Elleason Joshua G.

Francisco 3-Mar-23
2020110163

1. Differentiate

JUS COGENS AND OBLIGATIO ERGA OMNES

Jus Cogens, a norm that is generally accepted and recognized internationally by states
as a whole and as a norm from which no derogation is permitted and which can be
modified only by a subsequent norm of general international law having the same
character while Obligations erga omnes refers to the obligation of every State toward
the international community as a whole.

PACTA SUNT SERVANDA AND REBUS SIC STANTIBUS

Under the principle of Pacta sunt servanda, international agreements such as a treaty
must be performed in good faith while Rebus Sic Stanibus is a latin phrase that refers
to a situation where a contract cannot be withdrawn from or terminated as long as the
conditions and circumstances surrounding the contract have not fundamentally
changed.

INCORPORATION AND TRANSFORMATION DOCTRINES

The Doctrine of Incorporation means that the rules of international law form part of
the law of the land and no further legislative action is needed to make such rules
applicable in the domestic sphere while Doctrine of Transformation are generally
accepted rules of international law are not per se binding upon the State but must first
be embodied in legislature enacted by the lawmaking body and so transformed into
municipal law.

SOFT LAW AND HARD LAW

Hard laws are international laws which are transformed into a domestic law through
legislation while soft laws are those international laws which are transformed into a
domestic law either through judicial decisions or legislative act of a State.

2. PRINCIPLE OF EX AEQUO ET BONO

“Ex Aequo et bono” literally means “according to the right and good.” Under this
principle, a judgment is based on considerations of fairness, not on considerations of
existing laws. That is, to simply decide a case based upon a balancing of the equities.

3. DIGESTS
Pharmaceutical and Healthcare Association of the Philippines v. Duque III

Facts:
- The Incorporation Clause, generally accepted principles of international law are those
customary rules accepted as binding and established in different jurisdictions. They
are not recommendatory but are part of the general and consistent practice of states
from a sense of obligation.

- Pharmaceutical and Healthcare Association of the Philippines sought to nullify

Administrative Order No. 2006-0012 or the Revised Implementing Rule and
Regulations of the Executive Order No. 51 or the Milk Code (RIRR).

- Alleging that the RIRR is invalid because it contains provisions that are not
constitutional and go beyond the law it is supposed to implement. Specifically, the
RIRR prohibits advertising, promotion, sponsorships, or marketing breastmilk
substitutes for infants and young children. Through the RIRR, the Respondents
Department of Health officials amended and expanded the Milk Code.

- The Respondents’ defense countered that the RIRR implements not only the Milk
Code, but also various international agreements and instruments regarding infant and
young child nutrition, specifically Article 11 of the International Code of Marketing of
Breastmilk Substitutes (ICMBS) adopted by the World Health Assembly (WHA). For
them, these international agreements are deemed part of the law of the land under the
Doctrine of Incorporation as provided by the Constitution, and therefore must be
implemented through the RIRR.

Issue: 

Whether or not the international agreements are part of the law of the land and may be
implemented through the RIRR

Held:

No, the international law could become part of the law of the land either by
transformation or incorporation. In the transformation method, an international law can
be transformed into a domestic law through a constitutional mechanism such as
legislation. An enabling law is required in order for international law to become
effective. In the incorporation method, international law is deemed to have the force of
domestic law. Thus, under the Constitution, treaties or international agreements shall
become valid and effective upon concurrence of two-thirds of all members of the
Senate. Further, the Court held that under the Incorporation Clause, generally accepted
principles of international law are those customary rules accepted as binding and
established in different jurisdictions. They are not recommendatory but are part of the
general and consistent practice of states from a sense of obligation. If they are
recommendatory, these international laws are called soft law or non-binding norms,
principals, and practices that influence state behaviour, as opposed to hard law which
are binding rules of international law.

In the present case, the ICMBS and subsequent resolutions are merely recommendatory
and legally non-binding because the WHA Regulations provides that recommendations
of the assembly do not come into force for members, unlike conventions, agreements,
or regulations as they may be deemed as such. In fact, the WHA recommendations are
generally not binding but merely carry moral and political weight on certain health
issues, according to the World Health Organization (WHO). The ICMBS itself provides
that the code on the marketing of breastmilk substitutes was adopted in the form of
recommendation rather than a regulation. Thus, though the Milk Code adopted most of
the provisions under the ICMBS, the subsequent WHA resolutions, which includes the
non-promotion or advertisement of breastmilk substitutes, have not been adopted as a
domestic law, and cannot be considered as part of the law of the land.

