Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-30650 July 31, 1970

HON. NICOLAS C. ADOLFO, Municipal Judge of the Municipality of Subic, Province of Zambales, petitioner,
vs.
COURT OF FIRST INSTANCE OF ZAMBALES Branch I, Hon. Lucas Lacson, Presiding, and ALBERT L.
MERCHANT, respondents.

RESOLUTION

FERNANDO, J.:

In filing this petition for review on certiorari, on September 1, 1969, the Municipal Judge of Subic, Zambales, the
Honorable Nicolas C. Adolfo against the Court of First Instance of that province and a certain Albert L. Merchant, as
respondents, would have us reverse and set aside a decision of respondent Court of November 20, 1968 annulling
petitioner's order of June 29, 1967 in a criminal case pending before him declaring as non-existent the custody receipt
issued by the Commander of the United States Naval Base at Subic Bay for the provisional liberty of the respondent
Albert L. Merchant, the accused in that case, so that the warrant for his arrest could be reissued pursuant to Article 13 of
the United States-Philippines Military Bases Agreement of 1937. The petition quoted the specific provision of paragraph 5
of the aforesaid article in the 1947 Military Bases Agreement. It is worded thus: "In all cases over which the Philippines
exercises jurisdiction the custody of the accused, pending without delay trial and final judgment, shall be entrusted without
delay to the commanding officer of the nearest base, who shall acknowledge in writing that such accused has been
delivered to him for custody pending trial in a Competent court of the Philippines and that he will be held ready to appear
and will be produced before said court when required by it. The commanding officer shall be furnished by the fiscal
(prosecuting attorney) with a copy of the information against the accused upon the filing of the original in the competent
court."1 It likewise alleged that the clause "in all cases over which the Philippines exercises jurisdiction" did obviously refer
to the second paragraph of the same article which reads: "2. The Philippines shall have the right to exercise jurisdiction
over all other offenses committed outside the bases by any member of armed forces of the United States."2 After which
came this assertion in the petition: "There is no dispute that the crime for which respondent Albert L. Merchant is charged
was committed outside a base, or more particularly in Barrio Manggahan, Subic Zambales Said respondent, though a
citizen of the United States, is a civilian employee or component of the U.S. Naval Base at Subic Bay, thus not a member
of the armed forces of the United States within the purview of the oft-repeated Base Agreement." 3

Petitioner, represented by the then Solicitor General, the Honorable Felix Makasiar, took due note of the stand of
respondent Court and of private respondent which is that "even if the right of custody of a commanding officer over the
person of an accused civilian component of the base is not prescribed by the original Base Agreement, nonetheless such
a right is now provided for in paragraph 5 of the Agreed Official Minutes of the Agreement, entered into between the
Philippines and the United States on August 10, 1965, to wit: '5. In all cases over which the Republic of the Philippines
exercises jurisdiction, the custody of an accused  member of the United States' armed forces, civilian component, or
dependent, pending investigation, trial and final judgment, shall be entrusted without delay to the commanding officer of
the nearest base, who shall acknowledge in writing (a) that such accused has been delivered to him for custody pending
investigation, trial and final judgment in a competent court of the Philippines (6) that he will be made available to the
Philippine authorities for investigation upon their request and (c) that he will be produced before said court when required
by it. The commanding officer shall be furnished by the fiscal (prosecuting attorney) with A copy of the information against
the accused upon the filing of the original in the competent court." 4

The petition thus squarely raised in issue the validity of the exchange of notes on August 10, 1965, more commonly
known as the Mendez-Blair Agreement insofar as it would modify or amend the provisions of the Military Bases
Agreement without such exchange of notes having been submitted to the Senate for ratification as the Constitution
requires in the case of treaties. It made a distinction between a treaty and executive agreements, to which category the
aforesaid exchange of notes belongs. Thus: "A treaty may be defined as a compact made between two or more
independent nations with a view to the public welfare. (Tañada & Fernando, Constitution of the Philippines, 4th Edition,
Vol II, citing Altman & Co. vs. United States, 224 U.S. 583). Executive Agreements fall into two classes: (1) agreements
made purely as executive acts effecting external, relations and independent of or without legislative authorization, termed
as presidential agreements', and (2) agreements entered into in pursuance to acts of Congress, designated as
Congressional-Executive Agreements. (USAFFE Veterans Association Inc. vs. The Treasurer of the Philippines, et al.,
105 Phil. 1030, 1038; citing several authorities). However, the distinction between a 'treaty' or the called 'executive
agreements' is best understood by statements of including examples thereof what they are supposed to cover, of. This we
can find in the above-cited case of the Commissioner of Customs vs. Eastern Sea Trading, supra, citing U.S. authorities,
to wit: 'International agreements involving political issues or changes of national policy and those involving international
arrangements of a permanent character usually take the form of treaties. But international agreements
embodying adjustments of detail carrying out well-established national policies and traditions  and those
involving arrangements of a more or less temporary nature  usually take the form of executive agreements."5 After citing
an article of Francis B. Sayre on "The Constitutionality of Trade Agreement Acts" 6 it concluded: "We can thus see that
executive agreements cover such subjects as commercial and consular relations, property relations like parent rights,
trademark and copyrights, postal, navigation, settlement of private claims, tariff and trade matters. These types of
agreements are certainly not in the plane of one, like the US-P.I. Military Bases Agreement, which affects and reduces to
a certain degree the territorial authority, the jurisdiction and even the dignity of the country and its people. Said Base
Agreement undoubtedly involves more than a national policy, and is practically of a permanent nature (99 years or longer,
Art. XXIX, ibid.). Therefore, said Agreement is a treaty which must be ratified as it Was ratified, by the Senate." 7 The
petition reinforced the above conclusion with this argument: "Since the power to make  treaties is lodged under our
Constitution with the President with the concurrence of two-thirds of the Senate. the power to amend these treaties must
similarly be vested in those organs of the government. After all, an amendment to a statute produces one law, usually the
statute as amended. (Black, Interpretation of Laws, p. 574). In pari materia is the observation that only Congress, with its
legislative power, can make laws and alter or repeal them (Cooley, p. 183). The Chief Executive, with all his vast powers,
cannot suspend the operation of a statute (Philippine National Bank vs. Bitulok Sawmill Inc., et al.. G.R. L-24177-85, June
29, 1968); a fortiori, he cannot exercise the greater power to amend or to revoke a statute. Therefore, as applied to this
case, the making of the treat having been undertaken under the joint auspices of the President and the Senate, its
amendment or revision must similarly be undertaken by both agencies of the State as directed by the Constitution. The
August 10, 1965 notes to the U.S.-P.I. Military Bases Agreement of 1947, not having been ratified yet by the Senate,
remain as mere proposals."8

The answer for respondents, filed on October 25, 1969, after it admitted substantially the statement of facts, agreed as to
the decisive issue being the validity of the exchange of notes of August 10, 1965, which they would uphold, being, in their
opinion, in accord with law and established precedents.

The brief for petitioner-appellant was filed on February 26, 1970. After a motion for the extension of time to file the brief for
respondents-appellees was filed on April 27, 1970, they filed a motion to dismiss on May 6, 1970, wherein it was noted:
"By a letter dated April 16, 1970 which was received on April 20, 1970, Rear Admiral V. G. Lambert Commander of the
U.S. Naval Base at Subic Bay, advised petitioner-appellant Judge Nicolas G. Adolfo as follows: 'This is in reference to
Criminal Case No. 1625 in which Albert L. Merchant is charged with the crime of 'Less Serious Physical Injuries thru
Reckless imprudence.' Please be advised that, upon the request of Albert L. Merchant, the custody receipt issued on 26
June 1967 in accordance with Article XIII of the Military Bases Agreement, as revised on 10 August 1965, is hereby
withdraw and the undersigned can no longer be held responsible for his presence. We understand that Mr. Merchant is
taking this action because lie desires to have his case finally adjudicated in your Court at the earliest possible
time'."9 Mention was likewise made of the following "On April 20, 1970, Albert L. Merchant, through counsel,, submitted a
Constancia to the Municipal Court of Subic, Zambales, as follows: '[Comes now] the accused in the above-entitled case,
by his undersigned counsel, and, in accordance with the provisions of Section 14, Rule 114, of the Rules of Court, to this
Honorable Court respectfully submits the certificate from the Municipal Treasurer of Subic, Zambales, dated April 20,
1970, that the sum of Six Hundred Pesos (P600.00), Philippine currency, has been deposited as Cash Bond Deposit for
the accused in the above-entitled case, under Official Recent No. M-8888315 dated April 20, 1970, as well as a Xerox
copy of said official receipt, which are marked as Annexes 'A' and 'B', respectively, and made integral parts hereof.
(Wherefore) it is most respectfully prayed of this Honorable Court that the warrant for the arrest of the accused be recalled
or the accused be released from custody in accordance with the provisions of Section 14, Rule 114, of the Rules of
Court.'" 1 

The motion to dismiss was referred for comment to petitioner-appellant in a resolution of May 15, 1970. The comment
came in the form of a manifestation filed with us on June 2, 1970, the pertinent portion of which reads: "That as thus
crystallized, the issue is the validity of the custodial receipt issued by the Commander of the US Naval Base at Subic Bay
over the person of respondent, Albert L. Merchant who is a civilian component of the United States Navy. It is appellant's
contention that custodial authority over the person of a civilian component by the U.S. Base Commander is not provided
for in the original U.S.-P.I. Military Bases Agreement of 1947, though it is now the subject of the so- called Mendez-Blair
Agreement of August 10, 1965; and 2. That considering the fact that the custody receipt over the person of Albert L.
Merchant has already been withdrawn by the Base Commander and Merchant has offered to submit a cash bond, in lieu
of said receipt, before the Municipal Court of Subic, Zambales, the question with regard to said custodial authority has
indeed become moot and academic." 1 
The question raised is one the importance of which cannot be denied. Fortunately the turn of events clearly reflects a
change of mind on the part of respondent Albert L. Merchant manifesting respect towards the terms of the Military Bases
Agreement prior to its alleged modification in the exchange of notes of August 10, 1965. Its validity could have been
passed upon in this case were it not for such respondent Merchant's recognition of the controlling force and effect of the
explicit provision in the Military Bases Agreement as ratified by the Senate. As things stand now however, the
determination of such crucial question must await another day, the matter having become moot and academic.

WHEREFORE, in the absence of any objection to the dismissal of this petition by petitioner-appellant, this petition for
review on certiorari  is dismissed. Without pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro and Villamor, JJ., concur.

Teehankee and Barredo, JJ., took no part.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 162230               April 28, 2010

ISABELITA C. VINUYA, VICTORIA C. DELA PEÑA, HERMINIHILDA MANIMBO, LEONOR H. SUMAWANG, CANDELARIA L.
SOLIMAN, MARIA L. QUILANTANG, MARIA L. MAGISA, NATALIA M. ALONZO, LOURDES M. NAVARO, FRANCISCA M.
ATENCIO, ERLINDA MANALASTAS, TARCILA M. SAMPANG, ESTER M. PALACIO, MAXIMA R. DELA CRUZ, BELEN A. SAGUM,
FELICIDAD TURLA, FLORENCIA M. DELA PEÑA, EUGENIA M. LALU, JULIANA G. MAGAT, CECILIA SANGUYO, ANA ALONZO,
RUFINA P. MALLARI, ROSARIO M. ALARCON, RUFINA C. GULAPA, ZOILA B. MANALUS, CORAZON C. CALMA, MARTA A.
GULAPA, TEODORA M. HERNANDEZ, FERMIN B. DELA PEÑA, MARIA DELA PAZ B. CULALA, ESPERANZA MANAPOL,
JUANITA M. BRIONES, VERGINIA M. GUEVARRA, MAXIMA ANGULO, EMILIA SANGIL, TEOFILA R. PUNZALAN, JANUARIA G.
GARCIA, PERLA B. BALINGIT, BELEN A. CULALA, PILAR Q. GALANG, ROSARIO C. BUCO, GAUDENCIA C. DELA PEÑA,
RUFINA Q. CATACUTAN, FRANCIA A. BUCO, PASTORA C. GUEVARRA, VICTORIA M. DELA CRUZ, PETRONILA O. DELA
CRUZ, ZENAIDA P. DELA CRUZ, CORAZON M. SUBA, EMERINCIANA A. VINUYA, LYDIA A. SANCHEZ, ROSALINA M. BUCO,
PATRICIA A. BERNARDO, LUCILA H. PAYAWAL, MAGDALENA LIWAG, ESTER C. BALINGIT, JOVITA A. DAVID, EMILIA C.
MANGILIT, VERGINIA M. BANGIT, GUILLERMA S. BALINGIT, TERECITA PANGILINAN, MAMERTA C. PUNO, CRISENCIANA C.
GULAPA, SEFERINA S. TURLA, MAXIMA B. TURLA, LEONICIA G. GUEVARRA, ROSALINA M. CULALA, CATALINA Y. MANIO,
MAMERTA T. SAGUM, CARIDAD L. TURLA, et al. In their capacity and as members of the “Malaya Lolas
Organization”, Petitioners,
vs.
THE HONORABLE EXECUTIVE SECRETARY ALBERTO G. ROMULO, THE HONORABLE SECRETARY OF FOREIGN AFFAIRS
DELIA DOMINGO-ALBERT, THE HONORABLE SECRETARY OF JUSTICE MERCEDITAS N. GUTIERREZ, and THE
HONORABLE SOLICITOR GENERAL ALFREDO L. BENIPAYO, Respondents.

DECISION

DEL CASTILLO, J.:

The Treaty of Peace with Japan, insofar as it barred future claims such as those asserted by plaintiffs in these actions,
exchanged full compensation of plaintiffs for a future peace. History has vindicated the wisdom of that bargain. And while
full compensation for plaintiffs’ hardships, in the purely economic sense, has been denied these former prisoners and
countless other survivors of the war, the immeasurable bounty of life for themselves and their posterity in a free society
and in a more peaceful world services the debt.1

There is a broad range of vitally important areas that must be regularly decided by the Executive Department without
either challenge or interference by the Judiciary. One such area involves the delicate arena of foreign relations. It would
be strange indeed if the courts and the executive spoke with different voices in the realm of foreign policy. Precisely
because of the nature of the questions presented, and the lapse of more than 60 years since the conduct complained of,
we make no attempt to lay down general guidelines covering other situations not involved here, and confine the opinion
only to the very questions necessary to reach a decision on this matter.

Factual Antecedents
This is an original Petition for Certiorari under Rule 65 of the Rules of Court with an application for the issuance of a writ of
preliminary mandatory injunction against the Office of the Executive Secretary, the Secretary of the Department of Foreign
Affairs (DFA), the Secretary of the Department of Justice (DOJ), and the Office of the Solicitor General (OSG).

Petitioners are all members of the MALAYA LOLAS, a non-stock, non-profit organization registered with the Securities
and Exchange Commission, established for the purpose of providing aid to the victims of rape by Japanese military forces
in the Philippines during the Second World War.

Petitioners narrate that during the Second World War, the Japanese army attacked villages and systematically raped the
women as part of the destruction of the village. Their communities were bombed, houses were looted and burned, and
civilians were publicly tortured, mutilated, and slaughtered. Japanese soldiers forcibly seized the women and held them in
houses or cells, where they were repeatedly raped, beaten, and abused by Japanese soldiers. As a result of the actions
of their Japanese tormentors, the petitioners have spent their lives in misery, having endured physical injuries, pain and
disability, and mental and emotional suffering.2

Petitioners claim that since 1998, they have approached the Executive Department through the DOJ, DFA, and OSG,
requesting assistance in filing a claim against the Japanese officials and military officers who ordered the establishment of
the “comfort women” stations in the Philippines. However, officials of the Executive Department declined to assist the
petitioners, and took the position that the individual claims of the comfort women for compensation had already been fully
satisfied by Japan’s compliance with the Peace Treaty between the Philippines and Japan.

Issues

Hence, this petition where petitioners pray for this court to (a) declare that respondents committed grave abuse of
discretion amounting to lack or excess of discretion in refusing to espouse their claims for the crimes against humanity
and war crimes committed against them; and (b) compel the respondents to espouse their claims for official apology and
other forms of reparations against Japan before the International Court of Justice (ICJ) and other international tribunals.

Petitioners’ arguments

Petitioners argue that the general waiver of claims made by the Philippine government in the Treaty of Peace with Japan
is void. They claim that the comfort women system established by Japan, and the brutal rape and enslavement of
petitioners constituted a crime against humanity, 3 sexual slavery,4 and torture.5 They allege that the prohibition against
these international crimes is jus cogens norms from which no derogation is possible; as such, in waiving the claims of
Filipina comfort women and failing to espouse their complaints against Japan, the Philippine government is in breach of its
legal obligation not to afford impunity for crimes against humanity. Finally, petitioners assert that the Philippine
government’s acceptance of the “apologies” made by Japan as well as funds from the Asian Women’s Fund (AWF) were
contrary to international law.

Respondents’ Arguments

Respondents maintain that all claims of the Philippines and its nationals relative to the war were dealt with in the San
Francisco Peace Treaty of 1951 and the bilateral Reparations Agreement of 1956. 6

Article 14 of the Treaty of Peace7 provides:

Article 14. Claims and Property

a) It is recognized that Japan should pay reparations to the Allied Powers for the damage and suffering caused by it
during the war. Nevertheless it is also recognized that the resources of Japan are not presently sufficient, if it is to
maintain a viable economy, to make complete reparation for all such damage and suffering and at the present time meet
its other obligations.

b) Except as otherwise provided in the present Treaty, the Allied Powers waive all reparations claims of the Allied Powers,
other claims of the Allied Powers and their nationals arising out of any actions taken by Japan and its nationals in the
course of the prosecution of the war, and claims of the Allied Powers for direct military costs of occupation.

In addition, respondents argue that the apologies made by Japan 8 have been satisfactory, and that Japan had addressed
the individual claims of the women through the atonement money paid by the Asian Women’s Fund.
Historical Background

The comfort women system was the tragic legacy of the Rape of Nanking. In December 1937, Japanese military forces
captured the city of Nanking in China and began a “barbaric campaign of terror” known as the Rape of Nanking, which
included the rapes and murders of an estimated 20,000 to 80,000 Chinese women, including young girls, pregnant
mothers, and elderly women.9

In reaction to international outcry over the incident, the Japanese government sought ways to end international
condemnation10 by establishing the “comfort women” system. Under this system, the military could simultaneously
appease soldiers’ sexual appetites and contain soldiers’ activities within a regulated environment. 11 Comfort stations
would also prevent the spread of venereal disease among soldiers and discourage soldiers from raping inhabitants of
occupied territories.12

Daily life as a comfort woman was “unmitigated misery.” 13 The military forced victims into barracks-style stations divided
into tiny cubicles where they were forced to live, sleep, and have sex with as many 30 soldiers per day. 14 The 30 minutes
allotted for sexual relations with each soldier were 30-minute increments of unimaginable horror for the women. 15 Disease
was rampant.16 Military doctors regularly examined the women, but these checks were carried out to prevent the spread of
venereal diseases; little notice was taken of the frequent cigarette burns, bruises, bayonet stabs and even broken bones
inflicted on the women by soldiers.

Fewer than 30% of the women survived the war. 17 Their agony continued in having to suffer with the residual physical,
psychological, and emotional scars from their former lives. Some returned home and were ostracized by their families.
Some committed suicide. Others, out of shame, never returned home. 18

Efforts to Secure Reparation

The most prominent attempts to compel the Japanese government to accept legal responsibility and pay compensatory
damages for the comfort women system were through a series of lawsuits, discussion at the United Nations (UN),
resolutions by various nations, and the Women’s International Criminal Tribunal. The Japanese government, in turn,
responded through a series of public apologies and the creation of the AWF. 19

Lawsuits

In December 1991, Kim Hak-Sun and two other survivors filed the first lawsuit in Japan by former comfort women against
the Japanese government. The Tokyo District Court however dismissed their case. 20 Other suits followed,21 but the
Japanese government has, thus far, successfully caused the dismissal of every case. 22

Undoubtedly frustrated by the failure of litigation before Japanese courts, victims of the comfort women system brought
their claims before the United States (US). On September 18, 2000, 15 comfort women filed a class action lawsuit in the
US District Court for the District of Columbia 23 “seeking money damages for [allegedly] having been subjected to sexual
slavery and torture before and during World War II,” in violation of “both positive and customary international law.” The
case was filed pursuant to the Alien Tort Claims Act (“ATCA”), 24 which allowed the plaintiffs to sue the Japanese
government in a US federal district court. 25 On October 4, 2001, the district court dismissed the lawsuit due to lack of
jurisdiction over Japan, stating that “[t]here is no question that this court is not the appropriate forum in which plaintiffs
may seek to reopen x x x discussions nearly half a century later x x x [E]ven if Japan did not enjoy sovereign immunity,
plaintiffs’ claims are non-justiciable and must be dismissed.”

The District of Columbia Court of Appeals affirmed the lower court’s dismissal of the case. 26 On appeal, the US Supreme
Court granted the women’s petition for writ of certiorari, vacated the judgment of the District of Columbia Court of Appeals,
and remanded the case.27 On remand, the Court of Appeals affirmed its prior decision, noting that “much as we may feel
for the plight of the appellants, the courts of the US simply are not authorized to hear their case.” 28 The women again
brought their case to the US Supreme Court which denied their petition for writ of certiorari on February 21, 2006.

Efforts at the United Nations

In 1992, the Korean Council for the Women Drafted for Military Sexual Slavery by Japan (KCWS), submitted a petition to
the UN Human Rights Commission (UNHRC), asking for assistance in investigating crimes committed by Japan against
Korean women and seeking reparations for former comfort women. 29 The UNHRC placed the issue on its agenda and
appointed Radhika Coomaraswamy as the issue’s special investigator. In 1996, Coomaraswamy issued a Report
reaffirming Japan’s responsibility in forcing Korean women to act as sex slaves for the imperial army, and made the
following recommendations:

A. At the national level

137. The Government of Japan should:

(a) Acknowledge that the system of comfort stations set up by the Japanese Imperial Army during the Second World War
was a violation of its obligations under international law and accept legal responsibility for that violation;

(b) Pay compensation to individual victims of Japanese military sexual slavery according to principles outlined by the
Special Rapporteur of the Sub-Commission on Prevention of Discrimination and Protection of Minorities on the right to
restitution, compensation and rehabilitation for victims of grave violations of human rights and fundamental freedoms. A
special administrative tribunal for this purpose should be set up with a limited time-frame since many of the victims are of
a very advanced age;

(c) Make a full disclosure of documents and materials in its possession with regard to comfort stations and other related
activities of the Japanese Imperial Army during the Second World War;

(d) Make a public apology in writing to individual women who have come forward and can be substantiated as women
victims of Japanese military sexual slavery;

(e) Raise awareness of these issues by amending educational curricula to reflect historical realities;

(f) Identify and punish, as far as possible, perpetrators involved in the recruitment and institutionalization of comfort
stations during the Second World War.

Gay J. McDougal, the Special Rapporteur for the UN Sub-Commission on Prevention of Discrimination and Protection of
Minorities, also presented a report to the Sub-Committee on June 22, 1998 entitled Contemporary Forms of Slavery:
Systematic Rape, Sexual Slavery and Slavery-like Practices During Armed Conflict. The report included an appendix
entitled An Analysis of the Legal Liability of the Government of Japan for ‘Comfort Women Stations’ established during the
Second World War,30 which contained the following findings:

68. The present report concludes that the Japanese Government remains liable for grave violations of human rights and
humanitarian law, violations that amount in their totality to crimes against humanity. The Japanese Government’s
arguments to the contrary, including arguments that seek to attack the underlying humanitarian law prohibition of
enslavement and rape, remain as unpersuasive today as they were when they were first raised before the Nuremberg war
crimes tribunal more than 50 years ago. In addition, the Japanese Government’s argument that Japan has already settled
all claims from the Second World War through peace treaties and reparations agreements following the war remains
equally unpersuasive. This is due, in large part, to the failure until very recently of the Japanese Government to admit the
extent of the Japanese military’s direct involvement in the establishment and maintenance of these rape centres. The
Japanese Government’s silence on this point during the period in which peace and reparations agreements between
Japan and other Asian Governments were being negotiated following the end of the war must, as a matter of law and
justice, preclude Japan from relying today on these peace treaties to extinguish liability in these cases.

69. The failure to settle these claims more than half a century after the cessation of hostilities is a testament to the degree
to which the lives of women continue to be undervalued. Sadly, this failure to address crimes of a sexual nature
committed on a massive scale during the Second World War has added to the level of impunity with which similar crimes
are committed today. The Government of Japan has taken some steps to apologize and atone for the rape and
enslavement of over 200,000 women and girls who were brutalized in “comfort stations” during the Second World War.
However, anything less than full and unqualified acceptance by the Government of Japan of legal liability and the
consequences that flow from such liability is wholly inadequate. It must now fall to the Government of Japan to take the
necessary final steps to provide adequate redress.

The UN, since then, has not taken any official action directing Japan to provide the reparations sought.

Women’s International War Crimes

Tribunal
The Women’s International War Crimes Tribunal (WIWCT) was a “people’s tribunal” established by a number of Asian
women and human rights organizations, supported by an international coalition of non-governmental organizations. 31 First
proposed in 1998, the WIWCT convened in Tokyo in 2000 in order to “adjudicate Japan’s military sexual violence, in
particular the enslavement of comfort women, to bring those responsible for it to justice, and to end the ongoing cycle of
impunity for wartime sexual violence against women.”

After examining the evidence for more than a year, the “tribunal” issued its verdict on December 4, 2001, finding the
former Emperor Hirohito and the State of Japan guilty of crimes against humanity for the rape and sexual slavery of
women.32 It bears stressing, however, that although the tribunal included prosecutors, witnesses, and judges, its judgment
was not legally binding since the tribunal itself was organized by private citizens.

