. Illinois, 378 U.S. 478; Gideon vs. Wainwright, 372 U.S. 335;
Miranda vs. Arizona, 384 U.S. 436).
In Pascual v. Board of Medical Examiners (28 SCRA 344 [1969]), we
held that the right against self-incrimination under Section 17, Article
III of the 1987 Constitution which is ordinarily available only in
criminal prosecutions, extends to administrative proceedings which
possess a criminal or penal aspect, such as an administrative
investigation of a licensed physician who is charged with immorality,
which could result in his loss of the privilege to practice medicine if
found guilty. The Court, citing the earlier case of Cabal vs. Kapunan
(6 SCRA 1059 [1962]), pointed out that the revocation of one's
license as a medical practitioner, is an even greater deprivation than
forfeiture of property.
Cabal vs. Kapunan (supra) involved an administrative charge of
unexplained wealth against a respondent which was filed under
Republic Act No. 1379, or the Anti-Graft Law. Again, we therein ruled
that since the investigation may result in forfeiture of property, the
administrative proceedings are deemed criminal or penal, and such
forfeiture partakes the nature of a penalty. There is also the earlier
case of Almeda, Sr. vs. Perez (5 SCRA 970 [1962]), where the
Court, citing American jurisprudence, laid down the test to determine
whether a proceeding is civil or criminal: If the proceeding is under a
statute such that if an indictment is presented the forfeiture can be
included in the criminal case, such proceeding is criminal in nature,
although it may be civil in form; and where it must be gathered from
the statute that the action is meant to be criminal in its nature, it
cannot be considered as civil. If, however, the proceeding does not
involve the conviction of the wrongdoer for the offense charged, the
proceeding is civil in nature.
The cases mentioned above refer to an impending threat of
deprivation of one's property or property right. No less is this true,
but even more so in the case before us, involving as it does the
possible deprivation of liberty, which, based on the hierarchy of
constitutionally protected rights, is placed second only to life itself
and enjoys precedence over property, for while forfeited property can
be returned or replaced, the time spent in incarceration is
irretrievable and beyond recompense.
By comparison, a favorable action in an extradition request exposes
a person to eventual extradition to a foreign country, thus saliently
exhibiting the criminal or penal aspect of the process. In this sense,
the evaluation procedure is akin to a preliminary investigation since
both procedures may have the same result — the arrest and
imprisonment of the respondent or the person charged. Similar to the
evaluation stage of extradition proceedings, a preliminary
investigation, which may result in the filing of an information against
the respondent, can possibly lead to his arrest, and to the
deprivation of his liberty.
Petitioner's reliance on Wright vs. Court of Appeals (235 SCRA 241
[1992]) (p. 8, petitioner's Memorandum) that the extradition treaty is
neither a piece of criminal legislation nor a criminal procedural
statute is not well-taken. Wright is not authority for petitioner's
conclusion that his preliminary processing is not akin to a preliminary
investigation. The characterization of a treaty in Wright was in
reference to the applicability of the prohibition against an ex post
facto law. It had nothing to do with the denial of the right to notice,
information, and hearing.
As early as 1884, the United States Supreme Court ruled that "any
legal proceeding enforced by public authority, whether sanctioned by
age or custom, or newly devised in the discretion of the legislative
power, in furtherance of the general public good, which regards and
preserved these principles of liberty and justice, must be held to be
due process of law" (Hurtado vs. California, 110 U.S. 516).
Compliance with due process requirements cannot be deemed non-
compliance with treaty commitments.
The United States and the Philippines share a mutual concern about
the suppression and punishment of crime in their respective
jurisdictions. At the same time, both States accord common due
process protection to their respective citizens.
The due process clauses in the American and Philippine
Constitutions are not only worded in exactly identical language and
terminology, but more importantly, they are alike in what their
respective Supreme Courts have expounded as the spirit with which
the provisions are informed and impressed, the elasticity in their
interpretation, their dynamic and resilient character which make them
capable of meeting every modern problem, and their having been
designed from earliest time to the present to meet the exigencies of
an undefined and expanding future. The requirements of due
process are interpreted in both the United States and the Philippines
as not denying to the law the capacity for progress and
improvement. Toward this effect and in order to avoid the confines of
a legal straitjacket, the courts instead prefer to have the meaning of
the due process clause "gradually ascertained by the process of
inclusion and exclusion in the course of the decisions of cases as
they arise" (Twining vs. New Jersey, 211 U.S. 78). Capsulized, it
refers to "the embodiment of the sporting idea of fair play" (Ermita-
Malate Hotel and Motel Owner's Association vs. City Mayor of
Manila, 20 SCRA 849 [1967]). It relates to certain immutable
principles of justice which inhere in the very idea of free government
(Holden vs. Hardy, 169 U.S. 366).
Due process is comprised of two components — substantive due
process which requires the intrinsic validity of the law in interfering
with the rights of the person to his life, liberty, or property, and
procedural due process which consists of the two basic rights of
notice and hearing, as well as the guarantee of being heard by an
impartial and competent tribunal (Cruz, Constitutional Law, 1993
Ed., pp. 102-106).
True to the mandate of the due process clause, the basic rights of
notice and hearing pervade not only in criminal and civil
proceedings, but in administrative proceedings as well. Non-
observance of these rights will invalidate the proceedings.
Individuals are entitled to be notified of any pending case affecting
their interests, and upon notice, they may claim the right to appear
therein and present their side and to refute the position of the
opposing parties (Cruz, Phil. Administrative Law, 1996 ed., p. 64).
In a preliminary investigation which is an administrative investigatory
proceeding, Section 3, Rule 112 of the Rules of Court guarantees
the respondent's basic due process rights, granting him the right to
be furnished a copy of the complaint, the affidavits, and other
supporting documents, and the right to submit counter-affidavits and
other supporting documents within ten days from receipt thereof.
Moreover, the respondent shall have the right to examine all other
evidence submitted by the complainant.
These twin rights may, however, be considered dispensable in
certain instances, such as:
1. In proceeding where there is an urgent need for immediate action,
like the summary abatement of a nuisance per se (Article 704, Civil
Code), the preventive suspension of a public servant facing
administrative charges (Section 63, Local Government Code, B.P.
Blg. 337), the padlocking of filthy restaurants or theaters showing
obscene movies or like establishments which are immediate threats
to public health and decency, and the cancellation of a passport of a
person sought for criminal prosecution;
2. Where there is tentativeness of administrative action, that is,
where the respondent is not precluded from enjoying the right to
notice and hearing at a later time without prejudice to the person
affected, such as the summary distraint and levy of the property of a
delinquent taxpayer, and the replacement of a temporary appointee;
and
3. Where the twin rights have previously been offered but the right to
exercise them had not been claimed.
Applying the above principles to the case at bar, the query may be
asked: Does the evaluation stage of the extradition proceedings fall
under any of the described situations mentioned above?
Let us take a brief look at the nature of American extradition
proceedings which are quite noteworthy considering that the subject
treaty involves the U.S. Government.
American jurisprudence distinguishes between interstate rendition or
extradition which is based on the Extradition Clause in the U.S.
Constitution (Art. IV, §2 cl 2), and international extradition
proceedings. In interstate rendition or extradition, the governor of the
asylum state has the duty to deliver the fugitive to the demanding
state. The Extradition Clause and the implementing statute are given
a liberal construction to carry out their manifest purpose, which is to
effect the return as swiftly as possible of persons for trial to the state
in which they have been charged with crime (31A Am Jur 2d 754-
755). In order to achieve extradition of an alleged fugitive, the
requisition papers or the demand must be in proper form, and all the
elements or jurisdictional facts essential to the extradition must
appear on the face of the papers, such as the allegation that the
person demanded was in the demanding state at the time the
offense charged was committed, and that the person demanded is
charged with the commission of the crime or that prosecution has
been begun in the demanding state before some court or magistrate
(35 C.J.S. 406-407). The extradition documents are then filed with
the governor of the asylum state, and must contain such papers and
documents prescribed by statute, which essentially include a copy of
the instrument charging the person demanded with a crime, such as
an indictment or an affidavit made before a magistrate. Statutory
requirements with respect to said charging instrument or papers are
mandatory since said papers are necessary in order to confer
jurisdiction on the government of the asylum state to effect
extradition (35 C.J.S. 408-410). A statutory provision requiring
duplicate copies of the indictment, information, affidavit, or judgment
of conviction or sentence and other instruments accompanying the
demand or requisitions be furnished and delivered to the fugitive or
his attorney is directory. However, the right being such a basic one
has been held to be a right mandatory on demand (Ibid., p. 410,
citing Ex parte Moore, 256 S.W. 2d 103, 158 Tex. Cr. 407 and Ex
parte Tucker, Cr., 324, S.W.2d 853).
In international proceedings, extradition treaties generally provide for
the presentation to the executive authority of the Requested State of
a requisition or demand for the return of the alleged offender, and
the designation of the particular officer having authority to act in
behalf of the demanding nation (31A Am Jur 2d 815).
In petitioner's memorandum filed on September 15, 1999, he
attached thereto a letter dated September 13, 1999 from the
Criminal Division of the U.S. Department of Justice, summarizing the
U.S. extradition procedures and principles, which are basically
governed by a combination of treaties (with special reference to the
RP-US Extradition Treaty), federal statutes, and judicial decisions, to
wit:
1. All requests for extradition are transmitted through the diplomatic
channel. In urgent cases, requests for the provincial arrest of an
individual may be made directly by the Philippine Department of
Justice to the U.S. Department of Justice, and vice-versa. In the
event of a provisional arrest, a formal request for extradition is
transmitted subsequently through the diplomatic channel.
2. The Department of State forwards the incoming Philippine
extradition request to the Department of Justice. Before doing so, the
Department of State prepares a declaration confirming that a formal
request has been made, that the treaty is in full force and effect, that
under Article 17 thereof the parties provide reciprocal legal
representation in extradition proceedings, that the offenses are
covered as extraditable offenses under Article 2 thereof, and that the
documents have been authenticated in accordance with the federal
statute that ensures admissibility at any subsequent extradition
hearing.
3. A judge or magistrate judge is authorized to issue a warrant for
the arrest of the prospective extraditee (18 U.S.C. §3184). Said
judge or magistrate is authorized to hold a hearing to consider the
evidence offered in support of the extradition request (Ibid.)
4. At the hearing, the court must determine whether the person
arrested is extraditable to the foreign country. The court must also
determine that (a) it has jurisdiction over the defendant and
jurisdiction to conduct the hearing; (b) the defendant is being sought
for offenses for which the applicable treaty permits extradition; and
(c) there is probable cause to believe that the defendant is the
person sought and that he committed the offenses charged (Ibid.)
5. The judge or magistrate judge is vested with jurisdiction to certify
extraditability after having received a "complaint made under oath,
charging any person found within his jurisdiction" with having
committed any of the crimes provided for by the governing treaty in
the country requesting extradition (Ibid.) [In this regard, it is noted
that a long line of American decisions pronounce that international
extradition proceedings partake of the character of a preliminary
examination before a committing magistrate, rather than a trial of the
guilt or innocence of the alleged fugitive (31A Am Jur 2d 826).]
6. If the court decides that the elements necessary for extradition are
present, it incorporates its determinations in factual findings and
conclusions of law and certifies the person's extraditability. The court
then forwards this certification of extraditability to the Department of
State for disposition by the Secretary of State. The ultimate decision
whether to surrender an individual rests with the Secretary of State
(18 U.S.C. §3186).
7. The subject of an extradition request may not litigate questions
concerning the motives of the requesting government in seeking his
extradition. However, a person facing extradition may present
whatever information he deems relevant to the Secretary of State,
who makes the final determination whether to surrender an
individual to the foreign government concerned.
From the foregoing, it may be observed that in the United States,
extradition begins and ends with one entity — the Department of
State — which has the power to evaluate the request and the
extradition documents in the beginning, and, in the person of the
Secretary of State, the power to act or not to act on the court's
determination of extraditability. In the Philippine setting, it is the
Department of Foreign Affairs which should make the initial
evaluation of the request, and having satisfied itself on the points
earlier mentioned (see pp. 10-12), then forwards the request to the
Department of Justice for the preparation and filing of the petition for
extradition. Sadly, however, the Department of Foreign Affairs, in the
instant case, perfunctorily turned over the request to the Department
of Justice which has taken over the task of evaluating the request as
well as thereafter, if so warranted, preparing, filing, and prosecuting
the petition for extradition.
Private respondent asks what prejudice will be caused to the U.S.
Government should the person sought to be extradited be given due
process rights by the Philippines in the evaluation stage. He
emphasizes that petitioner's primary concern is the possible delay in
the evaluation process.
We agree with private respondent's citation of an American Supreme
Court ruling:
The establishment of prompt efficacious procedures to achieve
legitimate state ends is a proper state interest worthy of cognizance
in constitutional adjudication. But the Constitution recognizes higher
values than speed and efficiency. Indeed, one might fairly say of the
Bill of Rights in general, and the Due Process Clause, in particular,
that they were designed to protect the fragile values of a vulnerable
citizenry from the overbearing concern for efficiency and efficacy that
may characterize praiseworthy government officials no less, and
perhaps more, than mediocre ones.
(Stanley vs. Illinois, 404 U.S. 645, 656)
The United States, no doubt, shares the same interest as the
Philippine Government that no right — that of liberty — secured not
only by the Bills of Rights of the Philippines Constitution but of the
United States as well, is sacrificed at the altar of expediency.
(pp. 40-41, Private Respondent's Memorandum.)
In the Philippine context, this Court's ruling is invoked:
One of the basic principles of the democratic system is that where
the rights of the individual are concerned, the end does not justify the
means. It is not enough that there be a valid objective; it is also
necessary that the means employed to pursue it be in keeping with
the Constitution. Mere expediency will not excuse constitutional
shortcuts. There is no question that not even the strongest moral
conviction or the most urgent public need, subject only to a few
notable exceptions, will excuse the bypassing of an individual's
rights. It is no exaggeration to say that a person invoking a right
guaranteed under Article III of the Constitution is a majority of one
even as against the rest of the nation who would deny him that right
(Association of Small Landowners in the Philippines, Inc. vs.
Secretary of Agrarian Reform, 175 SCRA 343, 375-376 [1989]).
There can be no dispute over petitioner's argument that extradition is
a tool of criminal law enforcement. To be effective, requests for
extradition or the surrender of accused or convicted persons must be
processed expeditiously. Nevertheless, accelerated or fast-tracked
proceedings and adherence to fair procedures are, however, not
always incompatible. They do not always clash in discord. Summary
does not mean precipitous haste. It does not carry a disregard of the
basic principles inherent in "ordered liberty."
Is there really an urgent need for immediate action at the evaluation
stage? At that point, there is no extraditee yet in the strict sense of
the word. Extradition may or may not occur. In interstate extradition,
the governor of the asylum state may not, in the absence of
mandatory statute, be compelled to act favorably (37 C.J.S. 387)
since after a close evaluation of the extradition papers, he may hold
that federal and statutory requirements, which are significantly
jurisdictional, have not been met (31 Am Jur 2d 819). Similarly,
under an extradition treaty, the executive authority of the requested
state has the power to deny the behest from the requesting state.
Accordingly, if after a careful examination of the extradition
documents the Secretary of Foreign Affairs finds that the request
fails to meet the requirements of the law and the treaty, he shall not
forward the request to the Department of Justice for the filing of the
extradition petition since non-compliance with the aforesaid
requirements will not vest our government with jurisdiction to effect
the extradition.
In this light, it should be observed that the Department of Justice
exerted notable efforts in assuring compliance with the requirements
of the law and the treaty since it even informed the U.S. Government
of certain problems in the extradition papers (such as those that are
in Spanish and without the official English translation, and those that
are not properly authenticated). In fact, petitioner even admits that
consultation meetings are still supposed to take place between the
lawyers in his Department and those from the U.S. Justice
Department. With the meticulous nature of the evaluation, which
cannot just be completed in an abbreviated period of time due to its
intricacies, how then can we say that it is a proceeding that urgently
necessitates immediate and prompt action where notice and hearing
can be dispensed with?
Worthy of inquiry is the issue of whether or not there is tentativeness
of administrative action. Is private respondent precluded from
enjoying the right to notice and hearing at a later time without
prejudice to him? Here lies the peculiarity and deviant characteristic
of the evaluation procedure. On one hand there is yet no extraditee,
but ironically on the other, it results in an administrative if adverse to
the person involved, may cause his immediate incarceration. The
grant of the request shall lead to the filing of the extradition petition in
court. The "accused" (as Section 2[c] of Presidential Decree No.
1069 calls him), faces the threat of arrest, not only after the
extradition petition is filed in court, but even during the evaluation
proceeding itself by virtue of the provisional arrest allowed under the
treaty and the implementing law. The prejudice to the "accused" is
thus blatant and manifest.
Plainly, the notice and hearing requirements of administrative due
process cannot be dispensed with and shelved aside.
Apart from the due process clause of the Constitution, private
respondent likewise invokes Section 7 of Article III which reads:
Sec. 7. The right of the people to information on matters of public
concern shall be recognized. Access to official records, and to
documents and papers pertaining to official acts, transactions, or
decisions, as well as to government research data used as basis for
policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law.
The above provision guarantees political rights which are available to
citizens of the Philippines, namely: (1) the right to information on
matters of public concern, and (2) the corollary right of access to
official records documents. The general right guaranteed by said
provision is the right to information on matters of public concern. In
its implementation, the right of access to official records is likewise
conferred. These cognate or related rights are "subject to limitations
as may be provided by law" (Bernas, The 1987 Phil. Constitution A
Reviewer-Primer, 1997 ed., p. 104) and rely on the premise that
ultimately it is an informed and critical public opinion which alone can
protect the values of democratic government (Ibid.).
Petitioner argues that the matters covered by private respondent's
letter-request dated July 1, 1999 do not fall under the guarantee of
the foregoing provision since the matters contained in the
documents requested are not of public concern. On the other hand,
private respondent argues that the distinction between matters
vested with public interest and matters which are of purely private
interest only becomes material when a third person, who is not
directly affected by the matters requested, invokes the right to
information. However, if the person invoking the right is the one
directly affected thereby, his right to information becomes absolute.
The concept of matters of public concerns escapes exact definition.
Strictly speaking, every act of a public officer in the conduct of the
governmental process is a matter of public concern (Bernas, The
1987 Constitution of the Republic of the Philippines, 1996 ed., p.
336). This concept embraces a broad spectrum of subjects which the
public may want to know, either because these directly affect their
lives or simply because such matters arouse the interest of an
ordinary citizen (Legaspi v. Civil Service Commission, 150 SCRA
530 [1987]). Hence, the real party in interest is the people and any
citizen has "standing".
When the individual himself is involved in official government action
because said action has a direct bearing on his life, and may either
cause him some kind of deprivation or injury, he actually invokes the
basic right to be notified under Section 1 of the Bill of Rights and not
exactly the right to information on matters of public concern. As to an
accused in a criminal proceeding, he invokes Section 14, particularly
the right to be informed of the nature and cause of the accusation
against him.
The right to information is implemented by the right of access to
information within the control of the government (Bernas, The 1987
Constitution of the Republic of the Philippines, 1996 ed., p. 337).
Such information may be contained in official records, and in
documents and papers pertaining to official acts, transactions, or
decisions.
In the case at bar, the papers requested by private respondent
pertain to official government action from the U.S. Government. No
official action from our country has yet been taken. Moreover, the
papers have some relation to matters of foreign relations with the
U.S. Government. Consequently, if a third party invokes this
constitutional provision, stating that the extradition papers are
matters of public concern since they may result in the extradition of a
Filipino, we are afraid that the balance must be tilted, at such
particular time, in favor of the interests necessary for the proper
functioning of the government. During the evaluation procedure, no
official governmental action of our own government has as yet been
done; hence the invocation of the right is premature. Later, and in
contrast, records of the extradition hearing would already fall under
matters of public concern, because our government by then shall
have already made an official decision to grant the extradition
request. The extradition of a fellow Filipino would be forthcoming.
We now pass upon the final issue pertinent to the subject matter of
the instant controversy: Would private respondent's entitlement to
notice and hearing during the evaluation stage of the proceedings
constitute a breach of the legal duties of the Philippine Government
under the RP-Extradition Treaty? Assuming the answer is in the
affirmative, is there really a conflict between the treaty and the due
process clause in the Constitution?
First and foremost, let us categorically say that this is not the proper
time to pass upon the constitutionality of the provisions of the RP-US
Extradition Treaty nor the Extradition Law implementing the same.
We limit ourselves only to the effect of the grant of the basic rights of
notice and hearing to private respondent on foreign relations.
The rule of pacta sunt servanda, one of the oldest and most
fundamental maxims of international law, requires the parties to a
treaty to keep their agreement therein in good faith. The observance
of our country's legal duties under a treaty is also compelled by
Section 2, Article II of the Constitution which provides that "[t]he
Philippines renounces war as an instrument of national policy,
adopts the generally accepted principles of international law as part
of the law of the land, and adheres to the policy of peace, equality,
justice, freedom, cooperation and amity with nations." Under the
doctrine of incorporation, rules of international law form part of the
law of the and land no further legislative action is needed to make
such rules applicable in the domestic sphere (Salonga & Yap, Public
International Law, 1992 ed., p. 12).
The doctrine of incorporation is applied whenever municipal tribunals
(or local courts) are confronted with situations in which there appears
to be a conflict between a rule of international law and the provisions
of the constitution or statute of the local state. Efforts should first be
exerted to harmonize them, so as to give effect to both since it is to
be presumed that municipal law was enacted with proper regard for
the generally accepted principles of international law in observance
of the observance of the Incorporation Clause in the above-cited
constitutional provision (Cruz, Philippine Political Law, 1996 ed., p.
55). In a situation, however, where the conflict is irreconcilable and a
choice has to be made between a rule of international law and
municipal law, jurisprudence dictates that municipal law should be
upheld by the municipal courts (Ichong vs. Hernandez, 101 Phil.
1155 [1957]; Gonzales vs. Hechanova, 9 SCRA 230 [1963]; In re:
Garcia, 2 SCRA 984 [1961]) for the reason that such courts are
organs of municipal law and are accordingly bound by it in all
circumstances (Salonga & Yap, op. cit., p. 13). The fact that
international law has been made part of the law of the land does not
pertain to or imply the primacy of international law over national or
municipal law in the municipal sphere. The doctrine of incorporation,
as applied in most countries, decrees that rules of international law
are given equal standing with, but are not superior to, national
legislative enactments. Accordingly, the principle lex posterior
derogat priori takes effect — a treaty may repeal a statute and a
statute may repeal a treaty. In states where the constitution is the
highest law of the land, such as the Republic of the Philippines, both
statutes and treaties may be invalidated if they are in conflict with the
constitution (Ibid.).
In the case at bar, is there really a conflict between international law
and municipal or national law? En contrario, these two components
of the law of the land are not pined against each other. There is no
occasion to choose which of the two should be upheld. Instead, we
see a void in the provisions of the RP-US Extradition Treaty, as
implemented by Presidential Decree No. 1069, as regards the basic
due process rights of a prospective extraditee at the evaluation stage
of extradition proceedings. From the procedures earlier abstracted,
after the filing of the extradition petition and during the judicial
determination of the propriety of extradition, the rights of notice and
hearing are clearly granted to the prospective extraditee. However,
prior thereto, the law is silent as to these rights. Reference to the
U.S. extradition procedures also manifests this silence.
Petitioner interprets this silence as unavailability of these rights.
Consequently, he describes the evaluation procedure as an "ex
parte technical assessment" of the sufficiency of the extradition
request and the supporting documents.
We disagree.
In the absence of a law or principle of law, we must apply the rules of
fair play. An application of the basic twin due process rights of notice
and hearing will not go against the treaty or the implementing law.
Neither the Treaty nor the Extradition Law precludes these rights
from a prospective extraditee. Similarly, American jurisprudence and
procedures on extradition pose no proscription. In fact, in interstate
extradition proceedings as explained above, the prospective
extraditee may even request for copies of the extradition documents
from the governor of the asylum state, and if he does, his right to be
supplied the same becomes a demandable right (35 C.J.S. 410).
Petitioner contends that the United States requested the Philippine
Government to prevent unauthorized disclosure of confidential
information. Hence, the secrecy surrounding the action of the
Department of Justice Panel of Attorneys. The confidentiality
argument is, however, overturned by petitioner's revelation that
everything it refuses to make available at this stage would be
obtainable during trial. The Department of Justice states that the
U.S. District Court concerned has authorized the disclosure of
certain grand jury information. If the information is truly confidential,
the veil of secrecy cannot be lifted at any stage of the extradition
proceedings. Not even during trial.
A libertarian approach is thus called for under the premises.
One will search in vain the RP-US Extradition Treaty, the Extradition
Law, as well as American jurisprudence and procedures on
extradition, for any prohibition against the conferment of the two
basic due process rights of notice and hearing during the evaluation
stage of the extradition proceedings. We have to consider similar
situations in jurisprudence for an application by analogy.
Earlier, we stated that there are similarities between the evaluation
process and a preliminary investigation since both procedures may
result in the arrest of the respondent or the prospective extraditee. In
the evaluation process, a provisional arrest is even allowed by the
Treaty and the Extradition Law (Article 9, RP-US Extradition Treaty;
Sec. 20, Presidential Decree No. 1069). Following petitioner's
theory, because there is no provision of its availability, does this
imply that for a period of time, the privilege of the writ of habeas
corpus is suspended, despite Section 15, Article III of the
Constitution which states that "[t]he privilege of the writ or habeas
corpus shall not be suspended except in cases of invasion or
rebellion when the public safety requires it"? Petitioner's theory
would also infer that bail is not available during the arrest of the
prospective extraditee when the extradition petition has already been
filed in court since Presidential Decree No. 1069 does not provide
therefor, notwithstanding Section 13, Article III of the Constitution
which provides that "[a]ll persons, except those charged with
offenses punishable by reclusion perpetua when evidence of guilt is
strong, shall, before conviction, be bailable by sufficient sureties, or
be released on recognizance as may be provided by law. The right
to bail shall not be impaired even when the privilege of the writ of
habeas corpus is suspended. . ." Can petitioner validly argue that
since these contraventions are by virtue of a treaty and hence
affecting foreign relations, the aforestated guarantees in the Bill of
Rights could thus be subservient thereto?
The basic principles of administrative law instruct us that "the
essence of due process in administrative proceeding is an
opportunity to explain one's side or an opportunity to seek
reconsideration of the actions or ruling complained of (Mirano vs.
NLRC, 270 SCRA 96 [1997]; Padilla vs. NLRC, 273 SCRA 457
[1997]; PLDT vs. NLRC, 276 SCRA 1 [1997]; Helpmate, Inc. vs.
NLRC, 276 SCRA 315 [1997]; Aquinas School vs. Magnaye, 278
SCRA 602 [1997]; Jamer vs. NLRC, 278 SCRA 632 [1997]). In
essence, procedural due process refers to the method or manner by
which the law is enforced (Corona vs. United Harbor Pilots
Association of the Phils., 283 SCRA 31 [1997]). This Court will not
tolerate the least disregard of constitutional guarantees in the
enforcement of a law or treaty. Petitioner's fears that the Requesting
State may have valid objections to the Requested State's non-
performance of its commitments under the Extradition Treaty are
insubstantial and should not be given paramount consideration.
How then do we implement the RP-US Extradition Treaty? Do we
limit ourselves to the four corners of Presidential Decree No. 1069?
Of analogous application are the rulings in Government Service
Insurance System vs. Court of Appeals (201 SCRA 661 [1991]) and
Go vs. National Police Commission (271 SCRA 447 [1997]) where
we ruled that in summary proceedings under Presidential Decree
No. 807 (Providing for the Organization of the Civil Service
Commission in Accordance with Provisions of the Constitution,
Prescribing its Powers and Functions and for Other Purposes), and
Presidential Decree No. 971 (Providing Legal Assistance for
Members of the Integrated National Police who may be charged for
Service-Connected Offenses and Improving the Disciplinary System
in the Integrated National Police, Appropriating Funds Therefor and
for other purposes), as amended by Presidential Decree No. 1707,
although summary dismissals may be effected without the necessity
of a formal investigation, the minimum requirements of due process
still operate. As held in GSIS vs. Court of Appeals:
. . . [I]t is clear to us that what the opening sentence of Section 40 is
saying is that an employee may be removed or dismissed even
without formal investigation, in certain instances. It is equally clear to
us that an employee must be informed of the charges preferred
against him, and that the normal way by which the employee is so
informed is by furnishing him with a copy of the charges against him.
This is a basic procedural requirement that a statute cannot
dispense with and still remain consistent with the constitutional
provision on due process. The second minimum requirement is that
the employee charged with some misfeasance or malfeasance must
have a reasonable opportunity to present his side of the matter, that
is to say, his defenses against the charges levelled against him and
to present evidence in support of his defenses. . . .
(at p. 671)
Said summary dismissal proceedings are also non-litigious in nature,
yet we upheld the due process rights of the respondent.
In the case at bar, private respondent does not only face a clear and
present danger of loss of property or employment, but of liberty itself,
which may eventually lead to his forcible banishment to a foreign
land. The convergence of petitioner's favorable action on the
extradition request and the deprivation of private respondent's liberty
is easily comprehensible.
We have ruled time and again that this Court's equity jurisdiction,
which is aptly described as "justice outside legality," may be availed
of only in the absence of, and never against, statutory law or judicial
pronouncements (Smith Bell & Co., Inc. vs. Court of Appeals, 267
SCRA 530 [1997]; David-Chan vs. Court of Appeals, 268 SCRA 677
[1997]). The constitutional issue in the case at bar does not even call
for "justice outside legality," since private respondent's due process
rights, although not guaranteed by statute or by treaty, are protected
by constitutional guarantees. We would not be true to the organic
law of the land if we choose strict construction over guarantees
against the deprivation of liberty. That would not be in keeping with
the principles of democracy on which our Constitution is premised.
Verily, as one traverses treacherous waters of conflicting and
opposing currents of liberty and government authority, he must ever
hold the oar of freedom in the stronger arm, lest an errant and
wayward course be laid.
WHEREFORE, in view of the foregoing premises, the instant petition
is hereby DISMISSED for lack of merit. Petitioner is ordered to
furnish private respondent copies of the extradition request and its
supporting papers, and to grant him a reasonable period within
which to file his comment with supporting evidence. The incidents in
Civil Case No. 99-94684 having been rendered moot and academic
by this decision, the same is hereby ordered dismissed.
SO ORDERED.

G.R. No. 140520 December 18, 2000
JUSTICE SERAFIN R. CUEVAS, substituted by ARTEMIO G.
TUQUERO in his capacity as Secretary of Justice, Petitoner,
vs.
JUAN ANTONIO MUÑOZ, Respondent.
DECISION
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision1 of the
Court of Appeals, dated November 9, 1999, directing the immediate
release of respondent Juan Antonio Muñoz from the custody of law
upon finding the Order2 of provisional arrest dated September 20,
1999 issued by Branch 19 of the Regional Trial Court of Manila to be
null and void.
The antecedent facts:
On August 23, 1997, the Hong Kong Magistrate’s Court at Eastern
Magistracy issued a warrant for the arrest of respondent for seven
(7) counts of accepting an advantage as an agent contrary to
Section 9(1)(a) of the Prevention of Bribery Ordinance, Cap. 201 of
Hong Kong, and seven (7) counts of conspiracy to defraud, contrary
to the common law of Hong Kong.3 Said warrant remains in full force
and effect up to the present time.4
On September 13, 1999, the Philippine Department of Justice
(hereafter, "Philippine DOJ") received a request for the provisional
arrest of the respondent from the Mutual Legal Assistance Unit,
International Law Division of the Hong Kong Department of Justice
(hereafter, "Hong Kong DOJ")5 pursuant to Article 11(1) of the
"Agreement Between The Government Of The Republic Of The
Philippines And The Government Of Hong Kong For The Surrender
Of Accused And Convicted Persons" (hereafter, "RP-Hong Kong
Extradition Agreement").6 The Philippine DOJ forwarded the request
for provisional arrest to the Anti-Graft Division of the National Bureau
of Investigation (NBI).
On September 17, 1999, for and in behalf of the government of Hong
Kong, the NBI filed an application for the provisional arrest of
respondent with the Regional Trial Court (RTC) of Manila.
On September 20, 1999, Branch 19 of the RTC of Manila issued an
Order granting the application for provisional arrest and issuing the
corresponding Order of Arrest.7
On September 23, 1999, respondent was arrested pursuant to the
said order, and is currently detained at the NBI detention cell.8
On October 14, 1999, respondent filed with the Court of Appeals, a
petition for certiorari, prohibition and mandamus with application for
preliminary mandatory injunction and/or writ of habeas corpus
assailing the validity of the Order of Arrest. The Court of Appeals
rendered a decision declaring the Order of Arrest null and void on
the following grounds:
(1) that there was no urgency to warrant the request for provisional
arrest under Article 11(1) of the RP-Hong Kong Extradition
Agreement;9
(2) that the request for provisional arrest and the accompanying
warrant of arrest and summary of facts were unauthenticated and
mere facsimile copies which are insufficient to form a basis for the
issuance of the Order of Arrest;10
(3) that the twenty (20) day period for provisional arrest under
Section 20(d) of Presidential Decree No. 1069 otherwise known as
the Philippine Extradition Law, was not amended by Article 11(3) of
the RP-Hong Kong Extradition Agreement which provides for a forty-
five (45) day period for provisional arrest;11
(4) that the Order of Arrest was issued without the Judge having
personally determined the existence of probable cause;12 and
(5) that the requirement of dual criminality under Section 3(a) of P.D.
No. 1069 has not been satisfied as the crimes for which respondent
is wanted in Hong Kong, namely accepting an advantage as an
agent and conspiracy to commit fraud, are not punishable by
Philippine laws.13
Thus, petitioner Justice Serafin R. Cuevas, in his capacity as the
Secretary of the Department of Justice, lost no time in filing the
instant petition.14
On November 17, 1999, respondent filed an Urgent Motion For
Release Pending Appeal. He primarily contended that, since Section
20(d) of P.D. No. 1069 sets the maximum period of provisional arrest
at twenty (20) days, and he has been detained beyond the said
period, without both a request for extradition having been received
by the Philippine DOJ and the corresponding petition for extradition
having been filed in the proper RTC, he should be released from
detention. 15
On December 16, 1999, petitioner filed a Manifestation with this
Court stressing the fact that as early as November 5, 1999, the
Philippine DOJ had already received from the Hong Kong DOJ, a
formal request for the surrender of respondent. Petitioner also
informed this Court that pursuant to the said request for extradition,
the Philippine DOJ, representing the Government of Hong Kong,
filed on November 22, 1999, a verified petition for the extradition of
respondent docketed as Case No. 99-95733 and currently pending
in Branch 10 of the RTC of Manila.16
Petitioner submits that the Court of Appeals erred in nullifying the
Order of provisional arrest against respondent.
Petitioner imputes the following errors in the subject Decision of the
Court of Appeals, to wit:
I
The Court of Appeals gravely erred in holding that:
A. there was no urgency for the provisional arrest of respondent;
B. the municipal law (P.D. No. 1069) subordinates an international
agreement (RP-Hongkong Agreement);
C. the supporting documents for a request for provisional arrest have
to be authenticated;
D. there was lack of factual and legal bases in the determination of
probable cause; and
E. the offense of accepting an advantage as an agent is not an
offense under the Anti-Graft and Corrupt Practices Act, as amended.
II
The Court of Appeals seriously erred in declaring as null and void
the trial court’s Order of Arrest dated September 20, 1999 despite
that (sic) respondent waived the right to assail the order of arrest by
filing in the trial court a motion for release on recognizance, that (sic)
the issue of legality of the order of arrest was being determined by
the trial court, and respondent mocked the established rules of
procedure intended for an orderly administration of justice.17
Petitioner takes exception to the finding of the Court of Appeals that
the offense of accepting an advantage as an agent is not punishable
under Republic Act (R.A.) No. 3019 otherwise known as the Anti-
Graft and Corrupt Practices Act, thus, obviating the application of
P.D. No. 106918 that requires the offense to be punishable under
the laws both of the requesting state or government and the
Republic of the Philippines.19
However, the issue of whether or not the rule of double criminality
applies was not for the Court of Appeals to decide in the first place.
The trial court in which the petition for extradition is filed is vested
with jurisdiction to determine whether or not the offenses mentioned
in the petition are extraditable based on the application of the dual
criminality rule and other conditions mentioned in the applicable
treaty. In this case, the presiding Judge of Branch 10 of the RTC of
Manila has yet to rule on the extraditability of the offenses for which
the respondent is wanted in Hong Kong. Therefore, respondent has
prematurely raised this issue before the Court of Appeals and now,
before this Court.
Petitioner’s other arguments, however, are impressed with merit.
First. There was urgency for the provisional arrest of the respondent.
Section 20(a) of P.D. No. 1069 reads as follows:
Provisional Arrest. - (a) In case of urgency, the requesting state may,
pursuant to the relevant treaty or convention and while the same
remains in force, request for the provisional arrest of the accused,
pending receipt of the request for extradition made in accordance
with Section 4 of this Decree;
and Article 11 of the Extradition Agreement between the Philippines
and Hong Kong provides in part that:
(1) In urgent cases, the person sought may, in accordance with the
law of the requested Party, be provisionally arrested on the
application of the requesting Party. x x x.
Nothing in existing treaties or Philippine legislation defines the
meaning of "urgency" as used in the context of a request for
provisional arrest. Using reasonable standards of interpretation,
however, we believe that "urgency" connotes such conditions
relating to the nature of the offense charged and the personality of
the prospective extraditee which would make him susceptible to the
inclination to flee or escape from the jurisdiction if he were to learn
about the impending request for his extradition and/or likely to
destroy the evidence pertinent to the said request or his eventual
prosecution and without which the latter could not proceed.20
We find that such conditions exist in respondent’s case.
First. It should be noted that at the time the request for provisional
arrest was made, respondent’s pending application for the discharge
of a restraint order over certain assets held in relation to the offenses
with which he is being charged, was set to be heard by the Court of
First Instance of Hong Kong on September 17, 1999. The Hong
Kong DOJ was concerned that the pending request for the
extradition of the respondent would be disclosed to the latter during
the said proceedings, and would motivate respondent to flee the
Philippines before the request for extradition could be made.21
There is also the fact that respondent is charged with seven (7)
counts of accepting an advantage as an agent and seven (7) counts
of conspiracy to defraud, for each count of which, if found guilty, he
may be punished with seven (7) and fourteen (14) years
imprisonment, respectively. Undoubtedly, the gravity of the
imposable penalty upon an accused is a factor to consider in
determining the likelihood that the accused will abscond if allowed
provisional liberty. It is, after all, but human to fear a lengthy, if not a
lifetime, incarceration. Furthermore, it has also not escaped the
attention of this Court that respondent appears to be affluent and
possessed of sufficient resources to facilitate an escape from this
jurisdiction.22
The arguments raised by the respondent in support of his allegation
that he is not a flight risk, are, to wit:
a) He did not flee or hide when the Central Bank and the NBI
investigated the matter alleged in the request for extradition of the
Hongkong Government during the second half of 1994; he has since
been cleared by the Central Bank;
b) He did not flee or hide when the Hongkong Government’s
Independent Commission Against Corruption (ICAC) issued a
warrant for his arrest in August 1997; he has in fact filed a case in
Hongkong against the Hongkong Government for the release of his
frozen assets;
c) He never changed his address nor his identity, and has sought
vindication of his rights before the courts in Hongkong and in the
Philippines;
d) He has never evaded arrest by any lawful authority, and certainly
will never fly away now that his mother is on her death bed.23
do not convince this Court. That respondent did not flee despite the
investigation conducted by the Central Bank and the NBI way back
in 1994, nor when the warrant for his arrest was issued by the Hong
Kong ICAC in August 1997, is not a guarantee that he will not flee
now that proceedings for his extradition are well on the way.
Respondent is about to leave the protective sanctuary of his mother
state to face criminal charges in another jurisdiction. It cannot be
denied that this is sufficient impetus for him to flee the country as
soon as the opportunity to do so arises.
Respondent also avers that his mother’s impending death makes it
impossible for him to leave the country. However, by respondent’s
own admission, his mother finally expired at the Cardinal Santos
Hospital in Mandaluyong City last December 5, 1999.24
Second. Twelve (12) days after respondent was provisionally
arrested, the Philippine DOJ received from the Hong Kong DOJ, a
request for the surrender or extradition of respondent.
On one hand, Section 20(d) of P.D. No. 1069 reads as follows:
(d) If within a period of twenty (20) days after the provisional arrest
the Secretary of Foreign Affairs has not received the request for
extradition and the documents mentioned in Section 4 of this
Decree, the accused shall be released from custody.
On the other hand, Article 11(3) of the RP-Hong Kong Extradition
Agreement provides that:
(3) The provisional arrest of the person sought shall be terminated
upon the expiration of forty-five days from the date of arrest if the
request for surrender has not been received, unless the requesting
Party can justify continued provisional arrest of the person sought in
which case the period of provisional arrest shall be terminated upon
the expiration of a reasonable time not being more than a further
fifteen days. This provision shall not prevent the re-arrest or
surrender of the person sought if the request for the person’s
surrender is received subsequently.
Petitioner contends that Article 11(3) of the RP-Hong Kong
Extradition Agreement which allows a period of forty-five (45) days
for provisional arrest absent a formal request for extradition has
amended Section 20(d) of P.D. No. 1069 which provides only a
twenty (20) day period for the same.25
Petitioner’s argument on this point, however, has been rendered
moot and academic by the fact that as early as November 5, 1999 or
twelve (12) days after respondent’s arrest on September 23, 1999,
the Philippine DOJ already received from the Hong Kong DOJ, a
request for the surrender of respondent. The crucial event, after all,
which tolls the provisional detention period is the transmittal of the
request for the extradition or surrender of the extraditee. Hence, the
question as to whether the period for provisional arrest stands at
twenty (20) days, as provided for in P.D. No. 1069, or has been
extended to forty-five (45) days under the Extradition Agreement
between Hong Kong and the Philippines is rendered irrelevant by the
actual request made by the Hong Kong DOJ for the extradition of
respondent twelve (12) days after the request for the latter’s
provisional arrest.
Likewise, respondent’s contention in his motion for release pending
appeal, that his incarceration cannot continue beyond the twenty
(20) day period without a petition for his extradition having been filed
in court, is simply bereft of merit. It is clear from the above-cited
provisions, that for the provisional arrest of an accused to continue,
the formal request for extradition is not required to be filed in court. It
only need be received by the requested state within the periods
provided for by P.D. No. 1069 and the RP-Hong Kong Extradition
Agreement. By no stretch of imagination may we infer from the
required receipt of the request for extradition and its accompanying
documents, the additional requisite that the same be filed in the court
within the same periods.
Third. The request for provisional arrest of respondent and its
accompanying documents are valid despite lack of authentication.
Section 20(b) of P.D. No. 1069 reads as follows:
(b) A request for provisional arrest shall be sent to the Director of the
National Bureau of Investigation, Manila, either through the
diplomatic channels or direct by post or telegraph.
and Article 11(1) of the RP-Hong Kong Extradition Agreement
provides in part that:
x x x. The application for provisional arrest shall contain an indication
of intention to request the surrender of the person sought and the
text of a warrant of arrest or a judgment of conviction against that
person, a statement of the penalty for that offense, and such further
information, if any, as would be necessary to justify the issue of a
warrant of arrest had the offense been committed, or the person
convicted, within the jurisdiction of the requested Party.
The language of the abovequoted provisions is clear. There is no
requirement for the authentication of a request for provisional arrest
and its accompanying documents.
We also note that under Section 20(d) of P.D. No. 1069, viz:
(d) If within a period of 20 days after the request for provisional
arrest the Secretary of Foreign Affairs has not received the request
for extradition and the documents mentioned in Section 4 of this
Decree,26 the accused shall be released from custody.27
the original or authenticated copies of the decision or sentence
imposed upon the accused by the requesting state or the criminal
charge and the warrant of arrest issued by the authority of the
requesting state, need not accompany the request for provisional
arrest and may, in fact, be transmitted after the said request has
already been received by the requested state.
Furthermore, the pertinent provision of the RP-Hong Kong
Extradition Agreement enumerates the documents that must
accompany the request, as follows: (1) an indication of the intention
to request the surrender of the person sought; (2) the text of a
warrant of arrest or judgment of conviction against that person; (3) a
statement of penalty for that offense; and (4) such further information
as would justify the issue of a warrant of arrest had the offense been
committed, or the person convicted, within the jurisdiction of the
requested party.28 That the enumeration does not specify that these
documents must be authenticated copies, is not a mere omission of
law. This may be gleaned from the fact that while Article 11(1) does
not require the accompanying documents of a request for provisional
arrest to be authenticated, Article 9 of the same Extradition
Agreement makes authentication a requisite for admission in
evidence of any document accompanying a request for surrender or
extradition.29 In other words, authentication is required for the
request for surrender or extradition but not for the request for
provisional arrest.
We must also state that the above mentioned provisions of P.D. No.
1069 and the RP-Hong Kong Extradition Agreement, as they are
worded, serve the purpose sought to be achieved by treaty
stipulations for provisional arrest.
The process of preparing a formal request for extradition and its
accompanying documents, and transmitting them through diplomatic
channels, is not only time-consuming but also leakage-prone. There
is naturally a great likelihood of flight by criminals who get an
intimation of the pending request for their extradition. To solve this
problem, speedier initial steps in the form of treaty stipulations for
provisional arrest were formulated.30 Thus, it is an accepted practice
for the requesting state to rush its request in the form of a telex or
diplomatic cable, the practicality of the use of which is conceded.31
Even our own Extradition Law (P.D. No. 1069) allows the
transmission of a request for provisional arrest via telegraph.32 In
the advent of modern technology, the telegraph or cable have been
conveniently replaced by the facsimile machine. Therefore, the
transmission by the Hong Kong DOJ of the request for respondent’s
provisional arrest and the accompanying documents, namely, a copy
of the warrant of arrest against respondent, a summary of the facts
of the case against him, particulars of his birth and address, a
statement of the intention to request his provisional arrest and the
reason therefor, by fax machine, more than serves this purpose of
expediency.
Respondent’s reliance on Garvida v. Sales, Jr.33 is misplaced. The
proscription against the admission of a pleading that has been
transmitted by facsimile machine has no application in the case at
bar for obvious reasons. First, the instant case does not involve a
pleading; and second, unlike the COMELEC Rules of Procedure
which do not sanction the filing of a pleading by means of a facsimile
machine, P.D. No. 1069 and the RP Hong Kong Extradition
Agreement do not prohibit the transmission of a request for
provisional arrest by means of a fax machine.
In a futile attempt to convince this Court, respondent cites our ruling
in the recent case of Secretary of Justice v. Hon. Lantion, et al.34 ,
where we held that the right of an extraditee to due process
necessarily includes the right to be furnished with copies of the
extradition request and supporting papers, and to file a comment
thereto during the evaluation stage of the extradition proceedings.
Respondent posits that, in the same vein, the admission by the RTC
of the request for provisional arrest and its supporting documents
despite lack of authentication is a violation of the respondent’s right
to due process. This contention fails to impress us.
Respondent’s contention is now a non-issue, in view of our
Resolution dated October 17, 2000 in the said case of Secretary of
Justice v. Hon. Lantion, et al. reconsidering and reversing our earlier
decision therein. Acting on therein petitioner’s Motion for
Reconsideration, we held that therein respondent is bereft of the
right to notice and hearing during the evaluation stage of the
extradition process.35 Worthy to reiterate is the following concluding
pronouncement of this Court in the said case:36
In tilting the balance in favor of the interests of the State, the Court
stresses that it is not ruling that the private respondent has no right
to due process at all throughout the length and breath of the
extrajudicial proceedings. Procedural due process requires a
determination of what process is due, when it is due and the degree
of what is due. Stated otherwise, a prior determination should be
made as to whether procedural protections are at all due and when
they are due, which in turn depends on the extent to which an
individual will be ‘condemned to suffer grievous loss.’37 We have
explained why an extraditee has no right to notice and hearing
during the evaluation stage of the extradition process. As aforesaid,
P.D. 1069 xxx affords an extraditee sufficient opportunity to meet the
evidence against him once the petition is filed in court. The time for
the extraditee to know the basis of the request for his extradition is
merely moved to the filing in court of the formal petition for
extradition. The extraditee’s right to know is momentarily withheld
during the evaluation stage of the extradition process to
accommodate the more compelling interest of the State to prevent
escape of potential extraditees which can be precipitated by
premature information of the basis of the request for his extradition.
No less compelling at that stage of the extradition proceedings is the
need to be more deferential to the judgment of a co-equal branch of
the government, the Executive, which has been endowed by our
Constitution with greater power over matters involving our foreign
relations. Needless to state, this balance of interests is not a static
but a moving balance which can be adjusted as the extradition
process moves from the administrative stage to the judicial stage
and to the execution stage depending on factors that will come into
play. In sum, we rule that the temporary hold on private respondent’s
privilege of notice and hearing is a soft restraint on his right to due
process which will not deprive him of fundamental fairness should he
decide to resist the request for his extradition to the United States.
There is no denial of due process as long as fundamental fairness is
assured a party.
Respondent also contends that the request for his provisional arrest
was rendered defective by the fact that the person who made the
request was not a foreign diplomat as provided for in Section 4 (2) of
P.D. No. 1069, to wit:
SEC. 4. Request; By Whom Made; Requirements.-
(1) Any foreign state or government with which the Republic of the
Philippines has entered into extradition treaty or convention, and
only when the relevant treaty or convention, remains in force, may
request for the extradition of any accused who is suspected of being
in the territorial jurisdiction of the Philippines.
(2) The request shall be made by the Foreign Diplomat of the
requesting state or government, addressed to the Secretary of
Foreign Affairs, x x x.
This contention deserves scant consideration. The foregoing refers
to the requirements for a request for extradition and not for a request
for provisional arrest. The pertinent provisions are Article 11(2)
which states:
An application for provisional arrest may be forwarded through the
same channels as a request for surrender or through the
International Criminal Police Organization (INTERPOL);38
and Article 8(1) which provides:
Requests for surrender and related documents shall be conveyed
through the appropriate authority as may be notified from time to
time by one party to another.39
Hence, there is sufficient compliance with the foregoing if the request
for provisional arrest is made by an official who is authorized by the
government of the requesting state to make such a request and the
authorization is communicated to the requested state.
The request for provisional arrest of respondent was signed by
Wayne Walsh, Senior Government Counsel of the Mutual Legal
Assistance Unit, International Law Division of the Hong Kong DOJ
who stated in categorical terms that:
The Department of Justice (Mutual Legal Assistance Unit) of the
HKSAR is the appropriate authority under the Agreement to make
requests for provisional arrest and surrender. I confirm that as a
member of the Mutual Legal Assistance Unit, I am authorized (sic) to
make this request for provisional arrest.40
Last. There was sufficient factual and legal basis for the
determination of probable cause as a requisite for the issuance of
the Order of Arrest.41
We have defined probable cause for the issuance of a warrant of
arrest as "the existence of such facts and circumstances that would
lead a reasonably discreet and prudent person to believe that an
offense has been committed by the person sought to be arrested."42
The determination of probable cause is a function of the Judge. Such
is the mandate of our Constitution which provides that a warrant of
arrest shall issue only upon probable cause to be determined
personally by the judge after examination under oath or affirmation of
the complainant and the witnesses he may produce.43 In the case of
Allado v. Diokno,44 we stated that personal determination by the
Judge of the existence of probable cause means that he -
(a) shall personally evaluate the report and the supporting
documents submitted by the fiscal regarding the existence of
probable cause and, on the basis thereof, issue a warrant of arrest;
or, (b) if on the basis thereof he finds no probable cause, may
disregard the fiscal’s report and require the submission of supporting
affidavits of witnesses to aid him in arriving at a conclusion on the
existence of probable cause.45
The Judge cannot, therefore, merely rely on the certification issued
by the prosecutor. He is, however, not required to personally
examine ipso facto the complainant and his witnesses. He
sufficiently complies with the requirement of personal determination
if he reviews the information and the documents attached thereto,
and on the basis thereof forms a belief that the accused is probably
guilty of the crime with which he is being charged.46 The Judge
determines the existence of probable cause to pass upon whether a
warrant of arrest should be issued against the accused, that is,
whether there is a necessity for placing him under immediate
custody in order not to frustrate the ends of justice.47
The request for the respondent’s provisional arrest was
accompanied by facsimile copies of the outstanding warrant of arrest
issued by the Hong Kong government, a summary of the facts of the
case against respondent, particulars of his birth and address, an
intention to request his provisional arrest and the reason therefor.
The said documents were appended to the application for
respondent’s provisional arrest filed in the RTC,48 and formed the
basis of the judge’s finding of probable cause for the issuance of the
warrant of arrest against respondent.
Respondent alleges the contrary and surmises that all that the trial
judge did was to interview NBI agent Saunar who filed the
application for the issuance of the warrant of provisional arrest, and
that "her honor did not probably even notice that the supporting
documents were not authenticated."49 The allegation, baseless and
purely speculative, is one which we cannot countenance in view of
the legal presumption that official duty has been regularly
performed.50
That the Presiding Judge of RTC Manila, Branch 19, made a
personal determination of the existence of probable cause on the
basis of the documents forwarded by the Hong Kong DOJ is further
supported by the Order of Arrest against respondent which states:
ORDER
This treats of the Application For Provisional Arrest of Juan Antonio
Muñoz, for the purpose of extradition from the Republic of the
Philippines.
This application was filed in behalf of the Government of Hong Kong
Special Administrative Region for the provisional arrest of Juan
Antonio Muñoz, pursuant to Section 20 of Presidential Decree No.
1069, in relation to paragraph 1, Article 11 of the Agreement for the
Surrender of Accused and Convicted Persons between the Republic
of the Philippines and Hong Kong on provisional arrest. The
application alleged that Juan Antonio Muñoz is wanted in Hong Kong
for seven (7) counts of the offense of "accepting an advantage as an
agent", contrary to Section 9(1) (9) of the Prevention of Bribery
Ordinance Cap. 201 of Hong Kong and seven (7) counts of the
offense of "conspiracy to defraud", contrary to the Common Law of
Hong Kong.

That a warrant of arrest was issued by the Magistrate’s Court at

Eastern Magistracy, Hong Kong on August 23, 1997, pursuant to the
14 charges filed against him before the issuing Court. Juan Antonio
Muñoz is now alleged to be in the Philippines. He was born on June
24, 1941, a holder of Philippines Passport No. 2K 934808, formerly
an employee of the Central Bank of the Philippines and with address
at Phase 3, BF Homes, No. 26 D C Chuan Street, Metro Manila.

That there is an urgency in the issuance of the provisional arrest

warrant for the reason that the application to discharge the restraint
over the funds, subject of the offenses, in his Citibank Account in
Hong Kong was set for hearing on September 17, 1999 and that his
lawyer in Hong Kong will be notified of the request of the Hong Kong
Government for his provisional arrest (sic) and Juan Antonio E.
Muñoz upon knowledge of the request.

Considering that the Extradition treaty referred to is part of our

systems of laws and recognized by Presidential Decree No. 1069
and the Constitution itself by the adoption of international laws,
treaties and conventions as parts (sic) of the law of the land, the
application for provisional arrest of Juan Antonio Muñoz is hereby
GRANTED. Let a warrant for his provisional arrest therefore issue.

SO ORDERED.51 (Underscoring supplied.)

Finally, petitioner also avers that the respondent has waived his right
to assail the validity of his provisional arrest when he filed a motion
for release on recognizance. Considering that we find petitioner’s
other contentions to be impressed with merit, there is no need to
delve further into this particular issue.

WHEREFORE, the petition is GRANTED, and the assailed Decision

of the Court of Appeals, dated November 9, 1999, in CA-G.R. SP
No. 55343 is hereby REVERSED and SET ASIDE. Respondent’s
"Urgent Motion For Release Pending Appeal" is hereby DENIED.

SO ORDERED.