Further, the WHA Resolutions cannot be considered as customary international law

because the Respondents have not presented evidence that the said resolutions were
enforced or adopted by at least a majority of the members-states. They also failed to
prove that any compliance by member-states was obligatory in nature. Hence, they
cannot be considered as generally accepted principles of international law which shall
form part of the law of the land through the Doctrine of Incorporation, and may not be
used by the Respondents as basis for the RIRR.

Wherefore, the ppetition is partially g ranted. Sections 4(F), 11 And 46 Of

Administrative Order No. 2006-0012 Dated May 12, 2006 Are
declared Null and Void for Being Ultra Vires. The Department of Health and
Respondents Are Prohibited from Implementing Said Provisions

The Paquete Habana 

Facts:

- The United States imposed a blockade of Cuba and declared war against Spain.

- They were out to sea, fishing along the coast of Cuba and near Yucatan, two
Spanish vessels engaged in fishing off the coast of Cuba were captured by
blockading squadrons.

- stopped by the blockading squadron, the fishing vessels had no knowledge of the
existence of the war, or of any blockade.

- They had no arms or ammunition on board, and made no attempt to run the
blockade after they knew of its existence, nor any resistance at the time of the
capture. When the vessels returned with their catches of fresh fish, they were seized
and a libel of condemnation of each vessel as a prize of war was filed against the
vessel in court.

Issue:

Is the decree of condemnation and auction the fishing vessels valid?

Held:

The court ruled that under the law of nations, in the cases it was unlawful and without
probable cause. It was a rule of international law that coast fishing vessels, pursuing
their vocation of catching and bringing in fresh fish, were exempt, with their cargoes
and crews, from capture as prize of war. Although not reduced to treaty or statutory
law, courts were obligated to take notice of and give effect to that rule. Thus, the
decrees condemning the vessels were reversed and, in each case, it was ordered that the
proceeds of the sales of each vessel and cargo be restored to the respective claimant,
with compensatory damages and costs. The Court also noted that it had appellate
jurisdiction over the controversy without regard to the amount in dispute and without
certification from the district court, as required by prior statutory law.

Land Bank of The Philippines vs. Atlanta Industries, Inc.,

Facts:

- October 3, 2006, Land Bank of the Philippines and the International Bank for
Reconstruction and Development entered into loan aagreement for the
implementation. of the "Support for Strategic Local Development and Investment .
Project". The loan facility in the amount of JP¥11,710,000,000.00 was fully
guaranteed by the Government of the Philippines and conditioned upon the
participation of at least two (2) local government units by way of a Subsidiary Loan
Agreement with Land Bank.

- February 22, 2007, Land Bank entered into an subsidiary loan agreement  with the
City Government of Iligan to finance the development and expansion of the city's
water supply system, which had two (2) components, namely: (a) the procurement
of civil works; and ( b) the procurement of goods for the supply and delivery of
various sizes of PE 100 HDPE pipes and fittings. The SLA expressly provided that
the goods, works, and services to be financed out of the proceeds of the loan with
Land Bank were to be "procured in accordance with the provisions of Section I of
the 'Guidelines: Procurement under IBRD Loans and IDA Credits', and with the
provisions of [the] Schedule 4." Accordingly, the City Government of Iligan,
through its BAC, conducted a public bidding for the supply and delivery of various
sizes of PE 100 HDPE pipes and fittings using the IBRD Procurement Guidelines.

- Respondent Atlanta Industries, Inc. (Atlanta) participated in the said bidding and
came up with the second to the lowest bid in the amount of ₱193,959,354.34

- The letter dated July 27, 2009, the BAC informed Atlanta that the bidding was
declared a failure upon the recommendation of Land "Bank due to the IBRD 's non-
concurrence with the Bid Evaluation Report. Moreover, in a letterdated August 28,
2009, the BAC informed Atlanta of its disqualification from the bidding because it
lacked several documentary requirements.

- Their response, Atlanta, through a letter14 dated September 8, 2009, sought to

correct the BAC's erroneous assumption that it failed to submit the necessary
documents and to have its disqualification reconsidered. It expressed its objection
against the BAC's declaration of a failure of bidding, asserting that had it not been
improperly disqualified there would have also been no need to declare the bidding a
failure because its tender would be the sole responsive bid necessary to save the bid
process.

