Mariano, Cyndra D.

Arigo v Swift,
G.R. 206510 (2014)
FACTS : On January 15, 2013, the USS Guardian, a mine countermeasures ship of the US
Navy, while transiting the Sulu Sea, ran aground on the northwest side of South Shoal of the
Tubbataha Reefs, about 80 miles east-southeast of Palawan. The Tubbataha Reef was inscribed
by the United Nations Educational Scientific and Cultural Organization (UNESCO) as a World
Heritage Site, and RA 10067 or "Tubbataha Reefs Natural Park (TRNP) Act of 2009 was passed
by the Congress to ensure the protection and conservation of Tubbataha Reefs and imposed
penalty for those who will destroy and disturb the resources within the TRNP

Because of the environmental damages caused by this incident, petitioners filed before the Court,
a petition for the issuance of a Writ of Kalikasan with prayer for the issuance of a Temporary
Environmental Protection Order (TEPO) against Scott H. Swift in his capacity as Commander of
the US 7th Fleet, Mark A. Rice in his capacity as Commanding Officer of the USS Guardian and
Lt. Gen. Terry G. Robling, US Marine Corps Forces, and some other US respondents.

ISSUE: Whether or not the Court has jurisdiction over the complaint filed against the US
Respondents.

RULING: The Supreme Court reiterates that the immunity of the State from suit, known also as
the Doctrine of Sovereign Immunity or non-suability of the State, is expressly provided in
Article XVI of the1987 Constitution which states that the State may not be sued without its
consent.

In the case of the foreign state sought to be impleaded in the local jurisdiction, the added
inhibition is expressed in the maxim par in parem, non habet imperium. (equals have no
sovereignty over each other) All states are sovereign equals and cannot assert jurisdiction
over one another.

While the doctrine appears to prohibit only suits against the state without its consent, it is also
applicable to complaints filed against officials of the state for acts allegedly performed by them
in the discharge of their duties.

As provided in the case of Minucher v. Court of Appeals, If the acts giving rise to a suit are those
of a foreign government done by its foreign agent, although not necessarily a diplomatic
personage, but acting in his official capacity, the complaint could be barred by the immunity of
the foreign sovereign from suit without its consent.

In this case, the US respondents were sued in their official capacity as commanding officers of
the US Navy who had control and supervision over the USS Guardian and its crew. The alleged
act or omission resulting in the unfortunate grounding of the USS Guardian on the TRNP was
committed while they were performing official military duties. Considering that the satisfaction
of a judgment against said officials will require remedial actions and appropriation of funds by
the US government, the suit is deemed to be one against the US itself. The principle of State
immunity therefore bars the exercise of jurisdiction by this Court over the persons of US
respondents Swift, Rice and Robling.
Trinidad, Greg Trinidad F.

THE HOLY SEE VS. DEL ROSARIO JR.

G.R. No. 101949 December 1, 1994

FACTS: Lot 5-A is owned by The Holy See, adjacent to lots 5-B and 5-D owned by Philippine
Realty Corporation (PRC). These lots were sold to Ramon Licup through Msgr. Domingo Cirilos
Jr., who later assigned the rights to Starbright Sales Ent. Inc. (SSEI). Disputes arose regarding the
responsibility of evicting squatters on the land, with SSEI insisting on The Holy See clearing the
property. The Holy See proposed SSEI handle the eviction or return the earnest money, with Msgr.
Cirilos refunding the P100,000. SSEI then sued for annulment of sale, specific performance, and
damages against Msgr. Cirilos, PRC, and Tropicana Properties and Development Corporation. The
petitioner and Msgr. Cirilos attempted to dismiss the case on grounds of sovereign immunity, but
it was denied, leading to this special civil action for certiorari.

ISSUE: Whether or not the Holy See properly invokes sovereign immunity for its non-suability?

HELD: YES. In 1929, Italy and the Holy See entered into the Lateran Treaty, where Italy
recognized the exclusive dominion and sovereign jurisdiction of the Holy See over the Vatican
City. It also recognized the right of the Holy See to receive foreign diplomats, to send its own
diplomats to foreign countries, and to enter into treaties according to International Law (Garcia,
Questions and Problems In International Law, Public and Private 81 [1948]).

The Lot 5-A was acquired as a donation from the archdiocese of Manila for the site of its mission
or the Apostolic Nuniciature in the Philippines. The subsequent disposal was made because the
squatters living thereon made it impossible for petitioner to use it for the purpose of the donation.
Petitioner did not sell lot 5-A for profit or gain. 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.