G.R. No. 148571 September 24, 2002
GOVERNMENT OF THE UNITED STATES OF AMERICA,
Represented by the Philippine Department of Justice, petitioner,
vs.
HON. GUILLERMO PURGANAN, Presiding Judge Regional Trial
Court of Manila and
MARC JIMENEZ a.k.a. MARCIO BATACAN CRESPO, respondent
Davide Jr., CJ, Bellosillo, Puno, Vitug, Mendoza, Panganiban,
Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-
Martinez, Corona, Morales and Callejo, Sr.
DECISION
PANGANIBAN, J.:
In extradition proceedings, are prospective extraditees entitled to
notice and hearing before warrants for their arrest can be issued?
Equally important, are they entitled to the right to bail and provisional
liberty while the extradition proceedings are pending? In general, the
answer to these two novel questions is "No." The explanation of and
the reasons for, as well as the exceptions to, this rule are laid out in
this Decision.
The Case
Before us is a Petition for Certiorari under Rule 65 of the Rules of
Court, seeking to void and set aside the Orders dated May 23, 2001
1 and July 3, 2001 2 issued by the Regional Trial Court (RTC) of
Manila, Branch 42. 3 The first assailed Order set for hearing
petitioner’s application for the issuance of a warrant for the arrest of
Respondent Mark B. Jimenez.
The second challenged Order, on the other hand, directed the
issuance of a warrant, but at the same time granted bail to Jimenez.
The dispositive portion of the Order reads as follows:
WHEREFORE, in the light of the foregoing, the [Court] finds
probable cause against respondent Mark Jimenez. Accordingly let a
Warrant for the arrest of the respondent be issued. Consequently
and taking into consideration Section 9, Rule 114 of the Revised
Rules of Criminal Procedure, this Court fixes the reasonable amount
of bail for respondent’s temporary liberty at ONE MILLION PESOS
(Php 1,000,000.00), the same to be paid in cash.
Furthermore respondent is directed to immediately surrender to this
Court his passport and the Bureau of Immigration and Deportation is
likewise directed to include the name of the respondent in its Hold
Departure List." 4
Essentially, the Petition prays for the lifting of the bail Order, the
cancellation of the bond, and the taking of Jimenez into legal
custody.
The Facts
This Petition is really a sequel to GR No. 139465 entitled Secretary
of Justice v. Ralph C. Lantion. 5
Pursuant to the existing RP-US Extradition Treaty, 6 the United
States Government, through diplomatic channels, sent to the
Philippine Government Note Verbale No. 0522 dated June 16, 1999,
supplemented by Note Nos. 0597, 0720 and 0809 and accompanied
by duly authenticated documents requesting the extradition of Mark
B. Jimenez, also known as Mario Batacan Crespo. Upon receipt of
the Notes and documents, the secretary of foreign affairs (SFA)
transmitted them to the secretary of justice (SOJ) for appropriate
action, pursuant to Section 5 of Presidential Decree (PD) No. 1069,
also known as the Extradition Law.
Upon learning of the request for his extradition, Jimenez sought and
was granted a Temporary Restraining Order (TRO) by the RTC of
Manila, Branch 25. 7 The TRO prohibited the Department of Justice
(DOJ) from filing with the RTC a petition for his extradition. The
validity of the TRO was, however, assailed by the SOJ in a Petition
before this Court in the said GR No. 139465. Initially, the Court -- by
a vote of 9-6 -- dismissed the Petition. The SOJ was ordered to
furnish private respondent copies of the extradition request and its
supporting papers and to grant the latter a reasonable period within
which to file a comment and supporting evidence. 8
Acting on the Motion for Reconsideration filed by the SOJ, this Court
issued its October 17, 2000 Resolution. 9 By an identical vote of 9-6
-- after three justices changed their votes -- it reconsidered and
reversed its earlier Decision. It held that private respondent was
bereft of the right to notice and hearing during the evaluation stage
of the extradition process. This Resolution has become final and
executory.
Finding no more legal obstacle, the Government of the United States
of America, represented by the Philippine DOJ, filed with the RTC on
May 18, 2001, the appropriate Petition for Extradition which was
docketed as Extradition Case No. 01192061. The Petition alleged,
inter alia, that Jimenez was the subject of an arrest warrant issued
by the United States District Court for the Southern District of Florida
on April 15, 1999. The warrant had been issued in connection with
the following charges in Indictment No. 99-00281 CR-SEITZ: (1)
conspiracy to defraud the United States and to commit certain
offenses in violation of Title 18 US Code Section 371; (2) tax
evasion, in violation of Title 26 US Code Section 7201; (3) wire
fraud, in violation of Title 18 US Code Sections 1343 and 2; (4) false
statements, in violation of Title 18 US Code Sections 1001 and 2;
and (5) illegal campaign contributions, in violation of Title 2 US Code
Sections 441b, 441f and 437g(d) and Title 18 US Code Section 2. In
order to prevent the flight of Jimenez, the Petition prayed for the
issuance of an order for his "immediate arrest" pursuant to Section 6
of PD No. 1069.
Before the RTC could act on the Petition, Respondent Jimenez filed
before it an "Urgent Manifestation/Ex-Parte Motion," 10 which prayed
that petitioner’s application for an arrest warrant be set for hearing.
In its assailed May 23, 2001 Order, the RTC granted the Motion of
Jimenez and set the case for hearing on June 5, 2001. In that
hearing, petitioner manifested its reservations on the procedure
adopted by the trial court allowing the accused in an extradition case
to be heard prior to the issuance of a warrant of arrest.
After the hearing, the court a quo required the parties to submit their
respective memoranda. In his Memorandum, Jimenez sought an
alternative prayer: that in case a warrant should issue, he be allowed
to post bail in the amount of P100,000.
The alternative prayer of Jimenez was also set for hearing on June
15, 2001. Thereafter, the court below issued its questioned July 3,
2001 Order, directing the issuance of a warrant for his arrest and
fixing bail for his temporary liberty at one million pesos in cash. 11
After he had surrendered his passport and posted the required cash
bond, Jimenez was granted provisional liberty via the challenged
Order dated July 4, 2001. 12
Hence, this Petition. 13
Issues
Petitioner presents the following issues for the consideration of this
Court:
I.
The public respondent acted without or in excess of jurisdiction or
with grave abuse of discretion amounting to lack or excess of
jurisdiction in adopting a procedure of first hearing a potential
extraditee before issuing an arrest warrant under Section 6 of PD
No. 1069.
II.
The public respondent acted without or in excess of jurisdiction or
with grave abuse of discretion amounting to lack or excess of
jurisdiction in granting the prayer for bail and in allowing Jimenez to
go on provisional liberty because:
‘1. An extradition court has no power to authorize bail, in the
absence of any law that provides for such power.
‘2. Section 13, Article III (right to bail clause) of the 1987 Philippine
Constitution and Section 4, Rule 114 (Bail) of the Rules of Court, as
amended, which [were] relied upon, cannot be used as bases for
allowing bail in extradition proceedings.
‘3. The presumption is against bail in extradition proceedings or
proceedings leading to extradition.
‘4. On the assumption that bail is available in extradition proceedings
or proceedings leading to extradition, bail is not a matter of right but
only of discretion upon clear showing by the applicant of the
existence of special circumstances.
‘5. Assuming that bail is a matter of discretion in extradition
proceedings, the public respondent received no evidence of ‘special
circumstances’ which may justify release on bail.
‘6. The risk that Jimenez will flee is high, and no special
circumstance exists that will engender a well-founded belief that he
will not flee.
‘7. The conditions attached to the grant of bail are ineffectual and do
not ensure compliance by the Philippines with its obligations under
the RP-US Extradition Treaty.
‘8. The Court of Appeals Resolution promulgated on May 10, 2001 in
the case entitled ‘Eduardo T. Rodriguez et al. vs. The Hon. Presiding
Judge, RTC, Branch 17, Manila,’ CA-G.R. SP No. 64589, relied upon
by the public respondent in granting bail, had been recalled before
the issuance of the subject bail orders.’" 14
In sum, the substantive questions that this Court will address are: (1)
whether Jimenez is entitled to notice and hearing before a warrant
for his arrest can be issued, and (2) whether he is entitled to bail and
to provisional liberty while the extradition proceedings are pending.
Preliminarily, we shall take up the alleged prematurity of the Petition
for Certiorari arising from petitioner’s failure to file a Motion for
Reconsideration in the RTC and to seek relief in the Court of
Appeals (CA), instead of in this Court. 15 We shall also preliminarily
discuss five extradition postulates that will guide us in disposing of
the substantive issues.
The Court’s Ruling
The Petition is meritorious.
Preliminary Matters
Alleged Prematurity of Present Petition
Petitioner submits the following justifications for not filing a Motion for
Reconsideration in the Extradition Court: "(1) the issues were fully
considered by such court after requiring the parties to submit their
respective memoranda and position papers on the matter and thus,
the filing of a reconsideration motion would serve no useful purpose;
(2) the assailed orders are a patent nullity, absent factual and legal
basis therefor; and (3) the need for relief is extremely urgent, as the
passage of sufficient time would give Jimenez ample opportunity to
escape and avoid extradition; and (4) the issues raised are purely of
law." 16
For resorting directly to this Court instead of the CA, petitioner
submits the following reasons: "(1) even if the petition is lodged with
the Court of Appeals and such appellate court takes cognizance of
the issues and decides them, the parties would still bring the matter
to this Honorable Court to have the issues resolved once and for all
[and] to have a binding precedent that all lower courts ought to
follow; (2) the Honorable Court of Appeals had in one case 17 ruled
on the issue by disallowing bail but the court below refused to
recognize the decision as a judicial guide and all other courts might
likewise adopt the same attitude of refusal; and (3) there are pending
issues on bail both in the extradition courts and the Court of Appeals,
which, unless guided by the decision that this Honorable Court will
render in this case, would resolve to grant bail in favor of the
potential extraditees and would give them opportunity to flee and
thus, cause adverse effect on the ability of the Philippines to comply
with its obligations under existing extradition treaties." 18
As a general rule, a petition for certiorari before a higher court will
not prosper unless the inferior court has been given, through a
motion for reconsideration, a chance to correct the errors imputed to
it. This rule, though, has certain exceptions: (1) when the issue
raised is purely of law, (2) when public interest is involved, or (3) in
case of urgency. 19 As a fourth exception, the Court has also ruled
that the filing of a motion for reconsideration before availment of the
remedy of certiorari is not a sine qua non, when the questions raised
are the same as those that have already been squarely argued and
exhaustively passed upon by the lower court. 20 Aside from being of
this nature, the issues in the present case also involve pure
questions of law that are of public interest. Hence, a motion for
reconsideration may be dispensed with.
Likewise, this Court has allowed a direct invocation of its original
jurisdiction to issue writs of certiorari when there are special and
important reasons therefor. 21 In Fortich v. Corona 22 we stated:
[T]he Supreme Court has the full discretionary power to take
cognizance of the petition filed directly [before] it if compelling
reasons, or the nature and importance of the issues raised, warrant.
This has been the judicial policy to be observed and which has been
reiterated in subsequent cases, namely: Uy vs. Contreras, et. al.,
Torres vs. Arranz, Bercero vs. De Guzman, and, Advincula vs.
Legaspi, et. al. As we have further stated in Cuaresma:
‘x x x. A direct invocation of the Supreme Court’s original jurisdiction
to issue these writs should be allowed only when there are special
and important reasons therefor, clearly and specifically set out in the
petition. This is established policy. x x x.’
Pursuant to said judicial policy, we resolve to take primary
jurisdiction over the present petition in the interest of speedy justice
and to avoid future litigations so as to promptly put an end to the
present controversy which, as correctly observed by petitioners, has
sparked national interest because of the magnitude of the problem
created by the issuance of the assailed resolution. Moreover, x x x
requiring the petitioners to file their petition first with the Court of
Appeals would only result in a waste of time and money.
That the Court has the power to set aside its own rules in the higher
interests of justice is well-entrenched in our jurisprudence. We
reiterate what we said in Piczon vs. Court of Appeals: 23
‘Be it remembered that rules of procedure are but mere tools
designed to facilitate the attainment of justice. Their strict and rigid
application, which would result in technicalities that tend to frustrate
rather than promote substantial justice, must always be avoided.
Time and again, this Court has suspended its own rules and
excepted a particular case from their operation whenever the higher
interests of justice so require. In the instant petition, we forego a
lengthy disquisition of the proper procedure that should have been
taken by the parties involved and proceed directly to the merits of the
case.’
In a number of other exceptional cases, 24 we held as follows:
This Court has original jurisdiction, concurrent with that of Regional
Trial Courts and the Court of Appeals, over petitions for certiorari,
prohibition, mandamus, quo warranto and habeas corpus, and we
entertain direct resort to us in cases where special and important
reasons or exceptional and compelling circumstances justify the
same."
In the interest of justice and to settle once and for all the important
issue of bail in extradition proceedings, we deem it best to take
cognizance of the present case. Such proceedings constitute a
matter of first impression over which there is, as yet, no local
jurisprudence to guide lower courts.
Five Postulates of Extradition
The substantive issues raised in this case require an interpretation
or construction of the treaty and the law on extradition. A cardinal
rule in the interpretation of a treaty or a law is to ascertain and give
effect to its intent. 25 Since PD 1069 is intended as a guide for the
implementation of extradition treaties to which the Philippines is a
signatory, 26 understanding certain postulates of extradition will aid
us in properly deciding the issues raised here.
1. Extradition Is a Major Instrument for the Suppression of Crime.
First, extradition treaties are entered into for the purpose of
suppressing crime 27 by facilitating the arrest and the custodial
transfer 28 of a fugitive 29 from one state to the other.
With the advent of easier and faster means of international travel,
the flight of affluent criminals from one country to another for the
purpose of committing crime and evading prosecution has become
more frequent. Accordingly, governments are adjusting their
methods of dealing with criminals and crimes that transcend
international boundaries.
Today, "a majority of nations in the world community have come to
look upon extradition as the major effective instrument of
international co-operation in the suppression of crime." 30 It is the
only regular system that has been devised to return fugitives to the
jurisdiction of a court competent to try them in accordance with
municipal and international law. 31
An important practical effect x x x of the recognition of the principle
that criminals should be restored to a jurisdiction competent to try
and punish them is that the number of criminals seeking refuge
abroad will be reduced. For to the extent that efficient means of
detection and the threat of punishment play a significant role in the
deterrence of crime within the territorial limits of a State, so the
existence of effective extradition arrangements and the consequent
certainty of return to the locus delicti commissi play a corresponding
role in the deterrence of flight abroad in order to escape the
consequence of crime. x x x. From an absence of extradition
arrangements flight abroad by the ingenious criminal receives direct
encouragement and thus indirectly does the commission of crime
itself." 32
In Secretary v. Lantion 33 we explained:
The Philippines also has a national interest to help in suppressing
crimes and one way to do it is to facilitate the extradition of persons
covered by treaties duly entered [into] by our government. More and
more, crimes are becoming the concern of one world. Laws involving
crimes and crime prevention are undergoing universalization. One
manifest purpose of this trend towards globalization is to deny easy
refuge to a criminal whose activities threaten the peace and
progress of civilized countries. It is to the great interest of the
Philippines to be part of this irreversible movement in light of its
vulnerability to crimes, especially transnational crimes."
Indeed, in this era of globalization, easier and faster international
travel, and an expanding ring of international crimes and criminals,
we cannot afford to be an isolationist state. We need to cooperate
with other states in order to improve our chances of suppressing
crime in our own country.
2. The Requesting State Will Accord Due Process to the Accused
Second, an extradition treaty presupposes that both parties thereto
have examined, and that both accept and trust, each other’s legal
system and judicial process. 34 More pointedly, our duly authorized
representative’s signature on an extradition treaty signifies our
confidence in the capacity and the willingness of the other state to
protect the basic rights of the person sought to be extradited. 35
That signature signifies our full faith that the accused will be given,
upon extradition to the requesting state, all relevant and basic rights
in the criminal proceedings that will take place therein; otherwise, the
treaty would not have been signed, or would have been directly
attacked for its unconstitutionality.
3. The Proceedings Are Sui Generis
Third, as pointed out in Secretary of Justice v. Lantion, 36 extradition
proceedings are not criminal in nature. In criminal proceedings, the
constitutional rights of the accused are at fore; in extradition which is
sui generis -- in a class by itself -- they are not.
An extradition [proceeding] is sui generis. It is not a criminal
proceeding which will call into operation all the rights of an accused
as guaranteed by the Bill of Rights. To begin with, the process of
extradition does not involve the determination of the guilt or
innocence of an accused. His guilt or innocence will be adjudged in
the court of the state where he will be extradited. Hence, as a rule,
constitutional rights that are only relevant to determine the guilt or
innocence of an accused cannot be invoked by an extraditee x x x.
xxxxxxxxx
There are other differences between an extradition proceeding and a
criminal proceeding. An extradition proceeding is summary in nature
while criminal proceedings involve a full-blown trial. In
contradistinction to a criminal proceeding, the rules of evidence in an
extradition proceeding allow admission of evidence under less
stringent standards. In terms of the quantum of evidence to be
satisfied, a criminal case requires proof beyond reasonable doubt for
conviction while a fugitive may be ordered extradited ‘upon showing
of the existence of a prima facie case.’ Finally, unlike in a criminal
case where judgment becomes executory upon being rendered final,
in an extradition proceeding, our courts may adjudge an individual
extraditable but the President has the final discretion to extradite
him. The United States adheres to a similar practice whereby the
Secretary of State exercises wide discretion in balancing the equities
of the case and the demands of the nation’s foreign relations before
making the ultimate decision to extradite."
Given the foregoing, it is evident that the extradition court is not
called upon to ascertain the guilt or the innocence of the person
sought to be extradited. 37 Such determination during the extradition
proceedings will only result in needless duplication and delay.
Extradition is merely a measure of international judicial assistance
through which a person charged with or convicted of a crime is
restored to a jurisdiction with the best claim to try that person. It is
not part of the function of the assisting authorities to enter into
questions that are the prerogative of that jurisdiction. 38 The ultimate
purpose of extradition proceedings in court is only to determine
whether the extradition request complies with the Extradition Treaty,
and whether the person sought is extraditable. 39
4. Compliance Shall Be in Good Faith.
Fourth, our executive branch of government voluntarily entered into
the Extradition Treaty, and our legislative branch ratified it. Hence,
the Treaty carries the presumption that its implementation will serve
the national interest.
Fulfilling our obligations under the Extradition Treaty promotes
comity 40 with the requesting state. On the other hand, failure to
fulfill our obligations thereunder paints a bad image of our country
before the world community. Such failure would discourage other
states from entering into treaties with us, particularly an extradition
treaty that hinges on reciprocity. 41
Verily, we are bound by pacta sunt servanda to comply in good faith
with our obligations under the Treaty. 42 This principle requires that
we deliver the accused to the requesting country if the conditions
precedent to extradition, as set forth in the Treaty, are satisfied. In
other words, "[t]he demanding government, when it has done all that
the treaty and the law require it to do, is entitled to the delivery of the
accused on the issue of the proper warrant, and the other
government is under obligation to make the surrender." 43
Accordingly, the Philippines must be ready and in a position to
deliver the accused, should it be found proper.
5. There Is an Underlying Risk of Flight
Fifth, persons to be extradited are presumed to be flight risks. This
prima facie presumption finds reinforcement in the experience 44 of
the executive branch: nothing short of confinement can ensure that
the accused will not flee the jurisdiction of the requested state in
order to thwart their extradition to the requesting state.
The present extradition case further validates the premise that
persons sought to be extradited have a propensity to flee. Indeed,
extradition hearings would not even begin, if only the accused were
willing to submit to trial in the requesting country. 45 Prior acts of
herein respondent -- (1) leaving the requesting state right before the
conclusion of his indictment proceedings there; and (2) remaining in
the requested state despite learning that the requesting state is
seeking his return and that the crimes he is charged with are bailable
-- eloquently speak of his aversion to the processes in the requesting
state, as well as his predisposition to avoid them at all cost. These
circumstances point to an ever-present, underlying high risk of flight.
He has demonstrated that he has the capacity and the will to flee.
Having fled once, what is there to stop him, given sufficient
opportunity, from fleeing a second time?
First Substantive Issue:
Is Respondent Entitled to Notice and Hearing
Before the Issuance of a Warrant of Arrest?
Petitioner contends that the procedure adopted by the RTC --
informing the accused, a fugitive from justice, that an Extradition
Petition has been filed against him, and that petitioner is seeking his
arrest -- gives him notice to escape and to avoid extradition.
Moreover, petitioner pleads that such procedure may set a
dangerous precedent, in that those sought to be extradited --
including terrorists, mass murderers and war criminals -- may invoke
it in future extradition cases.
On the other hand, Respondent Jimenez argues that he should not
be hurriedly and arbitrarily deprived of his constitutional right to
liberty without due process. He further asserts that there is as yet no
specific law or rule setting forth the procedure prior to the issuance
of a warrant of arrest, after the petition for extradition has been filed
in court; ergo, the formulation of that procedure is within the
discretion of the presiding judge.
Both parties cite Section 6 of PD 1069 in support of their arguments.
It states:
SEC. 6. Issuance of Summons; Temporary Arrest; Hearing, Service
of Notices.- (1) Immediately upon receipt of the petition, the
presiding judge of the court shall, as soon as practicable, summon
the accused to appear and to answer the petition on the day and
hour fixed in the order. [H]e may issue a warrant for the immediate
arrest of the accused which may be served any where within the
Philippines if it appears to the presiding judge that the immediate
arrest and temporary detention of the accused will best serve the
ends of justice. Upon receipt of the answer, or should the accused
after having received the summons fail to answer within the time
fixed, the presiding judge shall hear the case or set another date for
the hearing thereof.
(2) The order and notice as well as a copy of the warrant of arrest, if
issued, shall be promptly served each upon the accused and the
attorney having charge of the case." (Emphasis ours)
Does this provision sanction RTC Judge Purganan’s act of
immediately setting for hearing the issuance of a warrant of arrest?
We rule in the negative.
1. On the Basis of the Extradition Law
It is significant to note that Section 6 of PD 1069, our Extradition
Law, uses the word "immediate" to qualify the arrest of the accused.
This qualification would be rendered nugatory by setting for hearing
the issuance of the arrest warrant. Hearing entails sending notices to
the opposing parties, 46 receiving facts and arguments 47 from
them, 48 and giving them time to prepare and present such facts and
arguments. Arrest subsequent to a hearing can no longer be
considered "immediate." The law could not have intended the word
as a mere superfluity but, on the whole, as a means of imparting a
sense of urgency and swiftness in the determination of whether a
warrant of arrest should be issued.
By using the phrase "if it appears," the law further conveys that
accuracy is not as important as speed at such early stage. The trial
court is not expected to make an exhaustive determination to ferret
out the true and actual situation, immediately upon the filing of the
petition. From the knowledge and the material then available to it,
the court is expected merely to get a good first impression -- a prima
facie finding -- sufficient to make a speedy initial determination as
regards the arrest and detention of the accused.
Attached to the Petition for Extradition, with a Certificate of
Authentication among others, were the following: (1) Annex H, the
Affidavit executed on May 26, 1999 by Mr. Michael E. Savage -- trial
attorney in the Campaign Financing Task Force of the Criminal
Division of the US Department of Justice; (2) Annexes H to G,
evidentiary Appendices of various exhibits that constituted evidence
of the crimes charged in the Indictment, with Exhibits 1 to 120 (duly
authenticated exhibits that constituted evidence of the crimes
charged in the Indictment); (3) Annex BB, the Exhibit I "Appendix of
Witness [excerpts] Statements Referenced in the Affidavit of Angela
Byers" and enclosed Statements in two volumes; (4) Annex GG, the
Exhibit J "Table of Contents for Supplemental Evidentiary Appendix"
with enclosed Exhibits 121 to 132; and (5) Annex MM, the Exhibit L
"Appendix of Witness [excerpts] Statements Referenced in the
Affidavit of Betty Steward" and enclosed Statements in two volumes.
49
It is evident that respondent judge could have already gotten an
impression from these records adequate for him to make an initial
determination of whether the accused was someone who should
immediately be arrested in order to "best serve the ends of justice."
He could have determined whether such facts and circumstances
existed as would lead a reasonably discreet and prudent person to
believe that the extradition request was prima facie meritorious. In
point of fact, he actually concluded from these supporting documents
that "probable cause" did exist. In the second questioned Order, he
stated:
In the instant petition, the documents sent by the US Government in
support of [its] request for extradition of herein respondent are
enough to convince the Court of the existence of probable cause to
proceed with the hearing against the extraditee." 50
We stress that the prima facie existence of probable cause for
hearing the petition and, a priori, for issuing an arrest warrant was
already evident from the Petition itself and its supporting documents.
Hence, after having already determined therefrom that a prima facie
finding did exist, respondent judge gravely abused his discretion
when he set the matter for hearing upon motion of Jimenez. 51
Moreover, the law specifies that the court sets a hearing upon
receipt of the answer or upon failure of the accused to answer after
receiving the summons. In connection with the matter of immediate
arrest, however, the word "hearing" is notably absent from the
provision. Evidently, had the holding of a hearing at that stage been
intended, the law could have easily so provided. It also bears
emphasizing at this point that extradition proceedings are summary
52 in nature. Hence, the silence of the Law and the Treaty leans to
the more reasonable interpretation that there is no intention to
punctuate with a hearing every little step in the entire proceedings.
It is taken for granted that the contracting parties intend something
reasonable and something not inconsistent with generally
recognized principles of International Law, nor with previous treaty
obligations towards third States. If, therefore, the meaning of a treaty
is ambiguous, the reasonable meaning is to be preferred to the
unreasonable, the more reasonable to the less reasonable x x x ." 53
Verily, as argued by petitioner, sending to persons sought to be
extradited a notice of the request for their arrest and setting it for
hearing at some future date would give them ample opportunity to
prepare and execute an escape. Neither the Treaty nor the Law
could have
intended that consequence, for the very purpose of both would have
been defeated by the escape of the accused from the requested
state.
2. On the Basis of the Constitution
Even Section 2 of Article III of our Constitution, which is invoked by
Jimenez, does not require a notice or a hearing before the issuance
of a warrant of arrest. It provides:
Sec. 2. The right of the people to be secure in their persons, houses,
papers, and effects against unreasonable searches and seizures of
whatever nature and for any purpose shall be inviolable, and no
search warrant or warrant of arrest shall issue except upon probable
cause to be determined personally by the judge after examination
under oath or affirmation of the complainant and the witnesses he
may produce, and particularly describing the place to be searched
and the persons or things to be seized."
To determine probable cause for the issuance of arrest warrants, the
Constitution itself requires only the examination -- under oath or
affirmation -- of complainants and the witnesses they may produce.
There is no requirement to notify and hear the accused before the
issuance of warrants of arrest.
In Ho v. People 54 and in all the cases cited therein, never was a
judge required to go to the extent of conducting a hearing just for the
purpose of personally determining probable cause for the issuance
of a warrant of arrest. All we required was that the "judge must have
sufficient supporting documents upon which to make his
independent judgment, or at the very least, upon which to verify the
findings of the prosecutor as to the existence of probable cause." 55
In Webb v. De Leon, 56 the Court categorically stated that a judge
was not supposed to conduct a hearing before issuing a warrant of
arrest:
Again, we stress that before issuing warrants of arrest, judges
merely determine personally the probability, not the certainty of guilt
of an accused. In doing so, judges do not conduct a de novo hearing
to determine the existence of probable cause. They just personally
review the initial determination of the prosecutor finding a probable
cause to see if it is supported by substantial evidence."
At most, in cases of clear insufficiency of evidence on record, judges
merely further examine complainants and their witnesses. 57 In the
present case, validating the act of respondent judge and instituting
the practice of hearing the accused and his witnesses at this early
stage would be discordant with the rationale for the entire system. If
the accused were allowed to be heard and necessarily to present
evidence during the prima facie determination for the issuance of a
warrant of arrest,
what would stop him from presenting his entire plethora of defenses
at this stage -- if he so desires -- in his effort to negate a prima facie
finding? Such a procedure could convert the determination of a
prima facie case into a full-blown trial of the entire proceedings and
possibly make trial of the main case superfluous. This scenario is
also anathema to the summary nature of extraditions.
That the case under consideration is an extradition and not a
criminal action is not sufficient to justify the adoption of a set of
procedures more protective of the accused. If a different procedure
were called for at all, a more restrictive one -- not the opposite --
would be justified in view of respondent’s demonstrated
predisposition to flee.
Since this is a matter of first impression, we deem it wise to restate
the proper procedure:
Upon receipt of a petition for extradition and its supporting
documents, the judge must study them and make, as soon as
possible, a prima facie finding whether (a) they are sufficient in form
and substance, (b) they show compliance with the Extradition Treaty
and Law, and (c) the person sought is extraditable. At his discretion,
the judge may
require the submission of further documentation or may personally
examine the affiants and witnesses of the petitioner. If, in spite of this
study and examination, no prima facie finding 58 is possible, the
petition may be dismissed at the discretion of the judge.
On the other hand, if the presence of a prima facie case is
determined, then the magistrate must immediately issue a warrant
for the arrest of the extraditee, who is at the same time summoned to
answer the petition and to appear at scheduled summary hearings.
Prior to the issuance of the warrant, the judge must not inform or
notify the potential extraditee of the pendency of the petition, lest the
latter be given the opportunity to escape and frustrate the
proceedings. In our opinion, the foregoing procedure will "best serve
the ends of justice" in extradition cases.
Second Substantive Issue:
Is Respondent Entitled to Bail?
Article III, Section 13 of the Constitution, is worded as follows:
Art. III, Sec. 13. All persons, except those charged with offenses
punishable by reclusion perpetua when evidence of guilt is strong,
shall, before conviction, be bailable by sufficient sureties, or be
released on recognizance as may be provided by law. The right to
bail shall not be impaired even when the privilege of the writ of
habeas corpus is suspended. Excessive bail shall not be required."
Respondent Mark B. Jimenez maintains that this constitutional
provision secures the right to bail of all persons, including those
sought to be extradited. Supposedly, the only exceptions are the
ones charged with offenses punishable with reclusion perpetua,
when evidence of guilt is strong. He also alleges the relevance to the
present case of Section 4 59 of Rule 114 of the Rules of Court
which, insofar as practicable and consistent with the summary nature
of extradition proceedings, shall also apply according to Section 9 of
PD 1069.
On the other hand, petitioner claims that there is no provision in the
Philippine Constitution granting the right to bail to a person who is
the subject of an extradition request and arrest warrant.
Extradition Different from Ordinary Criminal Proceedings
We agree with petitioner. As suggested by the use of the word
"conviction," the constitutional provision on bail quoted above, as
well as Section 4 of Rule 114 of the Rules of Court, applies only
when a person has been arrested and detained for violation of
Philippine criminal laws. It does not apply to extradition proceedings,
because extradition courts do not render judgments of conviction or
acquittal.
Moreover, the constitutional right to bail "flows from the presumption
of innocence in favor of every accused who should not be subjected
to the loss of freedom as thereafter he would be entitled to acquittal,
unless his guilt be proved beyond reasonable doubt." 60 It follows
that the constitutional provision on bail will not apply to a case like
extradition, where the presumption of innocence is not at issue.
The provision in the Constitution stating that the "right to bail shall
not be impaired even when the privilege of the writ of habeas corpus
is suspended" does not detract from the rule that the constitutional
right to bail is available only in criminal proceedings. It must be noted
that the suspension of the privilege of the writ of habeas corpus finds
application "only to persons judicially charged for rebellion or
offenses inherent in or directly connected with invasion." 61 Hence,
the second sentence in the constitutional provision on bail merely
emphasizes the right to bail in criminal proceedings for the
aforementioned offenses. It cannot be taken to mean that the right is
available even in extradition proceedings that are not criminal in
nature.
That the offenses for which Jimenez is sought to be extradited are
bailable in the United States is not an argument to grant him one in
the present case. To stress, extradition proceedings are separate
and distinct from the trial for the offenses for which he is charged. He
should apply for bail before the courts trying the criminal cases
against him, not before the extradition court.
No Violation of Due Process
Respondent Jimenez cites the foreign case Paretti 62 in arguing
that, constitutionally, "[n]o one shall be deprived of x x x liberty x x x
without due process of law."
Contrary to his contention, his detention prior to the conclusion of the
extradition proceedings does not amount to a violation of his right to
due process. We iterate the familiar doctrine that the essence of due
process is the opportunity to be heard 63 but, at the same time, point
out that the doctrine does not always call for a prior opportunity to be
heard. 64 Where the circumstances -- such as those present in an
extradition case -- call for it, a subsequent opportunity to be heard is
enough. 65 In the present case, respondent will be given full
opportunity to be heard subsequently, when the extradition court
hears the Petition for Extradition. Hence, there is no violation of his
right to due process and fundamental fairness.
Contrary to the contention of Jimenez, we find no arbitrariness,
either, in the immediate deprivation of his liberty prior to his being
heard. That his arrest and detention will not be arbitrary is sufficiently
ensured by (1) the DOJ’s filing in court the Petition with its
supporting documents after a determination that the extradition
request meets the requirements of the law and the relevant treaty;
(2) the extradition judge’s independent prima facie determination that
his arrest will best serve the ends of justice before the issuance of a
warrant for his arrest; and (3) his opportunity, once he is under the
court’s custody, to apply for bail as an exception to the no-initial-bail
rule.
It is also worth noting that before the US government requested the
extradition of respondent, proceedings had already been conducted
in that country. But because he left the jurisdiction of the requesting
state before those proceedings could be completed, it was hindered
from continuing with the due processes prescribed under its laws.
His invocation of due process now has thus become hollow. He
already had that opportunity in the requesting state; yet, instead of
taking it, he ran away.
In this light, would it be proper and just for the government to
increase the risk of violating its treaty obligations in order to accord
Respondent Jimenez his personal liberty in the span of time that it
takes to resolve the Petition for Extradition? His supposed immediate
deprivation of liberty without the due process that he had previously
shunned pales against the government’s interest in fulfilling its
Extradition Treaty obligations and in cooperating with the world
community in the suppression of crime. Indeed, "[c]onstitutional
liberties do not exist in a vacuum; the due process rights accorded to
individuals must be carefully balanced against exigent and palpable
government interests." 66
Too, we cannot allow our country to be a haven for fugitives,
cowards and weaklings who, instead of facing the consequences of
their actions, choose to run and hide. Hence, it would not be good
policy to increase the risk of violating our treaty obligations if,
through overprotection or excessively liberal treatment, persons
sought to be extradited are able to evade arrest or escape from our
custody. In the absence of any provision -- in the Constitution, the
law or the treaty -- expressly guaranteeing the right to bail in
extradition proceedings, adopting the practice of not granting them
bail, as a general rule, would be a step towards deterring fugitives
from coming to the Philippines to hide from or evade their
prosecutors.1âwphi1.nêt
The denial of bail as a matter of course in extradition cases falls into
place with and gives life to Article 14 67 of the Treaty, since this
practice would encourage the accused to voluntarily surrender to the
requesting state to cut short their detention here. Likewise, their
detention pending the resolution of extradition proceedings would fall
into place with the emphasis of the Extradition Law on the summary
nature of extradition cases and the need for their speedy disposition.
Exceptions to the No Bail Rule
The rule, we repeat, is that bail is not a matter of right in extradition
cases. However, the judiciary has the constitutional duty to curb
grave abuse of discretion 68 and tyranny, as well as the power to
promulgate rules to protect and enforce constitutional rights. 69
Furthermore, we believe that the right to due process is broad
enough to include the grant of basic fairness to extraditees. Indeed,
the right to due process extends to the "life, liberty or property" of
every person. It is "dynamic and resilient, adaptable to every
situation calling for its application." 70
Accordingly and to best serve the ends of justice, we believe and so
hold that, after a potential extraditee has been arrested or placed
under the custody of the law, bail may be applied for and granted as
an exception, only upon a clear and convincing showing (1) that,
once granted bail, the applicant will not be a flight risk or a danger to
the community; and (2) that there exist special, humanitarian and
compelling circumstances 71 including, as a matter of reciprocity,
those cited by the highest court in the requesting state when it grants
provisional liberty in extradition cases therein.
Since this exception has no express or specific statutory basis, and
since it is derived essentially from general principles of justice and
fairness, the applicant bears the burden of proving the above two-
tiered requirement with clarity, precision and emphatic forcefulness.
The Court realizes that extradition is basically an executive, not a
judicial, responsibility arising from the presidential power to conduct
foreign relations. In its barest concept, it partakes of the nature of
police assistance amongst states, which is not normally a judicial
prerogative. Hence, any intrusion by the courts into the exercise of
this power should be characterized by caution, so that the vital
international and bilateral interests of our country will not be
unreasonably impeded or compromised. In short, while this Court is
ever protective of "the sporting idea of fair play," it also recognizes
the limits of its own prerogatives and the need to fulfill international
obligations.
Along this line, Jimenez contends that there are special
circumstances that are compelling enough for the Court to grant his
request for provisional release on bail. We have carefully examined
these circumstances and shall now discuss them.
1. Alleged Disenfranchisement
While his extradition was pending, Respondent Jimenez was elected
as a member of the House of Representatives. On that basis, he
claims that his detention will disenfranchise his Manila district of
600,000 residents. We are not persuaded. In People v. Jalosjos, 72
the Court has already debunked the disenfranchisement argument
when it ruled thus:
When the voters of his district elected the accused-appellant to
Congress, they did so with full awareness of the limitations on his
freedom of action. They did so with the knowledge that he could
achieve only such legislative results which he could accomplish
within the confines of prison. To give a more drastic illustration, if
voters elect a person with full knowledge that he is suffering from a
terminal illness, they do so knowing that at any time, he may no
longer serve his full term in office.
In the ultimate analysis, the issue before us boils down to a question
of constitutional equal protection.
The Constitution guarantees: ‘x x x nor shall any person be denied
the equal protection of laws.’ This simply means that all persons
similarly situated shall be treated alike both in rights enjoyed and
responsibilities imposed. The organs of government may not show
any undue favoritism or hostility to any person. Neither partiality nor
prejudice shall be displayed.
Does being an elective official result in a substantial distinction that
allows different treatment? Is being a Congressman a substantial
differentiation which removes the accused-appellant as a prisoner
from the same class as all persons validly confined under law?
The performance of legitimate and even essential duties by public
officers has never been an excuse to free a person validly [from]
prison. The duties imposed by the ‘mandate of the people’ are
multifarious. The accused-appellant asserts that the duty to legislate
ranks highest in the hierarchy of government. The accused-appellant
is only one of 250 members of the House of Representatives, not to
mention the 24 members of the Senate, charged with the duties of
legislation. Congress continues to function well in the physical
absence of one or a few of its members. Depending on the exigency
of Government that has to be addressed, the President or the
Supreme Court can also be deemed the highest for that particular
duty. The importance of a function depends on the need for its
exercise. The duty of a mother to nurse her infant is most compelling
under the law of nature. A doctor with unique skills has the duty to
save the lives of those with a particular affliction. An elective
governor has to serve provincial constituents. A police officer must
maintain peace and order. Never has the call of a particular duty
lifted a prisoner into a different classification from those others who
are validly restrained by law.
A strict scrutiny of classifications is essential lest[,] wittingly or
otherwise, insidious discriminations are made in favor of or against
groups or types of individuals.
The Court cannot validate badges of inequality. The necessities
imposed by public welfare may justify exercise of government
authority to regulate even if thereby certain groups may plausibly
assert that their interests are disregarded.
We, therefore, find that election to the position of Congressman is
not a reasonable classification in criminal law enforcement. The
functions and duties of the office are not substantial distinctions
which lift him from the class of prisoners interrupted in their freedom
and restricted in liberty of movement. Lawful arrest and confinement
are germane to the purposes of the law and apply to all those
belonging to the same class." 73
It must be noted that even before private respondent ran for and won
a congressional seat in Manila, it was already of public knowledge
that the United States was requesting his extradition. Hence, his
constituents were or should have been prepared for the
consequences of the extradition case against their representative,
including his detention pending the final resolution of the case.
Premises considered and in line with Jalosjos, we are constrained to
rule against his claim that his election to public office is by itself a
compelling reason to grant him bail.
2. Anticipated Delay
Respondent Jimenez further contends that because the extradition
proceedings are lengthy, it would be unfair to confine him during the
pendency of the case. Again we are not convinced. We must
emphasize that extradition cases are summary in nature. They are
resorted to merely to determine whether the extradition petition and
its annexes conform to the Extradition Treaty, not to determine guilt
or innocence. Neither is it, as a rule, intended to address issues
relevant to the constitutional rights available to the accused in a
criminal action.
We are not overruling the possibility that petitioner may, in bad faith,
unduly delay the proceedings. This is quite another matter that is not
at issue here. Thus, any further discussion of this point would be
merely anticipatory and academic.
However, if the delay is due to maneuverings of respondent, with all
the more reason would the grant of bail not be justified. Giving
premium to delay by considering it as a special circumstance for the
grant of bail would be tantamount to giving him the power to grant
bail to himself. It would also encourage him to stretch out and
unreasonably delay the extradition proceedings even more. This we
cannot allow.
3. Not a Flight Risk?
Jimenez further claims that he is not a flight risk. To support this
claim, he stresses that he learned of the extradition request in June
1999; yet, he has not fled the country. True, he has not actually fled
during the preliminary stages of the request for his extradition. Yet,
this fact cannot be taken to mean that he will not flee as the process
moves forward to its conclusion, as he hears the footsteps of the
requesting government inching closer and closer. That he has not
yet fled from the Philippines cannot be taken to mean that he will
stand his ground and still be within reach of our government if and
when it matters; that is, upon the resolution of the Petition for
Extradition.
In any event, it is settled that bail may be applied for and granted by
the trial court at anytime after the applicant has been taken into
custody and prior to judgment, even after bail has been previously
denied. In the present case, the extradition court may continue
hearing evidence on the application for bail, which may be granted in
accordance with the guidelines in this Decision.
Brief Refutation of Dissents
The proposal to remand this case to the extradition court, we
believe, is totally unnecessary; in fact, it is a cop-out. The parties --
in particular, Respondent Jimenez -- have been given more than
sufficient opportunity both by the trial court and this Court to discuss
fully and exhaustively private respondent’s claim to bail. As already
stated, the RTC set for hearing not only petitioner’s application for an
arrest warrant, but also private respondent’s prayer for temporary
liberty. Thereafter required by the RTC were memoranda on the
arrest, then position papers on the application for bail, both of which
were separately filed by the parties.
This Court has meticulously pored over the Petition, the Comment,
the Reply, the lengthy Memoranda and the Position Papers of both
parties. Additionally, it has patiently heard them in Oral Arguments, a
procedure not normally observed in the great majority of cases in
this Tribunal. Moreover, after the Memos had been submitted, the
parties -- particularly the potential extraditee -- have bombarded this
Court with additional pleadings -- entitled "Manifestations" by both
parties and "Counter-Manifestation" by private respondent -- in which
the main topic was Mr. Jimenez’s plea for bail.
A remand would mean that this long, tedious process would be
repeated in its entirety. The trial court would again hear factual and
evidentiary matters. Be it noted, however, that, in all his voluminous
pleadings and verbal propositions, private respondent has not asked
for a remand. Evidently, even he realizes that there is absolutely no
need to rehear factual matters. Indeed, the inadequacy lies not in the
factual presentation of Mr. Jimenez. Rather, it lies in his legal
arguments. Remanding the case will not solve this utter lack of
persuasion and strength in his legal reasoning.
In short, this Court -- as shown by this Decision and the spirited
Concurring, Separate and Dissenting Opinions written by the learned
justices themselves -- has exhaustively deliberated and carefully
passed upon all relevant questions in this case. Thus, a remand will
not serve any useful purpose; it will only further delay these already
very delayed proceedings, 74 which our Extradition Law requires to
be summary in character. What we need now is prudent and
deliberate speed, not unnecessary and convoluted delay. What is
needed is a firm decision on the merits, not a circuitous cop-out.
Then, there is also the suggestion that this Court is allegedly
"disregarding basic freedoms when a case is one of extradition." We
believe that this charge is not only baseless, but also unfair. Suffice it
to say that, in its length and breath, this Decision has taken special
cognizance of the rights to due process and fundamental fairness of
potential extraditees.
Summation
As we draw to a close, it is now time to summarize and stress these
ten points:
1. The ultimate purpose of extradition proceedings is to determine
whether the request expressed in the petition, supported by its
annexes and the evidence that may be adduced during the hearing
of the petition, complies with the Extradition Treaty and Law; and
whether the person sought is extraditable. The proceedings are
intended merely to assist the requesting state in bringing the
accused -- or the fugitive who has illegally escaped -- back to its
territory, so that the criminal process may proceed therein.
2. By entering into an extradition treaty, the Philippines is deemed to
have reposed its trust in the reliability or soundness of the legal and
judicial system of its treaty partner, as well as in the ability and the
willingness of the latter to grant basic rights to the accused in the
pending criminal case therein.
3. By nature then, extradition proceedings are not equivalent to a
criminal case in which guilt or innocence is determined.
Consequently, an extradition case is not one in which the
constitutional rights of the accused are necessarily available. It is
more akin, if at all, to a court’s request to police authorities for the
arrest of the accused who is at large or has escaped detention or
jumped bail. Having once escaped the jurisdiction of the requesting
state, the reasonable prima facie presumption is that the person
would escape again if given the opportunity.
4. Immediately upon receipt of the petition for extradition and its
supporting documents, the judge shall make a prima facie finding
whether the petition is sufficient in form and substance, whether it
complies with the Extradition Treaty and Law, and whether the
person sought is extraditable. The magistrate has discretion to
require the petitioner to submit further documentation, or to
personally examine the affiants or witnesses. If convinced that a
prima facie case exists, the judge immediately issues a warrant for
the arrest of the potential extraditee and summons him or her to
answer and to appear at scheduled hearings on the petition.
5. After being taken into custody, potential extraditees may apply for
bail. Since the applicants have a history of absconding, they have
the burden of showing that (a) there is no flight risk and no danger to
the community; and (b) there exist special, humanitarian or
compelling circumstances. The grounds used by the highest court in
the requesting state for the grant of bail therein may be considered,
under the principle of reciprocity as a special circumstance. In
extradition cases, bail is not a matter of right; it is subject to judicial
discretion in the context of the peculiar facts of each case.
6. Potential extraditees are entitled to the rights to due process and
to fundamental fairness. Due process does not always call for a prior
opportunity to be heard. A subsequent opportunity is sufficient due to
the flight risk involved. Indeed, available during the hearings on the
petition and the answer is the full chance to be heard and to enjoy
fundamental fairness that is compatible with the summary nature of
extradition.
7. This Court will always remain a protector of human rights, a
bastion of liberty, a bulwark of democracy and the conscience of
society. But it is also well aware of the limitations of its authority and
of the need for respect for the prerogatives of the other co-equal and
co-independent organs of government.
8. We realize that extradition is essentially an executive, not a
judicial, responsibility arising out of the presidential power to conduct
foreign relations and to implement treaties. Thus, the Executive
Department of government has broad discretion in its duty and
power of implementation.
9. On the other hand, courts merely perform oversight functions and
exercise review authority to prevent or excise grave abuse and
tyranny. They should not allow contortions, delays and "over-due
process" every little step of the way, lest these summary extradition
proceedings become not only inutile but also sources of international
embarrassment due to our inability to comply in good faith with a
treaty partner’s simple request to return a fugitive. Worse, our
country should not be converted into a dubious haven where
fugitives and escapees can unreasonably delay, mummify, mock,
frustrate, checkmate and defeat the quest for bilateral justice and
international cooperation.
10. At bottom, extradition proceedings should be conducted with all
deliberate speed to determine compliance with the Extradition Treaty
and Law; and, while safeguarding basic individual rights, to avoid the
legalistic contortions, delays and technicalities that may negate that
purpose.
WHEREFORE, the Petition is GRANTED. The assailed RTC Order
dated May 23, 2001 is hereby declared NULL and VOID, while the
challenged Order dated July 3, 2001 is SET ASIDE insofar as it
granted bail to Respondent Mark Jimenez. The bail bond posted by
private respondent is CANCELLED. The Regional Trial Court of
Manila is directed to conduct the extradition proceedings before it,
with all deliberate speed pursuant to the spirit and the letter of our
Extradition Treaty with the United States as well as our Extradition
Law. No costs.

SO ORDERED.
G.R. No. 157977 February 27, 2006
EDUARDO TOLENTINO RODRIGUEZ and IMELDA GENER
RODRIGUEZ, Petitioners,
vs.
THE HONORABLE PRESIDING JUDGE OF THE REGIONAL TRIAL
COURT OF MANILA – BRANCH 17, GOVERNMENT OF THE
UNITED STATES OF AMERICA, represented by the Philippine
Department of Justice, and DIRECTOR OF NATIONAL BUREAU OF
INVESTIGATION, Respondents.
DECISION
QUISUMBING, J.:
Before us is a special civil action for certiorari and prohibition
directed against the Orders dated May 7, 20031 and May 9, 20032
of the Regional Trial Court of Manila, Branch 17 in Case No. 01-
190375, which cancelled the bail of petitioners and denied their
motion for reconsideration, respectively.
The case stemmed from the petition for extradition filed on March 12,
2001 by the Government of the United States of America (US
government) through the Department of Justice (DOJ) against the
petitioners.
After their arrest, petitioners applied for bail which the trial court
granted on September 25, 2001. The bail was set for one million
pesos for each. Petitioners then posted cash bonds. The US
government moved for reconsideration of the grant of bail, but the
motion was denied by the trial court. Unsatisfied, the US government
filed a petition for certiorari with this Court, entitled Government of
the United States of America, represented by the Philippine
Department of Justice v. Hon. Rodolfo A. Ponferrada, etc., et al., and
docketed as G.R. No. 151456.
Thereafter, we directed the trial court to resolve the matter of bail
which, according to its November 28, 2001 Order,3 shall be subject
to whatever ruling that this Court may have in the similar case of
Mark Jimenez entitled Government of the United States of America
v. Purganan,4 docketed as G.R No. 148571. In compliance with our
directive, the trial court, without prior notice and hearing, cancelled
the cash bond of the petitioners and ordered the issuance of a
warrant of arrest,5 to wit:
Accordingly, following the En Banc Decision of the Supreme Court in
G.R. No. 148571 dated September 24, 2002 to the effect that
extraditees are not entitled to bail… while the extradition
proceedings are pending…’ (page 1, En Banc Decision in G.R. No.
148571), let a warrant of arrest issue against the herein respondents
sans any bail, for implementation by the Sheriff or any member of
any law enforcement agency in line with Section 19 of Presidential
Decree No. 1069.
IT IS SO ORDERED.
Petitioners filed a very urgent motion for the reconsideration of the
cancellation of their bail. The motion was heard and denied on May
9, 2003.6
Having no alternative remedy, petitioners filed the present petition on
the following grounds:
I allowed to continue. They cite that petitioner Eduardo is in fact
…THE RESPONDENT JUDGE COMMITTED SUCH SERIOUS AND
GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR
EXCESS OF JURISDICTION IN CANCELLING THE BAIL OF
HEREIN PETITIONERS WITHOUT PRIOR NOTICE AND HEARING
OF ITS CANCELLATION.
II
…THE RESPONDENT JUDGE COMMITTED SUCH SERIOUS AND
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION IN NOT CONSIDERING CERTAIN
SPECIAL CIRCUMSTANCES ATTENDANT TO THE PRESENT
CASE, AS AN EXCEPTION TO THE GENERAL RULE OF "NO-
BAIL" IN EXTRADITION CASES WHEN PETITIONERS’ CASH BAIL
WAS UNILATERALLY CANCELLED.
III
…THE RESPONDENT JUDGE COMMITTED SUCH SERIOUS AND
GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR
EXCESS OF JURISDICTION IN ISSUING THE WARRANT OF
ARREST WITHOUT CONSIDERING THE HEREIN PETITIONERS’
SPECIAL CIRCUMSTANCE OF VOLUNTARY EXTRADITION
PRIOR TO CANCELLING THEIR CASH BAIL.7
Once again we face the controversial matter of bail in extradition
cases. We are asked to resolve twin issues: First, in an extradition
case, is prior notice and hearing required before bail is cancelled?
Second, what constitutes a "special circumstance" to be exempt
from the no-bail rule in extradition cases?
Petitioners assert that their bail cannot be cancelled without due
process of law. By way of analogy, they point to Rule 114, Section
218 of the Rules of Court where the surety or bonding company is
required to be notified and allowed to show cause why the bail bond
should not be cancelled. They say that if the rules grant this
opportunity to surety and bonding companies, the more reason then
that in an extradition case the same should be afforded.
Petitioners also contend that this Court’s directive in G.R. No.
151456 did not in any way authorize the respondent court to cancel
their bail. Petitioners aver that respondent court should have first
determined the facts to evaluate if petitioners were entitled to
continuance of their bail, e.g. their willingness to go on voluntary
extradition, which respondent court should have considered a
special circumstance.
Respondents, for their part, argue that prior notice and hearing are
not required to cancel petitioners’ bail, and the issuance of a warrant
of arrest ex parte against an extraditee is not a violation of the due
process clause. Further, respondents maintain that prior notice and
hearing would defeat the purpose of the arrest warrant since it could
give warning that respondents would be arrested and even
encourage them to flee.
Besides, even granting that prior notice and hearing are indeed
required, respondents contend that petitioners had been effectively
given prior notice and opportunity to be heard, because the trial
court’s order clearly stated that the matter of bail shall be subject to
whatever ruling the Supreme Court may render in the similar
extradition case of Government of the United States of America v.
Purganan.9 Petitioners did not contest the aforementioned order.
Respondents declare that petitioners were likewise notified of this
Court’s directives to the trial court to resolve the matter of their bail.
More significantly, petitioners claim that their bail should not have
been cancelled since their situation falls within the exception to the
general rule of no-bail. They allege that their continuous offer for
voluntary extradition is a special circumstance that should be
considered in determining that their temporary liberty while on bail be
already in the United States attending the trial. They also have not
taken flight as fugitives. Besides, according to petitioners, the State
is more than assured they would not flee because their passports
were already confiscated and there is an existing hold-departure
order against them. Moreover, petitioners assert, they are not a
danger to the community.
Respondents counter that petitioner Imelda Gener Rodriguez did not
show her good faith by her continued refusal to appear before the
respondent court. Further, the reasons of petitioners do not qualify
as compelling or special circumstances. Moreover, the special
circumstance of voluntary surrender of petitioner Eduardo is
separate and distinct from petitioner Imelda’s.
Additionally, respondents maintain that the ruling in the case of
Atong Ang10 has no applicability in the instant case. Ang’s bail was
allowed because the English translation of a testimony needed to
determine probable cause in Ang’s case would take time. This
special circumstance is not attendant in this case.
The trial court’s immediate cancellation of the bail of petitioners is
contrary to our ruling in Purganan, and it had misread and
misapplied our directive therein.
Now, was the order to issue warrant of arrest against petitioners and
to cancel the bail of extraditees a grave abuse of discretion of the
trial court?
Grave abuse of discretion is capricious or whimsical exercise of
judgment that is patent and gross as to amount to an evasion of
positive duty or a virtual refusal to perform a duty enjoined by law.18
In our view, the cancellation of co-petitioner’s bail, without prior
notice and hearing, could be considered a violation of co-petitioner’s
right to due process tantamount to grave abuse of discretion.

The issue of prior notice and hearing in extradition cases is not new.
In Secretary of Justice v. Lantion,11 by a vote of nine to six, we
initially ruled that notice and hearing should be afforded the
extraditee even when a possible extradition is still being
evaluated.12 The Court, deliberating on a motion for reconsideration
also by a vote of nine to six, qualified and declared that prospective
extraditees are entitled to notice and hearing only when the case is
filed in court and not during the process of evaluation.13
Finally, considering that remanding the case to the court a quo will
only delay the final resolution of the case as in all probability it would
only end up with us again,19 we will decide if Imelda’s bail was
validly cancelled.
In Purganan, we held also that the grounds used by the highest court
in the requesting state for the grant of bail may be considered, under
the principle of reciprocity.20

In the later case of Purganan, eight justices concurred that a
possible extraditee is not entitled to notice and hearing before the
issuance of a warrant of arrest while six others dissented.
Now, we are confronted with the question of whether a prospective
extraditee is entitled to notice and hearing before the cancellation of
his or her bail.
The issue has become moot and academic insofar as petitioner
Eduardo Rodriguez is concerned. He is now in the USA facing the
charges against him. But co-petitioner Imelda Gener Rodriguez is
here and stands on a different footing. We agree that her bail should
be restored.
Considering that she has not been shown to be a flight risk nor a
danger to the community, she is entitled to notice and hearing before
her bail could be cancelled. Based on the record, we find that,
absent prior notice and hearing, the bail’s cancellation was in
violation of her right to due process.
WHEREFORE, the instant petition is GRANTED IN PART. The
Orders dated May 7, 2003 and May 9, 2003 of the Regional Trial
Court of Manila, Branch 17 in Case No. 01-190375 are REVERSED
and SET ASIDE, as far as petitioner IMELDA GENER RODRIGUEZ
is concerned. We hereby (1) declare IMELDA GENER RODRIGUEZ
entitled to bail, (2) order her cancelled bail restored, and (3) order
the warrant for her arrest revoked.

In Purganan, we said that a prospective extraditee is not entitled to SO ORDERED.

notice and hearing before the issuance of a warrant of arrest,14
because notifying him before his arrest only tips him of his pending
arrest. But this is for cases pending the issuance of a warrant of
arrest, not in a cancellation of a bail that had been issued after
determination that the extraditee is a no-flight risk. The policy is that
a prospective extraditee is arrested and detained to avoid his flight
from justice.15 On the extraditee lies the burden of showing that he
will not flee once bail is granted.16 If after his arrest and if the trial
court finds that he is no flight risk, it grants him bail. The grant of the
bail, presupposes that the co-petitioner has already presented
evidence to prove her right to be on bail, that she is no flight risk, and
the trial court had already exercised its sound discretion and had
already determined that under the Constitution and laws in force, co-
petitioner is entitled to provisional release.

Under these premises, and with the trial court’s knowledge that in
this case, co-petitioner has offered to go on voluntary extradition;
that she and her husband had posted a cash bond of ₱1 million
each; that her husband had already gone on voluntary extradition
and is presently in the USA undergoing trial; that the passport of co-
petitioner is already in the possession of the authorities; that she
never attempted to flee; that there is an existing hold-departure order
against her; and that she is now in her sixties, sickly and under
medical treatment, we believe that the benefits of continued
temporary liberty on bail should not be revoked and their grant of bail
should not be cancelled, without the co-petitioner being given notice
and without her being heard why her temporary liberty should not be
discontinued.

We emphasize that bail may be granted to a possible extraditee only

upon a clear and convincing showing (1) that he will not be a flight
risk or a danger to the community, and (2) that there exist special,
humanitarian and compelling circumstances.17

G.R. No. 153675 April 19, 2007
GOVERNMENT OF HONG KONG SPECIAL ADMINISTRATIVE
REGION, represented by the Philippine Department of Justice,
Petitioner,
vs.
HON. FELIXBERTO T. OLALIA, JR. and JUAN ANTONIO MUÑOZ,
Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant Petition for Certiorari under Rule 65
of the 1997 Rules of Civil Procedure, as amended, seeking to nullify
the two Orders of the Regional Trial Court (RTC), Branch 8, Manila
(presided by respondent Judge Felixberto T. Olalia, Jr.) issued in
Civil Case No. 99-95773. These are: (1) the Order dated December
20, 2001 allowing Juan Antonio Muñoz, private respondent, to post
bail; and (2) the Order dated April 10, 2002 denying the motion to
vacate the said Order of December 20, 2001 filed by the
Government of Hong Kong Special Administrative Region,
represented by the Philippine Department of Justice (DOJ),
petitioner. The petition alleges that both Orders were issued by
respondent judge with grave abuse of discretion amounting to lack
or excess of jurisdiction as there is no provision in the Constitution
granting bail to a potential extraditee.
The facts are:
On January 30, 1995, the Republic of the Philippines and the then
British Crown Colony of Hong Kong signed an "Agreement for the
Surrender of Accused and Convicted Persons." It took effect on June
20, 1997.
On July 1, 1997, Hong Kong reverted back to the People’s Republic
of China and became the Hong Kong Special Administrative Region.
Private respondent Muñoz was charged before the Hong Kong Court
with three (3) counts of the offense of "accepting an advantage as
agent," in violation of Section 9 (1) (a) of the Prevention of Bribery
Ordinance, Cap. 201 of Hong Kong. He also faces seven (7) counts
of the offense of conspiracy to defraud, penalized by the common
law of Hong Kong. On August 23, 1997 and October 25, 1999,
warrants of arrest were issued against him. If convicted, he faces a
jail term of seven (7) to fourteen (14) years for each charge.
On September 13, 1999, the DOJ received from the Hong Kong
Department of Justice a request for the provisional arrest of private
respondent. The DOJ then forwarded the request to the National
Bureau of Investigation (NBI) which, in turn, filed with the RTC of
Manila, Branch 19 an application for the provisional arrest of private
respondent.
On September 23, 1999, the RTC, Branch 19, Manila issued an
Order of Arrest against private respondent. That same day, the NBI
agents arrested and detained him.
On October 14, 1999, private respondent filed with the Court of
Appeals a petition for certiorari, prohibition and mandamus with
application for preliminary mandatory injunction and/or writ of
habeas corpus questioning the validity of the Order of Arrest.
On November 9, 1999, the Court of Appeals rendered its Decision
declaring the Order of Arrest void.
On November 12, 1999, the DOJ filed with this Court a petition for
review on certiorari, docketed as G.R. No. 140520, praying that the
Decision of the Court of Appeals be reversed.
On December 18, 2000, this Court rendered a Decision granting the
petition of the DOJ and sustaining the validity of the Order of Arrest
against private respondent. The Decision became final and
executory on April 10, 2001.
Meanwhile, as early as November 22, 1999, petitioner Hong Kong
Special Administrative Region filed with the RTC of Manila a petition
for the extradition of private respondent, docketed as Civil Case No.
99-95733, raffled off to Branch 10, presided by Judge Ricardo
Bernardo, Jr. For his part, private respondent filed, in the same
case,- a petition for bail which was opposed by petitioner.
After hearing, or on October 8, 2001, Judge Bernardo, Jr. issued an
Order denying the petition for bail, holding that there is no Philippine
law granting bail in extradition cases and that private respondent is a
high "flight risk."
On October 22, 2001, Judge Bernardo, Jr. inhibited himself from
further hearing Civil Case No. 99-95733. It was then raffled off to
Branch 8 presided by respondent judge.
On October 30, 2001, private respondent filed a motion for
reconsideration of the Order denying his application for bail. This
was granted by respondent judge in an Order dated December 20,
2001 allowing private respondent to post bail, thus:
In conclusion, this Court will not contribute to accused’s further
erosion of civil liberties. The petition for bail is granted subject to the
following conditions:
1. Bail is set at Php750,000.00 in cash with the condition that
accused hereby undertakes that he will appear and answer the
issues raised in these proceedings and will at all times hold himself
amenable to orders and processes of this Court, will further appear
for judgment. If accused fails in this undertaking, the cash bond will
be forfeited in favor of the government;
2. Accused must surrender his valid passport to this Court;
3. The Department of Justice is given immediate notice and
discretion of filing its own motion for hold departure order before this
Court even in extradition proceeding; and
4. Accused is required to report to the government prosecutors
handling this case or if they so desire to the nearest office, at any
time and day of the week; and if they further desire, manifest before
this Court to require that all the assets of accused, real and personal,
be filed with this Court soonest, with the condition that if the accused
flees from his undertaking, said assets be forfeited in favor of the
government and that the corresponding lien/annotation be noted
therein accordingly.
SO ORDERED.
On December 21, 2001, petitioner filed an urgent motion to vacate
the above Order, but it was denied by respondent judge in his Order
dated April 10, 2002.
Hence, the instant petition. Petitioner alleged that the trial court
committed grave abuse of discretion amounting to lack or excess of
jurisdiction in admitting private respondent to bail; that there is
nothing in the Constitution or statutory law providing that a potential
extraditee has a right to bail, the right being limited solely to criminal
proceedings.
In his comment on the petition, private respondent maintained that
the right to bail guaranteed under the Bill of Rights extends to a
prospective extraditee; and that extradition is a harsh process
resulting in a prolonged deprivation of one’s liberty.

Section 13, Article III of the Constitution provides that the right to bail
shall not be impaired, thus:
Sec. 13. All persons, except those charged with offenses punishable
by reclusion perpetua when evidence of guilt is strong, shall, before
conviction, be bailable by sufficient sureties, or be released on
recognizance as may be provided by law. The right to bail shall not
be impaired even when the privilege of the writ of habeas corpus is
suspended. Excessive bail shall not be required.
Jurisprudence on extradition is but in its infancy in this jurisdiction.
Nonetheless, this is not the first time that this Court has an occasion
to resolve the question of whether a prospective extraditee may be
granted bail.
In Government of United States of America v. Hon. Guillermo G.
Purganan, Presiding Judge, RTC of Manila, Branch 42, and Mark B.
Jimenez, a.k.a. Mario Batacan Crespo,1 this Court, speaking
through then Associate Justice Artemio V. Panganiban, later Chief
Justice, held that the constitutional provision on bail does not apply
to extradition proceedings. It is "available only in criminal
proceedings," thus:
x x x. As suggested by the use of the word "conviction," the
constitutional provision on bail quoted above, as well as Section 4,
Rule 114 of the Rules of Court, applies only when a person has
been arrested and detained for violation of Philippine criminal laws. It
does not apply to extradition proceedings because extradition courts
do not render judgments of conviction or acquittal.
Moreover, the constitutional right to bail "flows from the presumption
of innocence in favor of every accused who should not be subjected
to the loss of freedom as thereafter he would be entitled to acquittal,
unless his guilt be proved beyond reasonable doubt" (De la Camara
v. Enage, 41 SCRA 1, 6, September 17, 1971, per Fernando, J.,
later CJ). It follows that the constitutional provision on bail will not
apply to a case like extradition, where the presumption of innocence
is not at issue.
The provision in the Constitution stating that the "right to bail shall
not be impaired even when the privilege of the writ of habeas corpus
is suspended" does not detract from the rule that the constitutional
right to bail is available only in criminal proceedings. It must be noted
that the suspension of the privilege of the writ of habeas corpus finds
application "only to persons judicially charged for rebellion or
offenses inherent in or directly connected with invasion" (Sec. 18,
Art. VIII, Constitution). Hence, the second sentence in the
constitutional provision on bail merely emphasizes the right to bail in
criminal proceedings for the aforementioned offenses. It cannot be
taken to mean that the right is available even in extradition
proceedings that are not criminal in nature.
At first glance, the above ruling applies squarely to private
respondent’s case. However, this Court cannot ignore the following
trends in international law: (1) the growing importance of the
individual person in public international law who, in the 20th century,
has gradually attained global recognition; (2) the higher value now
being given to human rights in the international sphere; (3) the
corresponding duty of countries to observe these universal human
rights in fulfilling their treaty obligations; and (4) the duty of this Court
to balance the rights of the individual under our fundamental law, on
one hand, and the law on extradition, on the other.
The modern trend in public international law is the primacy placed on
the worth of the individual person and the sanctity of human rights.
Slowly, the recognition that the individual person may properly be a
subject of international law is now taking root. The vulnerable
doctrine that the subjects of international law are limited only to
states was dramatically eroded towards the second half of the past
century. For one, the Nuremberg and Tokyo trials after World War II
resulted in the unprecedented spectacle of individual defendants for
acts characterized as violations of the laws of war, crimes against
peace, and crimes against humanity. Recently, under the Nuremberg
principle, Serbian leaders have been persecuted for war crimes and
crimes against humanity committed in the former Yugoslavia. These
significant events show that the individual person is now a valid
subject of international law.
On a more positive note, also after World War II, both international
organizations and states gave recognition and importance to human
rights. Thus, on December 10, 1948, the United Nations General
Assembly adopted the Universal Declaration of Human Rights in
which the right to life, liberty and all the other fundamental rights of
every person were proclaimed. While not a treaty, the principles
contained in the said Declaration are now recognized as customarily
binding upon the members of the international community. Thus, in
Mejoff v. Director of Prisons,2 this Court, in granting bail to a
prospective deportee, held that under the Constitution,3 the
principles set forth in that Declaration are part of the law of the land.
In 1966, the UN General Assembly also adopted the International
Covenant on Civil and Political Rights which the Philippines signed
and ratified. Fundamental among the rights enshrined therein are the
rights of every person to life, liberty, and due process.
The Philippines, along with the other members of the family of
nations, committed to uphold the fundamental human rights as well
as value the worth and dignity of every person. This commitment is
enshrined in Section II, Article II of our Constitution which provides:
"The State values the dignity of every human person and guarantees
full respect for human rights." The Philippines, therefore, has the
responsibility of protecting and promoting the right of every person to
liberty and due process, ensuring that those detained or arrested can
participate in the proceedings before a court, to enable it to decide
without delay on the legality of the detention and order their release
if justified. In other words, the Philippine authorities are under
obligation to make available to every person under detention such
remedies which safeguard their fundamental right to liberty. These
remedies include the right to be admitted to bail. While this Court in
Purganan limited the exercise of the right to bail to criminal
proceedings, however, in light of the various international treaties
giving recognition and protection to human rights, particularly the
right to life and liberty, a reexamination of this Court’s ruling in
Purganan is in order.
First, we note that the exercise of the State’s power to deprive an
individual of his liberty is not necessarily limited to criminal
proceedings. Respondents in administrative proceedings, such as
deportation and quarantine,4 have likewise been detained.
Second, to limit bail to criminal proceedings would be to close our
eyes to our jurisprudential history. Philippine jurisprudence has not
limited the exercise of the right to bail to criminal proceedings only.
This Court has admitted to bail persons who are not involved in
criminal proceedings. In fact, bail has been allowed in this jurisdiction
to persons in detention during the pendency of administrative
proceedings, taking into cognizance the obligation of the Philippines
under international conventions to uphold human rights.
The 1909 case of US v. Go-Sioco5 is illustrative. In this case, a
Chinese facing deportation for failure to secure the necessary
certificate of registration was granted bail pending his appeal. After
noting that the prospective deportee had committed no crime, the
Court opined that "To refuse him bail is to treat him as a person who
has committed the most serious crime known to law;" and that while
deportation is not a criminal proceeding, some of the machinery
used "is the machinery of criminal law." Thus, the provisions relating
to bail was applied to deportation proceedings.
In Mejoff v. Director of Prisons6 and Chirskoff v. Commission of
Immigration,7 this Court ruled that foreign nationals against whom no
formal criminal charges have been filed may be released on bail
pending the finality of an order of deportation. As previously stated,
the Court in Mejoff relied upon the Universal declaration of Human
Rights in sustaining the detainee’s right to bail.
If bail can be granted in deportation cases, we see no justification
why it should not also be allowed in extradition cases. Likewise,
considering that the Universal Declaration of Human Rights applies
to deportation cases, there is no reason why it cannot be invoked in
extradition cases. After all, both are administrative proceedings
where the innocence or guilt of the person detained is not in issue.
Clearly, the right of a prospective extraditee to apply for bail in this
jurisdiction must be viewed in the light of the various treaty
obligations of the Philippines concerning respect for the promotion
and protection of human rights. Under these treaties, the
presumption lies in favor of human liberty. Thus, the Philippines
should see to it that the right to liberty of every individual is not
impaired.
Section 2(a) of Presidential Decree (P.D.) No. 1069 (The Philippine
Extradition Law) defines "extradition" as "the removal of an accused
from the Philippines with the object of placing him at the disposal of
foreign authorities to enable the requesting state or government to
hold him in connection with any criminal investigation directed
against him or the execution of a penalty imposed on him under the
penal or criminal law of the requesting state or government."
Extradition has thus been characterized as the right of a foreign
power, created by treaty, to demand the surrender of one accused or
convicted of a crime within its territorial jurisdiction, and the
correlative duty of the other state to surrender him to the demanding
state.8 It is not a criminal proceeding.9 Even if the potential
extraditee is a criminal, an extradition proceeding is not by its nature
criminal, for it is not punishment for a crime, even though such
punishment may follow extradition.10 It is sui generis, tracing its
existence wholly to treaty obligations between different nations.11 It
is not a trial to determine the guilt or innocence of the potential
extraditee.12 Nor is it a full-blown civil action, but one that is merely
administrative in character.13 Its object is to prevent the escape of a
person accused or convicted of a crime and to secure his return to
the state from which he fled, for the purpose of trial or punishment.14
But while extradition is not a criminal proceeding, it is characterized
by the following: (a) it entails a deprivation of liberty on the part of the
potential extraditee and (b) the means employed to attain the
purpose of extradition is also "the machinery of criminal law." This is
shown by Section 6 of P.D. No. 1069 (The Philippine Extradition
Law) which mandates the "immediate arrest and temporary
detention of the accused" if such "will best serve the interest of
justice." We further note that Section 20 allows the requesting state
"in case of urgency" to ask for the "provisional arrest of the accused,
pending receipt of the request for extradition;" and that release from
provisional arrest "shall not prejudice re-arrest and extradition of the
accused if a request for extradition is received subsequently."
Obviously, an extradition proceeding, while ostensibly administrative,
bears all earmarks of a criminal process. A potential extraditee may
be subjected to arrest, to a prolonged restraint of liberty, and forced
to transfer to the demanding state following the proceedings.
"Temporary detention" may be a necessary step in the process of
extradition, but the length of time of the detention should be
reasonable.
Records show that private respondent was arrested on September
23, 1999, and remained incarcerated until December 20, 2001, when
the trial court ordered his admission to bail. In other words, he had
been detained for over two (2) years without having been convicted
of any crime. By any standard, such an extended period of detention
is a serious deprivation of his fundamental right to liberty. In fact, it
was this prolonged deprivation of liberty which prompted the
extradition court to grant him bail.
While our extradition law does not provide for the grant of bail to an
extraditee, however, there is no provision prohibiting him or her from
filing a motion for bail, a right to due process under the Constitution.
The applicable standard of due process, however, should not be the
same as that in criminal proceedings. In the latter, the standard of
due process is premised on the presumption of innocence of the
accused. As Purganan correctly points out, it is from this major
premise that the ancillary presumption in favor of admitting to bail
arises. Bearing in mind the purpose of extradition proceedings, the
premise behind the issuance of the arrest warrant and the
"temporary detention" is the possibility of flight of the potential
extraditee. This is based on the assumption that such extraditee is a
fugitive from justice.15 Given the foregoing, the prospective
extraditee thus bears the onus probandi of showing that he or she is
not a flight risk and should be granted bail.
The time-honored principle of pacta sunt servanda demands that the
Philippines honor its obligations under the Extradition Treaty it
entered into with the Hong Kong Special Administrative Region.
Failure to comply with these obligations is a setback in our foreign
relations and defeats the purpose of extradition. However, it does not
necessarily mean that in keeping with its treaty obligations, the
Philippines should diminish a potential extraditee’s rights to life,
liberty, and due process. More so, where these rights are
guaranteed, not only by our Constitution, but also by international
conventions, to which the Philippines is a party. We should not,
therefore, deprive an extraditee of his right to apply for bail, provided
that a certain standard for the grant is satisfactorily met.
An extradition proceeding being sui generis, the standard of proof
required in granting or denying bail can neither be the proof beyond
reasonable doubt in criminal cases nor the standard of proof of
preponderance of evidence in civil cases. While administrative in
character, the standard of substantial evidence used in
administrative cases cannot likewise apply given the object of
extradition law which is to prevent the prospective extraditee from
fleeing our jurisdiction. In his Separate Opinion in Purganan, then
Associate Justice, now Chief Justice Reynato S. Puno, proposed
that a new standard which he termed "clear and convincing
evidence" should be used in granting bail in extradition cases.
According to him, this standard should be lower than proof beyond
reasonable doubt but higher than preponderance of evidence. The
potential extraditee must prove by "clear and convincing evidence"
that he is not a flight risk and will abide with all the orders and
processes of the extradition court.
In this case, there is no showing that private respondent presented
evidence to show that he is not a flight risk. Consequently, this case
should be remanded to the trial court to determine whether private
respondent may be granted bail on the basis of "clear and
convincing evidence."
WHEREFORE, we DISMISS the petition. This case is REMANDED
to the trial court to determine whether private respondent is entitled
to bail on the basis of "clear and convincing evidence." If not, the trial
court should order the cancellation of his bail bond and his
immediate detention; and thereafter, conduct the extradition
proceedings with dispatch.
SO ORDERED.