- In their Resolution16 dated September 25, 2009, the BAC deemed it futile to

reconsider Atlanta's disqualification in view of the fact that the bidding had already
 been declared a failure because of noted violations of the IBRD Procurement
Guidelines and that, unless the BAC conducts a new bidding on the project, it
would not be able to obtain a "no objection" from .the World Bank. Atlanta did not
pursue the matter further with the BAC and opted, instead, to participate in the re-
bidding of the project, the notice of which was published anew on October 30,
2009.

- in a letter dated November 16, 2009, called the BAC's attention to its use of Bidding
Documents which, as it purported, not only failed to conform with the Third Edition
of the Philippine Bidding Documents for the Procurement of Goods
(PBDs) prescribed by the Government Procurement Policy Board (GPPB) but also
contained numerous provisions that were not in accordance with RA 9184 and its
Implementing Rules and Regulations (IRR). During the pre-bid conference, the
BAC declared that the project was not covered by RA 9184 or by any of the GPPB
's issuances. It further announced that the bid opening would be conducted on
December 14, 2009.

- Apprehensive of the BAC's use of bidding documents that appeared to be in

contravention of RA 9184 and its IRR, Atlanta filed on December 10, 2009 a
Petition for Prohibition and Mandamus22 with an urgent prayer for the issuance of a
temporary restraining order (TRO) and/or writ of preliminary injunction to enjoin
the re-bidding .of the project against the City Government of Iligan, the BAC, and
Land Bank before the Manila RTC, docketed as Civil Case No. 09-122643 (Petition
for Prohibition).

- In a Decision dated September 3, 2010, the Manila RTC declared the subject
bidding null and void on the ground that it was done contrary to the rules and
procedure prescribed in RA 9184 and its IRR. Consequently, it enjoined the City
Government of Iligan and. its BAC from entering into and/or implementing the
contract for the supply of water pipes with Moldex Products, Inc.

- The Manila RTC also ruled that the City Government of Iligan cannot claim
exemption from the application of RA 9184 and its IRR by virtue of Loan
Agreement No. 48~3-PH with the IBRD because it was Land Bank, and not the
City Government of Iligan, which was the party to the same. Moreover, it .held that
the IBRD could not have passed on its status as an international institution exempt
from RA 9184 simply because it loaned money to Land Bank.31 It added that the
SLA subsequently executed by Land Bank with the City Government of Iligan
cannot validly provide for the use of bidding procedures different from those
provided under RA 9184 because the said SLA is not in the nature of an
international agreement similar to the Loan Agreement with the IBRD.

Issue:

Whether or not the SLA between the Land Bank and the City Government of Iligan is
an executive agreement similar to Loan Agreement No. 4833-PH such that the
procurement of water pipes by the BAC of the City Government of Iligan should be
deemed exempt from the application of RA 9184.

Held:
As the parties have correctly discerned, Loan Agreement No. 4833-PH is in the nature
of an executive agreement. In Bayan Muna v. Romulo (Bayan Muna) the Court defined
an international agreement as one 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," and further
expounded that it may be in the form of either (a) treaties that require legislative
concurrence after executive ratification; or ( b) executive agreements that are similar to
treaties, except that they do not require legislative concurrence and are usually less
formal and deal with a narrower range of subject matters than treaties. 49 Examining its
features, Loan Agreement No. 4833-PH between the IBRD and the Land Bank is an
integral component of the Guarantee Agreement executed by the Government of the
Philippines as a subject of international law possessed of a treaty-making capacity, and
the IBRD, which, as an international lending institution organized by world
governments to provide loans conditioned upon the guarantee of repayment by the
borrowing sovereign state, is likewise regarded a subject of international law and
possessed of the capacity to enter into executive agreements with sovereign states.
Being similar to a treaty but without requiring legislative concurrence, Loan Agreement
No. 4833-PH - following the definition given in the Bayan Muna case - is an executive
agreement and is, thus, governed by international law. Owing to this classification, the
Government of the Philippines is therefore obligated to observe its terms and conditions
under the rule of pacta sunt servanda, a fundamental maxim of international law that
requires the parties to keep their agreement in good faith. 50 It bears pointing out that the
pacta sunt servanda rule has become part of the law of the land through the
incorporation clause found under Section 2, Article II of the 1987 Philippine
Constitution, which states 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." Keeping in mind
the foregoing attributions, the .Court now examines the SLA and its relation with Loan
Agreement No. 4833-PH.