Action by Individual Governments

On January 31, 2007, US Representative Michael Honda of California, along with six co-sponsor representatives,
introduced House Resolution 121 which called for Japanese action in light of the ongoing struggle for closure by former
comfort women. The Resolution was formally passed on July 30, 2007, 33 and made four distinct demands:

[I]t is the sense of the House of Representatives that the Government of Japan (1) should formally acknowledge,
apologize, and accept historical responsibility in a clear and unequivocal manner for its Imperial Armed Forces’ coercion
of young women into sexual slavery, known to the world as “comfort women”, during its colonial and wartime occupation
of Asia and the Pacific Islands from the 1930s through the duration of World War II; (2) would help to resolve recurring
questions about the sincerity and status of prior statements if the Prime Minister of Japan were to make such an apology
as a public statement in his official capacity; (3) should clearly and publicly refute any claims that the sexual enslavement
and trafficking of the “comfort women” for the Japanese Imperial Army never occurred; and (4) should educate current
and future generations about this horrible crime while following the recommendations of the international community with
respect to the “comfort women.”34

In December 2007, the European Parliament, the governing body of the European Union, drafted a resolution similar to
House Resolution 121.35 Entitled, “Justice for Comfort Women,” the resolution demanded: (1) a formal acknowledgment of
responsibility by the Japanese government; (2) a removal of the legal obstacles preventing compensation; and (3)
unabridged education of the past. The resolution also stressed the urgency with which Japan should act on these issues,
stating: “the right of individuals to claim reparations against the government should be expressly recognized in national
law, and cases for reparations for the survivors of sexual slavery, as a crime under international law, should be prioritized,
taking into account the age of the survivors.”

The Canadian and Dutch parliaments have each followed suit in drafting resolutions against Japan. Canada’s resolution
demands the Japanese government to issue a formal apology, to admit that its Imperial Military coerced or forced
hundreds of thousands of women into sexual slavery, and to restore references in Japanese textbooks to its war
crimes.36 The Dutch parliament’s resolution calls for the Japanese government to uphold the 1993 declaration of remorse
made by Chief Cabinet Secretary Yohei Kono.

The Foreign Affairs Committee of the United Kingdom’s Parliament also produced a report in November, 2008 entitled,
“Global Security: Japan and Korea” which concluded that Japan should acknowledge the pain caused by the issue of
comfort women in order to ensure cooperation between Japan and Korea.

Statements of Remorse made by representatives of the Japanese government

Various officials of the Government of Japan have issued the following public statements concerning the comfort system:

a) Statement by the Chief Cabinet Secretary Yohei Kono in 1993:

The Government of Japan has been conducting a study on the issue of wartime “comfort women” since December 1991. I
wish to announce the findings as a result of that study.

As a result of the study which indicates that comfort stations were operated in extensive areas for long periods, it is
apparent that there existed a great number of comfort women. Comfort stations were operated in response to the request
of the military authorities of the day. The then Japanese military was, directly or indirectly, involved in the establishment
and management of the comfort stations and the transfer of comfort women. The recruitment of the comfort women was
conducted mainly by private recruiters who acted in response to the request of the military. The Government study has
revealed that in many cases they were recruited against their own will, through coaxing coercion, etc., and that, at times,
administrative/military personnel directly took part in the recruitments. They lived in misery at comfort stations under a
coercive atmosphere.

As to the origin of those comfort women who were transferred to the war areas, excluding those from Japan, those from
the Korean Peninsula accounted for a large part. The Korean Peninsula was under Japanese rule in those days, and their
recruitment, transfer, control, etc., were conducted generally against their will, through coaxing, coercion, etc.

Undeniably, this was an act, with the involvement of the military authorities of the day, that severely injured the honor and
dignity of many women. The Government of Japan would like to take this opportunity once again to extend its sincere
apologies and remorse to all those, irrespective of place of origin, who suffered immeasurable pain and incurable physical
and psychological wounds as comfort women.

It is incumbent upon us, the Government of Japan, to continue to consider seriously, while listening to the views of
learned circles, how best we can express this sentiment.

We shall face squarely the historical facts as described above instead of evading them, and take them to heart as lessons
of history. We hereby reiterated our firm determination never to repeat the same mistake by forever engraving such issues
in our memories through the study and teaching of history.

As actions have been brought to court in Japan and interests have been shown in this issue outside Japan, the
Government of Japan shall continue to pay full attention to this matter, including private researched related thereto.

b) Prime Minister Tomiichi Murayama’s Statement in 1994

On the issue of wartime “comfort women”, which seriously stained the honor and dignity of many women, I would like to
take this opportunity once again to express my profound and sincere remorse and apologies”

c) Letters from the Prime Minister of Japan to Individual Comfort Women

The issue of comfort women, with the involvement of the Japanese military authorities at that time, was a grave affront to
the honor and dignity of a large number of women.

As Prime Minister of Japan, I thus extend anew my most sincere apologies and remorse to all the women who endured
immeasurable and painful experiences and suffered incurable physical and psychological wounds as comfort women.

I believe that our country, painfully aware of its moral responsibilities, with feelings of apology and remorse, should face
up squarely to its past history and accurately convey it to future generations.

d) The Diet (Japanese Parliament) passed resolutions in 1995 and 2005

Solemnly reflecting upon the many instances of colonial rule and acts of aggression that occurred in modern world history,
and recognizing that Japan carried out such acts in the past and inflicted suffering on the people of other countries,
especially in Asia, the Members of this House hereby express deep remorse. (Resolution of the House of Representatives
adopted on June 9, 1995)

e) Various Public Statements by Japanese Prime Minister Shinzo Abe

I have talked about this matter in the Diet sessions last year, and recently as well, and to the press. I have been
consistent. I will stand by the Kono Statement. This is our consistent position. Further, we have been apologizing sincerely
to those who suffered immeasurable pain and incurable psychological wounds as comfort women. Former Prime
Ministers, including Prime Ministers Koizumi and Hashimoto, have issued letters to the comfort women. I would like to be
clear that I carry the same feeling. This has not changed even slightly. (Excerpt from Remarks by Prime Minister Abe at
an Interview by NHK, March 11, 2007).

I am apologizing here and now. I am apologizing as the Prime Minister and it is as stated in the statement by the Chief
Cabinet Secretary Kono. (Excerpt from Remarks by Prime Minister Abe at the Budget Committee, the House of
Councilors, the Diet of Japan, March 26, 2007).
I am deeply sympathetic to the former comfort women who suffered hardships, and I have expressed my apologies for the
extremely agonizing circumstances into which they were placed. (Excerpt from Telephone Conference by Prime Minister
Abe to President George W. Bush, April 3, 2007).

I have to express sympathy from the bottom of my heart to those people who were taken as wartime comfort women. As a
human being, I would like to express my sympathies, and also as prime minister of Japan I need to apologize to them. My
administration has been saying all along that we continue to stand by the Kono Statement. We feel responsible for having
forced these women to go through that hardship and pain as comfort women under the circumstances at the time.
(Excerpt from an interview article “A Conversation with Shinzo Abe” by the Washington Post, April 22, 2007).

x x x both personally and as Prime Minister of Japan, my heart goes out in sympathy to all those who suffered extreme
hardships as comfort women; and I expressed my apologies for the fact that they were forced to endure such extreme and
harsh conditions. Human rights are violated in many parts of the world during the 20th Century; therefore we must work to
make the 21st Century a wonderful century in which no human rights are violated. And the Government of Japan and I
wish to make significant contributions to that end. (Excerpt from Prime Minister Abe’s remarks at the Joint Press
Availability after the summit meeting at Camp David between Prime Minister Abe and President Bush, April 27, 2007).

The Asian Women’s Fund

Established by the Japanese government in 1995, the AWF represented the government’s concrete attempt to address its
moral responsibility by offering monetary compensation to victims of the comfort women system. 37 The purpose of the
AWF was to show atonement of the Japanese people through expressions of apology and remorse to the former wartime
comfort women, to restore their honor, and to demonstrate Japan’s strong respect for women. 38

The AWF announced three programs for former comfort women who applied for assistance: (1) an atonement fund paying
¥2 million (approximately $20,000) to each woman; (2) medical and welfare support programs, paying ¥2.5-3 million
($25,000-$30,000) for each woman; and (3) a letter of apology from the Japanese Prime Minister to each woman.
Funding for the program came from the Japanese government and private donations from the Japanese people. As of
March 2006, the AWF provided ¥700 million (approximately $7 million) for these programs in South Korea, Taiwan, and
the Philippines; ¥380 million (approximately $3.8 million) in Indonesia; and ¥242 million (approximately $2.4 million) in the
Netherlands.

On January 15, 1997, the AWF and the Philippine government signed a Memorandum of Understanding for medical and
welfare support programs for former comfort women. Over the next five years, these were implemented by the
Department of Social Welfare and Development.

Our Ruling

Stripped down to its essentials, the issue in this case is whether the Executive Department committed grave abuse of
discretion in not espousing petitioners’ claims for official apology and other forms of reparations against Japan.

The petition lacks merit.

From a Domestic Law Perspective, the Executive Department has the exclusive prerogative to determine whether to
espouse petitioners’ claims against Japan.

Baker v. Carr39 remains the starting point for analysis under the political question doctrine. There the US Supreme Court
explained that:

x x x Prominent on the surface of any case held to involve a political question is found a textually demonstrable
constitutional commitment of the issue to a coordinate political department or a lack of judicially discoverable and
manageable standards for resolving it, or the impossibility of deciding without an initial policy determination of a kind
clearly for non-judicial discretion; or the impossibility of a court’s undertaking independent resolution without expressing
lack of the respect due coordinate branches of government; or an unusual need for unquestioning adherence to a political
decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on
question.

In Tañada v. Cuenco,40 we held that political questions refer “to those questions which, under the Constitution, are to be
decided by the people in their sovereign capacity, or in regard to which full discretionary authority has been delegated to
the legislative or executive branch of the government. It is concerned with issues dependent upon the wisdom, not legality
of a particular measure.”

Certain types of cases often have been found to present political questions. 41 One such category involves questions of
foreign relations. It is well-established that “[t]he conduct of the foreign relations of our government is committed by the
Constitution to the executive and legislative—’the political’—departments of the government, and the propriety of what
may be done in the exercise of this political power is not subject to judicial inquiry or decision.” 42 The US Supreme Court
has further cautioned that decisions relating to foreign policy are delicate, complex, and involve large elements of
prophecy. They are and should be undertaken only by those directly responsible to the people whose welfare they
advance or imperil. They are decisions of a kind for which the Judiciary has neither aptitude, facilities nor responsibility. 43

To be sure, not all cases implicating foreign relations present political questions, and courts certainly possess the
authority to construe or invalidate treaties and executive agreements. 44 However, the question whether the Philippine
government should espouse claims of its nationals against a foreign government is a foreign relations matter, the authority
for which is demonstrably committed by our Constitution not to the courts but to the political branches. In this case, the
Executive Department has already decided that it is to the best interest of the country to waive all claims of its nationals
for reparations against Japan in the Treaty of Peace of 1951. The wisdom of such decision is not for the courts to
question. Neither could petitioners herein assail the said determination by the Executive Department via the instant
petition for certiorari.

In the seminal case of US v. Curtiss-Wright Export Corp., 45 the US Supreme Court held that “[t]he President is the sole
organ of the nation in its external relations, and its sole representative with foreign relations.”

It is quite apparent that if, in the maintenance of our international relations, embarrassment—perhaps serious
embarrassment—is to be avoided and success for our aims achieved, congressional legislation which is to be made
effective through negotiation and inquiry within the international field must often accord to the President a degree of
discretion and freedom from statutory restriction which would not be admissible where domestic affairs alone involved.
Moreover, he, not Congress, has the better opportunity of knowing the conditions which prevail in foreign countries, and
especially is this true in time of war. He has his confidential sources of information. He has his agents in the form of
diplomatic, consular and other officials. x x x

This ruling has been incorporated in our jurisprudence through Bayan v. Executive Secretary 46 and Pimentel v. Executive
Secretary;47 its overreaching principle was, perhaps, best articulated in (now Chief) Justice Puno’s dissent in Secretary of
Justice v. Lantion:48

x x x The conduct of foreign relations is full of complexities and consequences, sometimes with life and death significance
to the nation especially in times of war. It can only be entrusted to that department of government which can act on the
basis of the best available information and can decide with decisiveness. x x x It is also the President who possesses the
most comprehensive and the most confidential information about foreign countries for our diplomatic and consular officials
regularly brief him on meaningful events all over the world. He has also unlimited access to ultra-sensitive military
intelligence data. In fine, the presidential role in foreign affairs is dominant and the President is traditionally accorded a
wider degree of discretion in the conduct of foreign affairs. The regularity, nay, validity of his actions are adjudged under
less stringent standards, lest their judicial repudiation lead to breach of an international obligation, rupture of state
relations, forfeiture of confidence, national embarrassment and a plethora of other problems with equally undesirable
consequences.

The Executive Department has determined that taking up petitioners’ cause would be inimical to our country’s foreign
policy interests, and could disrupt our relations with Japan, thereby creating serious implications for stability in this region.
For us to overturn the Executive Department’s determination would mean an assessment of the foreign policy judgments
by a coordinate political branch to which authority to make that judgment has been constitutionally committed.

In any event, it cannot reasonably be maintained that the Philippine government was without authority to negotiate the
Treaty of Peace with Japan. And it is equally true that, since time immemorial, when negotiating peace accords and
settling international claims:

x x x [g]overnments have dealt with x x x private claims as their own, treating them as national assets, and as counters,
`chips’, in international bargaining. Settlement agreements have lumped, or linked, claims deriving from private debts with
others that were intergovernmental in origin, and concessions in regard to one category of claims might be set off against
concessions in the other, or against larger political considerations unrelated to debts. 49
Indeed, except as an agreement might otherwise provide, international settlements generally wipe out the underlying
private claims, thereby terminating any recourse under domestic law. In Ware v. Hylton,50 a case brought by a British
subject to recover a debt confiscated by the Commonwealth of Virginia during the war, Justice Chase wrote:

I apprehend that the treaty of peace abolishes the subject of the war, and that after peace is concluded, neither the matter
in dispute, nor the conduct of either party, during the war, can ever be revived, or brought into contest again. All violences,
injuries, or damages sustained by the government, or people of either, during the war, are buried in oblivion; and all those
things are implied by the very treaty of peace; and therefore not necessary to be expressed. Hence it follows, that the
restitution of, or compensation for, British property confiscated, or extinguished, during the war, by any of the United
States, could only be provided for by the treaty of peace; and if there had been no provision, respecting these subjects, in
the treaty, they could not be agitated after the treaty, by the British government, much less by her subjects in courts of
justice. (Emphasis supplied).

This practice of settling claims by means of a peace treaty is certainly nothing new. For instance, in Dames & Moore v.
Regan,51 the US Supreme Court held:

Not infrequently in affairs between nations, outstanding claims by nationals of one country against the government of
another country are “sources of friction” between the two sovereigns. United States v. Pink, 315 U.S. 203, 225, 62 S.Ct.
552, 563, 86 L.Ed. 796 (1942). To resolve these difficulties, nations have often entered into agreements settling the claims
of their respective nationals. As one treatise writer puts it, international agreements settling claims by nationals of one
state against the government of another “are established international practice reflecting traditional international theory.”
L. Henkin, Foreign Affairs and the Constitution 262 (1972). Consistent with that principle, the United States has repeatedly
exercised its sovereign authority to settle the claims of its nationals against foreign countries. x x x Under such
agreements, the President has agreed to renounce or extinguish claims of United States nationals against foreign
governments in return for lump-sum payments or the establishment of arbitration procedures. To be sure, many of these
settlements were encouraged by the United States claimants themselves, since a claimant’s only hope of obtaining any
payment at all might lie in having his Government negotiate a diplomatic settlement on his behalf. But it is also undisputed
that the “United States has sometimes disposed of the claims of its citizens without their consent, or even without
consultation with them, usually without exclusive regard for their interests, as distinguished from those of the nation as a
whole.” Henkin, supra, at 262-263. Accord, Restatement (Second) of Foreign Relations Law of the United States § 213
(1965) (President “may waive or settle a claim against a foreign state x x x [even] without the consent of the [injured]
national”). It is clear that the practice of settling claims continues today.

Respondents explain that the Allied Powers concluded the Peace Treaty with Japan not necessarily for the complete
atonement of the suffering caused by Japanese aggression during the war, not for the payment of adequate reparations,
but for security purposes. The treaty sought to prevent the spread of communism in Japan, which occupied a strategic
position in the Far East. Thus, the Peace Treaty compromised individual claims in the collective interest of the free world.

This was also the finding in a similar case involving American victims of Japanese slave labor during the war. 52 In a
consolidated case in the Northern District of California, 53 the court dismissed the lawsuits filed, relying on the 1951 peace
treaty with Japan,54 because of the following policy considerations:

The official record of treaty negotiations establishes that a fundamental goal of the agreement was to settle the
reparations issue once and for all. As the statement of the chief United States negotiator, John Foster Dulles, makes
clear, it was well understood that leaving open the possibility of future claims would be an unacceptable impediment to a
lasting peace:

Reparation is usually the most controversial aspect of peacemaking. The present peace is no exception.

On the one hand, there are claims both vast and just. Japan’s aggression caused tremendous cost, losses and suffering.

On the other hand, to meet these claims, there stands a Japan presently reduced to four home islands which are unable
to produce the food its people need to live, or the raw materials they need to work. x x x

The policy of the United States that Japanese liability for reparations should be sharply limited was informed by the
experience of six years of United States-led occupation of Japan. During the occupation the Supreme Commander of the
Allied Powers (SCAP) for the region, General Douglas MacArthur, confiscated Japanese assets in conjunction with the
task of managing the economic affairs of the vanquished nation and with a view to reparations payments. It soon became
clear that Japan’s financial condition would render any aggressive reparations plan an exercise in futility. Meanwhile, the
importance of a stable, democratic Japan as a bulwark to communism in the region increased. At the end of 1948,
MacArthur expressed the view that “[t]he use of reparations as a weapon to retard the reconstruction of a viable economy
in Japan should be combated with all possible means” and “recommended that the reparations issue be settled finally and
without delay.”

That this policy was embodied in the treaty is clear not only from the negotiations history but also from the Senate Foreign
Relations Committee report recommending approval of the treaty by the Senate. The committee noted, for example:

Obviously insistence upon the payment of reparations in any proportion commensurate with the claims of the injured
countries and their nationals would wreck Japan’s economy, dissipate any credit that it may possess at present, destroy
the initiative of its people, and create misery and chaos in which the seeds of discontent and communism would flourish.
In short, [it] would be contrary to the basic purposes and policy of x x x the United States x x x.

We thus hold that, from a municipal law perspective, that certiorari will not lie. As a general principle—and particularly
here, where such an extraordinary length of time has lapsed between the treaty’s conclusion and our consideration—the
Executive must be given ample discretion to assess the foreign policy considerations of espousing a claim against Japan,
from the standpoint of both the interests of the petitioners and those of the Republic, and decide on that basis if apologies
are sufficient, and whether further steps are appropriate or necessary.

The Philippines is not under any international obligation to espouse petitioners’ claims.

In the international sphere, traditionally, the only means available for individuals to bring a claim within the international
legal system has been when the individual is able to persuade a government to bring a claim on the individual’s
behalf.55 Even then, it is not the individual’s rights that are being asserted, but rather, the state’s own rights. Nowhere is
this position more clearly reflected than in the dictum of the Permanent Court of International Justice (PCIJ) in the
1924 Mavrommatis Palestine Concessions Case:

By taking up the case of one of its subjects and by resorting to diplomatic action or international judicial proceedings on
his behalf, a State is in reality asserting its own right to ensure, in the person of its subjects, respect for the rules of
international law. The question, therefore, whether the present dispute originates in an injury to a private interest, which in
point of fact is the case in many international disputes, is irrelevant from this standpoint. Once a State has taken up a
case on behalf of one of its subjects before an international tribunal, in the eyes of the latter the State is sole claimant. 56

Since the exercise of diplomatic protection is the right of the State, reliance on the right is within the absolute discretion of
states, and the decision whether to exercise the discretion may invariably be influenced by political considerations other
than the legal merits of the particular claim.57 As clearly stated by the ICJ in

Barcelona Traction:

The Court would here observe that, within the limits prescribed by international law, a State may exercise diplomatic
protection by whatever means and to whatever extent it thinks fit, for it is its own right that the State is asserting. Should
the natural or legal person on whose behalf it is acting consider that their rights are not adequately protected, they have
no remedy in international law. All they can do is resort to national law, if means are available, with a view to furthering
their cause or obtaining redress. The municipal legislator may lay upon the State an obligation to protect its citizens
abroad, and may also confer upon the national a right to demand the performance of that obligation, and clothe the right
with corresponding sanctions. However, all these questions remain within the province of municipal law and do not affect
the position internationally.58 (Emphasis supplied)

The State, therefore, is the sole judge to decide whether its protection will be granted, to what extent it is granted, and
when will it cease. It retains, in this respect, a discretionary power the exercise of which may be determined by
considerations of a political or other nature, unrelated to the particular case.

The International Law Commission’s (ILC’s) Draft Articles on Diplomatic Protection fully support this traditional view. They
(i) state that “the right of diplomatic protection belongs to or vests in the State,” 59 (ii) affirm its discretionary nature by
clarifying that diplomatic protection is a “sovereign prerogative” of the State; 60 and (iii) stress that the state “has the right to
exercise diplomatic protection on behalf of a national. It is under no duty or obligation to do so.” 61

It has been argued, as petitioners argue now, that the State has a duty to protect its nationals and act on his/her behalf
when rights are injured.62 However, at present, there is no sufficient evidence to establish a general international
obligation for States to exercise diplomatic protection of their own nationals abroad. 63 Though, perhaps desirable, neither
state practice nor opinio juris has evolved in such a direction. If it is a duty internationally, it is only a moral and not a legal
duty, and there is no means of enforcing its fulfillment. 64

We fully agree that rape, sexual slavery, torture, and sexual violence are morally reprehensible as well as legally
prohibited under contemporary international law. 65 However, petitioners take quite a theoretical leap in claiming that these
proscriptions automatically imply that that the Philippines is under a non-derogable obligation to prosecute international
crimes, particularly since petitioners do not demand the imputation of individual criminal liability, but seek to recover
monetary reparations from the state of Japan. Absent the consent of states, an applicable treaty regime, or a directive by
the Security Council, there is no non-derogable duty to institute proceedings against Japan. Indeed, precisely because of
states’ reluctance to directly prosecute claims against another state, recent developments support the modern trend to
empower individuals to directly participate in suits against perpetrators of international crimes. 66 Nonetheless,
notwithstanding an array of General Assembly resolutions calling for the prosecution of crimes against humanity and the
strong policy arguments warranting such a rule, the practice of states does not yet support the present existence of an
obligation to prosecute international crimes. 67 Of course a customary duty of prosecution is ideal, but we cannot find
enough evidence to reasonably assert its existence. To the extent that any state practice in this area is widespread, it is in
the practice of granting amnesties, immunity, selective prosecution, or de facto impunity to those who commit crimes
against humanity.”68

Even the invocation of jus cogens norms and erga omnes obligations will not alter this analysis. Even if we sidestep the
question of whether jus cogens norms existed in 1951, petitioners have not deigned to show that the crimes committed by
the Japanese army violated jus cogens prohibitions at the time the Treaty of Peace was signed, or that the duty to
prosecute perpetrators of international crimes is an erga omnes obligation or has attained the status of jus cogens.

The term erga omnes (Latin: in relation to everyone) in international law has been used as a legal term describing
obligations owed by States towards the community of states as a whole. The concept was recognized by the ICJ in
Barcelona Traction:

x x x an essential distinction should be drawn between the obligations of a State towards the international community as a
whole, and those arising vis-à-vis another State in the field of diplomatic protection. By their very nature, the former are
the concern of all States. In view of the importance of the rights involved, all States can be held to have a legal interest in
their protection; they are obligations erga omnes.

Such obligations derive, for example, in contemporary international law, from the outlawing of acts of aggression, and of
genocide, as also from the principles and rules concerning the basic rights of the human person, including protection from
slavery and racial discrimination. Some of the corresponding rights of protection have entered into the body of general
international law … others are conferred by international instruments of a universal or quasi-universal character.

The Latin phrase, ‘erga omnes,’ has since become one of the rallying cries of those sharing a belief in the emergence of a
value-based international public order. However, as is so often the case, the reality is neither so clear nor so bright.
Whatever the relevance of obligations erga omnes as a legal concept, its full potential remains to be realized in practice. 69

The term is closely connected with the international law concept of jus cogens. In international law, the term “jus cogens”
(literally, “compelling law”) refers to norms that command peremptory authority, superseding conflicting treaties and
custom. Jus cogens norms are considered peremptory in the sense that they are mandatory, do not admit derogation, and
can be modified only by general international norms of equivalent authority. 70

Early strains of the jus cogens doctrine have existed since the 1700s, 71 but peremptory norms began to attract greater
scholarly attention with the publication of Alfred von Verdross’s influential 1937 article, Forbidden Treaties in International
Law.72 The recognition of jus cogens gained even more force in the 1950s and 1960s with the ILC’s preparation of the
Vienna Convention on the Law of Treaties (VCLT). 73 Though there was a consensus that certain international norms had
attained the status of jus cogens, 74 the ILC was unable to reach a consensus on the proper criteria for identifying
peremptory norms.