G.R. No. 207342, August 16, 2016
GOVERNMENT OF HONGKONG SPECIAL ADMINISTRATIVE
REGION, REPRESENTED BY THE PHILIPPINE DEPARTMENT OF
JUSTICE, Petitioner, v. JUAN ANTONIO MUNOZ, Respondent.
DECISION
BERSAMIN, J.:
This case is the third in the trilogy of cases that started with the 2000
case of Cuevas v. Muñoz,1 which dealt with respondent Juan
Antonio Munoz's provisional arrest as an extraditee, and the 2007
case of Government of Hong Kong Special Administrative Region v.
Olalia, Jr.,2 which resolved the question of Muñoz's right to bail as a
potential extraditee. Both rulings dealt with and resolved incidents
arising during the process of having Munoz extradited to Hong Kong
under and pursuant to the Agreement Between the Government of
the Republic of the Philippines and the Government of Hong Kong
for the Surrender of Accused and Convicted Persons (RP-HK
Agreement).
Up for our consideration and resolution in the current case is
whether or not the extradition request of the Government of Hong
Kong Special Administrative Region (HKSAR) sufficiently complied
with the RP-HK Agreement and Presidential Decree No. 1069
(Philippine Extradition Law): On November 28, 2006, the Regional
Trial Court (RTC), Branch 8, in Manila granted the request for the
extradition of Muñoz.3 Although the CA at first ruled that Munoz
could be tried in Hong Kong for the crimes of conspiracy to defraud
and accepting an advantage as an agent, it granted his motion for
reconsideration and promulgated the now assailed amended
decision on March 1, 2013 in CA-G.R. CV No. 88610,4 in which it
pronounced that the crime of accepting an advantage as an agent
should be excluded from the charges for which he would be tried in
Hong Kong due to non-compliance with the double criminality rule.
Also being challenged is the resolution promulgated on May 29,
2013 by the CA (denying the motion for reconsideration of the
petitioner).5chanrobleslaw
Antecedents
As factual antecedents, the CA narrated the following:
Bared to its essentials, the record shows that in late 1991,
respondent-appellant, as Head of the Treasury Department of the
Central Bank of the Philippines (CBP), was instructed by its
Governor to raise Seven Hundred Million US Dollars (US$700M) in
order to fund the buyback of Philippine debts and the purchase of
zero coupon US Treasury Bonds. To this end, respondent-appellant
recommended that the amount be obtained through gold
loans/swaps, for which, seven (7) contracts of about One Hundred
Million US Dollars (US$100M) each were to be awarded to certain
accredited parties. Two (2) of these contracts were granted to
Mocatta, London. These in turn were rolled over as they matured,
hence, totaling five (5) gold loan/swap agreements in Mocatta,
London's favor.
In relation to this, petitioner-appellee narrates:
xxxx
2. At all material times, Mr. Juan Antonio E. MUÑOZ ("MUÑOZ") was
the Head of the Treasury Department of the Central Bank of the
Philippines ("CBP"). In July 1993, CBP changed its name to the
Bangko Sentral ng Pilipinas.
3. At all material times, Mr. Ho CHI ("CHI") was the Chief Executive
of Standard Chartered Bank – The Mocatta Group (Hong Kong)
("MHK"), MHK was a branch of the Mocatta Group in London
("Mocatta London") which was a division of the Standard Chartered
Bank.
4. CBP and MHK had been dealing in small gold transactions for
several years prior to 1991. During the latter part of 1991, MUÑOZ
and CHI began negotiating larger deals up to US$100 M. CBP were
(sic) reluctant to deal with MHK for such large amounts and wanted
to deal 'directly with Mocatta (London).
5. CHI approached Philip WILSON ("WILSON"), the then Chief
Dealer of Mocatta (London) about the proposed deals. CHI indicated
that to get business it would be necessary for Mocatta (London) to
pay rebates to an unnamed group of people at CBP. WILSON told
CHI that that was wrong in principal (sic). CHI, however, approached
Keith SMITH, the then Managing Director of Mocatta (London), who
approved the payments.
xxxx
6. Between February 1992 to March 1993, there were a series of
"gold swaps" and gold backed loans between CBP (sic) and Mocatta
(London) through MHK in Hong Kong. The transactions were a
means for CBP to raise finance.
xxxx
9. As a result of these transactions, Mocatta (London) paid out
rebates of US$1,703,304.87 to an account ("the Sundry Creditors
Account") held with MHK for onward transmission by MHK to
destinations as instructed by CHI. Funds from this Sundry Creditors
Account were subsequently disbursed to the benefit of CHI and
MUÑOZ personally (x x x).
xxxx
10. In addition to the gold swaps and the gold backed loans referred
to above, there were option agreements created between CBP and
MHK. Under an option agreement, CBP granted a right to MHK to
exercise (or not to exercise) the option to buy gold at a fixed price on
a fixed date.
11. As a result, between 27 July 1992 and 6 May 1993, MHK paid
US$4,026,000 into the Sundry Creditors Account, ostensibly for
CBP, as premiums for these options, xxx
xxxx
13. CHI operated an account at Mocatta Hong Kong, called the MHK
No. 3 Account, purportedly on behalf of CBP, for trading in gold.
Profits from the trading were accrued to the amount of
US$1,625,000. The trading and the profits were unknown to CBP.
14. On 12 October 1993, this US$1,625,000 was transferred to the
Sundry Creditors Account. Funds from this Sundry Creditors Account
were subsequently disbursed to the benefit of CHI and MUÑOZ
personally (xxx).
xxxx
15. Apart from the aforesaid, there were other payments made by
MHK to the Sundry Creditors Account, ostensibly for CBP, namely:
commission on gold location swaps US$227,086.18
commission on silver location swaps US$ 47,524.69
commission on options US$ 9,750.00
interest US$ 32,889.61
16. None of the above payments were known to CBP and none of
them ever reached CBP. Funds from this Sundry Creditors Account
were subsequently disbursed to the benefit of CHI and MUÑOZ
personally (x x x).
xxxx
On the other hand, respondent-appellant gives his version, thus:
chanRoblesvirtualLawlibraryx x x the Central Bank executed all
these gold loan/swap agreements with the same counter party,
namely, Mocatta London. Munoz signed in behalf of the Central
Bank while Phil Wilson signed for Mocatta London.
xxxx
In late 1992 (around November or December), Munoz received a
note from Mocatta London requesting that their accreditation as
official counter party of the Central Bank be transferred to Standard
Chartered Bank (SCB) in view of an ongoing reorganization which
will result in Mocatta London being a mere division of SCB. Before
such reorganization, both Mocatta London and Mocatta Hong Kong
operated as independent subsidiaries of SCB.
xxxx
As mentioned earlier, the Monetary Board approved the transfer of
the accreditation of Mocatta London as authorized counter party of
the bank to SCB sometime in February or March of 1993. Mocatta
London became known as SCB-The Mocatta Group, or SCB-The
Mocatta Group (sic), or SCB-The Mocatta Group London, while
Mocatta became known as SCB-the Mocatta Group Hong Kong. Phil
Wilson was the Chief Executive Officer for London, while Ho Chi was
the Chief Executive for Hong Kong. The Group Chief Executive
Officer was Ron Altringham.
As can be seen in Annex 'C', even with the SCB reorganization, the
gold [loan]/swap agreements continued to be contracted with
Mocatta London. As shown, both the gold loan/swap agreements
dated March 25, 1993 and June 30, 1993 were signed by Phil
Wilson for Mocatta London (SCB-The Mocatta Group London). With
the accreditation of SCB as the official counter party of the bank,
however, CB did allow the dealers to transact minor trading
transactions with Mocatta Hong Kong. CB also allowed Mocatta
Hong Kong to quote on the gold and silver location swaps CB
periodically did to decongest its vaults at the gold plant in Quezon
City. The gold swap/loan agreements, however, as shown in the
Annex, continued to be rolled over with Mocatta London.
During Muñoz's stay in Treasury at the bank as its Head, he did not
involve himself in the details of work done by the Dealing Group,
Treasury Service Group (TSG) and Accounting which were all
headed by either Director or a Deputy Director who could clarify any
issue that may arise, and who consult with him on matters they were
unsure. The department had been operational over 6 years when
Muñoz joined, and the Treasury transactions had already become
routine for majority of the staff. Muñoz meet (sic) weekly with senior
officers to inform of development and discuss problems of the
department.
In respect to the five gold loan/swap agreements with Mocatta
London (as well as the agreements contracted with other official
counter parties), upon the signing of each agreement, a copy of the
agreement was forwarded to the Dealing Group for proper
implementation. The Treasury dealers usually coordinated with
dealers of the counter party involved in effecting the necessary
transactions.
These agreements are the subject often (10) criminal cases filed
against respondent-appellant in Hong Kong - i.e., three (3) counts of
accepting an advantage as an agent, contrary to Section 9(1) (a) of
the Prevention of Bribery Ordinance, Cap. 201 and seven (7) counts
of conspiracy to defraud, contrary to the common law of HKSAR.6
Invoking the Agreement Between the Government of the Republic of
the Philippines and the Government of Hong Kong for the Surrender
of Accused and Convicted Persons (RP-HK Agreement), which was
signed in Hong Kong on January 30, 1995, the Hong Kong Special
Administrative Region (HKSAR) sent Note No. SBCR 11/1/2716/80
dated July 9, 1997 to the Philippine Consulate General in Hong
Kong to inquire on which agency of the Philippine Government
should handle a request for extradition under the RP-HK Agreement.
The Philippine Consulate General replied through Note No. 78-97
dated October 16, 1997 that the proper agency was the Department
of Justice (DOJ).7 On September 13, 1999, therefore, the DOJ
received the request for the provisional arrest of Muñoz pursuant to
Article 11(1) of the RP-HK Agreement. On September 17, 1999, the
National Bureau of Investigation (NBI), acting for and in behalf of
HKSAR, initiated the proceedings for his arrest in the RTC, whose
Branch 19 then issued on September 3, 1999 the order granting the
application for the provisional arrest of Muñoz. Branch 19
consequently issued the corresponding order of arrest. On October
14, 1999, Muñoz challenged through certiorari, prohibition and
mandamus the validity of the order for his arrest in the CA, which
declared the order of arrest null and void in its judgment promulgated
on November 9, 1999. DOJ Secretary Serafin R. Cuevas
consequently appealed the decision of the CA to this Court, which
reversed the CA on December 18, 2000 in Cuevas v. Muñoz, 8
disposing:
WHEREFORE, the petition is GRANTED, and the assailed Decision
of the Court of Appeals, dated November 9, 1999, in CA-G.R. SP
No. 55343 is hereby REVERSED and SET ASIDE. Respondent's
"Urgent Motion For Release Pending Appeal" is hereby DENIED.
SO ORDERED.
Meantime, on November 22, 1999,9 the DOJ, representing the
HKSAR, filed a petition in the RTC for the surrender of Munoz to the
HKSAR to face the criminal charges against him in Hong Kong. He
filed a petition for bail. Initially, on October 8, 2001, the RTC, through
Presiding Judge Ricardo Bernardo, Jr. of Branch 10, denied the
petition for bail after hearing on the ground that there was no
Philippine law that allowed bail in extradition cases, and that he was
a high "flight risk." But after the case was re-assigned to Branch 8,
presided by Judge Felixberto T. Olalia, Jr., following the inhibition of
Judge Bernardo, Jr., Muñoz filed his motion for reconsideration
against the denial of his petition for bail. Granting the motion for
reconsideration on December 20, 2001,10 Judge Olalia, Jr. allowed
bail to Muñoz under the conditions stated in the order of that date.
Not satisfied, the DOJ assailed the granting of bail to Muñoz as a
potential extraditee by petition for certiorari directly filed in this Court.
The matter of bail for Muñoz was ultimately settled by the Court in
Government of Hong Kong Special Administrative Region v. Olalia,
Jr., 11viz. :
While our extradition law does not provide for the grant of bail to an
extraditee, however, there is no provision prohibiting him or her from
filing a motion for bail, a right to due process under the Constitution.
The applicable standard of due process, however, should not be the
same as that in criminal proceedings. In the latter, the standard of
due process is premised on the presumption of innocence of the
accused. As Purganan correctly points out, it is from this major
premise that the ancillary presumption in favor of admitting to bail
arises. Bearing in mind the purpose of extradition proceedings, the
premise behind the issuance of the arrest warrant and the
"temporary detention" is the possibility of flight of the potential
extraditee. This is based on the assumption that such extraditee is a
fugitive from justice. Given the foregoing, the prospective extraditee
thus bears the onus probandi of showing that he or she is not a flight
risk and should be granted bail.
The time-honored principle of pacta sunt servanda demands that the
Philippines honor its obligations under the Extradition Treaty it
entered into with the Hong Kong Special Administrative Region.
Failure to comply with these obligations is a setback in our foreign
relations and defeats the purpose of extradition. However, it does not
necessarily mean that in keeping with its treaty obligations, the
Philippines should diminish a potential extraditee's rights to life,
liberty, and due process. More so, where these rights are
guaranteed, not only by our Constitution, but also by international
conventions, to which the Philippines is a party. We should not,
therefore, deprive an extraditee of his right to apply for bail, provided
that a certain standard for the grant is satisfactorily met.
An extradition proceeding being sui generis, the standard of proof
required in granting or denying bail can neither be the proof beyond
reasonable doubt in criminal cases nor the standard of proof of
preponderance of evidence in civil cases. While administrative in
character, the standard of substantial evidence used in
administrative cases cannot likewise apply given the object of
extradition law which is to prevent the prospective extraditee from
fleeing our jurisdiction. In his Separate Opinion in Purganan, then
Associate Justice, now Chief Justice Reynato S. Puno, proposed
that a new standard which he termed "clear and convincing
evidence" should be used in granting bail in extradition cases.
According to him, this standard should be lower than proof beyond
reasonable doubt but higher than preponderance of evidence. The
potential extraditee must prove by "clear and convincing evidence"
that he is not a flight risk and will abide with all the orders and
processes of the extradition court.
In this case, there is no showing that private respondent presented
evidence to show that he is not a flight risk. Consequently, this case
should be remanded to the trial court to determine whether private
respondent may be granted bail on the basis of "clear and
convincing evidence."
WHEREFORE, we DISMISS the petition. This case is REMANDED
to the trial court to determine whether private respondent is entitled
to bail on the basis of "clear and convincing evidence." If not, the trial
court should order the cancellation of his bail bond and his
immediate detention; and thereafter, conduct the extradition
proceedings with dispatch.
SO ORDERED.12chanroblesvirtuallawlibrary
Eventually, on November 28, 2006, the RTC ruled on the main case
of extradition by holding that the extradition request sufficiently
complied with the RP-HK Agreement and Presidential Decree No.
1069.13chanrobleslaw
In due course, Muñoz elevated the adverse decision of November
28, 2006 to the CA upon the following issues, namely: (1) the
enforceability of the RP-HK Agreement, including the HKSAR's
personality to institute the petition under its current status as a
special administrative region; (2) the DOJ's authority to receive the
request for extradition and to file the petition despite Presidential
Decree No. 1069 naming the Secretary of Foreign Affairs for that
purpose; (3) the extraditability of the offense, considering the nature
of the crimes charged and the pieces of evidence presented in
support of the petition; and (4) the limits of the jurisdiction of the
extradition court, i.e., whether or not it included passing upon the
defenses of the person to be extradited.14chanrobleslaw
In its decision promulgated on August 30, 2012,15 the CA opined
that although the People's Republic of China resumed the exercise
of jurisdiction over the HKSAR, Article 9616 of the latter's Basic Law
still empowered it to enter into international agreements in its own
name, including extradition treaties;17 that despite the exception
made in the Joint Declaration of the Government of the United
Kingdom of Great Britain and Northern Ireland and the Government
of the People's Republic of China on the Question of Hong Kong to
the effect that the HKSAR would enjoy a high degree of autonomy,
except in foreign and defense affairs that were the responsibilities of
the Central People's Government, there was a status quo as regards
the laws currently in force in Hong Kong; that Article 153 of the Basic
Law explicitly provided that international agreements to which the
People's Republic of China was not a party but which were
implemented in Hong Kong could continue to be implemented in the
HKSAR; that an Exchange of Notes between the Governments of
China and the Philippines confirmed the continuous enforceability of
the RP-HK Agreement;18 that the DOJ had the authority to receive
the request for extradition by the HKSAR because the RP-Hong
Kong Agreement referred to the "appropriate authority" as would be
identified from time to time by one party to the other;19 and that, as
such, the reliance by Muñoz on the provision of Presidential Decree
No. 1069 that only the Secretary of Foreign Affairs had the authority
to receive requests for extradition should be rejected.
The CA affirmed the RTC's conclusion that the crimes of conspiracy
to defraud and accepting an advantage as an agent were
extraditable offenses; that not only was conspiracy to defraud
explicitly included in the offenses covered by the RP-HK Agreement,
but also that both crimes satisfied the double criminality rule, or the
principle to the effect that extradition was available only when the act
was an offense in the jurisdictions of both parties; and that it was not
for the Philippine court to determine the extent of the criminal
jurisdiction of the foreign court because entering into questions that
were the prerogative of that other jurisdiction was the function of the
assisting authorities.20chanrobleslaw
On September 14, 2012,21 Muñoz sought the reconsideration of the
August 30, 2012 decision.
On March 1, 2013,22 the CA promulgated its assailed amended
decision by partially granting Muñoz's motion for reconsideration.
Although affirming its previous ruling, it concluded that the crime of
accepting an advantage as an agent should be excluded from the
charges under which Muñoz would be tried due to non-compliance
with the double criminality rule.
After the HKSAR's motion for reconsideration was denied on May
29, 2013,23 it has appealed by petition for review on certiorari.
Issue
The sole issue raised by the HKSAR relates to the propriety of the
CA's conclusion that the crime of accepting an advantage as an
agent did not comply with the double criminality
rule.24chanrobleslaw
Ruling of the Court
Upon thorough consideration, we DENY the petition for review.
Extradition is "the surrender by one nation to another of an individual
accused or convicted of an offense outside of its own territory, and
within the territorial jurisdiction of the other, which, being competent
to try and to punish him, demands the surrender."25cralawred It is
not- part of customary international law, although the duty to
extradite exists only for some international crimes.26 Thus, a state
must extradite only when obliged by treaty to do so.27 The right of a
state to successfully request the extradition of a criminal offender
arises from a treaty with the requested state.28 Absent the treaty,
the duty to surrender a person who has sought asylum within its
boundaries does not inhere in the state, which, if it so wishes, can
extend to him a refuge and protection even from the state that he
has fled. Indeed, in granting him asylum, the state commits no
breach of international law. But by concluding the treaty, the asylum
state imposes limitations on itself, because it thereby agrees to do
something it was free not to do.29 The extradition treaty creates the
reciprocal obligation to surrender persons from the requested state's
jurisdiction charged or convicted of certain crimes committed within
the requesting state's territory, and is of the same level as a law
passed by the Legislatures of the respective parties.
Presidential Decree No. 1069 defines the general procedure for the
extradition of persons who have committed crimes in a foreign
country, and lays down the rules to guide the Executive Department
and the courts of the Philippines on the proper implementation of the
extradition treaties to which the country is a signatory. Nevertheless,
the particular treaties entered into by the Philippine Government with
other countries primarily govern the relationship between the parties.
The RP-HK Agreement is still in full force and effect as an extradition
treaty. The procedures therein delineated regulate the rights and
obligations of the Republic of the Philippines and the HKSAR under
the treaty in the handling of extradition requests.
For purposes of the extradition of Munoz, the HKSAR as the
requesting state must establish the following six elements,30
namely: (1) there must be an extradition treaty in force between the
HKSAR and the Philippines; (2) the criminal charges that are
pending in the HKSAR against the person to be extradited;31 (3) the
crimes for which the person to be extradited is charged are
extraditable within the terms of the treaty;32 (4) the individual before
the court is the same person charged in the HKSAR;33 (5) the
evidence submitted establishes probable cause to believe that the
person to be extradited committed the offenses charged;34 and (6)
the offenses are criminal in both the HKSAR and the Philippines
(double criminality rule).
The first five of the elements inarguably obtain herein, as both the
RTC and the CA found. To start with, the RP-Hong Kong Agreement
subsists and has not been revoked or terminated by either parties.
Secondly, there have been 10 criminal cases filed against Muñoz in
Hong Kong, specifically: three counts of accepting an advantage as
an agent and seven counts of conspiracy to defraud 35 Thirdly, the
crimes of accepting an advantage as an agent and of conspiracy to
defraud were extraditable under the terms of the RP-Hong Kong
Agreement. Fourthly, Muñoz was the very same person charged with
such offenses based on the documents relied upon by the DOJ, and
the examination and determination of probable cause by the RTC
that led to the issuance of the order for the arrest of Muñoz. And,
lastly, there is probable cause to believe that Muñoz committed the
offenses charged.
However, it was as to the sixth element that the CA took exception
as not having been established. Although the crime of conspiracy to
defraud was included among the offenses covered by the RP-Hong
Kong Agreement, and the RTC and the CA have agreed that the
crime was analogous to the felony of estafa through false pretense
as defined and penalized under Article 315(2)36 of the Revised
Penal Code, it was disputed whether or not the other crime of
accepting an advantage as an agent was also punished as a crime
in the Philippines. As such, the applicability of the double criminality
rule became the issue.
Under the double criminality rule, the extraditable offense must be
criminal under the laws of both the requesting and the requested
states".37 This simply means that the requested state comes under
no obligation to surrender the person if its laws do not regard the
conduct covered by the request for extradition as
criminal.38chanrobleslaw
The HKS AR defines the crime of accepting an advantage as an
agent under Section 9(1)(a) of the Prevention of Bribery Ordinance
(POBO), Cap. 201,39 to wit:
Section 9. Corrupt transactions with agents.
(1) Any agent who, without lawful authority or reasonable excuse,
solicits or accepts any advantage as an inducement to or reward for
or otherwise on account of his –
(a) doing or forbearing to do, or having done or forborne to do, any
act in relation to his principal's affairs or business; or
xxxx
A perusal of the decision of the RTC and the original decision of the
CA show that said courts determined that the crime of accepting an
advantage as an agent was analogous to the crime of corrupt
practices of public officers as defined under Section 340 of Republic
Act No. 3019 (Anti-Graft and Corrupt Practices Act). In its assailed
amended decision, however, the CA reversed itself, and agreed with
Muñoz to the effect that Section 9(1)(a) of the POBO referred only to
private individuals, not to persons belonging to the public sector. It
revised its determination by taking into consideration the expert
opinions on the nature and attributes of the crime of accepting an
advantage as an agent tendered by Clive Stephen Grossman,
Senior Counsel of the Hong Kong Bar Association, in behalf of
Muñoz, and Ian Charles Me Walters, Senior Assistant Director of
Public Prosecutions in the Department of Justice of the HKSAR,
testifying on behalf of the HKSAR. Said experts shared the opinion
that the POBO was a two-part statute concerned with corruption by
public officials and corruption in the private sector.41 However, Me
Walters gave the following explanation regarding the nature of the
offenses enumerated in Section 9 of the POBO, to wit:
8. A person can be guilty of a POBO bribery offense if he offers an
advantage to an agent, or being an agent, he solicits or accepts an
advantage. However, there is no mention of the word corruption, or
variants of it, in these offences. Proof of corruption comes from
establishing that the advantage was offered, solicited or accepted
"as an inducement to, reward for or otherwise on account of the
agent doing inter alia "an act in his capacity as a public servant"
(public sector bribery) or "an act in relation to his principal's affairs or
business" (private sector bribery). The private sector bribery offence
is section 9 of the POBO and its language is derived from section 1
of the United Kingdom's Prevention of Corruption Act of 1906. 42
Based on the foregoing, the CA ultimately concluded that the crime
of accepting an advantage as an agent did not have an equivalent in
this jurisdiction considering that when the unauthorized giving and
receiving of benefits happened in the private sector, the same was
not a crime because there was no law that defined and' punished
such act as criminal in this jurisdiction.43chanrobleslaw
We uphold the conclusion and observation by the CA.
A careful reading shows that the foreign law subject-matter of this
controversy deals with bribery in both public and private sectors.
However, it is also quite evident that the particular provision of the
POBO allegedly violated by Muñoz, i.e., Section 9(1 )(a), deals with
private sector bribery -this, despite the interpretation under Section 2
of the POBO that an "agent includes a public servant and any
person employed by or acting for another." The POBO clearly states
that the interpretation shall apply unless the context otherwise
requires.
It cannot be argued that Section 9(1)(a) of the POBO encompasses
both private individuals and public servants. A Section 9(1)(a)
offense has a parallel POBO provision applicable to public servants,
to wit:44
Private Sector Bribery Public Sector Bribery
Section 9. Corrupt transactions with agents.
(1) Any agent who, without lawful authority or reasonable excuse,
solicits or accepts any advantage as an inducement to or reward for
or otherwise on account of his –
(a) doing or forbearing to do or having done or forborne to do, any
act in relation to his principal's affairs or business; or Section 4.
BRIBERY, x x x x.
(2) Any public servant who, whether in Hong Kong or elsewhere,
without lawful authority or reasonable excuse, solicits or accepts any
advantage as an inducement to or reward for or otherwise on
account of his – (Amended 28 of 1980 s. 3)
a. performing or abstaining from performing, or having performed or
abstained from performing, any act in his capacity as a public
servant;
xxxx
shall be guilty of an offence.
Considering that the transactions were entered into by and in behalf
of the Central Bank of the Philippines, an instrumentality of the
Philippine Government, Munoz should be charged for the offenses
not as a regular agent or one representing a private entity but as a
public servant or employee of the Philippine Government. Yet,
because the offense of accepting an advantage as an agent charged
against him in the HKSAR is one that deals with private sector
bribery, the conditions for the application of the double criminality
rule are obviously not met. Accordingly, the crime of accepting an
advantage as an agent must be dropped from the request for
extradition. Conformably with the principle of specialty embodied in
Article 17 of the RP-HK Agreement, Muñoz should be proceeded
against only for the seven counts of conspiracy to defraud. As such,
the HKSAR shall hereafter arrange for Muñoz's surrender within the
period provided under Article 15 of the RP-HK Agreement.
WHEREFORE, the Court DENIES the petition for review on
certiorari; and AFFIRMS the amended decision promulgated on
March 1, 2013 in CA-G.R. SP No. 88610.
G.R. No. 139941       January 19, 2001
VICENTE B. CHUIDIAN, petitioner,
vs.
SANDIGANBAYAN (Fifth Division) and the REPUBLIC OF THE
PHILIPPINES, respondents.
YNARES-SANTIAGO, J.:
The instant petition arises from transactions that were entered into
by the government in the penultimate days of the Marcos
administration. Petitioner Vicente B. Chuidian was alleged to be a
dummy or nominee of Ferdinand and Imelda Marcos in several
companies said to have been illegally acquired by the Marcos
spouses. As a favored business associate of the Marcoses, Chuidian
allegedly used false pretenses to induce the officers of the Philippine
Export and Foreign Loan Guarantee Corporation
(PHILGUARANTEE), the Board of Investments (BOI) and the
Central Bank, to facilitate the procurement and issuance of a loan
guarantee in favor of the Asian Reliability Company, Incorporated
(ARCI) sometime in September 1980. ARCI, 98% of which was
allegedly owned by Chuidian, was granted a loan guarantee of
Twenty-Five Million U.S. Dollars (US$25,000,000.00).1âwphi1.nêt
While ARCI represented to Philguarantee that the loan proceeds
would be used to establish five inter-related projects in the
Philippines, Chuidian reneged on the approved business plan and
instead invested the proceeds of the loan in corporations operating
in the United States, more particularly Dynetics, Incorporated and
Interlek, Incorporated. Although ARCI had received the proceeds of
the loan guaranteed by Philguarantee, the former defaulted in the
payments thereof, compelling Philguarantee to undertake payments
for the same. Consequently, in June 1985, Philguarantee sued
Chuidian before the Santa Clara County Superior Court, 1 charging
that in violation of the terms of the loan, Chuidian not only defaulted
in payment, but also misused the funds by investing them in Silicon
Valley corporations and using them for his personal benefit.
For his part, Chuidian claimed that he himself was a victim of the
systematic plunder perpetrated by the Marcoses as he was the true
owner of these companies, and that he had in fact instituted an
action before the Federal Courts of the United States to recover the
companies which the Marcoses had illegally wrested from him. 2
On November 27, 1985, or three (3) months before the successful
people's revolt that toppled the Marcos dictatorship, Philguarantee
entered into a compromise agreement with Chuidian whereby
petitioner Chuidian shall assign and surrender title to all his
companies in favor of the Philippine government. In return,
Philguarantee shall absolve Chuidian from all civil and criminal
liability, and in so doing, desist from pursuing any suit against
Chuidian concerning the payments Philguarantee had made on
Chuidian's defaulted loans.
It was further stipulated that instead of Chuidian reimbursing the
payments made by Philguarantee arising from Chuidian's default,
the Philippine government shall pay Chuidian the amount of Five
Million Three Hundred Thousand Dollars (US$5,300,000.00). Initial
payment of Five Hundred Thousand Dollars (US$500,000.00) was
actually received by Chuidian, as well as succeeding payment of
Two Hundred Thousand Dollars (US$200,000.00). The remaining
balance of Four Million Six Hundred Thousand Dollars
(US$4,600,000.00) was to be paid through an irrevocable Letter of
Credit (L/C) from which Chuidian would draw One Hundred
Thousand Dollars (US$100,000.00) monthly.3 Accordingly, on
December 12, 1985, L/C No. SSD-005-85 was issued for the said
amount by the Philippine National Bank (PNB). Subsequently,
Chuidian was able to make two (2) monthly drawings from said L/C
at the Los Angeles branch of the PNB.4
With the advent of the Aquino administration, the newly-established
Presidential Commission on Good Government (PCGG) exerted
earnest efforts to search and recover money, gold, properties, stocks
and other assets suspected as having been illegally acquired by the
Marcoses, their relatives and cronies.
Petitioner Chuidian was among those whose assets were
sequestered by the PCGG. On May 30, 1986, the PCGG issued a
Sequestration Order5 directing the PNB to place under its custody,
for and in behalf of the PCGG, the irrevocable L/C (No. SSD-005-
85). Although Chuidian was then residing in the United States, his
name was placed in the Department of Foreign Affairs' Hold Order
list.6
In the meantime, Philguarantee filed a motion before the Superior
Court of Santa Clara County of California in Civil Case Nos. 575867
and 577697 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 which was highly unfavorable to
Philguarantee and grossly disadvantageous to the government; (b)
Chuidian blackmailed Marcos into pursuing and concluding 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. After considering the
factual matters before it, the said court concluded that Philguarantee
"had not carried its burden of showing that the settlement between
the parties should be set aside."7 On appeal, the Sixth Appellate
District of the Court of Appeal of the State of California affirmed the
judgment of the Superior Court of Sta. Clara County denying
Philguarantee's motion to vacate the stipulated judgment based on
the settlement agreement.8
After payment on the L/C was frozen by the PCGG, Chuidian filed
before the United States District Court, Central District of California,
an action against PNB seeking, among others, to compel PNB to pay
the proceeds of the L/C. PNB countered that it cannot be held liable
for a breach of contract under principles of illegality, international
comity and act of state, and thus it is excused from payment 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.9
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. 10
Meanwhile, on February 27, 1987, a Deed of Transfer 11 was
executed between then Secretary of Finance Jaime V. Ongpin and
then PNB President Edgardo B. Espiritu, to facilitate the
rehabilitation of PNB, among others, as part of the government's
economic recovery program. The said Deed of Transfer provided for
the transfer to the government of certain assets of PNB in exchange
for which the government would assume certain liabilities of
PNB.12 Among those liabilities which the government assumed were
unused commercial L/C's and Deferred L/C's, including SSD-005-85
listed under Dynetics, Incorporated in favor of Chuidian in the
amount of Four Million Four Hundred Thousand Dollars
(US$4,400,000.00).13
On July 30, 1987, the government filed before the Sandiganbayan
Civil Case No. 0027 against the Marcos spouses, several
government officials who served under the Marcos administration,
and a number of individuals known to be cronies of the Marcoses,
including Chuidian. The complaint sought the reconveyance,
reversion, accounting and restitution of all forms of wealth allegedly
procured illegally and stashed away by the defendants.
In particular, the complaint charged that Chuidian, by himself and/or
in conspiracy with the Marcos spouses, engaged in "devices,
schemes and stratagems" by: (1) forming corporations for the
purpose of hiding and avoiding discovery of illegally obtained assets;
(2) pillaging the coffers of government financial institutions such as
the Philguarantee; and (3) executing the court settlement between
Philguarantee and Chuidian which was grossly disadvantageous to
the government and the Filipino people.
In fine, the PCGG averred that the above-stated acts of Chuidian
committed in unlawful concert with the other defendants constituted
"gross abuse of official position of authority, flagrant breach of public
trust and fiduciary obligations, brazen abuse of right and power,
unjust enrichment, violation of the Constitution and laws" of the
land.14
While the case was pending, on March 17, 1993, the Republic of the
Philippines filed a motion for issuance of a writ of attachment 15 over
the L/C, 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 14, 1993, the Sandiganbayan issued a Resolution ordering
the issuance of a writ of attachment against L/C No. SSD-005-85 as
security for the satisfaction of judgment. 16 The Sandiganbayan's
ruling was based on its disquisition of the five points of contention
raised by the parties. On the first issue, the Sandiganbayan found
that although no separate affidavit 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 of the Rules of Court.
Anent the second contention, the Sandiganbayan ruled that there
was no fiduciary relationship existing between Chuidian and the
Republic, but only between Chuidian and ARCI. Since the Republic
is not privy to the fiduciary relationship between Chuidian and ARCI,
it cannot invoke Section 1(b) of Rule 57.
On the third issue of fraud on the part of Chuidian in contracting the
loan, or in concealing or disposing of the subject property, the
Sandiganbayan held that there was a prima facie case of fraud
committed by Chuidian, justifying the issuance of the writ of
attachment. 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.
Assuming that there is truth to the government's allegation that
Chuidian has removed or disposed of his property with the intent to
defraud, the Sandiganbayan held that the writ of attachment is
warranted, applying Section 1(e) of Rule 57. Besides, the Rules
provide for sufficient security should the owner of the property
attached suffer damage or prejudice caused by the attachment. 17
Chuidian's absence from the country was considered by the
Sandiganbayan to be "the most potent insofar as the relief being
sought is concerned." 18 Taking judicial notice of the admitted fact that
Chuidian was residing outside of the country, the Sandiganbayan
observed that:
"x x x no explanation whatsoever was given by him as to his
absence from the country, or as to his homecoming plans in the
future. It may be added, moreover, that he has no definite or clearcut
plan to return to the country at this juncture – given the manner by
which he has submitted himself to the jurisdiction of the court."19
Thus, the Sandiganbayan ruled that even if Chuidian is one who
ordinarily resides in the Philippines, but is temporarily living outside,
he is still subject to the provisional remedy of attachment.
Accordingly, an order of attachment 20 was issued by the
Sandiganbayan on July 19, 1993, ordering the Sandiganbayan
Sheriff to attach PNB L/C No. SSD-005-85 for safekeeping pursuant
to the Rules of Court as security for the satisfaction of judgment in
Sandiganbayan Civil Case No. 0027.
On August 11, 1997, or 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:
First, he had returned to the Philippines; hence, the
Sandiganbayan's "most potent ground" for the issuance of the writ of
preliminary attachment no longer existed. Since his absence in the
past was the very foundation of the Sandiganbayan's writ of
preliminary attachment, his presence in the country warrants the
immediate lifting thereof.
Second, there was no evidence at all of initial fraud or subsequent
concealment except for the affidavit submitted by the PCGG
Chairman citing mere "belief and information" and "not on knowledge
of the facts." Moreover, this statement is hearsay since the PCGG
Chairman 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.
Third, Chuidian 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. Fourth,
Chuidian belied the allegation that he was also a defendant in "other
related criminal action," for in fact, he had "never been a defendant
in any prosecution of any sort in the Philippines."21 Moreover, he
could not have personally appeared in any other action because he
had been deprived of his right to a travel document by the
government.
Fifth, the preliminary attachment was, in the first place, unwarranted
because he was not "guilty of fraud in contracting the debt or
incurring the obligation". In fact, the L/C was not a product of
fraudulent transactions, but was the result of a US Court-approved
settlement. Although he was accused of employing blackmail tactics
to procure the settlement, the California Supreme Court ruled
otherwise. And in relation thereto, he cites as a sixth ground the fact
that all these allegations of fraud and wrongdoing had already been
dealt with in actions before the State and Federal Courts of
California. While it cannot technically be considered as forum
shopping, it is nevertheless a "form of suit multiplicity over the same
issues, parties and subject matter." 22 These foreign judgments
constitute res judicata which warrant the dismissal of the case itself.
Chuidian further contends that 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 pursuant to the terms of the settlement in
Case No. 575867. Said assets, however, 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.
Since said assets were disposed of without his or the
Sandiganbayan's consent, it is the Republic who is fraudulently
disposing of assets.
Finally, Chuidian stressed that throughout the four (4) years that the
preliminary attachment had been in effect, the government had not
set the case for hearing. Under Rule 17, Section 3, 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.
Subsequently, on August 20, 1997, Chuidian filed a motion to require
the Republic to deposit the L/C in an interest bearing
account.23 Annex "D"; Rollo, pp. 77-79.23 He pointed out to the
Sandiganbayan that the face amount of the L/C had, since its
attachment, become fully demandable and payable. However, since
the amount is just lying dormant in the PNB, without earning any
interest, he proposed that it would be to the benefit of all if the
Sandiganbayan requires PNB to deposit the full amount to a
Sandiganbayan trust account at any bank in order to earn interest
while awaiting judgment of the action.
The Republic opposed Chuidian's motion to lift attachment, alleging
that Chuidian's absence was not the only ground for the attachment
and, therefore, his belated appearance before the Sandiganbayan is
not a sufficient reason to lift the attachment. Moreover, 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.
In a Resolution promulgated on November 13, 1998, the
Sandiganbayan denied Chuidian's motion to lift attachment.24
On the same day, the Sandiganbayan issued another Resolution
denying Chuidian's motion to require deposit of the attached L/C in
an interest bearing account.25
In a motion seeking a reconsideration of the first resolution, Chuidian
assailed the Sandiganbayan's finding that the issues raised in his
motion to lift attachment had already been dealt with in the earlier
resolution dated July 14, 1993 granting the application for the writ of
preliminary attachment based on the following grounds:
First, Chuidian was out of the country in 1993, but is now presently
residing in the country.
Second, the Sandiganbayan could not have known then that his
absence was due to the non-renewal of his passport at the instance
of the PCGG. Neither was it revealed that the Republic had already
disposed of Chuidian's assets ceded to the Republic in exchange for
the L/C. The foreign judgment was not an issue then because at that
time, said judgment had not yet been issued and much less final.
Furthermore, the authority of the PCGG Commissioner to subscribe
as a knowledgeable witness relative to the issuance of the writ of
preliminary attachment was raised for the first time in the motion to
lift the attachment. Finally, the issue of laches could not have been
raised then because it was the Republic's subsequent neglect or
failure to prosecute despite the passing of the years that gave rise to
laches.26
Chuidian also moved for a reconsideration of the Sandiganbayan
resolution denying the motion to require deposit of the L/C into an
interest bearing account. He argued that contrary to the
Sandiganbayan's pronouncement, allowing the deposit would not
amount to a virtual recognition of his right over the L/C, for he is not
asking for payment but simply requesting that it be deposited in an
account under the control of the Sandiganbayan. He further stressed
that the Sandiganbayan abdicated its bounden duty to rule on an
issue when it found "that his motion will render nugatory the purpose
of sequestration and freeze orders over the L/C." Considering that
his assets had already been sold by the Republic, he claimed that
the Sandiganbayan's refusal to exercise its fiduciary duty over
attached assets will cause him irreparable injury. Lastly, the
Sandiganbayan's position that Chuidian was not the owner but a
mere payee-beneficiary of the L/C issued in his favor negates
overwhelming jurisprudence on the Negotiable Instruments Law,
while at the same time obliterating his rights of ownership under the
Civil Code.27
On July 13, 1999, the Sandiganbayan gave due course to Chuidian's
plea for the attached L/C to be deposited in an interest-bearing
account, on the ground that it will redound to the benefit of both
parties.
The Sandiganbayan declared the national government as the
principal obligor of the L/C even though the liability remained in the
books of the PNB for accounting and monitoring purposes.
The Sandiganbayan, however, denied Chuidian's motion for
reconsideration of the denial of his motion to lift attachment,
agreeing in full with the government's apriorisms that:
x x x (1) it is a matter of record that the Court granted the application
for writ of attachment upon grounds other than defendant's absence
in the Philippine territory. In its Resolution dated July 14, 1993, the
Court found a prima facie case of fraud committed by defendant
Chuidian, and that defendant has recovered or disposed of his
property with the intent of defrauding plaintiff; (2) Chuidian's belated
presence in the Philippines cannot be invoked to secure the lifting of
attachment. The rule is specific that it applies to a party who is about
to depart from the Philippines with intent to defraud his creditors.
Chuidian's stay in the country is uncertain and he may leave at will
because he holds a foreign passport; and (3) Chuidian's other
ground, sufficiency of former PCGG Chairman Gunigundo's
verification of the complaint, has been met fairly and squarely in the
Resolution of July 14, 1993.28
Hence, the instant petition for certiorari contending that the
respondent Sandiganbayan committed grave abuse of discretion
amounting to lack or excess of jurisdiction when it ruled that:
1) Most of the issues raised in the motion to lift attachment
had been substantially addressed in the previous
resolutions dated July 14, 1993 and August 26, 1998, while
the rest were of no imperative relevance as to affect the
Sandiganbayan's disposition; and
2) PNB was relieved of the obligation to pay on its own L/C
by virtue of Presidential Proclamation No. 50.
The Rules of Court specifically provide for the remedies of a
defendant whose property or asset has been attached. As has been
consistently ruled by this Court, the determination of the existence of
grounds to discharge a writ of attachment rests in the sound
discretion of the lower courts.29
The question in this case is: What can the herein petitioner do to
quash the attachment of the L/C? There are two courses of action
available to the petitioner:
First. To file a counterbond in accordance with Rule 57, Section 12,
which provides:
SEC. 12. Discharge of attachment upon giving counterbond. – At
anytime after an order of attachment has been granted, the party
whose property has been attached, or the person appearing on his
behalf, may, upon reasonable notice to the applicant, apply to the
judge who granted the order, or to the judge of the court in which the
action is pending, for an order discharging the attachment wholly or
in part on the security given. The judge shall, after hearing, order the
discharge of the attachment if a cash deposit is made, or a
counterbond executed to the attaching creditor is filed, on behalf of
the adverse party, with the clerk or judge of the court where the
application is made, in an amount equal to the value of the property
attached as determined by the judge, to secure the payment of any
judgment that the attaching creditor may recover in the action. Upon
the filing of such counter-bond, copy thereof shall forthwith be served
on the attaching creditor or his lawyer. Upon the discharge of an
attachment in accordance with the provisions of this section the
property attached, or the proceeds of any sale thereof, shall be
delivered to the party making the deposit or giving the counter-bond,
or the person appearing on his behalf, the deposit or counter-bond
aforesaid standing in place of the property so released. Should such
counterbond for any reason be found to be, or become, insufficient,
and the party furnishing the same fail to file an additional counter-
bond, the attaching creditor may apply for a new order of
attachment.1âwphi1.nêt
or
Second. To quash the attachment on the ground that it was
irregularly or improvidently issued, as provided for in Section 13 of
the same Rule:
SEC. 13. Discharge of attachment for improper or irregular issuance.
- The party whose property has been attached may also, at any time
either before or after the release of the attached property, or before
any attachment shall have been actually levied, upon reasonable
notice to the attaching creditor, apply to the judge who granted the
order, or to the judge of the court in which the action is pending, for
an order to discharge the attachment on the ground that the same
was improperly or irregularly issued. If the motion be made on
affidavits on the part of the party whose property has been attached,
but not otherwise, the attaching creditor may oppose the same by
counter-affidavits or other evidence in addition to that on which the
attachment was made. After hearing, the judge shall order the
discharge of the attachment if it appears that it was improperly or
irregularly issued and the defect is not cured forthwith.
It would appear that petitioner chose the latter because the grounds
he raised assail the propriety of the issuance of the writ of
attachment. By his own admission, however, he repeatedly
acknowledged that his justifications to warrant the lifting of the
attachment are facts or events that came to light or took place after
the writ of attachment had already been implemented.
More particularly, petitioner emphasized that four (4) years after the
writ was issued, he had returned to the Philippines. Yet while he
noted that he would have returned earlier but for the cancellation of
his passport by the PCGG, he was not barred from returning to the
Philippines. Then he informed the Sandiganbayan that while the
case against him was pending, but after the attachment had already
been executed, the government lost two (2) cases for fraud lodged
against him before the U.S. Courts, thus invoking res judicata. Next,
he also pointed out that the government is estopped from pursuing
the case against him for failing to prosecute for the number of years
that it had been pending litigation.
It is clear that these grounds have nothing to do with the issuance of
the writ of attachment. Much less do they attack the issuance of the
writ at that time as improper or irregular. And yet, the rule
contemplates that the defect must be in the very issuance of the
attachment writ. For instance, the attachment may be discharged
under Section 13 of Rule 57 when it is proven that the allegations of
the complaint were deceptively framed,30 or when the complaint fails
to state a cause of action. 31 Supervening events which may or may
not justify the discharge of the writ are not within the purview of this
particular rule.
In the instant case, there is no showing that the issuance of the writ
of attachment was attended by impropriety or irregularity. Apart from
seeking a reconsideration of the resolution granting the application
for the writ, petitioner no longer questioned the writ itself. For four (4)
long years he kept silent and did not exercise any of the remedies
available to a defendant whose property or asset has been attached.
It is rather too late in the day for petitioner to question the propriety
of the issuance of the writ.
Petitioner also makes capital of the two foreign judgments which he
claims warrant the application of the principle of res judicata. The
first judgment, in Civil Case Nos. 575867 and 577697 brought by
Philguarantee before the Santa Clara Country Superior Court,
denied Philguarantee's prayer to set aside the stipulated judgment
wherein Philguarantee and Chuidian agreed on the subject attached
L/C. On March 14, 1990, the Court of Appeal of the State of
California affirmed the Superior Court's judgment. The said judgment
became the subject of a petition for review by the California
Supreme Court. There is no showing, however, of any final judgment
by the California Supreme Court. The records, including petitioner's
pleadings, are bereft of any evidence to show that there is a final
foreign judgment which the Philippine courts must defer to.
Hence, res judicata finds no application in this instance because it is
a requisite that the former judgment or order must be final.32
Second, petitioner cites the judgment of the United States District
Court in Civil Case 86-2255 RSWL brought by petitioner Chuidian
against PNB to compel the latter to pay the L/C. The said Court's
judgment, while it ruled in favor of petitioner on the matter of
Philguarantee's action-in-intervention to set aside the settlement
agreement, also ruled in favor of PNB, to wit:
Under Executive Order No. 1, the PCGG is vested by the Philippine
President with the power to enforce its directives and orders by
contempt proceedings. Under Executive Order No. 2, the PCGG is
empowered to freeze any, and all assets, funds and property illegally
acquired by former President Marcos or his close friends and
business associates.
On March 11, 1986, PNB/Manila received an order from the PCGG
ordering PNB to freeze any further drawings on the L/C. The freeze
order has remained in effect and was followed by a sequestration
order issued by the PCGG. Subsequently, Chuidian's Philippine
counsel filed a series of challenges to the freeze and sequestration
orders, which challenges were unsuccessful as the orders were
found valid by the Philippine Supreme Court. The freeze and
sequestration orders are presently in effect. Thus, under the PCGG
order and Executive Orders Nos. 1 and 2, performance by PNB
would be illegal under Philippine Law. Therefore PNB is excused
from performance of the L/C agreement as long as the freeze and
sequestration orders remain in effect. (Underscoring ours)
x x x       x x x       x x x
Chuidian argues that the fact that the L/C was issued pursuant to a
settlement in California, that the negotiations for which occurred in
California, and that two of the payments were made at PNB/LA,
compels the conclusion that the act of prohibiting payment of the L/C
occurred in Los Angeles. However, the majority of the evidence
and Tchacosh and Sabbatino compel the opposite conclusion. The
L/C was issued in Manila, such was done at the request of a
Philippine government instrumentality for the benefit of a Philippine
citizen, the L/C was to be performed in the Philippines, all significant
events relating to the issuance and implementation of the L/C
occurred in the Philippines, the L/C agreement provided that the L/C
was to be construed according to laws of the Philippines, and the
Philippine government certainly has an interest in preventing the L/C
from being remitted in that it would be the release of funds that are
potentially illgotten gains. Accordingly, the Court finds that the PCGG
orders are acts of state that must be respected by this Court, and
thus PNB is excused from making payment on the L/C as long as the
freeze and sequestration orders remain in effect.33 (Underscoring
ours)
Petitioner's own evidence strengthens the government's position that
the L/C is under the jurisdiction of the Philippine government and
that the U.S. Courts recognize the authority of the Republic to
sequester and freeze said L/C. Hence, the foreign judgments relied
upon by petitioner do not constitute a bar to the Republic's action to
recover whatever alleged ill-gotten wealth petitioner may have
acquired.
Petitioner may argue, albeit belatedly, that he also raised the issue
that there was no evidence of fraud on record other than the affidavit
of PCGG Chairman Gunigundo. This issue of fraud, however,
touches on the very merits of the main case which accuses petitioner
of committing fraudulent acts in his dealings with the government.
Moreover, this alleged fraud was one of the grounds for the
application of the writ, and the Sandiganbayan granted said
application after it found a prima facie case of fraud committed by
petitioner.
In fine, fraud was not only one of the grounds for the issuance of the
preliminary attachment, it was at the same time the government's
cause of action in the main case.
We have uniformly held that:
x x x when the preliminary attachment is issued upon a ground which
is at the same time the applicant's cause of action; e.g., "an action
for money or property embezzled or fraudulently misapplied or
converted to his own use by a public officer, or an officer of a
corporation, or an attorney, factor, broker, agent, or clerk, in the
course of his employment as such, or by any other person in a
fiduciary capacity, or for a willful violation of duty," or "an action
against a party who has been guilty of fraud in contracting the debt
or incurring the obligation upon which the action is brought," 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.34 (Underscoring ours)
Thus, this Court has time and again ruled that 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.35
It is not the Republic's fault that the litigation has been protracted.
There is as yet no evidence of fraud on the part of petitioner.
Petitioner is only one of the twenty-three (23) defendants in the main
action. As such, the litigation would take longer than most cases.
Petitioner cannot invoke this delay in the proceedings as an excuse
for not seeking the proper recourse in having the writ of attachment
lifted in due time. If ever laches set in, it was petitioner, not the
government, who failed to take action within a reasonable time
period. Challenging the issuance of the writ of attachment four (4)
years after its implementation showed petitioner's apparent
indifference towards the proceedings before the Sandiganbayan.
In sum, petitioner has failed to convince this Court that the
Sandiganbayan gravely abused its discretion in a whimsical,
capricious and arbitrary manner. There are no compelling reasons to
warrant the immediate lifting of the attachment even as the main
case is still pending. On the other hand, allowing the discharge of the
attachment at this stage of the proceedings would put in jeopardy the
right of the attaching party to realize upon the relief sought and
expected to be granted in the main or principal action. It would have
the effect of prejudging the main case.
The attachment is a mere provisional remedy to ensure the safety
and preservation of the thing attached until the plaintiff can, by
appropriate proceedings, obtain a judgment and have such property
applied to its satisfaction. 36 To discharge the attachment at this stage
of the proceedings would render inutile any favorable judgment
should the government prevail in the principal action against
petitioner. Thus, the Sandiganbayan, in issuing the questioned
resolutions, which are interlocutory in nature, committed no grave
abuse of discretion amounting to lack or excess of jurisdiction. As
long as the Sandiganbayan acted within its jurisdiction, any alleged
errors committed in the exercise of its jurisdiction will amount to
nothing more than errors of judgment which are reviewable by timely
appeal and not by special civil action of certiorari. 37
Moreover, we have held that when the writ of attachment is issued
upon a ground which is at the same time the applicant's cause of
action, the only other way the writ can be lifted or dissolved is by a
counterbond, in accordance with Section 12 of the same rule. 38 This
recourse, however, was not availed of by petitioner, as noted by the
Solicitor General in his comment.39
consent to the substitution of debtors. We are not unmindful that any
effort to secure petitioner's consent at that time would, in effect, be
deemed an admission that the L/C is valid and binding. Even the
Sandiganbayan found that: 36 Sta. Ines Melale Forest Products Corp.
v. Macaraig, Jr., 299 SCRA 491, 515 (1998).
x x x Movant has basis in pointing out that inasmuch as the L/C was
issued in his favor, he is presumed to be the lawful payee-
beneficiary of the L/C until such time that the plaintiff successfully
proves that said L/C is ill-gotten and he has no right over the same. 42
In Republic v. Sandiganbayan,43 we held that the provisional
remedies, such as freeze orders and sequestration, were not "meant
to deprive the owner or possessor of his title or any right to the
property sequestered, frozen or taken over and vest it in the
sequestering agency, the Government or other person."

To reiterate, there are only two ways of quashing a writ of
attachment: (a) by filing a counterbond immediately; or (b) by moving
to quash on the ground of improper and irregular issuance. 40 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.41 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.
Finally, we come to the matter of depositing the Letter of Credit in an
interest-bearing account. We agree with the Sandiganbayan that any
interest that the proceeds of the L/C may earn while the case is
being litigated would redound to the benefit of whichever party will
prevail, the Philippine government included. Thus, we affirm the
Sandiganbayan's ruling that the proceeds of the L/C should be
deposited in an interest bearing account with the Land Bank of the
Philippines for the account of the Sandiganbayan in escrow until
ordered released by the said Court.
Thus, until such time that the government is able to successfully
prove that petitioner has no right to claim the proceeds of the L/C, he
is deemed to be the lawful payee-beneficiary of said L/C, for which
any substitution of debtor requires his consent. The Sandiganbayan
thus erred in relieving PNB of its liability as the original debtor.
WHEREFORE, in view of all the foregoing, the petition is
DISMISSED. The Resolutions of the Sandiganbayan dated
November 6, 1998 and July 2, 1999 are AFFIRMED. The PNB is
DIRECTED to remit to the Sandiganbayan the proceeds of Letter of
Credit No. SFD-005-85 in the amount of U.S. $4.4 million within
fifteen (15) days from notice hereof, the same to be placed under
special time deposit with the Land Bank of the Philippines, for the
account of Sandiganbayan in escrow for the person or persons,
natural or juridical, who shall eventually be adjudged lawfully entitled
thereto, the same to earn interest at the current legal bank rates. The
principal and its interest shall remain in said account until ordered
released by the Court in accordance with law.1âwphi1.nêt

No costs.
We find no legal reason, however, to release the PNB from any
liability thereunder. The Deed of Transfer, whereby certain liabilities
of PNB were transferred to the national government, cannot affect SO ORDERED.
the said L/C since there was no valid substitution of debtor. Article
1293 of the New Civil Code provides:

Novation which consists in substituting a new debtor in the place of

the original one, may be made without the knowledge or against the
will of the latter, but not without the consent of the creditor. Payment
by the new debtor gives him the rights mentioned in Articles 1236
and 1237.

Accordingly, any substitution of debtor must be with the consent of

the creditor, whose consent thereto cannot just be presumed. Even
though Presidential Proclamation No. 50 can be considered an
"insuperable cause", it does not necessarily make the contracts and
obligations affected thereby exceptions to the above-quoted law,
such that the substitution of debtor can be validly made even without
the consent of the creditor. Presidential Proclamation No. 50 was not
intended to set aside laws that govern the very lifeblood of the
nation's commerce and economy. In fact, the Deed of Transfer that
was executed between PNB and the government pursuant to the
said Presidential Proclamation specifically stated that it shall be
deemed effective only upon compliance with several conditions, one
of which requires that:

(b) the BANK shall have secured such governmental and creditors'
approvals as may be necessary to establish the consummation,
legality and enforceability of the transactions contemplated hereby."

The validity of this Deed of Transfer is not disputed. Thus, PNB is

estopped from denying its liability thereunder considering that
neither the PNB nor the government bothered to secure petitioner's

G.R. No. 169304               March 13, 2007
THE DEPARTMENT OF HEALTH, SECRETARY MANUEL M.
DAYRIT, USEC. MA. MARGARITA GALON and USEC. ANTONIO
M. LOPEZ, Petitioners,
vs.
PHIL. PHARMAWEALTH, INC., Respondent.
DECISION
CARPIO MORALES, J.:
Assailed via petition for review are issuances of the Court of Appeals
in CA-G.R. SP No. 84457, to wit: a) Decision 1 dated May 12, 2005
which affirmed the order issued by Judge Leoncio M. Janolo, Jr. of
the Regional Trial Court of Pasig City, Branch 264 denying
petitioners’ motion to dismiss Civil Case No. 68208; and b)
Resolution2 dated August 9, 2005 which denied petitioners’ motion
for reconsideration.
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, 3 Series of
1998, outlining the guidelines and procedures on the accreditation of
government suppliers for pharmaceutical products.
A.O. No. 27 was later amended by A.O. No. 10, 4 Series of 2000,
providing for additional guidelines for accreditation of drug suppliers
aimed at ensuring that only qualified bidders can transact business
with petitioner Department of Health (DOH). Part V of A.O. No. 10
reads, in part:
1. Drug Manufacturer, Drug Trader and Drug Importer shall
be allowed to apply for accreditation.
2. Accreditation shall be done by the Central Office-
Department of Health.
3. A separate accreditation is required for the drug
suppliers and for their specific products.
xxxx
12. Only products accredited by the Committee shall be
allowed to be procured by the DOH and all other entities
under its jurisdiction.5 (Underscoring supplied)
On May 9, 20006 and May 29, 2000, 7 respondent submitted to
petitioner DOH a request for the inclusion of additional items in its list
of accredited drug products, including the antibiotic "Penicillin G
Benzathine." Based on the schedule provided by petitioner DOH, it
appears that processing of and release of the result of respondent’s
request were due on September 2000, the last month of the quarter
following the date of its filing.8
Sometime in September 2000, petitioner DOH, through petitioner
Antonio M. Lopez, chairperson of the pre-qualifications, bids and
awards committee, issued an Invitation for Bids 9 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. When the bids were opened on October 11,
2000, only two companies participated, with respondent submitting
the lower bid at ₱82.24 per unit, compared to Cathay/YSS
Laboratories’ (YSS) bid of ₱95.00 per unit. In view, however, of the
non-accreditation of respondent’s Penicillin G Benzathine product,
the contract was awarded to YSS.
Respondent thus filed a complaint 10 for injunction, mandamus and
damages with prayer for the issuance of a writ of preliminary
injunction and/or temporary restraining order with the Regional Trial
Court of Pasig City praying, inter alia, that the trial court "nullify the
award of the Penicillin G Benzathine contract (IFB No. 2000-10-11
[14]) to YSS Laboratories, Inc. and direct defendant DOH, defendant
Romualdez, defendant Galon and defendant Lopez to declare
plaintiff Pharmawealth as
the lowest complying responsible bidder for the Benzathine contract,
and that they accordingly award the same to plaintiff company" and
"adjudge defendants Romualdez, Galon and Lopez liable, jointly and
severally to plaintiff, for [the therein specified damages]."11
In their Comment,12 petitioner DOH, Secretary Alberto Romualdez,
Jr. who was later succeeded by petitioner Secretary Manuel M.
Dayrit, and individual petitioners Undersecretaries Margarita Galon
and Antonio Lopez argued for the dismissal of the complaint for lack
of merit in view of the express reservation made by petitioner DOH
to accept or reject any or all bids without incurring liability to the
bidders, they positing that government agencies have such full
discretion.
Petitioners subsequently filed a Manifestation and Motion13 (motion
to dismiss) praying for the outright dismissal of the complaint based
on the doctrine of state immunity. Additionally, they alleged that
respondent’s representative was not duly authorized by its board of
directors to file the complaint.
To petitioners’ motion to dismiss, respondent filed its
comment/opposition14 contending, in the main, that the doctrine of
state immunity is not applicable considering that individual
petitioners are being sued both in their official and personal
capacities, hence, they, not the state, would be liable for damages.
By Order of December 8, 2003, the trial court15 denied petitioners’
motion to dismiss.
Their motion for reconsideration having been denied, 16 petitioners
filed a petition for certiorari 17 with the Court of Appeals, before which
they maintained that the suit is against the state.
By the assailed Decision 18 of May 12, 2005, the Court of Appeals
affirmed the trial court’s Order. And by Resolution of August 9, 2005,
it denied petitioners’ motion for reconsideration.
Hence, the instant petition for review which raises the sole issue of
whether the Court of Appeals erred in upholding the denial of
petitioners’ motion to dismiss.
The petition fails.
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,19 and it is the official concerned who should be impleaded as
the proper party.20
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.21
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.22
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 23 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. 24
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.30
In the present case, suing individual petitioners in their personal
capacities for damages in connection with their alleged act of
"illegal[ly] abus[ing] their official positions to make sure that plaintiff
Pharmawealth would not be awarded the Benzathine contract [which
act was] done in bad faith and with full knowledge of the limits and
breadth of their powers given by law" 31 is permissible, in consonance
with the foregoing principles. For an officer who exceeds the power
conferred on him by law cannot hide behind the plea of sovereign
immunity and must bear the liability personally.32
It bears stressing, however, that the statements in the immediately
foregoing paragraph in no way reflect a ruling on the actual liability of
petitioners to respondent. The mere allegation that a government
official is being sued in his personal capacity does not automatically
remove the same from the protection of the doctrine of state
immunity. Neither, upon the other hand, does the mere invocation of
official character suffice to insulate such official from suability and
liability for an act committed without or in excess of his or her
authority.33 These are matters of evidence which should be
presented and proven at the trial.

As regards individual petitioners’ suability for damages, the following

discussion on the applicability of the defense of state immunity from WHEREFORE, the petition is DENIED. The assailed Decision dated
suit is relevant. May 12, 2005 and Resolution dated August 9, 2005 issued by the
Court of Appeals are AFFIRMED.

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 SO ORDERED.
the generally accepted principles of international law, which we have
now adopted as part of the law of the land.25

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. 26 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.27

The rule, however, is not so all-encompassing as to be applicable

under all circumstances. Shauf v. Court of Appeals28 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. vs. Aligaen,
etc., et al.,29 ‘ 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)1avvphi1

Hence, the rule does not apply where the public official is charged in
his official capacity for acts that are unauthorized or unlawful and
 percent (100%) of the enumerated supplies to TESDA consisting of
five hundred thousand (500,000) pieces of security foil; five (5)
pieces of security die with TESDA seal; five hundred thousand
(500,000) pieces of pre-printed and customized identification cards;
one hundred thousand (100,000) pieces of scannable answer
sheets; and five hundred thousand (500,000) customized TESDA
holographic laminate. In addition, PROVI would install and maintain
G.R. No. 155504               June 26, 2009 the following equipment: one (1) unit of Micropoise, two (2) units of
card printer, three (3) units of flatbed scanner, one (1) unit of OMR
scanner, one (1) unit of Server, and seven (7) units of personal
PROFESSIONAL VIDEO, INC., Petitioner, computer.
vs.
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT
AUTHORITY, Respondent. TESDA in turn undertook to pay PROVI thirty percent (30%) of the
total cost of the supplies within thirty (30) days after receipt and
acceptance of the contracted supplies, with the balance payable
DECISION within thirty (30) days after the initial payment.

BRION, J.: According to PROVI, it delivered the following items to TESDA on

the dates indicated:
We resolve the petition filed by Professional Video, Inc. (PROVI) 1 to
annul and set aside the Decision 2 of the Court of Appeals (CA) in
CA-G.R. SP No. 67599, and its subsequent Order denying PROVI’s Date Particulars Amount
motion for reconsideration.3 The assailed CA decision nullified:
26 April 48,500 pre-printed
₱ 2,764,500.00
2000 cards
a. the Order  dated July 16, 2001 of the Regional Trial Court (RTC),
4

Pasig City, in Civil Case No. 68527, directing the 07 June 330,000 pre-printed
attachment/garnishment of the properties of respondent Technical 18,810,000.00
2000 cards
Education and Skills Development Authority (TESDA) amounting to
Thirty Five Million Pesos (₱35,000,000.00); and 07 August 121,500 pre-printed
6,925,500.00
2000 cards
b. the RTC’s August 24, 2001 Order  denying respondent TESDA’s
5

motion to discharge/quash writ of attachment. 26 April 100,000 scannable

600,000.00
2000 answer sheets
THE FACTUAL BACKGROUND
06 June 5 Micro-Poise
375,000.00
2000 customized die
PROVI is an entity engaged in the sale of high technology
equipment, information technology products and broadcast devices, 13 June 35 boxes @ 15,000 10,000,000.00
including the supply of plastic card printing and security facilities. 2000 imp/box
Custom hologram
TESDA is an instrumentality of the government established under Foil
Republic Act (R.A.) No. 7796 (the TESDA Act of 1994) and attached
to the Department of Labor and Employment (DOLE) to "develop ₱
Total
and establish a national system of skills standardization, testing, and 39,475,000.00
certification in the country." 6 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. PROVI further alleged that out of TESDA’s liability of
₱39,475,000.00, TESDA paid PROVI only ₱3,739,500.00, leaving an
outstanding balance of ₱35,735,500.00, as evidenced by PROVI’s
TESDA’s Pre-Qualification Bids Award Committee (PBAC) Statement of Account.9 Despite the two demand letters dated March
conducted two (2) public biddings on June 25, 1999 and July 22, 8 and April 27, 2001 that PROVI sent TESDA,10 the outstanding
1999 for the printing and encoding of PVC cards. A failure of bidding balance remained unpaid.
resulted in both instances since only two (2) bidders – PROVI and
Sirex Phils. Corp. – submitted proposals.
On July 11, 2001, PROVI filed with the RTC a complaint for sum of
money with damages against TESDA. PROVI additionally prayed for
Due to the failed bidding, the PBAC recommended that TESDA enter the issuance of a writ of preliminary attachment/garnishment against
into a negotiated contract with PROVI. On December 29, 1999, TESDA. The case was docketed as Civil Case No. 68527. In an
TESDA and PROVI signed and executed their "Contract Agreement Order dated July 16, 2001, the RTC granted PROVI’s prayer and
Project: PVC ID Card Issuance" (the Contract Agreement) for the issued a writ of preliminary attachment against the properties of
provision of goods and services in the printing and encoding of PVC TESDA not exempt from execution in the amount of
cards.7 Under this Contract Agreement, PROVI was to provide ₱35,000,000.00.11
TESDA with the system and equipment compliant with the
specifications defined in the Technical Proposal. In return, TESDA
would pay PROVI the amount of Thirty-Nine Million Four Hundred TESDA responded on July 24, 2001 by filing a Motion to
and Seventy-Five Thousand Pesos (₱39,475,000) within fifteen (15) Discharge/Quash the Writ of Attachment, arguing mainly that public
days after TESDA’s acceptance of the contracted goods and funds cannot be the subject of garnishment. 12 The RTC denied
services. TESDA’s motion, and subsequently ordered the manager of the
Land Bank of the Philippines to produce TESDA’s bank statement
for the garnishment of the covered amount.13
On August 24, 2000, TESDA and PROVI executed an "Addendum to
the Contract Agreement Project: PVC ID Card Issuance"
(Addendum), 8 whose terms bound PROVI to deliver one hundred
Faced with these rulings, TESDA filed a Petition for Certiorari with
the CA to question the RTC orders, imputing grave abuse of
discretion amounting to lack or excess of jurisdiction on the trial court
for issuing a writ of preliminary attachment against TESDA’s public
funds.14
The CA set aside the RTC’s orders after finding that: (a) TESDA’s
funds are public in nature and, therefore, exempt from garnishment;
and (b) TESDA’s purchase of the PVC cards was a necessary
incident of its governmental function; consequently, it ruled that there
was no legal basis for the issuance of a writ of preliminary
attachment/garnishment.15 The CA subsequently denied PROVI’s
motion for reconsideration;16 hence, the present petition.
THE PETITION
The petition submits to this Court the single issue of whether or not
the writ of attachment against TESDA and its funds, to cover
PROVI’s claim against TESDA, is valid. The issue involves a pure
question of law and requires us to determine whether the CA was
correct in ruling that the RTC gravely abused its discretion in issuing
a writ of attachment against TESDA.
PROVI argues that the CA should have dismissed TESDA’s petition
for certiorari as the RTC did not commit any grave abuse of
discretion when it issued the Orders dated July 16, 2001 and August
24, 2001. According to PROVI, the RTC correctly found that when
TESDA entered into a purely commercial contract with PROVI,
TESDA went to the level of an ordinary private citizen and could no
longer use the defense of state immunity from suit. PROVI further
contends that it has alleged sufficient ultimate facts in the affidavit it
submitted to support its application for a writ of preliminary
attachment. Lastly, PROVI maintains that sufficient basis existed for
the RTC’s grant of the writ of preliminary attachment, since TESDA
fraudulently misapplied or embezzled the money earmarked for the
payment of the contracted supplies and services, as evidenced by
the Certification as to Availability of Funds.
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. Even assuming that it had
impliedly consented to be sued by entering into a contract with
PROVI, TESDA posits that the RTC still did not have the power to
garnish or attach its funds since these are public funds. Lastly,
TESDA points out that PROVI failed to comply with the elements for
the valid issuance of a writ of preliminary attachment, as set forth in
Section 1, Rule 57 of the 1997 Rules of Civil Procedure.
THE COURT’S RULING
We find, as the CA did, that the RTC’s questioned order involved a
gross misreading of the law and jurisprudence amounting to action in
excess of its jurisdiction. Hence, we resolve to DENY PROVI’s
petition for lack of merit.
TESDA is an instrumentality of the government undertaking
governmental functions.
R.A. No. 7796 created the Technical Education and Skills
Development Authority or TESDA under the declared "policy of the
State to provide relevant, accessible, high quality and efficient
technical education and skills development in support of the
development of high quality Filipino middle-level manpower
responsive to and in accordance with Philippine development goals
and priorities."17 TESDA replaced and absorbed the National
Manpower and Youth Council, the Bureau of Technical and
Vocational Education and the personnel and functions pertaining to
technical-vocational education in the regional offices of the
Department of Education, Culture and Sports and the apprenticeship
program of the Bureau of Local Employment of the DOLE.18 Thus,
TESDA is an unincorporated instrumentality of the government
operating under its own charter.
Among others, TESDA is empowered to: approve trade skills
standards and trade tests as established and conducted by private
industries; establish and administer a system of accreditation of both
public and private institutions; establish, develop and support the
institutions' trainors' training and/or programs; exact reasonable fees
and charges for such tests and trainings conducted, and retain such
earnings for its own use, subject to guidelines promulgated by the
Authority; and perform such other duties and functions necessary to
carry out the provisions of the Act, consistent with the purposes of
the creation of TESDA.19
Within TESDA’s structure, as provided by R.A. No. 7769, is a Skills
Standards and Certification Office expressly tasked, among others,
to develop and establish a national system of skills standardization,
testing and certification in the country; and to conduct research and
development on various occupational areas in order to recommend
policies, rules and regulations for effective and efficient skills
standardization, testing and certification system in the country. 20 The
law likewise mandates that "[T]here shall be national occupational
skills standards to be established by TESDA-accredited industry
committees. The TESDA shall develop and implement a certification
and accreditation program in which private groups and trade
associations are accredited to conduct approved trade tests, and the
local government units to promote such trade testing activities in
their respective areas in accordance with the guidelines to be set by
the TESDA. The Secretary of Labor and Employment shall
determine the occupational trades for mandatory certification. All
certificates relating to the national trade skills testing and certification
system shall be issued by the TESDA through its Secretariat." 21
All these measures are undertaken pursuant to the constitutional
command that "[T]he State affirms labor as a primary social
economic force," and shall "protect the rights of workers and
promote their welfare";22 that "[T]he State shall protect and promote
the right of all citizens to quality education at all levels, and shall take
appropriate steps to make such education accessible to all"; 23 in
order "to afford protection to labor" and "promote full employment
and equality of employment opportunities for all."24
Under these terms, both constitutional and statutory, we do not
believe that the role and status of TESDA can seriously be
contested: it is an unincorporated instrumentality of the government,
directly attached to the DOLE through the participation of the
Secretary of Labor as its Chairman, for the performance of
governmental functions – i.e., the handling of formal and non-formal
education and training, and skills development. As an
unincorporated instrumentality operating under a specific charter, it
is equipped with both express and implied powers, 25 and all State
immunities fully apply to it.26
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. 27 It is
as well a universally recognized principle of international law that
exempts a state and its organs from the jurisdiction of another
state.28 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.29 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, consequently, controlled in the uses and
dispositions of the means required for the proper administration of
the government.30
The proscribed suit that the state immunity principle covers takes on
various forms, namely: a suit against the Republic by name; a suit
against an unincorporated government agency; a suit against a
government agency covered by a charter with respect to the
agency’s performance of governmental 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
attachment was issued against a government agency covered by its
own charter. As discussed above, TESDA performs governmental
functions, and the issuance of certifications is a task within its
function of developing and establishing a system of skills
standardization, testing, and certification in the country. From the
perspective of this function, the core reason for the existence of state
immunity applies – i.e., the public policy reason that the performance
of governmental function cannot be hindered or delayed by suits, nor
can these suits control the use and disposition of the means for the
performance of governmental functions. In Providence Washington
Insurance Co. v. Republic of the Philippines,31 we said:
[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.
PROVI argues that TESDA can be sued because it has effectively
waived its immunity when it entered into a contract with PROVI for a
commercial purpose. According to PROVI, since the purpose of its
contract with TESDA is to provide identification PVC cards with
security seal which TESDA will thereafter sell to TESDA trainees,
TESDA thereby engages in commercial transactions not incidental to
its governmental functions.
TESDA’s response to this position is to point out that it is not
engaged in business, and there is nothing in the records to show
that its purchase of the PVC cards from PROVI is for a business
purpose. While TESDA admits that it will charge the trainees with a
fee for the PVC cards, it claims that this fee is only to recover their
costs and is not intended for profit.
We agree with TESDA. As the appellate court found, the PVC cards
purchased by TESDA from PROVI are meant to properly identify the
trainees who passed TESDA’s National Skills Certification Program
– the program that immediately serves TESDA’s mandated function
of developing and establishing a national system of skills
standardization, testing, and certification in the country. 32 Aside from
the express mention of this function in R.A. No. 7796, the details of
this function are provided under DOLE Administrative Order No. 157,
S. 1992, as supplemented by Department Order Nos. 3 thru 3-F, S.
1994 and Department Order No. 13, S. 1994.33
Admittedly, the certification and classification of trainees may be
undertaken in ways other than the issuance of identification cards,
as the RTC stated in its assailed Order. 34 How the mandated
certification is to be done, however, lies within the discretion of
TESDA as an incident of its mandated function, and is a properly
delegated authority that this Court cannot inquire into, unless its
exercise is attended by grave abuse of discretion.
That TESDA sells the PVC cards to its trainees for a fee does not
characterize the transaction as industrial or business; the sale,
expressly authorized by the TESDA Act,35 cannot be considered
separately from TESDA’s general governmental functions, as they
are undertaken in the discharge of these functions. Along this line of
reasoning, we held in Mobil Philippines v. Customs Arrastre
Services:36
Now, the fact that a non-corporate government entity performs a
function proprietary in nature does not necessarily result in its being
suable. If said non-governmental function is undertaken as an
incident to its governmental function, there is no waiver thereby of
the sovereign immunity from suit extended to such government
entity.
TESDA’s funds are public in character, hence exempt from
attachment or garnishment.
Even assuming that TESDA entered into a proprietary contract with
PROVI and thereby gave its implied consent to be sued, TESDA’s
funds are still public in nature and, thus, cannot be the valid subject
of a writ of garnishment or attachment. Under Section 33 of the
TESDA Act, the TESDA budget for the implementation of the Act
shall be included in the annual General Appropriation Act; hence,
TESDA funds, being sourced from the Treasury, are moneys
belonging to the government, or any of its departments, in the hands
of public officials.37 We specifically spoke of the limits in dealing with
this fund in Republic v. Villasor38 when we said:
This fundamental postulate underlying the 1935 Constitution is now
made explicit in the revised charter. It is therein expressly provided,
‘The State may not be sued without its consent.’ A corollary, both
dictated by logic and sound sense, from such a basic concept, is
that public funds cannot be the object of garnishment proceedings
even if the consent to be sued had been previously granted and the
state liability adjudged. Thus in the recent case of Commissioner of
Public Highways vs. San Diego, such a well-settled doctrine was
restated in the opinion of Justice Teehankee:
The universal rule that where the State gives its consent to be sued
by private parties either by general or special law, it may limit
claimant's action 'only up to the completion of proceedings anterior
to the stage of execution' and that the power of the Courts ends
when the judgment is rendered, since government funds and
properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious
considerations of public policy. Disbursements of public funds must
be covered by the corresponding appropriation as required by law.
The functions and public services rendered by the State cannot be
allowed to be paralyzed or disrupted by the diversion of public funds
from their legitimate and specific objects, as appropriated by
law. [Emphasis supplied.]
We reiterated this doctrine in Traders Royal Bank v. Intermediate
Appellate Court,39 where we said:
The NMPC’s implied consent to be sued notwithstanding, the trial
court did not have the power to garnish NMPC deposits to answer
for any eventual judgment against it. Being public funds, the deposits
are not within the reach of any garnishment or attachment
proceedings. [Emphasis supplied.]
As pointed out by TESDA in its Memorandum, 40 the garnished funds
constitute TESDA’s lifeblood – in government parlance, its
MOOE41 – whose withholding via a writ of attachment, even on a
temporary basis, would paralyze TESDA’s functions and services.
As well, these funds also include TESDA’s Personal Services funds
from which salaries of TESDA personnel are sourced. Again and for
obvious reasons, the release of these funds cannot be delayed.
PROVI has not shown that it is entitled to the writ of attachment.
Even without the benefit of any immunity from suit, the attachment of
TESDA funds should not have been granted, as PROVI failed to
prove that TESDA "fraudulently misapplied or converted funds
allocated under the Certificate as to Availability of Funds." Section 1,
Rule 57 of the Rules of Court sets forth the grounds for issuance of a
writ of preliminary attachment, as follows:
SECTION 1. Grounds upon which attachment may issue. – A plaintiff
or any proper party may, at the commencement of the action or at
any time thereafter, have the property of the adverse party attached
as security for the satisfaction of any judgment that may be
recovered in the following cases:
(a) In an action for recovery of a specified amount of
money or damages, other than moral and exemplary, on a
cause of action arising from law, contract, quasi-contract,
delict or quasi-delict against a party who is about to depart
from the Philippines with intent to defraud his creditors;
(b) In an action for money or property embezzled or
fraudulently misapplied or converted to his use by a public
officer, or an officer of a corporation, or an attorney, factor,
broker, agent or clerk, in the course of his employment as
such, or by any other person in a fiduciary capacity, or for a
willful violation of duty;
(c) In an action to recover the possession of property
unjustly or fraudulently taken, detained or converted, when
the property or any part thereof, has been concealed,
removed or disposed of to prevent its being found or taken
by the applicant or an authorized person;
(d) In an action against a party who has been guilty of
fraud in contracting the debt or incurring the obligation
upon which the action is brought, or in concealing or
disposing of the property for the taking, detention or
conversion of which the action is brought;
(e) In an action against a party who has removed or
disposed of his property, or is about to do so, with intent to
defraud his creditors;
(f) In an action against a party who does not reside and is
not found in the Philippines, or on whom summons may be
served by publication. [Emphasis supplied.]
Jurisprudence teaches us that the rule on the issuance of a writ of
attachment must be construed strictly in favor of the defendant.
Attachment, a harsh remedy, must be issued only on concrete and
specific grounds and not on general averments merely quoting the
words of the pertinent rules. 42 Thus, the applicant’s affidavit must
contain statements clearly showing that the ground relied upon for
the attachment exists.
Section 1(b), Rule 57 of the Rules of Court, that PROVI relied upon,
applies only where money or property has been embezzled or
converted by a public officer, an officer of a corporation, or some
other person who took advantage of his fiduciary position or who
willfully violated his duty.
PROVI, in this case, never entrusted any money or property to
TESDA. While the Contract Agreement is supported by a Certificate
as to Availability of Funds (Certificate) issued by the Chief of
TESDA’s Accounting Division, this Certificate does not automatically
confer ownership over the funds to PROVI. Absent any actual
disbursement, these funds form part of TESDA’s public funds, and
TESDA’s failure to pay PROVI the amount stated in the Certificate
cannot be construed as an act of fraudulent misapplication or
embezzlement. In this regard, Section 86 of Presidential Decree No.
1445 (The Accounting Code) provides:
Section 86. Certificate showing appropriation to meet contract. –
Except in a case of a contract for personal service, for supplies for
current consumption or to be carried in stock not exceeding the
estimated consumption for three months, or banking transactions of
government-owned or controlled banks, no contract involving the
expenditure of public funds by any government agency shall be
entered into or authorized unless the proper accounting official or the
agency concerned shall have certified to the officer entering into the
obligation that funds have been duly appropriated for the purpose
and that the amount necessary to cover the proposed contract for
the current fiscal year is available for expenditure on account
thereof, subject to verification by the auditor concerned. The
certification signed by the proper accounting official and the auditor
who verified it, shall be attached to and become an integral part of
the proposed contract, and the sum so certified shall not thereafter
be available for expenditure for any other purpose until the obligation
of the government agency concerned under the contract is fully
extinguished. [Emphasis supplied.]
By law, therefore, the amount stated in the Certification should be
intact and remains devoted to its purpose since its original
appropriation. PROVI can rebut the presumption that necessarily
arises from the cited provision only by evidence to the contrary. No
such evidence has been adduced.
Section 1 (d), Rule 57 of the Rules of Court applies where a party is
guilty of fraud in contracting a debt or incurring an obligation, or in
concealing or disposing of the property for the taking, detention or
conversion of which the action is brought. In Wee v.
Tankiansee,43 we held that for a writ of attachment to issue under
this Rule, the applicant must sufficiently show the factual
circumstances of the alleged fraud because fraudulent intent cannot
be inferred from the debtor’s mere non-payment of the debt or failure
to comply with his obligation. The affidavit, being the foundation of
the writ, must contain particulars showing how the imputed fraud was
committed for the court to decide whether or not to issue the writ. To
reiterate, a writ of attachment can only be granted on concrete and
specific grounds and not on general averments merely quoting the
words of the rules.44
The affidavit filed by PROVI through Elmer Ramiro, its President and
Chief Executive Officer, only contained a general allegation that
TESDA had fraudulent misapplied or converted the amount of
₱10,975,000.00 that was allotted to it. Clearly, we cannot infer any
finding of fraud from PROVI’s vague assertion, and the CA correctly
ruled that the lower court acted with grave abuse of discretion in
granting the writ of attachment despite want of any valid ground for
its issuance.1avvphi1
For all these reasons, we support the appellate court’s conclusion
that no valid ground exists to support the grant of the writ of
attachment against TESDA. The CA’s annulment and setting aside
of the Orders of the RTC were therefore fully in order.
WHEREFORE, premises considered, we hereby DENY the petition
filed by petitioner Professional Video, Inc., and AFFIRM the Court of
Appeals’ Decision dated July 23, 2002, and Resolution of September
27, 2002, in CA-G.R. SP No. 67599. Costs against the petitioner.
SO ORDERED.