As may be palpably observed, the terms and conditions of Loan Agreement No. 4833-
PH, being a project-based and government-guaranteed loan facility, were incorporated
and made part of the SLA that was subsequently entered into by Land Bank with the
City Government of Iligan.51 Consequently, this means that the SLA cannot be treated
as an independent and unrelated contract but as a conjunct of, or having a joint and
simultaneous occurrence with, Loan Agreement No. 4833-PH. Its nature and
consideration, being a mere accessory contract of Loan Agreement No. 4833-PH, are
thus the same as that of its principal contract from which it receives life and without
which it cannot exist as an independent contract. 52 Indeed, the accessory follows the
principal;53 and, concomitantly, accessory contracts should not be read independently of
the main contract.54 Hence, as Land Bank correctly puts it, the SLA has attained
indivisibility with the Loan Agreement and the Guarantee Agreement through the
incorporation of each other's terms and conditions such that the character of one has
likewise become the character of the other.

The question as to whether or not foreign loan agreements with international financial
institutions, such as Loan No. 7118-PH, partake of an executive or international
agreement within the purview of Section 4 of R.A. No. 9184, has been answered by the
Court in the affirmative in [Abaya v. Sec. Ebdane, Jr., 544 Phil. 645 (2007)].
Significantly, Abaya declared that the RP-JBIC loan agreement was to be of governing
application over the CP I project and that the JBIC · Procurement Guidelines, as
stipulated in the loan agreement, shall primarily govern the procurement of goods
necessary to implement the main project.

Under the fundamental international law principle of pacta sunt servanda, which is in
fact embodied in the afore-quoted Section 4 of R.A. No. 9184, the RP, as borrower,
bound itself to perform in good faith its duties and obligation under Loan No. 7118-PH.
Applying this postulate in the concrete to this case, the IABAC was legally obliged to
comply with, or accord, primacy to, the WB Guidelines on the conduct and
implementation of the bidding/procurement process in question.

Wherefore, The Petition Is Granted. The Decision Dated September 3, 2010 of The
Regional Trial Court Of Manila, Branch 21 In Civil Case No. 09-122643 Is Hereby
Reversed And Set Aside. The Petition For Prohibition And Mandamus Filed Before
The Manila RTC Is Dismissed.

Manila International Airport Authority Vs. Commission On Audit

Facts:

- The courts ruled that when MIAA and the Aeroports de Paris-Japan Airport
Consultants, Inc. Consortium (Consultant for brevity) entered into an Agreement for
Consulting Services (Agreement for, brevity) for the NAIA Terminal 2
Development Project on April 15, 1994. The Agreement, covering 795 man-months
of consulting services, commenced on July 1, 1994. It originally assumed a total
duration of 53 months that included a 14-month post construction services up to
November 30, 1998. The construction of the Project was originally estimated to
take 26 months from August 1, 1995 to September 30, 1997, followed by a 12-
month defect liability period.

- The duration of the services was extended and the number of man-months
increased, due to a prolonged process of prequalification, bidding and awarding
stages; delayed Department of Environment and Natural Resources approval and
Contractor's site possession, as well as numerous additional construction works.

- The total duration of the consulting services was, thus, extended from 53 to 69
months or a total of 1,083.81 man-months. The extension was covered by three (3)
Supplementary Agreements (SAs) entered into by the MIAA and the Consultant.

- November 24, 1999, the then Corporate Auditor of MIAA issued ND No. (FMT)
99-00-04 finding the Agreement's remuneration cost of P41,784,850.00 (excluding
expatriates) excessive because it was 19.80% above the corresponding COA
estimated remuneration cost of P34,876,915.00. Then General Manager Antonio P.
Gana of MIAA in his undated letter to COA, requested reconsideration of the ND
based on the following grounds:That the cost of Consulting Services was obtained
after detailed negotiations, embodied in an Agreement and the same was approved
by the Office of the Government Corporate Counsel (OGCC) and concurred in by
Japan Bank of International Cooperation (JBIC); and That under Section 9.3 of the
 NEDA Guidelines, the ceiling for contingency can be negated by any existing and
future commitments with respect to the selection of consultants financed partly or
wholly with funds from international financial institutions. Thus, considering that
the consulting services were 100% funded by JBIC and in view of other previous
JBIC projects, the 10% contingency was accepted by MIAA and the OGCC and
concurred in by the JBIC; that the provision of the Overseas Economic Cooperation
Fund (OECF) Loan Agreement should govern the expenditure of contingency and
that the contingency is not a committed payment to the consultant upon execution
of the Agreement, but may be used wholly or partially, or not at all depending on
the circumstances.