The restrictive theory, which is intended to be a solution to the host of problems involving the
issue of sovereign immunity, has created problems of its own. Legal treatises and the decisions in
countries which follow the restrictive theory have difficulty in characterizing whether a contract
of a sovereign state with a private party is an act jure gestionis or an act jure imperii. 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.

This Court has considered the following transactions by a foreign state with private parties as acts
jure imperii: (1) the lease by a foreign government of apartment buildings for use of its military
officers (Syquia v. Lopez, 84 Phil. 312 [1949]. On the other hand, this Court has considered the
following transactions by a foreign state with private parties as acts jure gestionis: (1) the hiring
of a cook in the recreation center, consisting of three restaurants, a cafeteria, a bakery, a store, and
a coffee and pastry shop at the John Hay Air Station in Baguio City, to cater to American
servicemen and the general public (United States of America v. Rodrigo, 182 SCRA
644 [1990]);

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.

In the case at bench if petitioner has bought and sold lands in the ordinary course of a real estate
business, surely the said transaction can be categorized as an act jure gestionis. However,
petitioner has denied that the acquisition and subsequent disposal of Lot 5- A were made for
profit but claimed that it acquired said property for the site of its mission or the Apostolic
Nunciature in the Philippines. Private respondent failed to dispute said claim.
Ahmed, Shailla B.

United States of America v. Ruiz

[G.R. No. L-35645, May 22, 1985]

Facts: US Navy invited the submission of bids for repair of its wharves and shoreline in the Subic
Bay Area. Eligion and Co. responded to the invitation and submitted bids. Said company was
requested by telegram to confirm its price proposals and for the name of its bonding company, and
from which it complied. The United States, through its agents, informed said company that it was
not qualified to receive an award at the project for the poorly completed projects it awarded to
third parties. The company sued the petitioner for specific performance and if no longer possible,
for damages.

Issue: Whether or not the US may be sued?

Held: No. The traditional rule of State immunity exempts a State from being sued in the courts of
another State without its consent or waiver. This rule is a necessary consequence of the principles
of independence and equality of States. However, the rules of International Law are not petrified;
they are constantly developing and evolving. And because the activities of states have multiplied,
it has been necessary to distinguish them — between sovereign and governmental acts (jure
imperii) and private, commercial and proprietary acts (jure gestionis). The result is that State
immunity now extends only to acts jure imperii.

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. In this case
the projects are an integral part of the naval base which is devoted to the defense of both the
United States and the Philippines, indisputably a function of the government of the highest
order; they are not utilized for nor dedicated to commercial or business purposes.

That the correct test for the application of State immunity is not the conclusion of a contract by a
State but the legal nature of the act is shown in Syquia vs. Lopez, 84 Phil. 312 (1949).

The Court held that the contract for the repair of wharves was a contract in jus imperii, because
the wharves were to be used in national defense, a governmental function.
Ahmed, Shailla B.

Minucher v. CA & Scalzo

[ G.R. No. 142396. February 11, 2003 ]

Facts: Khosrow Minucher, an Iranian national, was charged for violation of Section 4 of Republic
Act No. 6425, otherwise known as the "Dangerous Drugs Act of 1972." The narcotic agents who
raided the house of Minucher were accompanied by Arthur Scalzo. Minucher was acquitted and
filed a civil case before the Regional Trial Court of Manila for damages on account of what he
claimed to have been trumped-up charges of drug trafficking made by Arthur Scalzo. Scalzo filed
a motion to dismiss the complaint on the ground that, being a special agent of the United States
Drug Enforcement Administration, he was entitled to diplomatic immunity.

Issue: whether or not Arthur Scalzo is indeed entitled to diplomatic immunity.

Held: Yes. Scalzo contends that the Vienna Convention on Diplomatic Relations, to which the
Philippines is a signatory, grants him absolute immunity from suit, describing his functions as an
agent of the United States Drugs Enforcement Agency.

Scalzo submitted a number of pieces of evidence that would show (1) the United States Embassy
accordingly advised the Executive Department of the Philippine Government that Scalzo was a
member of the diplomatic staff of the United States diplomatic mission (2) that the United States
Government was firm from the very beginning in asserting the diplomatic immunity of Scalzo
with respect to the case pursuant to the provisions of the Vienna Convention on Diplomatic
Relations; and (3) that the United States Embassy repeatedly urged the Department of Foreign
Affairs to take appropriate action to inform the trial court of Scalzo's diplomatic immunity.

