GR 152318 April 16, 2009

German Agency for Technical Corporation, et.al vs Court of Appeals

Facts:
 On Sept ,1971 the government of Federal Republic of Germany ratified an agreement concerning technical
cooperation . This agreement upholds both countries’ interest in promoting the technical and economic
development. The agreement is expected to have 5 years of effectivity.
 On Dec 1999, the Phil. Gov't and the German gov't both yielded to promote a project called SHINE (Social Health
Insurance Networking and Empowerment). This SHINE aims to enable poor families to have health care of
sustainable quality. Provisions of what each government's obligations were stipulated in the agreement.
 The implementing organization for SHINE in the Phil. Are the DOH and PhilHealth. As for the German gov't is the
GTZ.
 The respondents Magtaas, Ramos Dela Paz, Tamayo and Ramilo are employees hired by GTZ for the Phil-
German bilateral project.
 But when Ann Nicolay took over the position of Project Manager, disputes concerning wages and program
implementation began to arise. A letter was given to different concerned officials regarding the employees'
sentiments including Nicolay.
 The employees did not intend to resign and their letters just wanted to lobby their issues. Yet after unfruitful
efforts Nicolay sent letters informing them of their pre-termination of contracts of employment for
insubordination and loss of confidence and trust.
 The respondents filed illegal dismissal with the NLRC. In response, the GTZ filed a motion to dismiss the case
claiming that their acts were undertaken in the discharge of governmental functions and sovereign acts of the
government Germany. This was dismissed by the labor arbiter stating that GTZ is a private corporation and the
company failed to secure DFA certification for its diplomatic status.
 GTZ again filed motion to dismiss, instead of dismissing the case the labor arbiter granted the complaint of illegal
dismissal.
 Instead of filing for motion for reconsideration to NLRC, GTZ filed for certiorari to the Court of Appeals.

ISSUE:
 Whether or not GTZ is covered by the Federal Republic of Germany's immunity to suit. (NO)

RULING/HELD:
 No, because GTZ is a company that has its own legal personality independent of the State of Germany. It has
corporate powers and distinct from the Government. (it is an incorporated agency like SSS)
 Sec. 9 Art XVI of the Constitution states that "the State may not be sued without its consent."This applies if the
agency does not have a juridical personality and is merged into the government itself (like unincorporated agency
like DOJ, Gov't Printing Office).
 In the nonexistence or lack of evidence, foreign laws are presumed to be the same as those of the Phil." With
GTZ, having a charter of its own as supported by the Civil Code, the GTZ can be sued.
 Still in the scope of International Law, a state or international agency desiring to appeal for immunity in a foreign
court, it should request the foreign office of the state where it is sued to convey to the court of the defendant's
immunity.
 Therefore, the GTZ cannot benefit from the immunity of its parent country. Applying by virtue the Corporation
code has consented to be sued.
 Petition is DENIED. (The Labor Arbiter's decision is then final and executory.)