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G.R. No.

L-2855

July 30, 1949

BORIS MEJOFF, petitioner, vs. DIRECTOR OF PRISONS, respondent. BENGZON, J.: The petitioner Boris Mejoff is an alien of Russian descent who was brought to this country from Shanghai as a secret operative by the Japanese forces during the latter's regime in these Islands. Upon liberation he was arrested aa a Japanese spy, by U. S. Army Counter Intelligence Corps. Later he was handed to the Commonwealth Government for disposition in accordance with Commonwealth Act No. 682. Thereafter the People's Court ordered his release. But the deportation board taking his case up, found that having no travel documents Mejoff was illegally in this country, and consequently refferd the matter to the immigration authorities. After the corresponding investigation, the Board oF Commissioners of Immigration on April 5, 1948, declared that Mejoff had entered the Philippines illegally in 1944, withoutinspection and admission by the immigration officials at a designated port of entry and, therefore, it ordered that he be deported on the first available transportation to Russia. The petitioner was then under custody, he having been arrested on March 18, 1948. In May, 1948, he was transferred to the Cebu Provincial Jail together with three other Russians to await the arrival of some Russian vessels. In July and in August of that year two boats of Russian nationality called at the Cebu Port. But their masters refused to take petitioner and his companions alleging lack of authority to do so. In October, 1948, after repeated failures to ship this deportee abroad, the authorities removed him to Bilibid Prison at Muntinglupa where he has been confined up to the present time, inasmuch as the Commissioner of Immigration believes it is for the best interest of the country to keep him under detention while arrangements for his deportation are being made. It is contended on behalf of petitioner that having been brought to the Philippines legally by the Japanese forces, he may not now be deported. It is enough to say that the argument would deny to this Government the power and the authority to eject from the Islands any and all of that members of the Nipponese Army of occupation who may still be found hiding in remote places. Which is absurd. Petitioner likewise contends that he may not be deported because the statutory period to do that under the laws has long expired. The proposition has no basis. Under section 37 of the Philippine Immigration Act of 1940 any alien who enters this country "without inspection and admission by the immigration authorities at a designated point of entry" is subject to deportation within five years. In a recent decision of a similar litigation (Borovsky vs. Commissioner of Immigration) we denied the request for habeas corpus, saying: "It must be admitted that temporary detention is a necessary step in the process of exclusion or expulsion of undesirable aliens and that pending arrangements for his deportation, the Government has the right to hold the undesirable alien under confinement for a reasonable lenght of time. However, under established precedents, too long a detention may justify the issuance of a writ of habeas 1 corpus. "The meaning of "reasonable time" depends upon the circumstances, specially the difficulties of obtaining a passport, the availability 2 of transfortation, the diplomatic arrangements concerned and the efforts displayed to send the deportee away. Considering that this Government desires to expel the alien, and does not relish keeping him at the people's expense, we must presume it is making efforts to carry out the decree of exclusion by the highest officer of the land. On top of this presumption assurances were made during the oral argument that the Government is really trying to expedite the expulsion of this petitioner. On the other hand, the record fails to show how long he has been under confinement since the last time he was apprehended. Neither does he indicate neglected opportunities to send him abroad. And unless it is shown that the deportee is being indefinitely imprisoned under the 3 4 pretense of awaiting a chance for deportation or unless the Government admits that itcan not deport him or unless the detainee is being held for too long a period our courts will not interfere. "In the United States there were at least two instances in which courts fixed a time limit within which the imprisoned aliens should 5 be deported otherwise their release would be ordered by writ of habeas corpus. Nevertheless, supposing such precedents apply in this jurisdiction, still we have no sufficient data fairly to fix a definite deadline." The difference between this and the Borovsky case lies in the fact that the record shows this petitioner has been detained since March, 1948. However, considering that in the United States (where transportation facilities are much greater and diplomatic arrangements are easier to make) a delay of twenty months in carrying out an order of deportation has not been held sufficient to 6 justify the issuance of the writ of habeas corpus, this petition must be, and it is hereby denied. So ordered. Agustin vs Edu 88 SCRA 195 Facts This case is a petition assailing the validity or the constitutionality of a Letter of Instruction No. 229,issued by President Ferdinand E. Marcos, requiring all vehicle owners, users or drivers to procure early warning devices to be installed a distance away from such vehicle when it stalls or is disabled. Incompliance with such letter of instruction, the Commissioner of the Land Transportation Office issued Administrative Order No. 1 directing the compliance thereof. This petition alleges that such letter of instruction and subsequent administrative order are unlawful and unconstitutional as it violates the provisions on due process, equal protection of the law and undue delegation of police power. Issue Whether or not the Letter of Instruction No. 229 and the subsequent Administrative Order issued is unconstitutional Ruling

The Supreme Court ruled for the dismissal of the petition. The statutes in question are deemed not unconstitutional. These were definitely in the exercise of police power as such was established to promote public welfare and public safety. In fact, the letter of instruction is based on the constitutional provision of adopting to the generally accepted principles of international law as part of the law of the land. The letter of instruction mentions, as its premise and basis, the resolutions of the 1968 Vienna Convention on Road Signs and Signals and the discussions on traffic safety by the United Nations that such letter was issued in consideration of a growing number of road accidents due to stalled or parked vehicles on the streets and highways. Facts : This is a petition questioning the validity of a Letter of Instruction providing for an early warning device mandatory for motor vehicles. It is assailed in this prohibition proceeding as being violative to the constitutional guarantee of due process in as far as the rules and regulations for its implementation are concerned. The assailed Letter of Instruction No. 229 of President Ferdinand Marcos aimed to prevent road accidents and in the interest of safety on all streets, highways including expressways. All motorist and motor vehicle owners shall have at all times one pair of early warning device. These hazards posed by such obstructions to traffic have been recognized by international bodies concerned with traffic safety, the 1968 Vienna Convention on Roads and Signs and the United Nations Organization (UN). Philippine Government under P.D. No. 207 ratified the said Vienna convention requiring the installation of road signs and devices. Herein respondent Edu in his capacity as Land Transportation Commisioner set forth the implementing rules and regulations of the said instruction. Issue : Whether or not the assailed Letter of Instruction is invalid and violated constitutional guarantees of due process. Held : The assailed Letter of Instruction was a valid exercise of police power and there was no unlawful delegation of legislative power on the part of the respondent. As identified, police power is a state authority to enact legislation that may interfere personal liberty or property in order to promote the general welfare. In this case, the particular exercise of police power was clearly intended to promote public safety. It cannot be disputed that the Declaration of Principle found in the Constitution possesses relevance: The Philippines ------ adopts the generally accepted principles of international law as part of the law of the nation. