The Doctrine of Sovereign Immunity from Suit in a Developing and Liberalizing Economy: Philippine Experience and Caselaw

in Austrian Review of International and European Law Online
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The Doctrine of Sovereign Immunity from Suit in a Developing and Liberalizing Economy: Philippine Experience and Caselaw

in Austrian Review of International and European Law Online


  • 1 Agreement Between the United States of America and the Republic of the Philippines Concerning Military Bases, 14 March 1947, 1 Phil. Treaty Series 257; 43 U.N. Treaty Se- ries 271, This Agreement was amended several times since 1947; the relevant diplomatic history includes E.Z. Romualdez, A Question of Sovereignty; The Military Bases in the Philip- pines 1944-1979 (1980); W.E. Berry, Jr., The Military Bases and Postwar U.S.-Philippines

  • Relations, in The Philippine Bases: Negotiating for the Future - American and Philippine Perspectives (F. Greene, ed., 1988; Council of Foreign Relations) 130. See, more generally: The Philippines Reader: A History of Colonialism, Neocolonialism, Dic- tatorship and Resistance (D.B. Schirmer and S.R. Shalom, eds. 1987); Rebuilding a Nation: Philippine Challenges andAmerican Policy (C.H. Land, ed., 1987); and H.W. Brands, Bound to Empire: The United States and the Philippines (1992). 2 Art. II(2), 1987 Constitution of the Philippines provides that "the generally accepted principles of international law are part of the law of the land..." This provision also formed part of the 1935 Constitution (Art. II[21) and the 1973 Constutition (Art. II[3]). 3 Department of Foreign Affiars v. National Labor Relations Commission et al., G.R. No. 113191, promulgated 18 September 1996. World Health Organization et al. v. Hon. Benjamin H. Aquino etc., et al., 48 Supreme Court Reports Annotated (hereafter, SCRA) 242 (1972). See also: Lasco v. United Nations Re- volving Fund for Natural Resources Exploration, 241 SCRA 681 (1995), involving a "Special Fund and subsidiary organ of the United Nations." 5 Lacanilao v. De Leon, 147 SCRA 286 (1987); Southeast Asian Fisheries Development Center-Agriculture Department v, National Labor Relations Commission, 206 SCRA 283 (1992); Southeast Asian Fisheries Development Center v. Acosta etc., et al. 226 SCRA 49 (1993); and Southeast Asian Fisheries Development Center v. National Labor Relations Commission, 241 SCRA 580 (1995).

  • 6 Callado v. International Rice Research Institute, 244 SCRA 210 (1995). The IRRI is not an inter-governmental organization. It was established by a Memorandum of Understanding between the Philippine Government and the Ford and Rockefeller Foundations. The IRRI was originally (in 1959) organized as a private corporation under Philippine Law. A Presidential Decree No. 1620, issued during the martial law period, granted IRRI "immunity from any penal, civil and administrative proceedings". In Kapisanan ng Manggagawa at T.9C sa IRRI v. Secretary of Labor and Employment and IRRI, 190 SCRA 130 (1990), the Supreme Court upheld the constitutionality of that Decree. The IRRI's immunity is, in other words, solely a creation of municipal law. 7 International Catholic Migration Commission v. Calleja, 190 SCRA 130 (1990). The ICMC, too, is not an inter-governmental organization. It was in fact incorporated under New York law as a non-profit entity, "at the request of the Holy See," and was accredited by the Philippine Government to operate the Refugee Processing Center in Bataan, Philippines. The Center had been established by agreement between the Philippine Government and the UN- HCR. A 1988 Memorandum of Agreement between the Philippine Department of Foreign Affairs and the ICMC provided that ICMC shall have a status "similar to that of a Specialized Agency [of the U.N.]." No statutory or treaty basis for this Memorandum of Agreement was identified by the Court. 8 84 Philippine Reports (hereafter, Phil.) 312 (1949).

  • 9 84 Phil. at 323. 10 84 Phil. at 320 11 Puhlic Law No. 370, 79th Congress, approved 30 APril 1946. 12 85 Phil. 27 (1949). 13 85 Phil. At 32.

  • 14 89 Phil. 568 (1951). 15 Through the medium of Section 3 of the Philippine Property Act of 1946 and Section (9)a of the Trading with the Enemy Act, both of which were U.S. federal statutes. It is noteworthy that the statutory consent was later modified by another amendment of the Trading with the Enemy Act which vested exclusive judicial review of debt claims against the Alien Property Custodian in the District Court for the District of Columbia. In Pareno v. Attorney General 92 Phil. 791 (1953) the Court affirmed the dismissal of a suit for collection of a money claim out of proceeds of property of a Japanese national vested by the Custodian, upon the ground that the consent to suit before foreign courts had been withdrawn by the U.S. Government. 16 57 SCRA 1 (1974). 17 94 Phil. 807 (1954). 18 87 Phil. 328 (1950).