- The MIAA Corporate Auditor referred, through the former Director of the then
Corporate Audit Office (CAO) II, this Commission, the above request to the COA
Technical Services Office (TSO), for further evaluation.

- January 25, 2000, MIAA and the Consultant entered into a fourth SA for the
extension of another 8 months, for a total of 77 months or up to November 30,
2000. The corresponding number of professional man-months increased to
1,221.65.

- COA-TSO, responded to the request for reconsideration, conducted a re-evaluation

of the Agreement and thereafter reversed its earlier stand on the excessive
remuneration cost, but as regards to the issue of the contingency, the COA-TSO
requested the then MIAA Corporate Auditor to validate the payments charged to
contingency.

- August 17, 2000, the then MIAA Corporate Auditor lifted and settled the
disallowed amount of P6,907,935.00 after the same was found reasonable based on
the COA-TSO Re-evaluation Report dated June 29, 2000.

- October 18, 2001, the then MIAA Corporate Auditor resubmitted the request for
reconsideration, together with the COA-TSO validation and opined that the sum of
payments charged to contingency was within the ceiling equivalent to 5% of the
amount of the contract as prescribed under the NEDA Guidelines. He stressed that
of ¥1,493,497,905.00 and P113,061,248.01 actually paid by MIAA to the
Consultant, ¥36,349,705.00 and P2,752,610.77 representing 2.49% and 2.495%,
respectively, or a total of 4.985% of the contract cost was charged to contingency.
Moreover, the then MIAA Corporate Auditor averred that all four SAs entered into
by MIAA and the Consultant were reviewed and found in order as to their technical
aspects by the COA-TSO.

- pursuant to COA Memorandum No. 2002-039 dated July 11, 2002, the former
Assistant Director of then Cluster IV-Industrial and Area Development and
Regulatory, Corporate Government Sector (CGS), this Commission, forwarded the
instant request to COA LAO-Corporate for appropriate action.

Issues:
Whether or not the loan agreement was equivalent to an executive agreement based on
the ruling in Abaya v. Ebdane (G.R. No. 167919,
 Held:

From the case regarding the pronouncement in Abaya v. Ebdane, supra, a loan

agreement executed in conjunction with the Exchange of Notes between the Philippine
Government and a foreign government is an executive agreement, and should be
governed by international law.

The pronouncement has been consistently applied in succeeding rulings, including

those in DBM Procurement Service v. Kolonwel Trading,  Land Bank of the
Philippines v. Atlanta Industries, Inc and Mitsubishi Corporation-Manila Branch v.
Commissioner of Internal Revenue.

The Loan Agreement No, financed the NAIA Terminal 2 Development Project, from
the August 16, 1993 exchange of notes whereby the Government of Japan agreed to
extend loans in favor of the Philippines to promote economic development and
stability. The loan agreement was the adjunct of the Exchange of Notes and should thus
be treated as an executive agreement. In other words, international law should apply in
the implementation and construction of the terms and conditions of Loan Agreement.
The Philippine Government was bound to faithfully comply with the provisions of the
loan agreements in accordance with the doctrine of pacta sunt servanda. Needless to
indicate, the doctrine has been incorporated in the 1987 Constitution pursuant to
Section 2 of its Article II, which declares:

Sec. 2. The Philippines renounces war as an instrument of national policy, adopts the
generally accepted principles of international law as part of the law of the land and
adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with
all nations. Logically, the Agreement for Consulting Services (ACS) executed by and
between the petitioner and the ADP-JAC Consortium, being a mere accessory of Loan
Agreement No. PH-136, should likewise be treated as an executive agreement, and
construed and interpreted in accordance with the doctrine of pacta sunt servanda

4. SUMMARY
Barcelona Traction at 40: The ICJ as an Agent of Legal Development

In respect to the idea of obligations erga omnes, the decision of International

Court of Justice has been described as "a powerful agent of legal development" in
the judgment in the case of Barcelona Traction. Explained that these courts’ judicial
decisions are a part of the worldwide community, the decisions made by the courts
of various states may have an impact on the actions that other international courts
will take in a particular case.
 

Jus Cogens and Obligations Erga Omnes

The article explained the difference and the similarities of Jus Cogens and Erga
Omnes:
In Jus Cogens, a norm that is generally accepted and recognized internationally by
states as a whole and as a norm from which no derogation is permitted and which can
be modified only by a subsequent norm of general international law having the same
character

In Obligations erga omnes refers to the obligation of every State toward the
international community as a whole.