The other documentary exhibits were presented to indicate that: (1) the Philippine government
itself, through its Executive Department, recognizing and respecting the diplomatic status of
Scalzo, formally advised the "Judicial Department" of his diplomatic status and his entitlement to
all diplomatic privileges and immunities under the Vienna Convention; and (2) the Department of
Foreign Affairs itself authenticated Diplomatic Note No. 414.

The Supreme Court held that a foreign agent, operating within a territory, can be cloaked with
immunity from suit but only as long as it can be established that he is acting within the directives
of the sending state. The consent of the host state is an indispensable requirement of basic courtesy
between the two sovereigns. The official exchanges of communication between agencies of the
government of the two countries, certifications from officials of both the Philippine Department
of Foreign Affairs and the United States Embassy, as well as the participation of members of the
Philippine Narcotics Command in the "buy-bust operation" conducted at the residence of
Minucher at the behest of Scalzo, may be inadequate to support the "diplomatic status" of the latter
but they give enough indication that the Philippine government has given its imprimatur, if not
consent, to the activities within Philippine territory of agent Scalzo of the United States Drug
Enforcement Agency.

The job description of Scalzo has tasked him to conduct surveillance on suspected drug suppliers
and, after having ascertained the target, to inform local law enforcers who would then be expected
to make the arrest. In conducting surveillance activities on Minucher, later acting as the poseur-
buyer during the buy-bust operation, and then becoming a principal witness in the criminal case
against Minucher, Scalzo hardly can be said to have acted beyond the scope of his official function
or duties.
Molina, Burt Kevin D.

Republic of Indonesia Vs Vinzon

[GR 154705, June 26, 2003]
Ponente: Azcuna

FACTS: Petitioner, Republic of Indonesia, represented by its Counsellor, Siti Partinah, entered
into a Maintenance Agreement in August 1995 with respondent James Vinzon, sole proprietor of
Vinzon Trade and Services, to maintain specified equipment at the Embassy Main Building,
Embassy Annex Building and the Wisma Duta, the official residence of petitioner Ambassador
Soeratmin.

Included in the agreement is that it will be effective for a period of four years, and it will renew
itself automatically unless cancelled by either party giving thirty days prior written notice from the
date of expiry.

Petitioners, before August 1999, informed the respondents that the renewal of their agreement will
be upon the discretion of the incoming Chief of Administration, Minister Counsellor Azhari
Kasim, who was expected to arrive in February 2000.

Petitioner terminated their agreement on August 31, 2000, since Minister Kasim allegedly found
that the respondent’s work and services were unsatisfactory and not in compliance with the
standards set in the Maintenance Agreement.

Respondent filed a complaint against petitioner claiming that the termination of their agreement
was arbitrary and unlawful, to which the RTC decided in favor of the respondent—and the CA
affirmed—since included in the agreement was the provision "Any legal action arising out of this
Maintenance Agreement shall be settled according to the laws of the Philippines and by the proper
court of Makati City, Philippines."

ISSUE: Whether or not the Republic of Indonesia has state immunity from being sued in the
instant case.

RULING: Yes. The Republic of Indonesia maintained the immunity from being sued even with
a provision in the agreement in the effect of "Any legal action arising out of this Maintenance
Agreement shall be settled according to the laws of the Philippines and by the proper court of
Makati City, Philippines." The Court ruled that the existence of this paragraph alone does not
indicate a waiver of sovereign immunity from suit. The aforesaid provision contains language not
necessarily inconsistent with sovereign immunity. Such provision may also be meant to apply
where the sovereign party elects to sue in the local courts, or otherwise waives its immunity by
any subsequent act.
The Solicitor General, in his Comment, submits the view that "the Maintenance Agreement was
entered into by the Republic of Indonesia in the discharge of its governmental functions.” As such,
the agreement was within the state’s act of jure imperii, which cloaks the state with immunity from
suit, unless the agreement included provisions where the foreign state submits to local jurisdiction
clearly and unequivocally.

International law is founded largely upon the principles of reciprocity, comity, independence, and
equality of States which were adopted as part of the law of our land under Article II, Section 2 of
the 1987 Constitution. The rule—that the sovereign states are not subject to the jurisdiction of each
other—is derived from the principle of the sovereign equality of States, as expressed in the maxim
par in parem non habet imperium. All states are sovereign equals and cannot assert jurisdiction
over one another. A contrary attitude would "unduly vex the peace of nations."

The Court decided to GRANT the petition, and REVERSED and SET ASIDE the complaint
against the petitioner.
Casareno, Ros Ann Nitz
DFA vs NLRC
[G.R. No. 113191 September 18, 1996]
Ponente: Vitug

Facts: ADB was charged by Labor Arbiter (Nieves) due to the alleged illegal dismissal of a
private respondent (Magnayi).