G.R. No. 178551               October 11, 2010
ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL and
MINISTRY OF PUBLIC HEALTH-KUWAIT Petitioners,
vs.
MA. JOSEFA ECHIN, Respondent.
DECISION
CARPIO MORALES, J.:
Josefina Echin (respondent) was hired by petitioner ATCI Overseas
Corporation in behalf of its principal-co-petitioner, the Ministry of
Public Health of Kuwait (the Ministry), for the position of medical
technologist under a two-year contract, denominated as a
Memorandum of Agreement (MOA), with a monthly salary of
US$1,200.00.
Under the MOA,1 all newly-hired employees undergo a probationary
period of one (1) year and are covered by Kuwait’s Civil Service
Board Employment Contract No. 2.
Respondent was deployed on February 17, 2000 but was terminated
from employment on February 11, 2001, she not having allegedly
passed the probationary period.
As the Ministry denied respondent’s request for reconsideration, she
returned to the Philippines on March 17, 2001, shouldering her own
air fare.
On July 27, 2001, respondent filed with the National Labor Relations
Commission (NLRC) a complaint2 for illegal dismissal against
petitioner ATCI as the local recruitment agency, represented by
petitioner, Amalia Ikdal (Ikdal), and the Ministry, as the foreign
principal.
By Decision3 of November 29, 2002, the Labor Arbiter, finding that
petitioners neither showed that there was just cause to warrant
respondent’s dismissal nor that she failed to qualify as a regular
employee, 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.
On appeal of petitioners ATCI and Ikdal, the NLRC affirmed the
Labor Arbiter’s decision by Resolution 4 of January 26, 2004.
Petitioners’ motion for reconsideration having been denied by
Resolution5 of April 22, 2004, they appealed to the Court of Appeals,
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 Kuwait’s Civil Service Laws. Petitioners further
contended that Ikdal should not be liable as an officer of petitioner
ATCI.
By Decision6 of March 30, 2007, the appellate court affirmed the
NLRC Resolution.
In brushing aside petitioners’ contention that they only acted as
agent of the Ministry and that they cannot be held jointly and
solidarily liable with it, the appellate court noted that under the law, a
private employment agency shall assume all responsibilities for the
implementation of the contract of employment of an overseas
worker, hence, it can be sued jointly and severally with the foreign
principal for any violation of the recruitment agreement or contract of
employment.
As to Ikdal’s liability, the appellate court held that under Sec. 10 of
Republic Act No. 8042, the "Migrant and Overseas Filipinos’ Act of
1995," corporate officers, directors and partners of a recruitment
agency may themselves be jointly and solidarily liable with the
recruitment agency for money claims and damages awarded to
overseas workers.
Petitioners’ motion for reconsideration having been denied by the
appellate court by Resolution 7 of June 27, 2007, the present petition
for review on certiorari was filed.
Petitioners maintain that they should not be held liable because
respondent’s employment contract specifically stipulates that her
employment shall be governed by the Civil Service Law and
Regulations of Kuwait. They thus conclude that it was patent error
for the labor tribunals and the appellate court to apply the Labor
Code provisions governing probationary employment in deciding the
present case.
Further, petitioners argue that even the Philippine Overseas
Employment Act (POEA) Rules relative to master employment
contracts (Part III, Sec. 2 of the POEA Rules and Regulations)
accord respect to the "customs, practices, company policies and
labor laws and legislation of the host country."
Finally, petitioners posit that assuming arguendo that Philippine labor
laws are applicable, given that the foreign principal is a government
agency which is immune from suit, as in fact it did not sign any
document agreeing to be held jointly and solidarily liable, petitioner
ATCI cannot likewise be held liable, more so since the Ministry’s
liability had not been judicially determined as jurisdiction was not
acquired over it.
The petition fails.
Petitioner ATCI, as a private recruitment agency, cannot evade
responsibility for the money claims of Overseas Filipino workers
(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 principal’s liability must first
be established before it, as agent, can be held jointly and solidarily
liable.
In providing for the joint and solidary liability of private recruitment
agencies with their foreign principals, Republic Act No. 8042
precisely affords the OFWs with a recourse and assures them of
immediate and sufficient payment of what is due them. Skippers
United Pacific v. Maguad8 explains:
. . . [T]he obligations covenanted in the recruitment agreement
entered into by and between the local agent and its foreign principal
are not coterminous with the term of such agreement so that if either
or both of the parties decide to end the agreement, the
responsibilities of such parties towards the contracted employees
under the agreement do not at all end, but the same extends up to
and until the expiration of the employment contracts of the
employees recruited and employed pursuant to the said recruitment
agreement. Otherwise, this will render nugatory the very purpose for
which the law governing the employment of workers for foreign jobs
abroad was enacted. (emphasis supplied)
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.9 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 principal’s liability before petitioner can be held liable
renders the law on joint and solidary liability inutile.
As to petitioners’ contentions that Philippine labor laws on
probationary employment are not applicable since it was expressly
provided in respondent’s 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.
Indeed, a contract freely entered into is considered the law between
the parties who can establish stipulations, clauses, terms and
conditions as they may deem convenient, including the laws which
they wish to govern their respective obligations, as long as they are
not contrary to law, morals, good customs, public order or public
policy.
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. The Court’s ruling in EDI-Staffbuilders
Int’l., v. NLRC10 illuminates:
In the present case, the employment contract signed by Gran
specifically states that Saudi Labor Laws will govern matters not
provided for in the contract (e.g. specific causes for termination,
termination procedures, etc.). Being the law intended by the parties
(lex loci intentiones) to apply to the contract, Saudi Labor Laws
should govern all matters relating to the termination of the
employment of Gran.
In international law, the party who wants to have a foreign law
applied to a dispute or case has the burden of proving the foreign
law. The foreign law is treated as a question of fact to be properly
pleaded and proved as the judge or labor arbiter cannot take judicial
notice of a foreign law. He is presumed to know only domestic or
forum law.
Unfortunately for petitioner, it did not prove the pertinent Saudi laws
on the matter; thus, the International Law doctrine of presumed-
identity approach or processual presumption comes into play. Where
a foreign law is not pleaded or, even if pleaded, is not proved, the
presumption is that foreign law is the same as ours. Thus, we apply
Philippine labor laws in determining the issues presented before us.
(emphasis and underscoring supplied)
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 Sections 24 and 25 of Rule 132 of the Revised Rules of
Court which reads:
SEC. 24. Proof of official record. — The record of public documents
referred to in paragraph (a) of Section 19, when admissible for any
purpose, may be evidenced by an official publication thereof or by a
copy attested by the officer having the legal custody of the record, or
by his deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the custody. If the
office in which the record is kept is in a foreign country, the certificate
may be made by a secretary of the embassy or legation, consul
general, consul, vice consul, or consular agent or by any officer in
the foreign service of the Philippines stationed in the foreign country
in which the record is kept, and authenticated by the seal of his
office. (emphasis supplied)
SEC. 25. What attestation of copy must state. — Whenever a copy
of a document or record is attested for the purpose of the evidence,
the attestation must state, in substance, that the copy is a correct
copy of the original, or a specific part thereof, as the case may be.
The attestation must be under the official seal of the attesting officer,
if there be any, or if he be the clerk of a court having a seal, under
the seal of such court.
To prove the Kuwaiti law, petitioners submitted the following: MOA
between respondent and the Ministry, as represented by ATCI,
which provides that the employee is subject to a probationary period
of one (1) year and that the host country’s Civil Service Laws and
Regulations apply; a translated copy11 (Arabic to English) of the
termination letter to respondent stating that she did not pass the
probation terms, without specifying the grounds therefor, and a
translated copy of the certificate of termination, 12 both of which
documents were certified by Mr. Mustapha Alawi, Head of the
Department of Foreign Affairs-Office of Consular Affairs Inslamic
Certification and Translation Unit; and respondent’s letter 13 of
reconsideration to the Ministry, wherein she noted that in her first
eight (8) months of employment, she was given a rating of
"Excellent" albeit it changed due to changes in her shift of work
schedule.
These documents, whether taken singly or as a whole, do not
sufficiently prove that respondent was validly terminated as a
probationary employee under Kuwaiti civil service laws. Instead of
submitting a copy of the pertinent Kuwaiti labor laws duly
authenticated and translated by Embassy officials thereat, as
required under the Rules, what petitioners submitted were mere
certifications attesting only to the correctness of the translations of
the MOA and the termination letter which does not prove at all that
Kuwaiti civil service laws differ from Philippine laws and that under
such Kuwaiti laws, respondent was validly terminated. Thus the
subject certifications read:
xxxx
This is to certify that the herein attached translation/s from Arabic to
English/Tagalog and or vice versa was/were presented to this Office
for review and certification and the same was/were found to be in
order. This Office, however, assumes no responsibility as to the
contents of the document/s.
This certification is being issued upon request of the interested party
for whatever legal purpose it may serve. (emphasis
supplied)1avvphi1
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
on money claims, viz:
SEC. 10. Money Claims.—Notwithstanding any provision of law to
the contrary, the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive jurisdiction
to hear and decide, within ninety (90) calendar days after the filing of
the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment including claims for actual moral,
exemplary and other forms of damages.
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.
(emphasis and underscoring supplied)
WHEREFORE, the petition is DENIED.
SO ORDERED.
G.R. No. 124772             August 14, 2007
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT and
MAGTANGGOL C. GUNIGUNDO, in his capacity as CHAIRMAN
thereof, petitioners,
vs.
SANDIGANBAYAN and OFFICECO HOLDINGS, N.V., respondents.
DECISION
TINGA, J.:
Before this Court is a Petition for Certiorari and Prohibition with
Prayer for Issuance of a Temporary Restraining Order filed by the
Presidential Commission on Good Government (PCGG) to restrain
and enjoin respondent Sandiganbayan from further proceeding with
Civil Case No. 0164, and to declare null and void the Resolutions of
the Sandiganbayan (Second Division) dated 11 January 1996 and
29 March 1996, which denied PCGG’s motion to dismiss and motion
for reconsideration, respectively, in Civil Case No. 0164.
The antecedent facts follow.
On 7 April 1986, in connection with criminal proceedings initiated in
the Philippines to locate, sequester and seek restitution of alleged ill-
gotten wealth amassed by the Marcoses and other accused from the
Philippine Government,1 the Office of the Solicitor General (OSG)
wrote the Federal Office for Police Matters in Berne, Switzerland,
requesting assistance for the latter office to: (a) ascertain and
provide the OSG with information as to where and in which cantons
the ill-gotten fortune of the Marcoses and other accused are located,
the names of the depositors and the banks and the amounts
involved; and (b) take necessary precautionary measures, such as
sequestration, to freeze the assets in order to preserve their existing
value and prevent any further transfer thereof (herein referred to as
the IMAC request).2
On 29 May 1986, the Office of the District Attorney in Zurich,
pursuant to the OSG’s request, issued an Order directing the Swiss
Banks in Zurich to freeze the accounts of the accused in PCGG I.S.
No. 1 and in the "List of Companies and Foundations." 3 In
compliance with said Order, Bankers Trust A.G. (BTAG) of Zurich
froze the accounts of Officeco Holdings, N.V. (Officeco). 4
Officeco appealed the Order of the District Attorney to the Attorney
General of the Canton of Zurich. The Attorney General affirmed the
Order of the District Attorney.5 Officeco further appealed to the Swiss
Federal Court which likewise dismissed the appeal on 31 May 1989.6
Thereafter, in late 1992, Officeco made representations with the
OSG and the PCGG for them to officially advise the Swiss Federal
Office for Police Matters to unfreeze Officeco’s assets. 7 The PCGG
required Officeco to present countervailing evidence to support its
request.
Instead of complying with the PCGG requirement for it to submit
countervailing evidence, on 12 September 1994, Officeco filed the
complaint8 which was docketed as Civil Case No. 0164 of the
Sandiganbayan. The complaint prayed for the PCGG and the OSG
to officially advise the Swiss government to exclude from the freeze
or sequestration order the account of Officeco with BTAG and to
unconditionally release the said account to Officeco.
The OSG filed a joint answer 9 on 24 November 1994 in behalf of all
the defendants in Civil Case No. 0164. 10 On 12 May 1995, the
PCGG itself filed a motion to dismiss 11 which was denied by the
Sandiganbayan (Third Division) in its Resolution promulgated on 11
January 1996.12 PCGG’s motion for reconsideration was likewise
denied in another Resolution dated 29 March 1996. 13 Hence, this
petition.
On 20 May 1996, the Sandiganbayan issued an order in Civil Case
No. 0164 canceling the pre-trial scheduled on said date in deference
to whatever action the Court may take on this petition. 14
The issues raised by the PCGG in its Memorandum 15 may be
summarized as follows: whether the Sandiganbayan erred in not
dismissing Civil Case No. 0164 on the grounds of (1) res judicata;
(2) lack of jurisdiction on account of the "act of state doctrine"; (3)
lack of cause of action for being premature for failure to exhaust
administrative remedies; and (4) lack of cause of action for the
reason that mandamus does not lie to compel performance of a
discretionary act, there being no showing of grave abuse of
discretion on the part of petitioners.
According to petitioners, the 31 May 1989 Decision of the Swiss
Federal Court denying Officeco’s appeal from the 29 May 1986 and
16 August 1988 freeze orders of the Zurich District Attorney and the
Attorney General of the Canton of Zurich, respectively, is conclusive
upon Officeco’s claims or demands for the release of the subject
deposit accounts with BTAG. Thus, a relitigation of the same claims
or demands cannot be done without violating the doctrine of res
judicata or conclusiveness of judgment.16
Next, petitioners claim that Civil Case No. 0164 in effect seeks a
judicial review of the legality or illegality of the acts of the Swiss
government since the Sandiganbayan would inevitably examine and
review the freeze orders of Swiss officials in resolving the case. This
would be in violation of the "act of state" doctrine which states that
courts of one country will not sit in judgment on the acts of the
government of another in due deference to the independence of
sovereignty of every sovereign state.17
Furthermore, if the Sandiganbayan allowed the complaint in Civil
Case No. 0164 to prosper, this would place the Philippine
government in an uncompromising position as it would be
constrained to take a position contrary to that contained in the IMAC
request.
Petitioners allege that Officeco failed to exhaust the administrative
remedies available under Secs. 5 and 6 of the PCGG Rules and
Regulations Implementing Executive Orders No. 1 and No. 2. This
failure, according to petitioners, stripped Officeco of a cause of
action thereby warranting the dismissal of the complaint before the
Sandiganbayan.
Petitioners further contend that the complaint before the
Sandiganbayan is actually one for mandamus but the act sought by
Officeco is discretionary in nature. Petitioners add that they did not
commit grave abuse of discretion in denying Officeco’s request to
unfreeze its account with BTAG since the denial was based on
Officeco’s failure to present countervailing evidence to support its
claim. The action for mandamus does not lie, petitioners conclude.
In its comment,18 Officeco questions the competence of the PCGG
lawyers to appear in the case since they are not properly authorized
by the OSG to represent the Philippine government and/or the
PCGG in ill-gotten wealth cases such as the one in the case at bar.
However, this issue has been rendered moot by an agreement by
and among the PCGG Chairman, the Solicitor General, the Chief
Presidential Legal Counsel, and the Secretary of Justice that the
PCGG lawyers would enter their appearance as counsel of PCGG or
the Republic and shall directly attend to the various cases of the
PCGG, by virtue of their deputization as active
counsel.19 Furthermore, the Memorandum in this case which was
prepared by the OSG reiterated the arguments in support of the
petition which was initially filed by PCGG.
Nevertheless, the petition is bereft of merit. We find that the
Sandiganbayan did not act with grave abuse of discretion in denying
petitioners’ motion to dismiss.
Res judicata
<="" i="">means a matter adjudged, a thing judicially acted upon or
decided; a thing or matter settled by judgment. 20 The doctrine of res
judicata provides that a final judgment on the merits rendered by a
court of competent jurisdiction is conclusive as to the rights of the
parties and their privies and constitutes an absolute bar to
subsequent actions involving the same claim, demand, or cause of
action.21
For the preclusive effect of res judicata to be enforced, the following
requisites must obtain: (1) The former judgment or order must be
final; (2) It must be a judgment or order on the merits, that is, it was
rendered after a consideration of the evidence or stipulations
submitted by the parties at the trial of the case; (3) It must have been
rendered by a court having jurisdiction over the subject matter and
the parties; and (4) There must be, between the first and second
actions, identity of parties, of subject matter and of cause of action.
This requisite is satisfied if the two actions are substantially between
the same parties.22
While the first three elements above are present in this case, we rule
that the fourth element is absent. Hence, res judicata does not apply
to prevent the Sandiganbayan from proceeding with Civil Case No.
0164.
Absolute identity of parties is not a condition sine qua non for res
judicata to apply, a shared identity of interest being sufficient to
invoke the coverage of the principle.23 In this regard, petitioners
claim that while "the Philippine government was not an impleaded
party respondent in Switzerland," it is undisputed that "the interest of
the Philippine government is identical to the interest of the Swiss
officials," harping on the fact that the Swiss officials issued the
freeze order on the basis of the IMAC request. 24 However, we fail to
see how petitioners can even claim an interest identical to that of the
courts of Switzerland. Petitioners’ interest, as reflected in their legal
mandate, is to recover ill-gotten wealth, wherever the same may be
located.25 The interest of the Swiss court, on the other hand, is only
to settle the issues raised before it, which include the propriety of the
legal assistance extended by the Swiss authorities to the Philippine
government.
Secondly, a subject matter is the item with respect to which the
controversy has arisen, or concerning which the wrong has been
done, and it is ordinarily the right, the thing, or the contract under
dispute.26 In the case at bar, the subject matter in the Swiss Federal
Court was described in the 31 May 1989 decision itself as "ruling on
temporary measures (freezing of accounts) and of taking of evidence
(gathering bank information)."27 It was thus concerned with
determining (1) whether "there is a reason of exclusion as defined in
Art. 2 lit. b and [Art. ] 3 par. 1 IRSG 28 or an applicable case of Art. 10
Par. 2 IRSG;" 29 (2) whether legal assistance should be refused on
the basis of Art. 2 lit. a IRSG; 30 (3) whether Officeco should be
regarded as a disinterested party owing to the fact that its name was
not included in the list accompanying the IMAC request as well as in
the order of the District Attorney of Zurich; and (4) whether the grant
of legal assistance is proper considering the actions of Gapud. 31 In
short, the subject matter before the Swiss courts was the propriety of
the legal assistance extended to the Philippine government. On the
other hand, the issue in Civil Case No. 0164 is whether the PCGG
may be compelled to officially advise the Swiss government to
exclude or drop from the freeze or sequestration order the account of
Officeco with BTAG and to release the said account to Officeco. In
short, the subject matter in Civil Case No. 0164 is the propriety of
PCGG’s stance regarding Officeco’s account with BTAG.
In arguing that there is identity of causes of action, petitioners claim
that "the proofs required to sustain a judgment for [Officeco] in
Switzerland is no different from the proofs that it would offer in the
Philippines." We disagree.
A cause of action is an act or omission of one party in violation of the
legal right of the other. 32 Causes of action are identical when there is
an identity in the facts essential to the maintenance of the two
actions, or where the same evidence will sustain both actions. 33 The
test often used in determining whether causes of action are identical
is to ascertain whether the same facts or evidence would support
and establish the former and present causes of action. 34 More
significantly, there is identity of causes of action when the judgment
sought will be inconsistent with the prior judgment. 35 In the case at
bar, allowing Civil Case No. 0164 to proceed to its logical conclusion
will not result in any inconsistency with the 31 May 1989 decision of
the Swiss Federal Court. Even if the Sandiganbayan finds for
Officeco, the same will not automatically result in the lifting of the
questioned freeze orders. It will merely serve as a basis for requiring
the PCGG (through the OSG) to make the appropriate
representations with the Swiss government agencies concerned.
Act of State Doctrine
The classic American statement of the act of state doctrine, which
appears to have taken root in England as early as 1674, 36 and began
to emerge in American jurisprudence in the late eighteenth and early
nineteenth centuries, is found in Underhill v. Hernandez,37 where
Chief Justice Fuller said for a unanimous Court:
Every sovereign state is bound to respect the
independence of every other state, and the courts of one
country will not sit in judgment on the acts of the
government of another, done within its territory. Redress of
grievances by reason of such acts must be obtained
through the means open to be availed of by sovereign
powers as between themselves.38
The act of state doctrine is one of the methods by which States
prevent their national courts from deciding disputes which relate to
the internal affairs of another State, the other two being immunity
and non-justiciability.39 It is an avoidance technique that is directly
related to a State’s obligation to respect the independence and
equality of other States by not requiring them to submit to
adjudication in a national court or to settlement of their disputes
without their consent.40 It requires the forum court to exercise
restraint in the adjudication of disputes relating to legislative or other
governmental acts which a foreign State has performed within its
territorial limits.41
It is petitioners’ contention that the Sandiganbayan "could not grant
or deny the prayers in [Officeco’s] complaint without first examining
and scrutinizing the freeze order of the Swiss officials in the light of
the evidence, which however is in the possession of said officials"
and that it would therefore "sit in judgment on the acts of the
government of another country."42 We disagree.
The parameters of the use of the act of state doctrine were clarified
in Banco Nacional de Cuba v. Sabbatino. 43 There, the U.S. Supreme
Court held that international law does not require the application of
this doctrine nor does it forbid the application of the rule even if it is
claimed that the act of state in question violated international law.
Moreover, due to the doctrine’s peculiar nation-to-nation character,
in practice the usual method for an individual to seek relief is to
exhaust local remedies and then repair to the executive authorities of
his own state to persuade them to champion his claim in diplomacy
or before an international tribunal. 44
Even assuming that international law requires the application of the
act of state doctrine, it bears stressing that the Sandiganbayan will
not examine and review the freeze orders of the concerned Swiss
officials in Civil Case No. 0164. The Sandiganbayan will not require
the Swiss officials to submit to its adjudication nor will it settle a
dispute involving said officials. In fact, as prayed for in the complaint,
the Sandiganbayan will only review and examine the propriety of
maintaining PCGG’s position with respect to Officeco’s accounts with
BTAG for the purpose of further determining the propriety of issuing
a writ against the PCGG and the OSG. Everything considered, the
act of state doctrine finds no application in this case and petitioners’
resort to it is utterly mislaid.
Exhaustion of Administrative Remedies
Petitioners advert to Officeco’s failure to exhaust the administrative
remedies provided in Secs. 5 and 6 of the PCGG Rules and
Regulations Implementing Executive Orders No. 1 and No.
2.45 However, a reading of said provisions shows that they refer only
to sequestration orders, freeze orders and hold orders issued by the
PCGG in the Philippines. They cannot be made to apply to the
freeze orders involved in this case which were issued by the
government of another country.
It was thus error for petitioners to treat Officeco’s request for the
lifting of the freeze orders as a request under Secs. 5 and 6 of its
rules. First, the PCGG cannot even grant the remedy embodied in
the said rules, i.e., lifting of the freeze orders. Second, any argument
towards a conclusion that PCGG can grant the remedy of lifting the
freeze order is totally inconsistent with its earlier argument using the
act of state doctrine. PCGG’s cognizance of such a request and
treating it as a request under Secs. 5 and 6 of its rules would require
a re-examination or review of the decision of the Swiss court, a
procedure that is prohibited by the act of state doctrine.
Complaint States a Cause of Action
While the stated issue is whether mandamus lies, the real crux of the
matter is whether Officeco’s complaint before the Sandiganbayan
states a cause of action. We uphold the sufficiency of the complaint.
It may be recalled that Officeco had alleged that it had sent several
letters to the PCGG and the OSG for these bodies to advise the
Swiss authorities to drop or exclude Officeco’s account with BTAG
from the freeze or sequestration, but no formal response was
received by petitioners on these letters. Copies of at least four (4) of
these letters were in fact attached as annexes to the complaint. 46
Section 5(a) of Republic Act No. 6713, or the Code of Conduct and
Ethical Standards for Public Officials and Employees, states:
Section 5. Duties of Public Officials and Employees. ― In
the performance of their duties, all public officials and
employees are under obligation to:
(a) Act promptly on letters and requests. ― All public
officials and employees shall, within fifteen (15) working
days from receipt thereof, respond to letters, telegrams or
other means of communications sent by the public. The
reply must contain the action taken on the request.
[Emphasis supplied.]
Since neither the PCGG nor the OSG replied to the requests of
Officeco within fifteen (15) days as required by law, such inaction is
equivalent to a denial of these requests. As such, no other recourse
was left except for judicial relief. The appreciation of the allegations
in the complaint from this standpoint allows us to see how the cause
of action precisely materialized. Even if these allegations were not
cast in the framework of a mandamus action, they still would give
rise to a viable cause of action, subject to the proof of the allegations
during trial.
A motion to dismiss on the ground of failure to state a cause of
action in the complaint hypothetically admits the truth of the facts
alleged therein. The hypothetical admission extends to the relevant
and material facts well pleaded in the complaint and inferences fairly
deducible therefrom. Hence, if the allegations in the complaint
furnish sufficient basis by which the complaint can be maintained,
the same should not be dismissed regardless of the defense that
may be assessed by the defendants.47
The following allegations culled from Officeco’s complaint in the
Sandiganbayan would, if proven, entitle Officeco to the main reliefs
sought in its complaint in view of petitioners’ refusal to exclude
Officeco’s account with BTAG in the list of ill-gotten wealth, to wit: (1)
The freeze order has been in effect for eleven (11) years, since
1986, without any judicial action instituted by the PCGG and the
OSG against Officeco; (2) The PCGG and the OSG have no
document or proof that the account of Officeco with BTAG belongs to
the Marcoses nor their cronies. Information on this matter was even
requested by the OSG from the PCGG and the latter from Swiss
authorities who, up to the present, have not responded positively on
the request;48 and (3) Requests49 by Officeco to the PCGG and OSG
to make representations with the Swiss authorities for the latter to
release Officeco’s account with the BTAG from the freeze order
remain unacted upon despite the mandate in Section 5(a) of
Republic Act No. 6713.
The truth of the above allegations, which must be deemed
hypothetically admitted for the purpose of considering the motion to
dismiss, may properly be determined only if Civil Case No. 0164 is
allowed to proceed, such that if they are found to be supported by
preponderance of evidence, adverse findings may properly be made
against PCGG and the corresponding reliefs granted in favor of
Officeco.
Furthermore, Officeco claims that on two separate occasions, upon
request of counsel for Security Bank and Trust Company (SBTC),
the PCGG and the OSG formally advised the Swiss authorities to
release from the freeze orders two other securities accounts with
BTAG. Because of these representations, the release of the two
accounts from the freeze order was effected. Gapud also assisted in
the establishment and administration of these accounts with
BTAG.50 According to Officeco, the continuous refusal of the PCGG
and the OSG to act favorably on its request while acting favorably on
the above two requests of SBTC is a clear violation of its right to
equal protection under the 1987 Constitution.51
The guarantee of equal protection, according to Tolentino v. Board
of Accountancy, et al.,52 simply means "that no person or class of
persons shall be deprived of the said protection of the laws which is
enjoyed by other persons or other classes in the same place and in
like circumstances."53 Indeed, if it were true that the PCGG and the
OSG facilitated the release of two deposit accounts upon the request
of SBTC and these accounts are similarly situated to Officeco’s
frozen account with BTAG, the operation of the equal protection
clause of the Constitution dictates that Officeco’s account should
likewise be ordered released. Again, this matter can properly be
resolved if Civil Case No. 0164 is allowed to proceed.
WHEREFORE, premises considered, the instant petition is
DISMISSED.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 142396             February 11, 2003
KHOSROW MINUCHER, petitioner,
vs.
HON. COURT OF APPEALS and ARTHUR SCALZO, respondents.
DECISION
VITUG, J.:
Sometime in May 1986, an Information for violation of Section 4 of
Republic Act No. 6425, otherwise also known as the "Dangerous
Drugs Act of 1972," was filed against petitioner Khosrow Minucher
and one Abbas Torabian with the Regional Trial Court, Branch 151,
of Pasig City. The criminal charge followed a "buy-bust operation"
conducted by the Philippine police narcotic agents in the house of
Minucher, an Iranian national, where a quantity of heroin, a
prohibited drug, was said to have been seized. The narcotic agents
were accompanied by private respondent Arthur Scalzo who would,
in due time, become one of the principal witnesses for the
prosecution. On 08 January 1988, Presiding Judge Eutropio Migrino
rendered a decision acquitting the two accused.
On 03 August 1988, Minucher filed Civil Case No. 88-45691 before
the Regional Trial Court (RTC), Branch 19, of Manila for damages on
account of what he claimed to have been trumped-up charges of
drug trafficking made by Arthur Scalzo. The Manila RTC detailed
what it had found to be the facts and circumstances surrounding the
case.
"The testimony of the plaintiff disclosed that he is an Iranian national.
He came to the Philippines to study in the University of the
Philippines in 1974. In 1976, under the regime of the Shah of Iran,
he was appointed Labor Attaché for the Iranian Embassies in Tokyo,
Japan and Manila, Philippines. When the Shah of Iran was deposed
by Ayatollah Khomeini, plaintiff became a refugee of the United
Nations and continued to stay in the Philippines. He headed the
Iranian National Resistance Movement in the Philippines.
"He came to know the defendant on May 13, 1986, when the latter
was brought to his house and introduced to him by a certain Jose
Iñigo, an informer of the Intelligence Unit of the military. Jose Iñigo,
on the other hand, was met by plaintiff at the office of Atty. Crisanto
Saruca, a lawyer for several Iranians whom plaintiff assisted as head
of the anti-Khomeini movement in the Philippines.
"During his first meeting with the defendant on May 13, 1986, upon
the introduction of Jose Iñigo, the defendant expressed his interest in
buying caviar. As a matter of fact, he bought two kilos of caviar from
plaintiff and paid P10,000.00 for it. Selling caviar, aside from that of
Persian carpets, pistachio nuts and other Iranian products was his
business after the Khomeini government cut his pension of over
$3,000.00 per month. During their introduction in that meeting, the
defendant gave the plaintiff his calling card, which showed that he is
working at the US Embassy in the Philippines, as a special agent of
the Drug Enforcement Administration, Department of Justice, of the
United States, and gave his address as US Embassy, Manila. At the
back of the card appears a telephone number in defendant’s own
handwriting, the number of which he can also be contacted.
"It was also during this first meeting that plaintiff expressed his
desire to obtain a US Visa for his wife and the wife of a countryman
named Abbas Torabian. The defendant told him that he [could] help
plaintiff for a fee of $2,000.00 per visa. Their conversation, however,
was more concentrated on politics, carpets and caviar. Thereafter,
the defendant promised to see plaintiff again.
"On May 19, 1986, the defendant called the plaintiff and invited the
latter for dinner at Mario's Restaurant at Makati. He wanted to buy
200 grams of caviar. Plaintiff brought the merchandize but for the
reason that the defendant was not yet there, he requested the
restaurant people to x x x place the same in the refrigerator.
Defendant, however, came and plaintiff gave him the caviar for
which he was paid. Then their conversation was again focused on
politics and business.
"On May 26, 1986, defendant visited plaintiff again at the latter's
residence for 18 years at Kapitolyo, Pasig. The defendant wanted to
buy a pair of carpets which plaintiff valued at $27,900.00. After some
haggling, they agreed at $24,000.00. For the reason that defendant
did not yet have the money, they agreed that defendant would come
back the next day. The following day, at 1:00 p.m., he came back
with his $24,000.00, which he gave to the plaintiff, and the latter, in
turn, gave him the pair of carpets.1awphi1.nét
"At about 3:00 in the afternoon of May 27, 1986, the defendant came
back again to plaintiff's house and directly proceeded to the latter's
bedroom, where the latter and his countryman, Abbas Torabian,
were playing chess. Plaintiff opened his safe in the bedroom and
obtained $2,000.00 from it, gave it to the defendant for the latter's
fee in obtaining a visa for plaintiff's wife. The defendant told him that
he would be leaving the Philippines very soon and requested him to
come out of the house for a while so that he can introduce him to his
cousin waiting in a cab. Without much ado, and without putting on
his shirt as he was only in his pajama pants, he followed the
defendant where he saw a parked cab opposite the street. To his
complete surprise, an American jumped out of the cab with a drawn
high-powered gun. He was in the company of about 30 to 40 Filipino
soldiers with 6 Americans, all armed. He was handcuffed and after
about 20 minutes in the street, he was brought inside the house by
the defendant. He was made to sit down while in handcuffs while the
defendant was inside his bedroom. The defendant came out of the
bedroom and out from defendant's attaché case, he took something
and placed it on the table in front of the plaintiff. They also took
plaintiff's wife who was at that time at the boutique near his house
and likewise arrested Torabian, who was playing chess with him in
the bedroom and both were handcuffed together. Plaintiff was not
told why he was being handcuffed and why the privacy of his house,
especially his bedroom was invaded by defendant. He was not
allowed to use the telephone. In fact, his telephone was unplugged.
He asked for any warrant, but the defendant told him to `shut up.’ He
was nevertheless told that he would be able to call for his lawyer
who can defend him.
"The plaintiff took note of the fact that when the defendant invited
him to come out to meet his cousin, his safe was opened where he
kept the $24,000.00 the defendant paid for the carpets and another
$8,000.00 which he also placed in the safe together with a bracelet
worth $15,000.00 and a pair of earrings worth $10,000.00. He also
discovered missing upon his release his 8 pieces hand-made
Persian carpets, valued at $65,000.00, a painting he bought for
P30,000.00 together with his TV and betamax sets. He claimed that
when he was handcuffed, the defendant took his keys from his
wallet. There was, therefore, nothing left in his house.
"That his arrest as a heroin trafficker x x x had been well publicized
throughout the world, in various newspapers, particularly in Australia,
America, Central Asia and in the Philippines. He was identified in the
papers as an international drug trafficker. x x x
In fact, the arrest of defendant and Torabian was likewise on
television, not only in the Philippines, but also in America and in
Germany. His friends in said places informed him that they saw him
on TV with said news.
"After the arrest made on plaintiff and Torabian, they were brought to
Camp Crame handcuffed together, where they were detained for
three days without food and water."1
During the trial, the law firm of Luna, Sison and Manas, filed a
special appearance for Scalzo and moved for extension of time to
file an answer pending a supposed advice from the United States
Department of State and Department of Justice on the defenses to
be raised. The trial court granted the motion. On 27 October 1988,
Scalzo filed another special appearance to quash the summons on
the ground that he, not being a resident of the Philippines and the
action being one in personam, was beyond the processes of the
court. The motion was denied by the court, in its order of 13
December 1988, holding that the filing by Scalzo of a motion for
extension of time to file an answer to the complaint was a voluntary
appearance equivalent to service of summons which could likewise
be construed a waiver of the requirement of formal notice. Scalzo
filed a motion for reconsideration of the court order, contending that
a motion for an extension of time to file an answer was not a
voluntary appearance equivalent to service of summons since it did
not seek an affirmative relief. Scalzo argued that in cases involving
the United States government, as well as its agencies and officials, a
motion for extension was peculiarly unavoidable due to the need (1)
for both the Department of State and the Department of Justice to
agree on the defenses to be raised and (2) to refer the case to a
Philippine lawyer who would be expected to first review the case.
The court a quo denied the motion for reconsideration in its order of
15 October 1989.
Scalzo filed a petition for review with the Court of Appeals, there
docketed CA-G.R. No. 17023, assailing the denial. In a decision,
dated 06 October 1989, the appellate court denied the petition and
affirmed the ruling of the trial court. Scalzo then elevated the incident
in a petition for review on certiorari, docketed G.R. No. 91173, to this
Court. The petition, however, was denied for its failure to comply with
SC Circular No. 1-88; in any event, the Court added, Scalzo had
failed to show that the appellate court was in error in its questioned
judgment.
Meanwhile, at the court a quo, an order, dated 09 February 1990,
was issued (a) declaring Scalzo in default for his failure to file a
responsive pleading (answer) and (b) setting the case for the
reception of evidence. On 12 March 1990, Scalzo filed a motion to
set aside the order of default and to admit his answer to the
complaint. Granting the motion, the trial court set the case for pre-
trial. In his answer, Scalzo denied the material allegations of the
complaint and raised the affirmative defenses (a) of Minucher’s
failure to state a cause of action in his complaint and (b) that Scalzo
had acted in the discharge of his official duties as being merely an
agent of the Drug Enforcement Administration of the United States
Department of Justice. Scalzo interposed a counterclaim of
P100,000.00 to answer for attorneys' fees and expenses of litigation.
Then, on 14 June 1990, after almost two years since the institution of
the civil case, Scalzo filed a motion to dismiss the complaint on the
ground that, being a special agent of the United States Drug
Enforcement Administration, he was entitled to diplomatic immunity.
He attached to his motion Diplomatic Note No. 414 of the United
States Embassy, dated 29 May 1990, addressed to the Department
of Foreign Affairs of the Philippines and a Certification, dated 11
June 1990, of Vice Consul Donna Woodward, certifying that the note
is a true and faithful copy of its original. In an order of 25 June 1990,
the trial court denied the motion to dismiss.
On 27 July 1990, Scalzo filed a petition for certiorari with injunction
with this Court, docketed G.R. No. 94257 and entitled "Arthur W.
Scalzo, Jr., vs. Hon. Wenceslao Polo, et al.," asking that the
complaint in Civil Case No. 88-45691 be ordered dismissed. The
case was referred to the Court of Appeals, there docketed CA-G.R.
SP No. 22505, per this Court’s resolution of 07 August 1990. On 31
October 1990, the Court of Appeals promulgated its decision
sustaining the diplomatic immunity of Scalzo and ordering the
dismissal of the complaint against him. Minucher filed a petition for
review with this Court, docketed G.R. No. 97765 and entitled
"Khosrow Minucher vs. the Honorable Court of Appeals, et. al."
(cited in 214 SCRA 242), appealing the judgment of the Court of
Appeals. In a decision, dated 24 September 1992, penned by Justice
(now Chief Justice) Hilario Davide, Jr., this Court reversed the
decision of the appellate court and remanded the case to the lower
court for trial. The remand was ordered on the theses (a) that the
Court of Appeals erred in granting the motion to dismiss of Scalzo for
lack of jurisdiction over his person without even considering the
issue of the authenticity of Diplomatic Note No. 414 and (b) that the
complaint contained sufficient allegations to the effect that Scalzo
committed the imputed acts in his personal capacity and outside the
scope of his official duties and, absent any evidence to the contrary,
the issue on Scalzo’s diplomatic immunity could not be taken up.
The Manila RTC thus continued with its hearings on the case. On 17
November 1995, the trial court reached a decision; it adjudged:
"WHEREFORE, and in view of all the foregoing considerations,
judgment is hereby rendered for the plaintiff, who successfully
established his claim by sufficient evidence, against the defendant in
the manner following:
"`Adjudging defendant liable to plaintiff in actual and compensatory
damages of P520,000.00; moral damages in the sum of P10 million;
exemplary damages in the sum of P100,000.00; attorney's fees in
the sum of P200,000.00 plus costs.
`The Clerk of the Regional Trial Court, Manila, is ordered to take
note of the lien of the Court on this judgment to answer for the
unpaid docket fees considering that the plaintiff in this case instituted
this action as a pauper litigant.’"2
While the trial court gave credence to the claim of Scalzo and the
evidence presented by him that he was a diplomatic agent entitled to
immunity as such, it ruled that he, nevertheless, should be held
accountable for the acts complained of committed outside his official
duties. On appeal, the Court of Appeals reversed the decision of the
trial court and sustained the defense of Scalzo that he was
sufficiently clothed with diplomatic immunity during his term of duty
and thereby immune from the criminal and civil jurisdiction of the
"Receiving State" pursuant to the terms of the Vienna Convention.
Hence, this recourse by Minucher. The instant petition for review
raises a two-fold issue: (1) whether or not the doctrine of
conclusiveness of judgment, following the decision rendered by this
Court in G.R. No. 97765, should have precluded the Court of
Appeals from resolving the appeal to it in an entirely different
manner, and (2) whether or not Arthur Scalzo is indeed entitled to
diplomatic immunity.
The doctrine of conclusiveness of judgment, or its kindred rule of res
judicata, would require 1) the finality of the prior judgment, 2) a valid
jurisdiction over the subject matter and the parties on the part of the
court that renders it, 3) a judgment on the merits, and 4) an identity
of the parties, subject matter and causes of action. 3 Even while one
of the issues submitted in G.R. No. 97765 - "whether or not public
respondent Court of Appeals erred in ruling that private respondent
Scalzo is a diplomat immune from civil suit conformably with the
Vienna Convention on Diplomatic Relations" - is also a pivotal
question raised in the instant petition, the ruling in G.R. No. 97765,
however, has not resolved that point with finality. Indeed, the Court
there has made this observation -
"It may be mentioned in this regard that private respondent himself,
in his Pre-trial Brief filed on 13 June 1990, unequivocally states that
he would present documentary evidence consisting of DEA records
on his investigation and surveillance of plaintiff and on his position
and duties as DEA special agent in Manila. Having thus reserved his
right to present evidence in support of his position, which is the basis
for the alleged diplomatic immunity, the barren self-serving claim in
the belated motion to dismiss cannot be relied upon for a
reasonable, intelligent and fair resolution of the issue of diplomatic
immunity."4
Scalzo contends that the Vienna Convention on Diplomatic
Relations, to which the Philippines is a signatory, grants him
absolute immunity from suit, describing his functions as an agent of
the United States Drugs Enforcement Agency as "conducting
surveillance operations on suspected drug dealers in the Philippines
believed to be the source of prohibited drugs being shipped to the
U.S., (and) having ascertained the target, (he then) would inform the
Philippine narcotic agents (to) make the actual arrest." Scalzo has
submitted to the trial court a number of documents -
1. Exh. '2' - Diplomatic Note No. 414 dated 29 May 1990;
2. Exh. '1' - Certification of Vice Consul Donna K.
Woodward dated 11 June 1990;
3. Exh. '5' - Diplomatic Note No. 757 dated 25 October
1991;
4. Exh. '6' - Diplomatic Note No. 791 dated 17 November
1992; and
5. Exh. '7' - Diplomatic Note No. 833 dated 21 October
1988.
6. Exh. '3' - 1st Indorsement of the Hon. Jorge R. Coquia,
Legal Adviser, Department of Foreign Affairs, dated 27
June 1990 forwarding Embassy Note No. 414 to the Clerk
of Court of RTC Manila, Branch 19 (the trial court);
7. Exh. '4' - Diplomatic Note No. 414, appended to the 1st
Indorsement (Exh. '3'); and
8. Exh. '8' - Letter dated 18 November 1992 from the Office
of the Protocol, Department of Foreign Affairs, through
Asst. Sec. Emmanuel Fernandez, addressed to the Chief
Justice of this Court.5
The documents, according to Scalzo, would show that: (1) the United
States Embassy accordingly advised the Executive Department of
the Philippine Government that Scalzo was a member of the
diplomatic staff of the United States diplomatic mission from his
arrival in the Philippines on 14 October 1985 until his departure on
10 August 1988; (2) that the United States Government was firm
from the very beginning in asserting the diplomatic immunity of
Scalzo with respect to the case pursuant to the provisions of the
Vienna Convention on Diplomatic Relations; and (3) that the United
States Embassy repeatedly urged the Department of Foreign Affairs
to take appropriate action to inform the trial court of Scalzo’s
diplomatic immunity. The other documentary exhibits were
presented to indicate that: (1) the Philippine government itself,
through its Executive Department, recognizing and respecting the
diplomatic status of Scalzo, formally advised the "Judicial
Department" of his diplomatic status and his entitlement to all
diplomatic privileges and immunities under the Vienna Convention;
and (2) the Department of Foreign Affairs itself authenticated
Diplomatic Note No. 414. Scalzo additionally presented Exhibits "9"
to "13" consisting of his reports of investigation on the surveillance
and subsequent arrest of Minucher, the certification of the Drug
Enforcement Administration of the United States Department of
Justice that Scalzo was a special agent assigned to the Philippines
at all times relevant to the complaint, and the special power of
attorney executed by him in favor of his previous counsel 6 to show
(a) that the United States Embassy, affirmed by its Vice Consul,
acknowledged Scalzo to be a member of the diplomatic staff of the
United States diplomatic mission from his arrival in the Philippines on
14 October 1985 until his departure on 10 August 1988, (b) that, on
May 1986, with the cooperation of the Philippine law enforcement
officials and in the exercise of his functions as member of the
mission, he investigated Minucher for alleged trafficking in a
prohibited drug, and (c) that the Philippine Department of Foreign
Affairs itself recognized that Scalzo during his tour of duty in the
Philippines (14 October 1985 up to 10 August 1988) was listed as
being an Assistant Attaché of the United States diplomatic mission
and accredited with diplomatic status by the Government of the
Philippines. In his Exhibit 12, Scalzo described the functions of the
overseas office of the United States Drugs Enforcement Agency, i.e.,
(1) to provide criminal investigative expertise and assistance to
foreign law enforcement agencies on narcotic and drug control
programs upon the request of the host country, 2) to establish and
maintain liaison with the host country and counterpart foreign law
enforcement officials, and 3) to conduct complex criminal
investigations involving international criminal conspiracies which
affect the interests of the United States.
The Vienna Convention on Diplomatic Relations was a codification of
centuries-old customary law and, by the time of its ratification on 18
April 1961, its rules of law had long become stable. Among the city
states of ancient Greece, among the peoples of the Mediterranean
before the establishment of the Roman Empire, and among the
states of India, the person of the herald in time of war and the person
of the diplomatic envoy in time of peace were universally held
sacrosanct.7 By the end of the 16th century, when the earliest
treatises on diplomatic law were published, the inviolability of
ambassadors was firmly established as a rule of customary
international law.8 Traditionally, the exercise of diplomatic intercourse
among states was undertaken by the head of state himself, as being
the preeminent embodiment of the state he represented, and the
foreign secretary, the official usually entrusted with the external
affairs of the state. Where a state would wish to have a more
prominent diplomatic presence in the receiving state, it would then
send to the latter a diplomatic mission. Conformably with the Vienna
Convention, the functions of the diplomatic mission involve, by and
large, the representation of the interests of the sending state and
promoting friendly relations with the receiving state.9
The Convention lists the classes of heads of diplomatic missions to
include (a) ambassadors or nuncios accredited to the heads of
state,10 (b) envoys,11 ministers or internuncios accredited to the
heads of states; and (c) charges d' affairs12 accredited to the
ministers of foreign affairs.13 Comprising the "staff of the (diplomatic)
mission" are the diplomatic staff, the administrative staff and the
technical and service staff. Only the heads of missions, as well as
members of the diplomatic staff, excluding the members of the
administrative, technical and service staff of the mission, are
accorded diplomatic rank. Even while the Vienna Convention on
Diplomatic Relations provides for immunity to the members of
diplomatic missions, it does so, nevertheless, with an understanding
that the same be restrictively applied. Only "diplomatic agents,"
under the terms of the Convention, are vested with blanket
diplomatic immunity from civil and criminal suits. The Convention
defines "diplomatic agents" as the heads of missions or members of
the diplomatic staff, thus impliedly withholding the same privileges
from all others. It might bear stressing that even consuls, who
represent their respective states in concerns of commerce and
navigation and perform certain administrative and notarial duties,
such as the issuance of passports and visas, authentication of
documents, and administration of oaths, do not ordinarily enjoy the
traditional diplomatic immunities and privileges accorded diplomats,
mainly for the reason that they are not charged with the duty of
representing their states in political matters. Indeed, the main
yardstick in ascertaining whether a person is a diplomat entitled to
immunity is the determination of whether or not he performs duties of
diplomatic nature.
Scalzo asserted, particularly in his Exhibits "9" to "13," that he was
an Assistant Attaché of the United States diplomatic mission and
was accredited as such by the Philippine Government. An attaché
belongs to a category of officers in the diplomatic establishment who
may be in charge of its cultural, press, administrative or financial
affairs. There could also be a class of attaches belonging to certain
ministries or departments of the government, other than the foreign
ministry or department, who are detailed by their respective
ministries or departments with the embassies such as the military,
naval, air, commercial, agricultural, labor, science, and customs
attaches, or the like. Attaches assist a chief of mission in his duties
and are administratively under him, but their main function is to
observe, analyze and interpret trends and developments in their
respective fields in the host country and submit reports to their own
ministries or departments in the home government. 14 These officials
are not generally regarded as members of the diplomatic mission,
nor are they normally designated as having diplomatic rank.
In an attempt to prove his diplomatic status, Scalzo presented
Diplomatic Notes Nos. 414, 757 and 791, all issued post litem
motam, respectively, on 29 May 1990, 25 October 1991 and 17
November 1992. The presentation did nothing much to alleviate the
Court's initial reservations in G.R. No. 97765, viz:
"While the trial court denied the motion to dismiss, the public
respondent gravely abused its discretion in dismissing Civil Case
No. 88-45691 on the basis of an erroneous assumption that simply
because of the diplomatic note, the private respondent is clothed
with diplomatic immunity, thereby divesting the trial court of
jurisdiction over his person.
"x x x x x x x x x
"And now, to the core issue - the alleged diplomatic immunity of the
private respondent. Setting aside for the moment the issue of
authenticity raised by the petitioner and the doubts that surround
such claim, in view of the fact that it took private respondent one (1)
year, eight (8) months and seventeen (17) days from the time his
counsel filed on 12 September 1988 a Special Appearance and
Motion asking for a first extension of time to file the Answer because
the Departments of State and Justice of the United States of
America were studying the case for the purpose of determining his
defenses, before he could secure the Diplomatic Note from the US
Embassy in Manila, and even granting for the sake of argument that
such note is authentic, the complaint for damages filed by petitioner
cannot be peremptorily dismissed.
"x x x x x x x x x
"There is of course the claim of private respondent that the acts
imputed to him were done in his official capacity. Nothing supports
this self-serving claim other than the so-called Diplomatic Note. x x x.
The public respondent then should have sustained the trial court's
denial of the motion to dismiss. Verily, it should have been the most
proper and appropriate recourse. It should not have been
overwhelmed by the self-serving Diplomatic Note whose belated
issuance is even suspect and whose authenticity has not yet been
proved. The undue haste with which respondent Court yielded to the
private respondent's claim is arbitrary."
A significant document would appear to be Exhibit No. 08, dated 08
November 1992, issued by the Office of Protocol of the Department
of Foreign Affairs and signed by Emmanuel C. Fernandez, Assistant
Secretary, certifying that "the records of the Department (would)
show that Mr. Arthur W. Scalzo, Jr., during his term of office in the
Philippines (from 14 October 1985 up to 10 August 1988) was listed
as an Assistant Attaché of the United States diplomatic mission and
was, therefore, accredited diplomatic status by the Government of
the Philippines." No certified true copy of such "records," the
supposed bases for the belated issuance, was presented in
evidence.
Concededly, vesting a person with diplomatic immunity is a
prerogative of the executive branch of the government. In World
Health Organization vs. Aquino, 15 the Court has recognized that, in
such matters, the hands of the courts are virtually tied. Amidst
apprehensions of indiscriminate and incautious grant of immunity,
designed to gain exemption from the jurisdiction of courts, it should
behoove the Philippine government, specifically its Department of
Foreign Affairs, to be most circumspect, that should particularly be
no less than compelling, in its post litem motam issuances. It might
be recalled that 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.16 The government of the United States itself, which
Scalzo claims to be acting for, has formulated its standards for
recognition of a diplomatic agent. The State Department policy is to
only concede diplomatic status to a person who possesses an
acknowledged diplomatic title and "performs duties of diplomatic
nature."17 Supplementary criteria for accreditation are the possession
of a valid diplomatic passport or, from States which do not issue
such passports, a diplomatic note formally representing the intention
to assign the person to diplomatic duties, the holding of a non-
immigrant visa, being over twenty-one years of age, and performing
diplomatic functions on an essentially full-time basis. 18 Diplomatic
missions are requested to provide the most accurate and descriptive
job title to that which currently applies to the duties performed. The
Office of the Protocol would then assign each individual to the
appropriate functional category. 19
But while the diplomatic immunity of Scalzo might thus remain
contentious, it was sufficiently established that, indeed, he worked
for the United States Drug Enforcement Agency and was tasked to
conduct surveillance of suspected drug activities within the country
on the dates pertinent to this case. If it should be ascertained that
Arthur Scalzo was acting well within his assigned functions when he
committed the acts alleged in the complaint, the present controversy
could then be resolved under the related doctrine of State Immunity
from Suit.
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 suit20 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.21 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.22 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.23
In United States of America vs. Guinto,24 involving officers of the
United States Air Force and special officers of the Air Force Office of
Special Investigators charged with the duty of preventing the
distribution, possession and use of prohibited drugs, this Court has
ruled -
"While the doctrine (of state immunity) appears to prohibit only suits the Philippine government has given its imprimatur, if not consent, to
against the state without its consent, it is also applicable to the activities within Philippine territory of agent Scalzo of the United
complaints filed against officials of the state for acts allegedly States Drug Enforcement Agency. The job description of Scalzo has
performed by them in the discharge of their duties. x x x. It cannot for tasked him to conduct surveillance on suspected drug suppliers and,
a moment be imagined that they were acting in their private or after having ascertained the target, to inform local law enforcers who
unofficial capacity when they apprehended and later testified against would then be expected to make the arrest. In conducting
the complainant. It follows that for discharging their duties as agents surveillance activities on Minucher, later acting as the poseur-buyer
of the United States, they cannot be directly impleaded for acts during the buy-bust operation, and then becoming a principal witness
imputable to their principal, which has not given its consent to be in the criminal case against Minucher, Scalzo hardly can be said to
sued. x x x As they have acted on behalf of the government, and have acted beyond the scope of his official function or duties.
within the scope of their authority, it is that government, and not the
petitioners personally, [who were] responsible for their acts." 25 All told, this Court is constrained to rule that respondent Arthur
Scalzo, an agent of the United States Drug Enforcement Agency
This immunity principle, however, has its limitations. Thus, Shauf vs. allowed by the Philippine government to conduct activities in the
Court of Appeals26 elaborates: country to help contain the problem on the drug traffic, is entitled to
the defense of state immunity from suit.
"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 WHEREFORE, on the foregoing premises, the petition is DENIED.
rights of the plaintiff. As was clearly set forth by Justice Zaldivar in No costs.
Director of the Bureau of Telecommunications, et al., vs. Aligaen, et
al. (33 SCRA 368): `Inasmuch as the State authorizes only legal acts SO ORDERED.
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.

"x x x x x x x x x

"(T)he 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 and
jurisdiction."27

A foreign agent, operating within a territory, can be cloaked with

immunity from suit but only as long as it can be established that he is
acting within the directives of the sending state. The consent of the
host state is an indispensable requirement of basic courtesy
between the two sovereigns. Guinto and Shauf both involve officers
and personnel of the United States, stationed within Philippine
territory, under the RP-US Military Bases Agreement. While
evidence is wanting to show any similar agreement between the
governments of the Philippines and of the United States (for the
latter to send its agents and to conduct surveillance and related
activities of suspected drug dealers in the Philippines), the consent
or imprimatur of the Philippine government to the activities of the
United States Drug Enforcement Agency, however, can be gleaned
from the facts heretofore elsewhere mentioned. The official
exchanges of communication between agencies of the government
of the two countries, certifications from officials of both the Philippine
Department of Foreign Affairs and the United States Embassy, as
well as the participation of members of the Philippine Narcotics
Command in the "buy-bust operation" conducted at the residence of
Minucher at the behest of Scalzo, may be inadequate to support the
"diplomatic status" of the latter but they give enough indication that

G.R. No. 154705               June 26, 2003
THE REPUBLIC OF INDONESIA, HIS EXCELLENCY
AMBASSADOR SOERATMIN, and MINISTER COUNSELLOR
AZHARI KASIM, Petitioners,
vs.
JAMES VINZON, doing business under the name and style of
VINZON TRADE AND SERVICES, Respondent.
DECISION
AZCUNA, J:
This is a petition for review on certiorari to set aside the Decision of
the Court of Appeals dated May 30, 2002 and its Resolution dated
August 16, 2002, in CA-G.R. SP No. 66894 entitled "The Republic of
Indonesia, His Excellency Ambassador Soeratmin and Minister
Counselor Azhari Kasim v. Hon. Cesar Santamaria, Presiding
Judge, RTC Branch 145, Makati City, and James Vinzon, doing
business under the name and style of Vinzon Trade and Services."
Petitioner, Republic of Indonesia, represented by its Counsellor, Siti
Partinah, 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
equipment 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.1
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 respondent’s 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,
2000.2 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 cites various circumstances
which purportedly negated petitioners’ alleged dissatisfaction over
respondent’s services: (a) in July 2000, Minister Counsellor Kasim
still requested respondent to assign to the embassy an additional
full-time worker to assist one of his other workers; (b) in August
2000, Minister Counsellor Kasim asked respondent to donate a
prize, which the latter did, on the occasion of the Indonesian
Independence Day golf tournament; and (c) in a letter dated August
22, 2000, petitioner Ambassador Soeratmin thanked respondent for
sponsoring a prize and expressed his hope that the cordial relations
happily existing between them will continue to prosper and be
strengthened in the coming years.
Hence, on December 15, 2000, respondent filed a complaint 3 against
petitioners docketed as Civil Case No. 18203 in the Regional Trial
Court (RTC) of Makati, Branch 145. On February 20, 2001,
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.4 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:
"Any legal action arising out of this Maintenance Agreement shall be
settled according to the laws of the Philippines and by the proper
court of Makati City, Philippines."
Respondent’s Opposition likewise alleged that Ambassador
Soeratmin and Minister Counsellor Kasim can be sued and held
liable in their private capacities for tortious acts done with malice and
bad faith.5
On May 17, 2001, the trial court denied herein petitioners’ Motion to
Dismiss. It likewise denied the Motion for Reconsideration
subsequently filed.
The trial court’s denial of the Motion to Dismiss was brought up to
the Court of Appeals by herein petitioners in a petition for certiorari
and prohibition. Said petition, docketed as CA-G.R. SP No. 66894,
alleged that the trial court gravely abused its discretion in ruling that
the Republic of Indonesia gave its consent to be sued and voluntarily
submitted itself to the laws and jurisdiction of Philippine courts and
that petitioners Ambassador Soeratmin and Minister Counsellor
Kasim waived their immunity from suit.
On May 30, 2002, the Court of Appeals rendered its assailed
decision denying the petition for lack of merit. 6 On August 16, 2002, it
denied herein petitioners’ motion for reconsideration. 7
Hence, this petition.
In the case at bar, petitioners raise the sole issue of whether or not
the Court of Appeals erred in sustaining the trial court’s decision that
petitioners have waived their immunity from suit by using as its basis
the abovementioned provision in the Maintenance Agreement.
The petition is impressed with merit.
International law is founded largely upon the principles of reciprocity,
comity, independence, and equality of States which were adopted as
part of the law of our land under Article II, Section 2 of the 1987
Constitution.8 The rule that a State may not be sued without its
consent is a necessary consequence of the principles of
independence and equality of States. 9 As enunciated in Sanders v.
Veridiano II,10 the practical justification for the doctrine of sovereign
immunity is that there can be no legal right against the authority that
makes the law on which the right depends. In the case of foreign
States, the rule is derived from the principle of the sovereign equality
of States, as expressed in the maxim par in parem non habet
imperium. All states are sovereign equals and cannot assert
jurisdiction over one another.11 A contrary attitude would "unduly vex
the peace of nations."12
The rules of International Law, however, are neither unyielding nor
impervious to change. The increasing need of sovereign States to
enter into purely commercial activities remotely connected with the
discharge of their governmental functions brought about a new
concept of sovereign immunity. This concept, the restrictive theory,
holds that the immunity of the sovereign is recognized only with
regard to public acts or acts jure imperii, but not with regard to
private acts or acts jure gestionis.13
In United States v. Ruiz,14 for instance, we held that the conduct of
public bidding for the repair of a wharf at a United States Naval
Station is an act jure imperii. On the other hand, we considered as
an act jure gestionis the hiring of a cook in the recreation center
catering to American servicemen and the general public at the John
Hay Air Station in Baguio City,15 as well as the bidding for the
operation of barber shops in Clark Air Base in Angeles City.16
Apropos the present case, the mere entering into a contract by a
foreign State with a private party cannot be construed as the ultimate
test of whether or not it is an act jure imperii or jure gestionis. Such
act is only the start of the inquiry. Is the foreign State engaged in the
regular conduct of a business? If the foreign State is not engaged
regularly in a business or commercial activity, and in this case it has
not been shown to be so engaged, the particular act or transaction
must then be tested by its nature. If the act is in pursuit of a
sovereign activity, or an incident thereof, then it is an act jure
imperii.17
capacities, Article 31 of the Vienna Convention on Diplomatic
Relations provides:
xxx
1. A diplomatic agent shall enjoy immunity from the criminal
jurisidiction of the receiving State. He shall also enjoy immunity from
its civil and administrative jurisdiction, except in the case of:
(a) a real action relating to private immovable property
situated in the territory of the receiving State, unless he
holds it on behalf of the sending State for the purposes of
the mission;
(b) an action relating to succession in which the diplomatic
agent is involved as executor, administrator, heir or legatee
as a private person and not on behalf of the sending State;

Hence, the existence alone of a paragraph in a contract stating that
any legal action arising out of the agreement shall be settled
according to the laws of the Philippines and by a specified court of
the Philippines is not necessarily a waiver of sovereign immunity
from suit. The 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.
Submission by a foreign state to local jurisdiction must be clear and
unequivocal. It must be given explicitly or by necessary implication.
We find no such waiver in this case.
(c) an action relating to any professional or commercial
activity exercised by the diplomatic agent in the receiving
State outside his official functions.
xxx
The act of petitioners Ambassador Soeratmin and Minister
Counsellor Kasim in terminating the Maintenance Agreement is not
covered by the exceptions provided in the abovementioned
provision.
The Solicitor General believes that said act may fall under
subparagraph (c) thereof,20 but said provision clearly applies only to
a situation where the diplomatic agent engages in any professional
or commercial activity outside official functions, which is not the case
herein.

Respondent concedes that the establishment of a diplomatic mission WHEREFORE, the petition is hereby GRANTED. The decision and
is a sovereign function.1âwphi1 On the other hand, he argues that resolution of the Court of Appeals in CA G.R. SP No. 66894 are
the actual physical maintenance of the premises of the diplomatic REVERSED and SET ASIDE and the complaint in Civil Case No.
mission, such as the upkeep of its furnishings and equipment, is no 18203 against petitioners is DISMISSED.
longer a sovereign function of the State.18
No costs.
We disagree. There is no dispute that the establishment of a
diplomatic mission is an act jure imperii. A sovereign State does not
merely establish a diplomatic mission and leave it at that; the SO ORDERED.
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 Solicitor General, in his Comment, submits the view that, "the
Maintenance Agreement was entered into by the Republic of
Indonesia in the discharge of its governmental functions. In such a
case, it cannot be deemed to have waived its immunity from suit." As
to the paragraph in the agreement relied upon by respondent, the
Solicitor General states that it "was not a waiver of their immunity
from suit but a mere stipulation that in the event they do waive their
immunity, Philippine laws shall govern the resolution of any legal
action arising out of the agreement and the proper court in Makati
City shall be the agreed venue thereof.19

On the matter of whether or not petitioners Ambassador Soeratmin

and Minister Counsellor Kasim may be sued herein in their private

G.R. No. 113191 September 18, 1996
DEPARTMENT OF FOREIGN AFFAIRS, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR
ARBITER NIEVES V. DE CASTRO and JOSE C.
MAGNAYI, respondents.
 
VITUG, J.:
The questions raised in the petition for certiorari are a few
coincidental matters relative to the diplomatic immunity extended to
the Asian Development Bank ("ADB").
On 27 January 1993, private respondent initiated NLRC-NCR Case
No. 00-01-0690-93 for his alleged illegal dismissal by ADB and the
latter's violation of the "labor-only" contracting law. Two summonses
were served, one sent directly to the ADB and the other through the
Department of Foreign Affairs ("DFA"), both with a copy of the
complaint. Forthwith, the ADB and the DFA notified respondent
Labor Arbiter that the ADB, as well as its President and Office, were
covered by an immunity from legal process except for borrowings,
guaranties or the sale of securities pursuant to Article 50(1) and
Article 55 of the Agreement Establishing the Asian Development
Bank (the "Charter") in relation to Section 5 and Section 44 of
the Agreement Between The Bank And The Government Of The
Philippines Regarding The Bank's Headquarters (the "Headquarters
Agreement").
The Labor Arbiter took cognizance of the complaint on the
impression that the ADB had waived its diplomatic immunity from
suit. In time, the Labor Arbiter rendered his decision, dated 31
August 1993, that concluded:
WHEREFORE, above premises considered,
judgment is hereby rendered declaring the
complainant as a regular employee of respondent
ADB, and the termination of his services as
illegal. Accordingly, respondent Bank is hereby
ordered:
1. To immediately reinstate the complainant to his
former position effective September 16, 1993;
2. To pay complainant full backwages from
December 1, 1992 to September 15, 1993 in the
amount of P42,750.00 (P4,500.00 x 9 months);
3. And to pay complainants other benefits and
without loss of seniority rights and other
privileges and benefits due a regular employee of
Asian Development Bank from the time he was
terminated on December 31, 1992;
4. To pay 10% attorney's fees of the total
entitlements.1
The ADB did not appeal the decision. Instead, on 03 November
1993, the DFA referred the matter to the National Labor Relations
Commission ("NLRC"); in its referral, the DFA sought a "formal
vacation of the void judgment." Replying to the letter, the NLRC
Chairman. wrote:
The undersigned submits that the request for the
"investigation" of Labor Arbiter Nieves de Castro,
by the National Labor Relations Commission, has
been erroneously premised on Art. 218(c) of the
Labor Code, as cited in the letter of Secretary
Padilla, considering that the provision deals with
"a question, matter or controversy within its (the
Commission) jurisdiction" obviously referring to a
labor dispute within the ambit of Art. 217 (on
jurisdiction of Labor Arbiters and the Commission
over labor cases).
The procedure, in the adjudication of labor cases,
including raising of defenses, is prescribed by
law. The defense of immunity could have been
raised before the Labor Arbiter by a special
appearance which, naturally, may not be
considered as a waiver of the very defense being
raised. Any decision thereafter is subject to legal
remedies, including appeals to the appropriate
division of the Commission and/or a petition
for certiorari with the Supreme Court, under Rule
65 of the Rules of Court. Except where an appeal
is seasonably and properly made, neither the
Commission nor the undersigned may review, or
even question, the property of any decision by a
Labor Arbiter. Incidentally, the Commission
sits en banc (all fifteen Commissioners) only to
promulgate rules of procedure, or to formulate
policies (Art. 213, Labor Code).
On the other hand, while the undersigned
exercises "administrative supervision over the
Commission and its regional branches and all its
personnel, including the Executive Labor Arbiters
and Labor Arbiters" (penultimate paragraph, Art.
213, Labor Code), he does not have the
competence to investigate or review any decision
of a Labor Arbiter. However, on the purely
administrative aspect of the decision-making
process, he may cause that an misconduct,
malfeasance or misfeasance, upon complaint
properly made.
If the Department of Foreign Affairs feels that the
action of Labor Arbiter Nieves de Castro
constitutes misconduct, malfeasance or
misfeasance, it is suggested that an appropriate
complaint be lodged with the Office of the
Ombudsman.
Thank you for kind attention. 2
Dissatisfied, the DFA lodged the instant petition for certiorari. In this
Court's resolution of 31 January 1994, respondents were required to
comment. Petitioner was later constrained to make an application for
a restraining order and/or writ of preliminary injunction following the
issuance, on 16 March 199, by the Labor Arbiter of a writ of
execution. In a resolution, dated 07 April 1994, the Court issued the
temporary restraining order prayed for.
The Office of the Solicitor General ("OSG"), in its comment of 26
May 1994, initially assailed the claim of immunity by the ADB.
Subsequently, however, it submitted a Manifestation (dated 20 June
1994) stating, among other things, that "after a thorough review of
the case and the records," it became convinced that ADB, indeed,
was correct in invoking its immunity from suit under the Charter and
the Headquarters Agreement.
The Court is of the same view.
Article 50(1) of the Charter provides:
The Bank shall enjoy immunity from every form of
legal process, except in cases arising out of or in
connection with the exercise of its powers to
borrow money, to guarantee obligations, or to buy
and sell or underwrite the sale of securities. 3
Under Article 55 thereof —
All Governors, Directors, alternates, officers and
employees of the Bank, including experts
performing missions for the Bank:
(1) shall be immune from legal process with
respect of acts performed by them in their official
capacity, except when the Bank waives the
immunity. 4
Like provisions are found in the Headquarters Agreement.
Thus, its Section 5 reads:
The Bank shall enjoy immunity from every form of
legal process, except in cases arising out of, or in
connection with, the exercise of its powers to
borrow money, to guarantee obligations, or to buy
and sell or underwrite the sale of securities. 5
And, with respect to certain officials of the bank, Section 44
of the agreement states:
Governors, other representatives of Members,
Directors, the president, Vice-President and
executive officers as may be agreed upon
between the Government and the Bank shall
enjoy, during their stay in the Republic of the
Philippines in connection with their official duties
with the Bank:
xxx xxx xxx
(b) Immunity from legal process of every kind in
respect of words spoken or written and all acts
done by them in their official
capacity. 6
The above stipulations of both the Charter and
Headquarters Agreement should be able, may well
enough, to establish that, except in the specified cases of
borrowing and guarantee operations, as well as the
purchase, sale and underwriting of securities, the ADB
enjoys immunity from legal process of every form. The
Bank's officers, on their part, enjoy immunity in respect of
all acts performed by them in their official capacity. The
Charter and the Headquarters Agreement granting these
immunities and privileges are treaty covenants and
commitments voluntarily assumed by the Philippines
government which must be respected.
In World Health Organization vs. Aquino. 7 we have declared:
It is a recognized principle of international law
and under our system of separation of powers
that diplomatic immunity is essentially a political
question and courts should refuse to look beyond
a determination by the executive branch of the
government, and where the plea of diplomatic
immunity is recognized and affirmed by the
executive branch of the government . . . it is then
the duty of the courts to accept the claim of
immunity upon appropriate suggestion by the
principal law officer of the government, . . . or
other officer acting under his direction. Hence, in
adherence to the settled principle that courts may
not so exercise their jurisdiction . . . as to
embarrass the executive arm of the government
in conducting foreign relations, it is accepted
doctrine that in "such cases the judicial
department of government follows the action of
the political branch and will not embarrass the
latter by assuming an antagonistic
jurisdiction." 8
To the same effect is the decision in International Catholic Migration
Commission vs. Calleja, 9 which has similarly deemed the
Memoranda of the Legal Adviser of the Department of Foreign
Affairs to be "a categorical recognition by the Executive Branch of
Government that ICMC . . . enjoy(s) immunities accorded to
international organizations" and which determination must be held
"conclusive upon the Courts in order not to embarrass a political
department of Government." In the instant case, the filing of the
petition by the DFA, in behalf of ADB, is itself an affirmance of the
government's own recognition of ADB's immunity.
Being an international organization that has been extended
diplomatic status, the ADB is independent of the municipal law. 10 In
Southeast Asian Fisheries Development Center vs. Acosta. 11 The
Court has cited with approval the opinion 12 of the Minister of justice;
thus —
One of the basic immunities of an international
organization is immunity from local
jurisdiction, i.e., that it is immune from the legal
writs and processes issued by the tribunals of the
country where it is found. (See Jenks, Id., pp. 37-
44). The obvious reason for this is that the
subjection of such an organization to the authority
of the local courts would afford a convenient
medium thru which the host government may
interfere in their operations or even influence or
control its policies and decisions of the
organization; besides, such subjection to local
jurisdiction would impair the capacity of such
body to discharge its responsibilities impartially
behalf of its member-states. 13
Contrary to private respondent's assertion, the claim of immunity is
not here being raised for the first time, it has been invoked before the
forum of origin through communications sent by petitioner and the
ADB to the Labor Arbiter, as well as before the NLRC following the
rendition of the questioned judgment by the Labor Arbiter, but
evidently to no avail.
In its communication of 27 May 1993, the DFA, through the Office of
legal Affairs, has advised the NLRC:
Respectfully returned to the Honorable Domingo
B. Mabazza, Labor Arbitration Associate
Commission, National Labor Relations
Commission, National Capital Judicial Region,
Arbitration Branch, Associated Bank Bldg., T.M.
 Kalaw St., Ermita, Manila, the attached Notice of
Hearing addressed to the Asian Development
Bank, in connection with the aforestated case, for
the reason stated in the Department's 1st
Indoresment dated 23 March 1993, copy
attached, which is self-explanatory.
In view of the fact that the Asian Development
Bank (ADB) invokes its immunity which is
sustained by the Department of Foreign Affairs, a
continuos hearing of this case erodes the
credibility of the Philippine government before the
international community, let alone the negative
implication of such a suit on the official
relationship of the Philippine government with the
ADB.
For the Secretary of Foreign Affairs
(Sgd.) SIME D. HIDALGO
Assistant Secretary
The Office of the President, likewise, has issued on 18 May
1993 a letter to the Secretary of Labor, viz
Dear Secretary Confesor,
I am writing to draw your attention to a case filed
by a certain Jose C. Magnayi against the Asian
Development Bank and its President, Kimmasa
Tarumizu, before the National Labor Relations
Commission, National Capital Region Arbitration
Board (NLRC NCR Case No. 00-01690-93).
Last March 8, the Labor Arbiter charged with the
case, Ms. Nieves V. de Castro, addressed a
Notice of Resolution/Order to the Bank which
brought it to the attention of the Department of
Foreign Affairs on the ground that the service of
such notice was in violation of the RP-ADB
Headquarters Agreement which provided, inter
alia, for the immunity of the Bank, its President
and officers from every form of legal process,
except only, in cases of borrowings, guarantees
or the sale of securities.
The Department of Foreign Affairs, in turn,
informed Labor Arbiter Nieves V. de Castro of
this fact by letter dated March 22, copied to you.
Despite this, the labor arbiter in question persited
to send summons, the latest dated May 4,
herewith attached, regarding the Magnayi case.
The Supreme Court has long settled the matter of
diplomatic immunities. In WHO
vs. Aquino, SCRA 48, it ruled that courts should
respect diplomatic immunities of foreign officials
recognized by the Supreme Court forms part of
the law of the land.
Perhaps you should point out to Labor Arbiter
Nieves V. de Castro that ignorance of the law is a
ground for dismissal.
Very truly yours,
(Sgd.) JOS
Chairman,
Private respondent argues that, by centering into service contracts
with different private companies, ADB has descended to the level of
an ordinary party to a commercial transaction giving rise to a waiver
of its immunity from suit. In the case of Holy See vs. Hon. Rosario,
Jr., 16 the Court has held:
There are two conflicting concept of sovereign
immunity, each widely held and firmly
established. According to the classical or
absolute theory, a sovereign cannot, without its
consent, be made a respondent in the Courts of
another sovereign. According to the newer or
restrictive theory, the immunity of the sovereign is
recognized only with regard to public acts or
acts jure imperii of a state, but not with regard to
private act or acts jure gestionis.
xxx xxx xxx
Certainly, the mere entering into a contract by a
foreign state with a private party cannot be the
ultimate test. Such an act can only be the start of
the inquiry. The logical question is whether the
foreign state is engaged in the activity in regular
course of business. If the foreign state is not
engaged regularly in a business or trade, the
particular act or transaction must then be tested
by its nature. If the act is in pursuit of a sovereign
activity, or an incident thereof, then it is an
act jure imperit, especially when it is not
undertaken for gain or profit. 17
The service contracts referred to by private respondent
have not been intended by the ADB for profit or gain but
are official acts over which a waiver of immunity would not
attack.
With regard to the issue of whether or not the DFA has the legal
standing to file the present petition, and whether or not petitioner has
regarded the basic rule that certiorari can be availed of only when
there is no appeal nor plain, speedy and adequate remedy in the
ordinary course of law, we hold both in the affirmative.
The DFA's function includes, among its other mandates, the
determination of persons and institutions covered by diplomatic
immunities, a determination which, when challenge, entitles it to
seek relief from the court so ass not to seriously impair the conduct
of the country's foreign relations. The DFA must be allowed to plead
its case whenever necessary or advisable to enable it to help keep
the credibility of the Philippine government before the international
community. When international agreements are concluded, the
parties therto are deemed to have likewise accepted the
responsibility of seeing to it that their agreements are duly regarded.
In our country, this task falls principally of the DFA as being the
highest executive department with the competence and authority to
so act in this aspect of the international arena. 18 In Holy See
vs. Hon. Rosario, Jr., 19 this Court has explained the matter in good
datail; viz:
In Public International Law, when a state or
international agency wishes to plead sovereign or
diplomatic immunity in a foreign court, it requests
the Foreign Office of the state where it is sued to
convey to the court that said defendant is entitled
to immunity.
 In the United States, the procedure followed is WHEREFORE, the petition for certiorari is GRANTED, and the
the process of "suggestion," where the foreign decision of the Labor Arbiter, dated 31 August 1993 is VACATED,
state or the international organization sued in an for being NULL AND VOID. The temporary restraining order issued
American court requests the Secretary of State to by this Court on 07 April 1994 is hereby made permanent. No costs.
make a determination as to whether it is entitled
to immunity. If the Secretary of State finds that SO ORDERED.
the defendant is immune from suit, he, in turn,
asks the attorney General to submit to the court a
"suggestion" that the defendant is entitled to
immunity. In England, a similar procedure is
followed, only the Foreign Office issues a
certification to the effect instead of submitting a
"suggestion" (O'Connell, In International Law 130
[1965]; Note: Immunity from Suit of Foreign
Sovereign Instrumentalities and Obligations 50
Yale Law Journal 1088 [1941]).

In the Philippines, the practice is for the foreign

government or the international organization to
first secure an executive endorsement of its claim
of sovereign or diplomatic immunity. But how the
Philippine Foreign Office conveys its
endorsement to the courts varies. In International
Catholic Migration Commission vs. Calleja, 190
SCRA 130 (1990), the Secretary of Foreign
Affairs just sent a letter directly to the Secretary
of Labor and Employment, informing the latter
that the respondent-employer could not be sued
because it enjoyed diplomatic immunity. In World
Health Organization vs. Aquino, 48 SCRA 242
(1972), the Secretary of Foreign Affairs sent the
trial court a telegram to that effect. In Baer
vs. Tizon, 57 SCRA 1 (1974), the U.S. Embassy
asked the Secretary of Foreign Affairs to request
the Solicitor General to make, in behalf of the
Commander of the United States Naval Base at
Olongapo City, Zambales, a "suggestion" to
respondent Judge. The Solicitor General
embodied the "suggestion" in a manifestation and
memorandum as amicus curiae.

In the case at bench, the Department of Foreign

Affairs, through the Office of Legal Affairs moved
with this Court to be allowed to intervene on the
side of petitioner. The Court allowed the said
Department to file its memorandum in support of
petitioner's claim of sovereign immunity.

In some cases, the defense of sovereign

immunity was submitted directly to the local
courts by the respondents through their private
counsels (Raquiza vs. Bradford, 75 Phil. 50
[1945]; Miquiabas vs. Philippine-Ryukyus
Command, 80 Phil. 262 [1948]; United States of
America vs. Guinto, 182 SCRA 644 [1990] and
companion cases). In cases where the foreign  
states bypass the Foreign Office, the courts can
in quire into the facts and make their own
determination as to the nature of the acts and G.R. Nos. 109095-109107 February 23, 1995
transactions involved. 20
ELDEPIO LASCO, RODOLFO ELISAN, URBANO BERADOR,
Relative to the property of the extraordinary remedy of certiorari, the FLORENTINO ESTOBIO, MARCELINO MATURAN, FRAEN
Court has, under special circumstances, so allowed and entertained BALIBAG, CARMELITO GAJOL, DEMOSTHENES MANTO,
such a petition when (a) the questioned order or decision is issued in SATURNINO BACOL, SATURNINO LASCO, RAMON LOYOLA,
excess of or without jurisdiction, 21 or (b) where the order or decision JOSENIANO B. ESPINA, all represented by MARIANO R.
is a patent nullity, 22 which, verily, are the circumstances that can be ESPINA, petitioner,
said to obtain in the present case. When an adjudicator is devoid of vs.
jurisdiction on a matter before him, his action that assumes UNITED NATIONS REVOLVING FUND FOR NATURAL
otherwise would be a clear nullity. RESOURCES EXPLORATION (UNRFNRE) represented by its
operations manager, DR. KYRIACOS LOUCA, OSCAR N. ABELLA,
LEON G. GONZAGA, JR., MUSIB M. BUAT, Commissioners of
National Labor Relations Commission (NLRC), Fifth Division,
Cagayan de Oro City and IRVING PETILLA, Labor Arbiter of Butuan
City, respondents.
QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of
Court to set aside the Resolution dated January 25, 1993 of the
National Labor Relations Commission (NLRC), Fifth Division,
Cagayan de Oro City.
We dismiss the petition.
I and equality of employment opportunities for all (1987 Constitution,
Petitioners were dismissed from their employment with private
respondent, the United Nations Revolving Fund for Natural
Resources Exploration (UNRFNRE), which is a special fund and
subsidiary organ of the United Nations. The UNRFNRE is involved in
a joint project of the Philippine Government and the United Nations
for exploration work in Dinagat Island.
Petitioners are the complainants in NLRC Cases Nos. SRAB 10-03-
00067-91 to 10-03-00078-91 and SRAB 10-07-00159-91 for illegal
dismissal and damages.
In its Motion to Dismiss, private respondent alleged that respondent
Labor Arbiter had no jurisdiction over its personality since it enjoyed
diplomatic immunity pursuant to the 1946 Convention on the
Privileges and Immunities of the United Nations. In support thereof,
private respondent attached a letter from the Department of Foreign
Affairs dated August 26, 1991, which acknowledged its immunity
from suit. The letter confirmed that private respondent, being a
special fund administered by the United Nations, was covered by the
1946 Convention on the Privileges and Immunities of the United
Nations of which the Philippine Government was an original
signatory (Rollo, p. 21).
On November 25, 1991, respondent Labor Arbiter issued an order
dismissing the complaints on the ground that private respondent was
protected by diplomatic immunity. The dismissal was based on the
letter of the Foreign Office dated September 10, 1991.
Petitioners' motion for reconsideration was denied. Thus, an appeal
was filed with the NLRC, which affirmed the dismissal of the
complaints in its Resolution dated January 25, 1993.
Petitioners filed the instant petition for certiorari without first seeking
a reconsideration of the NLRC resolution.
II
Article 223 of the Labor Code of the Philippines, as amended,
provides that decisions of the NLRC are final and executory. Thus,
they may only be questioned through certiorari as a special civil
action under Rule 65 of the Revised Rules of Court.
Ordinarily, certiorari as a special civil action will not lie unless a
motion for reconsideration is first filed before the respondent tribunal,
to allow it an opportunity to correct its assigned errors (Liberty
Insurance Corporation v. Court of Appeals, 222 SCRA 37 [1993]).
In the case at bench, petitioners' failure to file a motion for
reconsideration is fatal to the instant petition. Moreover, the petition
lacks any explanation for such omission, which may merit its being
considered as falling under the recognized exceptions to the
necessity of filing such motion.
Notwithstanding, we deem it wise to give due course to the petition
because of the implications of the issue in our international relations.
Petitioners argued that the acts of mining exploration and
exploitation are outside the official functions of an international
agency protected by diplomatic immunity. Even assuming that
private respondent was entitled to diplomatic immunity, petitioners
insisted that private respondent waived it when it engaged in
exploration work and entered into a contract of employment with
petitioners.
Petitioners, likewise, invoked the constitutional mandate that the
State shall afford full protection to labor and promote full employment
Art. XIII, Sec. 3).
The Office of the Solicitor General is of the view that private
respondent is covered by the mantle of diplomatic immunity. Private
respondent is a specialized agency of the United Nations. Under
Article 105 of the Charter of the United Nations:
1. The Organization shall enjoy in the territory of
its Members such privileges and immunities as
are necessary for the fulfillment of its purposes.
2. Representatives of the Members of the United
Nations and officials of the Organization shall
similarly enjoy such privileges and immunities as
are necessary for the independent exercise of
their functions in connection with the
organization.
Corollary to the cited article is the Convention on the Privileges and
Immunities of the Specialized Agencies of the United Nations, to
which the Philippines was a signatory (Vol. 1, Philippine Treaty
Series, p. 621). We quote Sections 4 and 5 of Article III thereof:
Sec. 4. The specialized agencies, their property
and assets, wherever located and by
whomsoever held shall enjoy immunity from
every form of legal process except insofar as in
any particular case they have expressly waived
their immunity. It is, however, understood that no
waiver of immunity shall extend to any measure
of execution (Emphasis supplied).
Sec. 5. The premises of the specialized agencies
shall be inviolable. The property and assets of
the specialized agencies, wherever located and
by whomsoever held, shall be immune from
search, requisition, confiscation, expropriation
and any other form of interference, whether by
executive, administrative, judicial or legislative
action (Emphasis supplied).
As a matter of state policy as expressed in the Constitution, the
Philippine Government adopts the generally accepted principles of
international law (1987 Constitution, Art. II, Sec. 2). Being a member
of the United Nations and a party to the Convention on the Privileges
and Immunities of the Specialized Agencies of the United Nations,
the Philippine Government adheres to the doctrine of immunity
granted to the United Nations and its specialized agencies. Both
treaties have the force and effect of law.
In World Health Organization v. Aquino, 48 SCRA 242, (1972), we Private respondent is not engaged in a commercial venture in the
had occasion to rule that: Philippines. Its presence here is by virtue of a joint project entered
into by the Philippine Government and the United Nations for mineral
It is a recognized principle of international law exploration in Dinagat Island. Its mission is not to exploit our natural
and under our system of separation of powers resources and gain pecuniarily thereby but to help improve the
that diplomatic immunity is essentially a political quality of life of the people, including that of petitioners.
question and courts should refuse to look beyond
a determination by the executive branch of the This is not to say that petitioner have no recourse. Section 31 of the
government, and where the plea of diplomatic Convention on the Privileges and Immunities of the Specialized
immunity is recognized and affirmed by the Agencies of the United Nations states that "each specialized agency
executive branch of the government as in the shall make a provision for appropriate modes of settlement of: (a)
case at bar, it is then the duty of the courts to disputes arising out of contracts or other disputes of private
accept the claim of immunity upon appropriate character to which the specialized agency is a party."
suggestion by the principal law officer of the
government, the Solicitor General or other officer WHEREFORE, the petition is DISMISSED.
acting under his direction. Hence, in adherence to
the settled principle that courts may not so
exercise their jurisdiction by seizure and SO ORDERED.
detention of property, as to embarrass the
executive arm of the government in conducting
foreign relations, it is accepted doctrine that "in
such cases the judicial department of (this)
government follows the action of the political
branch and will not embarrass the latter by
assuming an antagonistic jurisdiction (Emphasis
supplied).

We recognize the growth of international organizations dedicated to

specific universal endeavors, such as health, agriculture, science
and technology and environment. It is not surprising that their
existence has evolved into the concept of international immunities.
The reason behind the grant of privileges and immunities to
international organizations, its officials and functionaries is to secure
them legal and practical independence in fulfilling their duties (Jenks,
International Immunities 17 [1961]).

Immunity is necessary to assure unimpeded performance of their

functions. The purpose is "to shield the affairs of international
organizations, in accordance with international practice, from political
pressure or control by the host country to the prejudice of member
States of the organization, and to ensure the unhampered
performance of their functions" (International Catholic Migration
Commission v. Calleja, 190 SCRA 130 [1990]).

In the International Catholic Migration Commission case, we held

that there is no conflict between the constitutional duty of the State to
protect the rights of workers and to promote their welfare, and the
grant of immunity to international organizations. Clauses on
jurisdictional immunity are now standard in the charters of the
international organizations to guarantee the smooth discharge of
their functions.

The diplomatic immunity of private respondent was sufficiently

established by the letter of the Department of Foreign Affairs,
recognizing and confirming the immunity of UNRFNRE in
accordance with the 1946 Convention on Privileges and Immunities
of the United Nations where the Philippine Government was a party.
The issue whether an international organization is entitled to
diplomatic immunity is a "political question" and such determination
by the executive branch is conclusive on the courts and quasi-
judicial agencies (The Holy See v. Hon. Eriberto U. Rosario, Jr., G.R.
No. 101949, Dec. 1, 1994; International Catholic Migration
Commission v. Calleja, supra).

Our courts can only assume jurisdiction over private respondent if it

expressly waived its immunity, which is not so in the case at bench
(Convention on the Privileges and Immunities of the Specialized
Agencies of the United Nations, Art. III, Sec. 4).
G.R. No. L-35131 November 29, 1972

THE WORLD HEALTH ORGANIZATION and DR. LEONCE

VERSTUYFT, petitioners,
vs.
HON. BENJAMIN H. AQUINO, as Presiding Judge of Branch VIII,
Court of First Instance of Rizal, MAJOR WILFREDO CRUZ, MAJOR
ANTONIO G. RELLEVE, and CAPTAIN PEDRO S. NAVARRO of
the Constabulary Offshore Action Center (COSAC), respondents.

Sycip, Salazar, Luna, Manalo and Feliciano for petitioners.

Emilio L. Baldia for respondents.

TEEHANKEE, J.:p

An original action for certiorari and prohibition to set aside

respondent judge's refusal to quash a search warrant issued by him
at the instance of respondents COSAC (Constabulary Offshore
Action Center) officers for the search and seizure of the personal
effects of petitioner official of the WHO (World Health Organization)
notwithstanding his being entitled to diplomatic immunity, as duly
recognized by the executive branch of the Philippine Government
and to prohibit respondent judge from further proceedings in the
matter.

Upon filing of the petition, the Court issued on June 6, 1972 a

restraining order enjoining respondents from executing the search
warrant in question.

Respondents COSAC officers filed their answer joining issue against

petitioners and seeking to justify their act of applying for and
securing from respondent judge the warrant for the search and
seizure of ten crates consigned to petitioner Verstuyft and stored at
the Eternit Corporation warehouse on the ground that they "contain
large quantities of highly dutiable goods" beyond the official needs of
said petitioner "and the only lawful way to reach these articles and
effects for purposes of taxation is through a search warrant." 1

The Court thereafter called for the parties' memoranda in lieu of oral
argument, which were filed on August 3, 1972 by respondents and
on August 21, 1972 by petitioners, and the case was thereafter
deemed submitted for decision.

It is undisputed in the record that petitioner Dr. Leonce Verstuyft,

who was assigned on December 6, 1971 by the WHO from his last
station in Taipei to the Regional Office in Manila as Acting Assistant
Director of Health Services, is entitled to diplomatic immunity,
pursuant to the Host Agreement executed on July 22, 1951 between
the Philippine Government and the World Health Organization.

Such diplomatic immunity carries with it, among other diplomatic

privileges and immunities, personal inviolability, inviolability of the
official's properties, exemption from local jurisdiction, and exemption
from taxation and customs duties.

When petitioner Verstuyft's personal effects contained in twelve (12)

crates entered the Philippines as unaccompanied baggage on
January 10, 1972, they were accordingly allowed free entry from
duties and taxes. The crates were directly stored at the Eternit
Corporation's warehouse at Mandaluyong, Rizal, "pending his
relocation into permanent quarters upon the offer of Mr. Berg, Vice
President of Eternit who was once a patient of Dr. Verstuyft in the
Congo." 2
Nevertheless, as above stated, respondent judge issued on March 3,
1972 upon application on the same date of respondents COSAC
officers search warrant No. 72-138 for alleged violation of Republic
Act 4712 amending section 3601 of the Tariff and Customs
Code 3 directing the search and seizure of the dutiable items in said
crates.
Upon protest of March 6, 1972 of Dr. Francisco Dy, WHO Regional
Director for the Western Pacific with station in Manila, Secretary of
Foreign Affairs Carlos P. Romulo, personally wired on the same date
respondent Judge advising that "Dr. Verstuyft is entitled to immunity
from search in respect of his personal baggage as accorded to
members of diplomatic missions" pursuant to the Host Agreement
and requesting suspension of the search warrant order "pending
clarification of the matter from the ASAC."
Respondent judge set the Foreign Secretary's request for hearing
and heard the same on March 16, 1972, but notwithstanding the
official plea of diplomatic immunity interposed by a duly authorized
representative of the Department of Foreign Affairs who furnished
the respondent judge with a list of the articles brought in by petitioner
Verstuyft, respondent judge issued his order of the same date
maintaining the effectivity of the search warrant issued by him,
unless restrained by a higher court. 4
Petitioner Verstuyft's special appearance on March 24, 1972 for the
limited purpose of pleading his diplomatic immunity and motion to
quash search warrant of April 12, 1972 failed to move respondent
judge.
At the hearing thereof held on May 8, 1972, the Office of the Solicitor
General appeared and filed an extended comment stating the official
position of the executive branch of the Philippine Government that
petitioner Verstuyft is entitled to diplomatic immunity, he did not
abuse his diplomatic immunity, 5 and that court proceedings in the
receiving or host State are not the proper remedy in the case of
abuse of diplomatic immunity. 6
The Solicitor General accordingly joined petitioner Verstuyft's prayer
for the quashal of the search warrant. Respondent judge
nevertheless summarily denied quashal of the search warrant per
his order of May 9, 1972 "for the same reasons already stated in
(his) aforesaid order of March 16, 1972" disregarding Foreign
Secretary Romulo's plea of diplomatic immunity on behalf of Dr.
Verstuyft.
Hence, the petition at bar. Petitioner Verstuyft has in this Court been
joined by the World Health Organization (WHO) itself in full assertion
of petitioner Verstuyft's being entitled "to all privileges and
immunities, exemptions and facilities accorded to diplomatic envoys
in accordance with international law" under section 24 of the Host
Agreement.
The writs of certiorari and prohibition should issue as prayed for.
1. The executive branch of the Philippine Government
has expressly recognized that petitioner Verstuyft is entitled to
diplomatic immunity, pursuant to the provisions of the Host
Agreement. The Department of Foreign Affairs formally advised
respondent judge of the Philippine Government's official position that
accordingly "Dr. Verstuyft cannot be the subject of a Philippine court
summons without violating an obligation in international law of the
Philippine Government" and asked for the quashal of the search
warrant, since his personal effects and baggages after having been
allowed free entry from all customs duties and taxes, may not be
baselessly claimed to have been "unlawfully imported" in violation of
the tariff and customs code as claimed by respondents COSAC
officers. The Solicitor-General, as principal law officer of the
Government, 7 likewise expressly affirmed said petitioner's right to
diplomatic immunity and asked for the quashal of the search warrant.
It is a recognized principle of international law and under our system
of separation of powers that diplomatic immunity is essentially a
political question and courts should refuse to look beyond a
determination by the executive branch of the government, 8 and
where the plea of diplomatic immunity is recognized and affirmed by
the executive branch of the government as in the case at bar, it is
then the duty of the courts to accept the claim of immunity upon
appropriate suggestion by the principal law officer of the
government, the Solicitor General in this case, or other officer acting
under his direction.9 Hence, in adherence to the settled principle that
courts may not so exercise their jurisdiction by seizure and detention
of property, as to embarrass the executive arm of the government in
conducting foreign relations, it is accepted doctrine that "in such
cases the judicial department of (this) government follows the action
of the political branch and will not embarrass the latter by assuming
an antagonistic jurisdiction." 10
2. The unfortunate fact that respondent judge chose to rely on the
suspicion of respondents COSAC officers "that the other remaining
crates unopened contain contraband items" 11 rather than on the
categorical assurance of the Solicitor-General that petitioner
Verstuyft did not abuse his diplomatic immunity, 12 which was based
in turn on the official positions taken by the highest executive officials
with competence and authority to act on the matter, namely, the
Secretaries of Foreign Affairs and of Finance, could not justify
respondent judge's denial of the quashal of the search warrant.
As already stated above, and brought to respondent court's
attention, 13 the Philippine Government is bound by the procedure
laid down in Article VII of the Convention on the Privileges and
Immunities of the Specialized Agencies of the United Nations 14 for
consultations between the Host State and the United Nations agency
concerned to determine, in the first instance the fact of occurrence of
the abuse alleged, and if so, to ensure that no repetition occurs and
for other recourses. This is a treaty commitment voluntarily assumed
by the Philippine Government and as such, has the force and effect
of law.
Hence, even assuming arguendo as against the categorical
assurance of the executive branch of government that respondent
judge had some ground to prefer respondents COSAC officers'
suspicion that there had been an abuse of diplomatic immunity, the
continuation of the search warrant proceedings before him was not
the proper remedy. He should, nevertheless, in deference to the
exclusive competence and jurisdiction of the executive branch of
government to act on the matter, have acceded to the quashal of the
search warrant, and forwarded his findings or grounds to believe that
there had been such abuse of diplomatic immunity to the
Department of Foreign Affairs for it to deal with, in accordance with
the aforementioned Convention, if so warranted.
3. Finally, the Court has noted with concern the apparent lack of
coordination between the various departments involved in the
subject-matter of the case at bar, which made it possible for a small
unit, the COSAC, to which respondents officers belong, seemingly to
disregard and go against the authoritative determination and
pronouncements of both the Secretaries of Foreign Affairs and of
Finance that petitioner Verstuyft is entitled to diplomatic immunity, as
confirmed by the Solicitor-General as the principal law officer of the
Government. Such executive determination properly implemented
should have normally constrained respondents officers themselves
to obtain the quashal of the search warrant secured by them rather
than oppose such quashal up to this Court, to the embarrassment of
said department heads, if not of the Philippine Government itself vis
a vis the petitioners. 15
The seriousness of the matter is underscored when the provisions of
Republic Act 75 enacted since October 21, 1946 to safeguard the
jurisdictional immunity of diplomatic officials in the Philippines are
taken into account. Said Act declares as null and void writs or
processes sued out or prosecuted whereby inter alia the person of
an ambassador or public minister is arrested or imprisoned or his
goods or chattels are seized or attached and makes it a penal G.R. No. 85750 September 28, 1990
offense for "every person by whom the same is obtained or
prosecuted, whether as party or as attorney, and every officer
concerned in executing it" to obtain or enforce such writ or INTERNATIONAL CATHOLIC IMMIGRATION
process. 16 COMMISSION, petitioner
vs
HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE
The Court, therefore, holds that respondent judge acted without BUREAU OF LABOR RELATIONS AND TRADE UNIONS OF THE
jurisdiction and with grave abuse of discretion in not ordering the PHILIPPINES AND ALLIED SERVICES (TUPAS)
quashal of the search warrant issued by him in disregard of the WFTU respondents.
diplomatic immunity of petitioner Verstuyft.

G.R. No. 89331 September 28, 1990

ACCORDINGLY, the writs of certiorari and prohibition prayed for are
hereby granted, and the temporary restraining order heretofore
issued against execution or enforcement of the questioned search KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED
warrant, which is hereby declared null and void, is hereby made LABOR ASSOCIATION IN LINE INDUSTRIES AND
permanent. The respondent court is hereby commanded to desist AGRICULTURE, petitioner,
from further proceedings in the matter. No costs, none having been vs
prayed for. SECRETARY OF LABOR AND EMPLOYMENT AND
INTERNATIONAL RICE RESEARCH INSTITUTE,
INC., respondents.
The clerk of court is hereby directed to furnish a copy of this decision
to the Secretary of Justice for such action as he may find appropriate
with regard to the matters mentioned in paragraph 3 hereof. So Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750.
ordered.
Dominguez, Armamento, Cabana & Associates for petitioner in G.R.
Concepcion, C.J., Makalintal, Zaldivar, Fernando, Barredo, No. 89331.
Makasiar, Antonio and Esguerra, JJ., concur.
Jimenez & Associates for IRRI.
Castro, J., reserves his vote.
Alfredo L. Bentulan for private respondent in 85750.

MELENCIO-HERRERA, J.:

Consolidated on 11 December 1989, these two cases involve the

validity of the claim of immunity by the International Catholic
Migration Commission (ICMC) and the International Rice Research
Institute, Inc. (IRRI) from the application of Philippine labor laws.

Facts and Issues

A. G.R. No. 85750 — the International Catholic Migration

Commission (ICMC) Case.

As an aftermath of the Vietnam War, the plight of Vietnamese

refugees fleeing from South Vietnam's communist rule confronted
the international community.

In response to this crisis, on 23 February 1981, an Agreement was

forged between the Philippine Government and the United Nations
High Commissioner for Refugees whereby an operating center for
processing Indo-Chinese refugees for eventual resettlement to other
countries was to be established in Bataan (Annex "A", Rollo, pp. 22-
32).