After an extended debate over these and other theories of jus cogens, the ILC concluded ruefully in 1963 that “there is not
as yet any generally accepted criterion by which to identify a general rule of international law as having the character of
jus cogens.”75 In a commentary accompanying the draft convention, the ILC indicated that “the prudent course seems to
be to x x x leave the full content of this rule to be worked out in State practice and in the jurisprudence of international
tribunals.”76 Thus, while the existence of jus cogens in international law is undisputed, no consensus exists on its
substance,77 beyond a tiny core of principles and rules.78
Of course, we greatly sympathize with the cause of petitioners, and we cannot begin to comprehend the unimaginable
horror they underwent at the hands of the Japanese soldiers. We are also deeply concerned that, in apparent
contravention of fundamental principles of law, the petitioners appear to be without a remedy to challenge those that have
offended them before appropriate fora. Needless to say, our government should take the lead in protecting its citizens
against violation of their fundamental human rights. Regrettably, it is not within our power to order the Executive
Department to take up the petitioners’ cause. Ours is only the power to urge  and exhort  the Executive Department to
take up petitioners’ cause.

WHEREFORE, the Petition is hereby DISMISSED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

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 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 process. 16

The Court, therefore, holds that respondent judge acted without jurisdiction and with grave abuse of discretion in not
ordering the quashal of the search warrant issued by him in disregard of the diplomatic immunity of petitioner Verstuyft.

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 warrant, which is hereby declared null and
void, is hereby made permanent. The respondent court is hereby commanded to desist from further proceedings in the
matter. No costs, none having been prayed for.

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 ordered.

Concepcion, C.J., Makalintal, Zaldivar, Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ., concur.

Castro, J., reserves his vote.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

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 14

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.) JOSE B. ALEJANDRINO

Chairman, PCC-ADB 15

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 the process of "suggestion," where the foreign state or the
international organization sued in an American court requests the Secretary of State to make a
determination as to whether it is entitled to immunity. If the Secretary of State finds that 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 transactions
involved. 20
Relative to the property of the extraordinary remedy of certiorari, the Court has, under special circumstances, so allowed
and entertained such a petition when (a) the questioned order or decision is issued in excess of or without
jurisdiction, 21 or (b) where the order or decision is a patent nullity, 22 which, verily, are the circumstances that can be said
to obtain in the present case. When an adjudicator is devoid of jurisdiction on a matter before him, his action that assumes
otherwise would be a clear nullity.

WHEREFORE, the petition for certiorari is GRANTED, and the decision of the Labor Arbiter, dated 31 August 1993 is
VACATED, for being NULL AND VOID. The temporary restraining order issued by this Court on 07 April 1994 is hereby
made permanent. No costs.

SO ORDERED.

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

Davide, Jr., C.J., Puno, Kapunan and Pardo, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-65366 November 9, 1983

JOSE B.L. REYES, in behalf of the ANTI-BASES COALITION (ABC), petitioner,

vs.
RAMON BAGATSING, as Mayor of the City of Manila, respondent.

Lorenzo M. Tañada Jose W. Diokno and Haydee B. Yorac for petitioner.

The Solicitor General for respondent.

FERNANDO, C.J.:

This Court, in this case of first impression, at least as to some aspects, is called upon to delineate the boundaries of the
protected area of the cognate rights to free speech and peaceable assembly, 1 against an alleged intrusion by respondent
Mayor Ramon Bagatsing. Petitioner, retired Justice JB L. Reyes, on behalf of the Anti-Bases Coalition sought a permit
from the City of Manila to hold a peaceful march and rally on October 26, 1983 from 2:00 to 5:00 in the afternoon, starting
from the Luneta, a public park, to the gates of the United States Embassy, hardly two blocks away. Once there, and in an
open space of public property, a short program would be held. 2 During the course of the oral argument, 3 it was stated
that after the delivery of two brief speeches, a petition based on the resolution adopted on the last day by the International
Conference for General Disbarmament, World Peace and the Removal of All Foreign Military Bases held in Manila, would
be presented to a representative of the Embassy or any of its personnel who may be there so that it may be delivered to
the United States Ambassador. The march would be attended by the local and foreign participants of such conference.
There was likewise an assurance in the petition that in the exercise of the constitutional rights to free speech and
assembly, all the necessary steps would be taken by it "to ensure a peaceful march and rally." 4

The filing of this suit for mandamus with alternative prayer for writ of preliminary mandatory injunction on October 20,
1983 was due to the fact that as of that date, petitioner had not been informed of any action taken on his request on
behalf of the organization to hold a rally. On October 25, 1983, the answer of respondent Mayor was filed on his behalf by
Assistant Solicitor General Eduardo G. Montenegro. 5 It turned out that on October 19, such permit was denied. Petitioner
was unaware of such a fact as the denial was sent by ordinary mail. The reason for refusing a permit was due to police
intelligence reports which strongly militate against the advisability of issuing such permit at this time and at the place
applied for." 6 To be more specific, reference was made to persistent intelligence reports affirm[ing] the plans of
subversive/criminal elements to infiltrate and/or disrupt any assembly or congregations where a large number of people is
expected to attend." 7 Respondent Mayor suggested, however, in accordance with the recommendation of the police
authorities, that "a permit may be issued for the rally if it is to be held at the Rizal Coliseum or any other enclosed area
where the safety of the participants themselves and the general public may be ensured." 8

The oral argument was heard on October 25, 1983, the very same day the answer was filed. The Court then deliberated
on the matter. That same afternoon, a minute resolution was issued by the Court granting the mandatory injunction
prayed for on the ground that there was no showing of the existence of a clear and present danger of a substantive evil
that could justify the denial of a permit. On this point, the Court was unanimous, but there was a dissent by Justice Aquino
on the ground that the holding of a rally in front of the US Embassy would be violative of Ordinance No. 7295 of the City of
Manila. The last sentence of such minute resolution reads: "This resolution is without prejudice to a more extended
opinion." 9 Hence this detailed exposition of the Court's stand on the matter.

1. It is thus clear that the Court is called upon to protect the exercise of the cognate rights to free speech and peaceful
assembly, arising from the denial of a permit. The Constitution is quite explicit: "No law shall be passed abridging the
freedom of speech, or of the press, or the right of the people peaceably to assemble and petition the Government for
redress of grievances." 10 Free speech, like free press, may be Identified with the liberty to discuss publicly and truthfully
any matter of public concern without censorship or punishment. 11 There is to be then no previous restraint on the
communication of views or subsequent liability whether in libel suits, 12 prosecution for sedition, 13 or action for
damages, 14 or contempt proceedings 15 unless there be a clear and present danger of a substantive evil that [the State]
has a right to prevent." 16 Freedom of assembly connotes the right people to meet peaceably for consultation and
discussion of matters Of public concern.17 It is entitled to be accorded the utmost deference and respect. It is hot to be
limited, much less denied, except on a showing, as 's the case with freedom of expression, of a clear and present danger
of a substantive evil that the state has a right to prevent. 18 Even prior to the 1935 Constitution, Justice Maicolm had
occasion to stress that it is a necessary consequence of our republican institutions and complements the right of free
speech. 19 To paraphrase opinion of Justice Rutledge speaking for the majority of the American Supreme Court Thomas
v. Collins, 20 it was not by accident or coincidence that the right to freedom of speech and of the press were toupled in a
single guarantee with the and to petition the rights of the people peaceably to assemble and to petition the government for
redress of grievances. All these rights, while not Identical, are inseparable. the every case, therefo re there is a limitation
placed on the exercise of this right, the judiciary is called upon to examine the effects of the challenged governmental
actuation. The sole justification for a limitation on the exercise of this right, so fundamental to the maintenance of
democratic institutions, is the danger, of a character both grave and imminent, of a serious evil to public safety, public
morals, public health, or any other legitimate public interest. 21

2. Nowhere is the rationale that underlies the freedom of expression and peaceable assembly better expressed than in
this excerpt from an opinion of Justice Frankfurter: "It must never be forgotten, however, that the Bill of Rights was the
child of the Enlightenment. Back of the guaranty of free speech lay faith in the power of an appeal to reason by all the
peaceful means for gaining access to the mind. It was in order to avert force and explosions due to restrictions upon
rational modes of communication that the guaranty of free speech was given a generous scope. But utterance in a context
of violence can lose its significance as an appeal to reason and become part of an instrument of force. Such utterance
was not meant to be sheltered by the Constitution." 22 What was rightfully stressed is the abandonment of reason, the
utterance, whether verbal or printed, being in a context of violence. It must always be remembered that this right likewise
provides for a safety valve, allowing parties the opportunity to give vent to their-views, even if contrary to the prevailing
climate of opinion. For if the peaceful means of communication cannot be availed of, resort to non-peaceful means may
be the only alternative. Nor is this the sole reason for the expression of dissent. It means more than just the right to be
heard of the person who feels aggrieved or who is dissatisfied with things as they are. Its value may lie in the fact that
there may be something worth hearing from the dissenter. That is to ensure a true ferment of Ideas. There are, of course,
well-defined limits. What is guaranteed is peaceable assembly. One may not advocate disorder in the name of protest,
much less preach rebellion under the cloak of dissent. The Constitution frowns on disorder or tumult attending a rally or
assembly. resort to force is ruled out and outbreaks of violence to be avoided. The utmost calm though is not required. As
pointed out in an early Philippine case, penned in 1907 to be precise, United States v. Apurado: 23 "It is rather to be
expected that more or less disorder will mark the public assembly of the people to protest against grievances whether real
or imaginary, because on such occasions feeling is always wrought to a high pitch of excitement, and the greater the
grievance and the more intense the feeling, the less perfect, as a rule, will be the disciplinary control of the leaders over
their irresponsible followers." 24 It bears repeating that for the constitutional right to be invoked, riotous conduct, injury to
property, and acts of vandalism must be avoided, To give free rein to one's destructive urges is to call for condemnation. It
is to make a mockery of the high estate occupied by intellectual liberty in our scheme of values.

3. There can be no legal objection, absent the existence of a clear and present danger of a substantive evil, on the choice
of Luneta as the place where the peace rally would start. The Philippines is committed to the view expressed in the
plurality opinion, of 1939 vintage, of Justice Roberts in Hague v. CIO: 25 Whenever the title of streets and parks may rest,
they have immemorially been held in trust for the use of the public and, time out of mind, have been used for purposes of
assembly, communicating thoughts between citizens, and discussing public questions. Such use of the streets and public
places has, from ancient times, been a part of the privileges, immunities, rights, and liberties of citizens. The privilege of a
citizen of the United States to use the streets and parks for communication of views on national questions may be
regulated in the interest of all; it is not absolute, but relative, and must be exercised in subordination to the general
comfort and convenience, and in consonance with peace and good order; but it must not, in the guise of regulation, be
abridged or denied. 26 The above excerpt was quoted with approval in Primicias v. Fugoso. 27 Primicias made explicit what
was implicit in Municipality of Cavite v. Rojas," 28 a 1915 decision, where this Court categorically affirmed that plazas or
parks and streets are outside the commerce of man and thus nullified a contract that leased Plaza Soledad of plaintiff-
municipality. Reference was made to such plaza "being a promenade for public use," 29 which certainly is not the only
purpose that it could serve. To repeat, there can be no valid reason why a permit should not be granted for the or oposed
march and rally starting from a public dark that is the Luneta.

4. Neither can there be any valid objection to the use of the streets, to the gates of the US Embassy, hardly two block-
away at the Roxas Boulevard. Primicias v. Fugoso has resolved any lurking doubt on the matter. In holding that the then
Mayor Fugoso of the City of Manila should grant a permit for a public meeting at Plaza Miranda in Quiapo, this Court
categorically declared: "Our conclusion finds support in the decision in the case of Willis Cox vs. State of New Hampshire,
312 U.S., 569. In that case, the statute of New Hampshire P. L. chap. 145, section 2, providing that 'no parade or
procession upon any ground abutting thereon, shall 'De permitted unless a special license therefor shall first be explained
from the selectmen of the town or from licensing committee,' was construed by the Supreme Court of New Hampshire as
not conferring upon the licensing board unfettered discretion to refuse to grant the license, and held valid. And the
Supreme Court of the United States, in its decision (1941) penned by Chief Justice Hughes affirming the judgment of the
State Supreme Court, held that 'a statute requiring persons using the public streets for a parade or procession to procure
a special license therefor from the local authorities is not an unconstitutional abridgment of the rights of assembly or of
freedom of speech and press, where, as the statute is construed by the state courts, the licensing authorities are strictly
limited, in the issuance of licenses, to a consideration of the time, place, and manner of the parade or procession, with a
view to conserving the public convenience and of affording an opportunity to provide proper policing, and are not invested
with arbitrary discretion to issue or refuse license, ... " 30 Nor should the point made by Chief Justice Hughes in a
subsequent portion of the opinion be ignored, "Civil liberties, as guaranteed by the Constitution, imply the existence of an
organized society maintaining public order without which liberty itself would be lost in the excesses of unrestricted abuses.
The authority of a municipality to impose regulations in order to assure the safety and convenience of the people in the
use of public highways has never been regarded as inconsistent with civil liberties but rather as one of the means of
safeguarding the good order upon which they ultimately depend. The control of travel on the streets of cities is the most
familiar illustration of this recognition of social need. Where a restriction of the use of highways in that relation is designed
to promote the public convenience in the interest of all, it cannot be disregarded by the attempted exercise of some civil
right which in other circumstances would be entitled to protection." 31

5. There is a novel aspect to this case, If the rally were confined to Luneta, no question, as noted, would have arisen. So,
too, if the march would end at another park. As previously mentioned though, there would be a short program upon
reaching the public space between the two gates of the United States Embassy at Roxas Boulevard. That would be
followed by the handing over of a petition based on the resolution adopted at the closing session of the Anti-Bases
Coalition. a radius of five hundred (500) feet from any foreign mission or chancery and for other purposes. Unless the
ordinance is nullified, or declared ultra vires, its invocation as a defense is understandable but not decisive, in view of the
primacy The Philippines is a signatory of the Vienna Convention on Diplomatic Relations adopted in 1961. It was
concurred in by the then Philippine Senate on May 3, 1965 and the instrument of ratification was signed by the President
on October 11, 1965, and was thereafter deposited with the Secretary General of the United Nations on November 15. As
of that date then, it was binding on the Philippines. The second paragraph of the Article 22 reads: "2. The receiving State
is under a special duty to take appropriate steps to protect the premises of the mission against any intrusion or damage
and to prevent any disturbance of the peace of the mission or impairment of its dignity. " 32 The Constitution "adopts the
generally accepted principles of international law as part of the law of the land. ..." 33 To the extent that the Vienna
Convention is a restatement of the generally accepted principles of international law, it should be a part of the law of the
land. 34 That being the case, if there were a clear and present danger of any intrusion or damage, or disturbance of the
peace of the mission, or impairment of its dignity, there would be a justification for the denial of the permit insofar as the
terminal point would be the Embassy. Moreover, respondent Mayor relied on Ordinance No. 7295 of the City of Manila
prohibiting the holding or staging of rallies or demonstrations within accorded the constitutional rights of free speech and
peaceable assembly. Even if shown then to be applicable, that question the confronts this Court.

6. There is merit to the observation that except as to the novel aspects of a litigation, the judgment must be confined
within the limits of previous decisions. The law declared on past occasions is, on the whole, a safe guide, So it has been
here. Hence, as noted, on the afternoon of the hearing, October 25, 1983, this Court issued the minute resolution granting
the mandatory injunction allowing the proposed march and rally scheduled for the next day. That conclusion was
inevitable ill the absence of a clear and present danger of a substantive, evil to a legitimate public interest. There was no
justification then to deny the exercise of the constitutional rights of tree speech and peaceable assembly. These rights are
assured by our Constitution and the Universal Declaration of Human Rights. 35 The participants to such assembly,
composed primarily of those in attendance at the International Conference for General Disbarmament, World Peace and
the Removal of All Foreign Military Bases would start from the Luneta. proceeding through Roxas Boulevard to the gates
of the United States Embassy located at the same street. To repeat, it is settled law that as to public places, especially so
as to parks and streets, there is freedom of access. Nor is their use dependent on who is the applicant for the permit,
whether an individual or a group. If it were, then the freedom of access becomes discriminatory access, giving rise to an
equal protection question. The principle under American doctrines was given utterance by Chief Justice Hughes in these
words: "The question, if the rights of free speech and peaceable assembly are to be preserved, is not as to the auspices
under which the meeting is held but as to its purpose; not as to The relations of the speakers, but whether their utterances
transcend the bounds of the freedom of speech which the Constitution protects." 36 There could be danger to public peace
and safety if such a gathering were marked by turbulence. That would deprive it of its peaceful character. Even then, only
the guilty parties should be held accountable. It is true that the licensing official, here respondent Mayor, is not devoid of
discretion in determining whether or not a permit would be granted. It is not, however, unfettered discretion. While
prudence requires that there be a realistic appraisal not of what may possibly occur but of what may probably occur, given
all the relevant circumstances, still the assumption — especially so where the assembly is scheduled for a specific public
— place is that the permit must be for the assembly being held there. The exercise of such a right, in the language of
Justice Roberts, speaking for the American Supreme Court, is not to be "abridged on the plea that it may be exercised in
some other place." 37

7. In fairness to respondent Mayor, he acted on the belief that Navarro v. Villegas 38 and Pagkakaisa ng Manggagawang

Pilipino (PMP.) v. Bagatsing,  39  called for application. While the General rule is that a permit should recognize the right of
the applicants to hold their assembly at a public place of their choice, another place may be designated by the licensing
authority if it be shown that there is a clear and present danger of a substantive evil if no such change were made. In the
Navarro and the Pagkakaisa decisions, this Court was persuaded that the clear and present danger test was satisfied.
The present situation is quite different. Hence the decision reached by the Court. The mere assertion that subversives
may infiltrate the ranks of the demonstrators does not suffice. Not that it should be overlooked. There was in this case,
however, the assurance of General Narciso Cabrera, Superintendent, Western Police District, Metropolitan Police Force,
that the police force is in a position to cope with such emergency should it arise That is to comply with its duty to extend
protection to the participants of such peaceable assembly. Also from him came the commendable admission that there
were the least five previous demonstrations at the Bayview hotel Area and Plaza Ferguson in front of the United States
Embassy where no untoward event occurred. It was made clear by petitioner, through counsel, that no act offensive to the
dignity of the United States Mission in the Philippines would take place and that, as mentioned at the outset of this
opinion, "all the necessary steps would be taken by it 'to ensure a peaceful march and rally.' " 40 Assistant Solicitor
General Montenegro expressed the view that the presence of policemen may in itself be a provocation. It is a sufficient
answer that they should stay at a discreet distance, but ever ready and alert to cope with any contingency. There is no
need to repeat what was pointed out by Chief Justice Hughes in Cox that precisely, it is the duty of the city authorities to
provide the proper police protection to those exercising their right to peaceable assembly and freedom of expression.

8. By way of a summary The applicants for a permit to hold an assembly should inform the licensing authority of the date,
the public place where and the time when it will take place. If it were a private place, only the consent of the owner or the
one entitled to its legal possession is required. Such application should be filed well ahead in time to enable the public
official concerned to appraise whether there may be valid objections to the grant of the permit or to its grant but at another
public place. It is an indispensable condition to such refusal or modification that the clear and present danger test be the
standard for the decision reached. If he is of the view that there is such an imminent and grave danger of a substantive
evil, the applicants must be heard on the matter. Thereafter, his decision, whether favorable or adverse, must be
transmitted to them at the earliest opportunity. Thus if so minded, then, can have recourse to the proper judicial authority.
Free speech and peaceable assembly, along with the other intellectual freedoms, are highly ranked in our scheme of
constitutional values. It cannot be too strongly stressed that on the judiciary, — even more so than on the other
departments — rests the grave and delicate responsibility of assuring respect for and deference to such preferred rights.
No verbal formula, no sanctifying phrase can, of course, dispense with what has been so felicitiously termed by Justice
Holmes "as the sovereign prerogative of judgment." Nonetheless, the presumption must be to incline the weight of the
scales of justice on the side of such rights, enjoying as they do precedence and primacy. Clearly then, to the extent that
there may be inconsistencies between this resolution and that of Navarro v. Villegas, that case is pro tanto  modified. So it
was made clear in the original resolution of October 25, 1983.

9. Respondent Mayor posed the issue of the applicability of Ordinance No. 7295 of the City of Manila prohibiting the
holding or staging of rallies or demonstrations within a radius of five hundred (500) feet from any foreign mission or
chancery and for other purposes. It is to be admitted that it finds support In the previously quoted Article 22 of the Vienna
Convention on Diplomatic Relations. There was no showing, however, that the distance between the chancery and the
embassy gate is less than 500 feet. Even if it could be shown that such a condition is satisfied. it does not follow that
respondent Mayor could legally act the way he did. The validity of his denial of the permit sought could still be challenged.
It could be argued that a case of unconstitutional application of such ordinance to the exercise of the right of peaceable
assembly presents itself. As in this case there was no proof that the distance is less than 500 feet, the need to pass on
that issue was obviated, Should it come, then the qualification and observation of Justices Makasiar and Plana certainly
cannot be summarily brushed aside. The high estate accorded the rights to free speech and peaceable assembly
demands nothing less.

10. Ordinarily, the remedy in cases of this character is to set aside the denial or the modification of the permit sought and
order the respondent official, to grant it. Nonetheless, as there was urgency in this case, the proposed march and rally
being scheduled for the next day after the hearing, this Court. in the exercise of its conceded authority, granted the
mandatory injunction in the resolution of October 25, 1983. It may be noted that the peaceful character of the peace
march and rally on October 26 was not marred by any untoward incident. So it has been in other assemblies held
elsewhere. It is quite reassuring such that both on the part of the national government and the citizens, reason and
moderation have prevailed. That is as it should be.

WHEREFORE, the mandatory injunction prayed for is granted. No costs.

Concepcion, Jr., Guerrero, Melencio-Herrera, Escolin, Relova and Gutierrez, , Jr.,JJ., concur.

De Castro, J, is on leave.

Separate Opinions 

TEEHANKEE, J., concurring:

The Chief Justice's opinion of the Court reaffirms the doctrine of Primicias vs. Fugoso  1 that "the right to freedom of
speech and to peacefully assemble and petition the government for redress of grievances are fundamental personal rights
of the people recognized and guaranteed by the constitutions of democratic countries"  and that the city or town mayors
are not conferred "the power to refuse to grant the permit, but only the discretion, in issuing the permit, to determine or
specify the streets or public places where the parade or procession may pass or the meeting may be held." The most
recent graphic demonstration of what this great right of peaceful assembly and petition for redress of grievances could
accomplish was the civil rights march on Washington twenty years ago under the late assassinated black leader Martin
Luther King, Jr. (whose birthday has now been declared an American national holiday) which subpoenaed the conscience
of the nation," and awakened the conscience of millions of previously indifferent Americans and eventually (after many
disorders and riots yet to come) was to put an end to segregation and discrimination against the American Negro.

The procedure for the securing of such permits for peaceable assembly is succintly set forth in the summary given by the
Court Justice in paragraph 8 of the Court's opinion, with the injunction that "the presumption must be to incline the weight
of the scales of justice on the side of such rights, enjoying as they do, precedence and primacy," The exception of the
clear and present danger rule, which alone would warrant a limitation of these fundamental rights, is therein restated in
paragraph 1, thus: "The sole justification for a limitation on the exercise of this right, so fundamental to the maintenance of
democratic institutions, is the danger, of a character both grave and imminent, of a serious evil to public safety, public
morals, public health, or any other legitimate public interest. "

It bears emphasis that the burden to show the existence of grave and imminent danger that would justify adverse action
on the application lies on the mayor as licensing authority. There must be objective and convincing, not subjective or
conjectural proof of the existence of such clear and present danger. As stated in our Resolution of October 25, 1983,
which granted the mandatory injunction as prayed for, "It is essential for the validity of a denial of a permit which amounts
to a previous restraint or censorship that the licensing authority does not rely solely on his own appraisal of what public
welfare, peace or safety may require. To justify such a limitation there must be proof of such weight and sufficiency to
satisfy the clear and present danger test. The possibility that subversives may infiltrate the ranks of the demonstrators is
not enough." As stated by Justice Brandeis in his concurring opinion in Whitney vs. California. 2 têñ.£îhqwâ£

Fear of serious injury cannot alone justify suppression of free speech and assembly. Men feared witches
and burned women. It is the function of speech to free men from the bondage of irrational fears. To justify
suppression of free speech there must be reasonable ground to fear that serious evil will result if free
speech is practiced. There must be reasonable ground to believe that the danger apprehended
is imminent. There must be reasonable ground to believe that the evil to be prevented is a serious one * *
*.

Those who won our independence by revolution were not cowards. They did not fear political change.
They did not exalt order at the cost of liberty. * * *

Moreover, even imminent danger cannot justify resort to prohibition of these functions essential (for)
effective democracy, unless the evil apprehended is relatively serious. Prohibition of free speech and
assembly is a measure so stringent that it would be inappropriate as the means for averting a relatively
trivial harm to a society. * * * The fact that speech is likely to result in some violence or in destruction of
property is not enough to justify its suppression. There must be the probability of serious injury to the
state. Among freemen the deterrents ordinarily to be applied to prevent crimes are education and
punishment for violations of the law, not abridgment of the rights of free speech and assembly. (Emphasis
supplied)

The Court's opinion underscores that the exercise of the right is not to be "abridged  on the plea that it may be exercised
in some other place" (paragraph 6), and that "it is the duty of the city authorities to provide the proper police protection to
those exercising their right to peaceable assembly and freedom of expression," (at page 14) The U.S. Supreme Court's
pronouncement in Hague vs. Committee for Industrial Organization  3 cited in Fugoso is worth repeating: têñ.£îhqwâ£

* * * Wherever the title of streets and parks may rest, they have immemorially been held in trust for the
use of the public and, time out of mind, have been used for purposes of assembly, communicating
thoughts between citizens, and discussing public questions. Such use of the streets and public places
has, from ancient times, been a part of the privileges, immunities, rights, and liberties of citizens. The
privilege of a citizen * * * to use the streets and parks for communication of views on national questions
may be regulated in the interest of all; it is not absolute, but relative, and must be exercised in
subordination to the general comfort and convenience, and in consonance with peace and good order;
but it must not, in the guise of regulation, be abridged or denied.