DFA, on behalf of ADB, referred the matter to NLRC stating that ADB has diplomatic immunity
provided in their charter but NLRC redirected DFA to write a letter to the Office of the
Ombudsman since they are unable to question the decision made by the Labor Arbiter.

DFA filed an instant petition of certiorari to the Supreme Court along with application for
restraining order and preliminary injunction on the issuance made by the Labor Arbiter.

OSG, in its comment, subsequently agrees that ADB was right in invoking diplomatic immunity.

Respondents, however, argue 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 and cited Holy See vs. Hon. Rosario, Jr.

Issue: Whether or not ADB have diplomatic immunity in relation to the alleged illegal dismissal
of the private respondent and violation of labor-only law.

Ruling: ADB have diplomatic immunity and therefore, the decision of Labor Arbiter is null and
void.

The Charter and Headquarters Agreement 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.

This principle was also declared at World Health Organization vs. Aquino that states: 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 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.”

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.
As for respondent’s arguments that ADB has descended to the level of an ordinary party to a
commercial transaction giving rise to a waiver of its immunity from suit, Supreme Court
Baluyan, Gerwin Noe A.
ATCI v Echin
[GR 178551, Oct 11, 2010]

Facts:
● Echin was hired by ATCI on behalf of the Ministry of Public Health in Kuwait for the
position of medical technologist that has a salary of USD1,200.
● Under the MOA, all newly-hired employees undergo a probationary period of one year
and are covered by Kuwait’s Civil Service Board Employment Contract.
● Respondent was deployed on February 17, 2000 but was terminated from employment on
February 11, 2001, she not having allegedly passed the probationary period.
● Request for reconsideration was denied by the ministry and returned to the philippines on
17th March 2001 with Echin’s out of pocket cost airplane ticket.
● On July 27, 2001, respondent filed with the National Labor Relations Commission
(NLRC) a complaint for illegal dismissal against petitioner ATCI as the local recruitment
agency, represented by petitioner, Amalia Ikdal, and the Ministry, as the foreign
principal.

Issue:
● Whether or not ATCI is liable for the illegal dismissal of Josefina Echin.

Ruling:
● Yes. Petitioner ATCI, as a private recruitment agency, cannot evade responsibility for the
money claims of Overseas Filipino workers (OFWs) which it deploys abroad by the mere
expediency of claiming that its foreign principal is a government agency clothed with
immunity from suit, or that such foreign principal’s liability must first be established
before it, as agent, can be held jointly and solidarily liable.

● The imposition of joint and solidary liability is in line with the policy of the state to
protect and alleviate the plight of the working class. Verily, to allow petitioners to simply
invoke the immunity from suit of its foreign principal or to wait for the judicial
determination of the foreign principal’s liability before petitioner can be held liable
renders the law on joint and solidary liability inutile. As to petitioners’ contentions that
Philippine labor laws on probationary employment are not applicable since it was
expressly provided in respondent’s employment contract, which she voluntarily entered
into, that the terms of her engagement shall be governed by prevailing Kuwaiti Civil
Service Laws and Regulations as in fact POEA Rules accord respect to such rules,
customs and practices of the host country, the same was not substantiated.

● In international law, the party who wants to have a foreign law applied to a dispute or
case has the burden of proving the foreign law. The foreign law is treated as a question of
 fact to be properly pleaded and proved as the judge or labor arbiter cannot take judicial
notice of a foreign law. He is presumed to know only domestic or forum law.
Unfortunately for the petitioner, it did not prove the pertinent Saudi laws on the matter;
thus, the International Law doctrine of presumed-identity approach or processual
presumption comes into play. Where a foreign law is not pleaded or, even if pleaded, is
not proved, the presumption is that foreign law is the same as ours. Thus, we apply
Philippine labor laws in determining the issues presented before us.

● The liability of the principal/employer and the recruitment/placement agency for any and
all claims under this section shall be joint and several. This provision shall be
incorporated in the contract for overseas employment and shall be a condition precedent
for its approval. The performance bond to be filed by the recruitment/placement agency,
as provided by law, shall be answerable for all money claims or damages that may be
awarded to the workers. If the recruitment/placement agency is a juridical being, the
corporate officers and directors and partners as the case may be, shall themselves be
jointly and solidarily liable with the corporation or partnership for the aforesaid claims
and damages.
● Wherefore, petition is Denied.