ICMC was one of those accredited by the Philippine Government to

operate the refugee processing center in Morong, Bataan. It was
incorporated in New York, USA, at the request of the Holy See, as a
non-profit agency involved in international humanitarian and
voluntary work. It is duly registered with the United Nations
Economic and Social Council (ECOSOC) and enjoys Consultative
Status, Category II. As an international organization rendering
voluntary and humanitarian services in the Philippines, its activities
are parallel to those of the International Committee for Migration
(ICM) and the International Committee of the Red Cross (ICRC)
[DOLE Records of BLR Case No. A-2-62-87, ICMC v. Calleja, Vol.
1].
On 14 July 1986, Trade Unions of the Philippines and Allied
Services (TUPAS) filed with the then Ministry of Labor and
Employment a Petition for Certification Election among the rank and
file members employed by ICMC The latter opposed the petition on
the ground that it is an international organization registered with the
United Nations and, hence, enjoys diplomatic immunity.
On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained
ICMC and dismissed the petition for lack of jurisdiction.
On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor
Relations (BLR), reversed the Med-Arbiter's Decision and ordered
the immediate conduct of a certification election. At that time, ICMC's
request for recognition as a specialized agency was still pending
with the Department of Foreign Affairs (DEFORAF).
Subsequently, however, on 15 July 1988, the Philippine
Government, through the DEFORAF, granted ICMC the status of a
specialized agency with corresponding diplomatic privileges and
immunities, as evidenced by a Memorandum of Agreement between
the Government and ICMC (Annex "E", Petition, Rollo, pp. 41-
43), infra.
ICMC then sought the immediate dismissal of the TUPAS Petition for
Certification Election invoking the immunity expressly granted but
the same was denied by respondent BLR Director who, again,
ordered the immediate conduct of a pre-election conference. ICMC's
two Motions for Reconsideration were denied despite an opinion
rendered by DEFORAF on 17 October 1988 that said BLR Order
violated ICMC's diplomatic immunity.
Thus, on 24 November 1988, ICMC filed the present Petition for
Certiorari with Preliminary Injunction assailing the BLR Order.
On 28 November 1988, the Court issued a Temporary Restraining
Order enjoining the holding of the certification election.
On 10 January 1989, the DEFORAF, through its Legal Adviser,
retired Justice Jorge C. Coquia of the Court of Appeals, filed a
Motion for Intervention alleging that, as the highest executive
department with the competence and authority to act on matters
involving diplomatic immunity and privileges, and tasked with the
conduct of Philippine diplomatic and consular relations with foreign
governments and UN organizations, it has a legal interest in the
outcome of this case.
Over the opposition of the Solicitor General, the Court allowed
DEFORAF intervention.
On 12 July 1989, the Second Division gave due course to the ICMC
Petition and required the submittal of memoranda by the parties,
which has been complied with.
As initially stated, the issue is whether or not the grant of diplomatic
privileges and immunites to ICMC extends to immunity from the
application of Philippine labor laws.
ICMC sustains the affirmative of the proposition citing (1) its
Memorandum of Agreement with the Philippine Government giving it
the status of a specialized agency, (infra); (2) the Convention on the
Privileges and Immunities of Specialized Agencies, adopted by the
UN General Assembly on 21 November 1947 and concurred in by
the Philippine Senate through Resolution No. 91 on 17 May 1949
(the Philippine Instrument of Ratification was signed by the President
on 30 August 1949 and deposited with the UN on 20 March
1950) infra; and (3) Article II, Section 2 of the 1987 Constitution,
which declares that the Philippines adopts the generally accepted
principles of international law as part of the law of the land.
Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity
and seeks an affirmance of the DEFORAF determination that the
BLR Order for a certification election among the ICMC employees is
violative of the diplomatic immunity of said organization.
Respondent BLR Director, on the other hand, with whom the
Solicitor General agrees, cites State policy and Philippine labor laws
to justify its assailed Order, particularly, Article II, Section 18 and
Article III, Section 8 of the 1987 Constitution, infra; and Articles 243
and 246 of the Labor Code, as amended, ibid. In addition, she
contends that a certification election is not a litigation but a mere
investigation of a non-adversary, fact-finding character. It is not a suit
against ICMC its property, funds or assets, but is the sole concern of
the workers themselves.
B. G.R. No. 89331 — (The International Rice Research Institute
[IRRI] Case).
Before a Decision could be rendered in the ICMC Case, the Third
Division, on 11 December 1989, resolved to consolidate G.R. No.
89331 pending before it with G.R. No. 85750, the lower-numbered
case pending with the Second Division, upon manifestation by the
Solicitor General that both cases involve similar issues.
The facts disclose that on 9 December 1959, the Philippine
Government and the Ford and Rockefeller Foundations signed a
Memorandum of Understanding establishing the International Rice
Research Institute (IRRI) at Los Baños, Laguna. It was intended to
be an autonomous, philanthropic, tax-free, non-profit, non-stock
organization designed to carry out the principal objective of
conducting "basic research on the rice plant, on all phases of rice
production, management, distribution and utilization with a view to
attaining nutritive and economic advantage or benefit for the people
of Asia and other major rice-growing areas through improvement in
quality and quantity of rice."
Initially, IRRI was organized and registered with the Securities and
Exchange Commission as a private corporation subject to all laws
and regulations. However, by virtue of Pres. Decree No. 1620,
promulgated on 19 April 1979, IRRI was granted the status,
prerogatives, privileges and immunities of an international
organization.
The Organized Labor Association in Line Industries and Agriculture
(OLALIA), is a legitimate labor organization with an existing local
union, the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan,
for short) in respondent IRRI.
On 20 April 1987, the Kapisanan filed a Petition for Direct
Certification Election with Region IV, Regional Office of the
Department of Labor and Employment (DOLE).
IRRI opposed the petition invoking Pres. Decree No. 1620 conferring
upon it the status of an international organization and granting it
immunity from all civil, criminal and administrative proceedings under
Philippine laws.
On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the
opposition on the basis of Pres. Decree No. 1620 and dismissed the
Petition for Direct Certification.
On appeal, the BLR Director, who is the public respondent in the
ICMC Case, set aside the Med-Arbiter's Order and authorized the
calling of a certification election among the rank-and-file employees
of IRRI. Said Director relied on Article 243 of the Labor Code, as
amended, infra and Article XIII, Section 3 of the 1987
Constitution, 1 and held that "the immunities and privileges granted
to IRRI do not include exemption from coverage of our Labor Laws."
Reconsideration sought by IRRI was denied.
On appeal, the Secretary of Labor, in a Resolution of 5 July 1989,
set aside the BLR Director's Order, dismissed the Petition for
Certification Election, and held that the grant of specialized agency
status by the Philippine Government to the IRRI bars DOLE from
assuming and exercising jurisdiction over IRRI Said Resolution
reads in part as follows:
Presidential Decree No. 1620 which grants to the
IRRI the status, prerogatives, privileges and
immunities of an international organization is
clear and explicit. It provides in categorical terms
that:
Art. 3 — The Institute shall enjoy immunity from
any penal, civil and administrative proceedings,
except insofar as immunity has been expressly
waived by the Director-General of the Institution
or his authorized representative.
Verily, unless and until the Institute expressly
waives its immunity, no summons, subpoena,
orders, decisions or proceedings ordered by any
court or administrative or quasi-judicial agency
are enforceable as against the Institute. In the
case at bar there was no such waiver made by
the Director-General of the Institute. Indeed, the
Institute, at the very first opportunity already
vehemently questioned the jurisdiction of this
Department by filing an ex-parte motion to
dismiss the case.
Hence, the present Petition for Certiorari filed by Kapisanan alleging
grave abuse of discretion by respondent Secretary of Labor in
upholding IRRI's diplomatic immunity.
The Third Division, to which the case was originally assigned,
required the respondents to comment on the petition. In a
Manifestation filed on 4 August 1990, the Secretary of Labor
declared that it was "not adopting as his own" the decision of the
BLR Director in the ICMC Case as well as the Comment of the
Solicitor General sustaining said Director. The last pleading was filed
by IRRI on 14 August 1990.
Instead of a Comment, the Solicitor General filed a Manifestation
and Motion praying that he be excused from filing a comment "it
appearing that in the earlier case of International Catholic Migration
Commission v. Hon. Pura Calleja, G.R. No. 85750. the Office of the
Solicitor General had sustained the stand of Director Calleja on the
very same issue now before it, which position has been superseded
by respondent Secretary of Labor in G.R. No. 89331," the present
case. The Court acceded to the Solicitor General's prayer.
The Court is now asked to rule upon whether or not the Secretary of
Labor committed grave abuse of discretion in dismissing the Petition
for Certification Election filed by Kapisanan.
Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting
IRRI the status, privileges, prerogatives and immunities of an
international organization, invoked by the Secretary of Labor, is
unconstitutional in so far as it deprives the Filipino workers of their
fundamental and constitutional right to form trade unions for the
purpose of collective bargaining as enshrined in the 1987
Constitution.
A procedural issue is also raised. Kapisanan faults respondent
Secretary of Labor for entertaining IRRI'S appeal from the Order of
the Director of the Bureau of Labor Relations directing the holding of
a certification election. Kapisanan contends that pursuant to
Sections 7, 8, 9 and 10 of Rule V 2 of the Omnibus Rules
Implementing the Labor Code, the Order of the BLR Director had
become final and unappeable and that, therefore, the Secretary of
Labor had no more jurisdiction over the said appeal.
On the other hand, in entertaining the appeal, the Secretary of Labor
relied on Section 25 of Rep. Act. No. 6715, which took effect on 21
March 1989, providing for the direct filing of appeal from the Med-
Arbiter to the Office of the Secretary of Labor and Employment
instead of to the Director of the Bureau of Labor Relations in cases
involving certification election orders.
III
Findings in Both Cases.
There can be no question that diplomatic immunity has, in fact, been
granted ICMC and IRRI.
Article II of the Memorandum of Agreement between the Philippine
Government and ICMC provides that ICMC shall have a status
"similar to that of a specialized agency." Article III, Sections 4 and 5
of the Convention on the Privileges and Immunities of Specialized
Agencies, adopted by the UN General Assembly on 21 November
1947 and concurred in by the Philippine Senate through Resolution
No. 19 on 17 May 1949, explicitly provides:
Art. III, Section 4. The specialized agencies, their
property and assets, wherever located and by
whomsoever held, shall enjoy immunity from
every form of legal process except insofar as in
any particular case they have expressly waived
their immunity. It is, however, understood that no
waiver of immunity shall extend to any measure
of execution.
Sec. 5. — The premises of the specialized
agencies shall be inviolable. The property and
assets of the specialized agencies, wherever
located and by whomsoever held shall be
immune from search, requisition, confiscation,
expropriation and any other form of interference,
whether by executive, administrative, judicial or
legislative action. (Emphasis supplied).
IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit
in its grant of immunity, thus:
Art. 3. Immunity from Legal Process. — The
Institute shall enjoy immunity from any penal, civil
and administrative proceedings, except insofar as
that immunity has been expressly waived by the
Director-General of the Institute or his authorized
representatives.
Thus it is that the DEFORAF, through its Legal Adviser, sustained
ICMC'S invocation of immunity when in a Memorandum, dated 17
October 1988, it expressed the view that "the Order of the Director of
the Bureau of Labor Relations dated 21 September 1988 for the
conduct of Certification Election within ICMC violates the diplomatic
immunity of the organization." Similarly, in respect of IRRI, the
DEFORAF speaking through The Acting Secretary of Foreign Affairs,
Jose D. Ingles, in a letter, dated 17 June 1987, to the Secretary of
Labor, maintained that "IRRI enjoys immunity from the jurisdiction of
DOLE in this particular instance."
The foregoing opinions constitute a categorical recognition by the
Executive Branch of the Government that ICMC and IRRI enjoy
immunities accorded to international organizations, which
determination has been held to be a political question conclusive
upon the Courts in order not to embarrass a political department of
Government.
It is a recognized principle of international law
and under our system of separation of powers
that diplomatic immunity is essentially a political
question and courts should refuse to look beyond
a determination by the executive branch of the
government, and where the plea of diplomatic
immunity is recognized and affirmed by the
executive branch of the government as in the
case at bar, it is then the duty of the courts to
accept the claim of immunity upon appropriate
suggestion by the principal law officer of the
government . . . or other officer acting under his
direction. Hence, in adherence to the settled
principle that courts may not so exercise their
jurisdiction . . . as to embarrass the executive arm
of the government in conducting foreign relations,
it is accepted doctrine that in such cases the
judicial department of (this) government follows
the action of the political branch and will not
embarrass the latter by assuming an antagonistic
jurisdiction. 3
A brief look into the nature of international organizations and
specialized agencies is in order. The term "international
organization" is generally used to describe an organization set up by
agreement between two or more states. 4 Under contemporary
international law, such organizations are endowed with some degree
of international legal personality 5 such that they are capable of
exercising specific rights, duties and powers. 6 They are organized
mainly as a means for conducting general international business in
which the member states have an interest. 7 The United Nations, for
instance, is an international organization dedicated to the
propagation of world peace.
"Specialized agencies" are international organizations having
functions in particular fields. The term appears in Articles 57 8 and
63 9 of the Charter of the United Nations:
The Charter, while it invests the United Nations
with the general task of promoting progress and
international cooperation in economic, social,
health, cultural, educational and related matters,
contemplates that these tasks will be mainly
fulfilled not by organs of the United Nations itself
but by autonomous international organizations
established by inter-governmental agreements
outside the United Nations. There are now many
such international agencies having functions in
many different fields, e.g. in posts,
telecommunications, railways, canals, rivers, sea
transport, civil aviation, meteorology, atomic
energy, finance, trade, education and culture,
health and refugees. Some are virtually world-
wide in their membership, some are regional or
otherwise limited in their membership. The
Charter provides that those agencies which have
"wide international responsibilities" are to be
brought into relationship with the United Nations
by agreements entered into between them and
the Economic and Social Council, are then to be
known as "specialized agencies." 10
The rapid growth of international organizations under contemporary
international law has paved the way for the development of the
concept of international immunities.
It is now usual for the constitutions of
international organizations to contain provisions
conferring certain immunities on the
organizations themselves, representatives of their
member states and persons acting on behalf of
the organizations. A series of conventions,
agreements and protocols defining the
immunities of various international organizations
in relation to their members generally are now
widely in force; . . . 11
There are basically three propositions underlying the grant of
international immunities to international organizations. These
principles, contained in the ILO Memorandum are stated thus: 1)
international institutions should have a status which protects them
against control or interference by any one government in the
performance of functions for the effective discharge of which they
are responsible to democratically constituted international bodies in
which all the nations concerned are represented; 2) no country
should derive any national financial advantage by levying fiscal
charges on common international funds; and 3) the international
organization should, as a collectivity of States members, be
accorded the facilities for the conduct of its official business
customarily extended to each other by its individual member
States. 12 The theory behind all three propositions is said to be
essentially institutional in character. "It is not concerned with the
status, dignity or privileges of individuals, but with the elements of
functional independence necessary to free international institutions
from national control and to enable them to discharge their
responsibilities impartially on behalf of all their
members. 13 The raison d'etre for these immunities is the assurance
of unimpeded performance of their functions by the agencies
concerned.
The grant of immunity from local jurisdiction to ICMC and IRRI is
clearly necessitated by their international character and respective
purposes. The objective is to avoid the danger of partiality and
interference by the host country in their internal workings. The
exercise of jurisdiction by the Department of Labor in these
instances would defeat the very purpose of immunity, which is to
shield the affairs of international organizations, in accordance with
international practice, from political pressure or control by the host
country to the prejudice of member States of the organization, and to
ensure the unhampered performance of their functions.
ICMC's and IRRI's immunity from local jurisdiction by no means
deprives labor of its basic rights, which are guaranteed by Article II,
Section 18, 14 Article III, Section 8, 15 and Article XIII, Section 3
(supra), of the 1987 Constitution; and implemented by Articles 243
and 246 of the Labor Code, 16 relied on by the BLR Director and by
Kapisanan.
For, ICMC employees are not without recourse whenever there are
disputes to be settled. Section 31 of the Convention on the Privileges
and Immunities of the Specialized Agencies of the United
Nations 17 provides that "each specialized agency shall make
provision for appropriate modes of settlement of: (a) disputes arising
out of contracts or other disputes of private character to which the
specialized agency is a party." Moreover, pursuant to Article IV of
the Memorandum of Agreement between ICMC the the Philippine
Government, whenever there is any abuse of privilege by ICMC, the
Government is free to withdraw the privileges and immunities
accorded. Thus:
Art. IV. Cooperation with Government Authorities.
— 1. The Commission shall cooperate at all times
with the appropriate authorities of the
Government to ensure the observance of
Philippine laws, rules and regulations, facilitate
the proper administration of justice and prevent
the occurrences of any abuse of the privileges
and immunities granted its officials and alien
employees in Article III of this Agreement to the
Commission.
2. In the event that the Government determines
that there has been an abuse of the privileges
and immunities granted under this Agreement,
consultations shall be held between the
Government and the Commission to determine
whether any such abuse has occurred and, if so,
the Government shall withdraw the privileges and
immunities granted the Commission and its
officials.
Neither are the employees of IRRI without remedy in case of dispute
with management as, in fact, there had been organized a forum for
better management-employee relationship as evidenced by the
formation of the Council of IRRI Employees and Management
(CIEM) wherein "both management and employees were and still
are represented for purposes of maintaining mutual and beneficial
cooperation between IRRI and its employees." The existence of this
Union factually and tellingly belies the argument that Pres. Decree
No. 1620, which grants to IRRI the status, privileges and immunities
of an international organization, deprives its employees of the right
to self-organization.
The immunity granted being "from every form of legal process
except in so far as in any particular case they have expressly waived
their immunity," it is inaccurate to state that a certification election is
beyond the scope of that immunity for the reason that it is not a suit
against ICMC. A certification election cannot be viewed as an
independent or isolated process. It could tugger off a series of
events in the collective bargaining process together with related
incidents and/or concerted activities, which could inevitably involve
ICMC in the "legal process," which includes "any penal, civil and
administrative proceedings." The eventuality of Court litigation is
neither remote and from which international organizations are
precisely shielded to safeguard them from the disruption of their
functions. Clauses on jurisdictional immunity are said to be standard
provisions in the constitutions of international Organizations. "The
immunity covers the organization concerned, its property and its
assets. It is equally applicable to proceedings in personam and
proceedings in rem." 18
corresponding immunities, but also because ICMC in that case did
not invoke its immunity and, therefore, may be deemed to have
waived it, assuming that during that period (1983-1985) it was tacitly
recognized as enjoying such immunity.
Anent the procedural issue raised in the IRRI Case, suffice it to state
that the Decision of the BLR Director, dated 15 February 1989, had
not become final because of a Motion for Reconsideration filed by
IRRI Said Motion was acted upon only on 30 March 1989 when Rep.
Act No. 6715, which provides for direct appeals from the Orders of
the Med-Arbiter to the Secretary of Labor in certification election
cases either from the order or the results of the election itself, was
already in effect, specifically since 21 March 1989. Hence, no grave
abuse of discretion may be imputed to respondent Secretary of
Labor in his assumption of appellate jurisdiction, contrary to
Kapisanan's allegations. The pertinent portion of that law provides:
Art. 259. — Any party to an election may appeal
the order or results of the election as determined
by the Med-Arbiter directly to the Secretary of
Labor and Employment on the ground that the
rules and regulations or parts thereof established
by the Secretary of Labor and Employment for
the conduct of the election have been violated.
Such appeal shall be decided within 15 calendar
days (Emphasis supplied).
En passant, the Court is gratified to note that the heretofore
antagonistic positions assumed by two departments of the executive
branch of government have been rectified and the resultant
embarrassment to the Philippine Government in the eyes of the
international community now, hopefully, effaced.
WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is
GRANTED, the Order of the Bureau of Labor Relations for
certification election is SET ASIDE, and the Temporary Restraining
Order earlier issued is made PERMANENT.
In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no
grave abuse of discretion having been committed by the Secretary of
Labor and Employment in dismissing the Petition for Certification
Election.
No pronouncement as to costs.
SO ORDERED.

We take note of a Manifestation, dated 28 September 1989, in the

ICMC Case (p. 161, Rollo), wherein TUPAS calls attention to the
case entitled "International Catholic Migration Commission v. NLRC,
et als., (G.R. No. 72222, 30 January 1989, 169 SCRA 606), and
claims that, having taken cognizance of that dispute (on the issue of
payment of salary for the unexpired portion of a six-month
probationary employment), the Court is now estopped from passing
upon the question of DOLE jurisdiction petition over ICMC.

We find no merit to said submission. Not only did the facts of said
controversy occur between 1983-1985, or before the grant to ICMC
on 15 July 1988 of the status of a specialized agency with
FIRST DIVISION

G.R. No. 125865           January 28, 2000

JEFFREY LIANG (HUEFENG), petitioner,

vs.
PEOPLE OF THE PHILIPPINES, respondent.

YNARES-SANTIAGO, J.:

Petitioner is an economist working with the Asian Development Bank

(ADB). Sometime in 1994, for allegedly uttering defamatory words
against fellow ADB worker Joyce Cabal, he was charged before the
Metropolitan Trial Court (MeTC) of Mandaluyong City with two
counts of grave oral defamation docketed as Criminal Cases Nos.
53170 and 53171. Petitioner was arrested by virtue of a warrant
issued by the MeTC. After fixing petitioner's bail at P2,400.00 per
criminal charge, the MeTC released him to the custody of the
Security Officer of ADB. The next day, the MeTC judge received an
"office of protocol" from the Department of Foreign Affairs (DFA)
stating that petitioner is covered by immunity from legal process
under Section 45 of the Agreement between the ADB and the
Philippine Government regarding the Headquarters of the ADB
(hereinafter Agreement) in the country. Based on the said protocol
communication that petitioner is immune from suit, the MeTC judge
without notice to the prosecution dismissed the two criminal cases.
The latter filed a motion for reconsideration which was opposed by
the DFA. When its motion was denied, the prosecution filed a
petition for certiorari and mandamus with the Regional Trial Court
(RTC) of Pasig City which set aside the MeTC rulings and ordered
the latter court to enforce the warrant of arrest it earlier issued. After
the motion for reconsideration was denied, petitioner elevated the
case to this Court via a petition for review arguing that he is covered
by immunity under the Agreement and that no preliminary
investigation was held before the criminal cases were filed in
court.1âwphi1.nêt

The petition is not impressed with merit.

First, courts cannot blindly adhere and take on its face the
communication from the DFA that petitioner is covered by any
immunity. The DFA's determination that a certain person is covered
by immunity is only preliminary which has no binding effect in courts.
In receiving ex-parte the DFA's advice and in motu propio dismissing
the two criminal cases without notice to the prosecution, the latter's
right to due process was violated. It should be noted that due
process is a right of the accused as much as it is of the prosecution.
The needed inquiry in what capacity petitioner was acting at the time
of the alleged utterances requires for its resolution evidentiary basis
that has yet to be presented at the proper time. 1 At any rate, it has
been ruled that the mere invocation of the immunity clause does
not ipso facto result in the dropping of the charges.2

Second, under Section 45 of the Agreement which provides:

Officers and staff of the Bank including for the purpose of

this Article experts and consultants performing missions for
the Bank shall enjoy the following privileges and
immunities:
 a.) immunity from legal process with respect to
acts performed by them in their official capacity
except when the Bank waives the immunity.

the immunity mentioned therein is not absolute, but subject to the

exception that the acts was done in "official capacity." It is therefore
necessary to determine if petitioner's case falls within the ambit of
Section 45(a). Thus, the prosecution should have been given the
chance to rebut the DFA protocol and it must be accorded the
opportunity to present its controverting evidence, should it so desire.

Third, slandering a person could not possibly be covered by the

immunity agreement because our laws do not allow the commission
of a crime, such as defamation, in the name of official duty. 3 The
imputation of theft is ultra vires and cannot be part of official
functions. It is 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 or in bad faith or
beyond the scope of his authority or jurisdiction. 4 It appears that even
the government's chief legal counsel, the Solicitor General, does not
support the stand taken by petitioner and that of the DFA.

Fourth, under the Vienna Convention on Diplomatic Relations, a

diplomatic agent, assuming petitioner is such, enjoys immunity from
criminal jurisdiction of the receiving state except in the case of an
action relating to any professional or commercial activity exercised
by the diplomatic agent in the receiving state outside his official
functions.5 As already mentioned above, the commission of a crime
is not part of official duty.

Finally, on the contention that there was no preliminary investigation

conducted, suffice it to say that preliminary investigation is not a
matter of right in cases cognizable by the MeTC such as the one at
bar.6 Being purely a statutory right, preliminary investigation may be
invoked only when specifically granted by law.7 The rule on the
criminal procedure is clear that no preliminary investigation is
required in cases falling within the jurisdiction of the MeTC. 8 Besides
the absence of preliminary investigation does not affect the court's
jurisdiction nor does it impair the validity of the information or
otherwise render it defective.9

WHEREFORE, the petition is DENIED.

SO ORDERED.1âwphi1.nêt
[G.R. NO. 157141 August 31, 2005]
SPS. RODRIGO LACIERDA and DR. ERLINDA CRUZ-LACIERDA,
SPS. JESSICA and RENAN SALIENTE, RUBY SALDE and
ARMNIEL SIM, Petitioners, v. DR. ROLANDO PLATON, AGNES
LACUESTA, DAN BALIAO, AMELITA SUBOSA, MERLINDA
JUNION, TERESITA HILADO, DEMETRIO ESTENOR, SALVADOR
REX TILLO, TERESITA NATIVIDAD, TERESA MALLARE,
JOCELYN CONIZA and NELDA EBRON, Respondent.
DECISION
CARPIO MORALES, J.:
The present Petition for Review 1 assails the October 25, 2002
Order2 of Branch 36 of the Regional Trial Court (RTC) of Iloilo
dismissing, for lack of jurisdiction, petitioners' complaint,
denominated "FOR: INTERFERENCE WITH CONTRACT,
SPECIFIC PERFORMANCE AND DAMAGES," against Dr. Rolando
Platon, et al., as well as said court's January 14, 2003
Order3 denying their Motion for Reconsideration of the first Order.
Petitioners were all employees/officers of Southeast Asian Fisheries
Development Center (SEAFDEC), an international agency.
Respondents are officers, and with the management of SEAFDEC,
Aqua Culture Development (AQC), an international organization
composed of governments of Southeast Asia created by virtue of a
treaty of which the Philippines is a signatory.
As an international organization, SEAFDEC is immune from suits, it
being clothed with diplomatic immunity, and enjoys functional
independence and freedom from control of the state in whose
territory its office is located.4
On August 21, 2000, Japan International Cooperation Agency (JICA)
and SEAFDEC, represented by respondent Dr. Rolando R. Platon,
Chief of its Aquaculture Department, entered into a Memorandum of
Agreement (MOA),5 the pertinent provisions of which read:
xxx
WHEREAS, JICA has found the Department of Agriculture (DA)
through SEAFDEC to be qualified in providing the necessary
services and in implementing JICA's Third Country Training
Programme on Responsible Aquaculture Development (hereinafter
referred to as the "Training");
WHEREAS, SEAFDEC submitted the programme design and budget
proposal for the training;
xxx
ARTICLE 1. SCOPE OF WORK
1.01. That SEAFDEC agrees to furnish all the necessary materials
and services for the satisfactory implementation and completion of
the Training . . .
xxx
ARTICLE 2. THE CONTRACT AMOUNT
2.01 JICA agrees that for and in consideration of the faithful
performance by SEAFDEC, JICA shall pay to SEAFDEC, in a
manner provided hereinafter the amount of Three Million Five
Hundred Forty Thousand, One Hundred Fifty Pesos (P3,540.150.00)
segregated as per accomplished. The itemized breakdown of the
contract amount is shown in Annex 2.
xxx
ARTICLE 5. LIQUIDATION
5.01 Liquidation shall be made by submitting a statement of
expenditures . . . containing the itemized breakdown of all expenses
incurred, attaching therewith all copies of supporting documents and
evidences (sic) and receipts certifying the said expenditures (original
copies will be kept by SEAFDEC). In case there will be an excess in
the amount consigned, the excess amount will be returned to JICA . .
.
x x x (Emphasis and underscoring supplied).
Petitioners-employees of SEAFDEC who were assigned at its
Training and Information Division were selected by SEAFDEC to
take part in the training program subject of the MOA between JICA
and SEAFDEC.
As the training program involved visitation of several places - Bohol,
Cebu, Bacolod and Manila, petitioners were given cash advances
subject to liquidation.
After the training program was concluded, petitioners submitted to
SEAFDEC documents in support of their liquidation of cash
advances and claim for reimbursement of expenses, but in a Report
dated November 16, 20006 for the Chief submitted by respondent
Amelita A. Subosa, Audit Supervisor, an audit of the same showed
that "hotel receipts submitted [we]re much higher that the actual
amount that they paid on accommodation."
Petitioners were accordingly directed, by Memoranda Nos. ACL-276
and 277 dated December 12, 2000 issued by respondent Human
Resources Management Officer Agnes C. Lacuesta,7 to show cause
in writing why no administrative sanction should be imposed upon
them "for violation of the [SEAFDEC AQC] Rules on Personnel
Conduct and Discipline," particularly the following provisions:
IV. Moral Turpitude
A. Misrepresentation or false statements whether oral or written with
intent to gain or take advantage.
B. x x x fraudulent machinations for financial gain  the commission of
which are as stated in the Audit Findings . . .
x x x (Underscoring supplied).
And an Ad Hoc Committee to conduct an investigation on the Audit
Report was created by respondent Dan D. Baliao, Head
Administrative Division.8
While petitioners appear to have profferred their explanation behind
the charges against them, they, by letter of January 24,
2001,9 waived participating in the administrative hearing and
accordingly submitted for decision the administrative charges "on the
basis of the written charges by the management and of [their] written
explanation."
By separate Memoranda of March 5, 2001, 10 respondent Platon
notified petitioners that a study and evaluation of the evidence
against them established that they committed the "serious charges,"
hence, effective at the close of office hours of even date, they were
terminated for cause "on the ground of misrepresentation or false
statements with intent to gain or take advantage and fraudulent
machination for financial gain under Section IV (a & b) of the
Department' Rules on Personnel Conduct and Discipline in relation
to Article 282 (a and b) of the Labor Code of the Philippines."
More than a year later or on May 3, 2002, petitioners filed the
Complaint11 against respondents subject of the present petition, the
pertinent allegations of which read:
3. This case is not a suit against the Southeast Asian Fisheries
Development Center (SEAFDEC) or against the Japan international
Cooperation Agency (JICA), but against the defendants in their
individual and personal capacities who are individual officers and
employees of SEAFDEC, for their commission of malicious,
oppressive and inequitable actionable acts for which they alone are
liable but which they sought to cover up with the pretense of "official
actions";
xxx
7. The plaintiffs are the actual implementors and trainors for this
Seventh Session, which, being a "Special Project" is a work and a
responsibility governed by the MOA and is outside of their regular
duties and responsibilities as employees of SEAFDEC. For this
reason, they are given by JICA, from its own funds, honoraria, per
diems and accommodation allowances as part of the Training
program, specifically provided under par. 3.04 of the MOA, Annex
"A" hereof, which amount cannot be altered or changed as
specifically provided under par. 3.03 of the same MOA. The specific
sums payable is provided in the "itemized breakdown of the contract
amount" attached to the MOA as Annex "2" thereof. No funds of
SEAFDEC is involved in this Training;
8. On the other hand, the defendants had nothing to do with this
JICA Training nor do they have any participation in its
implementation, except as officers or employees of SEAFDEC who
must do or act what the MOA requires of SEAFDEC under its terms
and conditions;
9. This notwithstanding, the defendants, in conspiracy and
cooperation with each other, have interfered and violated the
aforementioned MOA between SEAFDEC and JICA by acts and
omissions:
(a) which reduced, and later eventually denied, the plaintiffs the
benefits they are entitled thereunder; andcralawlibrary
(b) thereafter, without legal bases and in excess and abuse of their
authority, have illegally and unlawfully terminated the employment of
plaintiffs with SEAFDEC for alleged violations which in fact are
authorized by the MOA and have nothing to do with plaintiffs' work
with SEAFDEC;
all of which caused the plaintiffs' damage and injury, . . .
xxx
15. However, when plaintiffs presented for liquidation and
reimbursement the receipts for expenses corresponding to the
excess amount over the SEAFDEC rate, which however did not
exceed the JICA rate, the aforenamed defendants disapproved
reimbursement. Instead, through the defendants Amelita Subosa as
Audit Supervisor and defendants Merlinda Junio and Teresita Hilado
as members of the Internal Audit Team, the said defendants caused
a verification and audit of these expenses whether they were validly
incurred;
16. This was never done in the past Six Sessions of the Training for
the basic reason that it was not necessary as the expenses incurred
were within the amount already budgeted and provided for under
Annex "2" of the MOA and the budgeted amount thereunder,
whether spent or not, should have been paid to the plaintiffs;
17. In this self-authorized audit and examination, the aforementioned
defendants-members of the Internal Audit Team conveniently found
and recommended that the plaintiffs' request for reimbursement be
denied, such that until the present, plaintiffs were not paid their
honoraria and per diems nor reimbursed the expenses they incurred
over the SEAFDEC rate but below the JICA rate for the field trips to
the aforenamed places, including the last one in Manila;
18. Worse and in addition to this unlawful acts, the aforenamed
defendants charged the plaintiffs with "(A) misrepresentation or false
statements whether oral or written with intent to gain or take
advantage; and (B) x x x fraudulent machination for financial gain"
for submitting their claims for reimbursement, which as these
defendants who are officers of SEAFDEC should know, are without
legal and factual basis because:
xxx
e. Even if arguendo defendants have such authority, the conduct and
framework thereof should be the MOA between SEAFDEC and
JICA, and not the unauthorized and illegal impositions and actions of
the defendants which are in fact violative of the provisions of the
MOA itself;
19. Worst, prompted by malice, bad faith and evil motive, defendants
unlawfully and illegally constituted an Investigating
Committee composed of defendants Demetrio Estenor, Salvador
Rex Tillo, Teresita Natividad, Teresa Mallare, Agnes Lacuesta,
Jocelyn Coniza and Nelda Ebron, which conducted an ex parte
investigation of the case; which disregarded plaintiffs' objections and
requests for the disqualifications of its members, and which on the
basis defendants' own evidence, decided and found the plaintiffs
guilty of violating what actually were fabricated charges based on the
unauthorized and illegal acts and impositions of the defendants, on
the basis of which, they recommended plaintiffs for dismissal from
service;
20. Using this recommendation as an excuse and justification,
defendant Dr. Rolando Platon at first tried to persuade the plaintiffs
to voluntarily retire from service; when plaintiffs refused, he promptly
terminated their services with SEAFDEC on March 5, 2001;
21. The termination is without factual and legal bases because (a)
the acts complained of were allowed under the MOA between
SEAFDEC and JICA: (b) defendant Dan Baliao had no authority nor
jurisdiction to constitute the Investigating Committee because the
acts subject of its investigation involve not SEAFDEC, but JICA
project governed by the MOA; (c) the Investigating Committee itself
has no legal basis for its existence and for its investigation because
it should have been JICA not SEAFDEC which should initiate and
conduct the same; and (d) the defendants who are SEAFDEC
officers and employees are not involved in the JICA Training project,
hence, they have no power or authority to assume investigation and
adjudication of matters arising from JICA projects like the one in
question;
21.1. Even assuming arguendo that they have, the penalty imposed
which is the dismissal of the plaintiffs from service in SEAFDEC is
oppressively and inequitably disproportionate to the alleged
violation which involve JICA project considering that (a) plaintiff
Rodrigo Lacierda has twenty two (22) years; (b) plaintiff Jessica
Saliente has nineteen (19) years; (c) plaintiff Ruby Salde has twenty
three (23) years; and (d) plaintiff Armniel Sim has seven (7) years of
services with SEAFDEC;
xxx
25. The defendants, in conspiracy and cooperation with each other,
by acts earlier-specified, have unlawfully and illegally interfered with
and intruded into the contractual relations between the plaintiffs and
JICA under a "stipulation pour autri" or stipulation for the benefit of
the plaintiffs as provided under the MOA between SEAFDEC and
JICA, made unauthorized alterations and changes in the MOA,
required plaintiffs to comply therewith when such compliance was
unnecessary thereunder, and on the pretext that plaintiffs failed to
abide by their unauthorized changes and alterations, denied the
plaintiffs the benefits to which they are entitled and unlawfully and
illegally terminated the employment of plaintiffs without authority to
do so from either SEAFDEC or JICA;
26. These unlawful interference and meddling of defendants in the
professional and contractual relations of the plaintiffs have been
causing plaintiffs continuing damage and injury and are violations of
and contrary to the standard of conduct prescribed under Art. 19,
and thereby make defendants jointly and severally liable under Arts.
20 and 21 of the Chapter on Human Relations and under Article
2176 of the Chapter on Quasi-Delicts, of the Civil Code of the
Philippines;
27. The defendants should, therefore, be compelled to abide and
comply with the terms and conditions of the MOA, particularly pars.
3.03 and 3.04, Article 3 thereof, in relation to Annex "B" attached
thereto and forming part of the contract; to declare as null and void
the creation, investigation and recommendation of the Investigating
Committee and the Notice of Termination issued by defendant
Rolando Platon; and to order the defendants concerned to restore
and return the plaintiffs to their respective work or positions in the
SEAFDEC before the illegal and unlawful termination of their
services by the defendants, without loss of seniority, diminution in
ranks or salaries.
x x x (Underscoring supplied).
Petitioners thus prayed as follows:
WHEREFORE, it is most respectfully prayed of this Honorable Court
that:
A. After due hearing, a writ of preliminary mandatory injunction be
issued directing the defendants, their agents and/or representatives,
to restore and return the plaintiffs to their respective work/positions in
SEAFDEC and to all the salaries, benefits and other privileges
appurtenant thereto without loss of seniority, diminution of ranks or
pay, to continue during the pendency of this case;
b. After trial on the merits, that judgment be rendered for plaintiffs
and against the defendants:
1. Making the writ of preliminary mandatory injunction, when
granted, final and permanent;
2. Directing the defendants, jointly and severally, to pay to the
plaintiffs actual damages in the amount of at least: (a) P482,000.00
for plaintiff Rodrigo Lacierda; (b) P482,000.00 for plaintiff Jessica L.
Saliente; (c) P407,000.00 for plaintiff Ruby Salde; and P194,000.0
for plaintiff Armniel Sim, plus all such other remunerations, benefits
and privileges which this Honorable Court may hereafter determine,
as well as moral damages of at least P100,000.00 for each plaintiff;
3. Ordering the defendants, jointly and severally, to pay the plaintiffs
attorney's fees of P200,000.00, plus a contingent 25% of whatever
amount adjudged in their favor; litigation expenses of at
least P100,000.00, such amount of exemplary damages as may be
just and equitable; andcralawlibrary
4. To pay the costs.
x x x12 (Emphasis and underscoring supplied).
Respondents, in their Answer,13 justified the conduct of an audit of
petitioners' travel expenses and the constitution of an Ad Hoc
Committee to investigate them for the charges found to have been
committed by them - bases of petitioners' termination from
employment. And they alleged that "[i]n reality this is a suit against
[SEAFDEC] of which the Honorable Court has no jurisdiction over its
person, and [s]imilarly, [the] cause of action being one of
reinstatement and recovery of wages, salaries, allowances and per
diems, the Honorable Court has also no jurisdiction over the subject
matter . . . [it involving] employer-employee relations."
Finally, respondents alleged that the MOA relied upon by petitioners
is an agreement between SEAFDEC and JICA under which
petitioners have no right, hence, they have no cause of action.
By Order of October 25, 2002, 14 Branch 36 of the Iloilo RTC
dismissed petitioners' complaint for want of jurisdiction over the
subject matter thereof and the person of the defendants-herein
respondents, it holding that nothing in the allegations of the
complaint shows that respondents acted in their personal capacities
or beyond the scope of their official functions as in fact respondents'
assailed acts could only be performed by them in their official
functions as administrators of SEAFDEC.
A careful analysis of the complaint will reveal that there is
really nothing in the averments of the complaint which indicate that
defendants acted in their personal capacities or beyond the scope of
their official functions, except plaintiffs' general allegation to that
effect. On the contrary, what they alleged were acts which could only
be performed by the defendants in their official duties/functions as
executives or administrators of SEAFDEC, and could not have been
done had they acted in their personal capacities. At most, it may be
argued that defendants committed some indiscretions or lapses in
their investigation or misappreciation of facts, but still their actions
were work related and within the scope of their functions as officials
of SEAFDEC. Accordingly, under such circumstances and as
correctly contended by the defendants, the suit against them is in
reality a suit directed against SEAFDEC. In fact, it can also
be observed in the complaint that the reliefs sought for by the plaintiff
is directed to SEAFDEC and not to the defendants who cannot
perform the same in their personal capacity.
Aside from the foregoing, the Court is also of the belief that it has no
jurisdiction over the subject matter of the case even assuming that it
could validly acquire jurisdiction over SEAFDEC. To reiterate, a
careful reading of the allegations in the complaint will show that
plaintiffs are complaining about their alleged illegal separation from
service and the non-payment of their salaries and other benefits, all
of which were allegedly caused by the defendants. Thus, they
prayed to be restored and returned to their respective work/positions
in SEAFDEC; to be given the salaries, benefits and other privileges;
to be awarded actual damages by reason of the deprivation of the
salaries and benefits they should have received; and to be paid
moral damages. Such allegations and reliefs clearly indicate
that plaintiffs cause/s of action arose out of employer-employee
relationship which under the law, is under the original and exclusive
jurisdiction of the Labor Arbiter and not the Regional Trial Court.
Article 217 of the Labor Code, as amended by R.A. 6715 provides
that "the Labor Arbiter shall have original and exclusive jurisdiction to
hear and decide x x x the following cases involving all workers,
whether agricultural or non-agricultural:
1. x x x
2. Termination disputes;
The allegations in the complaint-bases of determining jurisdiction
must be of the ultimate facts and the relief prayed for.18
A court cannot be divested of jurisdiction by the ingenuous omission
by a plaintiff of any reference to a matter which clearly shows that
said court has jurisdiction, nor can a court be conferred with
jurisdiction where it has none by a contrived wording by a plaintiff's
allegations in the complaint in order to impress that it is within said
court's jurisdiction.

3. If accompanied with a claim for reinstatement, those cases that

workers may file involving wages, rates of pay, hours of work and
other terms and conditions of employment;
4. Claims for actual, moral and exemplary and other forms of
damages arising from employer-employee relations;
5. x x x
6. x x x all other claims, arising from employer-employee relations x
x x involving an amount exceeding five thousand pesos (P5,000.00)
whether or not accompanied with a claim for reinstatement.
It may also be worthwhile to note that plaintiffs admitted that they
have also raised the issue of unlawful termination in another forum
(paragraph 22, complaint; TSN, September 10, 2002, pp. 14-15)
which has the authority to resolve said issue, i.e. they filed a motion
for reconsideration of the order of termination which to date has not
yet been resolved. However, notwithstanding the fact that the issue
of termination is still pending in another venue, they sought relief
from the Court on the very same issue hoping that they could secure
a favorable judgment. Such act, therefore, constitutes a violation of
the rule on forum shopping which Circular No. 28-91 intends to stop.
According to the Supreme Court "what is truly important to consider
in determining whether forum-shopping exists or not is the vexation
caused the courts and parties-litigant by a party who asks different
courts and/or administrative agencies to rule on the same or related
causes and/or grant the same or substantially the same reliefs, in the
process creating possibility of conflicting decisions being rendered
by the different for a upon the same issues" (Golango v. Court of
Appeals, 283 SCRA 493; MSF Tire and Rubber Inc. v. Court of
Appeals, 311 SCRA 784). (Emphasis and underscoring supplied).
Petitioners' Motion for Reconsideration having been denied, they
filed the present petition, they maintaining that
From the allegations of petitioners' complaint, it is clear that their
cause of action arose from the termination of their employment on
the basis of the findings and recommendation of the Ad Hoc
Investigating
Committee, of which some of respondents were members, which
termination petitioners claim to be "without factual and legal bases."
Petitioners' allegation in the complaint that respondents "unlawfully
and illegally interfered with and intruded into the contractual relations
between [them] and JICA" is a mere conclusion, not an allegation of
ultimate fact, worded as such in an attempt to justify their contention
that the complaint is one based on tort.
Petitioners' primary prayer - for the defendants-herein respondents
to be ordered "to restore and return [petitioners] to their respective
work/positions in SEAFDEC and to all the salaries, benefits and
other privileges appurtenent thereto without loss of seniority,
diminution of ranks or pay to continue during the pendency of this
case," betrays their cause of action, however. If respondents were
sued in their personal capacity as emphatically stressed by
petitioners, for tort and damages, they would under no circumstance,
power or authority be able to carry out such primary prayer. Where
lies petitioners' logic?chanroblesvirtualawlibrary
WHEREFORE, the petition is hereby DENIED. The assailed Orders
of October 25, 2002 and January 14, 2003 of the Regional Trial
Court of Iloilo, Branch 36 are hereby AFFIRMED.
Costs against petitioners.
SO ORDERED.

4.1. The lower court (Iloilo RTC Branch 36) has jurisdiction over the
respondents who are sued in their private capacities, hence it should
not have dismissed the plaintiffs' complaint;

4.2. The lower court erred in holding that petitioners' complaint for

interference with contract, specific performance and damages is a
labor case, since petitioners' action is based on tort; the restoration
of petitioners to their former position in SEAFDEC is only incidental
to the prayed for nullification of the acts complained of, hence the
lower court has jurisdiction over the subject matter of the
complaint.15 (Emphasis and underscoring supplied).

The assailed orders dismissing petitioners complaint are in order,

hence, the petition must be DENIED.

The issue raised is one of jurisdiction over the subject matter -

meaning, the nature of the cause of action and of the relief sought. 16

It is settled that jurisdiction over a particular case is determined by

the allegations of the complaint, or the allegations of the complaint
and the relief sought, or the allegations of the pleadings - the
complaint, motion to dismiss, and answer in some cases. 17
G.R. Nos. 171947-48             December 18, 2008
METROPOLITAN MANILA DEVELOPMENT AUTHORITY,
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES,
DEPARTMENT OF EDUCATION, CULTURE AND
SPORTS,1 DEPARTMENT OF HEALTH, DEPARTMENT OF
AGRICULTURE, DEPARTMENT OF PUBLIC WORKS AND
HIGHWAYS, DEPARTMENT OF BUDGET AND MANAGEMENT,
PHILIPPINE COAST GUARD, PHILIPPINE NATIONAL POLICE
MARITIME GROUP, and DEPARTMENT OF THE INTERIOR AND
LOCAL GOVERNMENT, petitioners,
vs.
CONCERNED RESIDENTS OF MANILA BAY, represented and
joined by DIVINA V. ILAS, SABINIANO ALBARRACIN, MANUEL
SANTOS, JR., DINAH DELA PEÑA, PAUL DENNIS QUINTERO,
MA. VICTORIA LLENOS, DONNA CALOZA, FATIMA QUITAIN,
VENICE SEGARRA, FRITZIE TANGKIA, SARAH JOELLE LINTAG,
HANNIBAL AUGUSTUS BOBIS, FELIMON SANTIAGUEL, and
JAIME AGUSTIN R. OPOSA, respondents.
DECISION
VELASCO, JR., J.:
The need to address environmental pollution, as a cause of climate
change, has of late gained the attention of the international
community. Media have finally trained their sights on the ill effects of
pollution, the destruction of forests and other critical habitats, oil
spills, and the unabated improper disposal of garbage. And rightly
so, for the magnitude of environmental destruction is now on a scale
few ever foresaw and the wound no longer simply heals by
itself.2 But amidst hard evidence and clear signs of a climate crisis
that need bold action, the voice of cynicism, naysayers, and
procrastinators can still be heard.
This case turns on government agencies and their officers who, by
the nature of their respective offices or by direct statutory command,
are tasked to protect and preserve, at the first instance, our internal
waters, rivers, shores, and seas polluted by human activities. To
most of these agencies and their official complement, the pollution
menace does not seem to carry the high national priority it deserves,
if their track records are to be the norm. Their cavalier attitude
towards solving, if not mitigating, the environmental pollution
problem, is a sad commentary on bureaucratic efficiency and
commitment.
At the core of the case is the Manila Bay, a place with a proud
historic past, once brimming with marine life and, for so many
decades in the past, a spot for different contact recreation activities,
but now a dirty and slowly dying expanse mainly because of the
abject official indifference of people and institutions that could have
otherwise made a difference.
This case started when, on January 29, 1999, respondents
Concerned Residents of Manila Bay filed a complaint before the
Regional Trial Court (RTC) in Imus, Cavite against several
government agencies, among them the petitioners, for the cleanup,
rehabilitation, and protection of the Manila Bay. Raffled to Branch 20
and docketed as Civil Case No. 1851-99 of the RTC, the complaint
alleged that the water quality of the Manila Bay had fallen way below
the allowable standards set by law, specifically Presidential Decree
No. (PD) 1152 or the Philippine Environment Code. This
environmental aberration, the complaint stated, stemmed from:
x x x [The] reckless, wholesale, accumulated and ongoing
acts of omission or commission [of the defendants]
resulting in the clear and present danger to public health
and in the depletion and contamination of the marine life of
Manila Bay, [for which reason] ALL defendants must be
held jointly and/or solidarily liable and be collectively
ordered to clean up Manila Bay and to restore its water
quality to class B waters fit for swimming, skin-diving, and
other forms of contact recreation.3
In their individual causes of action, respondents alleged that the
continued neglect of petitioners in abating the pollution of the Manila
Bay constitutes a violation of, among others:
(1) Respondents’ constitutional right to life, health, and a
balanced ecology;
(2) The Environment Code (PD 1152);
(3) The Pollution Control Law (PD 984);
(4) The Water Code (PD 1067);
(5) The Sanitation Code (PD 856);
(6) The Illegal Disposal of Wastes Decree (PD 825);
(7) The Marine Pollution Law (PD 979);
(8) Executive Order No. 192;
(9) The Toxic and Hazardous Wastes Law (Republic Act
No. 6969);
(10) Civil Code provisions on nuisance and human
relations;
(11) The Trust Doctrine and the Principle of Guardianship;
and
(12) International Law
Inter alia, respondents, as plaintiffs a quo, prayed that petitioners be
ordered to clean the Manila Bay and submit to the RTC a concerted
concrete plan of action for the purpose.
The trial of the case started off with a hearing at the Manila Yacht
Club followed by an ocular inspection of the Manila Bay. Renato T.
Cruz, the Chief of the Water Quality Management Section,
Environmental Management Bureau, Department of Environment
and Natural Resources (DENR), testifying for petitioners, stated that
water samples collected from different beaches around the Manila
Bay showed that the amount of fecal coliform content ranged from
50,000 to 80,000 most probable number (MPN)/ml when what DENR
Administrative Order No. 34-90 prescribed as a safe level for bathing
and other forms of contact recreational activities, or the "SB" level, is
one not exceeding 200 MPN/100 ml.4
Rebecca de Vera, for Metropolitan Waterworks and Sewerage
System (MWSS) and in behalf of other petitioners, testified about the
MWSS’ efforts to reduce pollution along the Manila Bay through the
Manila Second Sewerage Project. For its part, the Philippine Ports
Authority (PPA) presented, as part of its evidence, its memorandum
circulars on the study being conducted on ship-generated waste
treatment and disposal, and its Linis Dagat (Clean the Ocean)
project for the cleaning of wastes accumulated or washed to shore.
The RTC Ordered Petitioners to Clean Up and Rehabilitate Manila
Bay
On September 13, 2002, the RTC rendered a Decision 5 in favor of
respondents. The dispositive portion reads:
WHEREFORE, finding merit in the complaint, judgment is
hereby rendered ordering the abovenamed defendant-
government agencies, jointly and solidarily, to clean up and
rehabilitate Manila Bay and restore its waters to SB
classification to make it fit for swimming, skin-diving and
other forms of contact recreation. To attain this, defendant-
agencies, with defendant DENR as the lead agency, are
directed, within six (6) months from receipt hereof, to act
and perform their respective duties by devising a
consolidated, coordinated and concerted scheme of action
for the rehabilitation and restoration of the bay.
In particular:
Defendant MWSS is directed to install, operate and
maintain adequate [sewerage] treatment facilities in
strategic places under its jurisdiction and increase their
capacities.
Defendant LWUA, to see to it that the water districts under
its wings, provide, construct and operate sewage facilities
for the proper disposal of waste.
Defendant DENR, which is the lead agency in cleaning up
Manila Bay, to install, operate and maintain waste facilities
to rid the bay of toxic and hazardous substances.
Defendant PPA, to prevent and also to treat the discharge
not only of ship-generated wastes but also of other solid
and liquid wastes from docking vessels that contribute to
the pollution of the bay.
Defendant MMDA, to establish, operate and maintain an
adequate and appropriate sanitary landfill and/or adequate
solid waste and liquid disposal as well as other alternative
garbage disposal system such as re-use or recycling of
wastes.
Defendant DA, through the Bureau of Fisheries and
Aquatic Resources, to revitalize the marine life in Manila
Bay and restock its waters with indigenous fish and other
aquatic animals.
Defendant DBM, to provide and set aside an adequate
budget solely for the purpose of cleaning up and
rehabilitation of Manila Bay.
Defendant DPWH, to remove and demolish structures and
other nuisances that obstruct the free flow of waters to the
bay. These nuisances discharge solid and liquid wastes
which eventually end up in Manila Bay. As the construction
and engineering arm of the government, DPWH is ordered
to actively participate in removing debris, such as carcass
of sunken vessels, and other non-biodegradable garbage
in the bay.
Defendant DOH, to closely supervise and monitor the
operations of septic and sludge companies and require
them to have proper facilities for the treatment and
disposal of fecal sludge and sewage coming from septic
tanks.
Defendant DECS, to inculcate in the minds and hearts of
the people through education the importance of preserving
and protecting the environment.
Defendant Philippine Coast Guard and the PNP Maritime
Group, to protect at all costs the Manila Bay from all forms
of illegal fishing.
No pronouncement as to damages and costs.
SO ORDERED.
The MWSS, Local Water Utilities Administration (LWUA), and PPA
filed before the Court of Appeals (CA) individual Notices of Appeal
which were eventually consolidated and docketed as CA-G.R. CV
No. 76528.
On the other hand, the DENR, Department of Public Works and
Highways (DPWH), Metropolitan Manila Development Authority
(MMDA), Philippine Coast Guard (PCG), Philippine National Police
(PNP) Maritime Group, and five other executive departments and
agencies filed directly with this Court a petition for review under Rule
45. The Court, in a Resolution of December 9, 2002, sent the said
petition to the CA for consolidation with the consolidated appeals of
MWSS, LWUA, and PPA, docketed as CA-G.R. SP No. 74944.
Petitioners, before the CA, were one in arguing in the main that the
pertinent provisions of the Environment Code (PD 1152) relate only
to the cleaning of specific pollution incidents and do not cover
cleaning in general. And apart from raising concerns about the lack
of funds appropriated for cleaning purposes, petitioners also
asserted that the cleaning of the Manila Bay is not a ministerial act
which can be compelled by mandamus.
The CA Sustained the RTC
By a Decision6 of September 28, 2005, the CA denied petitioners’
appeal and affirmed the Decision of the RTC in toto, stressing that
the trial court’s decision did not require petitioners to do tasks
outside of their usual basic functions under existing laws. 7
Petitioners are now before this Court praying for the allowance of
their Rule 45 petition on the following ground and supporting
arguments:
THE [CA] DECIDED A QUESTION OF SUBSTANCE NOT
HERETOFORE PASSED UPON BY THE HONORABLE
COURT, I.E., IT AFFIRMED THE TRIAL COURT’S
DECISION DECLARING THAT SECTION 20 OF [PD]
1152 REQUIRES CONCERNED GOVERNMENT
AGENCIES TO REMOVE ALL POLLUTANTS SPILLED
AND DISCHARGED IN THE WATER SUCH AS FECAL
COLIFORMS.
ARGUMENTS
I
[SECTIONS] 17 AND 20 OF [PD] 1152 RELATE ONLY TO
THE CLEANING OF SPECIFIC POLLUTION INCIDENTS
AND [DO] NOT COVER CLEANING IN GENERAL
II
THE CLEANING OR REHABILITATION OF THE MANILA
BAY IS NOT A MINISTERIAL ACT OF PETITIONERS
THAT CAN BE COMPELLED BY MANDAMUS.
The issues before us are two-fold. First, do Sections 17 and 20 of
PD 1152 under the headings, Upgrading of Water
Quality and Clean-up Operations, envisage a cleanup in general or
are they limited only to the cleanup of specific pollution incidents?
And second, can petitioners be compelled by mandamus to clean up
and rehabilitate the Manila Bay?
On August 12, 2008, the Court conducted and heard the parties on
oral arguments.
Our Ruling
We shall first dwell on the propriety of the issuance of mandamus
under the premises.
The Cleaning or Rehabilitation of Manila Bay
Can be Compelled by Mandamus
Generally, the writ of mandamus lies to require the execution of a
ministerial duty.8 A ministerial duty is one that "requires neither the
exercise of official discretion nor judgment." 9 It connotes an act in
which nothing is left to the discretion of the person executing it. It is a
"simple, definite duty arising under conditions admitted or proved to
exist and imposed by law."10 Mandamus is available to compel
action, when refused, on matters involving discretion, but not to
direct the exercise of judgment or discretion one way or the other.
Petitioners maintain that the MMDA’s duty to take measures and
maintain adequate solid waste and liquid disposal systems
necessarily involves policy evaluation and the exercise of judgment
on the part of the agency concerned. They argue that the MMDA, in
carrying out its mandate, has to make decisions, including choosing
where a landfill should be located by undertaking feasibility studies
and cost estimates, all of which entail the exercise of discretion.
Respondents, on the other hand, counter that the statutory
command is clear and that petitioners’ duty to comply with and act
according to the clear mandate of the law does not require the
exercise of discretion. According to respondents, petitioners, the
MMDA in particular, are without discretion, for example, to choose
which bodies of water they are to clean up, or which discharge or
spill they are to contain. By the same token, respondents maintain
that petitioners are bereft of discretion on whether or not to alleviate
the problem of solid and liquid waste disposal; in other words, it is
the MMDA’s ministerial duty to attend to such services.
We agree with respondents.
First off, we wish to state that petitioners’ obligation to perform their
duties as defined by law, on one hand, and how they are to carry out
such duties, on the other, are two different concepts. While the
implementation of the MMDA’s mandated tasks may entail a
decision-making process, the enforcement of the law or the very act
of doing what the law exacts to be done is ministerial in nature and
may be compelled by mandamus. We said so in Social Justice
Society v. Atienza11 in which the Court directed the City of Manila to
enforce, as a matter of ministerial duty, its Ordinance No. 8027
directing the three big local oil players to cease and desist from
operating their business in the so-called "Pandacan Terminals"
within six months from the effectivity of the ordinance. But to
illustrate with respect to the instant case, the MMDA’s duty to put up
an adequate and appropriate sanitary landfill and solid waste and
liquid disposal as well as other alternative garbage disposal systems
is ministerial, its duty being a statutory imposition. The MMDA’s duty
in this regard is spelled out in Sec. 3(c) of Republic Act No. (RA)
7924 creating the MMDA. This section defines and delineates the
scope of the MMDA’s waste disposal services to include:
Solid waste disposal and management which include
formulation and implementation of policies, standards,
programs and projects for proper and sanitary waste
disposal. It shall likewise include the establishment and
operation of sanitary land fill and related facilities and the
implementation of other alternative programs intended to
reduce, reuse and recycle solid waste. (Emphasis added.)
The MMDA is duty-bound to comply with Sec. 41 of the Ecological
Solid Waste Management Act (RA 9003) which prescribes the
minimum criteria for the establishment of sanitary landfills and Sec.
42 which provides the minimum operating requirements that each
site operator shall maintain in the operation of a sanitary landfill.
Complementing Sec. 41 are Secs. 36 and 37 of RA 9003, 12 enjoining
the MMDA and local government units, among others, after the
effectivity of the law on February 15, 2001, from using and operating
open dumps for solid waste and disallowing, five years after such
effectivity, the use of controlled dumps.
The MMDA’s duty in the area of solid waste disposal, as may be
noted, is set forth not only in the Environment Code (PD 1152) and
RA 9003, but in its charter as well. This duty of putting up a proper
waste disposal system cannot be characterized as discretionary, for,
as earlier stated, discretion presupposes the power or right given by
law to public functionaries to act officially according to their judgment
or conscience.13 A discretionary duty is one that "allows a person to
exercise judgment and choose to perform or not to perform." 14 Any
suggestion that the MMDA has the option whether or not to perform
its solid waste disposal-related duties ought to be dismissed for want
of legal basis.
A perusal of other petitioners’ respective charters or like enabling
statutes and pertinent laws would yield this conclusion: these
government agencies are enjoined, as a matter of statutory
obligation, to perform certain functions relating directly or indirectly to
the cleanup, rehabilitation, protection, and preservation of the Manila
Bay. They are precluded from choosing not to perform these duties.
Consider:
(1) The DENR, under Executive Order No. (EO) 192, 15 is the primary
agency responsible for the conservation, management,
development, and proper use of the country’s environment and
natural resources. Sec. 19 of the Philippine Clean Water Act of 2004
(RA 9275), on the other hand, designates the DENR as the primary
government agency responsible for its enforcement and
implementation, more particularly over all aspects of water quality
management. On water pollution, the DENR, under the Act’s Sec.
19(k), exercises jurisdiction "over all aspects of water pollution,
determine[s] its location, magnitude, extent, severity, causes and
effects and other pertinent information on pollution, and [takes]
measures, using available methods and technologies, to prevent and
abate such pollution."
The DENR, under RA 9275, is also tasked to prepare a National
Water Quality Status Report, an Integrated Water Quality
Management Framework, and a 10-year Water Quality Management
Area Action Plan which is nationwide in scope covering the Manila
Bay and adjoining areas. Sec. 19 of RA 9275 provides:
Sec. 19 Lead Agency.––The [DENR] shall be the primary
government agency responsible for the implementation
and enforcement of this Act x x x unless otherwise
provided herein. As such, it shall have the following
functions, powers and responsibilities:
a) Prepare a National Water Quality Status report within
twenty-four (24) months from the effectivity of this Act:
Provided, That the Department shall thereafter review or
revise and publish annually, or as the need arises, said
report;
 b) Prepare an Integrated Water Quality Management
Framework within twelve (12) months following the
completion of the status report;
c) Prepare a ten (10) year Water Quality Management
Area Action Plan within 12 months following the completion
of the framework for each designated water management
area. Such action plan shall be reviewed by the water
quality management area governing board every five (5)
years or as need arises.
The DENR has prepared the status report for the period 2001 to
2005 and is in the process of completing the preparation of the
Integrated Water Quality Management Framework. 16 Within twelve
(12) months thereafter, it has to submit a final Water Quality
Management Area Action Plan.17 Again, like the MMDA, the DENR
should be made to accomplish the tasks assigned to it under RA
9275.
Parenthetically, during the oral arguments, the DENR Secretary
manifested that the DENR, with the assistance of and in partnership
with various government agencies and non-government
organizations, has completed, as of December 2005, the final draft
of a comprehensive action plan with estimated budget and time
frame, denominated as Operation Plan for the Manila Bay Coastal
Strategy, for the rehabilitation, restoration, and rehabilitation of the
Manila Bay.
The completion of the said action plan and even the implementation
of some of its phases should more than ever prod the concerned
agencies to fast track what are assigned them under existing laws.
(2) The MWSS, under Sec. 3 of RA 6234, 18 is vested with
jurisdiction, supervision, and control over all waterworks and
sewerage systems in the territory comprising what is now the cities
of Metro Manila and several towns of the provinces of Rizal and
Cavite, and charged with the duty:
(g) To construct, maintain, and operate such sanitary
sewerages as may be necessary for the proper sanitation
and other uses of the cities and towns comprising the
System; x x x
(3) The LWUA under PD 198 has the power of supervision and
control over local water districts. It can prescribe the minimum
standards and regulations for the operations of these districts and
shall monitor and evaluate local water standards. The LWUA can
direct these districts to construct, operate, and furnish facilities and
services for the collection, treatment, and disposal of sewerage,
waste, and storm water. Additionally, under RA 9275, the LWUA, as
attached agency of the DPWH, is tasked with providing sewerage
and sanitation facilities, inclusive of the setting up of efficient and
safe collection, treatment, and sewage disposal system in the
different parts of the country. 19 In relation to the instant petition, the
LWUA is mandated to provide sewerage and sanitation facilities in
Laguna, Cavite, Bulacan, Pampanga, and Bataan to prevent
pollution in the Manila Bay.
(4) The Department of Agriculture (DA), pursuant to the
Administrative Code of 1987 (EO 292), 20 is designated as the agency
tasked to promulgate and enforce all laws and issuances respecting
the conservation and proper utilization of agricultural and fishery
resources. Furthermore, the DA, under the Philippine Fisheries Code
of 1998 (RA 8550), is, in coordination with local government units
(LGUs) and other concerned sectors, in charge of establishing a
monitoring, control, and surveillance system to ensure that fisheries
and aquatic resources in Philippine waters are judiciously utilized
and managed on a sustainable basis. 21 Likewise under RA 9275, the
DA is charged with coordinating with the PCG and DENR for the
enforcement of water quality standards in marine waters. 22 More
specifically, its Bureau of Fisheries and Aquatic Resources (BFAR)
under Sec. 22(c) of RA 9275 shall primarily be responsible for the
prevention and control of water pollution for the development,
management, and conservation of the fisheries and aquatic
resources.
(5) The DPWH, as the engineering and construction arm of the
national government, is tasked under EO 292 23 to provide integrated
planning, design, and construction services for, among others, flood
control and water resource development systems in accordance with
national development objectives and approved government plans
and specifications.
In Metro Manila, however, the MMDA is authorized by Sec. 3(d), RA
7924 to perform metro-wide services relating to "flood control and
sewerage management which include the formulation and
implementation of policies, standards, programs and projects for an
integrated flood control, drainage and sewerage system."
On July 9, 2002, a Memorandum of Agreement was entered into
between the DPWH and MMDA, whereby MMDA was made the
agency primarily responsible for flood control in Metro Manila. For
the rest of the country, DPWH shall remain as the implementing
agency for flood control services. The mandate of the MMDA and
DPWH on flood control and drainage services shall include the
removal of structures, constructions, and encroachments built along
rivers, waterways, and esteros (drainages) in violation of RA 7279,
PD 1067, and other pertinent laws.
(6) The PCG, in accordance with Sec. 5(p) of PD 601, or the
Revised Coast Guard Law of 1974, and Sec. 6 of PD 979, 24 or the
Marine Pollution Decree of 1976, shall have the primary
responsibility of enforcing laws, rules, and regulations governing
marine pollution within the territorial waters of the Philippines. It shall
promulgate its own rules and regulations in accordance with the
national rules and policies set by the National Pollution Control
Commission upon consultation with the latter for the effective
implementation and enforcement of PD 979. It shall, under Sec. 4 of
the law, apprehend violators who:
a. discharge, dump x x x harmful substances from or out of
any ship, vessel, barge, or any other floating craft, or other
man-made structures at sea, by any method, means or
manner, into or upon the territorial and inland navigable
waters of the Philippines;
b. throw, discharge or deposit, dump, or cause, suffer or
procure to be thrown, discharged, or deposited either from
or out of any ship, barge, or other floating craft or vessel of
any kind, or from the shore, wharf, manufacturing
establishment, or mill of any kind, any refuse matter of any
kind or description whatever other than that flowing from
streets and sewers and passing therefrom in a liquid state
into tributary of any navigable water from which the same
shall float or be washed into such navigable water; and
c. deposit x x x material of any kind in any place on the
bank of any navigable water or on the bank of any tributary
of any navigable water, where the same shall be liable to
be washed into such navigable water, either by ordinary or
high tides, or by storms or floods, or otherwise, whereby
navigation shall or may be impeded or obstructed or
increase the level of pollution of such water.
(7) When RA 6975 or the Department of the Interior and Local
Government (DILG) Act of 1990 was signed into law on December
13, 1990, the PNP Maritime Group was tasked to "perform all police
functions over the Philippine territorial waters and rivers." Under Sec.
86, RA 6975, the police functions of the PCG shall be taken over by
the PNP when the latter acquires the capability to perform such
functions. Since the PNP Maritime Group has not yet attained the
capability to assume and perform the police functions of PCG over
marine pollution, the PCG and PNP Maritime Group shall coordinate
with regard to the enforcement of laws, rules, and regulations
governing marine pollution within the territorial waters of the
Philippines. This was made clear in Sec. 124, RA 8550 or the
Philippine Fisheries Code of 1998, in which both the PCG and PNP
Maritime Group were authorized to enforce said law and other
fishery laws, rules, and regulations.25
(8) In accordance with Sec. 2 of EO 513, the PPA is mandated "to
establish, develop, regulate, manage and operate a rationalized
national port system in support of trade and national
development."26 Moreover, Sec. 6-c of EO 513 states that the PPA
has police authority within the ports administered by it as may be
necessary to carry out its powers and functions and attain its
purposes and objectives, without prejudice to the exercise of the
functions of the Bureau of Customs and other law enforcement
bodies within the area. Such police authority shall include the
following:
xxxx
b) To regulate the entry to, exit from, and movement within
the port, of persons and vehicles, as well as movement
within the port of watercraft.27
Lastly, as a member of the International Marine Organization and a
signatory to the International Convention for the Prevention of
Pollution from Ships, as amended by MARPOL 73/78,28 the
Philippines, through the PPA, must ensure the provision of adequate
reception facilities at ports and terminals for the reception of sewage
from the ships docking in Philippine ports. Thus, the PPA is tasked to
adopt such measures as are necessary to prevent the discharge and
dumping of solid and liquid wastes and other ship-generated wastes
into the Manila Bay waters from vessels docked at ports and
apprehend the violators. When the vessels are not docked at ports
but within Philippine territorial waters, it is the PCG and PNP
Maritime Group that have jurisdiction over said vessels.
(9) The MMDA, as earlier indicated, is duty-bound to put up and
maintain adequate sanitary landfill and solid waste and liquid
disposal system as well as other alternative garbage disposal
systems. It is primarily responsible for the implementation and
enforcement of the provisions of RA 9003, which would necessary
include its penal provisions, within its area of jurisdiction.29
Among the prohibited acts under Sec. 48, Chapter VI of RA 9003
that are frequently violated are dumping of waste matters in public
places, such as roads, canals or esteros, open burning of solid
waste, squatting in open dumps and landfills, open dumping, burying
of biodegradable or non- biodegradable materials in flood-prone
areas, establishment or operation of open dumps as enjoined in RA
9003, and operation of waste management facilities without an
environmental compliance certificate.
Under Sec. 28 of the Urban Development and Housing Act of 1992
(RA 7279), eviction or demolition may be allowed "when persons or
entities occupy danger areas such as esteros, railroad tracks,
garbage dumps, riverbanks, shorelines, waterways, and other public
places such as sidewalks, roads, parks and playgrounds." The
MMDA, as lead agency, in coordination with the DPWH, LGUs, and
concerned agencies, can dismantle and remove all structures,
constructions, and other encroachments built in breach of RA 7279
and other pertinent laws along the rivers, waterways, and esteros in
Metro Manila. With respect to rivers, waterways, and esteros in
Bulacan, Bataan, Pampanga, Cavite, and Laguna that discharge
wastewater directly or eventually into the Manila Bay, the DILG shall
direct the concerned LGUs to implement the demolition and removal
of such structures, constructions, and other encroachments built in
violation of RA 7279 and other applicable laws in coordination with
the DPWH and concerned agencies.
(10) The Department of Health (DOH), under Article 76 of PD 1067
(the Water Code), is tasked to promulgate rules and regulations for
the establishment of waste disposal areas that affect the source of a
water supply or a reservoir for domestic or municipal use. And under
Sec. 8 of RA 9275, the DOH, in coordination with the DENR, DPWH,
and other concerned agencies, shall formulate guidelines and
standards for the collection, treatment, and disposal of sewage and
the establishment and operation of a centralized sewage treatment
system. In areas not considered as highly urbanized cities, septage
or a mix sewerage-septage management system shall be employed.
In accordance with Sec. 72 30 of PD 856, the Code of Sanitation of
the Philippines, and Sec. 5.1.131 of Chapter XVII of its implementing
rules, the DOH is also ordered to ensure the regulation and
monitoring of the proper disposal of wastes by private sludge
companies through the strict enforcement of the requirement to
obtain an environmental sanitation clearance of sludge collection
treatment and disposal before these companies are issued their
environmental sanitation permit.
(11) The Department of Education (DepEd), under the Philippine
Environment Code (PD 1152), is mandated to integrate subjects on
environmental education in its school curricula at all levels. 32 Under
Sec. 118 of RA 8550, the DepEd, in collaboration with the DA,
Commission on Higher Education, and Philippine Information
Agency, shall launch and pursue a nationwide educational campaign
to promote the development, management, conservation, and proper
use of the environment. Under the Ecological Solid Waste
Management Act (RA 9003), on the other hand, it is directed to
strengthen the integration of environmental concerns in school
curricula at all levels, with an emphasis on waste management
principles.33
(12) The Department of Budget and Management (DBM) is tasked
under Sec. 2, Title XVII of the Administrative Code of 1987 to ensure
the efficient and sound utilization of government funds and revenues
so as to effectively achieve the country’s development objectives. 34
One of the country’s development objectives is enshrined in RA
9275 or the Philippine Clean Water Act of 2004. This law stresses
that the State shall pursue a policy of economic growth in a manner
consistent with the protection, preservation, and revival of the quality
of our fresh, brackish, and marine waters. It also provides that it is
the policy of the government, among others, to streamline processes
and procedures in the prevention, control, and abatement of pollution
mechanisms for the protection of water resources; to promote
environmental strategies and use of appropriate economic
instruments and of control mechanisms for the protection of water
resources; to formulate a holistic national program of water quality
management that recognizes that issues related to this management
cannot be separated from concerns about water sources and
ecological protection, water supply, public health, and quality of life;
and to provide a comprehensive management program for water
pollution focusing on pollution prevention.
Thus, the DBM shall then endeavor to provide an adequate budget
to attain the noble objectives of RA 9275 in line with the country’s
development objectives.
All told, the aforementioned enabling laws and issuances are in
themselves clear, categorical, and complete as to what are the
obligations and mandate of each agency/petitioner under the law.
We need not belabor the issue that their tasks include the cleanup of
the Manila Bay.
Now, as to the crux of the petition. Do Secs. 17 and 20 of the
Environment Code encompass the cleanup of water pollution in
general, not just specific pollution incidents?
Secs. 17 and 20 of the Environment Code
Include Cleaning in General
The disputed sections are quoted as follows:
Section 17. Upgrading of Water Quality.––Where the
quality of water has deteriorated to a degree where its
state will adversely affect its best usage, the government
agencies concerned shall take such measures as may be
necessary to upgrade the quality of such water to meet the
prescribed water quality standards.
Section 20. Clean-up Operations.––It shall be the
responsibility of the polluter to contain, remove and clean-
up water pollution incidents at his own expense. In case of
his failure to do so, the government agencies concerned
shall undertake containment, removal and clean-up
operations and expenses incurred in said operations shall
be charged against the persons and/or entities responsible
for such pollution.
When the Clean Water Act (RA 9275) took effect, its Sec. 16 on the
subject, o, amended the counterpart provision (Sec. 20) of the
Environment Code (PD 1152). Sec. 17 of PD 1152 continues,
however, to be operational.
The amendatory Sec. 16 of RA 9275 reads:
SEC. 16. Cleanup Operations.––Notwithstanding the
provisions of Sections 15 and 26 hereof, any person who
causes pollution in or pollutes water bodies in excess of
the applicable and prevailing standards shall be
responsible to contain, remove and clean up any pollution
incident at his own expense to the extent that the same
water bodies have been rendered unfit for utilization and
beneficial use: Provided, That in the event emergency
cleanup operations are necessary and the polluter fails to
immediately undertake the same, the [DENR] in
coordination with other government agencies concerned,
shall undertake containment, removal and cleanup
operations. Expenses incurred in said operations shall be
reimbursed by the persons found to have caused such
pollution under proper administrative determination x x x.
Reimbursements of the cost incurred shall be made to the
Water Quality Management Fund or to such other funds
where said disbursements were sourced.
As may be noted, the amendment to Sec. 20 of the Environment
Code is more apparent than real since the amendment, insofar as it
is relevant to this case, merely consists in the designation of the
DENR as lead agency in the cleanup operations.
Petitioners contend at every turn that Secs. 17 and 20 of the
Environment Code concern themselves only with the matter of
cleaning up in specific pollution incidents, as opposed to cleanup in
general. They aver that the twin provisions would have to be read
alongside the succeeding Sec. 62(g) and (h), which defines the
terms "cleanup operations" and "accidental spills," as follows:
g. Clean-up Operations [refer] to activities conducted in
removing the pollutants discharged or spilled in water to
restore it to pre-spill condition.
h. Accidental Spills [refer] to spills of oil or other hazardous
substances in water that result from accidents such as
collisions and groundings.
Petitioners proffer the argument that Secs. 17 and 20 of PD 1152
merely direct the government agencies concerned to undertake
containment, removal, and cleaning operations of a specific polluted
portion or portions of the body of water concerned. They maintain
that the application of said Sec. 20 is limited only to "water pollution
incidents," which are situations that presuppose the occurrence of
specific, isolated pollution events requiring the corresponding
containment, removal, and cleaning operations. Pushing the point
further, they argue that the aforequoted Sec. 62(g) requires "cleanup
operations" to restore the body of water to pre-spill condition, which
means that there must have been a specific incident of either
intentional or accidental spillage of oil or other hazardous
substances, as mentioned in Sec. 62(h).
As a counterpoint, respondents argue that petitioners erroneously
read Sec. 62(g) as delimiting the application of Sec. 20 to the
containment, removal, and cleanup operations for accidental spills
only. Contrary to petitioners’ posture, respondents assert that Sec.
62(g), in fact, even expanded the coverage of Sec. 20. Respondents
explain that without its Sec. 62(g), PD 1152 may have indeed
covered only pollution accumulating from the day-to-day operations
of businesses around the Manila Bay and other sources of pollution
that slowly accumulated in the bay. Respondents, however,
emphasize that Sec. 62(g), far from being a delimiting provision, in
fact even enlarged the operational scope of Sec. 20, by including
accidental spills as among the water pollution incidents
contemplated in Sec. 17 in relation to Sec. 20 of PD 1152.
To respondents, petitioners’ parochial view on environmental issues,
coupled with their narrow reading of their respective mandated roles,
has contributed to the worsening water quality of the Manila Bay.
Assuming, respondents assert, that petitioners are correct in saying
that the cleanup coverage of Sec. 20 of PD 1152 is constricted by
the definition of the phrase "cleanup operations" embodied in Sec.
62(g), Sec. 17 is not hobbled by such limiting definition. As pointed
out, the phrases "cleanup operations" and "accidental spills" do not
appear in said Sec. 17, not even in the chapter where said section is
found.
Respondents are correct. For one thing, said Sec. 17 does not in any
way state that the government agencies concerned ought to confine
themselves to the containment, removal, and cleaning operations
when a specific pollution incident occurs. On the contrary, Sec. 17
requires them to act even in the absence of a specific pollution
incident, as long as water quality "has deteriorated to a degree
where its state will adversely affect its best usage." This section, to
stress, commands concerned government agencies, when
appropriate, "to take such measures as may be necessary to meet
the prescribed water quality standards." In fine, the underlying duty
to upgrade the quality of water is not conditional on the occurrence
of any pollution incident.
For another, a perusal of Sec. 20 of the Environment Code, as
couched, indicates that it is properly applicable to a specific situation
in which the pollution is caused by polluters who fail to clean up the
mess they left behind. In such instance, the concerned government
agencies shall undertake the cleanup work for the polluters’ account.
Petitioners’ assertion, that they have to perform cleanup operations
in the Manila Bay only when there is a water pollution incident and
the erring polluters do not undertake the containment, removal, and
cleanup operations, is quite off mark. As earlier discussed, the
complementary Sec. 17 of the Environment Code comes into play
and the specific duties of the agencies to clean up come in even if
there are no pollution incidents staring at them. Petitioners, thus,
cannot plausibly invoke and hide behind Sec. 20 of PD 1152 or Sec.
16 of RA 9275 on the pretext that their cleanup mandate depends on
the happening of a specific pollution incident. In this regard, what the
CA said with respect to the impasse over Secs. 17 and 20 of PD
1152 is at once valid as it is practical. The appellate court wrote: "PD
1152 aims to introduce a comprehensive program of environmental
protection and management. This is better served by making Secs.
17 & 20 of general application rather than limiting them to specific
pollution incidents."35
Granting arguendo that petitioners’ position thus described vis-à-vis
the implementation of Sec. 20 is correct, they seem to have
overlooked the fact that the pollution of the Manila Bay is of such
magnitude and scope that it is well-nigh impossible to draw the line
between a specific and a general pollution incident. And such
impossibility extends to pinpointing with reasonable certainty who
the polluters are. We note that Sec. 20 of PD 1152 mentions "water
pollution incidents" which may be caused by polluters in the waters
of the Manila Bay itself or by polluters in adjoining lands and in water
bodies or waterways that empty into the bay. Sec. 16 of RA 9275, on
the other hand, specifically adverts to "any person who causes
pollution in or pollutes water bodies," which may refer to an
individual or an establishment that pollutes the land mass near the
Manila Bay or the waterways, such that the contaminants eventually
end up in the bay. In this situation, the water pollution incidents are
so numerous and involve nameless and faceless polluters that they
can validly be categorized as beyond the specific pollution incident
level.
Not to be ignored of course is the reality that the government
agencies concerned are so undermanned that it would be almost
impossible to apprehend the numerous polluters of the Manila Bay. It
may perhaps not be amiss to say that the apprehension, if any, of
the Manila Bay polluters has been few and far between. Hence,
practically nobody has been required to contain, remove, or clean up
a given water pollution incident. In this kind of setting, it behooves
the Government to step in and undertake cleanup operations. Thus,
Sec. 16 of RA 9275, previously Sec. 20 of PD 1152, covers for all
intents and purposes a general cleanup situation.
The cleanup and/or restoration of the Manila Bay is only an aspect
and the initial stage of the long-term solution. The preservation of the
water quality of the bay after the rehabilitation process is as
important as the cleaning phase. It is imperative then that the wastes
and contaminants found in the rivers, inland bays, and other bodies
of water be stopped from reaching the Manila Bay. Otherwise, any
cleanup effort would just be a futile, cosmetic exercise, for, in no time
at all, the Manila Bay water quality would again deteriorate below the
ideal minimum standards set by PD 1152, RA 9275, and other
relevant laws. It thus behooves the Court to put the heads of the
petitioner-department-agencies and the bureaus and offices under
them on continuing notice about, and to enjoin them to perform, their
mandates and duties towards cleaning up the Manila Bay and
preserving the quality of its water to the ideal level. Under what other
judicial discipline describes as "continuing mandamus," 36 the Court
may, under extraordinary circumstances, issue directives with the
end in view of ensuring that its decision would not be set to naught
by administrative inaction or indifference. In India, the doctrine of
continuing mandamus was used to enforce directives of the court to
clean up the length of the Ganges River from industrial and
municipal pollution.37
The Court can take judicial notice of the presence of shanties and
other unauthorized structures which do not have septic tanks along
the Pasig-Marikina-San Juan Rivers, the National Capital Region
(NCR) (Parañaque-Zapote, Las Piñas) Rivers, the Navotas-
Malabon-Tullahan-Tenejeros Rivers, the Meycuayan-Marilao-
Obando (Bulacan) Rivers, the Talisay (Bataan) River, the Imus
(Cavite) River, the Laguna De Bay, and other minor rivers and
connecting waterways, river banks, and esteros which discharge
their waters, with all the accompanying filth, dirt, and garbage, into
the major rivers and eventually the Manila Bay. If there is one factor
responsible for the pollution of the major river systems and the
Manila Bay, these unauthorized structures would be on top of the
list. And if the issue of illegal or unauthorized structures is not
seriously addressed with sustained resolve, then practically all
efforts to cleanse these important bodies of water would be for
naught. The DENR Secretary said as much.38
Giving urgent dimension to the necessity of removing these illegal
structures is Art. 51 of PD 1067 or the Water Code, 39 which prohibits
the building of structures within a given length along banks of rivers
and other waterways. Art. 51 reads:
The banks of rivers and streams and the shores of the
seas and lakes throughout their entire length and within a
zone of three (3) meters in urban areas, twenty (20) meters
in agricultural areas and forty (40) meters in forest areas,
along their margins, are subject to the easement of public
use in the interest of recreation, navigation, floatage,
fishing and salvage. No person shall be allowed to stay in
this zone longer than what is necessary for recreation,
navigation, floatage, fishing or salvage or to build
structures of any kind. (Emphasis added.)
Judicial notice may likewise be taken of factories and other industrial
establishments standing along or near the banks of the Pasig River,
other major rivers, and connecting waterways. But while they may
not be treated as unauthorized constructions, some of these
establishments undoubtedly contribute to the pollution of the Pasig
River and waterways. The DILG and the concerned LGUs, have,
accordingly, the duty to see to it that non-complying industrial
establishments set up, within a reasonable period, the necessary
waste water treatment facilities and infrastructure to prevent their
industrial discharge, including their sewage waters, from flowing into
the Pasig River, other major rivers, and connecting waterways. After
such period, non-complying establishments shall be shut down or
asked to transfer their operations.
At this juncture, and if only to dramatize the urgency of the need for
petitioners-agencies to comply with their statutory tasks, we cite the
Asian Development Bank-commissioned study on the garbage
problem in Metro Manila, the results of which are embodied in
the The Garbage Book. As there reported, the garbage crisis in the
metropolitan area is as alarming as it is shocking. Some highlights of
the report:
1. As early as 2003, three land-filled dumpsites in Metro
Manila - the Payatas, Catmon and Rodriquez dumpsites -
generate an alarming quantity of lead and leachate or
liquid run-off. Leachate are toxic liquids that flow along the
surface and seep into the earth and poison the surface and
groundwater that are used for drinking, aquatic life, and the
environment.
2. The high level of fecal coliform confirms the presence of
a large amount of human waste in the dump sites and
surrounding areas, which is presumably generated by
households that lack alternatives to sanitation. To say that
Manila Bay needs rehabilitation is an understatement.
3. Most of the deadly leachate, lead and other dangerous
contaminants and possibly strains of pathogens seeps
untreated into ground water and runs into the Marikina and
Pasig River systems and Manila Bay.40
Given the above perspective, sufficient sanitary landfills should now
more than ever be established as prescribed by the Ecological Solid
Waste Management Act (RA 9003). Particular note should be taken
of the blatant violations by some LGUs and possibly the MMDA of
Sec. 37, reproduced below:
 Sec. 37. Prohibition against the Use of Open Dumps for
Solid Waste.––No open dumps shall be established and
operated, nor any practice or disposal of solid waste by
any person, including LGUs which [constitute] the use of
open dumps for solid waste, be allowed after the effectivity
of this Act: Provided, further that no controlled dumps shall
be allowed (5) years following the effectivity of this Act.
(Emphasis added.)
RA 9003 took effect on February 15, 2001 and the adverted grace
period of five (5) years which ended on February 21, 2006 has come
and gone, but no single sanitary landfill which strictly complies with
the prescribed standards under RA 9003 has yet been set up.
In addition, there are rampant and repeated violations of Sec. 48 of
RA 9003, like littering, dumping of waste matters in roads,
canals, esteros, and other public places, operation of open dumps,
open burning of solid waste, and the like. Some sludge companies
which do not have proper disposal facilities simply discharge sludge
into the Metro Manila sewerage system that ends up in the Manila
Bay. Equally unabated are violations of Sec. 27 of RA 9275, which
enjoins the pollution of water bodies, groundwater pollution, disposal
of infectious wastes from vessels, and unauthorized transport or
dumping into sea waters of sewage or solid waste and of Secs. 4
and 102 of RA 8550 which proscribes the introduction by human or
machine of substances to the aquatic environment including
"dumping/disposal of waste and other marine litters, discharge of
petroleum or residual products of petroleum of carbonaceous
materials/substances [and other] radioactive, noxious or harmful
liquid, gaseous or solid substances, from any water, land or air
transport or other human-made structure."
In the light of the ongoing environmental degradation, the Court
wishes to emphasize the extreme necessity for all concerned
executive departments and agencies to immediately act and
discharge their respective official duties and obligations. Indeed,
time is of the essence; hence, there is a need to set timetables for
the performance and completion of the tasks, some of them as
defined for them by law and the nature of their respective offices and
mandates.
The importance of the Manila Bay as a sea resource, playground,
and as a historical landmark cannot be over-emphasized. It is not yet
too late in the day to restore the Manila Bay to its former splendor
and bring back the plants and sea life that once thrived in its blue
waters. But the tasks ahead, daunting as they may be, could only be
accomplished if those mandated, with the help and cooperation of all
civic-minded individuals, would put their minds to these tasks and
take responsibility. This means that the State, through petitioners,
has to take the lead in the preservation and protection of the Manila
Bay.
The era of delays, procrastination, and ad hoc measures is over.
Petitioners must transcend their limitations, real or imaginary, and
buckle down to work before the problem at hand becomes
unmanageable. Thus, we must reiterate that different government
agencies and instrumentalities cannot shirk from their mandates;
they must perform their basic functions in cleaning up and
rehabilitating the Manila Bay. We are disturbed by petitioners’ hiding
behind two untenable claims: (1) that there ought to be a specific
pollution incident before they are required to act; and (2) that the
cleanup of the bay is a discretionary duty.
RA 9003 is a sweeping piece of legislation enacted to radically
transform and improve waste management. It implements Sec. 16,
Art. II of the 1987 Constitution, which explicitly provides that the
State shall protect and advance the right of the people to a balanced
and healthful ecology in accord with the rhythm and harmony of
nature.
So it was that in Oposa v. Factoran, Jr. the Court stated that the right
to a balanced and healthful ecology need not even 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.41 Even assuming the absence of a
categorical legal provision specifically prodding petitioners to clean
up the bay, they and the men and women representing them cannot
escape their obligation to future generations of Filipinos to keep the
waters of the Manila Bay clean and clear as humanly as possible.
Anything less would be a betrayal of the trust reposed in them.
WHEREFORE, the petition is DENIED. The September 28, 2005
Decision of the CA in CA-G.R. CV No. 76528 and SP No. 74944 and
the September 13, 2002 Decision of the RTC in Civil Case No. 1851-
99 are AFFIRMED but with MODIFICATIONS in view of subsequent
developments or supervening events in the case. The fallo of the
RTC Decision shall now read:
WHEREFORE, judgment is hereby rendered ordering the
abovenamed defendant-government agencies to clean up,
rehabilitate, and preserve Manila Bay, and restore and
maintain its waters to SB level (Class B sea waters per
Water Classification Tables under DENR Administrative
Order No. 34 [1990]) to make them fit for swimming, skin-
diving, and other forms of contact recreation.
In particular:
(1) Pursuant to Sec. 4 of EO 192, assigning the DENR as the
primary agency responsible for the conservation, management,
development, and proper use of the country’s environment and
natural resources, and Sec. 19 of RA 9275, designating the DENR
as the primary government agency responsible for its enforcement
and implementation, the DENR is directed to fully implement
its Operational Plan for the Manila Bay Coastal Strategy for the
rehabilitation, restoration, and conservation of the Manila Bay at the
earliest possible time. It is ordered to call regular coordination
meetings with concerned government departments and agencies to
ensure the successful implementation of the aforesaid plan of action
in accordance with its indicated completion schedules.
(2) Pursuant to Title XII (Local Government) of the Administrative
Code of 1987 and Sec. 25 of the Local Government Code of
1991,42 the DILG, in exercising the President’s power of general
supervision and its duty to promulgate guidelines in establishing
waste management programs under Sec. 43 of the Philippine
Environment Code (PD 1152), shall direct all LGUs in Metro Manila,
Rizal, Laguna, Cavite, Bulacan, Pampanga, and Bataan to inspect
all factories, commercial establishments, and private homes along
the banks of the major river systems in their respective areas of
jurisdiction, such as but not limited to the Pasig-Marikina-San Juan
Rivers, the NCR (Parañaque-Zapote, Las Piñas) Rivers, the
Navotas-Malabon-Tullahan-Tenejeros Rivers, the Meycauayan-
Marilao-Obando (Bulacan) Rivers, the Talisay (Bataan) River, the
Imus (Cavite) River, the Laguna De Bay, and other minor rivers and
waterways that eventually discharge water into the Manila Bay; and
the lands abutting the bay, to determine whether they have
wastewater treatment facilities or hygienic septic tanks as prescribed
by existing laws, ordinances, and rules and regulations. If none be
found, these LGUs shall be ordered to require non-complying
establishments and homes to set up said facilities or septic tanks
within a reasonable time to prevent industrial wastes, sewage water,
and human wastes from flowing into these rivers,
waterways, esteros, and the Manila Bay, under pain of closure or
imposition of fines and other sanctions.
(3) As mandated by Sec. 8 of RA 9275, 43 the MWSS is directed to
provide, install, operate, and maintain the necessary adequate waste
water treatment facilities in Metro Manila, Rizal, and Cavite where
needed at the earliest possible time.
(4) Pursuant to RA 9275,44 the LWUA, through the local water
districts and in coordination with the DENR, is ordered to provide,
install, operate, and maintain sewerage and sanitation facilities and
the efficient and safe collection, treatment, and disposal of sewage in
the provinces of Laguna, Cavite, Bulacan, Pampanga, and Bataan
where needed at the earliest possible time.
(5) Pursuant to Sec. 65 of RA 8550, 45 the DA, through the BFAR, is
ordered to improve and restore the marine life of the Manila Bay. It is
also directed to assist the LGUs in Metro Manila, Rizal, Cavite,
Laguna, Bulacan, Pampanga, and Bataan in developing, using
recognized methods, the fisheries and aquatic resources in the
Manila Bay.
(10) Pursuant to Sec. 53 of PD 1152, 48 Sec. 118 of RA 8550, and
Sec. 56 of RA 9003,49 the DepEd shall integrate lessons on pollution
prevention, waste management, environmental protection, and like
subjects in the school curricula of all levels to inculcate in the minds
and hearts of students and, through them, their parents and friends,
the importance of their duty toward achieving and maintaining a
balanced and healthful ecosystem in the Manila Bay and the entire
Philippine archipelago.
(11) The DBM shall consider incorporating an adequate budget in
the General Appropriations Act of 2010 and succeeding years to
cover the expenses relating to the cleanup, restoration, and
preservation of the water quality of the Manila Bay, in line with the
country’s development objective to attain economic growth in a
manner consistent with the protection, preservation, and revival of
our marine waters.