We think the court below was right in holding the ordinance quoted in Note I void upon its face. It does not
make comfort or convenience in the use of streets or parks the standard of official action. It enables the
Director of Safety to refuse a permit on his mere opinion that such refusal will prevent 'riots, disturbances
or disorderly assemblage. It can thus, as the record discloses, be made the instrument of arbitrary
suppression of free expression of views on national affairs  for the prohibition of all speaking will
undoubtedly 'prevent' such eventualities. But uncontrolled official suppression of the privilege cannot be
made a substitute for the duty to maintain order in connection with the exercise of the right. (Emphasis
supplied)

Needless to say, the leaders of the peaceable assembly should take all the necessary measures to ensure a peaceful
march and assembly and to avoid the possibility of infiltrators and troublemakers disrupting the same, concommitantly
with the duty of the police to extend protection to the participants "staying at a discreet distance, but ever ready and alert
to perform their duty." But should any disorderly conduct or incidents occur, whether provoked or otherwise, it is well to
recall former Chief Justice Ricardo Paras' injunction in his concurring opinion in Fugoso, citing the 1907 case of U.S. vs.
Apurado, 4 that such instances of "disorderly conduct by individual members of a crowd (be not seized) as an excuse to
characterize the assembly as a seditious and tumultuous rising against the authorities" and render illusory the right of
peaceable assembly, thus: têñ.£îhqwâ£

It is rather to be expected that more or less disorder will mark the public assembly of the people to protest
against grievances whether real or imaginary, because on such occasions feeling is always wrought to a
high pitch of excitement, and the greater the grievance and the more intense the feeling, the less perfect,
as a rule, will the disciplinary control of the leaders over their irresponsible followers. But if the
prosecution be permitted to seize upon every instance of such disorderly conduct by individual members
 of a crowd as an excuse to characterize the assembly as a seditious and tumultous rising against the
authorities, 'then the right to assemble and to petition for redress of grievances would become a delusion
and snare and the attempt to exercise it on the most righteous occasion and in the most peaceable
manner would expose all those who took part therein to the severest and most unmerited punishment, if
the purposes which they sought to attain did not happen to be pleasing to the prosecuting authorities. If
instances of disorderly conduct occur on such occasions, the guilty individuals should be sought out and
punished therefor. (Emphasis supplied).

As it turned out, the demonstration was held on October 26, 1983 peaceably and without any untoward event or evil
result, as pledged by the organizers (like at least five previous peaceful demonstrations in the area). However, even if
there had been any incidents of disorder, this would in no way show the Court's mandatory injunction to have been
wrongfully issued. The salutary desire on the part of respondent to prevent disorder cannot be pursued by the unjustified
denial and suppression of the people's basic rights, which would thereby turn out to be mere paper rights.

MAKASIAR, J.,  concurring:

With the justification that in case of conflict, the Philippine Constitution — particularly the Bill of Rights — should prevail
over the Vienna Convention.

ABAD SANTOS, J.,  concurring:

To add anything to the learned opinion of the Chief Justice is like bringing coal to Newcastle, I just want to state for the
record that I voted for the issuance ex-parte of a preliminary mandatory injunction.

PLANA, J., concurring:

On the whole, I concur in the learned views of the distinguished Chief Justice. I would like however to voice a reservation
regarding Ordinance No. 7295 of the City of Manila which has been invoked by the respondent.

The main opinion yields the implication that a rally or demonstration made within 500 feet from the chancery of a foreign
embassy would be banned for coming within the terms of the prohibition of the cited Ordinance which was adopted, so it
is said, precisely to implement a treaty obligation of the Philippines under the 1961 Vienna Convention on Diplomatic
Relations.

In my view, without saying that the Ordinance is obnoxious per se to the constitution, it cannot be validly invoked
whenever its application would collide with a constitutionally guaranteed right such as freedom of assembly and/or
expression, as in the case at bar, regardless of whether the chancery of any foreign embassy is beyond or within 500 feet
from the situs of the rally or demonstration.

AQUINO, J.,  dissenting:

Voted to dismiss the petition on the ground that the holding of the rally in front of the US Embassy violates Ordinance No.
7295 of the City of Manila. 

Separate Opinions

TEEHANKEE, J., concurring:

The Chief Justice's opinion of the Court reaffirms the doctrine of Primicias vs. Fugoso  1 that "the right to freedom of
speech and to peacefully assemble and petition the government for redress of grievances are fundamental personal rights
of the people recognized and guaranteed by the constitutions of democratic countries"  and that the city or town mayors
are not conferred "the power to refuse to grant the permit, but only the discretion, in issuing the permit, to determine or
specify the streets or public places where the parade or procession may pass or the meeting may be held." The most
recent graphic demonstration of what this great right of peaceful assembly and petition for redress of grievances could
accomplish was the civil rights march on Washington twenty years ago under the late assassinated black leader Martin
Luther King, Jr. (whose birthday has now been declared an American national holiday) which subpoenaed the conscience
of the nation," and awakened the conscience of millions of previously indifferent Americans and eventually (after many
disorders and riots yet to come) was to put an end to segregation and discrimination against the American Negro.

The procedure for the securing of such permits for peaceable assembly is succintly set forth in the summary given by the
Court Justice in paragraph 8 of the Court's opinion, with the injunction that "the presumption must be to incline the weight
of the scales of justice on the side of such rights, enjoying as they do, precedence and primacy," The exception of the
clear and present danger rule, which alone would warrant a limitation of these fundamental rights, is therein restated in
paragraph 1, thus: "The sole justification for a limitation on the exercise of this right, so fundamental to the maintenance of
democratic institutions, is the danger, of a character both grave and imminent, of a serious evil to public safety, public
morals, public health, or any other legitimate public interest. "

It bears emphasis that the burden to show the existence of grave and imminent danger that would justify adverse action
on the application lies on the mayor as licensing authority. There must be objective and convincing, not subjective or
conjectural proof of the existence of such clear and present danger. As stated in our Resolution of October 25, 1983,
which granted the mandatory injunction as prayed for, "It is essential for the validity of a denial of a permit which amounts
to a previous restraint or censorship that the licensing authority does not rely solely on his own appraisal of what public
welfare, peace or safety may require. To justify such a limitation there must be proof of such weight and sufficiency to
satisfy the clear and present danger test. The possibility that subversives may infiltrate the ranks of the demonstrators is
not enough." As stated by Justice Brandeis in his concurring opinion in Whitney vs. California. 2 têñ.£îhqwâ£

Fear of serious injury cannot alone justify suppression of free speech and assembly. Men feared witches
and burned women. It is the function of speech to free men from the bondage of irrational fears. To justify
suppression of free speech there must be reasonable ground to fear that serious evil will result if free
speech is practiced. There must be reasonable ground to believe that the danger apprehended
is imminent. There must be reasonable ground to believe that the evil to be prevented is a serious one * *
*.

Those who won our independence by revolution were not cowards. They did not fear political change.
They did not exalt order at the cost of liberty. * * *

Moreover, even imminent danger cannot justify resort to prohibition of these functions essential (for)
effective democracy, unless the evil apprehended is relatively serious. Prohibition of free speech and
assembly is a measure so stringent that it would be inappropriate as the means for averting a relatively
trivial harm to a society. * * * The fact that speech is likely to result in some violence or in destruction of
property is not enough to justify its suppression. There must be the probability of serious injury to the
state. Among freemen the deterrents ordinarily to be applied to prevent crimes are education and
punishment for violations of the law, not abridgment of the rights of free speech and assembly. (Emphasis
supplied)

The Court's opinion underscores that the exercise of the right is not to be "abridged  on the plea that it may be exercised
in some other place" (paragraph 6), and that "it is the duty of the city authorities to provide the proper police protection to
those exercising their right to peaceable assembly and freedom of expression," (at page 14) The U.S. Supreme Court's
pronouncement in Hague vs. Committee for Industrial Organization  3 cited in Fugoso is worth repeating: têñ.£îhqwâ£

* * * Wherever the title of streets and parks may rest, they have immemorially been held in trust for the
use of the public and, time out of mind, have been used for purposes of assembly, communicating
thoughts between citizens, and discussing public questions. Such use of the streets and public places
has, from ancient times, been a part of the privileges, immunities, rights, and liberties of citizens. The
privilege of a citizen * * * to use the streets and parks for communication of views on national questions
may be regulated in the interest of all; it is not absolute, but relative, and must be exercised in
subordination to the general comfort and convenience, and in consonance with peace and good order;
but it must not, in the guise of regulation, be abridged or denied.

We think the court below was right in holding the ordinance quoted in Note I void upon its face. It does not
make comfort or convenience in the use of streets or parks the standard of official action. It enables the
Director of Safety to refuse a permit on his mere opinion that such refusal will prevent 'riots, disturbances
 or disorderly assemblage. It can thus, as the record discloses, be made the instrument of arbitrary
suppression of free expression of views on national affairs  for the prohibition of all speaking will
undoubtedly 'prevent' such eventualities. But uncontrolled official suppression of the privilege cannot be
made a substitute for the duty to maintain order in connection with the exercise of the right. (Emphasis
supplied)

Needless to say, the leaders of the peaceable assembly should take all the necessary measures to ensure a peaceful
march and assembly and to avoid the possibility of infiltrators and troublemakers disrupting the same, concommitantly
with the duty of the police to extend protection to the participants "staying at a discreet distance, but ever ready and alert
to perform their duty." But should any disorderly conduct or incidents occur, whether provoked or otherwise, it is well to
recall former Chief Justice Ricardo Paras' injunction in his concurring opinion in Fugoso, citing the 1907 case of U.S. vs.
Apurado, 4 that such instances of "disorderly conduct by individual members of a crowd (be not seized) as an excuse to
characterize the assembly as a seditious and tumultuous rising against the authorities" and render illusory the right of
peaceable assembly, thus: têñ.£îhqwâ£

It is rather to be expected that more or less disorder will mark the public assembly of the people to protest
against grievances whether real or imaginary, because on such occasions feeling is always wrought to a
high pitch of excitement, and the greater the grievance and the more intense the feeling, the less perfect,
as a rule, will the disciplinary control of the leaders over their irresponsible followers. But if the
prosecution be permitted to seize upon every instance of such disorderly conduct by individual members
of a crowd as an excuse to characterize the assembly as a seditious and tumultous rising against the
authorities, 'then the right to assemble and to petition for redress of grievances would become a delusion
and snare and the attempt to exercise it on the most righteous occasion and in the most peaceable
manner would expose all those who took part therein to the severest and most unmerited punishment, if
the purposes which they sought to attain did not happen to be pleasing to the prosecuting authorities. If
instances of disorderly conduct occur on such occasions, the guilty individuals should be sought out and
punished therefor. (Emphasis supplied).

As it turned out, the demonstration was held on October 26, 1983 peaceably and without any untoward event or evil
result, as pledged by the organizers (like at least five previous peaceful demonstrations in the area). However, even if
there had been any incidents of disorder, this would in no way show the Court's mandatory injunction to have been
wrongfully issued. The salutary desire on the part of respondent to prevent disorder cannot be pursued by the unjustified
denial and suppression of the people's basic rights, which would thereby turn out to be mere paper rights.

MAKASIAR, J.,  concurring:

With the justification that in case of conflict, the Philippine Constitution — particularly the Bill of Rights — should prevail
over the Vienna Convention.

ABAD SANTOS, J.,  concurring:

To add anything to the learned opinion of the Chief Justice is like bringing coal to Newcastle, I just want to state for the
record that I voted for the issuance ex-parte of a preliminary mandatory injunction.

PLANA, J., concurring:

On the whole, I concur in the learned views of the distinguished Chief Justice. I would like however to voice a reservation
regarding Ordinance No. 7295 of the City of Manila which has been invoked by the respondent.

The main opinion yields the implication that a rally or demonstration made within 500 feet from the chancery of a foreign
embassy would be banned for coming within the terms of the prohibition of the cited Ordinance which was adopted, so it
is said, precisely to implement a treaty obligation of the Philippines under the 1961 Vienna Convention on Diplomatic
Relations.
In my view, without saying that the Ordinance is obnoxious per se to the constitution, it cannot be validly invoked
whenever its application would collide with a constitutionally guaranteed right such as freedom of assembly and/or
expression, as in the case at bar, regardless of whether the chancery of any foreign embassy is beyond or within 500 feet
from the situs of the rally or demonstration.

AQUINO, J.,  dissenting:

Voted to dismiss the petition on the ground that the holding of the rally in front of the US Embassy violates Ordinance No.
7295 of the City of Manila.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 108813 December 15, 1994

JUSMAG PHILIPPINES, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION (Second Division) and FLORENCIO SACRAMENTO, Union
President, JPFCEA, respondents.

Juan, Luces, Luna and Associates for petitioner.

Galutera & Aguilar Law Offices for private respondent.

PUNO, J.:

The immunity from suit of the Joint United States Military Assistance Group to the Republic of the Philippines (JUSMAG-
Philippines) is the pivotal issue in the case at bench.

JUSMAG assails the January 29, 1993 Resolution of the NATIONAL LABOR RELATIONS COMMISSION (public
respondent), in NLRC NCR CASE NO. 00-03-02092-92, reversing the July 30, 1991 Order of the Labor Arbiter, and
ordering the latter to assume jurisdiction over the complaint for illegal dismissal filed by FLORENCIO SACRAMENTO
(private respondent) against petitioner.

First, the undisputed facts.

Private respondent was one of the seventy-four (74) security assistance support personnel  (SASP) working at JUSMAG-
Philippines. 1 He had been with JUSMAG from December 18, 1969, until his dismissal on April 27, 1992. When dismissed,
he held the position of Illustrator 2 and was the incumbent President of JUSMAG PHILIPPINES-FILIPINO CIVILIAN
EMPLOYEES ASSOCIATION (JPFCEA), a labor organization duly registered with the Department of Labor and
Employment. His services were terminated allegedly due to the abolition of his position. 2 He was also advised that he was
under administrative leave until April 27, 1992, although the same was not charged against his leave.

On March 31, 1992, private respondent filed a complaint with the Department of Labor and Employment on the ground
that he was illegally suspended and dismissed from service by JUSMAG. 3 He asked for his reinstatement.
JUSMAG then filed a Motion to Dismiss invoking its immunity from suit as an agency of the United States. It further
alleged lack of employer-employee relationship and that it has no juridical personality to sue and be sued. 4

In an Order dated July 30, 1991, Labor Arbiter Daniel C. Cueto dismissed the subject complaint "  for want of
jurisdiction."5 Private respondent appealed6 to the National Labor Relations Commission (public respondent), assailing the
ruling that petitioner is immune from suit for alleged violation of our labor laws. JUSMAG filed its Opposition, 7 reiterating
its immunity from suit for its non-contractual, governmental and/or public acts.

In a Resolution, dated January 29, 1993, the NLRC8 reversed the ruling of the Labor Arbiter as it held that petitioner had
lost its right not to be sued. The resolution was predicated on two grounds: (1) the principle of estoppel — that JUSMAG
failed to refute the existence of employer-employee relationship under the "control test"; and (2) JUSMAG has waived its
right to immunity from suit when it hired the services of private respondent on December 18, 1969.

The NLRC relied on the case of Harry Lyons vs. United States of America,9 where the "United States Government (was
considered to have) waived its immunity from suit by entering into (a) contract of stevedoring services, and thus, it
submitted itself to the jurisdiction of the local courts."

Accordingly, the case was remanded to the labor arbiter for reception of evidence as to the issue on illegal dismissal.

Hence, this petition, JUSMAG contends:

THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK

AND/OR EXCESS OF JURISDICTION —

A. IN REVERSING THE DECISION OF THE LABOR ARBITER AND IN NOT AFFIRMING THE
DISMISSAL OF THE COMPLAINT IT BEING A SUIT AGAINST THE UNITED STATES OF
AMERICA WHICH HAD NOT GIVEN ITS CONSENT TO BE SUED; AND

B. IN FINDING WAIVER BY JUSMAG OF IMMUNITY FROM SUIT;

II

THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK

AND/OR EXCESS OF JURISDICTION —

A. WHEN IT FOUND AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN JUSMAG AND

PRIVATE RESPONDENT; AND

B. WHEN IT CONSIDERED JUSMAG ESTOPPED FROM DENYING THAT PRIVATE

RESPONDENT IS ITS EMPLOYEE FOR FAILURE TO PRESENT PROOF TO THE
CONTRARY.

We find the petition impressed with merit.

It is meet to discuss the historical background of the JUSMAG to determine its immunity from suit.

JUSMAG was created pursuant to the Military Assistance Agreement 10 dated March 21, 1947, between the Government
of the Republic of the Philippines and the Government of the United States of America. As agreed upon, JUSMAG shall
consist of Air, Naval and Army group, and its primary task was to advise and assist the Philippines, on air force, army and
naval matters. 11

Article 14 of the 1947 Agreement provides, inter alia, that "the cost of all services required by the Group, including
compensation of locally employed interpreters, clerks, laborers, and other personnel, except personal servants, shall be
borne by the Republic of the Philippines."
This set-up was to change in 1991. In Note No 22, addressed to the Department of Foreign Affairs (DFA) of the
Philippines, dated January 23, 1991, the United States Government, thru its Embassy, manifested its preparedness "to
provide funds to cover the salaries of security assistance support personnel" and security guards, the rent of JUSMAG
occupied buildings and housing, and the cost of utilities. 12 This offer was accepted by our Government, thru the DFA, in
Note No. 911725, dated April 18, 1991.13

Consequently, a Memorandum of Agreement  14 was forged between the Armed Forces of the Philippines and JUSMAG-
Philippines, thru General Lisandro C. Abadia and U.S. Brigadier General Robert G. Sausser. The Agreement delineated
the terms of the assistance-in-kind of JUSMAG for 1991, the relevant parts of which read:

a. The term salaries as used in this agreement include those for the security guards currently contracted
between JUSMAG and A' Prime Security Services Inc., and the Security Assistance Support
Personnel (SASP). . . . .

b. The term Security Assistance Support Personnel (SASP) does not include active duty uniformed
members of the Armed Forces of the Philippines performing duty at JUSMAG.

c. It is understood that SASP are employees of the Armed Forces of the Philippines  (AFP). Therefore, the
AFP agrees to appoint, for service with JUSMAG, no more than 74 personnel to designated positions with
JUSMAG.

d. SASP are under the total operational control of the Chief, JUSMAG-Philippines. The term "Operational
Control" includes, but is not limited to, all personnel administrative actions, such as: hiring
recommendations; firing recommendations; position classification; discipline; nomination and approval of
incentive awards; and payroll computation. Personnel administration will be guided by Annex E of
JUSMAG-Philippines Memo 10-2. For the period of time that there is an exceptional funding agreement
between the government of the Philippines and the United States Government (USG), JUSMAG will pay
the total payroll costs for the SASP employees. Payroll costs include only regular salary; approved
overtime, costs of living allowance; medical insurance; regular contributions to the Philippine Social
Security System, PAG-IBIG Fund and Personnel Economic Relief Allowance (PERA); and the thirteenth-
month bonus. Payroll costs do not include gifts or other bonus payments in addition to those previously
defined above. Entitlements not considered payroll costs under this agreement will be funded and paid by
the AFP.

e. All SASP employed as of July 1, 1990 will continue their service with JUSMAG at their current rate of
pay and benefits up to 30 June 1991, with an annual renewal of employment thereafter  subject to renewal
of their appointment with the AFP (employees and rates of pay are indicated at Enclosure 3). No
promotion or transfer internal to JUSMAG of the listed personnel will result in the reduction of their pay
and benefits.

f. All SASP will, after proper classification, be paid salaries and benefits at established AFP civilian rates.
Rules for computation of pay and allowances will be made available to the Comptroller, JUSMAG, by the
Comptroller, GHQ, AFP. Additionally, any legally mandated changes in salary levels or methods of
computation shall be transmitted within 48 hours of receipt by Comptroller, GHQ to Comptroller,
JUSMAG.

g. The AFP agrees not to terminate SASP without 60 days prior written notice to Chief, JUSMAG-
Philippines. Any termination of these personnel thought to be necessary because of budgetary restrictions
or manpower ceiling will be subject to consultations between AFP and JUSMAG to ensure that
JUSMAG's mission of dedicated support to the AFP will not be degraded or harmed in any way.

h. The AFP agrees to assume the severance pay/retirement pay liability for all appointed SASP.
(Enclosure 3 lists the severance pay liability date for current SASP). Any termination of services, other
than voluntary resignations or termination for cause, will result in immediate payments of AFP of all
termination pay to the entitled employee. Vouchers for severance/retirement pay and accrued bonuses
and annual leave will be presented to the Comptroller, GHQ, AFP, not later than 14 calendar days prior to
required date of payment.

i. All SASP listed in Enclosure 3 will continue to participate in the Philippine Social Security System.
A year later, or in 1992, the United States Embassy sent another note of similar import to the Department of Foreign
Affairs (No. 227, dated April 8, 1992), extending the funding agreement for the salaries of SASP and security guards until
December 31, 1992.

From the foregoing, it is apparent that when JUSMAG took the services of private respondent, it was performing a
governmental function on behalf of the United States pursuant to the Military Assistance Agreement dated March 21,
1947. Hence, we agree with petitioner that the suit is, in effect, one against the United States Government, albeit it was
not impleaded in the complaint. Considering that the United States has not waived or consented to the suit, the complaint
against JUSMAG cannot not prosper.

In this jurisdiction, we recognize and adopt the generally accepted principles of international law as part of the law of the
land. 15 Immunity of State from suit is one of these universally recognized principles. In international law, "immunity" is
commonly understood as an exemption of the state and its organs from the judicial jurisdiction of another state. 16 This is
anchored on the principle of the sovereign equality of states under which one state cannot assert jurisdiction over another
in violation of the maxim par in parem non habet imperium (an equal has no power over an equal). 17

Under the traditional rule of State immunity, a state cannot be sued in the courts of another State, without its consent or
waiver. However, in Santos, et al., vs. Santos, et al., 18 we recognized an exception to the doctrine of immunity from suit
by a state, thus:

. . . . Nevertheless, if, where and when the state or its government enters into a contract, through its
officers or agents, in furtherance of a legitimate aim and purpose and pursuant to constitutional legislative
authority, whereby mutual or reciprocal benefits accrue and rights and obligations arise therefrom, and if
the law granting the authority to enter into such contract does not provide for or name the officer against
whom action may be brought in the event of a breach thereof, the state itself may be sued, even without
its consent, because by entering into a contract, the sovereign state has descended to the level of the
citizen and its consent to be sued is implied from the very act of entering into such contract. . . . .
(emphasis ours)

It was in this light that the state immunity issue in Harry Lyons, Inc., vs. United States of America 19 was decided.

In the case of Harry Lyons, Inc., the petitioner entered into a contract with the United States Government for stevedoring
services at the U.S. Naval Base, Subic Bay, Philippines. It then sought to collect from the US government sums of money
arising from the contract. One of the issues posed in the case was whether or not the defunct Court of First Instance had
jurisdiction over the defendant United States, a sovereign state which cannot be sued without its consent. This Court
upheld the contention of Harry Lyons, Inc., that "when a sovereign state enters into a contract with a private person, the
state can be sued upon the theory that it has descended to the level of an individual from which it can be implied that it
has given its consent to be sued under the contract."

The doctrine of state immunity from suit has undergone further metamorphosis. The view evolved that the existence of a
contract does not, per se, mean that sovereign states may, at all times, be sued in local courts. The complexity of
relationships between sovereign states, brought about by their increasing commercial activities, mothered a
more restrictive application of the doctrine. 20 Thus, in United States of America vs. Ruiz, 21 we clarified that our
pronouncement in Harry Lyons, supra, with respect to the waiver of State immunity, was obiter and "has no value as an
imperative authority."

As it stands now, the application of the doctrine of immunity from suit has been restricted to sovereign or governmental
activities ( jure imperii). 22 The mantle of state immunity cannot be extended to commercial, private and proprietary
acts (  jure gestionis). As aptly stated by this Court (En banc) in US vs. Ruiz, supra:

The restrictive application of State immunity is proper when the proceedings arise out of commercial
transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, a
State may be said to have descended to the level of an individual and thus can be deemed to have tacitly
given its consent to be used only when it enters into business contracts. It does not  apply where the
contract relates to the exercise of its sovereign functions. (emphasis ours)

We held further, that the application of the doctrine of state immunity depends on the legal nature of the act. Ergo, since
a governmental function  was involved — the transaction dealt with the improvement of the wharves in the naval
installation at Subic Bay — it was held that the United States was not deemed to have waived its immunity from suit.
Then came the case of United States vs. Hon. Rodrigo, et al. 23 In said case, Genove was employed as a cook in the Main
Club located at U.S. Air Force Recreation Center, John Hay Air Station. He was dismissed from service after he was
found to have polluted the stock of soup with urine. Genove countered with a complaint for damages. Apparently, the
restaurant services offered at the John Hay Air Station partake of the nature of a business enterprise undertaken by the
United States government in its  proprietary capacity. The Court then noted that the restaurant is well known and available
to the general public, thus, the services are operated for profit, as a commercial and not a governmental activity. Speaking
through Associate Justice Isagani Cruz, the Court (En Banc) said:

The consequence of this finding is that the petitioners cannot invoke the doctrine of state immunity to
justify the dismissal of the damage suit against them by Genove. Such defense will not prosper even if it
be established that they were acting as agents of the United States when they investigated and later
dismissed Genove. For the matter, not even the United States government itself can claim such immunity.
The reason is that by entering into the employment contract with Genove in the discharge of its
proprietary functions, it impliedly divested itself of its sovereign immunity from suit. (emphasis ours)

Conversely, if the contract was entered into in the discharge of its governmental functions, the sovereign state cannot be
deemed to have waived its immunity from suit. 24 Such is the case at bench. Prescinding from this premise, we need not
determine whether JUSMAG controls the employment conditions of the private respondent.

