CONSTITUTIONAL LAW 1 SUN | 1-5:00PM

ATTY. CLARICE JOY SAN JOSE

TOPIC: Sovereignty
Department of Foreign Affairs vs. National Labor Relations Commission
G.R. No. 113191
September 18, 1996
PONENTE: VITUG, J. DIGESTED BY:
FACTS:
- Jose C. Magnayi filed a complaint for illegal dismissal against the Asian
Development Bank (ADB) and alleged violation of the "labor-only" contracting
law.
- ADB and the Department of Foreign Affairs (DFA) notified the Labor Arbiter that
the ADB, as well as its President and Officers, were covered by immunity from
legal process, except for certain specified cases.
- The Labor Arbiter proceeded with the case, assuming that the ADB had waived
its immunity.
- The Labor Arbiter rendered a decision in favor of Magnayi, declaring his
dismissal as illegal and ordering the ADB to reinstate him and pay backwages,
benefits, and attorney's fees.
- The ADB did not appeal the decision but instead referred the matter to the
NLRC, seeking to vacate the judgment.
- The NLRC Chairman stated that the Commission could not review the decision
of the Labor Arbiter unless an appeal was properly made.
- The DFA filed a petition for certiorari, challenging the decision of the Labor
Arbiter.
- The Office of the Solicitor General initially questioned the ADB's claim of
immunity but later changed its position and supported the ADB's immunity.

Background of the Case

- The case involves a labor dispute between the Asian Development Bank
(ADB) and a private respondent.
- The ADB and the Department of Foreign Affairs (DFA) assert diplomatic
immunity in the case.
- The Labor Arbiter proceeded with the case despite the claim of immunity by
ADB.

Decision of the Labor Arbiter

- The Labor Arbiter rendered a decision in favor of the private respondent,
ordering ADB to reinstate the complainant and pay backwages and other
benefits.
- ADB did not appeal the decision but referred the matter to the National
Labor Relations Commission (NLRC) to vacate the judgment.
- The NLRC declined to review the decision, stating that it had no jurisdiction
to do so.

Petition for Certiorari with the Supreme Court

- The DFA filed a petition for certiorari with the Supreme Court, challenging
the decision of the NLRC.
 - The Office of the Solicitor General initially opposed ADB's claim of immunity
but later supported it.

Supreme Court's Ruling on Diplomatic Immunity

- The Supreme Court ruled in favor of ADB, upholding its diplomatic
immunity.
- The Court cited provisions in the Charter and Headquarters Agreement of
ADB that grant immunity from legal process, except in certain specified
cases.
- The Court recognized diplomatic immunity as a political question and
deferred to the executive branch's determination of immunity.
- The Court emphasized the importance of diplomatic immunity in protecting
international organizations from interference by host governments and
allowing them to fulfill their responsibilities impartially.

Distinction between Sovereign Acts and Commercial Acts

- The Court rejected the argument that ADB's service contracts with private
companies waived its immunity.
- The Court distinguished between acts jure imperii (sovereign acts) and acts
jure gestionis (commercial acts).
- The Court stated that ADB's service contracts were official acts and not
intended for profit or gain.

Legal Standing of the DFA and Use of Certiorari as a Remedy

- The Court affirmed the legal standing of the DFA to file the petition.
- The Court held that the DFA has the authority to determine diplomatic
immunities.
- The Court deemed certiorari as an appropriate remedy when the
questioned decision is issued without jurisdiction or is a patent nullity.

Conclusion
- The Supreme Court upheld the diplomatic immunity of ADB and its officers.
- The Court declared the decision of the Labor Arbiter null and void.
- The temporary restraining order issued by the Court was made permanent.
-
ISSUE/S:
- Whether the ADB and its officers enjoy diplomatic immunity from legal
process in a labor dispute case.
RULING:
- The Supreme Court ruled in favor of the ADB and its officers, upholding
their diplomatic immunity.
- The decision of the Labor Arbiter was declared null and void.
RATIO DECIDENDI:
- The Court emphasized that diplomatic immunity is a recognized principle of
international law.
- Courts should defer to the determination of immunity made by the executive
branch of the government.
- The ADB, as an international organization with diplomatic status, is
independent of municipal law and enjoys immunity to protect its operations
 from interference by the host government.
- The Court clarified that the service contracts entered into by the ADB were
official acts and not intended for profit or gain, thus not waiving its immunity.
- The DFA's intervention was necessary to protect the credibility of the Philippine
government in foreign relations.
- The Court justified the use of certiorari as an extraordinary remedy in this case,
as the Labor Arbiter's decision was issued without jurisdiction and was a patent
nullity.

Conclusion:
- The Supreme Court granted the petition for certiorari, vacated the decision of
the Labor Arbiter, and made the temporary restraining order permanent.
- The ADB and its officers were upheld to have diplomatic immunity.
- The case was dismissed.