(6) The PCG, pursuant to Secs. 4 and 6 of PD 979, and the PNP
Maritime Group, in accordance with Sec. 124 of RA 8550, in
coordination with each other, shall apprehend violators of PD 979,
RA 8550, and other existing laws and regulations designed to
prevent marine pollution in the Manila Bay.
(12) The heads of petitioners-agencies MMDA, DENR, DepEd, DOH,
DA, DPWH, DBM, PCG, PNP Maritime Group, DILG, and also of
MWSS, LWUA, and PPA, in line with the principle of "continuing
mandamus," shall, from finality of this Decision, each submit to the
Court a quarterly progressive report of the activities undertaken in
accordance with this Decision.

(7) Pursuant to Secs. 2 and 6-c of EO 513 46 and the International

Convention for the Prevention of Pollution from Ships, the PPA is No costs.
ordered to immediately adopt such measures to prevent the
discharge and dumping of solid and liquid wastes and other ship- SO ORDERED.
generated wastes into the Manila Bay waters from vessels docked at
ports and apprehend the violators.

(8) The MMDA, as the lead agency and implementor of programs

and projects for flood control projects and drainage services in Metro
Manila, in coordination with the DPWH, DILG, affected LGUs, PNP
Maritime Group, Housing and Urban Development Coordinating
Council (HUDCC), and other agencies, shall dismantle and remove
all structures, constructions, and other encroachments established or
built in violation of RA 7279, and other applicable laws along the
Pasig-Marikina-San Juan Rivers, the NCR (Parañaque-Zapote, Las
Piñas) Rivers, the Navotas-Malabon-Tullahan-Tenejeros Rivers, and
connecting waterways and esteros in Metro Manila. The DPWH, as
the principal implementor of programs and projects for flood control
services in the rest of the country more particularly in Bulacan,
Bataan, Pampanga, Cavite, and Laguna, in coordination with the
DILG, affected LGUs, PNP Maritime Group, HUDCC, and other
concerned government agencies, shall remove and demolish all
structures, constructions, and other encroachments built in breach of
RA 7279 and other applicable laws along the Meycauayan-Marilao-
Obando (Bulacan) Rivers, the Talisay (Bataan) River, the Imus
(Cavite) River, the Laguna De Bay, and other rivers, connecting
waterways, and esteros that discharge wastewater into the Manila
Bay.

In addition, the MMDA is ordered to establish, operate, and maintain

a sanitary landfill, as prescribed by RA 9003, within a period of one
(1) year from finality of this Decision. On matters within its territorial
jurisdiction and in connection with the discharge of its duties on the
maintenance of sanitary landfills and like undertakings, it is also
ordered to cause the apprehension and filing of the appropriate
criminal cases against violators of the respective penal provisions of
RA 9003,47 Sec. 27 of RA 9275 (the Clean Water Act), and other
existing laws on pollution.

(9) The DOH shall, as directed by Art. 76 of PD 1067 and Sec. 8 of

RA 9275, within one (1) year from finality of this Decision, determine
if all licensed septic and sludge companies have the proper facilities
for the treatment and disposal of fecal sludge and sewage coming
from septic tanks. The DOH shall give the companies, if found to be
non-complying, a reasonable time within which to set up the
necessary facilities under pain of cancellation of its environmental
sanitation clearance.
March 7, 2017
G.R. No. 211010
VICTORIA SEGOVIA, RUEL LAGO, CLARIESSE JAMI CHAN,
REPRESENTING THE CARLESS PEOPLE OF THE PHILIPPINES;
GABRIEL ANASTACIO, REPRESENTED BY HIS MOTHER GRACE
ANASTACIO, DENNIS ORLANDOSANGALANG, REPRESENTED
BY HIS MOTHER MAY ALILI SANGALANG, MARIA PAULINA
CASTANEDA, REPRESENTED BY HER MOTHERATRICIAANN
CASTANEDA, REPRESENTING THE CHILDREN OF THE
PHILIPPINES AND CHILDREN OF THE FUTURE; AND RENATO
PINEDA, JR., ARON KERR MENGUITO, MAY ALILI SANGALANG,
AND GLYNDA BATHAN BATERINA, REPRESENTING
CAROWNERS WHO WOULD RATHER NOT HA VE CARS IF
GOOD PUBLIC TRANSPORTATION WERE SAFE, CONVENIENT,
ACCESSIBLE AND RELIABLE, Petitioners
vs
THE CLIMATE CHANGE COMMISSION, REPRESENTED BY ITS
CHAIRMAN, HIS EXCELLENCY BENIGNO S. AQUINO III, AND ITS
COMMISSIONERS MARY ANN LUCILLE SERING, HEHERSON
ALVAREZANDNADAREV SANO; DEPARTMENT OF
TRANSPORTATION AND COMMUNICATIONS (DOTC)
REPRESENTED BY ITS SECRETARY, HONORABLE JOSEPH
ABAYA; DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS
(DPWH) AND THE ROAD BOARD, REPRESENTED BY ITS
SECRETARY, HONORABLE ROGELIO SINGSON; DEPARTMENT
OF INTERIOR AND LOCAL GOVERNMENT (DILG),
REPRESENTED BY ITS SECRETARY, HONORABLE MANUEL
ROXAS; DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES (DENR), REPRESENTED BY ITS SECRETARY,
HONORABLE RAMON PAJE; DEPARTMENT OF BUDGET AND
MANAGEMENT (DBM), REPRESENTED BY ITS SECRETARY,
HONORABLE FLORENCIO ABAD; METROPOLITAN MANILA
DEVELOPMENT AUTHORITY (MMDA), REPRESENTED BY ITS
CHAIRMAN, FRANCIS TOLENTINO; DEPARTMENT OF
AGRICULTURE (DA), REPRESENTED BY ITS SECRETARY,
HONORABLE PROCESO ALCALA; AND JOHN DOES,
REPRESENTING AS YET UNNAMED LOCAL GOVERNMENT
UNITS AND THEIR RESPECTIVE LOCAL CHIEF EXECUTIVE,
JURIDICAL ENTITIES, AND NATURAL PERSONS WHO FAIL OR
REFUSE TO IMPLEMENT THE LAW OR COOPERATE IN THE
IMPLEMENTATION OF THE LAW, Respondents
DECISION
CAGUIOA, J.:
This is a petition for the issuance of writs of kalikasan and
continuing mandamus to compel the implementation of the following
environmental laws and executive issuances - Republic Act No. (RA)
97291 (Climate Change Act), and RA 87492 (Clean Air Act);
Executive Order No. 7743 (BO 774); AO 254, s. 20094 (AO 254); and
Administrative Order No. 171, s. 20075 (AO 171).
Accordingly, the Petitioners seek to compel: (a) the public
respondents to: (1) implement the Road Sharing Principle in all
roads; (2) divide all roads lengthwise, one-half (½) for all-weather
sidewalk and bicycling, the other half for Filipino-made transport
vehicles; (3) submit a time-bound action plan to implement the Road
Sharing Principle throughout the country; (b) the Office of the
President, Cabinet officials and public employees of Cabinet
members to reduce their fuel consumption by fifty percent (50%) and
to take public transportation fifty percent (50%) of the time; (c) Public
respondent DPWH to demarcate and delineate the road right-of-way
in all roads and sidewalks; and (d) Public respondent DBM to
instantly release funds for Road Users' Tax.6
The Facts
To address the clamor for a more tangible response to climate
change, Former President Gloria Macapagal-Arroyo issued AO 171
which created the Presidential Task Force on Climate Change
(PTFCC) on February 20, 2007. This body was reorganized through
BO 774, which designated the President as Chairperson, and
cabinet secretaries as members of the Task Force. EO 774
expressed what is now referred to by the petitioners as the "Road
Sharing Principle." Its Section 9(a) reads:
Section 9. Task Group on Fossil Fuels. - (a) To reduce the
consumption of fossil fuels, the Department of Transportation and
Communications (DOTC) shall lead a Task Group to reform the
transportation sector. The new paradigm in the movement of men
and things must follow a simple principle: "Those who have less in
wheels must have more in road." For this purpose, the system shall
favor nonmotorized locomotion and collective transportation system
(walking, bicycling, and the man-powered mini-train).
In 2009, AO 254 was issued, mandating the DOTC (as lead agency
for the Task Group on Fossil Fuels or TGFF) to formulate a national
Environmentally Sustainable Transport Strategy (EST) for the
Philippines. The Road Sharing Principle is similarly mentioned, thus:
SECTION 4. Functions of the TGFF- In addition to the functions
provided in EO 774, the TGFF shall initiate and pursue the
formulation of the National EST Strategy for the Philippines.
Specifically, the TGFF shall perform the following functions:
(a) Reform the transport sector to reduce the consumption of fossil
fuels. The new paradigm in the movement of men and things must
follow a simple principle: "Those who have less in wheels must have
more in road." For this purpose, the system shall favor non-
motorized locomotion and collective transportation system (walking,
bicycling, and the manpowered mini-train).
xxxx
Later that same year, Congress passed the Climate Change Act. It
created the Climate Change Commission which absorbed the
functions of the PTFCC and became the lead policy-making body of
the government which shall be tasked to coordinate, monitor and
evaluate the programs and action plans of the government relating to
climate change.7
Herein petitioners wrote respondents regarding their pleas for
implementation of the Road Sharing Principle, demanding the reform
of the road and transportation system in the whole country within
thirty (30) days from receipt of the said letter - foremost, through the
bifurcation of roads and the reduction of official and government fuel
consumption by fifty percent (50%). 8 Claiming to have not received a
response, they filed this petition.
The Petition
Petitioners are Carless People of the Philippines, parents,
representing their children, who in turn represent "Children of the
Future, and Car-owners who would rather not have cars if good
public transportation were safe, convenient, accessible, available,
and reliable". They claim that they are entitled to the issuance of the
extraordinary writs due to the alleged failure and refusal of
respondents to perform an act mandated by environmental laws, and
violation of environmental laws resulting in environmental damage of
such magnitude as to prejudice the life, health and property of all
Filipinos.9
These identified violations10 include: (a) The government's violation
of "atmospheric trust" as provided under Article XI, Section 1 of the
Constitution, and thoughtless extravagance in the midst of acute
public want under Article 25 of the Civil Code for failure to reduce
personal and official consumption of fossil fuels by at least fifty
percent (50%); (b) DOTC and DPWH's failure to implement the
Road Sharing Principle under EO 774; (c) DA's failure to devote
public open spaces along sidewalks, roads and parking lots to
sustainable urban farming as mandated by Section 12(b) 11 f EO
774; (d) DILG's failure to coordinate with local government units
(LGUs) to guide them on the Road Sharing Principle under Section
9(g)12 of EO 774; (e) DENR's failure to reduce air pollutant
emissions; and lastly, (f) DBM's failure to make available Road
Users' Tax for purposes stated in Section 9(e)13 of EO 774.
In gist, petitioners contend that respondents' failure to implement the
foregoing laws and executive issuances resulted in the continued
degradation of air quality, particularly in Metro Manila, in violation of
the petitioners' constitutional right to a balanced and healthful
ecology,14 and may even be tantamount to deprivation of life, and of
life sources or "land, water, and air" by the government without due
process of law.15 They also decry the "unequal" protection of laws in
the prevailing scheme, claiming that ninety-eight percent (98%) of
Filipinos are discriminated against by the law when the car-owning
two percent (2%) is given almost all of the road space and while
large budgets are allocated for construction and maintenance of
roads, hardly any budget is given for sidewalks, bike lanes and non-
motorized transportation systems.16
Respondents, through the Office of the Solicitor General, filed
their Comment seeking the outright dismissal of the petition for lack
of standing and failure to adhere to the doctrine of hierarchy of
courts.17 Moreover, respondents argue that petitioners are not
entitled to the reliefs prayed for.
Specifically, respondents assert that petitioners are not entitled to a
writ of kalikasan because they failed to show that the public
respondents are guilty of an unlawful act or omission; state the
environmental law/s violated; show environmental damage of such
magnitude as to prejudice the life, health or property of inhabitants of
two or more cities; and prove that non- implementation of Road
Sharing Principle will cause environmental damage. Respondents
likewise assert that petitioners are similarly not entitled to a
Continuing Mandamus because: (a) there is no showing of a direct
or personal injury or a clear legal right to the thing demanded; (b) the
writ will not compel a discretionary act or anything not in a public
officer's duty to do (i.e. the manner by which the Road Sharing
Principle will be applied; and to compel DA to exercise jurisdiction
over roadside lands); and (c) DBM cannot be compelled to make an
instant release of funds as the same requires an appropriation made
by law (Article VI, Section 29[1] of the Constitution) and the use of
the Road Users' Tax (more appropriately, the Motor Vehicle Users'
Charge) requires prior approval of the Road Board.18
In any event, respondents denied the specific violations alleged in
the petition, stating that they have taken and continue to take
measures to improve the traffic situation in Philippine roads and to
improve the environment condition - through projects and programs
such as: priority tagging of expenditures for climate change
adaptation and mitigation, the Integrated Transport System which is
aimed to decongest major thoroughfares, Truck Ban, Anti-Smoke
Belching Campaign, Anti-Colorum, Mobile Bike Service Programs,
and Urban Re-Greening Programs. These projects are individually
and jointly implemented by the public respondents to improve the
traffic condition and mitigate the effects of motorized vehicles on the
environment.19 Contrary to petitioners' claims, public respondents
assert that they consider the impact of the transport sector on the
environment, as shown in the Philippine National Implementation
Plan on Environment Improvement in the Transport Sector which
targets air pollution improvement actions, greenhouse gases
emission mitigation, and updating of noise pollution standards for the
transport sector.
In response, petitioner filed their Reply, substantially reiterating the
arguments they raised in the Petition.
ISSUES
From the foregoing submissions, the main issues for resolution are:
1. Whether or not the petitioners have standing to file the petition;
2. Whether or not the petition should be dismissed for failing to
adhere to the doctrine of hierarchy of courts; and
3. Whether or not a writ of Kalikasan and/or
Continuing Mandamus should issue.
RULING
The petition must be dismissed.
Procedural Issues
Citing Section 1, Rule 7 of the Rules of Procedure for Environmental
Cases20 (RPEC), respondents argue that the petitioners failed to
show that they have the requisite standing to file the petition, being
representatives of a rather amorphous sector of society and without
a concrete interest or injury. 21 Petitioners counter that they filed the
suit as citizens, taxpayers, and representatives; that the rules on
standing had been relaxed following the decision in Oposa v.
Factoran;22 and that, in any event, legal standing is a procedural
technicality which the Court may set aside in its discretion.23
The Court agrees with the petitioners' position. The RPEC did
liberalize the requirements on standing, allowing the filing of citizen's
suit for the enforcement of rights and obligations under
environmental laws.24 This has been confirmed by this Court's rulings
in Arigo v. Swift,25 and International Service for the Acquisition of
Agri-BioTech Applications, Inc. v. Greenpeace Southeast Asia
(Philippines).26 However, it bears noting that there is a difference
between a petition for the issuance of a writ of kalikasan, wherein it
is sufficient that the person filing represents the inhabitants
prejudiced by the environmental damage subject of the writ; 27 and a
petition for the issuance of a writ of continuing mandamus, which is
only available to one who is personally aggrieved by the unlawful act
or omission. 28
Respondents also seek the dismissal of the petition on the ground
that the petitioners failed to adhere to the doctrine of hierarchy of
courts, reasoning that since a petition for the issuance of a writ
of kalikasan must be filed with the Supreme Court or with any of the
stations of the Court of Appeals, 29 then the doctrine of hierarchy of
courts is applicable.30 Petitioners, on the other hand, cite the same
provision and argue that direct recourse to this Court is available,
and that the provision shows that the remedy to environmental
damage should not be limited to the territorial jurisdiction of the lower
courts.31
The respondents' argument does not persuade. Under the RPEC,
the writ of kalikasan is an extraordinary remedy covering
environmental damage of such magnitude that will prejudice the life,
health or property of inhabitants in two or more cities or provinces. It
is designed for a narrow but special purpose: to accord a stronger
protection for environmental rights, aiming, among others, to provide
a speedy and effective resolution of a case involving the violation of
one's constitutional right to a healthful and balanced ecology that
transcends political and territorial boundaries, and to address the
potentially exponential nature of large-scale ecological threats. 32 At
the very least, the magnitude of the ecological problems
contemplated under the RPEC satisfies at least one of the
exceptions to the rule on hierarchy of courts, as when direct resort is
allowed where it is dictated by public welfare.1âwphi1 Given that the
RPEC allows direct resort to this Court, 33 it is ultimately within the
Court's discretion whether or not to accept petitions brought directly
before it.
Requisites for issuance of Writs of
Kalikasan and Continuing
Mandamus
We find that the petitioners failed to establish the requisites for the
issuance of the writs prayed for.
For a writ of kalikasan to issue, the following requisites must concur:
1. there is an actual or threatened violation of the constitutional right
to a balanced and healthful ecology;
2. the actual or threatened violation arises from an unlawful act or
omission of a public official or employee, or private individual or
entity; and
3. the actual or threatened violation involves or will lead to an
environmental damage of such magnitude as to prejudice the life,
health or property of inhabitants in two or more cities or provinces. 34
It is well-settled that a party claiming the privilege for the issuance of
a writ of kalikasan has to show that a law, rule or regulation was
violated or would be violated.35
In this case, apart from repeated invocation of the constitutional right
to health and to a balanced and healthful ecology and bare
allegations that their right was violated, the petitioners failed to show
that public respondents are guilty of any unlawful act or omission
that constitutes a violation of the petitioners' right to a balanced and
healthful ecology.
While there can be no disagreement with the general propositions
put forth by the petitioners on the correlation of air quality and public
health, petitioners have not been able to show that respondents are
guilty of violation or neglect of environmental laws that causes or
contributes to bad air quality. Notably, apart from bare allegations,
petitioners were not able to show that respondents failed to execute
any of the laws petitioners cited. In fact, apart from adducing expert
testimony on the adverse effects of air pollution on public health, the
petitioners did not go beyond mere allegation in establishing the
unlawful acts or omissions on the part of the public respondents that
have a causal link or reasonable connection to the actual or
threatened violation of the constitutional right to a balanced and
healthful ecology of the magnitude contemplated under the Rules, as
required of petitions of this nature. 36
Moreover, the National Air Quality Status Report for 2005-2007
(NAQSR) submitted by the petitioners belies their claim that the
DENR failed to reduce air pollutant emissions - in fact, the NAQSR
shows that the National Ambient Total Suspended Particulates
(TSP) value used to determine air quality has steadily declined from
2004 to 2007,37 and while the values still exceed the air quality
guideline value, it has remained on this same downward trend until
as recently as 2011.38
On the other hand, public respondents sufficiently showed that they
did not unlawfully refuse to implement or neglect the laws, executive
and administrative orders as claimed by the petitioners. Projects and
programs that seek to improve air quality were undertaken by the
respondents, jointly and in coordination with stakeholders, such as:
priority tagging of expenditures for climate change adaptation and
mitigation, the Integrated Transport System which is aimed to
decongest major thoroughfares, Truck Ban, Anti-Smoke Belching
Campaign, Anti-Colorum, Mobile Bike Service Programs, and Urban
Re-Greening Programs.
In fact, the same NAQSR submitted by the petitioners show that the
DENR was, and is, taking concrete steps to improve national air
quality, such as information campaigns, free emission testing to
complement the anti-smoke-belching program and other programs to
reduce emissions from industrial smokestacks and from open
burning of waste.39 The efforts of local governments and
administrative regions in conjunction with other · executive agencies
and stakeholders are also outlined.40
Similarly, the writ of continuing mandamus cannot issue.
Rule 8, Section 1 of the RPEC lays down the requirements for a
petition for continuing mandamus as follows:
RULES
WRIT OF CONTINUING MANDAMUS
SECTION 1. Petition for continuing mandamus.-When any agency
or instrumentality of the government or officer thereof unlawfully
neglects the performance of an act which the law specifically enjoins
as a duty resulting from an office, trust or station in connection with
the enforcement or violation of an environmental law rule or
regulation or a right therein, or unlawfully excludes another from the
use or enjoyment of such right and there is no other plain, speedy
and adequate remedy in the ordinary course of law, the person
aggrieved thereby may file a verified petition in the proper court,
alleging the facts with certainty, attaching thereto supporting
evidence, specifying that the petition concerns an environmental law,
rule or regulation, and praying that judgment be rendered
commanding the respondent to do an act or series of acts until the
judgment is fully satisfied, and to pay damages sustained by the
petitioner by reason of the malicious neglect to perform the duties of
the respondent, under the law, rules or regulations. The petition shall
also contain a sworn certification of non-forum shopping.
First, the petitioners failed to prove direct or personal injury arising
from acts attributable to the respondents to be entitled to the
writ.1âwphi1 While the requirements of standing had been liberalized
in environmental cases, the general rule of real party-in-interest
applies to a petition for continuing mandamus.41
Second, the Road Sharing Principle is precisely as it is denominated
- a principle. It cannot be considered an absolute imposition to
encroach upon the province of public respondents to determine the
manner by which this principle is applied or considered in their policy
decisions. Mandamus lies to compel the performance of duties that
are purely ministerial in nature, not those that are
discretionary,42 and the official can only be directed by mandamus to
act but not to act one way or the other. The duty being enjoined
in mandamus must be one according to the terms provided in the
law itself. Thus, the recognized rule is that, in the performance of an
official duty or act involving discretion, the corresponding official can
only be directed by mandamus to act, but not to act one way or the
other.43
This Court cannot but note that this is precisely the thrust of the
petition - to compel the respondents to act one way to implement the
Road Sharing Principle - to bifurcate all roads in the country to
devote half to sidewalk and bicycling, and the other to Filipino-made
transport - when there is nothing in EO 774, AO 254 and allied
issuances that require that specific course of action in order to
implement the same. Their good intentions notwithstanding, the
petitioners cannot supplant the executive department's discretion of the DILG, this priority tagging and tracking is cascaded down to
with their own through this petition for the issuance of writs the local budget management of local government units.49
of kalikasan and continuing mandamus.
Other causes of action
In this case, there is no showing of unlawful neglect on the part of
the respondents to perform any act that the law specifically enjoins As previously discussed, the petitioners' failure to show any violation
as a duty - there being nothing in the executive issuances relied on the part of the respondents renders it unnecessary to rule on
upon by the petitioners that specifically enjoins the bifurcation of other allegations of violation that the petitioners rely upon as causes
roads to implement the Road Sharing Principle. To the opposite, the of action against the public respondents.
respondents were able to show that they were and are actively
implementing projects and programs that seek to improve air
quality.1âwphi1 In fine, the allegations and supporting evidence in the petition fall
short in showing an actual or threatened violation of the petitioners'
constitutional right to a balanced and healthful ecology arising from
At its core, what the petitioners are seeking to compel is not the an unlawful act or omission by, or any unlawful neglect on the part
performance of a ministerial act, but a discretionary act - the manner of, the respondents that would warrant the issuance of the writs
of implementation of the Road Sharing Principle. Clearly, petitioners' prayed for.
preferred specific course of action (i.e. the bifurcation of roads to
devote for all-weather sidewalk and bicycling and Filipino-made
transport vehicles) to implement the Road Sharing Principle finds no WHEREFORE, the petition is DISMISSED.
textual basis in law or executive issuances for it to be considered an
act enjoined by law as a duty, leading to the necessary conclusion SO ORDERED.
that the continuing mandamus prayed for seeks not the
implementation of an environmental law, rule or regulation, but to
control the exercise of discretion of the executive as to how the
principle enunciated in an executive issuance relating to the
environment is best implemented. Clearly, the determination of the
means to be taken by the executive in implementing or actualizing
any stated legislative or executive policy relating to the environment
requires the use of discretion. Absent a showing that the executive is
guilty of "gross abuse of discretion, manifest injustice or palpable
excess of authority,"44 the general rule applies that discretion cannot
be checked via this petition for continuing mandamus. Hence, the
continuing mandamus cannot issue.1âwphi1

Road Users' Tax

Finally, petitioners seek to compel DBM to release the Road Users'

Tax to fund the reform of the road and transportation system and the
implementation of the Road Sharing Principle.

It bears clarifying that the Road Users' Tax mentioned in Section

9(e) of EO 774, apparently reiterated in Section 5 of AO 254 is the
Special Vehicle Pollution Control Fund component of the Motor
Vehicle Users' . Charge ("MVUC') imposed on owners of motor
vehicles in RA 8794, otherwise known as the Road Users' Tax Law.
By the express provisions of the aforementioned law, the amounts in
the special trust accounts of the MVUC are earmarked solely and
used exclusively (1) for road maintenance and the improvement of
the road drainage, (2) for the installation of adequate and efficient
traffic lights and road safety devices, and (3) for the air pollution
control, and their utilization are subject to the management of the
Road Board.45 Verily, the petitioners' demand for the immediate
and unilateral release of the Road Users' Tax by the DBM to support
the petitioners' operationalization of this Road Sharing Principle has
no basis in law. The executive issuances relied upon by the
petitioner do not rise to the level of law that can supplant the
provisions of RA 8794 that require the approval of the Road Board
for the use of the monies in the trust fund. In other words, the
provisions on the release of funds by the DBM as provided in EO
774 and AO 254 are necessarily subject to the conditions set forth in
RA 8794. Notably, RA 9729, as amended by RA 10174, provides for
the establishment for the People's Survival Fund 46 that may be
tapped for adaptation activities, which similarly require approval from
the PSF Board.47

That notwithstanding, the claim made by the petitioners that hardly

any budget is allotted to mitigating environmental pollution is belied
by the priority given to programs aimed at addressing and mitigating
climate change that the DBM and the CCC had been tagging and
tracking as priority expenditures since 2013. 48 With the coordination
G.R. No. 246209, September 03, 2019
MONICO A. ABOGADO, ROBERTO M. ASIADO, LARRY HUGO,
ANGELO SADANG, NONELON BALBONTIN, SALITO LAGROSA,
ARZEL BELIDAN, RONALD GRANDIA, TROY LAGROSA, RONEL
BADILLA, ARCHIE GARCIANO, REGIDOR ASIADO, ELY LOPEZ,
EXPEDITO MAGDAYAO, RENY MAGBANUA, ROMULO CANA,
JR., ROGELIO HINGPIT, JONEL HUGO, ROBERT VALDEZ, RIZEN
GALVAN, RICARDO NATURAL, SANNY BELIDAN, ROWEL P.
EJONA, FELIX ULZON, RAFFY M. ASIADO, PRIMO M. ASIADO,
ADRIAN P. ABAYAN, RANDY DACUMOS, DANILO BELONO,
ROMEO MALAGUIT, DENNIS BANIA, JASON VILLAMOR, GARY
CASTILLOS, ALBERTO SONIO, DOLIE DUSONG, BJ PIRING AND
JING MALINAO (COLLECTIVELY KNOWN AS THE "KALAYAAN
PALAWAN FARMERS AND FISHERFOLK ASSOCIATION"), NILO
LABRADOR, W1LFREDO LABANDELO AND ROLANDO
LABANDELO, AND INTEGRATED BAR OF THE PHILIPPINES,
PETITIONERS, v. DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES, REPRESENTED BY SECRETARY HON.
ROY A. CIMATU, DEPARTMENT OF AGRICULTURE,
REPRESENTED BY SECRETARY HON. EMMANUEL PIÑOL,
BUREAU OF FISHERIES AND AQUATIC RESOURCES,
REPRESENTED BY NATIONAL DIRECTOR HON. EDUARDO B.
GONGONA, PHILIPPINE NAVY, REPRESENTED BY FLAG
OFFICER IN COMMAND HON. VADM ROBERT EMPEDRAD, PN,
PHILIPPINE COAST GUARD, REPRESENTED BY COMMANDANT
HON. ADMIRAL ELSON E. HERMOGINO, PCG, PHILIPPINE
NATIONAL POLICE, REPRESENTED BY CHIEF HON. PDG.
OSCAR ALBAYALDE, PNP MARITIME GROUP, REPRESENTED
BY DIRECTOR HON. PCSUPT RODELIO B. JOCSON, AND
DEPARTMENT OF JUSTICE, REPRESENTED BY SECRETARY
HON. MENARDO I. GUEVARRA, RESPONDENTS.
RESOLUTION
LEONEN, J.:
Cases involving the public interest which seek to protect the
marginalized and oppressed deserve more attention from their
lawyers as compared with any other case. Those who have the least
deserve to have more in law.
Before this Court is an Omnibus Motion with Manifestation 1 and
Compliance with Motion2 requesting, among others, the withdrawal
of a Petition seeking writs of kalikasan and continuing mandamus.
On April 16, 2019, a Petition3 was filed by the Integrated Bar of the
Philippines, Monico A. Abogado, Roberto M. Asiado, Larry Hugo,
Angelo Sadang, Nonelon Balbontin, Salito Lagrosa, Arzel Belidan,
Ronald Grandia, Troy Lagrosa, Ronel Badilla, Archie Garciano,
Regidor Asiado, Ely Lopez, Expedito Magdayao, Reny Magbanua,
Romulo Cana, Jr., Rogelio Hingpit, Jonel Hugo, Robert Valdez,
Rizen Galvan, Ricardo Natural, Sanny Belidan, Rowel P. Ejona,
Felix Ulzon, Raffy M. Asiado, Primo M. Asiado, Adrian P. Abayan,
Randy Dacumos, Danilo Belono, Romeo Malaguit, Dennis Bania,
Jason Villamor, Gary Castillos, Alberto Sonio, Dolie Dusong, BJ
Piring, and Jing Malinao,4 all members of the Kalayaan Palawan
Farmers and Fisherfolk Association, along with Nilo Labrador,
Wilfredo Labandelo, and Rolando Labandelo, who were residents of
Sitio Kinabuksan, Cawag, Zambales.
They sought the issuance of writs of kalikasan and
continuing mandamus under A.M. No. 09-6-8-SC, or the Rules of
Procedure for Environmental Cases, over Panatag Shoal
(Scarborough Shoal), Panganiban Reef (Mischief Reef), and
Ayungin Shoal (Second Thomas Shoal), located within the
Philippines' exclusive economic zone.
Petitioners relied on the Permanent Court of Arbitration's findings in
its July 12, 2016 Arbitral Award 5 that Chinese fisherfolk and China's
construction of artificial lands have caused severe environmental
damage to the marine environment of these areas. They alleged that
their "constitutional right to a balanced and healthful ecology" 6 was
being threatened and was being violated due to the "omissions,
failure, and/or refusal of Respondents to enforce Philippine laws in
Panatag Shoal, Ayungin Shoal, and Panganiban Reef."7
Respondents in this case include the Department of Environment
and Natural Resources, represented by Secretary Roy A. Cimatu,
the Department of Agriculture, represented by Secretary Emmanuel
Pifiol, the Bureau Of Fisheries and Aquatic Resources, represented
by National Director Eduardo B. Gongona, the Philippine Navy,
represented by Flag Officer In Command Robert Empedrad, the
Philippine Coast Guard, represented by Admiral Elson E.
Hermogino, the Philippine National Police, represented by Chief
Oscar Albayalde, the Philippine National Police Maritime Group,
represented by Director Rodelio B. Jocson, and the Department Of
Justice, represented by Secretary Menardo I. Guevarra.
On May 3, 2019, this Court issued a Writ of Kalikasan and ordered
respondents to file a verified return within a non-extendible period of
10 days from receipt of notice.8
On May 24, 2019, respondents, through the Office of the Solicitor
General, filed their Verified Return with Comment. 9 They argued that
the Petition suffered from fatal procedural infirmities, which should
have warranted its dismissal. They alleged that the Petition failed to
state a cause of action since petitioners merely relied on the 2016
Arbitral Award as evidence and failed to attach the required judicial
affidavits of witnesses.10
Respondents likewise made several factual allegations to
substantiate their argument that they complied with environmental
laws and regulations in the protection and preservation of Panatag
Shoal (Scarborough Shoal), Panganiban Reef (Mischief Reef), and
Ayungin Shoal (Second Thomas Shoal). 11 They submitted that since
the case involved the conduct of foreign relations, the remedies
sought by petitioners were diplomatic and political in nature, and
hence "transcend[ed] mere enforcement of environmental laws."12
On June 4, 2019, this Court issued a Resolution 13 setting the case
for oral arguments.14 Preliminary conference was held on June 18,
2019. On the same day, this Court issued the Advisory 15 for oral
arguments. Parties were informed to submit their written copies of
opening statements, tables of authorities, copies of any document to
be presented, and all slide presentations no later than July 1, 2019. 16
On July 2, 2019, this Court issued a Resolution 17 informing the
parties that Associate Justice Antonio T. Carpio voluntarily inhibited
from the case.
The first round of oral arguments was held on July 2, 2019.
Petitioners' counsel Atty. Andre C. Palacios and collaborating
counsel Atty. Jose Manuel I. Diokno presented their opening
statements and were interpellated by this Court En Banc.18
On July 9, 2019, the oral arguments resumed, with Solicitor General
Jose C. Calida (Solicitor General Calida) about to present
respondents' arguments. However, before presenting his opening
statement, he orally manifested that he be allowed to submit as
additional compliance a Manifestation and Motion,19 along with its
attached documents, to be admitted as part of the case records. 20
The documents attached to the Manifestation and Motion were
affidavits21 executed by 19 of the 40 fisherfolk-petitioners before
respondent Bureau of Fisheries and Aquatic Resources, requesting
that their signatures be withdrawn from the Petition, which they
claimed they did not read and was not explained to them before
signing. They stated that they had been misinformed about the
nature of the Petition filed before this Court. Thinking that the
respondents would be the foreign nationals who caused the
environmental damage, they said that they were surprised to hear
that the case was instead filed against the Bureau of Fisheries and
Aquatic Resources and the Philippine Navy, whom they considered
allies.
In particular, the affidavits read:
[Sinumpaang Salaysay of petitioners Monico Abogado and Roberto
Asiado, May 29, 2019]
1. Kami ay minsang kinausap ni Atty[.] Ann Fatima Chavez
patungkol sa pag proteksybn sa lugar naming sa Pag-Asa laban sa
mga dayuhan gaya ng mga intsik at Vietnamese na gumagamit ng
cyanide at dinamita sa kanilang pangingisda;
2. May inilatag syang dokumento sa amin kung paano
mapangalagaan ang kalikasan sa aming lugar at para sa aming
ikabubuti bilang mangingisda. Ipinaliwanag pa sa amin kung ano
ang mga nakasaad sa dokumento na ang layunin lamang ay ang
pangalagaan ang karagatan na buong nasasakupan ng Kalayaan, at
para rin sa kapakanan naming mga mangingisda;
....
6. Walang nabanggit sa amin na kakasuhan ang ano mang ahensya
ditto (sic) dahil kung nagkaganon, talagang di kami pipirma. Nagulat
na lang kami nang malaman namin na tila ginagamit ang asosasyon
namin sa Kalayaan upang kasuhan pala ang mismong mga ahensya
na ito na syang katuwang namin doon;
7. Pagkatapos ng pag-uusap na iyon, ipinabatid naming sa aming
mga kasamahan na may pipirmahan sila at suportahan namin ito
dahil ang buong akala naman namin baka may donasyon o
benepisyo para sa aming mga mangingisda at kasamahang
magsasaka;
8. Ang buod ng salaysay na ito ay upang ilahad ang katotohanan na
iba ang paliwanag sa amin ni Atty. Chavez sa lumalabas ngayon na
reklamo "daw" na mula sa amin. Ito po ay mariin naming
pinapasinungalingan. Di po katanggap-tanggap sa amin na
mismong navy at coast guard na siyang katuwang namin sa Pag-
Asa ay kakasuhan namin ngayon. Wala kaming alam dito at di
naming suportado and inihaing petisyon laban sa mga ahensyang
ito;
9. Wala kaming kopya na nakuha dahil buong tiwala kami dun sa
aming napag-usapan para sa aming benepisyo at kapakanan. Muli,
walang nabanggit na pagsasampa ng reklamo laban sa katuwang
naming mga ahensyang ito. Parang niloko po kami sa lagay na 'to e.
Maganda ang samahan naming ng navy pero tila sinisira kami sa
isa't isa.22 (Emphasis supplied)
[Sinumpaang Salaysay of petitioner Monico Abogado, June 27,
2019]
8. Nagtungo ulit ako ng Navy sa sumunod na araw at doon ko na
lang nalaman na pati pala ang mga ibang ahensiya ng gobyerno,
kasali na ang BFAR, ay kinasuhan din pala gamit ang aming
asosasyon bilang petitioner. At masakit sa loob ko na may isinama
pang ibang pangalan na hindi naman myembro ng aming asosasyon
tulad nina, NILO LABRADOR, WILFREDO LABANDELO at
ROLANDO LABANDELO na hindi namin ka-myembro, at di namin
kilala. Kami ay 37 lang na miyembro ng aming asosasyon at hindi
sila kasali. Para sa akin, isang malaking panlilinlang ito at
panggagamit lamang sa aming asosasyon. Kaming mga maliliit ang
naiipit dito. Ngayong araw ko lang nalaman na ang nasabing tatlong
mangingisda pala ay kasama naming napangalanan bilang petitioner
pala at hindi pinapalabas bilang myembro ng aming asosasyon;
9. Pinapatunayan ko po na wala akong kinalaman sa petisyon na
sinasabi nila laban sa mga ahensiya ng gobyerno. Wala akong
nababasa na petisyon laban sa Navy, BFAR at ibang ahensiya.
Wala akong pinipirmahan na petisyon laban sa mga ahensiya. Na sa
pagkakatanda ko ay may nabanggit lamang si Atty. Chavez sa akin
dati na petisyon laban sa mga dayuhang nangingisda sa Kalayaan
ngunit ang petisyon na sinasabi niya ay hindi ko din nakita at
pinirmahan.
....
14. Wala akong anumang hawak na kopya ng petisyon laban sa
mga dayuhang mangingisda at wala din akong hawak na kopya ng
petisyon laban sa mga ahensiya ng gobyerno. Muli, walang
nabanggit sa akin na pagsasampa ng reklamo laban sa katuwang
naming mga ahensyang ito. Parang niloko yung asosasyon namin.
Maganda ang samahan namin sa Navy at iba pang ahensiya pero
tila sinisira kami sa isa't isa;
15. Na ngayong araw ko lang nakita ang buong kopya ng sinasabing
petisyon. Nagulat ako na may nakita akong katulad ng aking pirma
duon sa baba ng "verification" ng parte ng petisyon. Muli, wala
akong natatandaan na may pinirmahan akong ganun at wala din
akong nababasang ganung papel[.]23 (Emphasis supplied)
[Sinumpaang Salaysay of petitioner Roberto Asiado, June 27, 2019]
4. May inilatag siyang dokumento sa akin kung paano
mapangangalagaan ang kalikasan sa aming lugar at para sa aming
ikabubuti bilang mga mangingisda. Ang sabi ni Atty. Ann Fatima
Chavez akin (sic) ay dokumentong ito ay isang petisyon laban sa
mga dayuhan, sa kanilang illegal na pangingisda at paninira sa ating
karagatan. Ipinaliwanag pa sa akin kung ano ang mga nakasaad sa
dokumento na ang layunin lamang ay ang pangalagaan ang
karagatan na buong nasasakupan ng Pag-Asa, Kalayaan, Palawan,
at para rin sa kapakanan naming mga mangingisda;
5. Pinasadahan kong binasa ang dokumento na ito pero dahil
maganda naman ang pagkapaliwanag at mahaba-haba siyang
basahin at dahil malaki ang tiwala ko kay Atty. Ann Fatima Chavez,
pumayag ako na pumirma dito kahit na di ko nabasa ang nilalaman
ng petisyon;
6. Dito ako pansamantalang nakabase sa Puerto Princesa, Palawan,
at dahil ako ang president ng aming asosasyon, ako ang siyang
kinausap patungkol sa sinasabing layunin na maprotektahan ang
kapakanan naming mga mangingisda sa Pag-Asa, Kalayaan,
Palawan;
7. Ako mismo ang naghatid ng napirmahang petisyon na galing sa
Pag-Aasa, Kalayaan, Palawan sa law office nina Atty. Chavez sa
may gasoline station sa Malvar, Puerto Princesa, Palawan. Matapos
noon, di na kami nagkita pa ni Atty. Chavez;
....
11. Wala akong nakuhang kopya ng petisyon dahil buo ang tiwala ko
kay Atty. Chavez. Muli, walang nabanggit na pagsasampa ng
reklamo laban sa mga ahensyang ito. Parang niloko po kami ni Atty.
Chavez sa lagay na ito. Maganda ang samahan naming ng BFAR,
Philippine Navy at Philippine Coast guard pero tila sinisira kami
laban sa isa't isa[.]24 (Emphasis supplied)
[Sinumpaang Salaysay of petitioner Arzel Belidan, June 27, 2019]
2. Noong mga February 2018, nasa opisina ako ng asosasyon
namin dito sa Puerto Princesa. Pinatawag ako para utusang
magpadala ng isang envelope papuntang Brgy. Pag-asa, Kalayaan,
Palawan;
3. Ang envelope na aking ipinadala ay naka seal ng masking tape, at
naka address ito sa pangalan ni Nonelon Balbontin, myembro ng
aming asosasyon na naka base sa Brgy. Pag-asa, Kalayaan,
Palawaan noon;
4. Hindi ko nakita ang loob ng envelope. Hindi ko rin po binuksan
ang envelope na iyon. Wala akong alam sa nilalaman na dokumento
ng envelope na iyon, at kung ano na ang nangyari duon pagkatapos
kong naipadala ito;
5. Ngayon, nagulat nalang po ako na may petisyon daw kaming
inihain laban sa mga ahensya ng gobyerno, at ang pangalan ko ay
nakasali sa mga nag rereklamo. Ako din ay nabigla ng may pirma
ako sa nasabing petition. Sa katunayan wala akong pinipirmahan
napetsyon laban sa mga ahensya ng gobyerno kagaya ng BFAR,
Philippine Navy, Philippine Coast Guard at iba pa;
6. Wala naman po akong reklamo sa mga nasabing ahensya ng
gobyerno dahil ang mga ito ang tumutulong at kaagapay at
katuwang namin sa Brgy. Pag-Asa, Kalayaan, Palawan;
7. Marami pong naitulong ang BFAR, Philippine Navy at Philippine
Coast Guard sa amin;
8. Ang buod ng salaysay na ito ay upang ilahad ang katotohanan na
hindi ako pumirma sa nasabing reklamo laban sa mga ahensyang
ito. Di po katanggap-tanggap sa akin na mismong BFAR, Philippine
Navy at Philippine Coast Guard na siyang katuwang namin sa Pag-
Asa ay kakasuhan namin ngayon. Wala kaming alam dito at di
namin suportado ang inihaing petisyon laban sa mga ahensyang
ito[.]25 (Emphasis supplied)
[Sinumpaang Salaysay of petitioner Angelo Sadang, July 4, 2019]
2. Na ako ay nautusang mag pa-ikot ng dalawang pahina ng papel
para pirmahan ng mga kasama ko sa asosasyon;
3. Ang pagkakaalam ko po ang papel na iyon ay para sa mga
benepisyo ng ibibigay ng gobyerno para sa amin. Wala akong
kaalaman na ang papel na iyon ay kaso pala laban sa gobyerno; at
4. Noong nakaraang linggo ko lang nalaman sa president naming
(sic) na meron palang isang petisyon laban sa mga ahensiya ng
gobyerno na kami daw ang nagsampa. Pinapatunayan ko po na
wala akong kinalaman sa petisyon at wala akong pinipirmahan na
petisyon laban sa mga ahensiya[.]26 (Emphasis supplied)
[Handwritten letter of petitioner Randy Dacumos, July 4, 2019]
Ako[,] RANDY DACUMOS[,] resid[e]nte ng Bgy. Pag-Asa, Mun. of
Kalayaan Member ng Samahan ng Fisher Fo[l]ks[.] Ako po ay
nagulat ng (sic) malaman kong nadawit [ang aming] pangalan sa
isinampa[ng] kaso[.] Gusto ko pong malaman nin[y]o na wala akong
pin[i]rmahang papel [na] kinakas[u]han ang ibang [ahensya] ng
go[by]erno.27
[Handwritten letter of petitioner Larry Hugo, July 4, 2019]
Ako po si Larry Hugo nagmula po ako sa bayan ng Kalayaan. Ako
yong Vice Prest. (sic) ng Samahan ng mga [illegible] na
mangingisda ng Kalayaan[.] Hindi po totoo na kami po ay pumirma
doon sa sinasabing [illegible] kas[u]han ang B[F]AR, NAVY[.]
Inos[e]nt[e] po kami sa naturang problema[.] Nagamit lamang po ang
aming Samahan para sa kanilang mga masamang piano kung ano
man yon!28
[Handwritten letter of petitioner Romulo Caña, Jr., July 4, 2019]
Ako po si Romulo C. Caña, Jr. taga Barangay Pag-asa Kalayaan
Palawan[.] Wala po akong alam sa pirmahan nagulat nalang po ako
na nadamay ang pangalan ko sa kaso. Ang alam kolang (sic) ay
may ipamimigay sila sa amin [b]ilang tulong po sa amin. Wala talaga
po akong alam diyan.29
[Handwritten letter of petitioner Danilo Belono, July 4, 2019]
Ako si Danilo Belono.
May asawa at anak[.] Naninirahan sa Pag-Asa, Kalayaan, Palawan[.]
Isa po ak[o]ng member sa Fish[er] Fo[lk.] Hindi po alam na ganon
ang ma[n]gyayari[.] Hindi po kami nag pirma laban sa ibang
samahan na t[u]m[u]t[u]long sa amin (sic) tulad po na BFAR at mga
su[n]dalo[.]30
[Pinagsamang Sinumpaang Salaysay of petitioners Regidor Asiado
and Richard Galvan, July 5, 2019 and Pinagsamang Sinumpaang
Salaysay of petitioners Dennis Bania, Felix Ulzon, Jing Malinao,
Ronald Grandia, Expedito Magdayao, Robert Valdez, Raffy M.
Asiado, Primo M. Asiado, Adrian P. Abayan, and Romeo M.
Malaguit, July 5, 2019]
2. Na nalaman na lang namin mula sa mga kasamahan namin sa
asosasyon na meron palang isang petisyon laban sa mga ahensiya
ng gobyerno na kami daw ang nagsampa. Pinapatunayan po
naming (sic) na wala kaming kinalaman sa petisyon;
3. Na hindi po naming (sic) kayang kasuhan ang mga ahensiya ng
gobyerno dahil sila ang tumutulong sa aming mga mangingisda;
4. Walang nabang[g]it sa amin na kakasuhan ang ano mang
ahensya ng gobyerno ng ating bansa dahil kung nag kaganoon,
talagang di kami pipirma. Nagulat na lang kami nang malaman
namin na tila ginagamit ang asosasyon namin sa Kalayaan upang
kasuhan pala ang mismong mga ahensya na ito na syang katuwang
namin sa Kalayaan[.]31 (Emphasis supplied)
[Sinumpaang Salayasay of petitioners Wilfredo M. Labandelo and
Nilo P. Labrador, July 5, 2019]
5. Noong Abril 2019, kami (Wilfredo Labandelo, Nilo Labrador) ay
pinapatawag ng IBP sa kanilang tanggapan sa Maynila kung saan
may pinakita sa aming Petition. Kung anuman ang nilalaman ng
Petition na ito ay hindi namin nalaman noong pagkakataong iyon
sapagkat di kami binigyan ng pagkakataon para mabasa ang
nilalalman nito.
6. Sinubukan rin naming manghingi ng kopya ng nasabing Petition
sa IBP at pinangakuan na bibigyan nito subalit hanggang ngayon
wala pa rin nakakarating sa amin. Sa dahilang ito, pinapatunayan
namin na hanggang sa araw na ito ay hindi pa rin namin alam ang
buong nilalaman ng Petition na ito.
7. Nalaman nalang namin sa news na aming napanood sa
telebisyon at sa Rappler na ang Petition na aming pinirmahan pala
ay tungkol sa mga nangyayaring problema sa West Philippine Sea.
8. Pinapatunayan namin na wala kaming kinalaman sa naturang
Petition na laban sa anumang ahensiya ng gobyerno sapagkat ito ay
magkaiba sa kasalukuyang problema na inilapit namin sa IBP gaya
ng pagpapasara ng paaralan, at ang pagpapaalis sa mga
naninirahan sa Sitio Kinabukasan.
9. Lumapit po kami sa IBP na walang intensyong magreklamo o
mag-file ng Petition laban sa mga ahensiya ng gobyerno gaya ng
BFAR, DENR, DA, Philippine Coast Guard, at iba pa. Wala rin po
nabanggit sa amin sa kahit anumang pagkakataon na magsasampa
kami kasama ng IBP ng anumang kaso sa mga nasabing
ahensiya.32 (Emphasis supplied)
Petitioners' counsels objected to Solicitor General Calida's
Manifestation and Motion, arguing that it was unethical for
respondent Bureau of Fisheries and Aquatic Resources to have
conferred with petitioners without their counsels' knowledge. 33
In view of this development, the parties were required to move in the
premises and submit their respective compliances by 4:30 p.m. on
July 12, 2019.34
On July 12, 2019, petitioners' counsels filed a Motion for Extension
of Time to Confer with Clients and Obtain Special Authority. 35 Citing
Rule 138, Section 2336 of the Rules of Court, they requested a 10-
day extension, or until July 22, 2019, to confer with their clients
before proceeding with any action that would result in the termination
of the case.
The Office of the Solicitor General, on the other hand, filed a 7. WILFREDO LABANDELO
Compliance (Re: Order to Move in the Premises). 37 It opposed the 8. THE INTEGRATED BAR OF THE
Motion for Extension of Time, saying that the pleading "will not cure PHILIPPINES
the infirmity that the Petition was initiated by counsel without the full
knowledge and understanding of the fisherfolk-petitioners." 38 As
such, it requested that the case be immediately dismissed. 39

On July 16,2019, this Court issued a Resolution 40 granting the 2. GRANT the undersigned counsels' Motion to
Motion for Extension of Time until 12:00 noon of July 19, 2019 and Withdraw as Counsel for the following Petitioners:
noting the Compliance. It also reminded counsels for all parties to 1. RICARDO NATURAL
observe the rule on subjudice and refrain from making statements 2. LARRY HUGO
about the case to the media or on social media.41 3. ARZEL BELIDAN
4. RONALD GRANDIA
At 4:18 p.m. on July 19, 2019, petitioners' counsels filed an Omnibus 5. RONEL BADILLA
Motion with Manifestation.42 They informed this Court that they met 6. EXPEDITO MAGDAYAO
with six (6) of the fisherfolk-petitioners, who signified that they no 7. JONEL HUGO
longer wished to pursue the case. They also signed a handwritten 8. ROBERT VALDEZ
letter, which read: 9. SANNY BELIDAN
Mga Ginoo, 10. ROWL P. EJONA (sic)
11. FELIX ULZON
Una po sa lahat ay nais naming magpasalamat sa inyong panahong 12. RAFFY M. ASIADO
ginugol sa pakikipagpulong sa amin. 13. PRIMO M. ASIADO
14. ADRIAN P. ABAYAN
Matapos po ang ating pag-uusap kahapon, isinangguni po namin 15. DANILO BELONO
ang usapin sa mga kapwa naming kasapi at aming napagkaisahang 16. ROMEO MALAGUIT
iatras nyo na lamang ang kaso, nang sa gayon ay maging tahimik na 17. DENNIS BANIA
ang aming mga buhay. 18. JING MALINAO
19. NILO LABRADOR
Bilang mga kinatawan ng samahan ng Fisherfolks ng Kalayaan at 20. ROLANDO LABANDELO.
upang patunayan ang kagustuhan ng nakararami, aming inilagda
ang aming mga pangalan ngayong araw na ito sa Lungsod ng Pto.
Princesa.43
Petitioners' counsels stated that the lawyers of the Integrated Bar of
the Philippines-Palawan Chapter were able to meet with these six 3. GRANT the Petitioners' Motion to Expunge from
(6) fisherfolk-petitioners in Puerto Princesa City as they could not the Records Respondents' Manifestation [and]
leave yet for Pag-asa Island due to engine trouble in their vessel. As Motion filed on 9 July 2019.
for the 20 other fisherfolk-petitioners who had signed the Petition, the
lawyers were unable to meet them as they were "on Pag-asa Island 4. NOTE the above manifestations.50
and the undersigned counsels cannot travel to meet them there;
or ... communicate with them as Philippine telephone companies In a July 30, 2019 Resolution, 51 this Court deferred action on the
have no or very weak network coverage there."44 Motion to Withdraw as Counsel and required petitioners' counsels to:
(a) exert more efforts to reach their clients through means of
Petitioners' counsels also stated that despite "heavy rain, strong communication they have established when they engaged them as
wind, and large waves[,]" 45 the lawyers of the Integrated Bar of the their clients; (b) provide adequate proof that the 20 other clients have
Philippines-Zambales Chapter exerted efforts to meet with the three actual knowledge of the contents of their petition; and (c) provide
(3) fisherfolk-petitioners in Sitio Kinabuksan, Zambales. However, legal justification that the Motion to Withdraw as Counsel may be
they were only able to meet with petitioner Wilfredo Labandelo granted while leaving most of the petitioners without
(Wilfredo), who informed them that his brother, petitioner Rolando representation.52
Labandelo (Rolando), had already moved to Palawan on June 22, Petitioners' counsels were given a non-extendible period of seven
2019 and that petitioner Nilo Labrador (Labrador) has since (7) days53 to comply with the Resolution.
relocated to another place on July 12, 2019 but did not leave any
contact details.46 Petitioner Wilfredo also executed a handwritten On August 14, 2019, petitioners' counsels filed a Motion to Admit
letter stating: Compliance with Motion.54 In it, they explained that while they were
Mga Ginoo: able to send through registered mail a copy of the Compliance to the
Office of the Solicitor General on August 13, 2019, "the heavier-than-
Pakiurong nyo ang kaso namin Abogado vs DENR[.]47 usual traffic"55 caused their messenger to arrive a few minutes after
Petitioners' counsels also informed this Court that on July 19, 2019, 5:00 p.m. and fail to file, the pleading before this Court. Hence, they
the Integrated Bar of the Philippines Board of Governors adopted prayed that the Compliance with Motion still be admitted by this
resolutions requesting the Petition's withdrawal. 48 Moreover, they Court.
again objected to the Office of the Solicitor General's Manifestation
and Motion dated July 9, 2019, which they said "has caused this In their attached Compliance with Motion, 56 petitioners' counsels
case to become a media spectacle instead of being a case that explained that on August 4, 2019, members of the Integrated Bar of
presents important issues concerning the environment in the West the Philippines-Zambales Chapter met with fisherfolk-petitioners
Philippine Sea."49 Thus, they prayed that this Court: Rolando and Labrador, who provided them with letters stating:
Mga
1. GRANT the following Petitioners' Motion to
ginoo!
Withdraw the Petition for the following Petitioners:
1. MONICO ABOGADO
Pakiurong nyo aiig kaso
2. ROBERTO ASIADO  
naming Abogado vs. DENR
3. NONELON BALBONTIN
4. RANDY DACUMOS
     
5. ANGELO SADANG
6. RENY MAGBANUA
 Rolano M.
   
Labandelo
Aug. 4/ 2019
(sic)
     
....  
Mga
ginoo:
     