We also hold that there appears to be no basis for public respondent to rule that JUSMAG is stopped from denying the
existence of employer-employee relationship with private respondent. On the contrary, in its Opposition before the public
respondent, JUSMAG consistently contended that the (74) SASP, including private respondent, working in JUSMAG, are
employees of the Armed Forces of the Philippines. This can be gleaned from: (1) the Military Assistance
Agreement, supra, (2) the exchange of notes between our Government, thru Department of Foreign Affairs, and the
United States, thru the US Embassy to the Philippines, and (3) the Agreement on May 21, 1991, supra between the
Armed Forces of the Philippines and JUSMAG.

We symphatize with the plight of private respondent who had served JUSMAG for more than twenty (20) years.
Considering his length of service with JUSMAG, he deserves a more compassionate treatment. Unfortunately, JUSMAG
is beyond the jurisdiction of this Court. Nonetheless, the Executive branch, through the Department of Foreign Affairs and
the Armed Forces of the Philippines, can take the cudgel for private respondent and the other SASP working for
JUSMAG, pursuant to the aforestated Military Assistance Agreement.

IN VIEW OF THE FOREGOING, the petition for certiorari is GRANTED. Accordingly, the impugned Resolution dated
January 29, 1993 of the National Labor Relations Commission is REVERSED and SET ASIDE. No costs.

SO ORDERED.

Narvasa, C.J., Regalado and Mendoza, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 85750 September 28, 1990

INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION, petitioner

vs
HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND TRADE
UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU respondents.

G.R. No. 89331 September 28, 1990

KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR ASSOCIATION IN LINE INDUSTRIES AND

AGRICULTURE, petitioner,
vs
SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE RESEARCH INSTITUTE,
INC., respondents.

Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750.

Dominguez, Armamento, Cabana & Associates for petitioner in G.R. No. 89331.

Jimenez & Associates for IRRI.

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

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 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.

Padilla, Sarmiento and Regalado, JJ., concur.

Paras, J., is on leave.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-1648             August 17, 1949

PEDRO SYQUIA, GONZALO SYQUIA, and LEOPOLDO SYQUIA, petitioners,

vs.
NATIVIDAD ALMEDA LOPEZ, Judge of Municipal Court of Manila, CONRADO V. SANCHEZ, Judge of Court of
First Instance of Manila, GEORGE F. MOORE, ET AL., respondents.

Gibbs, Gibbs, Chuidian and Quasha for petitioner.

J. A. Wolfson for respondent.

MONTEMAYOR, J.:

For the purposes of this decision, the following facts gathered from and based on the pleadings, may be stated. The
plaintiffs named Pedro, Gonzalo, and Leopoldo, all surnamed Syquia, are the undivided joint owners of three apartment
buildings situated in the City of Manila known as the North Syquia Apartments, South Syquia Apartments and Michel
Apartments located at 1131 M. H. del Pilar, 1151 M. H. del Pilar and 1188 A. Mabini Streets, respectively.

About the middle of the year 1945, said plaintiffs executed three lease contracts, one for each of the three apartments, in
favor of the United States of America at a monthly rental of P1,775 for the North Syquia Apartments, P1,890 for the South
Syquia Apartment, and P3,335 for the Michel Apartments. The term or period for the three leases was to be "for the
duration of the war and six months thereafter, unless sooner terminated by the United States of America." The apartment
buildings were used for billeting and quartering officers of the U. S. armed forces stationed in the Manila area.

In March 1947, when these court proceedings were commenced, George F. Moore was the Commanding General, United
States Army, Philippine Ryukus Command, Manila, and as Commanding General of the U. S. Army in the Manila Theatre,
was said to control the occupancy of the said apartment houses and had authority in the name of the United States
Government to assign officers of the U. S. Army to said apartments or to order said officers to vacate the same. Erland A.
Tillman was the Chief, Real Estate Division, Office of the District Engineers, U. S. Army, Manila, who, under the command
of defendant Moore was in direct charge and control of the lease and occupancy of said three apartment buildings.
Defendant Moore and Tillman themselves did not occupy any part of the premises in question.

Under the theory that said leases terminated six months after September 2, 1945, when Japan surrendered, plaintiffs
sometime in March, 1946, approached the predecessors in office of defendants Moore and Tillman and requested the
return of the apartment buildings to them, but were advised that the U. S. Army wanted to continue occupying the
premises. On May 11, 1946, said plaintiffs requested the predecessors in office of Moore and Tillman to renegotiate said
leases, execute lease contract for a period of three years and to pay a reasonable rental higher than those payable under
the old contracts. The predecessors in office of Moore in a letter dated June 6, 1946, refused to execute new leases but
advised that "it is contemplated that the United States Army will vacate subject properties prior to 1 February 1947." Not
being in conformity with the continuance of the old leases because of the alleged comparatively low rentals being paid
thereunder, plaintiffs formally requested Tillman to cancel said three leases and to release the apartment buildings on
June 28, 1946. Tillman refused to comply with the request. Because of the alleged representation and assurance that the
U.S. Government would vacate the premises before February 1, 1947, the plaintiffs took no further steps to secure
possession of the buildings and accepted the monthly rentals tendered by the predecessors in office of Moore and Tillman
on the basis of a month to month lease subject to cancellation upon thirty days notice. Because of the failure to comply
with the alleged representation and assurance that the three apartment buildings will be vacated prior to February 1,
1947, plaintiffs on February 17, 1947, served formal notice upon defendants Moore and Tillman and 64 other army
officers or members of the United States Armed Forces who were then occupying apartments in said three buildings,
demanding (a) cancellation of said leases; (b) increase in rentals to P300 per month per apartment effective thirty days
from notice; (c) execution of new leases for the three or any one or two of the said apartment buildings for a definite term,
otherwise, (d) release of said apartment buildings within thirty days of said notice in the event of the failure to comply with
the foregoing demands. The thirty-day period having expired without any of the defendants having complied with plaintiffs'
demands, the plaintiffs commenced the present action in the Municipal Court of Manila in the form of an action for
unlawful detainer (desahucio) against Moore and Tillman and the 64 persons occupying apartments in the three buildings
for the purpose of having them vacate the apartments, each occupants to pay P300 a month for his particular apartment
from January 1, 1947 until each of said particular defendant had vacated said apartment; to permit plaintiffs access to said
apartment buildings for the purpose of appraising the damages sustained as the result of the occupancy by defendants;
that defendants be ordered to pay plaintiffs whatever damages may have been actually caused on said property; and that
in the event said occupants are unable to pay said P300 a month and/or the damages sustained by said property, the
defendants Moore and Tillman jointly and severally be made to pay said monthly rentals of P300 per month per apartment
from January 1, 1947 to March 19, 1947, inclusive, and/or the damages sustained by said apartments, and that
defendants Moore and Tillman be permanently enjoined against ordering any additional parties in the future from entering
and occupying said premises.

Acting upon a motion to dismiss filed through the Special Assistant of the Judge Advocate, Philippine Ryukus Command
on the ground that the court had no jurisdiction over the defendants and over the subject matter of the action, because the
real party in interest was the U.S. Government and not the individual defendants named in the complaint, and that the
complaint did not state a cause of action, the municipal court of Manila in an order dated April 29, 1947, found that the war
between the United States of America and her allies on one side and Germany and Japan on the other, had not yet
terminated and, consequently, the period or term of the three leases had not yet expired; that under the well settled rule of
International Law, a foreign government like the United States Government cannot be sued in the courts of another state
without its consent; that it was clear from the allegations of the complaint that although the United States of America has
not been named therein as defendant, it is nevertheless the real defendant in this case, as the parties named as
defendants are officers of the United States Army and were occupying the buildings in question as such and pursuant to
orders received from that Government. The municipal court dismissed the action with costs against the plaintiffs with the
suggestion or opinion that a citizen of the Philippines, who feels aggrieved by the acts of the Government of a foreign
country has the right to demand that the Philippine Government study his claim and if found meritorious, take such
diplomatic steps as may be necessary for the vindication of rights of that citizen, and that the matter included or involved
in the action should be a proper subject matter of representations between the Government of the Government of the
United States of America and the Philippines. Not being satisfied with the order, plaintiffs appealed to the Court of Manila,
where the motion to dismiss was renewed.

The Court of First Instance of Manila in an order dated July 12, 1947, affirmed the order of the municipal court dismissing
plaintiffs' complaint. It conceded that under the doctrine laid down in the case of U. S. vs. Lee, 106 U. S., 196 and affirmed
in the case of Tindal vs. Wesley, 167 U. S., 204 ordinarily, courts have jurisdiction over cases where private parties sue to
recover possession of property being held by officers or agents acting in the name of the U. S. Government even though
no suit can be brought against the Government itself, but inasmuch as the plaintiffs in the present case are bringing this
action against officers and agents of the U. S. Government not only to recover the possession of the three apartment
houses supposedly being held illegally by them in the name of their government, but also to collect back rents, not only at
the rate agreed upon in the lease contracts entered into by the United States of America but in excess of said rate, to say
nothing of the damages claimed, as a result of which, a judgment in these proceedings may become a charge against the
U. S. Treasury, then under the rule laid down in the case of Land vs. Dollar, 91 Law. ed., 1209, the present suit must be
regarded as one against the United States Government itself, which cannot be sued without its consent, specially by
citizens of another country.

The plaintiffs as petitioners have brought this case before us on a petition for a writ of mandamus seeking to order the
Municipal Court of Manila to take jurisdiction over the case. On October 30, 1947, counsel for respondents Almeda Lopez,
Sanchez, Moore and Tillman filed a motion to dismiss on several grounds. The case was orally argued on November 26,
1947. On March 4, 1948, petitioners filed a petition which, among other things, informed this Court that the North Syquia
Apartments, the South Syquia Apartments and Michel Apartments would be vacated by their occupants on February 29,
March 31, and May 31, 1948, respectively. As a matter of fact, said apartments were actually vacated on the dates
already mentioned and were received by the plaintiff-owners.

On the basis of this petition and because of the return of the three apartment houses to the owners, counsel for
respondents Almeda Lopez, Sanchez, Moore and Tillman filed a petition to dismiss the present case on the ground that it
is moot. Counsel for the petitioners answering the motion, claimed that the plaintiffs and petitioners possession of the
three apartment houses, reserving all of their rights against respondents including the right to collect rents and damages;
that they have not been paid rents since January 1, 1947; that respondents admitted that there is a total of P109,895 in
rentals due and owing to petitioners; that should this case be now dismissed, the petitioners will be unable to enforce
collection; that the question of law involved in this case may again come up before the courts when conflicts arise
between Filipino civilian property owners and the U.S. Army authorities concerning contracts entered into in the
Philippines between said Filipinos and the U.S. Government. Consequently, this Court, according to the petitioners, far
from dismissing the case, should decide it, particularly the question of jurisdiction.

On June 18, 1949, through a "petition to amend complaint" counsel for the petitioners informed this court that petitioners
had already received the U. S. Army Forces in the Western Pacific the sum of P109,895 as rentals for the three
apartments, but with the reservation that said acceptance should not be construed as jeopardizing the rights of the
petitioners in the case now pending in the courts of the Philippines or their rights against the U. S. Government with
respect to the three apartment houses. In view of this last petition, counsel for respondents alleging that both respondent
Moore and Tillman had long left the Islands for other Army assignments, and now that both the possession of the three
apartments in question as well as the rentals for their occupation have already been received by the petitioners renew
their motion for dismissal on the ground that this case has now become moot.

The main purpose of the original action in the municipal court was to recover the possession of the three apartment
houses in question. The recovery of rentals as submitted by the very counsel for the petitioner was merely incidental to
the main action. Because the prime purpose of the action had been achieved, namely, the recovery of the possession of
the premises, apart from the fact that the rentals amounting to P109,895 had been paid to the petitioners and accepted by
them though under reservations, this Court may now well dismiss the present proceedings on the ground that the
questions involved therein have become academic and moot. Counsel for the petitioners however, insists that a decision
be rendered on the merits, particularly on the question of jurisdiction of the municipal court over the original action, not
only for the satisfaction of the parties involved but also to serve as a guide in future cases involving cases of similar nature
such as contracts of lease entered into between the Government of the United States of America on one side and Filipino
citizens on the other regarding properties of the latter. We accept the suggestion of petitioners and shall proceed to
discuss the facts and law involved and rule upon them.

We shall concede as correctly did the Court of First Instance, that following the doctrine laid down in the cases of U. S. vs.
Lee  and U. S. vs. Tindal, supra, a private citizen claiming title and right of possession of a certain property may, to
recover possession of said property, sue as individuals, officers and agents of the Government who are said to be illegally
witholding the same from him, though in doing so, said officers and agents claim that they are acting for the Government,
and the court may entertain such a suit altho the Government itself is not included as a party-defendant. Of course, the
Government is not bound or concluded by the decision. The philosophy of this ruling is that unless the courts are
permitted to take cognizance and to assume jurisdiction over such a case, a private citizen would be helpless and without
redress and protection of his rights which may have been invaded by the officers of the government professing to act in its
name. In such a case the officials or agents asserting rightful possession must prove and justify their claim before the
courts, when it is made to appear in the suit against them that the title and right of possession is in the private citizen.
However, and this is important, where the judgment in such a case would result not only in the recovery of possession of
the property in favor of said citizen but also in a charge against or financial liability to the Government, then the suit should
be regarded as one against the government itself, and, consequently, it cannot prosper or be validly entertained by the
courts except with the consent of said Government. (See case of Land vs. Dollar, 91 Law. ed., 1209.)

From a careful study of this case, considering the facts involved therein as well as those of public knowledge of which we
take judicial cognizance, we are convinced that the real party in interest as defendant in the original case is the United
States of America. The lessee in each of the three lease agreements was the United States of America and the lease
agreement themselves were executed in her name by her officials acting as her agents. The considerations or rentals was
always paid by the U. S. Government. The original action in the municipal court was brought on the basis of these three
lease contracts and it is obvious in the opinion of this court that any back rentals or increased rentals will have to be paid
by the U. S. Government not only because, as already stated, the contracts of lease were entered into by such
Government but also because the premises were used by officers of her armed forces during the war and immediately
after the terminations of hostilities.

We cannot see how the defendants and respondents Moore and Tillman could be held individually responsible for the
payments of rentals or damages in relation to the occupancy of the apartment houses in question. Both of these army
officials had no intervention whatsoever in the execution of the lease agreements nor in the initial occupancy of the
premises both of which were effected thru the intervention of and at the instance of their predecessors in office. The
original request made by the petitioners for the return of the apartment buildings after the supposed termination of the
leases, was made to, and denied not by Moore and Tillman but by their predecessors in office. The notice and decision
that the U. S. Army wanted and in fact continued to occupy the premises was made not by Moore and Tillman but by
predecessors in office. The refusal to renegotiate the leases as requested by the petitioners was made not by Moore but
by his predecessors in office according to the very complaint filed in the municipal court. The assurance that the U. S.
Army will vacate the premises prior to February 29, 1947, was also made by the predecessors in office of Moore.

As to the defendant Tillman, according to the complaint he was Chief, Real State Division, Office of the District Engineer,
U. S. Army, and was in direct charge and control of the leases and occupancy of the apartment buildings, but he was
under the command of defendant Moore, his superior officer. We cannot see how said defendant Tillman in assigning new
officers to occupy apartments in the three buildings, in obedience to order or direction from his superior, defendant Moore,
could be held personally liable for the payment of rentals or increase thereof, or damages said to have been suffered by
the plaintiffs.

With respect to defendant General Moore, when he assumed his command in Manila, these lease agreement had already
been negotiated and executed and were in actual operation. The three apartment buildings were occupied by army
officers assigned thereto by his predecessors in office. All that he must have done was to assign or billet incoming army
officers to apartments as they were vacated by outgoing officers due to changes in station. He found these apartment
buildings occupied by his government and devoted to the use and occupancy of army officers stationed in Manila under
his command, and he had reasons to believe that he could continue holding and using the premises theretofore assigned
for that purpose and under contracts previously entered into by his government, as long as and until orders to the contrary
were received by him. It is even to be presumed that when demand was made by the plaintiffs for the payment of
increased rentals or for vacating the three apartment buildings, defendant Moore, not a lawyer by profession but a soldier,
must have consulted and sought the advise of his legal department, and that his action in declining to pay the increased
rentals or to eject all his army officers from the three buildings must have been in pursuance to the advice and counsel of
his legal division. At least, he was not in a position to pay increased rentals above those set and stipulated in the lease
agreements, without the approval of his government, unless he personally assumed financial responsibility therefor.
Under these circumstances, neither do we believe nor find that defendant Moore can be held personally liable for the
payment of back or increased rentals and alleged damages.

As to the army officers who actually occupied the apartments involved, there is less reason for holding them personally
liable for rentals and supposed damages as sought by the plaintiffs. It must be remembered that these army officers when
coming to their station in Manila were not given the choice of their dwellings. They were merely assigned quarters in the
apartment buildings in question. Said assignments or billets may well be regarded as orders, and all that those officers did
was to obey them, and, accordingly, occupied the rooms assigned to them. Under such circumstances, can it be
supposed or conceived that such army officers would first inquire whether the rental being paid by the government for the
rooms or apartments assigned to them by order of their superior officer was fair and reasonable or not, and whether the
period of lease between their government and the owners of the premises had expired, and whether their occupancy of
their rooms or apartments was legal or illegal? And if they dismissed these seemingly idle speculations, assuming that
they ever entered their minds, and continued to live in their apartments unless and until orders to the contrary were
received by them, could they later be held personally liable for any back rentals which their government may have failed to
pay to the owners of the building, or for any damages to the premises incident to all leases of property, specially in the
absence of proof that such damages to property had been caused by them and not by the previous occupants, also army
officers who are not now parties defendant to this suit? Incidentally it may be stated that both defendants Moore and
Tillman have long left these Islands to assume other commands or assignments and in all probability none of their 64 co-
defendants is still within this jurisdiction.

On the basis of the foregoing considerations we are of the belief and we hold that the real party defendant in interest is
the Government of the United States of America; that any judgment for back or increased rentals or damages will have to
be paid not by defendants Moore and Tillman and their 64 co-defendants but by the said U. S. Government. On the basis
of the ruling in the case of Land vs. Dollar already cited, and on what we have already stated, the present action must be
considered as one against the U. S. Government. It is clear that the courts of the Philippines including the Municipal Court
of Manila have no jurisdiction over the present case for unlawful detainer. The question of lack of jurisdiction was raised
and interposed at the very beginning of the action. The U. S. Government has not given its consent to the filing of this suit
which is essentially against her, though not in name. Moreover, this is not only a case of a citizen filing a suit against his
own Government without the latter's consent but it is of citizen filing an action against a foreign government without said
government's consent, which renders more obvious the lack of jurisdiction of the courts of his country. The principles of
the law behind this rule are so elementary and of such general acceptance that we deem it unnecessary to cite authorities
in support thereof.

In conclusion we find that the Municipal Court of Manila committed no error in dismissing the case for lack of jurisdiction
and that the Court of First Instance acted correctly in affirming the municipal court's order of dismissal. Case dismissed,
without pronouncement as to costs.
Moran, C.J., Paras, Feria, Bengzon, Tuason and Reyes, JJ., concur.

Separate Opinions

PERFECTO, J.,  dissenting:

The petition must be granted. This is the conclusion we have arrived at long ago, soon after this case had been submitted
for our decision. We regret that, to avoid further delay in the promulgation of the decision in this case, we are constrained
to limit ourselves to a synthesis of the reasons for our stand. So that this opinion may be released immediately, we are
making it as short as possible. To said effect we have to waive the opportunity of elaborating on our arguments.

We are of the opinion that both the municipal court and the Court of First Instance of Manila erred in dismissing
petitioners' complaint and the majority of the Supreme Court have given their exequatur to such grievous error.

There is no question that the Municipal Court of Manila had and has completed jurisdiction to take cognizance of and
decide the case initiated by petitioners. That jurisdiction is the same whether the true defendants are those specifically
mentioned in the complaint or the Government of the United States.

The contention that the Government of the United States of America is the real party defendant does not appear to be
supported either by the pleadings or by the text of the contract of lease in question. If said government is the real property
defendant and had intended to impugn the jurisdiction of the Municipal Court of Manila, it must have done so through its
diplomatic representative in the Philippines, i. e., the American Ambassador. It does not appear that the American
Ambassador had intervened in the case in any way and we believe no one appearing in the case has the legal personality
to represent said government.

In the hypothesis that the Government of the United States of America is the lessee in the contract in question and,
therefore, should be considered as the real party defendant in the ejectment case, that simple fact does not deprive our
courts of justice of their jurisdiction to try any legal litigation relating to said contract of lease. The very fact that the
government of the United States of America had entered into a private contract with private citizens of the Philippines and
the deed executed in our country concerns real property located in Manila, place said government, for purposes of the
jurisdiction of our courts, on the same legal level of the lessors.

Although, generally, foreign governments are beyond the jurisdiction of domestic courts of justice, such rule is inapplicable
to cases in which the foreign government enters into private contracts with the citizens of the court's jurisdiction. A
contrary view would simply run against all principles of decency and violative of all tenets of morals.

Moral principles and principles of justice are as valid and applicable as well with regard to private individuals as with
regard to governments either domestic or foreign. Once a foreign government enters into a private contract with the
private citizens of another country, such foreign government cannot shield its non-performance or contravention of the
terms of the contract under the cloak of non-jurisdiction. To place such foreign government beyond the jurisdiction of the
domestic courts is to give approval to the execution of unilateral contracts, graphically described in Spanish as "contratos
leoninos," because one party gets the lion's share to the detriment of the other. To give validity to such contract is to
sanctify bad faith, deceit, fraud. We prepare to adhere to the thesis that all parties in a private contract, including
governments and the most powerful of them, are amenable to law, and that such contracts are enforceable through the
help of the courts of justice with jurisdiction to take cognizance of any violation of such contracts if he same had been
entered into only by private individuals.

To advance the proposition that the Government of the United States of America, soon after liberating the Philippines from
the invading Japanese forces, had entered with the petitioners in to the lease contract in question with the knowledge that
petitioners could not bring an action in our courts of justice to enforce the terms of said contract is to hurl against said
government the blackest indictment. Under such situation, all the vociferous avowals of adherence to the principles of
justice, liberty, democracy, of said Government would appear as sham. We cannot believe that the Government of the
United States of America can in honest conscience support the stand of respondents in this case. We cannot believe that
said government is so callous as not to understand the meaning of the shame entailed in the legal stand of non-
jurisdiction intended to place said government beyond the reach of our courts of justice.
 EN BANC

G.R. No. 138570               October 10, 2000

BAYAN (Bagong Alyansang Makabayan), a JUNK VFA MOVEMENT, BISHOP TOMAS MILLAMENA (Iglesia Filipina
Independiente), BISHOP ELMER BOLOCAN (United Church of Christ of the Phil.), DR. REYNALDO LEGASCA, MD,
KILUSANG MAMBUBUKID NG PILIPINAS, KILUSANG MAYO UNO, GABRIELA, PROLABOR, and the PUBLIC
INTEREST LAW CENTER, petitioners,
vs.
EXECUTIVE SECRETARY RONALDO ZAMORA, FOREIGN AFFAIRS SECRETARY DOMINGO SIAZON, DEFENSE
SECRETARY ORLANDO MERCADO, BRIG. GEN. ALEXANDER AGUIRRE, SENATE PRESIDENT MARCELO
FERNAN, SENATOR FRANKLIN DRILON, SENATOR BLAS OPLE, SENATOR RODOLFO BIAZON, and SENATOR
FRANCISCO TATAD, respondents.
x-----------------------x
G.R. No. 138572               October 10, 2000
PHILIPPINE CONSTITUTION ASSOCIATION, INC.(PHILCONSA), EXEQUIEL B. GARCIA, AMADOGAT INCIONG,
CAMILO L. SABIO, AND RAMON A. GONZALES, petitioners,
vs.
HON. RONALDO B. ZAMORA, as Executive Secretary, HON. ORLANDO MERCADO, as Secretary of National
Defense, and HON. DOMINGO L. SIAZON, JR., as Secretary of Foreign Affairs, respondents.
x-----------------------x
G.R. No. 138587               October 10, 2000
TEOFISTO T. GUINGONA, JR., RAUL S. ROCO, and SERGIO R. OSMEÑA III, petitioners,
vs.
JOSEPH E. ESTRADA, RONALDO B. ZAMORA, DOMINGO L. SIAZON, JR., ORLANDO B. MERCADO, MARCELO B.
FERNAN, FRANKLIN M. DRILON, BLAS F. OPLE and RODOLFO G. BIAZON, respondents.
x-----------------------x
G.R. No. 138680               October 10, 2000
INTEGRATED BAR OF THE PHILIPPINES, Represented by its National President, Jose Aguila
Grapilon, petitioners,
vs.
JOSEPH EJERCITO ESTRADA, in his capacity as President, Republic of the Philippines, and HON. DOMINGO
SIAZON, in his capacity as Secretary of Foreign Affairs, respondents.
x-----------------------x
G.R. No. 138698               October 10, 2000
JOVITO R. SALONGA, WIGBERTO TAÑADA, ZENAIDA QUEZON-AVENCEÑA, ROLANDO SIMBULAN, PABLITO V.
SANIDAD, MA. SOCORRO I. DIOKNO, AGAPITO A. AQUINO, JOKER P. ARROYO, FRANCISCO C. RIVERA JR.,
RENE A.V. SAGUISAG, KILOSBAYAN, MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND
NATIONALISM, INC. (MABINI), petitioners,
vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF FOREIGN AFFAIRS, THE SECRETARY OF NATIONAL
DEFENSE, SENATE PRESIDENT MARCELO B. FERNAN, SENATOR BLAS F. OPLE, SENATOR RODOLFO G.
BIAZON, AND ALL OTHER PERSONS ACTING THEIR CONTROL, SUPERVISION, DIRECTION, AND INSTRUCTION
IN RELATION TO THE VISITING FORCES AGREEMENT (VFA), respondents.

