CHAPTER 4 - THE DOCTRINE OF STATE IMMUNITY

“The State may not be sued without its consent” – declared by the Constitution

 Recognition of the:
 Sovereign character of the State
 Express affirmation of the unwritten rule insulating it from the jurisdiction of the
courts of justice
 One of the generally accepted Principle of international law  adopted as part of the
laws of the land (Article 2, Section 2)

I. BASIS
If suit against the state is permitted:

 impairment of its dignity

 challenge to its supposed infallibility

Doctrine of non-suability according to Justice Holmes:

NOT BASED ON BASED ON

Any formal or obsolete theory LOGICAL AND PRACTICAL GROUND THAT
 there can be no legal right against the
authority which makes thaw law on
which the right depends

Demands & Inconveniences of litigation (in filing a suit against the State)
 divert the time and resources of the State from the more pressing matters demanding its
attention  prejudice of the welfare
Q: Does the doctrine apply when filing a suit against other States?
A: Yes, if they are sought to be sued in the courts of the local State
Q: Why?
A: Because one State cannot assert jurisdiction over another. It will be a violation to maxim:
“par in pare, non habet imperium” It would unduly vex (agitate) the peace of the nation
Q: Does that mean that the foreign state is at all times immuned?
A: Not necessarily. They can be sued when:

 engaged regularly in a business or trade

 if not so engaged, contracts may be considered as:
o purely commercial
 o private & proprietary acts

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BUT NOT  contracts entered into by its governmental/sovereign acts
Q: What mothered a more restrictive application of the doctrine?
A: The complexity of relationships between sovereign states, brought about by their increasing
commercial activities. Thus;

Jure Imperii Jure Gestonis

Actions or activities undertaken by a state or Actions or activities carried out by a state or
government in its sovereign capacity. government in a commercial or private
capacity

State immunity is restricted to these acts State immunity cannot be extended to these
acts

Character of the contract

 need to be determined whether its commercial in nature or not

 If commercial: IMMUNITY IS WAIVED
 If not: IMMUNITY IS NOT WAIVED
 When a foreign state enters into a contract with a private party in the host state, it
would not necessarily result to a waiver of immunity
Sovereign immunity

 Legal principle that protects foreign governments and their agents from being sued in the
courts of another country.
 It's not an absolute shield and has limitations.
 It depends on the nature of the activity and whether it's considered governmental (jure
imperii) or commercial (jure gestionis)

Association of Medical Clinics for Overseas Workers, Inc. v. GCC Approved Medical
Centers Association, Inc
 In this case, the Supreme Court discussed the concept of sovereign immunity in the
context of a dispute involving medical clinics.
 The key points are as follows:
o The Court emphasized that sovereign immunity is not an absolute shield for
foreign governments. While it acknowledges the principle of sovereign
equality and independence, it doesn't mean foreign governments or their
agents are exempt from following the laws of the country where they
operate. The Court made it clear that when a foreign state engages in
commercial transactions (jus gestionis), it can be treated like a private
individual and is not immune from legal consequences. In this case, it implies
that if a foreign government or its agents are involved in commercial
activities in the Philippines, they can be subject to legal actions there.
 o The Court noted that the mere recognition of sovereign immunity doesn't
exempt foreign governments from complying with the domestic laws of the
Philippines. It emphasized that there was no evidence presented to show
that the principle of sovereign equality and independence had evolved into
an international custom protecting state agents from compliance with another
country's domestic laws.

German Agency for Technical Cooperation v. Court of Appeals

 This case involved a German agency's attempt to invoke sovereign immunity to
avoid a lawsuit in the Philippines.
 Key points:
o The German agency, German Agency for Technical Cooperation (GTZ),
claimed immunity from a complaint filed against it for illegal dismissal before
the National Labor Relations Commission in the Philippines. GTZ argued
that it was acting on behalf of the Federal Republic of Germany and
performing governmental functions, which should grant it immunity.
o However, the Philippine Supreme Court rejected GTZ's argument. It found
that GTZ had not provided sufficient evidence to demonstrate that it
deserved the same level of immunity as its parent country, Germany. It
emphasized that even if GTZ was acting on behalf of the German
government, it didn't automatically grant GTZ the ability to invoke sovereign
immunity from lawsuits in the Philippines.
Not all government actions (jure imperii) exempt a state from lawsuits

 for example, the exercise of eminent domain (legal concept that gives the government
authority to take private property for public use, provided that the property owner
receives just compensation) without just compensation can still lead to legal actions.
Not every agency of a foreign state can invoke sovereign immunity; it depends on
the specific circumstances and evidence.