  • 19 See, e.g., Shauf v. Court of Appeals et al., 191 SCRA 713 (1990) involved a civilian per- sonnel officer and the education director of the Personnel Division, Central Civilian Personnel Office, Third Combat Support Group, Clark Air Force Base. In United States of America v. Judge Reyes etc. et al. 219 SCRA 192 (1993), the claim of immunity was set up by the manager of the U.S. Navy Exchange at the Joint United States Military Assistance Group (JUSMAG) Headquarters at Quezon City. In M.H. Wylie v. Rarang 209 SCRA 357 (1992), pe6tioner Wylie was assistant administrative officer of the US Naval Station, Subic Bay, charged with, inter alia, supervising the publication of a daily news and information sheet, while petitioner Williams was Commanding Officer of the Naval Station. In all these cases, the claim to immunity from suit was rejected upon the ground that the claimants had acted outside the scope of their official duties and had been sued in their personal capacities for allegedly tortious acts, which acts could not be attributed to the United States. See also Minucher v. Court of Appeals 214 SCRA 242 (1992) which related to the acts of an agent of the Drug Enforcement Administration, an agency of the U.S. Department of Justice. In Sanders et al. v. Judge Ueridiano 11 etc. et al. 162 SCRA 88 (1988), the Court set out this salutory caveat: ... [T]he mere allegation that a government functionary is being sued in his personal ca- pacity will not automatically remove him from the protection of the law public officers and, if appropriate, the doctrine of state immunity. By the same token, the mere invocation of official character will not suffice to insulate him from suability and liability for an act imputed to him as a personal tort committed without or in excess of his authority. These well-settled principles are applicable not only to the officiers of the local state but also where the person sued in its courts pertains to the government of a forein state, as in the present case."

  • 20 Article XVI (3). 21 See Chavez v. Sandiganbayan, 193 SCRA 282 (1991). 22 Santos et al. v. Santos et al. 92 Phil. 281 at p. 284 (1952).

  • 23104Phil. 593 (1958). 24 104 Phil. at 5096. Nevertheless, the Supreme Court affirmed the dismissal by the trial court in view of the afailure of plaintiff corporation to exhaust its contractual remedies before proceeding to litigation. 25 136 SCRA 487 (1985).

  • 26136 SCRA at 492 27 136 SCRA at 492.

  • 28 182 SCRA 644 (1990). Also JUSMAG Philippines v. National Labor Relations Commis- sion et al., 239 SCRA 224 (1994). 29 182 SCRA at 662. 30 182 SCRA at 661. 238 SCRA 524 (1994).

  • 33 Article 11(3) and (4), 1987 Constitution.

  • 34 Article 11(7), 1987 Constitution. 35 In Insurance Co. of North America v. Warner, Barnes and Co., Ltd., 21 ACRA 765 (1967), the Court held that the Bureau of Customs, which was an arm of the Department of Finance and without legal personality of its own, apart from the Republic of the Philippines, was immune from suit without its consent. The Bureau of Customs operated an arrastre (steve- doring) service, which was concededly a proprietary function but one which was, at the same time, a "necessary incident to the primary governmental job of assessing and collecting lawful duties, fees, charges, fines and penalties" (21 SCRA at 767). In Mobil Philippines Exploration Inc. v. Customs Arrastre Service and Bureau of Customs, 18 SCRA l I20 (1996), the Court had also remarked that "sovereign immunity, granted as to the end, should not be denied as to the necessary means to that end" (18 SCRA at 1126). Earlier cases on non-suability of non-incorporated arms of the National Government in- clude : Metran v. Paredes, 79 Phil. 819 (1948); Treasurer of the Philippines v. Encarnacion, 93 Phil. 610 (1953); Angat River Irrigation System v. Angat River Workers Union, 102 Phil. 789 (1957); and Bureau of Printing v. Bureau of Printing Employees Association, I SCRA 340(1961). ).

  • 36 It is noteworthy that the 1991 Draft Articles recognize that express consent to exercise of jurisdiction by the forum may be set out in a written contract. Article VlI(l) provides: "A State cannot invoke immunity from jurisprudiction in a proceeding before a court of another state with regard to matter or case if it has expressly consented to the exercise of jurisdiction by the court with regard to the matter or case: (a) by international agreement; (b) in a written contract; or (c) by a declaration before the court or by a written communication in a specific proceeding." (Emphasis supplied). 3� Cf. the definition by enumeration of "State" found in Article 2(l)(b) of the 1991 Draft Articles, which enumeration includes the following: "(iv) agencies or instrumentalities of the State and other entities, to the extent that they are entitled to perform acts in the exercise of the sovereign authority of the State;"


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