DECISION

BUENA, J.:
Confronting the Court for resolution in the instant consolidated petitions for certiorari and prohibition are issues relating to,
and borne by, an agreement forged in the turn of the last century between the Republic of the Philippines and the United
States of America -the Visiting Forces Agreement.

The antecedents unfold.

On March 14, 1947, the Philippines and the United States of America forged a Military Bases Agreement which
formalized, among others, the use of installations in the Philippine territory by United States military personnel. To further
strengthen their defense and security relationship, the Philippines and the United States entered into a Mutual Defense
Treaty on August 30, 1951. Under the treaty, the parties agreed to respond to any external armed attack on their territory,
armed forces, public vessels, and aircraft.1

In view of the impending expiration of the RP-US Military Bases Agreement in 1991, the Philippines and the United States
negotiated for a possible extension of the military bases agreement. On September 16, 1991, the Philippine Senate
rejected the proposed RP-US Treaty of Friendship, Cooperation and Security which, in effect, would have extended the
presence of US military bases in the Philippines.2 With the expiration of the RP-US Military Bases Agreement, the periodic
military exercises conducted between the two countries were held in abeyance. Notwithstanding, the defense and security
relationship between the Philippines and the United States of America continued pursuant to the Mutual Defense Treaty.

On July 18, 1997, the United States panel, headed by US Defense Deputy Assistant Secretary for Asia Pacific Kurt
Campbell, met with the Philippine panel, headed by Foreign Affairs Undersecretary Rodolfo Severino Jr., to exchange
notes on "the complementing strategic interests of the United States and the Philippines in the Asia-Pacific region." Both
sides discussed, among other things, the possible elements of the Visiting Forces Agreement (VFA for brevity).
Negotiations by both panels on the VFA led to a consolidated draft text, which in turn resulted to a final series of
conferences and negotiations3 that culminated in Manila on January 12 and 13, 1998. Thereafter, then President Fidel V.
Ramos approved the VFA, which was respectively signed by public respondent Secretary Siazon and Unites States
Ambassador Thomas Hubbard on February 10, 1998.

On October 5, 1998, President Joseph E. Estrada, through respondent Secretary of Foreign Affairs, ratified the VFA. 4

On October 6, 1998, the President, acting through respondent Executive Secretary Ronaldo Zamora, officially transmitted
to the Senate of the Philippines,5 the Instrument of Ratification, the letter of the President 6 and the VFA, for concurrence
pursuant to Section 21, Article VII of the 1987 Constitution. The Senate, in turn, referred the VFA to its Committee on
Foreign Relations, chaired by Senator Blas F. Ople, and its Committee on National Defense and Security, chaired by
Senator Rodolfo G. Biazon, for their joint consideration and recommendation. Thereafter, joint public hearings were held
by the two Committees.7

On May 3, 1999, the Committees submitted Proposed Senate Resolution No. 443 8 recommending the concurrence of the
Senate to the VFA and the creation of a Legislative Oversight Committee to oversee its implementation. Debates then
ensued.

On May 27, 1999, Proposed Senate Resolution No. 443 was approved by the Senate, by a two-thirds (2/3) vote 9 of its
members. Senate Resolution No. 443 was then re-numbered as Senate Resolution No. 18. 10

On June 1, 1999, the VFA officially entered into force after an Exchange of Notes between respondent Secretary Siazon
and United States Ambassador Hubbard.

The VFA, which consists of a Preamble and nine (9) Articles, provides for the mechanism for regulating the circumstances
and conditions under which US Armed Forces and defense personnel may be present in the Philippines, and is quoted in
its full text, hereunder:

"Article I
Definitions

"As used in this Agreement, ‘United States personnel’ means United States military and civilian personnel temporarily in
the Philippines in connection with activities approved by the Philippine Government.

"Within this definition:

 "1. The term ‘military personnel’ refers to military members of the United States Army, Navy, Marine Corps, Air
Force, and Coast Guard.

"2. The term ‘civilian personnel’ refers to individuals who are neither nationals of, nor ordinary residents in the
Philippines and who are employed by the United States armed forces or who are accompanying the United States
armed forces, such as employees of the American Red Cross and the United Services Organization.

"Article II
Respect for Law
"It is the duty of the United States personnel to respect the laws of the Republic of the Philippines and to abstain from any
activity inconsistent with the spirit of this agreement, and, in particular, from any political activity in the Philippines. The
Government of the United States shall take all measures within its authority to ensure that this is done.

"Article III
Entry and Departure

"1. The Government of the Philippines shall facilitate the admission of United States personnel and their departure
from the Philippines in connection with activities covered by this agreement.

"2. United States military personnel shall be exempt from passport and visa regulations upon entering and
departing the Philippines.

"3. The following documents only, which shall be presented on demand, shall be required in respect of United
States military personnel who enter the Philippines:

"(a) personal identity card issued by the appropriate United States authority showing full name, date of
birth, rank or grade and service number (if any), branch of service and photograph;

"(b) individual or collective document issued by the appropriate United States authority, authorizing the
travel or visit and identifying the individual or group as United States military personnel; and

"(c) the commanding officer of a military aircraft or vessel shall present a declaration of health, and when
required by the cognizant representative of the Government of the Philippines, shall conduct a quarantine
inspection and will certify that the aircraft or vessel is free from quarantinable diseases. Any quarantine
inspection of United States aircraft or United States vessels or cargoes thereon shall be conducted by the
United States commanding officer in accordance with the international health regulations as promulgated
by the World Health Organization, and mutually agreed procedures.

"4. United States civilian personnel shall be exempt from visa requirements but shall present, upon demand, valid
passports upon entry and departure of the Philippines.

"5. If the Government of the Philippines has requested the removal of any United States personnel from its
territory, the United States authorities shall be responsible for receiving the person concerned within its own
territory or otherwise disposing of said person outside of the Philippines.

"Article IV
Driving and Vehicle Registration

"1. Philippine authorities shall accept as valid, without test or fee, a driving permit or license issued by the
appropriate United States authority to United States personnel for the operation of military or official vehicles.

"2. Vehicles owned by the Government of the United States need not be registered, but shall have appropriate
markings.

"Article V
Criminal Jurisdiction

"1. Subject to the provisions of this article:

 (a) Philippine authorities shall have jurisdiction over United States personnel with respect to offenses
committed within the Philippines and punishable under the law of the Philippines.

(b) United States military authorities shall have the right to exercise within the Philippines all criminal and
disciplinary jurisdiction conferred on them by the military law of the United States over United States
personnel in the Philippines.

"2. (a) Philippine authorities exercise exclusive jurisdiction over United States personnel with respect to offenses,
including offenses relating to the security of the Philippines, punishable under the laws of the Philippines, but not under
the laws of the United States.

(b) United States authorities exercise exclusive jurisdiction over United States personnel with respect to
offenses, including offenses relating to the security of the United States, punishable under the laws of the
United States, but not under the laws of the Philippines.

(c) For the purposes of this paragraph and paragraph 3 of this article, an offense relating to security
means:

(1) treason;
(2) sabotage, espionage or violation of any law relating to national defense.

"3. In cases where the right to exercise jurisdiction is concurrent, the following rules shall apply:

(a) Philippine authorities shall have the primary right to exercise jurisdiction over all offenses committed by United
States personnel, except in cases provided for in paragraphs 1(b), 2 (b), and 3 (b) of this Article.

(b) United States military authorities shall have the primary right to exercise jurisdiction over United States
personnel subject to the military law of the United States in relation to.

(1) offenses solely against the property or security of the United States or offenses solely against the
property or person of United States personnel; and

(2) offenses arising out of any act or omission done in performance of official duty.

(c) The authorities of either government may request the authorities of the other government to waive
their primary right to exercise jurisdiction in a particular case.

(d) Recognizing the responsibility of the United States military authorities to maintain good order and
discipline among their forces, Philippine authorities will, upon request by the United States, waive their
primary right to exercise jurisdiction except in cases of particular importance to the Philippines. If the
Government of the Philippines determines that the case is of particular importance, it shall communicate
such determination to the United States authorities within twenty (20) days after the Philippine authorities
receive the United States request.

(e) When the United States military commander determines that an offense charged by authorities of the
Philippines against United states personnel arises out of an act or omission done in the performance of
official duty, the commander will issue a certificate setting forth such determination. This certificate will be
transmitted to the appropriate authorities of the Philippines and will constitute sufficient proof of
performance of official duty for the purposes of paragraph 3(b)(2) of this Article. In those cases where the
Government of the Philippines believes the circumstances of the case require a review of the duty
certificate, United States military authorities and Philippine authorities shall consult immediately.
Philippine authorities at the highest levels may also present any information bearing on its validity. United
States military authorities shall take full account of the Philippine position. Where appropriate, United
States military authorities will take disciplinary or other action against offenders in official duty cases, and
notify the Government of the Philippines of the actions taken.

(f) If the government having the primary right does not exercise jurisdiction, it shall notify the authorities of
the other government as soon as possible.
 (g) The authorities of the Philippines and the United States shall notify each other of the disposition of all
cases in which both the authorities of the Philippines and the United States have the right to exercise
jurisdiction.

"4. Within the scope of their legal competence, the authorities of the Philippines and United States shall assist each other
in the arrest of United States personnel in the Philippines and in handling them over to authorities who are to exercise
jurisdiction in accordance with the provisions of this article.

"5. United States military authorities shall promptly notify Philippine authorities of the arrest or detention of United States
personnel who are subject of Philippine primary or exclusive jurisdiction. Philippine authorities shall promptly notify United
States military authorities of the arrest or detention of any United States personnel.

"6. The custody of any United States personnel over whom the Philippines is to exercise jurisdiction shall immediately
reside with United States military authorities, if they so request, from the commission of the offense until completion of all
judicial proceedings. United States military authorities shall, upon formal notification by the Philippine authorities and
without delay, make such personnel available to those authorities in time for any investigative or judicial proceedings
relating to the offense with which the person has been charged in extraordinary cases, the Philippine Government shall
present its position to the United States Government regarding custody, which the United States Government shall take
into full account. In the event Philippine judicial proceedings are not completed within one year, the United States shall be
relieved of any obligations under this paragraph. The one-year period will not include the time necessary to appeal. Also,
the one-year period will not include any time during which scheduled trial procedures are delayed because United States
authorities, after timely notification by Philippine authorities to arrange for the presence of the accused, fail to do so.

"7. Within the scope of their legal authority, United States and Philippine authorities shall assist each other in the carrying
out of all necessary investigation into offenses and shall cooperate in providing for the attendance of witnesses and in the
collection and production of evidence, including seizure and, in proper cases, the delivery of objects connected with an
offense.

"8. When United States personnel have been tried in accordance with the provisions of this Article and have been
acquitted or have been convicted and are serving, or have served their sentence, or have had their sentence remitted or
suspended, or have been pardoned, they may not be tried again for the same offense in the Philippines. Nothing in this
paragraph, however, shall prevent United States military authorities from trying United States personnel for any violation
of rules of discipline arising from the act or omission which constituted an offense for which they were tried by Philippine
authorities.

"9. When United States personnel are detained, taken into custody, or prosecuted by Philippine authorities, they shall be
accorded all procedural safeguards established by the law of the Philippines. At the minimum, United States personnel
shall be entitled:

(a) To a prompt and speedy trial;

(b) To be informed in advance of trial of the specific charge or charges made against them and to have
reasonable time to prepare a defense;

(c) To be confronted with witnesses against them and to cross examine such witnesses;

(d) To present evidence in their defense and to have compulsory process for obtaining witnesses;

(e) To have free and assisted legal representation of their own choice on the same basis as nationals of the
Philippines;

(f) To have the service of a competent interpreter; and

(g) To communicate promptly with and to be visited regularly by United States authorities, and to have such
authorities present at all judicial proceedings. These proceedings shall be public unless the court, in accordance
with Philippine laws, excludes persons who have no role in the proceedings.
"10. The confinement or detention by Philippine authorities of United States personnel shall be carried out in facilities
agreed on by appropriate Philippine and United States authorities. United States Personnel serving sentences in the
Philippines shall have the right to visits and material assistance.

"11. United States personnel shall be subject to trial only in Philippine courts of ordinary jurisdiction, and shall not be
subject to the jurisdiction of Philippine military or religious courts.

"Article VI
Claims

"1. Except for contractual arrangements, including United States foreign military sales letters of offer and
acceptance and leases of military equipment, both governments waive any and all claims against each other for
damage, loss or destruction to property of each other’s armed forces or for death or injury to their military and
civilian personnel arising from activities to which this agreement applies.

"2. For claims against the United States, other than contractual claims and those to which paragraph 1 applies,
the United States Government, in accordance with United States law regarding foreign claims, will pay just and
reasonable compensation in settlement of meritorious claims for damage, loss, personal injury or death, caused
by acts or omissions of United States personnel, or otherwise incident to the non-combat activities of the United
States forces.

"Article VII
Importation and Exportation

"1. United States Government equipment, materials, supplies, and other property imported into or acquired in the
Philippines by or on behalf of the United States armed forces in connection with activities to which this agreement
applies, shall be free of all Philippine duties, taxes and other similar charges. Title to such property shall remain
with the United States, which may remove such property from the Philippines at any time, free from export duties,
taxes, and other similar charges. The exemptions provided in this paragraph shall also extend to any duty, tax, or
other similar charges which would otherwise be assessed upon such property after importation into, or acquisition
within, the Philippines. Such property may be removed from the Philippines, or disposed of therein, provided that
disposition of such property in the Philippines to persons or entities not entitled to exemption from applicable
taxes and duties shall be subject to payment of such taxes, and duties and prior approval of the Philippine
Government.

"2. Reasonable quantities of personal baggage, personal effects, and other property for the personal use of
United States personnel may be imported into and used in the Philippines free of all duties, taxes and other
similar charges during the period of their temporary stay in the Philippines. Transfers to persons or entities in the
Philippines not entitled to import privileges may only be made upon prior approval of the appropriate Philippine
authorities including payment by the recipient of applicable duties and taxes imposed in accordance with the laws
of the Philippines. The exportation of such property and of property acquired in the Philippines by United States
personnel shall be free of all Philippine duties, taxes, and other similar charges.

"Article VIII
Movement of Vessels and Aircraft

"1. Aircraft operated by or for the United States armed forces may enter the Philippines upon approval of the
Government of the Philippines in accordance with procedures stipulated in implementing arrangements.

"2. Vessels operated by or for the United States armed forces may enter the Philippines upon approval of the
Government of the Philippines. The movement of vessels shall be in accordance with international custom and
practice governing such vessels, and such agreed implementing arrangements as necessary.

"3. Vehicles, vessels, and aircraft operated by or for the United States armed forces shall not be subject to the
payment of landing or port fees, navigation or over flight charges, or tolls or other use charges, including light and
harbor dues, while in the Philippines. Aircraft operated by or for the United States armed forces shall observe
local air traffic control regulations while in the Philippines. Vessels owned or operated by the United States solely
on United States Government non-commercial service shall not be subject to compulsory pilotage at Philippine
ports.
 "Article IX
Duration and Termination

"This agreement shall enter into force on the date on which the parties have notified each other in writing through the
diplomatic channel that they have completed their constitutional requirements for entry into force. This agreement shall
remain in force until the expiration of 180 days from the date on which either party gives the other party notice in writing
that it desires to terminate the agreement."

Via these consolidated11 petitions for certiorari and prohibition, petitioners - as legislators, non-governmental

organizations, citizens and taxpayers - assail the constitutionality of the VFA and impute to herein respondents grave
abuse of discretion in ratifying the agreement.

We have simplified the issues raised by the petitioners into the following:

I
Do petitioners have legal standing as concerned citizens, taxpayers, or legislators to question the constitutionality of the
VFA?
II
Is the VFA governed by the provisions of Section 21, Article VII or of Section 25, Article XVIII of the Constitution?
III
Does the VFA constitute an abdication of Philippine sovereignty?
a. Are Philippine courts deprived of their jurisdiction to hear and try offenses committed by US military personnel?
b. Is the Supreme Court deprived of its jurisdiction over offenses punishable by reclusion perpetua or higher?
IV
Does the VFA violate:
a. the equal protection clause under Section 1, Article III of the Constitution?
b. the Prohibition against nuclear weapons under Article II, Section 8?
c. Section 28 (4), Article VI of the Constitution granting the exemption from taxes and duties for the equipment,
materials supplies and other properties imported into or acquired in the Philippines by, or on behalf, of the US
Armed Forces?

LOCUS STANDI
At the outset, respondents challenge petitioner’s standing to sue, on the ground that the latter have not shown any interest
in the case, and that petitioners failed to substantiate that they have sustained, or will sustain direct injury as a result of
the operation of the VFA.12 Petitioners, on the other hand, counter that the validity or invalidity of the VFA is a matter of
transcendental importance which justifies their standing. 13

A party bringing a suit challenging the constitutionality of a law, act, or statute must show "not only that the law is invalid,
but also that he has sustained or in is in immediate, or imminent danger of sustaining some direct injury as a result of its
enforcement, and not merely that he suffers thereby in some indefinite way." He must show that he has been, or is about
to be, denied some right or privilege to which he is lawfully entitled, or that he is about to be subjected to some burdens or
penalties by reason of the statute complained of. 14

In the case before us, petitioners failed to show, to the satisfaction of this Court, that they have sustained, or are in danger
of sustaining any direct injury as a result of the enforcement of the VFA. As taxpayers, petitioners have not established
that the VFA involves the exercise by Congress of its taxing or spending powers. 15 On this point, it bears stressing that a
taxpayer’s suit refers to a case where the act complained of directly involves the illegal disbursement of public funds
derived from taxation.16 Thus, in Bugnay Const. & Development Corp. vs. Laron17 ,  we held:

"x x x it is exigent that the taxpayer-plaintiff sufficiently show that he would be benefited or injured by the judgment or
entitled to the avails of the suit as a real party in interest. Before he can invoke the power of judicial review, he must
specifically prove that he has sufficient interest in preventing the illegal expenditure of money raised by taxation and that
he will sustain a direct injury as a result of the enforcement of the questioned statute or contract. It is not sufficient that he
has merely a general interest common to all members of the public."

Clearly, inasmuch as no public funds raised by taxation are involved in this case, and in the absence of any allegation by
petitioners that public funds are being misspent or illegally expended, petitioners, as taxpayers, have no legal standing to
assail the legality of the VFA.
Similarly, Representatives Wigberto Tañada, Agapito Aquino and Joker Arroyo, as petitioners-legislators, do not possess
the requisite locus standi to maintain the present suit. While this Court, in Phil. Constitution Association vs. Hon.
Salvador Enriquez,18 sustained the legal standing of a member of the Senate and the House of Representatives to
question the validity of a presidential veto or a condition imposed on an item in an appropriation bull, we cannot, at this
instance, similarly uphold petitioners’ standing as members of Congress, in the absence of a clear showing of any direct
injury to their person or to the institution to which they belong.

Beyond this, the allegations of impairment of legislative power, such as the delegation of the power of Congress to grant
tax exemptions, are more apparent than real. While it may be true that petitioners pointed to provisions of the VFA which
allegedly impair their legislative powers, petitioners failed however to sufficiently show that they have in fact suffered
direct injury.

In the same vein, petitioner Integrated Bar of the Philippines (IBP) is stripped of standing in these cases. As aptly
observed by the Solicitor General, the IBP lacks the legal capacity to bring this suit in the absence of a board resolution
from its Board of Governors authorizing its National President to commence the present action. 19

Notwithstanding, in view of the paramount importance and the constitutional significance of the issues raised in the
petitions, this Court, in the exercise of its sound discretion, brushes aside the procedural barrier and takes cognizance of
the petitions, as we have done in the early Emergency Powers Cases,20 where we had occasion to rule:

"x x x ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders issued by
President Quirino although they were involving only an indirect and general interest shared in common with the public.
The Court dismissed the objection that they were not proper parties and ruled that ‘transcendental importance to the
public of these cases demands that they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure.’ We have since then applied the exception in many other cases. (Association of Small
Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343)." (Underscoring Supplied)

This principle was reiterated in the subsequent cases of Gonzales vs. COMELEC,21 Daza vs. Singson,22 and Basco vs.
Phil. Amusement and Gaming Corporation,23 where we emphatically held:

"Considering however the importance to the public of the case at bar, and in keeping with the Court’s duty, under the 1987
Constitution, to determine whether or not the other branches of the government have kept themselves within the limits of
the Constitution and the laws and that they have not abused the discretion given to them, the Court has brushed aside
technicalities of procedure and has taken cognizance of this petition. x x x"

Again, in the more recent case of Kilosbayan vs. Guingona, Jr.,24 thisCourt ruled that in cases of transcendental
importance, the Court may relax the standing requirements and allow a suit to prosper even where there is no
direct injury to the party claiming the right of judicial review.

Although courts generally avoid having to decide a constitutional question based on the doctrine of separation of powers,
which enjoins upon the departments of the government a becoming respect for each others’ acts, 25 this Court nevertheless
resolves to take cognizance of the instant petitions.

APPLICABLE CONSTITUTIONAL PROVISION

One focal point of inquiry in this controversy is the determination of which provision of the Constitution applies, with regard
to the exercise by the senate of its constitutional power to concur with the VFA. Petitioners argue that Section 25, Article
XVIII is applicable considering that the VFA has for its subject the presence of foreign military troops in the Philippines.
Respondents, on the contrary, maintain that Section 21, Article VII should apply inasmuch as the VFA is not a basing
arrangement but an agreement which involves merely the temporary visits of United States personnel engaged in joint
military exercises.

The 1987 Philippine Constitution contains two provisions requiring the concurrence of the Senate on treaties or
international agreements. Section 21, Article VII, which herein respondents invoke, reads:

"No treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the
Members of the Senate."

Section 25, Article XVIII, provides:

"After the expiration in 1991 of the Agreement between the Republic of the Philippines and the United States of America
concerning Military Bases, foreign military bases, troops, or facilities shall not be allowed in the Philippines except under a
treaty duly concurred in by the senate and, when the Congress so requires, ratified by a majority of the votes cast by the
people in a national referendum held for that purpose, and recognized as a treaty by the other contracting State."

Section 21, Article VII deals with treatise or international agreements in general, in which case, the concurrence of at least
two-thirds (2/3) of all the Members of the Senate is required to make the subject treaty, or international agreement, valid
and binding on the part of the Philippines. This provision lays down the general rule on treatise or international
agreements and applies to any form of treaty with a wide variety of subject matter, such as, but not limited to, extradition
or tax treatise or those economic in nature. All treaties or international agreements entered into by the Philippines,
regardless of subject matter, coverage, or particular designation or appellation, requires the concurrence of the Senate to
be valid and effective.

In contrast, Section 25, Article XVIII is a special provision that applies to treaties which involve the presence of foreign
military bases, troops or facilities in the Philippines. Under this provision, the concurrence of the Senate is only one of the
requisites to render compliance with the constitutional requirements and to consider the agreement binding on the
Philippines. Section 25, Article XVIII further requires that "foreign military bases, troops, or facilities" may be allowed in the
Philippines only by virtue of a treaty duly concurred in by the Senate, ratified by a majority of the votes cast in a national
referendum held for that purpose if so required by Congress, and recognized as such by the other contracting state.

It is our considered view that both constitutional provisions, far from contradicting each other, actually share some
common ground. These constitutional provisions both embody phrases in the negative and thus, are deemed prohibitory
in mandate and character. In particular, Section 21 opens with the clause "No treaty x x x," and Section 25 contains the
phrase "shall not be allowed." Additionally, in both instances, the concurrence of the Senate is indispensable to render the
treaty or international agreement valid and effective.

To our mind, the fact that the President referred the VFA to the Senate under Section 21, Article VII, and that the Senate
extended its concurrence under the same provision, is immaterial. For in either case, whether under Section 21, Article VII
or Section 25, Article XVIII, the fundamental law is crystalline that the concurrence of the Senate is mandatory to comply
with the strict constitutional requirements.

On the whole, the VFA is an agreement which defines the treatment of United States troops and personnel visiting the
Philippines. It provides for the guidelines to govern such visits of military personnel, and further defines the rights of the
United States and the Philippine government in the matter of criminal jurisdiction, movement of vessel and aircraft,
importation and exportation of equipment, materials and supplies.

Undoubtedly, Section 25, Article XVIII, which specifically deals with treaties involving foreign military bases, troops, or
facilities, should apply in the instant case. To a certain extent and in a limited sense, however, the provisions of section
21, Article VII will find applicability with regard to the issue and for the sole purpose of determining the number of votes
required to obtain the valid concurrence of the Senate, as will be further discussed hereunder.

It is a finely-imbedded principle in statutory construction that a special provision or law prevails over a general one. Lex
specialis derogat generali. Thus, where there is in the same statute a particular enactment and also a general one
which, in its most comprehensive sense, would include what is embraced in the former, the particular enactment must be
operative, and the general enactment must be taken to affect only such cases within its general language which are not
within the provision of the particular enactment.26

In Leveriza vs. Intermediate Appellate Court,27 we enunciated:

"x x x that another basic principle of statutory construction mandates that general legislation must give way to a special
legislation on the same subject, and generally be so interpreted as to embrace only cases in which the special provisions
are not applicable (Sto. Domingo vs. de los Angeles, 96 SCRA 139), that a specific statute prevails over a general statute
(De Jesus vs. People, 120 SCRA 760) and that where two statutes are of equal theoretical application to a particular
case, the one designed therefor specially should prevail (Wil Wilhensen Inc. vs. Baluyot, 83 SCRA 38)."