China National Machinery & Equipment Corporation v. Sta. Maria

 There was a situation where a company from the Republic of China claimed that it
should have sovereign immunity in a lawsuit related to a project in the Philippines.
 The Chinese company was hired as the main contractor for a big project in the
Philippines. They said they should be immune from lawsuits because they were working
on behalf of the Chinese government.
 However, the Philippine Supreme Court disagreed, using a similar ruling from a previous
case involving a German agency. The Court pointed out that just because the company
said it was doing government work didn't automatically mean it had immunity.
 To have immunity, they needed to prove that Chinese law protected them from being
sued, but they couldn't provide such proof. So, the Court assumed that this Chinese
company was like a regular government-owned business and could be sued under
Philippine law. This case shows that claiming sovereign immunity isn't automatic, and
you need to provide evidence that your home country's laws protect you from lawsuits in
 another country. In this case, the Chinese company couldn't do that, so they were not
granted immunity.
II. APPLICATION
Q: Why are actions rarely instituted directly against the Republic of the Philippines?
A: Presumably because such step will:
1) Provoke resort to the Doctrine of State Immunity
2) Possible dismissal of the complain for lack of jurisdiction
The usual practice in filing:

 File claims against the government who is:

o supposed to discharge the responsibility
o grant the redress (remedy) demanded

It is important to determine if:

 State is the real party of interest

o If proved, directly a liability of the State
o Not on the officer impleaded

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The action can be dismissed as a suit against the State unless its immunity had been
previously WAIVED.
Confederation of Coconut Farmers of the Philippines, Inc. v Aquino

 The court explained that the release of coconut levy assets, which were declared as
public funds, doesn't always require a writ of execution before enforcement.
 The government can take steps to preserve and use these assets without needing a writ
of execution.
 Courts still have the power to issue such writs if the government faces obstacles in
enforcing the decision
In contrast, the Supreme Court ruled that it's not against the State when someone sues the
Secretary of National Defense for:

 payment of an architect's fees already approved by the government.

 The State has fulfilled its obligation by setting aside the payment, and the claimant's
request is for the actual payment, which is the responsibility of the defendant. The
lawsuit was correctly filed against the defendant without requiring a waiver of the State's
immunity.
Public officers can be sued in their official capacity in certain situations without needing the
State's consent.
EXAMPLE:
if a public officer is:
  not fulfilling a legal duty,
 engaging in unconstitutional or illegal actions,
 has unlawfully assessed or collected taxes
They can be sued.
However, if the lawsuit includes:
 claim for damages that would require the government to allocate money to satisfy the
judgment
A waiver of immunity is needed.

Key test

 Whether enforcing a decision against a public officer would require an action from the
State, like allocating funds to satisfy the judgment.
 Lawsuit is against the State
 State should be a party defendant

 If the officer can comply with the court's decision independently, without State
involvement,
 Lawsuit can proceed against the officer
 Isn't considered a claim against the State

 When a public officer acts:

o without authority
o exceeds their jurisdiction,
 Any harm caused is their personal liability
 Cannot be attributed to the State
Festejo v. Fernando

 A government official took property without authorization and built an irrigation canal
 Lawsuit for property recovery or its value was correctly filed against the defendant in
their personal capacity, not covered by the State immunity doctrine.

(Read cases in 58-59 kapoy type hekhok 😊)

Page 60:
The Supreme Court emphasized a rule in a case called China National
Machinery & Equipment Corporation v. Sta. Maria. This rule says that only the
Department of Foreign Affairs (DFA) has the power to decide if a person or entity has
immunity from being sued. The opinions or endorsements from other government
offices, like the Office of the Solicitor General or the Office of the Government Corporate
Counsel, don't carry the same weight as the DFA's decision.
 III. WAIVER OF IMMUNITY
Doctrine of State Immunity  the royal prerogative of dishonesty

 The State does not avail itself of this rule to take advantage of parties that may
have legitimate claims against it.
 Built in qualifications:
o Divests itself of its sovereign immunity
o Voluntarily open itself to suit
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THE STATE MAY BE SUID IF IT GIVES ITS CONSENT
 It now appears to be the General Policy
 Result: filing suits against the State has become less difficult than
before

IV. FORMS OF CONSENT: Express or Implied

A. Express  manifested through General or Special Law

General Law Special Law

Act no. 3093
 The government of the Philippine
Island hereby consents and submits
to be sued upon:
 ANY MONEYED CLAIM
INVOLVING LIABILITY ARISING
FROM:
- CONTRACT whether: Express
Implied
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Serve as BASIS of Civil Action
between private parties
PD 1445 (previously CA No. 327)
 A claim against the government must
be first filed with the:
COMISSION ON AUDIT
 Which must act upon within 60 days
 Rejection of the claim:
 authorize the claimant to elevate
the matter to the SC on certiorari
 in effect: SUE THE STATE WITH
ITS CONSENT
1. Republic vs. Purisima
Express Consent
 Must be embodied in a duly enacted
statute
 May not be given by a mere counsel
of the government
 Not binding upon the State
 Defendant: Philippines
Service of Summons
- must be made on Solicitor Gen
2. Amigable vs Cuenca
 Doctrine cannot be used to:
 perpetuate injustice on a citizen
Doctrine of Immunity cannot be properly
invoked even though the exercise of the
power of eminent domain is jus imperii
 Gov taking private property for public
use:
 Conditioned upon payment of
JUST COMPENSATION
3. Santiago vs. Republic
 Revocation of Donation due to failure
of the defendant to comply with
stipulated conditions
 Suit could proper
 Did not involve money claims
against the State
B. Implied
i. State commences litigation
ii. State enters into a commercial/private/proprietary contract