Pakiurong nyo ang kaso
namin Abogado vs. DENR
     
    Nilo Labrador
Oua. 4/2019
   
(sic)57
Petitioners' counsels likewise stated that Atty. Josefina Ela Bueno,
the former president of the Integrated Bar of the Philippines-
Zambales Chapter, executed an affidavit narrating how she and the
other officers of the Chapter met with and explained the Petition's
contents to the fisherfolk-petitioners, recounting how the latter
voluntarily signed its Verification/Certification. 58 "However, due to
logistical difficulties brought about by the inclement weather and the
distance between Zambales and Manila," 59 petitioners' counsels said
that the affidavit could not be attached to the pleading. Hence, they
prayed for additional time to file this affidavit. 60
To prove the difficulties in contacting their clients, petitioners'
counsels attached a Certification61 from the Kalayaan Municipal
Administrator, who stated that there had been no cellphone or
internet service in Pag-asa Island from the third quarter of 2016 until
July 27, 2019.62
Petitioners' counsels further manifested that on August 2, 2019, in
Puerto Princesa City members of the Integrated Bar of the
Philippines-Palawan Chapter met with fisherfolk-petitioner Ricardo
Natural (Natural), who expressed his desire to withdraw the case. 63
Petitioners' counsels likewise manifested that at around 10:00 a.m.
on the same day, they were able to videoconference with 12 of the
fisherfolk-petitioners, namely, Arzel Belidan, Ronald Grandia,
Expedito Magdayao, Jonel Hugo, Robert Valdez, Felix Ulson, Raffy
Asiado, Adrian Abayan, Danilo Belono, and Jing Malinao. They did
the same with two (2) other fisherfolk-petitioners, Romeo Malaguit
and Dennis Bania, at 2:00 p.m. that day. While fisherfolk-petitioner
Larry Hugo (Larry) was unable to join the video conference, he,
together with the 14 fisherfolk-petitioners, executed a letter stating
their desire to join the other fisherfolk-petitioners in withdrawing the
Petition.64
Petitioners' counsels alleged that Sanny Belidan (Sanny) and Rowel
Ejona (Ejona), the remaining fisherfolk-petitioners who have yet to
give their conformity to the Petition's withdrawal, could not be
contacted despite several attempts through their mobile
phones.65 Leonila De Jesus, the officer-in-charge for Pag-asa Island,
also confirmed that they were not in Pag-asa Island. 66 Petitioners'
counsels maintained, however, that two (2) officers of the Kalayaan
Palawan Farmers and Fisherfolk Association would execute an
affidavit narrating the circumstances of their participation and their
understanding of the Petition's contents. As such, they requested
additional time to submit the affidavit.67
In sum, petitioners' counsels prayed that this Court:
1. NOTE this Compliance;
2. GRANT the undersigned counsels' motion for
additional time, or until 16 August 2019 (Friday)
to file the affidavit of Atty. Josefina Ela Bueno and
the letter from the officers of the Kalayaan
Palawan Farmers and Fisherfolk Association; and
3. GRANT the Motion to Withdraw the Petition.68
This Court resolves to grant the Motion to Withdraw the Petition. The
Petition is dismissed, without passing upon any of the substantive
issues raised. However, we take this occasion to discuss the
following points.
The nature of a writ of kalikasan is stated in Rule 7, Section 1 of the
Rules of Procedure for Environmental Cases:69
SECTION 1. Nature of the writ. — The writ is a remedy available to a
natural or juridical person, entity authorized by law, people's
organization, non-governmental organization, or any public interest
group accredited by or registered with any government agency, on
behalf of persons whose constitutional right to a balanced and
healthful ecology is violated, or threatened with violation by an
unlawful act or omission of a public official or employee, or private
individual or entity, involving environmental damage of such
magnitude as to prejudice the life, health or property of inhabitants in
two or more cities or provinces.
Paje v. Casiño70 discusses the scope of the writ and the reliefs that
may be granted under it:
The writ is categorized as a special civil action and was, thus,
conceptualized as an extraordinary remedy, which aims to provide
judicial relief from threatened or actual violation/s of the
constitutional right to a balanced and healthful ecology of a
magnitude or degree of damage that transcends political and
territorial boundaries. It is intended "to provide a stronger defense for
environmental rights through judicial efforts where institutional
arrangements of enforcement, implementation and legislation have
fallen short" and seeks "to address the potentially exponential nature
of large-scale ecological threats."
Under Section 1 of Rule 7, the following requisites must be present
to avail of this extraordinary remedy: (1) there is an actual or
threatened violation of the constitutional right to a balanced and
healthful ecology; (2) the actual or threatened violation arises from
an unlawful act or omission of a public official or employee, or private
individual or entity; and (3) the actual or threatened violation involves
or will lead to an environmental damage of such magnitude as to
prejudice the life, health or property of inhabitants in two or more
cities or provinces.
Expectedly, the Rules do not define the exact nature or degree of
environmental damage but only that it must be sufficiently grave, in
terms of the territorial scope of such damage, so as to call for the
grant of this extraordinary remedy. The gravity of environmental
damage sufficient to grant the writ is, thus, to be decided on a case-
to-case basis.
If the petitioner successfully proves the foregoing requisites, the
court shall render judgment granting the privilege of the writ of
kalikasan. Otherwise, the petition shall be denied. If the petition is
granted, the court may grant the reliefs provided for under Section
15 of Rule 7, to wit:
Section 15. Judgment. — Within sixty (60) days from the time the
petition is submitted for decision, the court shall render judgment
granting or denying the privilege of the writ of kalikasan.
The reliefs that may be granted under the writ are the following:
(a) Directing respondent to permanently cease and desist from
committing acts or neglecting the performance of a duty in violation
of environmental laws resulting in environmental destruction or
damage;
(b) Directing the respondent public official, government agency,
private person or entity to protect, preserve, rehabilitate or restore
the environment;
(c) Directing the respondent public official, government agency,
private person or entity to monitor strict compliance with the decision
and orders of the court;
(d) Directing the respondent public official, government agency, or
private person or entity to make periodic reports on the execution of
the final judgment; and
(e) Such other reliefs which relate to the right of the people to a
balanced and healthful ecology or to the protection, preservation,
rehabilitation or restoration of the environment, except the award of
damages to individual petitioners.
It must be noted, however, that the above enumerated reliefs are
non-exhaustive. The reliefs that may be granted under the writ are
broad, comprehensive and non-exclusive.71
Thus, a writ of kalikasan is an extraordinary remedy that "covers
environmental damages the magnitude of which transcends both
political and territorial boundaries."72 The damage must be caused by
an unlawful act or omission of a public official, public employee, or
private individual or entity. It must affect the inhabitants of at least
two (2) cities or provinces.73
In civil, criminal, and administrative cases, parties are clear as to the
quantum of evidence necessary to prove their case. Civil cases
require a preponderance of evidence,74 or "evidence which is of
greater weight, or more convincing, that which is offered in
opposition to it[.]"75 Administrative cases require substantial
evidence,76 or "such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion, even if other minds
equally reasonable might conceivably opine otherwise." 77 Criminal
cases require proof beyond reasonable doubt,78 or "that degree of
proof which produces conviction in an unprejudiced mind." 79 In
petitions for the issuance of a writ of kalikasan, however, the
quantum of evidence is not specifically stated.
Other special civil actions such as
certiorari,80 prohibition,81 and mandamus82 must be filed by a party
that is directly injured or will be injured by the act and omission
complained of. However, a petition for the writ of kalikasan may be
filed on behalf of those whose right is violated. The Rules of
Procedure for Environmental Cases only requires that the public
interest group is duly accredited. 83 Filing through representation is
also allowed for other extraordinary writs such as habeas
corpus,84amparo85 and habeas data.86
This Court explained that "the Rules [of Procedure for Environmental
Cases] do[es] not define the exact nature or degree of environmental
damage but only that it must be sufficiently grave, in terms of the
territorial scope of such damage[.]" 87 Every petition, therefore, must
be examined on a case-to-case basis. It is imperative, however, that
even before a petition for its issuance can be filed, the petition must
be verified and must contain:
(a) The personal circumstances of the petitioner;
(b) The name and personal circumstances of the respondent or if the
name and personal circumstances are unknown and uncertain, the
respondent may be described by an assumed appellation;
(c) The environmental law, rule or regulation violated or threatened
to be violated, the act or omission complained of, and the
environmental damage of such magnitude as to prejudice the life,
health or property of inhabitants in two or more cities or provinces.
(d) All relevant and material evidence consisting of the affidavits of
witnesses, documentary evidence, scientific or other expert studies,
and if possible, object evidence;
(e) The certification of petitioner under oath that: (1) petitioner has
not commenced any action or filed any claim involving the same
issues in any court, tribunal or quasi-judicial agency, and no such
other action or claim is pending therein; (2) if there is such other
pending action or claim, a complete statement of its present status;
(3) if petitioner should learn that the same or similar action or claim
has been filed or is pending, petitioner shall report to the court that
fact within five (5) days therefrom; and
(f) The reliefs prayed for which may include a prayer for the issuance
of a TEPO.88
Parties that seek the issuance of the writ of kalikasan, whether on
their own or on others' behalf, carry the burden of substantiating the
writ's elements. Before private parties or public interest groups may
proceed with the case, they must be ready with the evidence
necessary for the determination of the writ's issuance.
In LNL Archipelago Minerals v. Agham Party List,89 this Court denied
the petition for the issuance of the writ filed by a party list group
advocating for the protection of the environment. This was due to the
group's failure to substantiate its allegations:
It is well-settled that a party claiming the privilege for the issuance of
a Writ of Kalikasan has to show that a law, rule or regulation was
violated or would be violated. In the present case, the allegation by
Agham that two laws — the Revised Forestry Code, as amended,
and the Philippine Mining Act — were violated by LAMI was not
adequately substantiated by Agham. Even the facts submitted by
Agham to establish environmental damage were mere general
allegations.
Second, Agham's allegation that there was a "mountain" [levelled] in
LAMI's port site was earlier established as false as the "mountain"
was non-existent as proven by the testimonies of the witnesses and
reports made by environmental experts and persons who have been
educated and trained in their respective fields.90
This was, unfortunately, not the only time that environmental
advocates have come to this Court unprepared. In Paje,91 this Court
denied a petition filed against the construction of a coal-fired power
plant in Subic Bay Industrial Park for the public interest group's
failure to provide the necessary evidence:
The records of this case painfully chronicle the embarrassingly
inadequate evidence marshalled by those that initially filed the
Petition for a Writ of Kalikasan. Even with the most conscientious
perusal of the records and with the most sympathetic view for the
interests of the community and the environment, the obvious
conclusion that there was not much thought or preparation in
substantiating the allegations made in the Petition cannot be hidden.
Legal advocacy for the environment deserves much more.92
The imminence or emergency of an ecological disaster should not be
an excuse for litigants to do away with their responsibility of
substantiating their petitions before the courts. As with any special
civil action for extraordinary writs, parties seeking the writ of
kalikasan must be ready with the evidence required to prove their
allegations by the time the petition is filed. Hasty slipshod petitions,
filed in the guise of environmental advocacy, only serve to
undermine that advocacy:
Environmental advocacy is primarily motivated by care and
compassion for communities and the environment. It can rightly be a
passionately held mission. It is founded on faith that the world as it is
now can be different. It implies the belief that the longer view of
protecting our ecology should never be sacrificed for short-term
convenience.
However, environmental advocacy is not only about passion. It is
also about responsibility. There are communities with almost no
resources and are at a disadvantage against large projects that
might impact on their livelihoods. Those that take the cudgels lead
them as they assert their ecological rights must show that they have
both the professionalism and the capability to carry their cause
forward. When they file a case to protect the interests of those who
they represent, they should be able to make both allegation and
proof. The dangers from an improperly managed environmental case
are as real to the communities sought to be represented as the
dangers from a project by proponents who do not consider their
interests.93
Environmental advocacy requires more than passion for saving the
environment. Thus:
Certainly, there is a need for leaders, organizations, and dedicated
movements that amplify the concerns of communities, groups, and
identities which tend to be put in the margins of forums dominated by
larger and more politically connected commercial interests. This
includes forums that create and implement regulatory frameworks.
Liberal democratic deliberations at times fail to represent the
silenced majority as it succumbs to the powerful minority.
While acknowledging this reality, we also need to be careful that the
chambers of this court do not substitute for the needed political
debate on public issues or the analytical rigor required by truths in
science. We are Justices primarily. While politics and science
envelope some of our important decisions, we should not lose the
humility that the Constitution itself requires of us. We are an
important part of the constitutional order: always only a part, never
one that should dominate. Our decisions have the veneer of finality.
It should never, however, be disguised superiority in any form or
manner.
Political debates indeed also mature when we pronounce the nature
of fundamental rights in concrete cases. Before cases ripen — or, as
in this case, when it has become moot — restraint will be the better
approach. We participate in the shaping of the content of these
fundamental rights only with the guidance of an actual case. This,
among others, distinguishes the judicial function from the purely
political engagement.
....
If any, the resolution of this case implies rigor in environmental
advocacy. Vigilance and passion are the hallmarks of the public
interest movement. There is no reason that the members of this
movement should not evolve the proper skills and attitudes to
properly work the legal system and understand the role of the judicial
process. Environmental advocacy also requires an understanding of
science and the locating of the proper place of various norms such
as the precautionary principle. After all, representation of
marginalized community voices deserves excellent representation
and responsible leadership. Filing a judicial remedy almost two years
too late and without the required scientific rigor patently required by
the allegations and the arguments misses these standards. 94
A writ of kalikasan cannot and should not substitute other remedies
that may be available to the parties, whether legal, administrative, or
political. Mere concern for the environment is not an excuse to
invoke this Court's jurisdiction in cases where other remedies are
available:
The function of the extraordinary and equitable remedy of a Writ of
Kalikasan should not supplant other available remedies and the
nature of the forums that they provide. The Writ of Kalikasan is a
highly prerogative writ that issues only when there is a showing of
actual or imminent threat and when there is such inaction on the part
of the relevant administrative bodies that will make an environmental
catastrophe inevitable. It is not a remedy that is availing when there
is no actual threat or when imminence of danger is not
demonstrable. The Writ of Kalikasan thus is not an excuse to invoke
judicial remedies when there still remain administrative forums to
properly address the common concern to protect and advance
ecological rights. After all, we cannot presume that only the Supreme
Court can conscientiously fulfill the ecological duties required of the
entire state.95
Moreover, there are other legal remedies available:
The writ of kalikasan is not an all-embracing legal remedy to be
wielded like a political tool. It is both an extraordinary and equitable
remedy which assists to prevent environmental catastrophes. It does
not replace other legal remedies similarly motivated by concern for
the environment and the community's ecological welfare. Certainly,
when the petition itself alleges that remedial and preventive
remedies have occurred, the functions of the writ cease to exist. In
case of disagreement, parties need to exhaust the political and
administrative arena. Only when a concrete cause of action arises
out of facts that can be proven with substantial evidence may the
proper legal action be entertained.96
A writ of continuing mandamus, on the other hand, "is a special civil
action that may be availed of 'to compel the performance of an act
specifically enjoined by law.'"97 Rule 8, Section 1 of the Rules of
Procedure for Environmental Cases provides:
SECTION 1. Petition for continuing mandamus. — When any agency
or instrumentality of the government or officer thereof unlawfully
neglects the performance of an act which the law specifically enjoins
as a duty resulting from an office, trust or station in connection with
the enforcement or violation of an environmental law rule or
regulation or a right therein, or unlawfully excludes another from the
use or enjoyment of such right and there is no other plain, speedy
and adequate remedy in the ordinary course of law, the person
aggrieved thereby may file a verified petition in the proper court,
alleging the facts with certainty, attaching thereto supporting
evidence, specifying that the petition concerns an environmental law,
rule or regulation, and praying that judgment be rendered
commanding the respondent to do an act or series of acts until the
judgment is fully satisfied, and to pay damages sustained by the
petitioner by reason of the malicious neglect to perform the duties of
the respondent, under the law, rules or regulations. The petition shall
also contain a sworn certification of non-forum shopping.
The rationale for the grant of the writ was explained in Boracay
Foundation, Inc. v. Province of Aklan:98
Environmental law highlights the shift in the focal-point from the
initiation of regulation by Congress to the implementation of
regulatory programs by the appropriate government agencies.
Thus, a government agency's inaction, if any, has serious
implications on the future of environmental law enforcement. Private
individuals, to the extent that they seek to change the scope of the
regulatory process, will have to rely on such agencies to take the
initial incentives, which may require a judicial component.
Accordingly, questions regarding the propriety of an agency's action
or inaction will need to be analyzed.
This point is emphasized in the availability of the remedy of the writ
of mandamus, which allows for the enforcement of the conduct of the
tasks to which the writ pertains: the performance of a legal duty. 99
While Rule 2100 of the Rules of Procedure for Environmental Cases
provides a civil procedure for the enforcement or violation of
environmental laws, Rule 8 provides a distinct remedy and
procedure for allegations of unlawful neglect in the enforcement of
environmental laws or the unlawful exclusion in the use or enjoyment
of an environmental right. As with the procedure in special civil
actions for certiorari, prohibition, and mandamus, this procedure also
requires that the petition should be sufficient in form and substance
before a court can take further action. Failure to comply may be
basis for the petition's outright dismissal.101
Sufficiency in the substance of a petition for a writ of
continuing mandamus requires:
... that the petition must contain substantive allegations specifically
constituting an actionable neglect or omission and must establish, at
the very least, a prima facie basis for the issuance of the writ, viz.:
(1) an agency or instrumentality of government or its officer
unlawfully neglects the performance of an act or unlawfully excludes
another from the use or enjoyment of a right; (2) the act to be
performed by the government agency, instrumentality or its officer is
specifically enjoined by law as a duty; (3) such duty results from an
office, trust or station in connection with the enforcement or violation
of an environmental law, rule or regulation or a right therein; and (4)
there is no other plain, speedy and adequate remedy in the course of
law.102 (Citation omitted)
The writ is essentially a continuing order of the court, as it:
... "permits the court to retain jurisdiction after judgment in order to
ensure the successful implementation of the reliefs mandated under
the court's decision" and, in order to do this, "the court may compel
the submission of compliance reports from the respondent
government agencies as well as avail of other means to monitor
Ronel
compliance with its decision."103 10. Yes Yes
Badilla
However, requiring the periodic submission of compliance reports
does not mean that the court acquires supervisory powers over
Archie
administrative agencies. This interpretation would violate the 11. No
Graciano
principle of the separation of powers since courts do not have the
power to enforce laws, create laws, or revise legislative
Regidor
actions.104 The writ should not be used to supplant executive or 12. No Yes
Asiado
legislative privileges. Neither should it be used where the remedies
required are clearly political or administrative in nature.
Ely
13. No
For this reason, every petition for the issuance of a writ of Lopez
continuing mandamus must be clear on the guidelines sought for its
implementation and its termination point. Petitioners cannot merely Expedito
request the writ's issuance without specifically outlining the reliefs 14. Magdaya Yes Yes Yes
sought to be implemented and the period when the submission of o
compliance reports may cease.
Reny
15. Magbanu Yes Yes
II a
This Court likewise takes this occasion to pass upon the prior Motion Romulo
for Withdrawal as Counsels for 20 of the fisherfolk-petitioners. 16. No Yes
Cana, Jr.
There are 41 petitioners here, consisting of 37 fishers from Palawan, Rogelio
three (3) fishers from Zambales, and the Integrated Bar of the 17. No
Hingpit
Philippines.
Jonel
Of the 37 fishers from Palawan, 13 did not verify the 18. Yes Yes
Hugo
Petition.105 Nineteen (19) of the 40 fisherfolk-petitioners from both
Palawan and Zambales submitted affidavits 106 to respondent Bureau
Robert
of Fisheries and Aquatic Resources disowning the Petition. In 19. Yes Yes Yes
Valdez
summary:
Whether Whether Rizen
Whether 20. No Yes
petitione petitione Galvan
petitioner
Whethe r r
s'
r submitte requeste Ricardo
counsels 21. Yes Yes
petition d an d to Natural
Name of asked to
  er affidavit withdraw
petitioner withdraw
signed to the the Sanny
as 22. Yes Yes
the BFAR Petition Belidan
counsels
Petition disownin as of
as of July
g the July 19, Rowel P.
19, 2019 23. Yes Yes
Petition 2019 Ejona

Monico Felix
24. Yes Yes Yes
1. A. Yes Yes Yes Ulzon
Abogado
Raffy M.
25. Yes Yes Yes
Roberto Asiado
2. M. Yes Yes Yes
Asiado Primo M.
26. Yes Yes Yes
Asiado
Larry
3. Yes Yes Yes
Hugo Adrian P.
27. Yes Yes Yes
Abayan
Angelo
4. Yes Yes Yes
Sadang Randy
28. Yes Yes Yes
Dacumos
Nonelon
5. Yes Yes
Balbontin Danilo
29. Yes Yes Yes
Belono
Salito
6. No
Lagrosa Romeo
30. Yes Yes Yes
Malaguit
Arzel
7. Yes Yes Yes
Belidan Dennis
31. Yes Yes Yes
Bania
Ronald
8. Yes Yes Yes
Grandia Jason
32. No
Villamor
Troy
9. No
Lagrosa
 Canon 22, Rule 22.01 of the Code of Professional Responsibility
Gary
33. No provides the "good causes" under which a counsel may withdraw
Castillos
without the written conformity of the client:
CANON 22 — A LAWYER SHALL WITHDRAW HIS SERVICES
Alberto
34. No ONLY FOR GOOD CAUSE AND UPON NOTICE APPROPRIATE IN
Sonio
THE CIRCUMSTANCES.
Dolie
35. No Rule 22.01 A lawyer may withdraw his services in any of the
Dusong
following cases:
36. BJ Piring No a) When the client pursues an illegal or immoral course of conduct in
connection with the matter he is handling;
Jing
37. Yes Yes Yes
Malinao b) When the client insists that the lawyer pursue conduct violative of
these canons and rules;
Nilo
38. Yes Yes Yes
Labrador c) When his inability to work with co-counsel will not promote the
best interest of the client;
Wildredo
39. Labandel Yes Yes Yes d) When the mental or physical condition of the lawyer renders it
o difficult for him to carry out the employment effectively;
Rolando e) When the client deliberately fails to pay the fees for the services
40. Labandel Yes Yes or fails to comply with the retainer agreement;
o
f) When the lawyer is elected or appointed to public office; and
Integrate
d Bar of g) Other similar cases.
41. the Yes Yes Failure to contact the client despite diligent efforts is not considered
Philippin under this Rule as a "good cause" upon which a lawyer may
es withdraw from the case without first seeking the client's written
On July 19, 2019, petitioners' counsels requested to withdraw as conformity. Had this Court granted the Motion to Withdraw as
counsels for 18 of the fisherfolk-petitioners, namely, Natural, Larry, Counsel, 20 fisherfolk-petitioners would be left without counsel to
Sanny, Ejona, Arzel Belidan, Ronald Grandia, Ronel Badilla, inquire if they were still pursuing the case.
Expedito Magdayao, Jonel Hugo, Robert Valdez, Felix Ulzon, Raffy
M. Asiado, Primo M. Asiado, Adrian P. Abayan, Danilo Belono, Even if we were to apply liberality and consider the fisherfolk-
Romeo Malaguit, Dennis Bania, and Jing Malinao, on the ground petitioners' affidavits disowning the Petition as their written
that they were "on Pag-asa Island and the undersigned counsels conformity to counsels' withdrawal, the other fisherfolk-petitioners
cannot travel to meet them there; or ... communicate with them as who verified the Petition but submitted no affidavit would have been
Philippine telephone companies have no or very weak network left without any representation:
coverage there."107 As for two (2) of the fisherfolk-petitioners in 1. Ronel Badilla
Zambales, they reasoned that Labrador and Rolando have since 2. Jonel Hugo
moved away and did not leave any contact details.108 3. Ricardo Natural
4. Sanny Belidan
Rule 138, Section 26 of the Rules of Court provides the rule on 5. Rowel P. Ejona
withdrawal of counsels: 6. Rolando Labandelo
RULE 138 To recall, petitioners' counsels filed a Motion for Extension of Time to
Attorneys and Admission to Bar Confer with Clients and Obtain Special Authority, 111 citing as basis
.... Rule 138, Section 23 of the Rules of Court, which reads:
SECTION 23. Authority of attorneys to bind clients. — Attorneys
SECTION 26. Change of attorneys. — An attorney may retire at any have authority to bind their clients in any case by any agreement in
time from any action or special proceeding, by the written consent of relation thereto made in writing, and in taking appeals, and in all
his client filed in court. He may also retire at any time from an action matters of ordinary judicial procedure. But they cannot, without
or special proceeding, without the consent of his client, should the special authority, compromise their client's litigation, or receive
court, on notice to the client and attorney, and on hearing, determine anything in discharge of a client's claim but the full amount in cash.
that he ought to be allowed to retire. In case of substitution, the Counsels' filing of their Motion to Withdraw as Counsel without prior
name of the attorney newly employed shall be entered on the docket notice to the clients is a violation of the very rule they sought to
of the court in place of the former one, and written notice of the uphold. The Petition's withdrawal compromises their clients'
change shall be given to the adverse party. litigation, since the case will be dismissed without their consent and
A counsel may only be allowed to withdraw from the action either without prior notice. In Natividad v. Natividad:112
with the written consent of the client or "from a good cause." The cause of action, the claim or demand sued upon, and the
In Orcino v. Gaspar:109 subject matter of the litigation are all within the exclusive control of
The rule in this jurisdiction is that a client has the absolute right to the client; and the attorney may not impair, compromise, settle,
terminate the attorney-client relation at any time with or without surrender, or destroy them without his client's consent.113
cause. The right of an attorney to withdraw or terminate the relation Monteverde v. Court of Industrial Relations114 likewise held:
other than for sufficient cause is, however, considerably restricted. The main issue is whether or not the Court of Industrial Relations
Among the fundamental rules of ethics is the principle that an correctly dismissed the case for unfair labor practice after it had
attorney who undertakes to conduct an action impliedly stipulates to rendered a decision dated March 21, 1968 on the motion of Atty.
carry it to its conclusion. He is not at liberty to abandon it without Juan G. Sison, Jr., counsel of the petitioners, without inquiring into
reasonable cause. A lawyer's right to withdraw from a case before its the authority of the lawyer to ask for the dismissal of the case.
final adjudication arises only from the client's written consent or from
a good cause.110 It was stated in the dissenting opinion of Judge Amando C.
Bugayong that nowhere in the minutes of the hearing of July 23,
1969 does it appear that the complainants have admitted in open
court that they had authorized their counsel, Atty. Juan G. Sison, Jr.,
to enter into a settlement with the FIBISCO. All that is recorded in
the minutes is the request for the sending of a notice of hearing to
Atty. Juan G. Sison, Jr. both at his known address at Rm. 313 de
Leon Bldg., Rizal Avenue, Manila and at 745 Dos Castillas,
Sampaloc, Manila.
Bilang mga kinatawan ng samahan ng Fisherfolks ng Kalayaan at
upang patunayan ang kagustuhan ng nakararami, aming inilagda
ang aming mga pangalan ngayong araw na ito sa Lungsod ng Pto.
Princesa.120 (Emphasis supplied)
For this reason, this Court considers the Petition withdrawn as to all
fisherfolk-petitioners. The case is considered dismissed, without
passing upon any of the substantive issues raised.

It is elementary that lawyers "cannot, without special authority, WHEREFORE, the Motion to Withdraw the Petition is GRANTED.
compromise their client's litigation, or receive anything in discharge The case is considered DISMISSED, without passing upon any of
of a client's claim but the full amount in cash." the substantive issues raised.

It is clear that the Court of Industrial Relations erred in dismissing the In view of the unusual procedural developments of this case,
case on the motion of Atty. Juan G. Sison, Jr. alone without inquiring counsels of petitioners are STERNLY WARNED to be mindful of
into his authority. The Court of Industrial Relations did not even their duties and obligations under the Code of Professional
bother to find out what kind of settlement was entered into between Responsibility and that the same or similar infractions in the future
Atty. Juan G. Sison, Jr. and the FIBISCO.115 shall be dealt with more severely by this Court.
Thus, in Belandres vs. Lopez Sugar Central Mill Company, Inc.:116
"The broad implied or apparent powers of an attorney with respect to SO ORDERED.
the conduct or control of litigation are, however, limited to matters
which relate only to the procedure or remedy. The employment of
itself confers upon the attorney no implied or apparent power or
authority over the subject matter of the cause of action or defense;
and, unless the attorney has expressly been granted authority with
respect thereto, the power to deal with or surrender these matters is
regarded as remaining exclusively in the client."

"The line of demarcation between the respective rights and powers

of an attorney and his client is clearly defined. The cause of action,
the claim or demand sued upon, and the subject matter of the
litigation are all within the exclusive control of a client; and an
attorney may not impair, compromise, settle, surrender, or destroy
them without his client's consent. But all the proceedings in court to
enforce the remedy to bring the claim, demand, cause of action, or
subject matter of the suit to hearing, trial, determination, judgment,
and execution, are within the exclusive control of the attorney." 117
To prevent compromising the interests of the remaining fisherfolk-
petitioners, this Court, instead of granting the Motion to Withdraw as
Counsel, required counsels to exert more efforts in contacting their
clients. In Mercado v. Commission on Higher Education:118
The rule that the withdrawal of a counsel with the written conformity
of the client is immediately effective once filed in court, however, is
not absolute. When the counsel's impending withdrawal with the
written conformity of the client would leave the latter with no legal
representation in the case, it is an accepted practice for courts to
order the deferment of the effectivity of such withdrawal until such
time that it becomes certain that service of court processes and
other papers to the party-client would not thereby be compromised
— either by the due substitution of the withdrawing counsel in the
case or by the express assurance of the party-client that he now
undertakes to himself receive serviceable processes and other
papers. Adoption by courts of such a practice in that particular
context, while neither mandatory nor sanctioned by a specific
provision of the Rules of Court, is nevertheless justified as part of
their inherent power to see to it that the potency of judicial processes
and judgment are preserved.119
Petitioners' counsels had the responsibility, right at the start of their
engagement, to establish the modality of communication with their
clients. Mere difficulty in contacting the client is not a sufficient
reason for his or her counsel to abandon his or her cause, more so
in this case where counsels are rendering legal aid pro bono.
Counsels should exert the same amount of professionalism,
regardless of their client's capacity to pay for their services.

Nonetheless, it would be unjust for this Court to compel the two (2)
remaining fisherfolk-petitioners, Sanny and Ejona, to continue with
this case without legal counsel. Petitioners' counsels have likewise
manifested that they exerted earnest attempts to contact them on
their cellular phones but were unable to as the two were no longer in
Pag-asa Island. This Court also takes note of the six (6) fisherfolk-
petitioners' handwritten letter dated July 15, 2019, in which they
manifested their representation of the other members of the
fisherfolk association:
G.R. No. L-78325               January 25, 1990
DEL MONTE CORPORATION and PHILIPPINE PACKING
CORPORATION, petitioners,
vs.
COURT OF APPEALS and SUNSHINE SAUCE MANUFACTURING
INDUSTRIES, respondents.
Bito, Misa & Lozada for petitioners.
Reynaldo F. Singson for private respondent.
CRUZ, J.:
The petitioners are questioning the decision of the respondent court
upholding the dismissal by the trial court of their complaint against
the private respondent for infringement of trademark and unfair
competition.
Petitioner Del Monte Corporation is a foreign company organized
under the laws of the United States and not engaged in business in
the Philippines. Both the Philippines and the United States are
signatories to the Convention of Paris of September 27, 1965, which
grants to the nationals of the parties rights and advantages which
their own nationals enjoy for the repression of acts of infringement
and unfair competition.
Petitioner Philippine Packing Corporation (Philpack) is a domestic
corporation duly organized under the laws of the Philippines. On
April 11, 1969, Del Monte granted Philpack the right to manufacture,
distribute and sell in the Philippines various agricultural products,
including catsup, under the Del Monte trademark and logo.
On October 27,1965, Del Monte authorized Philpack to register with
the Philippine Patent Office the Del Monte catsup bottle
configuration, for which it was granted Certificate of Trademark
Registration No. SR-913 by the Philippine Patent Office under the
Supplemental Register. 1 On November 20, 1972, Del Monte also
obtained two registration certificates for its trademark "DEL MONTE"
and its logo. 2
Respondent Sunshine Sauce Manufacturing Industries was issued a
Certificate of Registration by the Bureau of Domestic Trade on April
17,1980, to engage in the manufacture, packing, distribution and
sale of various kinds of sauce, identified by the logo Sunshine Fruit
Catsup.3
This logo was registered in the Supplemental Register on
September 20, 1983. 4
The product itself was contained in various kinds of bottles, including
the Del Monte bottle, which the private respondent bought from the
junk shops for recycling.
Having received reports that the private respondent was using its
exclusively designed bottles and a logo confusingly similar to Del
Monte's, Philpack warned it to desist from doing so on pain of legal
action. Thereafter, claiming that the demand had been ignored,
Philpack and Del Monte filed a complaint against the private
respondent for infringement of trademark and unfair competition,
with a prayer for damages and the issuance of a writ of preliminary
injunction. 5
In its answer, Sunshine alleged that it had long ceased to use the
Del Monte bottle and that its logo was substantially different from the
Del Monte logo and would not confuse the buying public to the
detriment of the petitioners. 6
After trial, the Regional Trial Court of Makati dismissed the
complaint. It held that there were substantial differences between the
logos or trademarks of the parties; that the defendant had ceased
using the petitioners' bottles; and that in any case the defendant
became the owner of the said bottles upon its purchase thereof from
the junk yards. Furthermore, the complainants had failed to establish
the defendant's malice or bad faith, which was an essential element
of infringement of trademark or unfair competition. 7
This decision was affirmed in toto by the respondent court, which is
now faulted in this petition for certiorari under Rule 45 of the Rules of
Court.
Section 22 of R.A. No. 166, otherwise known as the Trademark Law,
provides in part as follows:
Sec. 22. Infringement, what constitutes. — Any person
who shall use, without the consent of the registrant, any
reproduction, counterfeit, copy or colorable imitation of any
registered mark or trade-name in connection with the sale,
offering for sale, or advertising of any goods, business or
services on or in connection with which such use is likely to
cause confusion or mistake or to deceive purchasers or
others as to the source or origin of such goods or services
or identity of such business; or reproduce, counterfeit copy
or colorably imitate any such mark or trade name and
apply such reproduction, counterfeit copy or colorable
imitation to labels, signs, prints, packages, wrappers,
receptacles or advertisements intended to be used upon or
in connection with such goods, business or services, shall
be liable to a civil action by the registrant for any or all of
the remedies herein provided.
Sec. 29 of the same law states as follows:
Sec. 29. Unfair competition, rights and remedies. — A
person who has identified in the mind of the public the
goods he manufactures or deals in, his business or
services from those of others, whether or not a mark or
tradename is employed, has a property right in the goodwill
of the said goods, business or services so identified, which
will be protected in the same manner as other property
rights. Such a person shall have the remedies provided in
section twenty- three, Chapter V hereof.
Any person who shall employ deception or any other
means contrary to good faith by which he shall pass off the
goods manufactured by him or in which he deals, or his
business, or services for those of the one having
established such goodwill, or who shall commit any acts
calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.
In particular, and without in any way limiting the scope of
unfair competition, the following shall be deemed guilty of
unfair competition:
(a) Any person, who in selling his goods shall
give them the general appearance of goods of
another manufacturer or dealer, either as to the
goods themselves or in the wrapping of the
packages in which they are contained, or the
devices or words thereon, or in any other feature
 of their appearance, which would likely influence
purchasers to believe that the goods offered are
those of a manufacturer or dealer other than the
actual manufacturer or dealer, or who otherwise
clothes the goods with such appearance as shall
deceive the public and defraud another of his
legitimate trade, or any subsequent vendor of
such goods or any agent of any vendor engaged
in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or
who employs ally other means calculated to
induce the false belief that such person is offering
the services of another who has identified such
services in the mind of the public; or
(c) Any person who shall make any false
statement in the course of trade or who shall
commit any other act contrary to good faith of a
nature calculated to discredit the goods, business
or services of another.
To arrive at a proper resolution of this case, it is important
to bear in mind the following distinctions between
infringement of trademark and unfair competition.
(1) Infringement of trademark is the unauthorized
use of a trademark, whereas unfair competition is
the passing off of one's goods as those of
another.
(2) In infringement of trademark fraudulent intent
is unnecessary whereas in unfair competition
fraudulent intent is essential.
(3) In infringement of trademark the prior
registration of the trademark is a prerequisite to
the action, whereas in unfair competition
registration is not necessary. 8
In the challenged decision, the respondent court cited the
following test laid down by this Court in a number of cases:
In determining whether two trademarks are
confusingly similar, the two marks in their entirety
as they appear in the respective labels must be
considered in relation to the goods to which they
are attached; the discerning eye of the observer
must focus not only on the predorninant words
but also on the other features appearing on both
labels. 9
and applying the same, held that there was no colorable
imitation of the petitioners' trademark and logo by the
private respondent. The respondent court agreed with the
findings of the trial court that:
In order to resolve the said issue, the Court now attempts to make a
comparison of the two products, to wit:
1. As to the shape of label or make:
Del Monte: Semi-rectangular with a crown or
tomato shape design on top of the rectangle.
Sunshine: Regular rectangle.
2. As to brand printed on label:
Del Monte: Tomato catsup mark.
Sunshine: Fruit catsup.
3. As to the words or lettering on label or mark:
Del Monte: Clearly indicated words packed by
Sysu International, Inc., Q.C., Philippines.
Sunshine: Sunshine fruit catsup is clearly
indicated "made in the Philippines by Sunshine
Sauce Manufacturing Industries" No. 1 Del Monte
Avenue, Malabon, Metro Manila.
4. As to color of logo:
Del Monte: Combination of yellow and dark red,
with words "Del Monte Quality" in white.
Sunshine: White, light green and light red, with
words "Sunshine Brand" in yellow.
5. As to shape of logo:
Del Monte: In the shape of a tomato.
Sunshine: Entirely different in shape.
6. As to label below the cap:
Del Monte: Seal covering the cap down to the
neck of the bottle, with picture of tomatoes with
words "made from real tomatoes."
Sunshine: There is a label below the cap which
says "Sunshine Brand."
7. As to the color of the products:
Del Monte: Darker red.
Sunshine: Lighter than Del Monte.
While the Court does recognize these distinctions, it does not agree
with the conclusion that there was no infringement or unfair
competition. It seems to us that the lower courts have been so pre-
occupied with the details that they have not seen the total picture.
It has been correctly held that side-by-side comparison is not the
final test of similarity. 10 Such comparison requires a careful scrutiny
to determine in what points the labels of the products differ, as was
done by the trial judge. The ordinary buyer does not usually make
such scrutiny nor does he usually have the time to do so. The
average shopper is usually in a hurry and does not inspect every
product on the shelf as if he were browsing in a library. Where the
housewife has to return home as soon as possible to her baby or the
working woman has to make quick purchases during her off hours,
she is apt to be confused by similar labels even if they do have
minute differences. The male shopper is worse as he usually does
not bother about such distinctions.
The question is not whether the two articles are distinguishable by
their label when set side by side but whether the general confusion
made by the article upon the eye of the casual purchaser who is
unsuspicious and off his guard, is such as to likely result in his
confounding it with the original. 11 As observed in several cases, the
general impression of the ordinary purchaser, buying under the
normally prevalent conditions in trade and giving the attention such
purchasers usually give in buying that class of goods is the
touchstone. 12
It has been held that in making purchases, the consumer must
depend upon his recollection of the appearance of the product which
he intends to purchase. 13 The buyer having in mind the mark/label of
the respondent must rely upon his memory of the petitioner's
mark. 14 Unlike the judge who has ample time to minutely examine
the labels in question in the comfort of his sala, the ordinary shopper
does not enjoy the same opportunity.
A number of courts have held that to determine whether a trademark
has been infringed, we must consider the mark as a whole and not
as dissected. If the buyer is deceived, it is attributable to the marks
as a totality, not usually to any part of it. 15 The court therefore should
be guided by its first impression, 16 for a buyer acts quickly and is
governed by a casual glance, the value of which may be dissipated
as soon as the court assumes to analyze carefully the respective
features of the mark. 17
It has also been held that it is not the function of the court in cases of
infringement and unfair competition to educate purchasers but rather
to take their carelessness for granted, and to be ever conscious of
the fact that marks need not be identical. A confusing similarity will
justify the intervention of equity. 18 The judge must also be aware of
the fact that usually a defendant in cases of infringement does not
normally copy but makes only colorable changes. 19 Well has it been
said that the most successful form of copying is to employ enough
points of similarity to confuse the public with enough points of
difference to confuse the courts. 20
We also note that the respondent court failed to take into
consideration several factors which should have affected its
conclusion, to wit: age, training and education of the usual
purchaser, the nature and cost of the article, whether the article is
bought for immediate consumption and also the conditions under
which it is usually purchased . 21 Among these, what essentially
determines the attitude of the purchaser, specifically his inclination to
be cautious, is the cost of the goods. To be sure, a person who buys
a box of candies will not exercise as much care as one who buys an
expensive watch. As a general rule, an ordinary buyer does not
exercise as much prudence in buying an article for which he pays a
few centavos as he does in purchasing a more valuable
thing. 22 Expensive and valuable items are normally bought only after
deliberate, comparative and analytical investigation. But mass
products, low priced articles in wide use, and matters of everyday
purchase requiring frequent replacement are bought by the casual
consumer without great care. 23 In this latter category is catsup.
At that, even if the labels were analyzed together it is not difficult to
see that the Sunshine label is a colorable imitation of the Del Monte
trademark. The predominant colors used in the Del Monte label are
green and red-orange, the same with Sunshine. The word "catsup"
in both bottles is printed in white and the style of the print/letter is the
same. Although the logo of Sunshine is not a tomato, the figure
nevertheless approximates that of a tomato.
As previously stated, the person who infringes a trade mark does not
normally copy out but only makes colorable changes, employing
enough points of similarity to confuse the public with enough points
of differences to confuse the courts. What is undeniable is the fact
that when a manufacturer prepares to package his product, he has
before him a boundless choice of words, phrases, colors and
symbols sufficient to distinguish his product from the others. When
as in this case, Sunshine chose, without a reasonable explanation,
to use the same colors and letters as those used by Del Monte
though the field of its selection was so broad, the inevitable
conclusion is that it was done deliberately to deceive .24
It has been aptly observed that the ultimate ratio in cases of grave
doubt is the rule that as between a newcomer who by the confusion
has nothing to lose and everything to gain and one who by honest
dealing has already achieved favor with the public, any doubt should
be resolved against the newcomer inasmuch as the field from which
he can select a desirable trademark to indicate the origin of his
product is obviously a large one. 25
Coming now to the second issue, we find that the private respondent
is not guilty of infringement for having used the Del Monte bottle. The
reason is that the configuration of the said bottle was merely
registered in the Supplemental Register. In the case of Lorenzana v.
Macagba, 26 we declared that:
(1) Registration in the Principal Register gives rise to a
presumption of the validity of the registration, the
registrant's ownership of the mark and his right to the
exclusive use thereof. There is no such presumption in the
registration in the Supplemental Register.
(2) Registration in the Principal Register is limited to the
actual owner of the trademark and proceedings therein on
the issue of ownership which may be contested through
opposition or interference proceedings or, after registration,
in a petition for cancellation.
Registration in the Principal Register is constructive notice
of the registrant's claim of ownership, while registration in
the Supplemental Register is merely proof of actual use of
the trademark and notice that the registrant has used or
appropriated it. It is not subject to opposition although it
may be cancelled after the issuance. Corollarily,
registration in the Principal Register is a basis for an action
for infringement while registration in the Supplemental
Register is not.
(3) In applications for registration in the Principal Register,
publication of the application is necessary. This is not so in
applications for registrations in the Supplemental Register.
It can be inferred from the foregoing that although Del Monte has
actual use of the bottle's configuration, the petitioners cannot claim
exclusive use thereof because it has not been registered in the
Principal Register. However, we find that Sunshine, despite the
many choices available to it and notwithstanding that the caution
"Del Monte Corporation, Not to be Refilled" was embossed on the
bottle, still opted to use the petitioners' bottle to market a product
which Philpack also produces. This clearly shows the private
respondent's bad faith and its intention to capitalize on the latter's
reputation and goodwill and pass off its own product as that of Del
Monte.
The Court observes that the reasons given by the respondent court
in resolving the case in favor of Sunshine are untenable. First, it
declared that the registration of the Sunshine label belied the
company's malicious intent to imitate petitioner's product. Second, it
held that the Sunshine label was not improper because the Bureau
of Patent presumably considered other trademarks before approving
it. Third, it cited the case of Shell Co. v. Insular Petroleum, 27 where
this Court declared that selling oil in containers of another with
markings erased, without intent to deceive, was not unfair
competition.
Regarding the fact of registration, it is to be noted that the Sunshine
label was registered not in the Principal Register but only in the
Supplemental Register where the presumption of the validity of the
trademark, the registrant's ownership of the mark and his right to its
exclusive use are all absent.
The complaining party, upon proper showing may also be
granted injunction.1âwphi1
Fortunately for the petitioners, they may still find some small comfort
in Art. 2222 of the Civil Code, which provides:

Anent the assumption that the Bureau of Patent had considered
other existing patents, it is reiterated that since registration was only
in the Supplemental Register, this did not vest the registrant with the
exclusive right to use the label nor did it give rise to the presumption
of the validity of the registration.
Art. 2222. The court may award nominal damages in every
obligation arising from any source enumerated in Art. 1157,
or in every case where any property right has been
invaded.

Accordingly, the Court can only award to the petitioners, as it hereby

On the argument that no unfair competition was committed, the Shell does award, nominal damages in the amount of Pl,000.00.
Case is not on all fours with the case at bar because:

WHEREFORE, the petition is GRANTED. The decision of the Court

(1) In Shell, the absence of intent to deceive was of Appeals dated December 24, 1986 and the Resolution dated April
supported by the fact that the respondent therein, before 27,1987, are REVERSED and SET ASIDE and a new judgment is
marketing its product, totally obliterated and erased the hereby rendered:
brands/mark of the different companies stenciled on the
containers thereof, except for a single isolated transaction.
The respondent in the present case made no similar effort. (1) Canceling the private respondent's Certificate of
Register No. SR-6310 and permanently enjoining the
private respondent from using a label similar to that of the
(2) In Shell, what was involved was a single isolated petitioners.
transaction. Of the many drums used, there was only one
container where the Shell label was not erased, while in
the case at hand, the respondent admitted that it made use (2) Prohibiting the private respondent from using the empty
of several Del Monte bottles and without obliterating the bottles of the petitioners as containers for its own products.
embossed warning.
(3) Ordering the private respondent to pay the petitioners
(3) In Shell, the product of respondent was sold to dealers, nominal damages in the amount of Pl,000.00, and the
not to ultimate consumers. As a general rule, dealers are costs of the suit.
well acquainted with the manufacturer from whom they
make their purchases and since they are more SO ORDERED.
experienced, they cannot be so easily deceived like the
inexperienced public. There may well be similarities and
imitations which deceive all, but generally the interests of
the dealers are not regarded with the same solicitude as
are the interests of the ordinary consumer. For it is the
form in which the wares come to the final buyer that is of
significance. 28

As Sunshine's label is an infringement of the Del Monte's trademark,

law and equity call for the cancellation of the private respondent's
registration and withdrawal of all its products bearing the questioned
label from the market. With regard to the use of Del Monte's bottle,
the same constitutes unfair competition; hence, the respondent
should be permanently enjoined from the use of such bottles.

The court must rule, however, that the damage prayed for cannot be
granted because the petitioner has not presented evidence to prove
the amount thereof. Section 23 of R.A. No. 166 provides:

Sec. 23. Actions and damages and injunction for

infringement. — Any person entitled to the exclusive use of
a registered mark or trade name may recover damages in
a civil action from any person who infringes his rights, and
the measure of the damages suffered shall be either the
reasonable profit which the complaining party would have
made, had the defendant not infringed his said rights or the
profit which the defendant actually made out of the
infringement, or in the event such measure of damages
cannot be readily ascertained with reasonable certainty the
court may award as damages reasonable percentage
based upon the amount of gross sales of the defendant or
the value of the services in connection with which the mark
or trade name was used in the infringement of the rights of
the complaining party. In cases where actual intent to
mislead the public or to defraud the complaining party shall
be shown, in the discretion of the court, the damages may
be doubled.
THIRD DIVISION
G. R. No. 141833 - March 26, 2003
LM POWER ENGINEERING CORPORATION, Petitioner,
vs. CAPITOL INDUSTRIAL CONSTRUCTION GROUPS,
INC., Respondent.
PANGANIBAN, J.:
Alternative dispute resolution methods or ADRs -- like arbitration,
mediation, negotiation and conciliation -- are encouraged by the
Supreme Court. By enabling parties to resolve their disputes
amicably, they provide solutions that are less time-consuming, less
tedious, less confrontational, and more productive of goodwill and
lasting relationships.1
The Case
Before us is a Petition for Review on Certiorari  under Rule 45 of the
2
Rules of Court, seeking to set aside the January 28, 2000 Decision
of the Court of Appeals3 (CA) in CA-GR CV No. 54232. The
dispositive portion of the Decision reads as follows:
"WHEREFORE, the judgment appealed from is REVERSED and
SET ASIDE. The parties are ORDERED to present their dispute to
arbitration in accordance with their Sub-contract Agreement. The
surety bond posted by [respondent] is [d]ischarged." 4
The Facts
On February 22, 1983, Petitioner LM Power Engineering Corporation
and Respondent Capitol Industrial Construction Groups Inc. entered
into a "Subcontract Agreement" involving electrical work at the Third
Port of Zamboanga.5
On April 25, 1985, respondent took over some of the work
contracted to petitioner.6 Allegedly, the latter had failed to finish it
because of its inability to procure materials.7
Upon completing its task under the Contract, petitioner billed
respondent in the amount of P6,711,813.90. 8 Contesting the
accuracy of the amount of advances and billable accomplishments
listed by the former, the latter refused to pay. Respondent also took
refuge in the termination clause of the Agreement. 9 That clause
allowed it to set off the cost of the work that petitioner had failed to
undertake -- due to termination or take-over -- against the amount it
owed the latter.
Because of the dispute, petitioner filed with the Regional Trial Court
(RTC) of Makati (Branch 141) a Complaint 10 for the collection of the
amount representing the alleged balance due it under the
Subcontract. Instead of submitting an Answer, respondent filed a
Motion to Dismiss,11 alleging that the Complaint was premature,
because there was no prior recourse to arbitration.
In its Order12 dated September 15, 1987, the RTC denied the Motion
on the ground that the dispute did not involve the interpretation or
the implementation of the Agreement and was, therefore, not
covered by the arbitral clause.13
After trial on the merits, the RTC 14 ruled that the take-over of some
work items by respondent was not equivalent to a termination, but a
mere modification, of the Subcontract. The latter was ordered to give
full payment for the work completed by petitioner.
Ruling of the Court of Appeals
On appeal, the CA reversed the RTC and ordered the referral of the
case to arbitration. The appellate court held as arbitrable the issue of
whether respondents take-over of some work items had been
intended to be a termination of the original contract under Letter "K"
of the Subcontract. It ruled likewise on two other issues: whether
petitioner was liable under the warranty clause of the Agreement,
and whether it should reimburse respondent for the work the latter
had taken over.15
Hence, this Petition.16
The Issues
In its Memorandum, petitioner raises the following issues for the
Courts consideration:
"A
Whether or not there exist[s] a controversy/dispute between
petitioner and respondent regarding the interpretation and
implementation of the Sub-Contract Agreement dated February 22,
1983 that requires prior recourse to voluntary arbitration;
"B
In the affirmative, whether or not the requirements provided in Article
III 1 of CIAC Arbitration Rules regarding request for arbitration ha[ve]
been complied with[.]"17
The Courts Ruling
The Petition is unmeritorious.
First Issue:
Whether Dispute Is Arbitrable
Petitioner claims that there is no conflict regarding the interpretation
or the implementation of the Agreement. Thus, without having to
resort to prior arbitration, it is entitled to collect the value of the
services it rendered through an ordinary action for the collection of a
sum of money from respondent. On the other hand, the latter
contends that there is a need for prior arbitration as provided in the
Agreement. This is because there are some disparities between the
parties positions regarding the extent of the work done, the amount
of advances and billable accomplishments, and the set off of
expenses incurred by respondent in its take-over of petitioners work.
We side with respondent. Essentially, the dispute arose from the
parties ncongruent positions on whether certain provisions of their
Agreement could be applied to the facts. The instant case involves
technical discrepancies that are better left to an arbitral body that
has expertise in those areas. In any event, the inclusion of an
arbitration clause in a contract does not ipso facto divest the courts
of jurisdiction to pass upon the findings of arbitral bodies, because
the awards are still judicially reviewable under certain conditions.18
In the case before us, the Subcontract has the following arbitral
clause:
"6. The Parties hereto agree that any dispute or conflict as regards
to interpretation and implementation of this Agreement which cannot
be settled between [respondent] and [petitioner] amicably shall be
settled by means of arbitration x x x."19
Clearly, the resolution of the dispute between the parties herein
requires a referral to the provisions of their Agreement. Within the
scope of the arbitration clause are discrepancies as to the amount of
advances and billable accomplishments, the application of the
provision on termination, and the consequent set-off of expenses.
A review of the factual allegations of the parties reveals that they
differ on the following questions: (1) Did a take-over/termination
occur? (2) May the expenses incurred by respondent in the take-
over be set off against the amounts it owed petitioner? (3) How much
were the advances and billable accomplishments?
The resolution of the foregoing issues lies in the interpretation of the
provisions of the Agreement. According to respondent, the take-over
was caused by petitioners delay in completing the work. Such delay
was in violation of the provision in the Agreement as to time
schedule:
"G. TIME SCHEDULE
"[Petitioner] shall adhere strictly to the schedule related to the
WORK and complete the WORK within the period set forth in Annex
C hereof. NO time extension shall be granted by [respondent] to
[petitioner] unless a corresponding time extension is granted by [the
Ministry of Public Works and Highways] to the CONSORTIUM."20
Because of the delay, respondent alleges that it took over some of
the work contracted to petitioner, pursuant to the following provision
in the Agreement:
"K. TERMINATION OF AGREEMENT
"[Respondent] has the right to terminate and/or take over this
Agreement for any of the following causes:
xxx-xxx-xxx
6. If despite previous warnings by [respondent], [petitioner] does not
execute the WORK in accordance with this Agreement,
or persistently or flagrantly neglects to carry out [its] obligations
under this Agreement."21
Supposedly, as a result of the "take-over," respondent incurred
expenses in excess of the contracted price. It sought to set off those
expenses against the amount claimed by petitioner for the work the
latter accomplished, pursuant to the following provision:
"If the total direct and indirect cost of completing the remaining part
of the WORK exceed the sum which would have been payable to
[petitioner] had it completed the WORK, the amount of such excess
[may be] claimed by [respondent] from either of the following:
1. Any amount due [petitioner] from [respondent] at the time of the
termination of this Agreement."22
The issue as to the correct amount of petitioners advances and
billable accomplishments involves an evaluation of the manner in
which the parties completed the work, the extent to which they did it,
and the expenses each of them incurred in connection therewith.
Arbitrators also need to look into the computation of foreign and local
costs of materials, foreign and local advances, retention fees and
letters of credit, and taxes and duties as set forth in the Agreement.
These data can be gathered from a review of the Agreement,
pertinent portions of which are reproduced hereunder:
"C. CONTRACT PRICE AND TERMS OF PAYMENT
xxx-xxx-xxx
"All progress payments to be made by [respondent] to [petitioner]
shall be subject to a retention sum of ten percent (10%) of the value
of the approved quantities. Any claims by [respondent] on [petitioner]
may be deducted by [respondent] from the progress payments
and/or retained amount. Any excess from the retained amount after
deducting [respondents] claims shall be released by [respondent] to
[petitioner] after the issuance of [the Ministry of Public Works and
Highways] of the Certificate of Completion and final acceptance of
the WORK by [the Ministry of Public Works and Highways].
xxx-xxx-xxx
"D. IMPORTED MATERIALS AND EQUIPMENT
"[Respondent shall open the letters of credit for the importation of
equipment and materials listed in Annex E hereof after the drawings,
brochures, and other technical data of each items in the list have
been formally approved by [the Ministry of Public Works and
Highways]. However, petitioner will still be fully responsible for all
imported materials and equipment.
"All expenses incurred by [respondent], both in foreign and local
currencies in connection with the opening of the letters of credit shall
be deducted from the Contract Prices.
xxx-xxx-xxx
"N. OTHER CONDITIONS
xxx-xxx-xxx
"2. All customs duties, import duties, contractors taxes, income
taxes, and other taxes that may be required by any government
agencies in connection with this Agreement shall be for the sole
account of [petitioner]."23
Being an inexpensive, speedy and amicable method of settling
disputes,24 arbitration -- along with mediation, conciliation and
negotiation -- is encouraged by the Supreme Court. Aside from
unclogging judicial dockets, arbitration also hastens the resolution of
disputes, especially of the commercial kind. 25 It is thus regarded as
the "wave of the future" in international civil and commercial
disputes.26 Brushing aside a contractual agreement calling for
arbitration between the parties would be a step backward. 27
Consistent with the above-mentioned policy of encouraging
alternative dispute resolution methods, courts should liberally
construe arbitration clauses. Provided such clause is susceptible of
an interpretation that covers the asserted dispute, an order to
arbitrate should be granted.28 Any doubt should be resolved in favor
of arbitration.29
Second Issue:
Prior Request for Arbitration
According to petitioner, assuming arguendo that the dispute is
arbitrable, the failure to file a formal request for arbitration with the
Construction Industry Arbitration Commission (CIAC) precluded the
latter from acquiring jurisdiction over the question. To bolster its
position, petitioner even cites our ruling in Tesco Services
Incorporated v. Vera.30 We are not persuaded.
Section 1 of Article II of the old Rules of Procedure Governing
Construction Arbitration indeed required the submission of a request
for arbitration, as follows:
"SECTION. 1. Submission to Arbitration -- Any party to a SO ORDERED.
construction contract wishing to have recourse to arbitration by the
Construction Industry Arbitration Commission (CIAC) shall submit its
Request for Arbitration in sufficient copies to the Secretariat of the
CIAC; PROVIDED, that in the case of government construction
contracts, all administrative remedies available to the parties must
have been exhausted within 90 days from the time the dispute
arose."

Tesco was promulgated by this Court, using the foregoing provision

as reference.

On the other hand, Section 1 of Article III of the new Rules of

Procedure Governing Construction Arbitration has dispensed with
this requirement and recourse to the CIAC may now be availed of
whenever a contract "contains a clause for the submission of a
future controversy to arbitration," in this wise:

"SECTION 1. Submission to CIAC Jurisdiction An arbitration clause

in a construction contract or a submission to arbitration of a
construction dispute shall be deemed an agreement to submit an
existing or future controversy to CIAC jurisdiction, notwithstanding
the reference to a different arbitration institution or arbitral body in
such contract or submission. When a contract contains a clause for
the submission of a future controversy to arbitration, it is not
necessary for the parties to enter into a submission agreement
before the claimant may invoke the jurisdiction of CIAC."

The foregoing amendments in the Rules were formalized by CIAC

Resolution Nos. 2-91 and 3-93.31

The difference in the two provisions was clearly explained in China

Chang Jiang Energy Corporation (Philippines) v. Rosal Infrastructure
Builders et al.32 (an extended unsigned Resolution) and reiterated
in National Irrigation Administration v. Court of Appeals,33 from which
we quote thus:

"Under the present Rules of Procedure, for a particular construction

contract to fall within the jurisdiction of CIAC, it is merely required
that the parties agree to submit the same to voluntary arbitration
Unlike in the original version of Section 1, as applied in the Tesco
case, the law as it now stands does not provide that the parties
should agree to submit disputes arising from their agreement
specifically to the CIAC for the latter to acquire jurisdiction over the
same. Rather, it is plain and clear that as long as the parties agree to
submit to voluntary arbitration, regardless of what forum they may
choose, their agreement will fall within the jurisdiction of the CIAC,
such that, even if they specifically choose another forum, the parties
will not be precluded from electing to submit their dispute before the
CIAC because this right has been vested upon each party by law,
i.e., E.O. No. 1008."34

Clearly, there is no more need to file a request with the CIAC in

order to vest it with jurisdiction to decide a construction dispute.

The arbitral clause in the Agreement is a commitment on the part of

the parties to submit to arbitration the disputes covered therein.
Because that clause is binding, they are expected to abide by it in
good faith.35 And because it covers the dispute between the parties
in the present case, either of them may compel the other to
arbitrate.36

Since petitioner has already filed a Complaint with the RTC without
prior recourse to arbitration, the proper procedure to enable the
CIAC to decide on the dispute is to request the stay or suspension of
such action, as provided under RA 876 [the Arbitration Law].37

WHEREFORE, the Petition is DENIED and the assailed Decision

AFFIRMED. Costs against petitioner.
FIRST DIVISION
G.R. No. 158560               August 17, 2007
FRABELLE FISHING CORPORATION, Petitioner,
vs.
THE PHILIPPINE AMERICAN LIFE INSURANCE COMPANY,
PHILAM PROPERTIES CORPORATION and PERF REALTY
CORPORATION, Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us is the instant Petition for Review on Certiorari under Rule
45 of the 1997 Rules of Civil Procedure, as amended, assailing the
Decision1 and Resolution of the Court of Appeals dated December 2,
2002 and May 30, 2003, respectively, in CA-G.R. SP No. 71389.
The facts are:
Philam Properties Corporation, Philippine American Life Insurance
Company, and PERF Realty Corporation, herein respondents, are all
corporations duly organized and existing under Philippine laws.
On May 8, 1996, respondents entered into a Memorandum of
Agreement (1996 MOA)2 whereby each agreed to contribute cash,
property, and services for the construction and development of
Philamlife Tower, a 45-storey office condominium along Paseo de
Roxas, Makati City.
On December 6, 1996, respondents executed a Deed of Assignment
(1996 DOA)3 wherein they assigned to Frabelle Properties
Corporation (Frabelle) their rights and obligations under the 1996
MOA with respect to the construction, development, and subsequent
ownership of Unit No. 38-B located at the 38th floor of Philamlife
Tower. The parties also stipulated that the assignee shall be
deemed as a co-developer of the construction project with respect to
Unit No. 38-B.4
Frabelle, in turn, assigned to Frabelle Fishing Corporation (Frabelle
Fishing), petitioner herein, its rights, obligations and interests over
Unit No. 38-B.
On March 9, 1998, petitioner Frabelle Fishing and respondents
executed a Memorandum of Agreement (1998 MOA) 5 to fund the
construction of designated office floors in Philamlife Tower.
The dispute between the parties started when petitioner found
material concealment on the part of respondents regarding certain
details in the 1996 DOA and 1998 MOA and their gross violation of
their contractual obligations as condominium developers. These
violations are: (a) the non-construction of a partition wall between
Unit No. 38-B and the rest of the floor area; and (b) the reduction of
the net usable floor area from four hundred sixty eight (468) square
meters to only three hundred fifteen (315) square meters.
Dissatisfied with its existing arrangement with respondents,
petitioner, on October 22, 2001, referred the matter to the Philippine
Dispute Resolution Center, Inc. (PDRCI) for arbitration. 6 However, in
a letter7 dated November 7, 2001, respondents manifested their
refusal to submit to PDRCI’s jurisdiction.
On February 11, 2002, petitioner filed with the Housing and Land
Use Regulatory Board (HLURB), Expanded National Capital Region
Field Office a complaint8 for reformation of instrument, specific
performance and damages against respondents, docketed as
HLURB Case No. REM-021102-11791. Petitioner alleged, among
others, that the contracts do not reflect the true intention of the
parties; and that it is a mere buyer and not co-developer and/or co-
owner of the condominium unit.
After considering their respective memoranda, HLURB Arbiter Atty.
Dunstan T. San Vicente, with the approval of HLURB Regional
Director Jesse A. Obligacion, issued an Order9 dated May 14, 2002,
the dispositive portion of which reads:
Accordingly, respondents’ plea for the outright dismissal of the
present case is denied. Set the initial preliminary hearing of this case
on June 25, 2002 at 10:00 A.M.
IT IS SO ORDERED.
Respondents then filed with the Court of Appeals a petition for
prohibition with prayer for the issuance of a temporary restraining
order and/or writ of preliminary injunction, 10 docketed as CA-G.R. SP
No. 71389. Petitioner claimed, among others, that the HLURB has
no jurisdiction over the subject matter of the controversy and that the
contracts between the parties provide for compulsory arbitration.
On December 2, 2002, the Court of Appeals rendered its
Decision11 granting the petition, thus:
WHEREFORE, premises considered, the petition is GRANTED.
Public respondents Atty. Dunstan San Vicente and Jesse A.
Obligacion of the Housing and Land Use Regulatory Board,
Expanded National Capital Region Field Office are hereby
permanently ENJOINED and PROHIBITED from further proceeding
with and acting on HLURB Case No. REM-021102-11791. The order
of May 14, 2002 is hereby SET ASIDE and the complaint is
DISMISSED.
SO ORDERED.
In dismissing petitioner’s complaint, the Court of Appeals held that
the HLURB has no jurisdiction over an action for reformation of
contracts. The jurisdiction lies with the Regional Trial Court.
Forthwith, petitioner filed a motion for reconsideration 12 but it was
denied by the appellate court in its Resolution13 dated May 30, 2003.
Hence, the instant petition for review on certiorari.
The issues for our resolution are: (1) whether the HLURB has
jurisdiction over the complaint for reformation of instruments, specific
performance and damages; and (2) whether the parties should
initially resort to arbitration.
The petition lacks merit.
As the records show, the complaint filed by petitioner with the
HLURB is one for reformation of instruments. Petitioner claimed
that the terms of the contract are not clear and prayed that they
should be reformed to reflect the true stipulations of the parties.
Petitioner prayed:
WHEREFORE, in view of all the foregoing, it is respectfully prayed of
this Honorable Office that after due notice and hearing, a judgment
be please rendered:
1. Declaring that the instruments executed by the complainant
FRABELLE and respondent PHILAM to have been in fact a Contract
to Sell. The parties are thereby governed by the provisions of P.D.
957 entitled, "Regulating the Sale of Subdivision Lots and
Condominiums, Providing Penalties for Violations Thereof" as buyer
and developer, respectively, of a condominium unit and not as co-
developer and/or co-owner of the same;

x x x (Emphasis supplied)

We hold that being an action for reformation of instruments,

petitioner’s complaint necessarily falls under the jurisdiction of the
Regional Trial Court pursuant to Section 1, Rule 63 of the 1997
Rules of Civil Procedure, as amended, which provides:

SECTION 1. Who may file petition. – Any person interested under a

deed, will, contract or other written instrument, whose rights are
affected by a statute,
G.R. No. 161957             January 22, 2007
JORGE GONZALES and PANEL OF ARBITRATORS, Petitioners,
vs.
CLIMAX MINING LTD., CLIMAX-ARIMCO MINING CORP., and
AUSTRALASIAN PHILIPPINES MINING INC., Respondents.
x--------------------------------------------------------------------------------- x
G.R. No. 167994            January 22, 2007
JORGE GONZALES, Petitioner,
vs.
HON. OSCAR B. PIMENTEL, in his capacity as PRESIDING
JUDGE of BR. 148 of the REGIONAL TRIAL COURT of MAKATI
CITY, and CLIMAX-ARIMCO MINING
CORPORATION, Respondents.
RESOLUTION
TINGA, J.:
This is a consolidation of two petitions rooted in the same disputed
Addendum Contract entered into by the parties. In G.R. No. 161957,
the Court in its Decision of 28 February 20051 denied the Rule 45
petition of petitioner Jorge Gonzales (Gonzales). It held that the
DENR Panel of Arbitrators had no jurisdiction over the complaint for
the annulment of the Addendum Contract on grounds of fraud and
violation of the Constitution and that the action should have been
brought before the regular courts as it involved judicial issues. Both
parties filed separate motions for reconsideration. Gonzales avers in
his Motion for Reconsideration 2 that the Court erred in holding that
the DENR Panel of Arbitrators was bereft of jurisdiction, reiterating
its argument that the case involves a mining dispute that properly
falls within the ambit of the Panel’s authority. Gonzales adds that the
Court failed to rule on other issues he raised relating to the
sufficiency of his complaint before the DENR Panel of Arbitrators
and the timeliness of its filing.
Respondents Climax Mining Ltd., et al., (respondents) filed their
Motion for Partial Reconsideration and/or Clarification 3 seeking
reconsideration of that part of the Decision holding that the case
should not be brought for arbitration under Republic Act (R.A.) No.
876, also known as the Arbitration Law. 4 Respondents, citing
American jurisprudence5 and the UNCITRAL Model Law, 6 argue that
the arbitration clause in the Addendum Contract should be treated
as an agreement independent of the other terms of the contract, and
that a claimed rescission of the main contract does not avoid the
duty to arbitrate. Respondents add that Gonzales’s argument
relating to the alleged invalidity of the Addendum Contract still has to
be proven and adjudicated on in a proper proceeding; that is, an
action separate from the motion to compel arbitration. Pending
judgment in such separate action, the Addendum Contract remains
valid and binding and so does the arbitration clause therein.
Respondents add that the holding in the Decision that "the case
should not be brought under the ambit of the Arbitration Law"
appears to be premised on Gonzales’s having "impugn[ed] the
existence or validity" of the addendum contract. If so, it supposedly
conveys the idea that Gonzales’s unilateral repudiation of the
contract or mere allegation of its invalidity is all it takes to avoid
arbitration. Hence, respondents submit that the court’s holding that
"the case should not be brought under the ambit of the Arbitration
Law" be understood or clarified as operative only where the
challenge to the arbitration agreement has been sustained by final
judgment.
Both parties were required to file their respective comments to the
other party’s motion for reconsideration/clarification. 7 Respondents
filed their Comment on 17 August 2005, 8 while Gonzales filed his
only on 25 July 2006.9
On the other hand, G.R. No. 167994 is a Rule 65 petition filed on 6
May 2005, or while the motions for reconsideration in G.R. No.
16195710 were pending, wherein Gonzales challenged the orders of
the Regional Trial Court (RTC) requiring him to proceed with the
arbitration proceedings as sought by Climax-Arimco Mining
Corporation (Climax-Arimco).
On 5 June 2006, the two cases, G.R. Nos. 161957 and 167994,
were consolidated upon the recommendation of the Assistant
Division Clerk of Court since the cases are rooted in the same
Addendum Contract.
We first tackle the more recent case which is G.R. No. 167994. It
stemmed from the petition to compel arbitration filed by respondent
Climax-Arimco before the RTC of Makati City on 31 March 2000
while the complaint for the nullification of the Addendum Contract
was pending before the DENR Panel of Arbitrators. On 23 March
2000, Climax-Arimco had sent Gonzales a Demand for Arbitration
pursuant to Clause 19.111 of the Addendum Contract and also in
accordance with Sec. 5 of R.A. No. 876. The petition for arbitration
was subsequently filed and Climax-Arimco sought an order to
compel the parties to arbitrate pursuant to the said arbitration clause.
The case, docketed as Civil Case No. 00-444, was initially raffled to
Br. 132 of the RTC of Makati City, with Judge Herminio I. Benito as
Presiding Judge. Respondent Climax-Arimco filed on 5 April 2000 a
motion to set the application to compel arbitration for hearing.
On 14 April 2000, Gonzales filed a motion to dismiss which he
however failed to set for hearing. On 15 May 2000, he filed an
Answer with Counterclaim,12 questioning the validity of the
Addendum Contract containing the arbitration clause. Gonzales
alleged that the Addendum Contract containing the arbitration clause
is void in view of Climax-Arimco’s acts of fraud, oppression and
violation of the Constitution. Thus, the arbitration clause, Clause
19.1, contained in the Addendum Contract is also null and void ab
initio and legally inexistent.1awphi1.net
On 18 May 2000, the RTC issued an order declaring Gonzales’s
motion to dismiss moot and academic in view of the filing of his
Answer with Counterclaim.13
On 31 May 2000, Gonzales asked the RTC to set the case for pre-
trial.14 This the RTC denied on 16 June 2000, holding that the
petition for arbitration is a special proceeding that is summary in
nature.15 However, on 7 July 2000, the RTC granted Gonzales’s
motion for reconsideration of the 16 June 2000 Order and set the
case for pre-trial on 10 August 2000, it being of the view that
Gonzales had raised in his answer the issue of the making of the
arbitration agreement.16
Climax-Arimco then filed a motion to resolve its pending motion to
compel arbitration. The RTC denied the same in its 24 July 2000
order.
On 28 July 2000, Climax-Arimco filed a Motion to Inhibit Judge
Herminio I. Benito for "not possessing the cold neutrality of an
impartial judge."17 On 5 August 2000, Judge Benito issued an Order
granting the Motion to Inhibit and ordered the re-raffling of the
petition for arbitration. 18 The case was raffled to the sala of public
respondent Judge Oscar B. Pimentel of Branch 148.
On 23 August 2000, Climax-Arimco filed a motion for reconsideration
of the 24 July 2000 Order. 19 Climax-Arimco argued that R.A. No. 876
does not authorize a pre-trial or trial for a motion to compel
arbitration but directs the court to hear the motion summarily and
resolve it within ten days from hearing. Judge Pimentel granted the
motion and directed the parties to arbitration. On 13 February 2001,
Judge Pimentel issued the first assailed order requiring Gonzales to
proceed with arbitration proceedings and appointing retired CA
Justice Jorge Coquia as sole arbitrator. 20
Gonzales moved for reconsideration on 20 March 2001 but this was
denied in the Order dated 7 March 2005.21
Gonzales thus filed the Rule 65 petition assailing the Orders dated
13 February 2001 and 7 March 2005 of Judge Pimentel. Gonzales
contends that public respondent Judge Pimentel acted with grave
abuse of discretion in immediately ordering the parties to proceed
with arbitration despite the proper, valid, and timely raised argument
in his Answer with Counterclaim that the Addendum Contract,
containing the arbitration clause, is null and void. Gonzales has also
sought a temporary restraining order to prevent the enforcement of
the assailed orders directing the parties to arbitrate, and to direct
Judge Pimentel to hold a pre-trial conference and the necessary
hearings on the determination of the nullity of the Addendum
Contract.
In support of his argument, Gonzales invokes Sec. 6 of R.A. No.
876:
Sec. 6. Hearing by court.—A party aggrieved by the failure, neglect
or refusal of another to perform under an agreement in writing
providing for arbitration may petition the court for an order directing
that such arbitration proceed in the manner provided for in such
agreement. Five days notice in writing of the hearing of such
application shall be served either personally or by registered mail
upon the party in default. The court shall hear the parties, and upon
being satisfied that the making of the agreement or such failure to
comply therewith is not in issue, shall make an order directing the
parties to proceed to arbitration in accordance with the terms of the
agreement. If the making of the agreement or default be in issue the
court shall proceed to summarily hear such issue. If the finding be
that no agreement in writing providing for arbitration was made, or
that there is no default in the proceeding thereunder, the proceeding
shall be dismissed. If the finding be that a written provision for
arbitration was made and there is a default in proceeding
thereunder, an order shall be made summarily directing the parties
to proceed with the arbitration in accordance with the terms thereof.
The court shall decide all motions, petitions or applications filed
under the provisions of this Act, within ten (10) days after such
motions, petitions, or applications have been heard by it.
Gonzales also cites Sec. 24 of R.A. No. 9285 or the "Alternative
Dispute Resolution Act of 2004:"
Sec. 24. Referral to Arbitration.—A court before which an action is
brought in a matter which is the subject matter of an arbitration
agreement shall, if at least one party so requests not later than the
pre-trial conference, or upon the request of both parties thereafter,
refer the parties to arbitration unless it finds that the arbitration
agreement is null and void, inoperative or incapable of being
performed.
According to Gonzales, the above-quoted provisions of law outline
the procedure to be followed in petitions to compel arbitration, which
the RTC did not follow. Thus, referral of the parties to arbitration by
Judge Pimentel despite the timely and properly raised issue of nullity
of the Addendum Contract was misplaced and without legal basis.
Both R.A. No. 876 and R.A. No. 9285 mandate that any issue as to
the nullity, inoperativeness, or incapability of performance of the
arbitration clause/agreement raised by one of the parties to the
alleged arbitration agreement must be determined by the court prior
to referring them to arbitration. They require that the trial court first
determine or resolve the issue of nullity, and there is no other venue
for this determination other than a pre-trial and hearing on the issue
by the trial court which has jurisdiction over the case. Gonzales adds
that the assailed 13 February 2001 Order also violated his right to
procedural due process when the trial court erroneously ruled on the
existence of the arbitration agreement despite the absence of a
hearing for the presentation of evidence on the nullity of the
Addendum Contract.
Respondent Climax-Arimco, on the other hand, assails the mode of
review availed of by Gonzales. Climax-Arimco cites Sec. 29 of R.A.
No. 876:
Sec. 29. Appeals.—An appeal may be taken from an order made in
a proceeding under this Act, or from a judgment entered upon an
award through certiorari proceedings, but such appeals shall be
limited to questions of law. The proceedings upon such an appeal,
including the judgment thereon shall be governed by the Rules of
Court in so far as they are applicable.
Climax-Arimco mentions that the special civil action for certiorari
employed by Gonzales is available only where there is no appeal or
any plain, speedy, and adequate remedy in the ordinary course of
law against the challenged orders or acts. Climax-Arimco then points
out that R.A. No. 876 provides for an appeal from such orders,
which, under the Rules of Court, must be filed within 15 days from
notice of the final order or resolution appealed from or of the denial
of the motion for reconsideration filed in due time. Gonzales has not
denied that the relevant 15-day period for an appeal had elapsed
long before he filed this petition for certiorari. He cannot use the
special civil action of certiorari as a remedy for a lost appeal.
Climax-Arimco adds that an application to compel arbitration under
Sec. 6 of R.A. No. 876 confers on the trial court only a limited and
special jurisdiction, i.e., a jurisdiction solely to determine (a) whether
or not the parties have a written contract to arbitrate, and (b) if the
defendant has failed to comply with that contract. Respondent
cites La Naval Drug Corporation v. Court of Appeals,22 which holds
that in a proceeding to compel arbitration, "[t]he arbitration law
explicitly confines the court’s authority only to pass upon the issue of
whether there is or there is no agreement in writing providing for
arbitration," and "[i]n the affirmative, the statute ordains that the court
shall issue an order ‘summarily directing the parties to proceed with
the arbitration in accordance with the terms thereof.’" 23 Climax-
Arimco argues that R.A. No. 876 gives no room for any other issue
to be dealt with in such a proceeding, and that the court presented
with an application to compel arbitration may order arbitration or
dismiss the same, depending solely on its finding as to those two
limited issues. If either of these matters is disputed, the court is
required to conduct a summary hearing on it. Gonzales’s proposition
contradicts both the trial court’s limited jurisdiction and the summary
nature of the proceeding itself.
Climax-Arimco further notes that Gonzales’s attack on or repudiation
of the Addendum Contract also is not a ground to deny effect to the
arbitration clause in the Contract. The arbitration agreement is
separate and severable from the contract evidencing the parties’
commercial or economic transaction, it stresses. Hence, the alleged
defect or failure of the main contract is not a ground to deny
enforcement of the parties’ arbitration agreement. Even the party
who has repudiated the main contract is not prevented from
enforcing its arbitration provision. R.A. No. 876 itself treats the
arbitration clause or agreement as a contract separate from the
commercial, economic or other transaction to be arbitrated. The
statute, in particular paragraph 1 of Sec. 2 thereof, considers the
arbitration stipulation an independent contract in its own right whose
enforcement may be prevented only on grounds which legally make
the arbitration agreement itself revocable, thus:
Sec. 2. Persons and matters subject to arbitration.—Two or more
persons or parties may submit to the arbitration of one or more
arbitrators any controversy existing, between them at the time of the
submission and which may be the subject of an action, or the parties
to any contract may in such contract agree to settle by arbitration a
controversy thereafter arising between them. Such submission or
contract shall be valid, enforceable and irrevocable, save upon such
grounds as exist at law for the revocation of any contract.
xxxx
The grounds Gonzales invokes for the revocation of the Addendum
Contract—fraud and oppression in the execution thereof—are also
not grounds for the revocation of the arbitration clause in the
Contract, Climax-Arimco notes. Such grounds may only be raised by
way of defense in the arbitration itself and cannot be used to
frustrate or delay the conduct of arbitration proceedings. Instead,
these should be raised in a separate action for rescission, it
continues.
Climax-Arimco emphasizes that the summary proceeding to compel
arbitration under Sec. 6 of R.A. No. 876 should not be confused with
the procedure in Sec. 24 of R.A. No. 9285. Sec. 6 of R.A. No. 876
refers to an application to compel arbitration where the court’s
authority is limited to resolving the issue of whether there is or there
is no agreement in writing providing for arbitration, while Sec. 24 of
R.A. No. 9285 refers to an ordinary action which covers a matter that
appears to be arbitrable or subject to arbitration under the arbitration
agreement. In the latter case, the statute is clear that the court,
instead of trying the case, may, on request of either or both parties,
refer the parties to arbitration, unless it finds that the arbitration
agreement is null and void, inoperative or incapable of being
performed. Arbitration may even be ordered in the same suit brought
upon a matter covered by an arbitration agreement even without
waiting for the outcome of the issue of the validity of the arbitration
agreement. Art. 8 of the UNCITRAL Model Law 24 states that where a
court before which an action is brought in a matter which is subject
of an arbitration agreement refers the parties to arbitration, the
arbitral proceedings may proceed even while the action is pending.
Thus, the main issue raised in the Petition for Certiorari is whether it
was proper for the RTC, in the proceeding to compel arbitration
under R.A. No. 876, to order the parties to arbitrate even though the
defendant therein has raised the twin issues of validity and nullity of
the Addendum Contract and, consequently, of the arbitration clause
therein as well. The resolution of both Climax-Arimco’s Motion for
Partial Reconsideration and/or Clarification in G.R. No. 161957 and
Gonzales’s Petition for Certiorari in G.R. No. 167994 essentially
turns on whether the question of validity of the Addendum Contract
bears upon the applicability or enforceability of the arbitration clause
contained therein. The two pending matters shall thus be jointly
resolved.
We address the Rule 65 petition in G.R. No. 167994 first from the
remedial law perspective. It deserves to be dismissed on procedural
grounds, as it was filed in lieu of appeal which is the prescribed
remedy and at that far beyond the reglementary period. It is
elementary in remedial law that the use of an erroneous mode of
appeal is cause for dismissal of the petition for certiorari and it has
been repeatedly stressed that a petition for certiorari is not a
substitute for a lost appeal. As its nature, a petition for certiorari lies
only where there is "no appeal," and "no plain, speedy and adequate
remedy in the ordinary course of law." 25 The Arbitration Law
specifically provides for an appeal by certiorari, i.e., a petition for
review under certiorari under Rule 45 of the Rules of Court that
raises pure questions of law. 26 There is no merit to Gonzales’s
argument that the use of the permissive term "may" in Sec. 29, R.A.
No. 876 in the filing of appeals does not prohibit nor discount the
filing of a petition for certiorari under Rule 65.27 Proper interpretation
of the aforesaid provision of law shows that the term "may" refers
only to the filing of an appeal, not to the mode of review to be
employed. Indeed, the use of "may" merely reiterates the principle
that the right to appeal is not part of due process of law but is a mere
statutory privilege to be exercised only in the manner and in
accordance with law.
Neither can BF Corporation v. Court of Appeals 28 cited by Gonzales
support his theory. Gonzales argues that said case recognized and
allowed a petition for certiorari under Rule 65 "appealing the order of
the Regional Trial Court disregarding the arbitration agreement as an
acceptable remedy."29 The BF Corporation case had its origins in a
complaint for collection of sum of money filed by therein petitioner
BF Corporation against Shangri-la Properties, Inc. (SPI). SPI moved
to suspend the proceedings alleging that the construction agreement
or the Articles of Agreement between the parties contained a clause
requiring prior resort to arbitration before judicial intervention. The
trial court found that an arbitration clause was incorporated in the
Conditions of Contract appended to and deemed an integral part of
the Articles of Agreement. Still, the trial court denied the motion to
suspend proceedings upon a finding that the Conditions of Contract
were not duly executed and signed by the parties. The trial court also
found that SPI had failed to file any written notice of demand for
arbitration within the period specified in the arbitration clause. The
trial court denied SPI's motion for reconsideration and ordered it to
file its responsive pleading. Instead of filing an answer, SPI filed a
petition for certiorari under Rule 65, which the Court of Appeals,
favorably acted upon. In a petition for review before this Court, BF
Corporation alleged, among others, that the Court of Appeals should
have dismissed the petition for certiorari since the order of the trial
court denying the motion to suspend proceedings "is a resolution of
an incident on the merits" and upon the continuation of the
proceedings, the trial court would eventually render a decision on the
merits, which decision could then be elevated to a higher court "in an
ordinary appeal."30
The Court did not uphold BF Corporation’s argument. The issue
raised before the Court was whether SPI had taken the proper mode
of appeal before the Court of Appeals. The question before the Court
of Appeals was whether the trial court had prematurely assumed
jurisdiction over the controversy. The question of jurisdiction in turn
depended on the question of existence of the arbitration clause
which is one of fact. While on its face the question of existence of the
arbitration clause is a question of fact that is not proper in a petition
for certiorari, yet since the determination of the question obliged the
Court of Appeals as it did to interpret the contract documents in
accordance with R.A. No. 876 and existing jurisprudence, the
question is likewise a question of law which may be properly taken
cognizance of in a petition for certiorari under Rule 65, so the Court
held.31
The situation in B.F. Corporation is not availing in the present
petition. The disquisition in B.F. Corporation led to the conclusion
that in order that the question of jurisdiction may be resolved, the
appellate court had to deal first with a question of law which could be
addressed in a certiorari proceeding. In the present case, Gonzales’s
petition raises a question of law, but not a question of jurisdiction.
Judge Pimentel acted in accordance with the procedure prescribed
in R.A. No. 876 when he ordered Gonzales to proceed with
arbitration and appointed a sole arbitrator after making the
determination that there was indeed an arbitration agreement. It has
been held that as long as a court acts within its jurisdiction and does
not gravely abuse its discretion in the exercise thereof, any
supposed error committed by it will amount to nothing more than an
error of judgment reviewable by a timely appeal and not assailable
by a special civil action of certiorari. 32 Even if we overlook the
employment of the wrong remedy in the broader interests of justice,
the petition would nevertheless be dismissed for failure of Gonzalez
to show grave abuse of discretion.
Arbitration, as an alternative mode of settling disputes, has long
been recognized and accepted in our jurisdiction. The Civil Code is
explicit on the matter.33 R.A. No. 876 also expressly authorizes
arbitration of domestic disputes. Foreign arbitration, as a system of
settling commercial disputes of an international character, was
likewise recognized when the Philippines adhered to the United
Nations "Convention on the Recognition and the Enforcement of
Foreign Arbitral Awards of 1958," under the 10 May 1965 Resolution
No. 71 of the Philippine Senate, giving reciprocal recognition and
allowing enforcement of international arbitration agreements
between parties of different nationalities within a contracting
state.34 The enactment of R.A. No. 9285 on 2 April 2004 further
institutionalized the use of alternative dispute resolution systems,
including arbitration, in the settlement of disputes.
Disputes do not go to arbitration unless and until the parties have
agreed to abide by the arbitrator’s decision. Necessarily, a contract
is required for arbitration to take place and to be binding. R.A. No.
876 recognizes the contractual nature of the arbitration agreement,
thus:
Sec. 2. Persons and matters subject to arbitration.—Two or more
persons or parties may submit to the arbitration of one or more
arbitrators any controversy existing, between them at the time of the
submission and which may be the subject of an action, or the parties
to any contract may in such contract agree to settle by arbitration a
controversy thereafter arising between them. Such submission or
contract shall be valid, enforceable and irrevocable, save upon such
grounds as exist at law for the revocation of any contract.
Such submission or contract may include question arising out of
valuations, appraisals or other controversies which may be
collateral, incidental, precedent or subsequent to any issue between
the parties.
A controversy cannot be arbitrated where one of the parties to the
controversy is an infant, or a person judicially declared to be
incompetent, unless the appropriate court having jurisdiction
approve a petition for permission to submit such controversy to
arbitration made by the general guardian or guardian ad litem of the
infant or of the incompetent. [Emphasis added.]
Thus, we held in Manila Electric Co. v. Pasay Transportation
Co.35 that a submission to arbitration is a contract. A clause in a
contract providing that all matters in dispute between the parties
shall be referred to arbitration is a contract, 36 and in Del Monte
Corporation-USA v. Court of Appeals37 that "[t]he provision to submit
to arbitration any dispute arising therefrom and the relationship of
the parties is part of that contract and is itself a contract. As a rule,
contracts are respected as the law between the contracting parties
and produce effect as between them, their assigns and heirs."38
The special proceeding under Sec. 6 of R.A. No. 876 recognizes the
contractual nature of arbitration clauses or agreements. It provides:
Sec. 6. Hearing by court.—A party aggrieved by the failure, neglect
or refusal of another to perform under an agreement in writing
providing for arbitration may petition the court for an order directing
that such arbitration proceed in the manner provided for in such
agreement. Five days notice in writing of the hearing of such
application shall be served either personally or by registered mail
upon the party in default. The court shall hear the parties, and upon
being satisfied that the making of the agreement or such failure to
comply therewith is not in issue, shall make an order directing the
parties to proceed to arbitration in accordance with the terms of the
agreement. If the making of the agreement or default be in issue the
court shall proceed to summarily hear such issue. If the finding be
that no agreement in writing providing for arbitration was made, or
that there is no default in the proceeding thereunder, the proceeding
shall be dismissed. If the finding be that a written provision for
arbitration was made and there is a default in proceeding
thereunder, an order shall be made summarily directing the parties
to proceed with the arbitration in accordance with the terms thereof.
The court shall decide all motions, petitions or applications filed
under the provisions of this Act, within ten days after such motions,
petitions, or applications have been heard by it. [Emphasis added.]
This special proceeding is the procedural mechanism for the
enforcement of the contract to arbitrate. The jurisdiction of the courts
in relation to Sec. 6 of R.A. No. 876 as well as the nature of the
proceedings therein was expounded upon in La Naval Drug
Corporation v. Court of Appeals.39 There it was held that R.A. No.
876 explicitly confines the court's authority only to the determination
of whether or not there is an agreement in writing providing for
arbitration. In the affirmative, the statute ordains that the court shall
issue an order "summarily directing the parties to proceed with the
arbitration in accordance with the terms thereof." If the court, upon
the other hand, finds that no such agreement exists, "the proceeding
shall be dismissed."40 The cited case also stressed that the
proceedings are summary in nature. 41 The same thrust was made in
the earlier case of Mindanao Portland Cement Corp. v. McDonough
Construction Co. of Florida42 which held, thus:
Since there obtains herein a written provision for arbitration as well
as failure on respondent's part to comply therewith, the court a quo
rightly ordered the parties to proceed to arbitration in accordance
with the terms of their agreement (Sec. 6, Republic Act 876).
Respondent's arguments touching upon the merits of the dispute are
improperly raised herein. They should be addressed to the
arbitrators. This proceeding is merely a summary remedy to enforce
the agreement to arbitrate. The duty of the court in this case is not to
resolve the merits of the parties' claims but only to determine if they
should proceed to arbitration or not. x x x x43
Implicit in the summary nature of the judicial proceedings is the
separable or independent character of the arbitration clause or
agreement. This was highlighted in the cases of Manila Electric Co.
v. Pasay Trans. Co.44 and Del Monte Corporation-USA v. Court of
Appeals.45
The doctrine of separability, or severability as other writers call it,
enunciates that an arbitration agreement is independent of the main
contract. The arbitration agreement is to be treated as a separate
agreement and the arbitration agreement does not automatically
terminate when the contract of which it is part comes to an end. 46
The separability of the arbitration agreement is especially significant
to the determination of whether the invalidity of the main contract
also nullifies the arbitration clause. Indeed, the doctrine denotes that
the invalidity of the main contract, also referred to as the "container"
contract, does not affect the validity of the arbitration agreement.
Irrespective of the fact that the main contract is invalid, the arbitration
clause/agreement still remains valid and enforceable. 47
The separability of the arbitration clause is confirmed in Art. 16(1) of
the UNCITRAL Model Law and Art. 21(2) of the UNCITRAL
Arbitration Rules.48
The separability doctrine was dwelt upon at length in the U.S. case
of Prima Paint Corp. v. Flood & Conklin Manufacturing Co. 49 In that
case, Prima Paint and Flood and Conklin (F & C) entered into a
consulting agreement whereby F & C undertook to act as consultant
to Prima Paint for six years, sold to Prima Paint a list of its customers
and promised not to sell paint to these customers during the same
period. The consulting agreement contained an arbitration clause.
Prima Paint did not make payments as provided in the consulting
agreement, contending that F & C had fraudulently misrepresented
that it was solvent and able for perform its contract when in fact it
was not and had even intended to file for bankruptcy after executing
the consultancy agreement. Thus, F & C served Prima Paint with a
notice of intention to arbitrate. Prima Paint sued in court for
rescission of the consulting agreement on the ground of fraudulent
misrepresentation and asked for the issuance of an order enjoining F
& C from proceeding with arbitration. F & C moved to stay the suit
pending arbitration. The trial court granted F & C’s motion, and the
U.S. Supreme Court affirmed.
The U.S. Supreme Court did not address Prima Paint’s argument
that it had been fraudulently induced by F & C to sign the consulting
agreement and held that no court should address this argument.
Relying on Sec. 4 of the Federal Arbitration Act—which provides that
"if a party [claims to be] aggrieved by the alleged failure x x x of
another to arbitrate x x x, [t]he court shall hear the parties, and upon
being satisfied that the making of the agreement for arbitration or the
failure to comply therewith is not in issue, the court shall make an
order directing the parties to proceed to arbitration x x x. If the
making of the arbitration agreement or the failure, neglect, or refusal
to perform the same be in issue, the court shall proceed summarily
to the trial thereof"—the U.S. High Court held that the court should
not order the parties to arbitrate if the making of the arbitration
agreement is in issue. The parties should be ordered to arbitration if,
and only if, they have contracted to submit to arbitration. Prima Paint
was not entitled to trial on the question of whether an arbitration
agreement was made because its allegations of fraudulent
inducement were not directed to the arbitration clause itself, but only
to the consulting agreement which contained the arbitration
agreement.50 Prima Paint held that "arbitration clauses are
‘separable’ from the contracts in which they are embedded, and that
where no claim is made that fraud was directed to the arbitration
clause itself, a broad arbitration clause will be held to encompass
arbitration of the claim that the contract itself was induced by
fraud."51
There is reason, therefore, to rule against Gonzales when he alleges
that Judge Pimentel acted with grave abuse of discretion in ordering
the parties to proceed with arbitration. Gonzales’s argument that the
Addendum Contract is null and void and, therefore the arbitration
clause therein is void as well, is not tenable. First, the proceeding in
a petition for arbitration under R.A. No. 876 is limited only to the
resolution of the question of whether the arbitration agreement
exists. Second, the separability of the arbitration clause from the
Addendum Contract means that validity or invalidity of the
Addendum Contract will not affect the enforceability of the
agreement to arbitrate. Thus, Gonzales’s petition for certiorari should
be dismissed.
This brings us back to G.R. No. 161957. The adjudication of the
petition in G.R. No. 167994 effectively modifies part of the Decision
dated 28 February 2005 in G.R. No. 161957. Hence, we now hold
that the validity of the contract containing the agreement to submit to
arbitration does not affect the applicability of the arbitration clause
itself. A contrary ruling would suggest that a party’s mere repudiation
of the main contract is sufficient to avoid arbitration. That is exactly
the situation that the separability doctrine, as well as jurisprudence
applying it, seeks to avoid. We add that when it was declared in G.R.
No. 161957 that the case should not be brought for arbitration, it
should be clarified that the case referred to is the case actually filed
by Gonzales before the DENR Panel of Arbitrators, which was for
the nullification of the main contract on the ground of fraud, as it had
already been determined that the case should have been brought
before the regular courts involving as it did judicial issues.
The Motion for Reconsideration of Gonzales in G.R. No. 161957
should also be denied. In the motion, Gonzales raises the same
question of jurisdiction, more particularly that the complaint for
nullification of the Addendum Contract pertained to the DENR Panel
of Arbitrators, not the regular courts. He insists that the subject of his
complaint is a mining dispute since it involves a dispute concerning
rights to mining areas, the Financial and Technical Assistance
Agreement (FTAA) between the parties, and it also involves
claimowners. He adds that the Court failed to rule on other issues he
raised, such as whether he had ceded his claims over the mineral
deposits located within the Addendum Area of Influence; whether the
complaint filed before the DENR Panel of Arbitrators alleged ultimate
facts of fraud; and whether the action to declare the nullity of the
Addendum Contract on the ground of fraud has
prescribed.1avvphi1.net
These are the same issues that Gonzales raised in his Rule 45
petition in G.R. No. 161957 which were resolved against him in the
Decision of 28 February 2005. Gonzales does not raise any new
argument that would sway the Court even a bit to alter its holding
that the complaint filed before the DENR Panel of Arbitrators
involves judicial issues which should properly be resolved by the
regular courts. He alleged fraud or misrepresentation in the
execution of the Addendum Contract which is a ground for the
annulment of a voidable contract. Clearly, such allegations entail
legal questions which are within the jurisdiction of the courts.
The question of whether Gonzales had ceded his claims over the
mineral deposits in the Addendum Area of Influence is a factual
question which is not proper for determination before this Court. At
all events, moreover, the question is irrelevant to the issue of
jurisdiction of the DENR Panel of Arbitrators. It should be pointed out
that the DENR Panel of Arbitrators made a factual finding in its Order
dated 18 October 2001, which it reiterated in its Order dated 25 June
2002, that Gonzales had, "through the various agreements, assigned
his interest over the mineral claims all in favor of [Climax-Arimco]" as
well as that without the complainant [Gonzales] assigning his interest
over the mineral claims in favor of [Climax-Arimco], there would be
no FTAA to speak of."52 This finding was affirmed by the Court of
Appeals in its Decision dated 30 July 2003 resolving the petition for
certiorari filed by Climax-Arimco in regard to the 18 October 2001
Order of the DENR Panel.53
The Court of Appeals likewise found that Gonzales’s complaint
alleged fraud but did not provide any particulars to substantiate it.
The complaint repeatedly mentioned fraud, oppression, violation of
the Constitution and similar conclusions but nowhere did it give any
ultimate facts or particulars relative to the allegations. 54
Sec. 5, Rule 8 of the Rules of Court specifically provides that in all
averments of fraud, the circumstances constituting fraud must be
stated with particularity. This is to enable the opposing party to
controvert the particular facts allegedly constituting the same.
Perusal of the complaint indeed shows that it failed to state with
particularity the ultimate facts and circumstances constituting the
alleged fraud. It does not state what particulars about Climax-
Arimco’s financial or technical capability were misrepresented, or
how the misrepresentation was done. Incorporated in the body of the
complaint are verbatim reproductions of the contracts,
correspondence and government issuances that reportedly explain
the allegations of fraud and misrepresentation, but these are, at best,
evidentiary matters that should not be included in the pleading.
As to the issue of prescription, Gonzales’s claims of fraud and
misrepresentation attending the execution of the Addendum Contract
are grounds for the annulment of a voidable contract under the Civil
Code.55 Under Art. 1391 of the Code, an action for annulment shall
be brought within four years, in the case of fraud, beginning from the
time of the discovery of the same. However, the time of the
discovery of the alleged fraud is not clear from the allegations of
Gonzales’s complaint. That being the situation coupled with the fact
that this Court is not a trier of facts, any ruling on the issue of
prescription would be uncalled for or even unnecessary.
WHEREFORE, the Petition for Certiorari in G.R. No. 167994 is
DISMISSED. Such dismissal effectively renders superfluous formal
action on the Motion for Partial Reconsideration and/or Clarification
filed by Climax Mining Ltd., et al. in G.R. No. 161957.
The Motion for Reconsideration filed by Jorge Gonzales in G.R. No.
161957 is DENIED WITH FINALITY.
SO ORDERED.
executive order or regulation, ordinance, or any other governmental
regulation may, before breach or violation thereof, bring an action in
the appropriate Regional Trial Court to determine any question of
construction or validity arising, and for a declaration of his rights or
duties thereunder.