Moreover, it is specious to argue that Section 25, Article XVIII is inapplicable to mere transient agreements for the reason
that there is no permanent placing of structure for the establishment of a military base. On this score, the Constitution
makes no distinction between "transient’ and "permanent". Certainly, we find nothing in Section 25, Article XVIII that
requires foreign troops or facilities to be stationed or placed permanently  in the Philippines.
It is a rudiment in legal hermenuetics that when no distinction is made by law, the Court should not distinguish- Ubi lex
non distinguit nec nos distinguire debemos.

In like manner, we do not subscribe to the argument that Section 25, Article XVIII is not controlling since no foreign
military bases, but merely foreign troops and facilities, are involved in the VFA. Notably, a perusal of said constitutional
provision reveals that the proscription covers "foreign military bases, troops, or  facilities." Stated differently, this
prohibition is not limited to the entry of troops and facilities without any foreign bases being established. The clause does
not refer to "foreign military bases, troops, or  facilities" collectively but treats them as separate and independent subjects.
The use of comma and the disjunctive word "or" clearly signifies disassociation and independence of one thing from the
others included in the enumeration,28 such that, the provision contemplates three different situations - a military treaty the
subject of which could be either (a) foreign bases, (b) foreign troops, or (c) foreign facilities - any of the three standing
alone places it under the coverage of Section 25, Article XVIII.

To this end, the intention of the framers of the Charter, as manifested during the deliberations of the 1986 Constitutional
Commission, is consistent with this interpretation:

"MR. MAAMBONG. I just want to address a question or two to Commissioner Bernas.

This formulation speaks of three things: foreign military bases, troops or facilities. My first question is: If the country does
enter into such kind of a treaty, must it cover the three-bases, troops or facilities-or could the treaty entered into
cover only one or two?

FR. BERNAS. Definitely, it can cover only one. Whether it covers only one or it covers three, the requirement will
be the same.

MR. MAAMBONG. In other words, the Philippine government can enter into a treaty covering not bases but merely
troops?

FR. BERNAS. Yes.

MR. MAAMBONG. I cannot find any reason why the government can enter into a treaty covering only troops.

FR. BERNAS. Why not? Probably if we stretch our imagination a little bit more, we will find some. We just want to cover
everything."29 (Underscoring Supplied)

Moreover, military bases established within the territory of another state is no longer viable because of the alternatives
offered by new means and weapons of warfare such as nuclear weapons, guided missiles as well as huge sea vessels
that can stay afloat in the sea even for months and years without returning to their home country. These military warships
are actually used as substitutes for a land-home base not only of military aircraft but also of military personnel and
facilities. Besides, vessels are mobile as compared to a land-based military headquarters.

At this juncture, we shall then resolve the issue of whether or not the requirements of Section 25 were complied with when
the Senate gave its concurrence to the VFA.

Section 25, Article XVIII disallows foreign military bases, troops, or facilities in the country, unless the following conditions
are sufficiently met, viz: (a) it must be under a treaty; (b) the treaty must be duly concurred in by the Senate and, when
so required by congress, ratified by a majority of the votes cast by the people in a national referendum; and
(c) recognized as a treaty by the other contracting state.

There is no dispute as to the presence of the first two requisites in the case of the VFA. The concurrence handed by the
Senate through Resolution No. 18 is in accordance with the provisions of the Constitution, whether under the general
requirement in Section 21, Article VII, or the specific mandate mentioned in Section 25, Article XVIII, the provision in the
latter article requiring ratification by a majority of the votes cast in a national referendum being unnecessary since
Congress has not required it.

As to the matter of voting, Section 21, Article VII particularly requires that a treaty or international agreement, to be valid
and effective, must be concurred in by at least two-thirds of all the members of the Senate. On the other hand,
Section 25, Article XVIII simply provides that the treaty be "duly concurred in by the Senate."
Applying the foregoing constitutional provisions, a two-thirds vote of all the members of the Senate is clearly required so
that the concurrence contemplated by law may be validly obtained and deemed present. While it is true that Section 25,
Article XVIII requires, among other things, that the treaty-the VFA, in the instant case-be "duly concurred in by the
Senate," it is very true however that said provision must be related and viewed in light of the clear mandate embodied in
Section 21, Article VII, which in more specific terms, requires that the concurrence of a treaty, or international agreement,
be made by a two -thirds vote of all the members of the Senate. Indeed, Section 25, Article XVIII must not be treated in
isolation to section 21, Article, VII.

As noted, the "concurrence requirement" under Section 25, Article XVIII must be construed in relation to the provisions of
Section 21, Article VII. In a more particular language, the concurrence of the Senate contemplated under Section 25,
Article XVIII means that at least two-thirds of all the members of the Senate favorably vote to concur with the treaty-the
VFA in the instant case.

Under these circumstances, the charter provides that the Senate shall be composed of twenty-four (24)
Senators.30 Without a tinge of doubt, two-thirds (2/3) of this figure, or not less than sixteen (16) members, favorably acting
on the proposal is an unquestionable compliance with the requisite number of votes mentioned in Section 21 of Article VII.
The fact that there were actually twenty-three (23) incumbent Senators at the time the voting was made, 31 will not alter in
any significant way the circumstance that more than two-thirds of the members of the Senate concurred with the proposed
VFA, even if the two-thirds vote requirement is based on this figure of actual members (23). In this regard, the
fundamental law is clear that two-thirds of the 24 Senators, or at least 16 favorable votes, suffice so as to render
compliance with the strict constitutional mandate of giving concurrence to the subject treaty.

Having resolved that the first two requisites prescribed in Section 25, Article XVIII are present, we shall now pass upon
and delve on the requirement that the VFA should be recognized as a treaty by the United States of America.

Petitioners content that the phrase "recognized as a treaty," embodied in section 25, Article XVIII, means that the VFA
should have the advice and consent of the United States Senate pursuant to its own constitutional process, and that it
should not be considered merely an executive agreement by the United States.

In opposition, respondents argue that the letter of United States Ambassador Hubbard stating that the VFA is binding on
the United States Government is conclusive, on the point that the VFA is recognized as a treaty by the United States of
America. According to respondents, the VFA, to be binding, must only be accepted as a treaty by the United States.

This Court is of the firm view that the phrase "recognized as a treaty" means that the other contracting party accepts or
acknowledges the agreement as a treaty.32 To require the other contracting state, the United States of America in this
case, to submit the VFA to the United States Senate for concurrence pursuant to its Constitution, 33 is to accord strict
meaning to the phrase.

Well-entrenched is the principle that the words used in the Constitution are to be given their ordinary meaning except
where technical terms are employed, in which case the significance thus attached to them prevails. Its language should
be understood in the sense they have in common use. 34

Moreover, it is inconsequential whether the United States treats the VFA only as an executive agreement because, under
international law, an executive agreement is as binding as a treaty. 35 To be sure, as long as the VFA possesses the
elements of an agreement under international law, the said agreement is to be taken equally as a treaty.

A treaty, as defined by the Vienna Convention on the Law of Treaties, is "an international instrument concluded between
States in written form and governed by international law, whether embodied in a single instrument or in two or more
related instruments, and whatever its particular designation."36 There are many other terms used for a treaty or
international agreement, some of which are: act, protocol, agreement, compromis d’ arbitrage, concordat, convention,
declaration, exchange of notes, pact, statute, charter and modus vivendi. All writers, from Hugo Grotius onward, have
pointed out that the names or titles of international agreements included under the general term treaty have little or no
legal significance. Certain terms are useful, but they furnish little more than mere description. 37

Article 2(2) of the Vienna Convention provides that "the provisions of paragraph 1 regarding the use of terms in the
present Convention are without prejudice to the use of those terms, or to the meanings which may be given to them in the
internal law of the State."
Thus, in international law, there is no difference between treaties and executive agreements in their binding effect upon
states concerned, as long as the negotiating functionaries have remained within their powers. 38 International law continues
to make no distinction between treaties and executive agreements: they are equally binding obligations upon nations. 39

In our jurisdiction, we have recognized the binding effect of executive agreements even without the concurrence of the
Senate or Congress. In Commissioner of Customs vs. Eastern Sea Trading,40 we had occasion to pronounce:

"x x x the right of the Executive to enter into binding agreements without the necessity of subsequent congressional
approval has been confirmed by long usage. From the earliest days of our history we have entered into executive
agreements covering such subjects as commercial and consular relations, most-favored-nation rights, patent rights,
trademark and copyright protection, postal and navigation arrangements and the settlement of claims. The validity of
these has never been seriously questioned by our courts.

"x x x x x x x x x

"Furthermore, the United States Supreme Court has expressly recognized the validity and constitutionality of executive
agreements entered into without Senate approval. (39 Columbia Law Review, pp. 753-754) (See, also, U.S. vs. Curtis
Wright Export Corporation, 299 U.S. 304, 81 L. ed. 255; U.S. vs. Belmont, 301 U.S. 324, 81 L. ed. 1134; U.S. vs.
Pink, 315 U.S. 203, 86 L. ed. 796; Ozanic vs. U.S. 188 F. 2d. 288; Yale Law Journal, Vol. 15 pp. 1905-1906;
California Law Review, Vol. 25, pp. 670-675; Hyde on International Law [revised Edition], Vol. 2, pp. 1405, 1416-
1418; willoughby on the U.S. Constitution Law, Vol. I [2d ed.], pp. 537-540; Moore, International Law Digest, Vol.
V, pp. 210-218; Hackworth, International Law Digest, Vol. V, pp. 390-407). (Italics Supplied)" (Emphasis Ours)

The deliberations of the Constitutional Commission which drafted the 1987 Constitution is enlightening and highly-
instructive:

"MR. MAAMBONG. Of course it goes without saying that as far as ratification of the other state is concerned, that is
entirely their concern under their own laws.

FR. BERNAS. Yes, but we will accept whatever they say. If they say that we have done everything to make it a treaty,
then as far as we are concerned, we will accept it as a treaty." 41

The records reveal that the United States Government, through Ambassador Thomas C. Hubbard, has stated that the
United States government has fully committed to living up to the terms of the VFA. 42 For as long as the united States of
America accepts or acknowledges the VFA as a treaty, and binds itself further to comply with its obligations under the
treaty, there is indeed marked compliance with the mandate of the Constitution.

Worth stressing too, is that the ratification, by the President, of the VFA and the concurrence of the Senate should be
taken as a clear an unequivocal expression of our nation’s consent to be bound by said treaty, with the concomitant duty
to uphold the obligations and responsibilities embodied thereunder.

Ratification is generally held to be an executive act, undertaken by the head of the state or of the government, as the case
may be, through which the formal acceptance of the treaty is proclaimed. 43 A State may provide in its domestic legislation
the process of ratification of a treaty. The consent of the State to be bound by a treaty is expressed by ratification when:
(a) the treaty provides for such ratification, (b) it is otherwise established that the negotiating States agreed that ratification
should be required, (c) the representative of the State has signed the treaty subject to ratification, or (d) the intention of
the State to sign the treaty subject to ratification appears from the full powers of its representative, or was expressed
during the negotiation.44

In our jurisdiction, the power to ratify is vested in the President and not, as commonly believed, in the legislature. The role
of the Senate is limited only to giving or withholding its consent, or concurrence, to the ratification. 45

With the ratification of the VFA, which is equivalent to final acceptance, and with the exchange of notes between the
Philippines and the United States of America, it now becomes obligatory and incumbent on our part, under the principles
of international law, to be bound by the terms of the agreement. Thus, no less than Section 2, Article II of the
Constitution,46 declares that the Philippines 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 all nations.
As a member of the family of nations, the Philippines agrees to be bound by generally accepted rules for the conduct of its
international relations. While the international obligation devolves upon the state and not upon any particular branch,
institution, or individual member of its government, the Philippines is nonetheless responsible for violations committed by
any branch or subdivision of its government or any official thereof. As an integral part of the community of nations, we are
responsible to assure that our government, Constitution and laws will carry out our international obligation. 47 Hence, we
cannot readily plead the Constitution as a convenient excuse for non-compliance with our obligations, duties and
responsibilities under international law.

Beyond this, Article 13 of the Declaration of Rights and Duties of States adopted by the International Law Commission in
1949 provides: "Every State has the duty to carry out in good faith its obligations arising from treaties and other sources of
international law, and it may not invoke provisions in its constitution or its laws as an excuse for failure to perform this
duty."48

Equally important is Article 26 of the convention which provides that "Every treaty in force is binding upon the parties to it
and must be performed by them in good faith." This is known as the principle of pacta sunt servanda which preserves the
sanctity of treaties and have been one of the most fundamental principles of positive international law, supported by the
jurisprudence of international tribunals.49

NO GRAVE ABUSE OF DISCRETION

In the instant controversy, the President, in effect, is heavily faulted for exercising a power and performing a task
conferred upon him by the Constitution-the power to enter into and ratify treaties. Through the expediency of Rule 65 of
the Rules of Court, petitioners in these consolidated cases impute grave abuse of discretion on the part of the chief
Executive in ratifying the VFA, and referring the same to the Senate pursuant to the provisions of Section 21, Article VII of
the Constitution.

On this particular matter, grave abuse of discretion implies such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction, or, when the power is exercised in an arbitrary or despotic manner by reason of passion
or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty enjoined or to act at
all in contemplation of law.50

By constitutional fiat and by the intrinsic nature of his office, the President, as head of State, is the sole organ and
authority in the external affairs of the country. In many ways, the President is the chief architect of the nation’s foreign
policy; his "dominance in the field of foreign relations is (then) conceded." 51 Wielding vast powers an influence, his conduct
in the external affairs of the nation, as Jefferson describes, is "executive altogether."52

As regards the power to enter into treaties or international agreements, the Constitution vests the same in the President,
subject only to the concurrence of at least two-thirds vote of all the members of the Senate. In this light, the negotiation of
the VFA and the subsequent ratification of the agreement are exclusive acts which pertain solely to the President, in the
lawful exercise of his vast executive and diplomatic powers granted him no less than by the fundamental law itself. Into
the field of negotiation the Senate cannot intrude, and Congress itself is powerless to invade it.53 Consequently, the acts or
judgment calls of the President involving the VFA-specifically the acts of ratification and entering into a treaty and those
necessary or incidental to the exercise of such principal acts - squarely fall within the sphere of his constitutional powers
and thus, may not be validly struck down, much less calibrated by this Court, in the absence of clear showing of grave
abuse of power or discretion.

It is the Court’s considered view that the President, in ratifying the VFA and in submitting the same to the Senate for
concurrence, acted within the confines and limits of the powers vested in him by the Constitution. It is of no moment that
the President, in the exercise of his wide latitude of discretion and in the honest belief that the VFA falls within the ambit of
Section 21, Article VII of the Constitution, referred the VFA to the Senate for concurrence under the aforementioned
provision. Certainly, no abuse of discretion, much less a grave, patent and whimsical abuse of judgment, may be imputed
to the President in his act of ratifying the VFA and referring the same to the Senate for the purpose of complying with the
concurrence requirement embodied in the fundamental law. In doing so, the President merely performed a constitutional
task and exercised a prerogative that chiefly pertains to the functions of his office. Even if he erred in submitting the VFA
to the Senate for concurrence under the provisions of Section 21 of Article VII, instead of Section 25 of Article XVIII of the
Constitution, still, the President may not be faulted or scarred, much less be adjudged guilty of committing an abuse of
discretion in some patent, gross, and capricious manner.

For while it is conceded that Article VIII, Section 1, of the Constitution has broadened the scope of judicial inquiry into
areas normally left to the political departments to decide, such as those relating to national security, it has not altogether
done away with political questions such as those which arise in the field of foreign relations. 54 The High Tribunal’s function,
as sanctioned by Article VIII, Section 1, "is merely (to) check whether or not the governmental branch or agency has gone
beyond the constitutional limits of its jurisdiction, not that it erred or has a different view. In the absence of a showing…
(of) grave abuse of discretion amounting to lack of jurisdiction, there is no occasion for the Court to exercise its corrective
power…It has no power to look into what it thinks is apparent error." 55

As to the power to concur with treaties, the constitution lodges the same with the Senate alone.1âwphi1 Thus, once the
Senate56 performs that power, or exercises its prerogative within the boundaries prescribed by the Constitution, the
concurrence cannot, in like manner, be viewed to constitute an abuse of power, much less grave abuse thereof.
Corollarily, the Senate, in the exercise of its discretion and acting within the limits of such power, may not be similarly
faulted for having simply performed a task conferred and sanctioned by no less than the fundamental law.

For the role of the Senate in relation to treaties is essentially legislative in character; 57 the Senate, as an independent body
possessed of its own erudite mind, has the prerogative to either accept or reject the proposed agreement, and whatever
action it takes in the exercise of its wide latitude of discretion, pertains to the wisdom rather than the legality of the act. In
this sense, the Senate partakes a principal, yet delicate, role in keeping the principles of separation of powers and
of checks and balances alive and vigilantly ensures that these cherished rudiments remain true to their form in a
democratic government such as ours. The Constitution thus animates, through this treaty-concurring power of the Senate,
a healthy system of checks and balances indispensable toward our nation’s pursuit of political maturity and growth. True
enough, rudimentary is the principle that matters pertaining to the wisdom of a legislative act are beyond the ambit and
province of the courts to inquire.

In fine, absent any clear showing of grave abuse of discretion on the part of respondents, this Court- as the final arbiter of
legal controversies and staunch sentinel of the rights of the people - is then without power to conduct an incursion and
meddle with such affairs purely executive and legislative in character and nature. For the Constitution no less, maps out
the distinct boundaries and limits the metes and bounds within which each of the three political branches of government
may exercise the powers exclusively and essentially conferred to it by law.

WHEREFORE, in light of the foregoing disquisitions, the instant petitions are hereby DISMISSED.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Kapunan, Quisumbing, Purisima, Pardo, Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr.,
JJ., concur.
Melo, and Vitug, JJ., join the dissent of J. Puno.
Puno , J., see dissenting opinion.
Mendoza, J., in the result.
Panganiban, J., no part due to close personal and former professional relations with a petitioner, Sen. J.R. Salonga.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 185572               February 7, 2012
CHINA NATIONAL MACHINERY & EQUIPMENT CORP. (GROUP), Petitioner,
vs.
HON. CESAR D. SANTAMARIA, in his official capacity as Presiding Judge of Branch 145, Regional Trial Court of
Makati City, HERMINIO HARRY L. ROQUE, JR., JOEL R. BUTUYAN, ROGER R. RAYEL, ROMEL R. BAGARES,
CHRISTOPHER FRANCISCO C. BOLASTIG, LEAGUE OF URBAN POOR FOR ACTION (LUPA), KILUSAN NG
MARALITA SA MEYCAUAYAN (KMM-LUPA CHAPTER), DANILO M. CALDERON, VICENTE C. ALBAN, MERLYN M.
VAAL, LOLITA S. QUINONES, RICARDO D. LANOZO, JR., CONCHITA G. GOZO, MA. TERESA D. ZEPEDA,
JOSEFINA A. LANOZO, and SERGIO C. LEGASPI, JR., KALIPUNAN NG DAMAYANG MAHIHIRAP (KADAMAY),
EDY CLERIGO, RAMMIL DINGAL, NELSON B. TERRADO, CARMEN DEUNIDA, and EDUARDO
LEGSON, Respondents.
DECISION
SERENO, J.:

This is a Petition for Review on Certiorari with Prayer for the Issuance of a Temporary Restraining Order (TRO) and/or
Preliminary Injunction assailing the 30 September 2008 Decision and 5 December 2008 Resolution of the Court of
Appeals (CA) in CA–G.R. SP No. 103351.1

On 14 September 2002, petitioner China National Machinery & Equipment Corp. (Group) (CNMEG), represented by its
chairperson, Ren Hongbin, entered into a Memorandum of Understanding with the North Luzon Railways Corporation
(Northrail), represented by its president, Jose L. Cortes, Jr. for the conduct of a feasibility study on a possible railway line
from Manila to San Fernando, La Union (the Northrail Project). 2

On 30 August 2003, the Export Import Bank of China (EXIM Bank) and the Department of Finance of the Philippines
(DOF) entered into a Memorandum of Understanding (Aug 30 MOU), wherein China agreed to extend Preferential Buyer’s
Credit to the Philippine government to finance the Northrail Project. 3 The Chinese government designated EXIM Bank as
the lender, while the Philippine government named the DOF as the borrower. 4 Under the Aug 30 MOU, EXIM Bank agreed
to extend an amount not exceeding USD 400,000,000 in favor of the DOF, payable in 20 years, with a 5-year grace
period, and at the rate of 3% per annum.5

On 1 October 2003, the Chinese Ambassador to the Philippines, Wang Chungui (Amb. Wang), wrote a letter to DOF
Secretary Jose Isidro Camacho (Sec. Camacho) informing him of CNMEG’s designation as the Prime Contractor for the
Northrail Project.6

On 30 December 2003, Northrail and CNMEG executed a Contract Agreement for the construction of Section I, Phase I of
the North Luzon Railway System from Caloocan to Malolos on a turnkey basis (the Contract Agreement). 7 The contract
price for the Northrail Project was pegged at USD 421,050,000. 8

On 26 February 2004, the Philippine government and EXIM Bank entered into a counterpart financial agreement – Buyer
Credit Loan Agreement No. BLA 04055 (the Loan Agreement). 9 In the Loan Agreement, EXIM Bank agreed to extend
Preferential Buyer’s Credit in the amount of USD 400,000,000 in favor of the Philippine government in order to finance the
construction of Phase I of the Northrail Project.10

On 13 February 2006, respondents filed a Complaint for Annulment of Contract and Injunction with Urgent Motion for
Summary Hearing to Determine the Existence of Facts and Circumstances Justifying the Issuance of Writs of Preliminary
Prohibitory and Mandatory Injunction and/or TRO against CNMEG, the Office of the Executive Secretary, the DOF, the
Department of Budget and Management, the National Economic Development Authority and Northrail. 11 The case was
docketed as Civil Case No. 06-203 before the Regional Trial Court, National Capital Judicial Region, Makati City, Branch
145 (RTC Br. 145). In the Complaint, respondents alleged that the Contract Agreement and the Loan Agreement were
void for being contrary to (a) the Constitution; (b) Republic Act No. 9184 (R.A. No. 9184), otherwise known as the
Government Procurement Reform Act; (c) Presidential Decree No. 1445, otherwise known as the Government Auditing
Code; and (d) Executive Order No. 292, otherwise known as the Administrative Code. 12

RTC Br. 145 issued an Order dated 17 March 2006 setting the case for hearing on the issuance of injunctive reliefs. 13 On
29 March 2006, CNMEG filed an Urgent Motion for Reconsideration of this Order. 14 Before RTC Br. 145 could rule
thereon, CNMEG filed a Motion to Dismiss dated 12 April 2006, arguing that the trial court did not have jurisdiction over
(a) its person, as it was an agent of the Chinese government, making it immune from suit, and (b) the subject matter, as
the Northrail Project was a product of an executive agreement. 15

On 15 May 2007, RTC Br. 145 issued an Omnibus Order denying CNMEG’s Motion to Dismiss and setting the case for
summary hearing to determine whether the injunctive reliefs prayed for should be issued. 16 CNMEG then filed a Motion for
Reconsideration,17 which was denied by the trial court in an Order dated 10 March 2008. 18 Thus, CNMEG filed before the
CA a Petition for Certiorari with Prayer for the Issuance of TRO and/or Writ of Preliminary Injunction dated 4 April 2008. 19

In the assailed Decision dated 30 September 2008, the appellate court dismissed the Petition for
Certiorari.20 Subsequently, CNMEG filed a Motion for Reconsideration, 21 which was denied by the CA in a Resolution
dated 5 December 2008.22 Thus, CNMEG filed the instant Petition for Review on Certiorari dated 21 January 2009, raising
the following issues: 23

Whether or not petitioner CNMEG is an agent of the sovereign People’s Republic of China.
Whether or not the Northrail contracts are products of an executive agreement between two sovereign states.
Whether or not the certification from the Department of Foreign Affairs is necessary under the foregoing circumstances.
Whether or not the act being undertaken by petitioner CNMEG is an act jure imperii.
Whether or not the Court of Appeals failed to avoid a procedural limbo in the lower court.
Whether or not the Northrail Project is subject to competitive public bidding.
Whether or not the Court of Appeals ignored the ruling of this Honorable Court in the Neri case.

CNMEG prays for the dismissal of Civil Case No. 06-203 before RTC Br. 145 for lack of jurisdiction. It likewise requests
this Court for the issuance of a TRO and, later on, a writ of preliminary injunction to restrain public respondent from
proceeding with the disposition of Civil Case No. 06-203.

The crux of this case boils down to two main issues, namely:

1. Whether CNMEG is entitled to immunity, precluding it from being sued before a local court.

2. Whether the Contract Agreement is an executive agreement, such that it cannot be questioned by or before a
local court.

First issue: Whether CNMEG is entitled to immunity

This Court explained the doctrine of sovereign immunity in Holy See v. Rosario,24 to wit:

There are two conflicting concepts 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 acts or acts jure gestionis.  (Emphasis
supplied; citations omitted.)

x x x           x x x          x x x

The restrictive theory came about because of the entry of sovereign states into purely commercial activities remotely
connected with the discharge of governmental functions. This is particularly true with respect to the Communist states
which took control of nationalized business activities and international trading.

In JUSMAG v. National Labor Relations Commission,25 this Court affirmed the Philippines’ adherence to the restrictive
theory as follows:

The doctrine of state immunity from suit has undergone further metamorphosis. The view evolved that the existence of a
contract does not, per se, mean that sovereign states may, at all times, be sued in local courts. The complexity of
relationships between sovereign states, brought about by their increasing commercial activities, mothered a
more restrictive application of the doctrine.

x x x           x x x          x x x

As it stands now, the application of the doctrine of immunity from suit has been restricted to sovereign or governmental
activities (jure imperii). The mantle of state immunity cannot be extended to commercial, private and proprietary acts (jure
gestionis).26 (Emphasis supplied.)

Since the Philippines adheres to the restrictive theory, it is crucial to ascertain the legal nature of the act involved –
whether the entity claiming immunity performs governmental, as opposed to proprietary, functions. As held in United
States of America v. Ruiz –27

The restrictive application of State immunity is proper only when the proceedings arise out of commercial transactions of
the foreign sovereign, its commercial activities or economic affairs. Stated differently, a State may be said to have
descended to the level of an individual and can thus be deemed to have tacitly given its consent to be sued only when it
enters into business contracts. It does not apply where the contract relates to the exercise of its sovereign functions. 28

A. CNMEG is engaged in a proprietary activity.

A threshold question that must be answered is whether CNMEG performs governmental or proprietary functions. A
thorough examination of the basic facts of the case would show that CNMEG is engaged in a proprietary activity.

The parties executed the Contract Agreement for the purpose of constructing the Luzon Railways, viz: 29

WHEREAS the Employer (Northrail) desired to construct the railways form Caloocan to Malolos, section I, Phase I of
Philippine North Luzon Railways Project (hereinafter referred to as THE PROJECT);

AND WHEREAS the Contractor has offered to provide the Project on Turnkey basis, including design, manufacturing,
supply, construction, commissioning, and training of the Employer’s personnel;

AND WHEREAS the Loan Agreement of the Preferential Buyer’s Credit between Export-Import Bank of China and
Department of Finance of Republic of the Philippines;

NOW, THEREFORE, the parties agree to sign this Contract for the Implementation of the Project.

The above-cited portion of the Contract Agreement, however, does not on its own reveal whether the construction of the
Luzon railways was meant to be a proprietary endeavor. In order to fully understand the intention behind and the purpose
of the entire undertaking, the Contract Agreement must not be read in isolation. Instead, it must be construed in
conjunction with three other documents executed in relation to the Northrail Project, namely: (a) the Memorandum of
Understanding dated 14 September 2002 between Northrail and CNMEG; 30 (b) the letter of Amb. Wang dated 1 October
2003 addressed to Sec. Camacho;31 and (c) the Loan Agreement.32

1. Memorandum of Understanding dated 14 September 2002

The Memorandum of Understanding dated 14 September 2002 shows that CNMEG sought the construction of the Luzon
Railways as a proprietary venture. The relevant parts thereof read:

WHEREAS, CNMEG has the financial capability, professional competence and technical expertise to assess the state of
the [Main Line North (MLN)] and recommend implementation plans as well as undertake its rehabilitation and/or
modernization;
WHEREAS, CNMEG has expressed interest in the rehabilitation and/or modernization of the MLN from Metro Manila to
San Fernando, La Union passing through the provinces of Bulacan, Pampanga, Tarlac, Pangasinan and La Union (the
‘Project’);
WHEREAS, the NORTHRAIL CORP. welcomes CNMEG’s proposal to undertake a Feasibility Study (the "Study") at no
cost to NORTHRAIL CORP.;
WHEREAS, the NORTHRAIL CORP. also welcomes CNMEG’s interest in undertaking the Project with Supplier’s Credit
and intends to employ CNMEG as the Contractor for the Project subject to compliance with Philippine and Chinese laws,
rules and regulations for the selection of a contractor;
WHEREAS, the NORTHRAIL CORP. considers CNMEG’s proposal advantageous to the Government of the Republic of
the Philippines and has therefore agreed to assist CNMEG in the conduct of the aforesaid Study;
x x x           x x x          x x x

II. APPROVAL PROCESS

2.1 As soon as possible after completion and presentation of the Study in accordance with Paragraphs 1.3 and 1.4 above
and in compliance with necessary governmental laws, rules, regulations and procedures required from both parties, the
parties shall commence the preparation and negotiation of the terms and conditions of the Contract (the "Contract") to be
entered into between them on the implementation of the Project. The parties shall use their best endeavors to formulate
and finalize a Contract with a view to signing the Contract within one hundred twenty (120) days from CNMEG’s
presentation of the Study.33 (Emphasis supplied)

Clearly, it was CNMEG that initiated the undertaking, and not the Chinese government. The Feasibility Study was
conducted not because of any diplomatic gratuity from or exercise of sovereign functions by the Chinese government, but
was plainly a business strategy employed by CNMEG with a view to securing this commercial enterprise.

2. Letter dated 1 October 2003

That CNMEG, and not the Chinese government, initiated the Northrail Project was confirmed by Amb. Wang in his letter
dated 1 October 2003, thus:

1. CNMEG has the proven competence and capability to undertake the Project as evidenced by the ranking of 42
given by the ENR among 225 global construction companies.

2. CNMEG already signed an MOU with the North Luzon Railways Corporation last September 14, 2000 during
the visit of Chairman Li Peng. Such being the case, they have already established an initial working relationship
with your North Luzon Railways Corporation. This would categorize CNMEG as the state corporation within the
People’s Republic of China which initiated our Government’s involvement in the Project.

3. Among the various state corporations of the People’s Republic of China, only CNMEG has the advantage of
being fully familiar with the current requirements of the Northrail Project having already accomplished a Feasibility
Study which was used as inputs by the North Luzon Railways Corporation in the approvals (sic) process required
by the Republic of the Philippines.34 (Emphasis supplied.)

Thus, the desire of CNMEG to secure the Northrail Project was in the ordinary or regular course of its business as a
global construction company. The implementation of the Northrail Project was intended to generate profit for CNMEG,
with the Contract Agreement placing a contract price of USD 421,050,000 for the venture. 35 The use of the term "state
corporation" to refer to CNMEG was only descriptive of its nature as a government-owned and/or -controlled corporation,
and its assignment as the Primary Contractor did not imply that it was acting on behalf of China in the performance of the
latter’s sovereign functions. To imply otherwise would result in an absurd situation, in which all Chinese corporations
owned by the state would be automatically considered as performing governmental activities, even if they are clearly
engaged in commercial or proprietary pursuits.

3. The Loan Agreement

CNMEG claims immunity on the ground that the Aug 30 MOU on the financing of the Northrail Project was signed by the
Philippine and Chinese governments, and its assignment as the Primary Contractor meant that it was bound to perform a
governmental function on behalf of China. However, the Loan Agreement, which originated from the same Aug 30 MOU,
belies this reasoning, viz:

Article 11. xxx (j) Commercial Activity The execution and delivery of this Agreement by the Borrower constitute, and the
Borrower’s performance of and compliance with its obligations under this Agreement will constitute, private and
commercial acts done and performed for commercial purposes under the laws of the Republic of the Philippines
and neither the Borrower nor any of its assets is entitled to any immunity or privilege (sovereign or otherwise)
from suit, execution or any other legal process with respect to its obligations under this Agreement, as the case
may be, in any jurisdiction. Notwithstanding the foregoing, the Borrower does not waive any immunity with respect of its
assets which are (i) used by a diplomatic or consular mission of the Borrower and (ii) assets of a military character and
under control of a military authority or defense agency and (iii) located in the Philippines and dedicated to public or
governmental use (as distinguished from patrimonial assets or assets dedicated to commercial use). (Emphasis supplied.)
(k) Proceedings to Enforce Agreement In any proceeding in the Republic of the Philippines to enforce this Agreement, the
choice of the laws of the People’s Republic of China as the governing law hereof will be recognized and such law will be
applied. The waiver of immunity by the Borrower, the irrevocable submissions of the Borrower to the non-exclusive
jurisdiction of the courts of the People’s Republic of China and the appointment of the Borrower’s Chinese Process Agent
is legal, valid, binding and enforceable and any judgment obtained in the People’s Republic of China will be if introduced,
evidence for enforcement in any proceedings against the Borrower and its assets in the Republic of the Philippines
provided that (a) the court rendering judgment had jurisdiction over the subject matter of the action in accordance with its
jurisdictional rules, (b) the Republic had notice of the proceedings, (c) the judgment of the court was not obtained through
collusion or fraud, and (d) such judgment was not based on a clear mistake of fact or law. 36

Further, the Loan Agreement likewise contains this express waiver of immunity:

15.5 Waiver of Immunity The Borrower irrevocably and unconditionally waives, any immunity to which it or its property
may at any time be or become entitled, whether characterized as sovereign immunity or otherwise, from any suit,
judgment, service of process upon it or any agent, execution on judgment, set-off, attachment prior to judgment,
attachment in aid of execution to which it or its assets may be entitled in any legal action or proceedings with respect to
this Agreement or any of the transactions contemplated hereby or hereunder. Notwithstanding the foregoing, the Borrower
does not waive any immunity in respect of its assets which are (i) used by a diplomatic or consular mission of the
Borrower, (ii) assets of a military character and under control of a military authority or defense agency and (iii) located in
the Philippines and dedicated to a public or governmental use (as distinguished from patrimonial assets or assets
dedicated to commercial use).37

Thus, despite petitioner’s claim that the EXIM Bank extended financial assistance to Northrail because the bank was
mandated by the Chinese government, and not because of any motivation to do business in the Philippines, 38 it is clear
from the foregoing provisions that the Northrail Project was a purely commercial transaction.

Admittedly, the Loan Agreement was entered into between EXIM Bank and the Philippine government, while the Contract
Agreement was between Northrail and CNMEG. Although the Contract Agreement is silent on the classification of the
legal nature of the transaction, the foregoing provisions of the Loan Agreement, which is an inextricable part of the entire
undertaking, nonetheless reveal the intention of the parties to the Northrail Project to classify the whole venture as
commercial or proprietary in character.

Thus, piecing together the content and tenor of the Contract Agreement, the Memorandum of Understanding dated 14
September 2002, Amb. Wang’s letter dated 1 October 2003, and the Loan Agreement would reveal the desire of CNMEG
to construct the Luzon Railways in pursuit of a purely commercial activity performed in the ordinary course of its business.

B. CNMEG failed to adduce evidence that it is immune from suit under Chinese law.

Even assuming arguendo that CNMEG performs governmental functions, such claim does not automatically vest it with
immunity. This view finds support in Malong v. Philippine National Railways, in which this Court held that "(i)mmunity from
suit is determined by the character of the objects for which the entity was organized." 39

In this regard, this Court’s ruling in Deutsche Gesellschaft Für Technische Zusammenarbeit (GTZ) v. CA 40 must be
examined. In Deutsche Gesellschaft, Germany and the Philippines entered into a Technical Cooperation Agreement,
pursuant to which both signed an arrangement promoting the Social Health Insurance–Networking and Empowerment
(SHINE) project. The two governments named their respective implementing organizations: the Department of Health
(DOH) and the Philippine Health Insurance Corporation (PHIC) for the Philippines, and GTZ for the implementation of
Germany’s contributions. In ruling that GTZ was not immune from suit, this Court held:

The arguments raised by GTZ and the [Office of the Solicitor General (OSG)] are rooted in several indisputable facts. The
SHINE project was implemented pursuant to the bilateral agreements between the Philippine and German governments.
GTZ was tasked, under the 1991 agreement, with the implementation of the contributions of the German government. The
activities performed by GTZ pertaining to the SHINE project are governmental in nature, related as they are to the
promotion of health insurance in the Philippines. The fact that GTZ entered into employment contracts with the private
respondents did not disqualify it from invoking immunity from suit, as held in cases such as Holy See v. Rosario, Jr., which
set forth what remains valid doctrine:

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 the
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 imperii, especially when it is not undertaken for gain or profit.

Beyond dispute is the tenability of the comment points (sic) raised by GTZ and the OSG that GTZ was not performing
proprietary functions notwithstanding its entry into the particular employment contracts. Yet there is an equally
fundamental premise which GTZ and the OSG fail to address, namely: Is GTZ, by conception, able to enjoy the Federal
Republic’s immunity from suit?

The principle of state immunity from suit, whether a local state or a foreign state, is reflected in Section 9, Article XVI of
the Constitution, which states that "the State may not be sued without its consent." Who or what consists of "the State"?
For one, the doctrine is available to foreign States insofar as they are sought to be sued in the courts of the local State,
necessary as it is to avoid "unduly vexing the peace of nations."

If the instant suit had been brought directly against the Federal Republic of Germany, there would be no doubt that it is a
suit brought against a State, and the only necessary inquiry is whether said State had consented to be sued. However,
the present suit was brought against GTZ. It is necessary for us to understand what precisely are the parameters of the
legal personality of GTZ.

Counsel for GTZ characterizes GTZ as "the implementing agency of the Government of the Federal Republic of
Germany," a depiction similarly adopted by the OSG. Assuming that the characterization is correct, it does not
automatically invest GTZ with the ability to invoke State immunity from suit. The distinction lies in whether the
agency is incorporated or unincorporated.

x x x           x x x          x x x

State immunity from suit may be waived by general or special law. The special law can take the form of the original
charter of the incorporated government agency. Jurisprudence is replete with examples of incorporated government
agencies which were ruled not entitled to invoke immunity from suit, owing to provisions in their charters manifesting their
consent to be sued.

x x x           x x x          x x x

It is useful to note that on the part of the Philippine government, it had designated two entities, the Department of Health
and the Philippine Health Insurance Corporation (PHIC), as the implementing agencies in behalf of the Philippines. The
PHIC was established under Republic Act No. 7875, Section 16 (g) of which grants the corporation the power "to sue and
be sued in court." Applying the previously cited jurisprudence, PHIC would not enjoy immunity from suit even in the
performance of its functions connected with SHINE, however, (sic) governmental in nature as (sic) they may be.

Is GTZ an incorporated agency of the German government? There is some mystery surrounding that question.
Neither GTZ nor the OSG go beyond the claim that petitioner is "the implementing agency of the Government of
the Federal Republic of Germany." On the other hand, private respondents asserted before the Labor Arbiter that GTZ
was "a private corporation engaged in the implementation of development projects." The Labor Arbiter accepted that claim
in his Order denying the Motion to Dismiss, though he was silent on that point in his Decision. Nevertheless, private
respondents argue in their Comment that the finding that GTZ was a private corporation "was never controverted, and is
therefore deemed admitted." In its Reply, GTZ controverts that finding, saying that it is a matter of public knowledge that
the status of petitioner GTZ is that of the "implementing agency," and not that of a private corporation.

In truth, private respondents were unable to adduce any evidence to substantiate their claim that GTZ was a "private
corporation," and the Labor Arbiter acted rashly in accepting such claim without explanation. But neither has GTZ
supplied any evidence defining its legal nature beyond that of the bare descriptive "implementing agency." There
is no doubt that the 1991 Agreement designated GTZ as the "implementing agency" in behalf of the German
government. Yet the catch is that such term has no precise definition that is responsive to our concerns.
Inherently, an agent acts in behalf of a principal, and the GTZ can be said to act in behalf of the German state. But
that is as far as "implementing agency" could take us. The term by itself does not supply whether GTZ is
incorporated or unincorporated, whether it is owned by the German state or by private interests, whether it has
juridical personality independent of the German government or none at all.

x x x           x x x          x x x
Again, we are uncertain of the corresponding legal implications under German law surrounding "a private
company owned by the Federal Republic of Germany." Yet taking the description on face value, the apparent
equivalent under Philippine law is that of a corporation organized under the Corporation Code but owned by the
Philippine government, or a government-owned or controlled corporation without original charter. And it bears
notice that Section 36 of the Corporate Code states that "[e]very corporation incorporated under this Code has
the power and capacity x x x to sue and be sued in its corporate name."

It is entirely possible that under German law, an entity such as GTZ or particularly GTZ itself has not been vested or has
been specifically deprived the power and capacity to sue and/or be sued. Yet in the proceedings below and before this
Court, GTZ has failed to establish that under German law, it has not consented to be sued despite it being owned
by the Federal Republic of Germany. We adhere to the rule that in the absence of evidence to the contrary,
foreign laws on a particular subject are presumed to be the same as those of the Philippines, and following the
most intelligent assumption we can gather, GTZ is akin to a governmental owned or controlled corporation
without original charter which, by virtue of the Corporation Code, has expressly consented to be sued. At the very
least, like the Labor Arbiter and the Court of Appeals, this Court has no basis in fact to conclude or presume that GTZ
enjoys immunity from suit.41 (Emphasis supplied.)

Applying the foregoing ruling to the case at bar, it is readily apparent that CNMEG cannot claim immunity from suit, even if
it contends that it performs governmental functions. Its designation as the Primary Contractor does not automatically grant
it immunity, just as the term "implementing agency" has no precise definition for purposes of ascertaining whether GTZ
was immune from suit. Although CNMEG claims to be a government-owned corporation, it failed to adduce evidence that
it has not consented to be sued under Chinese law. Thus, following this Court’s ruling in Deutsche Gesellschaft, in the
absence of evidence to the contrary, CNMEG is to be presumed to be a government-owned and -controlled corporation
without an original charter. As a result, it has the capacity to sue and be sued under Section 36 of the Corporation Code.

C. CNMEG failed to present a certification from the Department of Foreign Affairs.

In Holy See,42 this Court reiterated the oft-cited doctrine that the determination by the Executive that an entity is entitled to
sovereign or diplomatic immunity is a political question conclusive upon the courts, to wit:

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.

x x x           x x x          x x x

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 v. 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 v.
Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court a telegram to that effect. In Baer v.
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 v. Bradford, 75 Phil. 50 [1945]; Miquiabas v. Philippine-Ryukyus Command, 80 Phil. 262
[1948]; United States of America v. Guinto, 182 SCRA 644 [1990] and companion cases). In cases where the foreign
states bypass the Foreign Office, the courts can inquire into the facts and make their own determination as to the nature
of the acts and transactions involved.43 (Emphasis supplied.)

The question now is whether any agency of the Executive Branch can make a determination of immunity from suit, which
may be considered as conclusive upon the courts. This Court, in Department of Foreign Affairs (DFA) v. National Labor
Relations Commission (NLRC),44 emphasized the DFA’s competence and authority to provide such necessary
determination, to wit:

The DFA’s function includes, among its other mandates, the determination of persons and institutions covered by
diplomatic immunities, a determination which, when challenge, (sic) entitles it to seek relief from the court so as 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 thereto 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 (sic) the
DFA as being the highest executive department with the competence and authority to so act in this aspect of the
international arena.45 (Emphasis supplied.)

Further, the fact that this authority is exclusive to the DFA was also emphasized in this Court’s ruling in Deutsche
Gesellschaft:

It is to be recalled that the Labor Arbiter, in both of his rulings, noted that it was imperative for petitioners to secure from
the Department of Foreign Affairs "a certification of respondents’ diplomatic status and entitlement to diplomatic privileges
including immunity from suits." The requirement might not necessarily be imperative. However, had GTZ obtained such
certification from the DFA, it would have provided factual basis for its claim of immunity that would, at the very least,
establish a disputable evidentiary presumption that the foreign party is indeed immune which the opposing party will have
to overcome with its own factual evidence. We do not see why GTZ could not have secured such certification or
endorsement from the DFA for purposes of this case. Certainly, it would have been highly prudential for GTZ to obtain the
same after the Labor Arbiter had denied the motion to dismiss. Still, even at this juncture, we do not see any evidence that
the DFA, the office of the executive branch in charge of our diplomatic relations, has indeed endorsed GTZ’s claim of
immunity. It may be possible that GTZ tried, but failed to secure such certification, due to the same concerns that we have
discussed herein.

Would the fact that the Solicitor General has endorsed GTZ’s claim of State’s immunity from suit before this Court
sufficiently substitute for the DFA certification? Note that the rule in public international law quoted in Holy See referred to
endorsement by the Foreign Office of the State where the suit is filed, such foreign office in the Philippines being the
Department of Foreign Affairs. Nowhere in the Comment of the OSG is it manifested that the DFA has endorsed GTZ’s
claim, or that the OSG had solicited the DFA’s views on the issue. The arguments raised by the OSG are virtually the
same as the arguments raised by GTZ without any indication of any special and distinct perspective maintained by the
Philippine government on the issue. The Comment filed by the OSG does not inspire the same degree of confidence as a
certification from the DFA would have elicited.46 (Emphasis supplied.)

In the case at bar, CNMEG offers the Certification executed by the Economic and Commercial Office of the Embassy of
the People’s Republic of China, stating that the Northrail Project is in pursuit of a sovereign activity. 47 Surely, this is not the
kind of certification that can establish CNMEG’s entitlement to immunity from suit, as Holy See unequivocally refers to the
determination of the "Foreign Office of the state where it is sued."

Further, CNMEG also claims that its immunity from suit has the executive endorsement of both the OSG and the Office of
the Government Corporate Counsel (OGCC), which must be respected by the courts. However, as expressly enunciated
in Deutsche Gesellschaft, this determination by the OSG, or by the OGCC for that matter, does not inspire the same
degree of confidence as a DFA certification. Even with a DFA certification, however, it must be remembered that this
Court is not precluded from making an inquiry into the intrinsic correctness of such certification.

D. An agreement to submit any dispute to arbitration may be construed as an implicit waiver of immunity from suit.

In the United States, the Foreign Sovereign Immunities Act of 1976 provides for a waiver by implication of state immunity.
In the said law, the agreement to submit disputes to arbitration in a foreign country is construed as an implicit waiver of
immunity from suit. Although there is no similar law in the Philippines, there is reason to apply the legal reasoning behind
the waiver in this case.

The Conditions of Contract,48 which is an integral part of the Contract Agreement, 49 states:

33. SETTLEMENT OF DISPUTES AND ARBITRATION

33.1. Amicable Settlement

Both parties shall attempt to amicably settle all disputes or controversies arising from this Contract before the
commencement of arbitration.

33.2. Arbitration

All disputes or controversies arising from this Contract which cannot be settled between the Employer and the Contractor
shall be submitted to arbitration in accordance with the UNCITRAL Arbitration Rules at present in force and as may be
amended by the rest of this Clause. The appointing authority shall be Hong Kong International Arbitration Center. The
place of arbitration shall be in Hong Kong at Hong Kong International Arbitration Center (HKIAC).

Under the above provisions, if any dispute arises between Northrail and CNMEG, both parties are bound to submit the
matter to the HKIAC for arbitration. In case the HKIAC makes an arbitral award in favor of Northrail, its enforcement in the
Philippines would be subject to the Special Rules on Alternative Dispute Resolution (Special Rules). Rule 13 thereof
provides for the Recognition and Enforcement of a Foreign Arbitral Award. Under Rules 13.2 and 13.3 of the Special
Rules, the party to arbitration wishing to have an arbitral award recognized and enforced in the Philippines must petition
the proper regional trial court (a) where the assets to be attached or levied upon is located; (b) where the acts to be
enjoined are being performed; (c) in the principal place of business in the Philippines of any of the parties; (d) if any of the
parties is an individual, where any of those individuals resides; or (e) in the National Capital Judicial Region.

From all the foregoing, it is clear that CNMEG has agreed that it will not be afforded immunity from suit. Thus, the courts
have the competence and jurisdiction to ascertain the validity of the Contract Agreement.

Second issue: Whether the Contract Agreement is an executive agreement

Article 2(1) of the Vienna Convention on the Law of Treaties (Vienna Convention) defines a treaty as follows:

[A]n international agreement concluded between States in written form and governed by international law, whether
embodied in a single instrument or in two or more related instruments and whatever its particular designation.

In Bayan Muna v. Romulo, this Court held that an executive agreement is similar to a treaty, except that the former (a)
does not require legislative concurrence; (b) is usually less formal; and (c) deals with a narrower range of subject
matters.50

Despite these differences, to be considered an executive agreement, the following three requisites provided under the
Vienna Convention must nevertheless concur: (a) the agreement must be between states; (b) it must be written; and (c) it
must governed by international law. The first and the third requisites do not obtain in the case at bar.

A. CNMEG is neither a government nor a government agency.

The Contract Agreement was not concluded between the Philippines and China, but between Northrail and CNMEG. 51 By
the terms of the Contract Agreement, Northrail is a government-owned or -controlled corporation, while CNMEG is a
corporation duly organized and created under the laws of the People’s Republic of China. 52 Thus, both Northrail and
CNMEG entered into the Contract Agreement as entities with personalities distinct and separate from the Philippine and
Chinese governments, respectively.

Neither can it be said that CNMEG acted as agent of the Chinese government. As previously discussed, the fact that
Amb. Wang, in his letter dated 1 October 2003,53 described CNMEG as a "state corporation" and declared its designation
as the Primary Contractor in the Northrail Project did not mean it was to perform sovereign functions on behalf of China.
That label was only descriptive of its nature as a state-owned corporation, and did not preclude it from engaging in purely
commercial or proprietary ventures.

B. The Contract Agreement is to be governed by Philippine law.

Article 2 of the Conditions of Contract,54 which under Article 1.1 of the Contract Agreement is an integral part of the latter,
states:

APPLICABLE LAW AND GOVERNING LANGUAGE

The contract shall in all respects be read and construed in accordance with the laws of the Philippines.
The contract shall be written in English language. All correspondence and other documents pertaining to the Contract
which are exchanged by the parties shall be written in English language.

Since the Contract Agreement explicitly provides that Philippine law shall be applicable, the parties have effectively
conceded that their rights and obligations thereunder are not governed by international law.

It is therefore clear from the foregoing reasons that the Contract Agreement does not partake of the nature of an executive
agreement. It is merely an ordinary commercial contract that can be questioned before the local courts.

WHEREFORE, the instant Petition is DENIED. Petitioner China National Machinery & Equipment Corp. (Group) is not
entitled to immunity from suit, and the Contract Agreement is not an executive agreement. CNMEG’s prayer for the
issuance of a TRO and/or Writ of Preliminary Injunction is DENIED for being moot and academic. This case is
REMANDED to the Regional Trial Court of Makati, Branch 145, for further proceedings as regards the validity of the
contracts subject of Civil Case No. 06-203.

No pronouncement on costs of suit.

SO ORDERED.