An action for the reformation of an instrument, to quiet title to real

property or remove clouds therefrom, or to consolidate ownership
under Article 1607 of the Civil Code, may be brought under this
Rule. (Emphasis ours)

As correctly held by the Court of Appeals, any disagreement as to

the nature of the parties’ relationship which would require first an
amendment or reformation of their contract is an issue which the
courts may and can resolve without the need of the expertise and
specialized knowledge of the HLURB.

With regard to the second and last issue, paragraph 4.2 of the 1998
MOA mandates that any dispute between or among the
parties "shall finally be settled by arbitration conducted in
accordance with the Rules of Conciliation and Arbitration of the
International Chamber of Commerce."14 Petitioner referred the
dispute to the PDRCI but respondents refused to submit to its
jurisdiction.

It bears stressing that such arbitration agreement is the law between

the parties.1awphi1 They are, therefore, expected to abide by it in
good faith.15

This Court has previously held that arbitration is one of the

alternative methods of dispute resolution that is now rightfully
vaunted as "the wave of the future" in international relations, and is
recognized worldwide. To brush aside a contractual agreement
calling for arbitration in case of disagreement between the parties
would therefore be a step backward. 16

WHEREFORE, we DENY the petition. The challenged Decision and

Resolution of the Court of Appeals in CA-G.R. SP No. 71389
are AFFIRMED.

Costs against petitioner.

SO ORDERED.
G.R. No. 196171               December 10, 2012
RCBC CAPITAL CORPORATION, Petitioners,
vs.
BANCO DE ORO UNIBANK, INC., Respondent.
X- - - - - - - - - - - - - - - - - - - - - - - - - -X
G.R. No. 199238
BANCO DE ORO UNIBANK, INC., Petitioner,
vs.
COURT OF APPEALS and RCBC CAPITAL
CORPORATION, Respondents.
DECISION
VILLARAMA, JR., J.:
Before the Court are two consolidated petitions separately filed by
the parties in an arbitration case administered by the International
Chamber of Commerce-International Court of Arbitration (ICC-ICA)
pursuant to the arbitration clause in their contract.
The Case
In G.R. No. 196171, a petition for review under Rule 45 of the 1997
Rules of Civil Procedure, as amended, RCBC Capital Corporation
(RCBC) seeks to reverse the Court of Appeals (CA) Decision1 dated
December 23, 2010 in CA-G.R. SP No. 113525 which reversed and
set aside the June 24, 2009 Order 2 of the Regional Trial Court (RTC)
of Makati City, Branch 148 in SP Proc. Case No. M-6046.
In G.R. No. 199238,a petition for certiorari under Rule 65, Banco De
Oro Unibank, Inc. (BDO)assails the Resolution 3 dated September 13,
2011 in CA-G.R. SP No. 120888 which denied BDO’s application for
the issuance of a stay order and/or temporary restraining order
(TRO)/preliminary injunction against the implementation of the Writ
of Execution4 dated August 22, 2011 issued by the Makati City RTC,
Branch 148 in SP Proc. Case No. M-6046.
Factual Antecedents
On May 24, 2000, RCBC entered into a Share Purchase
Agreement5 (SPA) with Equitable-PCI Bank, Inc. (EPCIB), George L.
Go and the individual shareholders 6 of Bankard, Inc. (Bankard) for
the sale to RCBC of 226,460,000 shares (Subject Shares) of
Bankard, constituting 67% of the latter’s capital stock. After
completing payment of the contract price (₱1,786,769,400), the
corresponding deeds of sale over the subject shares were executed
in January 2001.
The dispute between the parties arose sometime in May 2003 when
RCBC informed EPCIB and the other selling shareholdersof an
overpayment of the subject shares, claiming there was an
overstatement of valuation of accounts amounting to ₱478 million
and that the sellers violated their warrantyunder Section 5(g)of the
SPA.7
As no settlement was reached, RCBC commenced arbitration
proceedings with the ICC-ICA in accordance with Section 10 of the
SPA which states:
Section 10.Arbitration
Should there be any dispute arising between the parties relating to
this Agreement including the interpretation or performance hereof
which cannot be resolved by agreement of the parties within fifteen
(15) days after written notice by a party to another, such matter shall
then be finally settled by arbitration under the Rules of Conciliation
and Arbitration of the International Chamber of Commerce in force
as of the time of arbitration, by three arbitrators appointed in
accordance with such rules. The venue of arbitration shall be in
Makati City, Philippines and the arbitration proceedings shall be
conducted in the English language. Substantive aspects of the
dispute shall be settled by applying the laws of the Philippines. The
decision of the arbitrators shall be final and binding upon the parties
hereto and the expenses of arbitration (including without limitation
the award of attorney’s fees to the prevailing party) shall be paid as
the arbitrators shall determine.8
In its Request for Arbitration 9 dated May 12, 2004, Claimant RCBC
charged Bankard with deviating from and contravening generally
accepted accounting principles and practices, due to which the
financial statements of Bankard prior to the stock purchase were far
from fair and accurate, and resulted in the overpayment of ₱556
million. For this violation of sellers’representations and warranties
under the SPA, RCBC sought its rescission, as well as payment of
actual damages in the amount of ₱573,132,110, legal interest on the
purchase price until actual restitution, moral damages and litigation
and attorney’s fees, with alternative prayer for award of damages in
the amount of at least ₱809,796,082 plus legal interest.
In their Answer,10 EPCIB, Go and the other selling individual
shareholders (Respondents) denied RCBC’s allegations contending
that RCBC’s claim is one for overpayment or price reduction under
Section 5(h) of the SPA which is already time-barred, the remedy of
rescission is unavailable, and even assuming that rescission is
permitted by the SPA, RCBC failed to file its claim within a
reasonable time. They further asserted that RCBC is not entitled to
its alternative prayer for damages, being guilty of laches and failing
to set out the details of the breach as required under Section 7 of the
SPA. A counterclaim for litigation expenses and costs of arbitration
in the amount of US$300,000, as well as moral and exemplary
damages, was likewise raised by the Respondents.
RCBC submitted a Reply11 to the aforesaid Answer.
Subsequently, the Arbitration Tribunal was constituted. Mr. Neil
Kaplan was nominated by RCBC; Justice Santiago M. Kapunan (a
retired Member of this Court) was nominated by the Respondents;
and Sir Ian Barker was appointed by the ICC-ICA as Chairman.
On August 13, 2004, the ICC-ICA informed the parties that they are
required to pay US$350,000 as advance on costs pursuant to Article
30 (3) of the ICC Rules of Arbitration (ICC Rules). RCBC paid its
share of US$107,000, the balance remaining after deducting
payments of US$2,500 and US$65,000 it made earlier.
Respondents’ share of the advance on costs was thus fixed at
US$175,000.
Respondents filed an Application for Separate Advances on
Costs12 dated September 17, 2004 under Article 30(2) of the ICC
Rules, praying that the ICC fix separate advances on the cost of the
parties’ respective claims and counterclaims, instead of directing
them to share equally on the advance cost of Claimant’s (RCBC)
claim. Respondents deemed this advance cost allocation to be
proper, pointing out that the total amount of RCBC’s claim is
substantially higher – more than 40 times –the total amount of their
counterclaims, and that it would be unfair to require them to share in
the costs of arbitrating what is essentially a price issue that is now
time-barred under the SPA.
On September 20, 2004, the ICC-ICA informed Respondents that
their application for separate advances on costs was premature
pending the execution of the Terms of Reference (TOR). 13 The TOR
was settled by the parties and signed by the Chairman and Members
of the Arbitral Tribunal by October 11, 2004. On December 3,
2004,14 the ICC-ICA denied the application for separate advances on
costs and invited anew the Respondents to pay its share in the
advance on costs. However, despite reminders from the ICC-ICA,
Respondents refused to pay their share in the advance cost fixed by
the ICC-ICA. On December 16, 2004, the ICC-ICA informed the
parties that if Respondents still failed to pay its share in the advance
cost, it would apply Article 30(4) of the ICC Rules and request the
Arbitration Tribunal to suspend its work and set a new time limit, and
if such requested deposit remains unpaid at the expiry thereof, the
counterclaims would be considered withdrawn. 15
In a fax-letter dated January 4, 2005, the ICC-ICA invited RCBC to
pay the said amount in substitution of Respondents.It also granted
an extension until January 17, 2005 within which to pay the balance
of the advance cost (US$175,000). RCBC replied that it was not
willing to shoulder the share of Respondents in the advance on costs
but nevertheless requested for a clarification as to the effect of such
refusal to substitute for Respondents’share.16
On March 10, 2005, the ICC-ICA instructed the Arbitration Tribunal
to suspend its work and granted the parties a final time-limit of 15
days to pay the balance of the advanceon costs, failing which the
claims shall be considered withdrawn, without prejudice to their
reintroduction at a later date in another proceeding. The parties were
advised that if any of them objects to the measure, it should make a
request in writing within such period. 17 For the same reason of non-
receipt of the balance of the advance cost, the ICC-ICA issued
Procedural Order No. 3 for the adjournment of the substantive
hearings and granting the Respondents a two-month extension
within which to submit their brief of evidence and witnesses.
RCBC objected to the cancellation of hearings, pointing out that
Respondents have been given ample time and opportunity to submit
their brief of evidence and prepare for the hearings and that their
request for postponement serves no other purpose but to delay the
proceedings. It alleged that Respondents’ unjustified refusal to pay
their share in the advance on costs warrants a ruling that they have
lost standing to participate in the proceedings. It thus prayed that
Respondents be declared as in default, the substantive hearings be
conducted as originally scheduled, and RCBC be allowed to submit
rebuttal evidence and additional witness statements.18
On December 15, 2005, the ICC-ICA notified the parties of its
decision to increase the advances on costs from US$350,000 to
US$450,000 subject to later readjustments, and again invited the
Respondents to pay the US$100,000 increment within 30 days from
notice. Respondents, however, refused to pay the increment,
insisting that RCBC should bear the cost of prosecuting its own claim
and that compelling the Respondents to fund such prosecution is
inequitable. Respondents reiterated that it was willing to pay the
advance on costs for their counterclaim.19
On December 27, 2005, the ICC-ICA advised that it was not possible
to fix separate advances on costs as explained in its December 3,
2004 letter, and again invited Respondents to pay their share in the
advance on costs. Respondents’ response contained in the letter
dated January 6, 2006 was still the same: it was willing to pay only
the separate advance on costs of their counterclaim. 20 In view of
Respondents’ continuing refusal to pay its equal share in the
advance on costs and increment, RCBC wrote the ICC-ICA stating
that the latter should compel the Respondents to pay as otherwise
RCBC will be prejudiced and the inaction of the ICC-ICA and the
Arbitration Tribunal will detract from the effectiveness of arbitration
as a means of settling disputes. In accordance with Article 30(4) of
the ICC Rules, RCBC reiterated its request to declare the
Respondents as in default without any personality to participate in
the proceedings not only with respect to their counterclaims but also
to the claim of RCBC.21
Chairman Ian Barker, in a letter dated January 25, 2006, stated in
part:
xxxx
2. The Tribunal has no power under the ICC Rules to
order the Respondents to pay the advance on costs
sought by the ICC or to give the Claimant any relief
against the Respondents’ refusal to pay. The ICC Rules
differ from, for example, the Rules of the LCIA (Article 24.3)
which enables a party paying the share of costs which the
other party has refused to pay, to recover "that amount as
a debt immediately due from the defaulting party."
3. The only sanction under the ICC Rules is contained
within Article 30 (4). Where a request for an advance on
costs has not been complied with, after consultation with
the Tribunal, the Secretary-General may direct the Tribunal
to suspend its work. After expiry of a time limit, all claims
and counterclaims are then considered as withdrawn. This
provision cannot assist a Claimant who is anxious to
litigate its claim. Such a Claimant has to pay the sums
requested (including the Respondents’ share) if it wishes
the arbitration to proceed.
4. It may be possible for a Claimant in the course of the
arbitral hearing (or whenever costs are being
considered by the Tribunal) to make submissions
based on the failure of the Respondents to pay their
share of the costs advance.What relief, if any, would
have to be then determined by the Tribunal after
having heard submissions from the Respondents.
5. I should be pleased if the Claimant will advise the
Tribunal of its intention in relation to the costs advance. If
the costs are not paid, the arbitration cannot
proceed.22 (Italics in the original; emphasis supplied)
RCBC paid the additional US$100,000 under the second
assessment to avert suspension of the Arbitration Tribunal’s
proceedings.
Upon the commencement of the hearings, the Arbitration Tribunal
decided that hearings will be initially confined to issues of liability
(liability phase) while the substantial issues will be heard on a later
date (quantum phase).
Meanwhile, EPCIB’s corporate name was officially changed to
Banco De Oro (BDO)-EPCIB after its merger with BDO was duly
approved by the Securities and Exchange Commission. As such,
BDO assumed all the obligations and liabilities of EPCIB under the
SPA.
On September 27, 2007, the Arbitration Tribunal rendered a Partial
Award23 (First Partial Award) in ICC-ICA Case No.
13290/MS/JB/JEM,as follows:
15 AWARD AND DIRECTIONS
15.1 The Tribunal makes the following declarations by way
of Partial Award:
(a) The Claimant’s claim is not time-barred under
the provisions of this SPA.
 (b) The Claimant is not estopped by its conduct
or the equitable doctrine of laches from pursuing
its claim.
(c) As detailed in the Partial Award, the Claimant
has established the following breaches by the
Respondents of clause 5(g) of the SPA:
i) the assets, revenue and net worth of
Bankard were overstated by reason of
its policy on and recognition of Late
Payment Fees;
ii) reported receivables were higher
than their realisable values by reason of
the ‘bucketing’ method, thus overstating
Bankard’s assets; and
iii) the relevant Bankard statements
were inadequate and misleading in that
their disclosures caused readers to be
misinformed about Bankard’s
accounting policies on revenue and
receivables.
(d) Subject to proof of loss the Claimant is
entitled to damages for the foregoing breaches.
(e) The Claimant is not entitled to rescission of
the SPA.
(f) All other issues, including any issue
relating to costs, will be dealt with in a further
or final award.
15.2 A further Procedural Order will be necessary
subsequent to the delivery of this Partial Award to deal with
the determination of quantum and in particular, whether
there should be an Expert appointed by the Tribunal under
Article 20(4) of the ICC Rules to assist the Tribunal in this
regard.
15.3 This Award is delivered by a majority of the Tribunal
(Sir Ian Barker and Mr. Kaplan). Justice Kapunan is unable
to agree with the majority’s conclusion on the claim of
estoppel brought by the Respondents.24 (Emphasis
supplied)
On October 26, 2007, RCBC filed with the Makati City RTC, Branch
148 (SP Proc. Case No. M-6046)amotion to confirm the First Partial
Award, while Respondents filed a motion to vacate the same.
ICC-ICA by letter25 dated October 12, 2007 increased the advance
on costs from US$450,000 to US$580,000. Under this third
assessment, RCBC paid US$130,000 as its share on the increment.
Respondents declined to pay its adjudged total share of US$290,000
on account of its filing in the RTC of a motion to vacate the First
Partial Award.26 The ICC-ICA then invited RCBC to substitute for
Respondents in paying the balance of US$130,000 by December 21,
2007.27 RCBC complied with the request, making its total payments
in the amount of US$580,000.28
While RCBC paid Respondents’ share in the increment
(US$130,000), it reiterated its plea that Respondents be declared as
in default and the counterclaimsdeemed as withdrawn. 29
Chairman Barker’s letter dated December 18, 2007 states in part:
xxxx
8. Contrary to the Complainant’s view, the Tribunal has no
jurisdiction to declare that the Respondents have no right
to participate in the proceedings concerning the claim.
Article 30(4) of the ICC Rules applies only to any
counterclaim of the Respondents.
9. The Tribunal interprets the Claimant’s latest letter as
an application by the Claimant to the Tribunal for the
issue of a partial award against the Respondents in
respect of their failure to pay their share of the ICC’s
requests for advance on costs.
10. I should be grateful if the Claimant would confirm that
this is the situation. If so, the Claimant should propose a
timetable for which written submissions should be made by
both parties. This is an application which can be
considered by the Tribunal on written
submissions.30 (Emphasis supplied)
RCBC, in a letter dated December 26, 2007, confirmed the
Arbitration Tribunal’s interpretation that it was applying for a partial
award against Respondents’ failure to pay their share in the advance
on costs.31
Meanwhile, on January 8, 2008, the Makati City RTC, Branch 148
issued an order in SP Proc. Case No. M-6046 confirming the First
Partial Award and denying Respondents’ separate motions to vacate
and to suspend and inhibit Barker and Kaplan. Respondents’ motion
for reconsideration was likewise denied. Respondents directly filed
with this Court a petition for review on certiorari under Rule 45,
docketed as G.R. No. 182248 and entitled Equitable PCI Banking
Corporation v. RCBC Capital Corporation.32 In our Decision dated
December 18, 2008, we denied the petition and affirmed the RTC’s
ruling confirming the First Partial Award.
On January 18, 2008, the Arbitration Tribunal set a timetable for the
filing of submission by the parties on whether it should issue a
Second Partial Award in respect of the Respondents’ refusal to pay
an advance on costs to the ICC-ICA.
In compliance, RCBC filed on February 7, 2008an Application for
Reimbursement of Advance on Costs Paid, praying for the issuance
of a partial award directing the Respondents to reimburse its
payment in the amount of US$290,000 representing Respondents’
share in the Advance on Costs and to consider Respondents’
counterclaim for actual damages in the amount of US$300,000, and
moral and exemplary damages as withdrawn for their failure to pay
their equal share in the advance on costs. RCBC invoked the plain
terms of Article 30 (2) and (3) to stress the liability of Respondents to
share equally in paying the advance on costs where the Arbitration
Tribunal has fixed the same.33
Respondents, on the other hand, filed their Opposition 34 to the said
application alleging that the Arbitration Tribunal has lost its objectivity
in an unnecessary litigation over the payment of Respondents’ share
in the advance costs. They pointed out that RCBC’s letter merely
asked that Respondents be declared as in default for their failure to
pay advance costs but the Arbitration Tribunal, while denying the
request offered an alternative to RCBC: a Partial Award for
Respondents’ share in the advance costs even if it was clear from
the language of RCBC’s December 11, 2007 letter that it had no
intention of litigating for the advance costs. Chairman Barker, after
ruling earlier that it cannot grant RCBC’s request to declare the
Respondents as having no right to participate in the proceedings
concerning the claim, interpreted RCBC’s letter as an application for
the Arbitration Tribunal to issue a partial award in respect of such
refusal of Respondents to pay their share in the advance on costs,
and subsequently directed the parties to make submissions on the
matter.Aside from violating their right to due process and to be heard
by an impartial tribunal, Respondents also argued that in issuing the
award for advance cost, the ArbitrationTribunal decided an issue
beyond the terms of the TOR.
Respondents also emphasized that the parties agreed on a two-part
arbitration: the first part of the Tribunal’s proceedings would
determine Respondents’ liability, if any, for alleged violation of
Section 5(g) and (h) of the SPA; and the second part of the
proceedings would determine the amounts owed by one party to
another as a consequence of a finding of liability or lack thereof. An
award for "reimbursement of advances for costs" clearly falls outside
the scope of either proceedings. Neither can the Tribunal justify such
proceedings under Article 23 of the ICC Rules (Conservatory and
Interim Measures) because that provision does not contemplate an
award for the reimbursement of advance on costs in arbitration
cases. Respondents further asserted that since the advances on
costs have been paid by the Claimant (RCBC), the main claim and
counterclaim may both be heard by the Arbitration Tribunal.
In his letter dated March 13, 2008, Chairman Barker advised the
parties, as follows:
1. The Tribunal acknowledges the Respondents’ response
to the Claimant’s application for a Partial Award, based on
the Respondents’ failure to pay their share of the costs, as
requested by the ICC.
2. The Tribunal notes that neither party has referred to
an article by Mat[t]hew Secomb on this very subject
which appears in the ICC Bulletin Vol. 14 No.1 (Spring
2003). To assist both sides and to ensure that the Tribunal
does not consider material on which the parties have not
been given an opportunity to address, I attach a copy of
this article, which also contains reference to other scholarly
works on the subject.
3. The Tribunal will give each party seven days within
which to submit further written comments as a
consequence of being alerted to the above
authorities.35 (Additional emphasis supplied)
The parties complied by submitting their respective comments.
RCBC refuted Respondents’ allegation of partiality on the part of
Chairman Barker and reiterated the prayer in its application for
reimbursement of advance on costs paid to the ICC-ICA. RCBC
contended that based on Mr. Secomb’s article, whether the
"contractual" or "provisional measures" approach is applied, the
Arbitration Tribunal is vested with jurisdiction and authority to render
an award with respect to said reimbursement of advance cost paid
by the non-defaulting party.36
Respondents, on the other hand, maintained that RCBC’s
application for reimbursement of advance cost has no basis under
the ICC Rules. They contended that no manifest injustice can be
inferred from an act of a party paying for the share of the defaulting
party as this scenario is allowed by the ICC Rules. Neither can a
partial award for advance cost be justified under the "contractual
approach" since the matter of costs for arbitration is between the
ICC and the parties, not the Arbitration Tribunal and the parties. An
arbitration tribunal can issue decisions on costs only for those costs
not fixed by the ICC.37
Respondents reiterated their position that Article 30(3) envisions a
situation whereby a party would refuse to pay its share on the
advance on costs and provides a remedy therefor – the other party
"shall be free to pay the whole of the advance on costs." Such
party’s reimbursement for payments of the defaulting party’s share
depends on the final arbitral award where the party liable for costs
would be determined. This is the only remedy provided by the ICC
Rules.38
On May 28, 2008, the Arbitration Tribunal rendered the Second
Partial Award,39 as follows:
7 AWARD
7.1 Having read and considered the submissions of both parties, the
Tribunal AWARDS, DECLARES AND ORDERS as follows:
(a) The Respondents are forthwith to pay to the Claimant
the sum of US$290,000.
(b) The Respondents’ counterclaim is to be considered as
withdrawn.
(c) All other questions, including interest and costs, will be
dealt with in a subsequent award.40
The above partial award was received by RCBC and Respondents
on June 12, 2008.
On July 11, 2008, EPCIB filed a Motion to Vacate Second Partial
Award41 in the Makati City RTC, Branch 148 (SP Proc. Case No. M-
6046). On July 10, 2008, RCBC filed in the same court a Motion to
Confirm Second Partial Award.42
EPCIB raised the following grounds for vacating the Second Partial
Award: (a) the award is void ab initio having been rendered by the
arbitrators who exceeded their power or acted without it; and (b) the
award was procured by undue means or issued with evident
partiality or attended by misbehavior on the part of the Tribunal
which resulted in a material prejudice to the rights of the
Respondents. EPCIB argued that there is no express agreement
either in the SPA or the ICC Rules for such right of reimbursement.
There is likewise no implied agreement because from the ICC Rules,
the only inference is that the parties agreed to await the dispositions
on costs liability in the Final Award, not before.
On the ruling of the Arbitration Tribunal that Respondents’
application for costs are not counterclaims, EPCIB asserted that this
is contrary to Philippine law as it is basic in our jurisdiction that
counterclaims for litigation expenses, moral and exemplary damages
are proper counterclaims, which rule should be recognized in view of
Section 10 of the SPA which provides that "substantive aspects of
the dispute shall be settled by applying the laws of the Philippines."
Finally, EPCIB takes issue with Chairman Barker’s interpretation of
RCBC’s December 11, 2007 letter as an application for a partial
award for reimbursement of the substituted payments. Such conduct
of Chairman Barker is prejudicial and proves his evident partiality in
favor of RCBC.
RCBC filed its Opposition,43 asserting that the Arbitration Tribunal
had jurisdiction to consider Respondents’ counterclaim as
withdrawn, the same having been abandoned by not presenting any
computation or substantiation by evidence, their only computation
relates only to attorney’s fees which are simply cost of litigation
properly brought at the conclusion of the arbitration. It also pointed
out that the Arbitration Tribunal was empowered by the parties’
arbitral clause to determine the manner of payment of expenses of
arbitration, and that the Second Partial Award was based on
authorities and treatiseson the mandatory and contractual nature of
the obligation to pay advances on costs.
In its Reply,44 EPCIB contended that RCBC had the option to agree
to its proposal for separate advances on costs but decided against it;
RCBC’s act of paying the balance of the advance cost in substitution
of EPCIB was for the purpose of having EPCIB defaulted and the
latter’s counterclaim withdrawn. Having agreed to finance the
arbitration until its completion, RCBC is not entitled to immediate
reimbursement of the amount it paid in substitution of EPCIB under
an interim award, as its right to a partial or total reimbursement will
have to be determined under the final award. EPCIB asserted that
the matter of reimbursement of advance cost paid cannot be said to
have properly arisen during arbitration. EPCIB reiterated that
Chairman Barker’s interpretation of RCBC’s December 11, 2007
letter as an application for interim award for reimbursement is
tantamount to a promise that the award will be issued in due course.
After a further exchange of pleadings, and other motions seeking
relief from the court in connection with the arbitration proceedings
(quantum phase), the Makati City RTC, Branch 148 issued the
Order45 dated June 24, 2009 confirming the Second Partial Award
and denying EPCIB’s motion to vacate the same. Said court held
that since the parties agreed to submit any dispute under the SPA to
arbitration and to be bound by the ICC Rules, they are also bound to
pay in equal shares the advance on costs as provided in Article 30
(2) and (3). It noted that RCBC was forced to pay the share of
EPCIB in substitution of the latter to prevent a suspension of the
arbitration proceedings, while EPCIB’s non-payment seems more
like a scheme to delay such proceedings. On the Arbitration
Tribunal’s ruling on EPCIB’s counterclaim, no error was committed in
considering it withdrawn for failure of EPCIB to quantify and
substantiate it with supporting evidence. As to EPCIB’s claim for
attorney’s fees, the RTC agreed that these should be brought only at
the close of arbitration.
EPCIB moved to reconsider the June 24, 2009 Order and for the
voluntary inhibition of the Presiding Judge (Judge Oscar B.
Pimentel) on the ground that EPCIB’s new counsel represented
another client in another case before him in which said counsel
assailed his conduct and had likewise sought his inhibition. Both
motions were denied in the Joint Order46 dated March 23, 2010.
On April 14, 2010, EPCIB filed in the CA a petition for review with
47 
application for TRO and/or writ of preliminary injunction (CA-G.R. SP
No. 113525) in accordance with Rule 19, Section 4 of the Special
Rules of Court on Alternative Dispute Resolution 48 (Special ADR
Rules). EPCIB assailed the Makati City RTC, Branch 148 in denying
its motion to vacate the Second Partial Award despite (a) said award
having been rendered in excess of jurisdiction or power, and
contrary to public policy; (b) the fact that it was issued with evident
partiality and serious misconduct; (c) the award deals with a dispute
not contemplated within the terms of submission to arbitration or
beyond the scope of such submission, which therefore ought to be
vacated pursuant to Article 34 of the UNCITRAL Model Law; and (d)
the Presiding Judge having exhibited bias and prejudice against
BDO and its counsel as confirmed by his pronouncements in the
Joint Order dated March 23, 2010 in which, instead of recusing
himself, he imputed malice and unethical conduct in the entry of
appearance of Belo Gozon Elma Asuncion and Lucila Law Offices in
SP Proc. Case No. M-6046, which warrants his voluntary inhibition.
Meanwhile, on June 16, 2010, the Arbitration Tribunal issued the
Final Award,49 as follows:
15 AWARD
15.1 The Tribunal by a majority (Sir Ian Barker & Mr. Kaplan)
awards, declares and adjudges as follows:
(a) the Respondents are to pay damages to the Claimant
for breach of the sale and purchase agreement for Bankard
shares in the sum of ₱348,736,920.29.
(b) The Respondents are to pay to the Claimant the sum of
US$880,000 in respect of the costs of the arbitration as
fixed by the ICC Court.
(c) The Respondents are to pay to the Claimant the sum of
US$582,936.56 for the fees and expenses of Mr. Best.
(d) The Respondents are to pay to the Claimant their
expenses of the arbitration as follows:
(i) Experts’ fees ₱7,082,788.55
(ii) Costs of without prejudice meeting
₱22,571.45
(iii) Costs of arbitration hearings ₱553,420.66
(iv) Costs of transcription service ₱483,597.26
Total ₱8,144,377.62
(e) The Respondents are to pay to the Claimant the sum of
₱7,000,000 for party-and-party legal costs.
(f) The Counterclaims of the Respondents are all
dismissed.
(g) All claims of the Claimant are dismissed, other than
those referred to above.
15.2 Justice Kapunan does not agree with the majority of the
members of the Tribunal and has issued a dissenting opinion. He
has refused to sign this Award.50
On July 1, 2010 BDO filed in the Makati City RTC a Petition to
Vacate Final Award Ad Cautelam,51 docketed as SP Proc. Case No.
M-6995, which was raffled to Branch 65.
On July 28, 2010, RCBC filed with the Makati City RTC, Branch 148
(SP Proc. Case No. M-6046) a Motion to Confirm Final
Award.52 BDO filed its Opposition With Motion to Dismiss 53 on
grounds that a Petition to Vacate Final Award Ad Cautelamhad
already been filed in SP Proc. Case No. M-6995. BDO also pointed
out that RCBC did not file the required petition but instead filed a
mere motion which did not go through the process of raffling to a
proper branch of the RTC of Makati City and the payment of the
required docket/filing fees. Even assuming that Branch 148 has
jurisdiction over RCBC’s motion to confirm final award, BDO
asserted that RCBC had filed before the Arbitration Tribunal an
Application for Correction and Interpretation of Award under Article
29 of the ICC Rules, which is irreconcilable with its Motion to Confirm
Final Award before said court. Hence, the Motion to Confirm Award
was filed precipitately.
On August 18, 2010, RCBC filed an Omnibus Motion in SP Proc.
Case No. M-6995 (Branch 65) praying for the dismissal of BDO’s
Petition to Vacate Final Award or the transfer of the same to Branch
148 for consolidation with SP Proc. Case No. M-6046. RCBC
contended that BDO’s filing of its petition with another court is a
blatant violation of the Special ADR Rules and is merely a
subterfuge to commit forum-shopping. BDO filed its Opposition to the
Omnibus Motion.54
On October 28, 2010, Branch 65 issued a Resolution55 denying
RCBC’s omnibus motion and directing the service of the petition to
RCBC for the latter’s filing of a comment thereon. RCBC’s motion for
reconsideration was likewise denied in the said court’s Order dated
December 15, 2010. RCBC then filed its Opposition to the Petition to
Vacate Final Award Ad Cautelam.
Meanwhile, on November 10, 2010, Branch 148 (SP Proc. Case No.
M-6046) issued an Order56 confirming the Final Award "subject to the
correction/interpretation thereof by the Arbitral Tribunal pursuant to
the ICC Rules and the UNCITRAL Model Law," and denying BDO’s
Opposition with Motion to Dismiss.
On December 30, 2010, George L. Go, in his personal capacity and
as attorney-in-fact of the other listed shareholders of Bankard, Inc. in
the SPA (Individual Shareholders), filed a petition in the CA, CA-G.R.
SP No. 117451, seeking to set aside the above-cited November 10,
2010 Order and to enjoin Branch 148 from further proceeding in SP
Proc. Case No. M-6046. By Decision57 dated June 15, 2011, the CA
dismissed the said petition. Their motion for reconsideration of the
said decision was likewise denied by the CA in its Resolution 58 dated
December 14, 2011.
On December 23, 2010, the CA rendered its Decision in CA-G.R. SP
No. 113525, the dispositive portion of which states:
WHEREFORE, premises considered, the following are
hereby REVERSED and SET ASIDE:
1. the Order dated June 24, 2009 issued in SP Proc. Case
No. M-6046 by the Regional Trial Court of Makati City,
Branch 148, insofar as it denied the Motion to Vacate
Second Partial Award dated July 8, 2008 and granted the
Motion to Confirm Second Partial Award dated July 10,
2008;
2. the Joint Order dated March 23, 2010 issued in SP Proc.
Case No. M-6046 by the Regional Trial Court of Makati
City, Branch 148, insofar as it denied the Motion For
Reconsideration dated July 28, 2009 relative to the
motions concerning the Second Partial Award immediately
mentioned above; and
3. the Second Partial Award dated May 28, 2008 issued in
International Chamber of Commerce Court of Arbitration
Reference No. 13290/MS/JB/JEM.
SO ORDERED.59
RCBC filed a motion for reconsideration but the CA denied the same
in its Resolution60 dated March 16, 2011. On April 6, 2011, it filed a
petition for review on certiorari in this Court (G.R. No. 196171).
On February 25, 2011, Branch 65 rendered a Decision61 in SP Proc.
Case No. M-6995, as follows:
WHEREFORE, premises considered, the Final Award dated June
16, 2010 in ICC Ref. No. 13290/MS/JB/JEM is hereby VACATED
with cost against the respondent.
SO ORDERED.62
In SP Proc. Case No. M-6046, Branch 148 issued an Order 63 dated
August 8, 2011 resolving the following motions: (1) Motion for
Reconsideration filed by BDO, Go and Individual Shareholders of the
November 10, 2010 Order confirming the Final Award; (2) RCBC’s
Omnibus Motion to expunge the motion for reconsideration filed by
Go and Individual Shareholders, and for execution of the Final
Award; (3) Motion for Execution filed by RCBC against BDO; (4)
BDO’s Motion for Leave to File Supplement to the Motion for
Reconsideration; and (5) Motion for Inhibition filed by Go and
Individual Shareholders. Said Order decreed:
WHEREFORE, premises considered, it is hereby ORDERED, to wit:
1. Banco De Oro’s Motion for Reconsideration, Motion for
Leave to File Supplement to Motion for Reconsideration,
and Motion to Inhibit are DENIED for lack of merit.
2. RCBC Capital’s Motion to Expunge, Motion to Execute
against Mr. George L. Go and the Bankard Shareholders,
and the Motion to Execute against Banco De Oro are
hereby GRANTED.
3. The damages awarded to RCBC Capital Corporation in
the amount of Ph₱348,736,920.29 is subject to an interest
of 6% per annum reckoned from the date of RCBC
Capital’s extra-judicial demand or from May 5, 2003 until
the confirmation of the Final Award. Likewise, this
compounded amount is subject to 12% interest per annum
from the date of the confirmation of the Final Award until its
satisfaction. The costs of the arbitration amounting to
US$880,000.00, the fees and expenses of Mr. Best
amounting to US$582,936.56, the Claimant’s expenses of
the arbitration amounting to Ph₱8,144,377.62, and the
party-and-party legal costs amounting to Ph₱7,000,000.00
all ruled in favor of RCBC Capital Corporation in the Final
Award of the Arbitral Tribunal dated June 16, 2010 are
subject to 12% legal interest per annum, also reckoned
from the date of the confirmation of the Final Award until its
satisfaction.
4. Pursuant to Section 40 of R.A. No. 9285, otherwise
known as the Alternative Dispute Resolution Act of 2004 in
relation to Rule 39 of the Rules of Court, since the Final
Award have been confirmed, the same shall be enforced in
the same manner as final and executory decisions of the
Regional Trial Court, let a writ of execution be issued
commanding the Sheriff to enforce this instant Order
confirming this Court’s Order dated November 10, 2010
that judicially confirmed the June 16, 2010 Final Award.
SO ORDERED.64
Immediately thereafter, RCBC filed an Urgent Motion for Issuance of
a Writ of Execution.65 On August 22, 2011, after approving the
execution bond, Branch 148 issued a Writ of Execution for the
implementation of the said court’s "Order dated August 8, 2011
confirming the November 10, 2010 Order that judicially confirmed the
June 16, 2010 Final Award x x x."66
BDO then filed in the CA, a "Petition for Review (With Application for
a Stay Order or Temporary Restraining Order and/or Writ of
Preliminary Injunction," docketed as CA-G.R. SP No. 120888. BDO
sought to reverse and set aside the Orders dated November 10,
2010 and August 8, 2011, and any writ of execution issued pursuant
thereto, as well as the Final Award dated June 16, 2010 issued by
the Arbitration Tribunal.
In its Urgent Omnibus Motion 67 to resolve the application for a stay
order and/or TRO/writ of preliminary injunction, and to quash the Writ
of Execution dated August 22, 2011 and lift the Notices of
Garnishment dated August 22, 2011, BDO argued that the assailed
orders of execution (Writ of Execution and Notice of Garnishment)
were issued with indecent haste and despite the non-compliance
with the procedures in Special ADR Rules of the November 10, 2010
Order confirming the Final Award. BDO was not given sufficient time
to respond to the demand for payment or to elect the method of
satisfaction of the judgment debt or the property to be levied upon. In
any case, with the posting of a bond by BDO, Branch 148 has no
jurisdiction to implement the appealed orders as it would pre-empt
the CA from exercising its review under Rule 19 of the Special ADR
Rules after BDO had perfected its appeal. BDO stressed that the
bond posted by RCBC was for a measly sum of ₱3,000,000.00 to
cause execution pending appeal of a monetary award that may
reach ₱631,429,345.29. RCBC also failed to adduce evidence of
"good cause" or "good reason" to justify discretionary execution
under Section 2(a), Rule 39 of the Rules of Court.
BDO further contended that the writ of execution should be quashed
for having been issued with grave abuse of discretion amounting to
lack or excess of jurisdiction as Branch 148 modified the Final Award
at the time of execution by imposing the payment of interests though
none was provided therein nor in the Order confirming the same.
During the pendency of CA-G.R. SP No. 120888, Branch 148
continued with execution proceedings and on motion by RCBC
designated/deputized additional sheriffs to replace Sheriff Flora who
was supposedly physically indisposed. 68 These court personnel went
to the offices/branches of BDO attempting to serve notices of
garnishment and to levy the furniture, fixtures and equipment.
On September 12, 2011, BDO filed a Very Urgent Motion to Lift Levy
and For Leave to Post Counter-Bond 69 before Branch 148 praying for
the lifting of the levy of BDO Private Bank, Inc. (BPBI) shares and
the cancellation of the execution sale thereof scheduled on
September 15, 2011, which was set for hearing on September 14,
2011. BDO claimed that the levy was invalid because it was served
by the RTC Sheriffs not to the authorized representatives of BPBI, as
provided under Section 9(b), Rule 39 in relation to Section 7, Rule
57 of the Rules of Court stating that a notice of levy on shares of
stock must be served to the president or managing agent of the
company which issued the shares. However, BDO was advised by
court staff that Judge Sarabia was on leave and the case could not
be set for hearing.
In its Opposition to BDO’s application for injunctive relief, RCBC
prayed for its outright denial as BDO’s petition raises questions of
fact and/or law which call for the CA to substitute its judgment with
that of the Arbitration Tribunal, in patent violation of applicable rules
of procedure governing domestic arbitration and beyond the
appellate court’s jurisdiction. RCBC asserted that BDO’s application
has become moot and academic as the writ of execution was
already implemented and/or enforced. It also contended that BDO
has no clear and unmistakable right to warrant injunctive relief
because the issue of jurisdiction was already ruled upon in CA-G.R.
SP No. 117451 which dismissed the petition filed by Go and the
Individual Shareholders of Bankard questioning the authority of
Branch 148 over RCBC’s motion to confirm the Final Award despite
the earlier filing by BDO in another branch of the RTC (Branch 65) of
a petition to vacate the said award.
On September 13, 2011, BDO, to avert the sale of the BPBI shares
scheduled on September 15, 2011 and prevent further disruption in
the operations of BDO and BPBI, paid under protest by tendering a
Manager’s Check in the amount of ₱637,941,185.55, which was
accepted by RCBC as full and complete satisfaction of the writ of
execution. BDO manifested before Branch 148 that such payment
was made without prejudice to its appeal before the CA.70
On even date, the CA denied BDO’s application for a stay order
and/or TRO/preliminary injunction for non-compliance with Rule
19.25 of the Special ADR Rules. The CA ruled that BDO failed to
show the existence of a clear right to be protected and that the acts
sought to be enjoined violated any right. Neither was BDO able to
demonstrate that the injury to be suffered by it is irreparable or not
susceptible to mathematical computation.
BDO did not file a motion for reconsideration and directly filed with
this Court a petition for certiorari with urgent application for writ of
preliminary mandatory injunction (G.R. No. 199238).
The Petitions
In G.R. No. 196171, RCBC set forth the following grounds for the
reversal of the CA Decision dated December 23, 2010:
I.
THE COURT OF APPEALS ACTED CONTRARY TO LAW
AND PRIOR RULINGS OF THIS HONORABLE COURT
AND COMMITTED REVERSIBLE ERROR IN VACATING
THE SECOND PARTIAL AWARD ON THE BASIS OF
CHAIRMAN BARKER’S ALLEGED PARTIALITY, WHICH
IT CLAIMS IS INDICATIVE OF BIAS CONSIDERING
THAT THE ALLEGATIONS CONTAINED IN BDO/EPCIB’S
PETITION FALL SHORT OF THE JURISPRUDENTIAL
REQUIREMENT THAT THE SAME BE SUPPORTED BY
CLEAR AND CONVINCING EVIDENCE.
II.
THE COURT OF APPEALS ACTED CONTRARY TO LAW
AND PRIOR RULINGS OF THIS HONORABLE COURT
AND COMMITTED REVERSIBLE ERROR WHEN IT
REVERSED THE ARBITRAL TRIBUNAL’S FINDINGS OF
FACT AND LAW IN THE SECOND PARTIAL AWARD IN
PATENT CONTRAVENTION OF THE SPECIAL ADR
RULES WHICH EXPRESSLY PROHIBITS THE COURTS,
IN AN APPLICATION TO VACATE AN ARBITRAL
AWARD, FROM DISTURBING THE FINDINGS OF FACT
AND/OR INTERPRE[TA]TION OF LAW OF THE
ARBITRAL TRIBUNAL.71
BDO raises the following arguments in G.R. No. 199238:
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN PERFUNCTORILY DENYING PETITIONER
BDO’S APPLICATION FOR STAY ORDER, AND/OR TEMPORARY
RESTRAINING ORDER AND PRELIMINARY INJUNCTION
DESPITE THE EXISTENCE AND CONCURRENCE OF ALL THE
ELEMENTS FOR THE ISSUANCE OF SAID PROVISIONAL
RELIEFS
A. PETITIONER BDO HAS CLEAR AND UNMISTAKABLE
RIGHTS TO BE PROTECTED BY THE ISSUANCE OF
THE INJUNCTIVE RELIEF PRAYED FOR, WHICH,
HOWEVER, WERE DISREGARDED BY PUBLIC
RESPONDENT WHEN IT DENIED PETITIONER BDO’S
PRAYER FOR ISSUANCE OF A STAY ORDER AND/OR
TRO
B. PETITIONER BDO’S RIGHT TO DUE PROCESS AND
EQUAL PROTECTION OF THE LAW WAS GROSSLY
VIOLATED BY THE RTC-MAKATI CITY BRANCH 148,
THE DEPUTIZED SHERIFFS AND RESPONDENT RCBC
CAPITAL, WHICH VIOLATION WAS AIDED BY PUBLIC
RESPONDENT’S INACTION ON AND EVENTUAL
DENIAL OF THE PRAYER FOR STAY ORDER AND/OR
TRO
C. DUE TO THE ACTS AND ORDERS OF RTC BRANCH
148, PETITIONER BDO SUFFERED IRREPARABLE
DAMAGE AND INJURY, AND THERE WAS DIRE AND
URGENT NECESSITY FOR THE ISSUANCE OF THE
 INJUNCTIVE RELIEF PRAYED FOR WHICH PUBLIC
RESPONDENT DENIED IN GRAVE ABUSE OF
DISCRETION72
Essentially, the issues to be resolved are: (1) whether there is legal
ground to vacate the Second Partial Award; and (2) whether BDO is
entitled to injunctive relief in connection with the execution
proceedings in SP Proc. Case No. M-6046.
In their TOR, the parties agreed on the governing law and rules as
follows:
Laws to be Applied
13 The Tribunal shall determine the issues to be resolved in
accordance with the laws of the Republic of the Philippines.
Procedure to be Applied
14 The proceedings before the Tribunal shall be governed by the
ICC Rules of Arbitration (1 January 1998) and the law currently
applicable to arbitration in the Republic of the Philippines.73
As stated in the Partial Award dated September 27, 2007, although
the parties provided in Section 10 of the SPA that the arbitration
shall be conducted under the ICC Rules, it was nevertheless
arbitration under Philippine law since the parties are both residents
of this country. The provisions of Republic Act No. 876 74 (RA 876),as
amended by Republic Act No. 9285 75 (RA 9285)principally applied in
the arbitration between the herein parties.76
The pertinent provisions of R.A. 9285 provide:
SEC. 40. Confirmation of Award. – The confirmation of a domestic
arbitral award shall be governed by Section 23 of R.A. 876.
A domestic arbitral award when confirmed shall be enforced in the
same manner as final and executory decisions of the Regional Trial
Court.
The confirmation of a domestic award shall be made by the regional
trial court in accordance with the Rules of Procedure to be
promulgated by the Supreme Court.
xxxx
SEC. 41. Vacation Award. – A party to a domestic arbitration may
question the arbitral award with the appropriate regional trial court in
accordance with the rules of procedure to be promulgated by the
Supreme Court only on those grounds enumerated in Section 25 of
Republic Act No. 876. Any other ground raised against a domestic
arbitral award shall be disregarded by the regional trial court.
Rule 11.4 of the Special ADR Rules sets forth the grounds for
vacating an arbitral award:
Rule 11.4. Grounds.—(A) To vacate an arbitral award. – The arbitral
award may be vacated on the following grounds:
a. The arbitral award was procured through corruption,
fraud or other undue means;
b. There was evident partiality or corruption in the
arbitral tribunal or any of its members;
c. The arbitral tribunal was guilty of misconduct or any form
of misbehavior that has materially prejudiced the rights of
any party such as refusing to postpone a hearing upon
sufficient cause shown or to hear evidence pertinent and
material to the controversy;
d. One or more of the arbitrators was disqualified to act as
such under the law and willfully refrained from disclosing
such disqualification; or
e. The arbitral tribunal exceeded its powers, or so
imperfectly executed them, such that a complete, final and
definite award upon the subject matter submitted to them
was not made.
The award may also be vacated on any or all of the following
grounds:
a. The arbitration agreement did not exist, or is invalid for
any ground for the revocation of a contract or is otherwise
unenforceable; or
b. A party to arbitration is a minor or a person judicially
declared to be incompetent.
xxxx
In deciding the petition to vacate the arbitral award, the court shall
disregard any other ground than those enumerated above.
(Emphasis supplied)
Judicial Review
At the outset, it must be stated that a review brought to this Court
under the Special ADR Rules is not a matter of right. Rule 19.36 of
said Rules specified the conditions for the exercise of this Court’s
discretionary review of the CA’s decision.
Rule 19.36.Review discretionary.—A review by the Supreme Court
is not a matter of right, but of sound judicial discretion, which will be
granted only for serious and compelling reasons resulting in
grave prejudice to the aggrieved party. The following, while
neither controlling nor fully measuring the court’s discretion, indicate
the serious and compelling, and necessarily, restrictive nature of the
grounds that will warrant the exercise of the Supreme Court’s
discretionary powers, when the Court of Appeals:
a. Failed to apply the applicable standard or test for
judicial review prescribed in these Special ADR
Rules in arriving at its decision resulting in substantial
prejudice to the aggrieved party;
b. Erred in upholding a final order or decision despite the
lack of jurisdiction of the court that rendered such final
order or decision;
c. Failed to apply any provision, principle, policy or rule
contained in these Special ADR Rules resulting in
substantial prejudice to the aggrieved party; and
d. Committed an error so egregious and harmful to a party
as to amount to an undeniable excess of jurisdiction.
The mere fact that the petitioner disagrees with the Court of Appeals’
determination of questions of fact, of law or both questions of fact
and law, shall not warrant the exercise of the Supreme Court’s
discretionary power. The error imputed to the Court of Appeals
must be grounded upon any of the above prescribed grounds
for review or be closely analogous thereto.
A mere general allegation that the Court of Appeals has committed
serious and substantial error or that it has acted with grave abuse of
discretion resulting in substantial prejudice to the petitioner without
indicating with specificity the nature of such error or abuse of
discretion and the serious prejudice suffered by the petitioner on
account thereof, shall constitute sufficient ground for the Supreme
Court to dismiss outright the petition. (Emphasis supplied)
The applicable standard for judicial review of arbitral awards in this
jurisdiction is set forth in Rule 19.10 which states:
Rule 19.10. Rule on judicial review on arbitration in the Philippines.--
As a general rule, the court can only vacate or set aside the decision
of an arbitral tribunal upon a clear showing that the award suffers
from any of the infirmities or grounds for vacating an arbitral
award under Section 24 of Republic Act No. 876 or under Rule
34 of the Model Law in a domestic arbitration, or for setting aside
an award in an international arbitration under Article 34 of the Model
Law, or for such other grounds provided under these Special Rules.
xxxx
The court shall not set aside or vacate the award of the arbitral
tribunal merelyon the ground that the arbitral tribunal committed
errors of fact, or of law, or of fact and law, as the court cannot
substitute its judgment for that of the arbitral tribunal. (Emphasis
supplied)
The above rule embodied the stricter standard in deciding appeals
from arbitral awards established by jurisprudence. In the case
of Asset Privatization Trust v. Court of Appeals,77 this Court held:
As a rule, the award of an arbitrator cannot be set aside for mere
errors of judgment either as to the law or as to the facts.Courts are
without power to amend or overrule merely because of disagreement
with matters of law or facts determined by the arbitrators.They will
not review the findings of law and fact contained in an award, and
will not undertake to substitute their judgment for that of the
arbitrators, since any other rule would make an award the
commencement, not the end, of litigation.Errors of law and fact, or
an erroneous decision of matters submitted to the judgment of the
arbitrators, are insufficient to invalidate an award fairly and honestly
made. Judicial review of an arbitration is, thus, more limited than
judicial review of a trial.78
Accordingly, we examine the merits of the petition before us solely
on the statutory ground raised for vacating the Second Partial
Award: evident partiality, pursuant to Section 24 (b) of the Arbitration
Law (RA 876) and Rule 11.4 (b) of the Special ADR Rules.
Evident Partiality
Evident partiality is not defined in our arbitration laws. As one of the
grounds for vacating an arbitral award under the Federal Arbitration
Act (FAA) in the United States (US), the term "encompasses both an
arbitrator’s explicit bias toward one party and an arbitrator’s inferred
bias when an arbitrator fails to disclose relevant information to the
parties."79
From a recent decision80 of the Court of Appeals of Oregon, we
quote a brief discussion of the common meaning of evident partiality:
To determine the meaning of "evident partiality," we begin with the
terms themselves. The common meaning of "partiality" is
"the inclination to favor one side."Webster’s Third New Int'l
Dictionary 1646 (unabridged ed 2002); see also id. (defining "partial"
as "inclined to favor one party in a cause or one side of a question
more than the other: biased, predisposed" (formatting in original)).
"Inclination," in turn, means "a particular disposition of mind or
character : propensity, bent" or "a tendency to a particular aspect,
state, character, or action."Id. at 1143 (formatting in original); see
also id. (defining "inclined" as "having inclination, disposition, or
tendency").
The common meaning of "evident" is "capable of being perceived
esp[ecially] by sight : distinctly visible : being in evidence :
discernable[;] * * * clear to the understanding : obvious, manifest,
apparent."Id. at 789 (formatting in original); see also id. (stating that
synonyms of "evident" include "apparent, patent, manifest, plain,
clear, distinct, obvious, [and] palpable" and that, "[s]ince evident
rather naturally suggests evidence, it may imply the existence
of signs and indications that must lead to an identification or
inference" (formatting in original)). (Emphasis supplied)
Evident partiality in its common definition thus implies "the existence
of signs and indications that must lead to an identification or
inference" of partiality.81 Despite the increasing adoption of arbitration
in many jurisdictions, there seems to be no established standard for
determining the existence of evident partiality. In the US, evident
partiality "continues to be the subject of somewhat conflicting and
inconsistent judicial interpretation when an arbitrator’s failure to
disclose prior dealings is at issue."82
The first case to delineate the standard of evident partiality in
arbitration proceedings was Commonwealth Coatings Corp. v.
Continental Casualty Co., et al.83 decided by the US Supreme Court
in 1968. The Court therein addressed the issue of whether the
requirement of impartiality applies to an arbitration proceeding. The
plurality opinion written by Justice Black laid down the rule that the
arbitrators must disclose to the parties "any dealings that might
create an impression of possible bias,"84 and that underlying such
standard is "the premise that any tribunal permitted by law to try
cases and controversies not only must be unbiased but also must
avoid even the appearance of bias."85 In a separate concurring
opinion, Justice White joined by Justice Marshall, remarked that
"[t]he Court does not decide today that arbitrators are to be held to
the standards of judicial decorum of Article III judges, or indeed of
any judges."86 He opined that arbitrators should not automatically be
disqualified from an arbitration proceeding because of a business
relationship where both parties are aware of the relationship in
advance, or where the parties are unaware of the circumstances but
the relationship is trivial. However, in the event that the arbitrator has
a "substantial interest" in the transaction at hand, such information
must be disclosed.
Subsequent cases decided by the US Court of Appeals Circuit
Courts adopted different approaches, given the imprecise standard
of evident partiality in Commonwealth Coatings.
In Morelite Construction Corp. v. New York District Council
Carpenters Benefit Funds,87 the Second Circuit reversed the
judgment of the district court and remanded with instructions to
vacate the arbitrator’s award, holding that the existence of a father-
son relationship between the arbitrator and the president of appellee
union provided strong evidence of partiality and was unfair to
appellant construction contractor. After examining prior decisions in
the Circuit, the court concluded that –
x x x we cannot countenance the promulgation of a standard for
partiality as insurmountable as "proof of actual bias" -- as the literal
words of Section 10 might suggest. Bias is always difficult, and
indeed often impossible, to "prove." Unless an arbitrator publicly
announces his partiality, or is overheard in a moment of private
admission, it is difficult to imagine how "proof" would be obtained.
Such a standard, we fear, occasionally would require that we enforce
awards in situations that are clearly repugnant to our sense of
fairness, yet do not yield "proof" of anything.
If the standard of "appearance of bias" is too low for the
invocation of Section 10, and "proof of actual bias" too high,
with what are we left? Profoundly aware of the competing forces that
have already been discussed, we hold that "evident partiality"
within the meaning of 9 U.S.C. § 10 will be found where a
reasonable person would have to conclude that an arbitrator
was partial to one party to the arbitration.x x x88 (Emphasis
supplied)
In Apperson v. Fleet Carrier Corporation,89 the Sixth Circuit agreed
with the Morelite court’s analysis, and accordingly held that to
invalidate an arbitration award on the grounds of bias, the
challenging party must show that "a reasonable person would have
to conclude that an arbitrator was partial" to the other party to the
arbitration.
This "myriad of judicial interpretations and approaches to evident
partiality" resulted in a lack of a uniform standard, leaving the courts
"to examine evident partiality on a case-by-case basis."90 The case at
bar does not present a non-disclosure issue but conduct allegedly
showing an arbitrator’s partiality to one of the parties.
EPCIB/BDO, in moving to vacate the Second Partial Award claimed
that the Arbitration Tribunal exceeded its powers in deciding the
issue of advance cost not contemplated in the TOR, and that
Chairman Barker acted with evident partiality in making such award.
The RTC held that BDO failed to substantiate these allegations. On
appeal, the CA likewise found that the Arbitration Tribunal did not go
beyond the submission of the parties because the phrasing of the
scope of the agreed issues in the TOR ("[t]he issues to be
determined by the Tribunal are those issues arising from the said
Request for Arbitration, Answer and Reply and such other issues as
may properly arise during the arbitration")is broad enough to
accommodate a finding on the liability and the repercussions of
BDO’s failure to share in the advances on costs. Section 10 of the
SPA also gave the Arbitration Tribunal authority to decide how the
costs should be apportioned between them.
However, the CA found factual support in BDO’s charge of partiality,
thus:
On the issue on evident partiality, the rationale in the American case
of Commonwealth Coatings Corp. v. Continental Cas. Co. appears
to be very prudent. In Commonwealth, the United States Supreme
Court reasoned that courts "should…be even more scrupulous to
safeguard the impartiality of arbitrators than judges, since the former
have completely free rein to decide the law as well as the facts, and
are not subject to appellate review" in general. This taken into
account, the Court applies the standard demanded of the
conduct of magistrates by analogy. After all, the ICC Rules
require that an arbitral tribunal should act fairly and impartially.
Hence, an arbitrator’s conduct should be beyond reproach and
suspicion. His acts should be free from the appearances of
impropriety.
An examination of the circumstances claimed to be illustrative of
Chairman Barker’s partiality is indicative of bias. Although RCBC
had repeatedly asked for reimbursement and the withdrawal of
BDO’s counterclaims prior to Chairman Barker’s December 18, 2007
letter, it is baffling why it is only in the said letter that RCBC’s
prayer was given a complexion of being an application for a
partial award. To the Court, the said letter signaled a
preconceived course of action that the relief prayed for by
RCBC will be granted.
That there was an action to be taken beforehand is confirmed by
Chairman Barker’s furnishing the parties with a copy of the Secomb
article. This article ultimately favored RCBC by advancing its
cause. Chairman Barker makes it appear that he intended good
to be done in doing so but due process dictates the cold
neutrality of impartiality. This means that "it is not enough…[that]
cases [be decided] without bias and favoritism. Nor is it sufficient
that…prepossessions [be rid of]. [A]ctuations should moreover
inspire that belief." These put into the equation, the furnishing of the
Secomb article further marred the trust reposed in Chairman Barker.
The suspicion of his partiality on the subject matter deepened.
Specifically, his act established that he had pre-formed opinions.
Chairman Barker’s providing of copies of the said text is easily
interpretable that he had prejudged the matter before him. In any
case, the Secomb article tackled bases upon which the Second
Partial Award was founded. The subject article reflected in
advance the disposition of the ICC arbitral tribunal. The award
can definitely be viewed as an affirmation that the bases in the
Secomb article were adopted earlier on. To the Court, actuations of
arbitrators, like the language of judges, "must be guarded and
measured lest the best of intentions be misconstrued."
x x x x91 (Emphasis supplied)
We affirm the foregoing findings and conclusion of the appellate
court save for its reference to the obiter in Commonwealth
Coatings that arbitrators are held to the same standard of conduct
imposed on judges. Instead, the Court adopts the reasonable
impression of partiality standard, which requires a showing that a
reasonable person would have to conclude that an arbitrator was
partial to the other party to the arbitration. Such interest or bias,
moreover, "must be direct, definite and capable of demonstration
rather than remote, uncertain, or speculative."92 When a claim of
arbitrator’s evident partiality is made, "the court must ascertain from
such record as is available whether the arbitrators’ conduct was so
biased and prejudiced as to destroy fundamental fairness."93
Applying the foregoing standard, we agree with the CA in finding that
Chairman Barker’s act of furnishing the parties with copies of
Matthew Secomb’s article, considering the attendant
circumstances,is indicative of partiality such that a reasonable man
would have to conclude that he was favoring the Claimant, RCBC.
Even before the issuance of the Second Partial Award for the
reimbursement of advance costs paid by RCBC, Chairman Barker
exhibited strong inclination to grant such relief to RCBC,
notwithstanding his categorical ruling that the Arbitration Tribunal
"has no power under the ICC Rules to order the Respondents to pay
the advance on costs sought by the ICC or to give the Claimantany
relief against the Respondents’ refusal to pay."94 That Chairman
Barker was predisposed to grant relief to RCBC was shown by his
act of interpreting RCBC’s letter, which merely reiterated its plea to
declare the Respondents in default and consider all counterclaims
withdrawn – as what the ICC Rules provide – as an application to the
Arbitration Tribunal to issue a partial award in respect of BDO’s
failure to share in the advance costs. It must be noted that RCBC in
said letter did not contemplate the issuance of a partial order,
despite Chairman Barker’s previous letter which mentioned the
possibility of granting relief upon the parties making submissions to
the Arbitration Tribunal. Expectedly, in compliance with Chairman
Barker’s December 18, 2007 letter, RCBC formally applied for the
issuance of a partial award ordering BDO to pay its share in the
advance costs.
Mr. Secomb’s article, "Awards and Orders Dealing With the Advance
on Costs in ICC Arbitration: Theoretical Questions and Practical
Problems"95 specifically dealt with the situation when one of the
parties to international commercial arbitration refuses to pay its
share on the advance on costs. After a brief discussion of the
provisions of ICC Rules dealing with advance on costs, which did not
provide for issuance of a partial award to compel payment by the
defaulting party, the author stated:
4. As we can see, the Rules have certain mechanisms to deal with
defaulting parties. Occasionally, however, parties have sought to use
other methods to tackle the problem of a party refusing to pay its part
of the advance on costs. These have included seeking an order or
award from the arbitral tribunal condemning the defaulting party to
pay its share of the advance on costs.1âwphi1 Such applications are
the subject of this article.96
By furnishing the parties with a copy of this article, Chairman Barker
practically armed RCBC with supporting legal arguments under the
"contractual approach" discussed by Secomb. True enough, RCBC
in its Application for Reimbursement of Advance Costs Paid utilized
said approach as it singularly focused on Article 30(3) 97 of the ICC
Rules and fiercely argued that BDO was contractually bound to
share in the advance costs fixed by the ICC. 98 But whether under the
"contractual approach" or "provisional approach" (an application
must be treated as an interim measure of protection under Article 23
[1] rather than enforcement of a contractual obligation), both treated
in the Secomb article, RCBC succeeded in availing of a remedy
which was not expressly allowed by the Rules but in practice has
been resorted to by parties in international commercial arbitration
proceedings. It may also be mentioned that the author, Matthew
Secomb, is a member of the ICC Secretariat and the "Counsel in
charge of the file", as in fact he signed some early communications
on behalf of the ICC Secretariat pertaining to the advance costs fixed
by the ICC.99 This bolstered the impression that Chairman Barker
was predisposed to grant relief to RCBC by issuing a partial award.
Indeed, fairness dictates that Chairman Barker refrainfrom
suggesting to or directing RCBC towards a course of action to
advance the latter’s cause, by providing it with legal arguments
contained in an article written by a lawyer who serves at the ICC
Secretariat and was involved or had participation -- insofar as the
actions or recommendations of the ICC – in the case. Though done
purportedly to assist both parties, Chairman Barker’s act clearly
violated Article 15 of the ICC Rules declaring that "[i]n all cases, the
Arbitral Tribunal shall act fairly and impartially and ensure that each
party has a reasonable opportunity to present its case." Having pre-
judged the matter in dispute, Chairman Barker had lost his objectivity
in the issuance of the Second Partial Award.
In fine, we hold that the CA did not err in concluding that the article
ultimately favored RCBC as it reflected in advance the disposition of
the Arbitral Tribunal, as well as "signalled a preconceived course of
action that the relief prayed for by RCBC will be granted." This
conclusion is further confirmed by the Arbitral Tribunal’s
pronouncements in its Second Partial Award which not only adopted
the "contractual approach" but even cited Secomb’s article along
with other references, thus:
6.1 It appears to the Tribunal that the issue posed by this application
is essentially a contractual one. x x x
xxxx
6.5 Matthew Secomb, considered these points in the article in 14
ICC Bulletin No. 1 (2003) which was sent to the parties. At Para. 19,
the learned author quoted from an ICC Tribunal (Case No. 11330)
as follows:
"The Arbitral Tribunal concludes that the partiesin arbitrations
conducted under the ICC Rules have a mutually binding obligation to
pay the advance on costs as determined by the ICC Court, based on
Article 30-3 ICC Rules which – by reference – forms part of the
parties’ agreement to arbitration under such Rules."100
The Court, however, must clarify that the merits of the parties’
arguments as to the propriety of the issuance of the Second Partial
Award are not in issue here. Courts are generally without power to
amend or overrule merely because of disagreement with matters of
law or facts determined by the arbitrators. They will not review the
findings of law and fact contained in an award, and will not undertake
to substitute their judgment for that of the arbitrators. A contrary rule
would make an arbitration award the commencement, not the end, of
litigation.101 It is the finding of evident partiality which constitutes legal
ground for vacating the Second Partial Award and not the Arbitration
Tribunal’s application of the ICC Rules adopting the "contractual
approach" tackled in Secomb’s article.
Alternative dispute resolution methods or ADRs – like arbitration,
mediation, negotiation and conciliation – are encouraged by this
Court. By enabling parties to resolve their disputes amicably, they
provide solutions that are less time-consuming, less tedious, less
confrontational, and more productive of goodwill and lasting
relationship.102 Institutionalization of ADR was envisioned as "an
important means to achieve speedy and impartial justice and declog
court dockets."103 The most important feature of arbitration, and
indeed, the key to its success, is the public’s confidence and trust in
the integrity of the process.104 For this reason, the law authorizes
vacating an arbitral award when there is evident partiality in the
arbitrators.
Injunction Against Execution Of Arbitral Award
Before an injunctive writ can be issued, it is essential that the
following requisites are present: (1) there must be a right inesse or
the existence of a right to be protected; and (2) the act against which
injunction to be directed is a violation of such right. The onus
probandi is on movant to show that there exists a right to be
protected, which is directly threatened by the act sought to be
enjoined. Further, there must be a showing that the invasion of the
right is material and substantial and that there is an urgent and
paramount necessity for the writ to prevent a serious damage. 105
Rule 19.22 of the Special ADR Rules states:
Rule 19.22. Effect of appeal.—The appeal shall not stay the award,
judgment, final order or resolution sought to be reviewed unless the
Court of Appeals directs otherwise upon such terms as it may deem
just.
We find no reversible error or grave abuse of discretion in the CA’s
denial of the application for stay order or TRO upon its finding that
BDO failed to establish the existence of a clear legal right to enjoin
execution of the Final Award confirmed by the Makati City RTC,
Branch 148, pending resolution of its appeal.It would be premature
to address on the merits the issues raised by BDO in the present
petition considering that the CA still has to decide on the validity of
said court's orders confirming the Final Award. But more important,
since BOO had already paid ₱637,941,185.55 m manager's check,
albeit under protest, and which payment was accepted by RCBC as
full and complete satisfaction of the writ of execution, there is no
more act to be enjoined.
Settled is the rule that injunctive reliefs are preservative remedies for
the protection of substantive rights and interests. Injunction is not a
cause of action in itself, but merely a provisional remedy, an adjunct
to a main suit. When the act sought to be enjoined has become fait
accompli, the prayer for provisional remedy should be denied. 106
Thus, the Court ruled in Gov. Looyuko107 that when the events
sought to be prevented by injunction or prohibition have already
happened, nothing more could be enjoined or prohibited. Indeed, it is
a universal principle of law that an injunction will not issue to restrain
the performance of an act already done. This is so for the simple
reason that nothing more can be done in reference thereto. A writ of
injunction becomes moot and academic after the act sought to be
enjoined has already been consummated.
WHEREFORE, premises considered, the petition m G.R. No.
199238 is DENIED. The Resolution dated September 13,2011 ofthe
Court of Appeals in CA-G.R. SP No. 120888 is AFFIRMED.

The petition in G.R. No. 196171 is DENIED. The

Decision dated December 23, 2010 of the Court of
Appeals in CA-G.R. SP No. 113525 is
hereby AFFIRMED.

SO ORDERED.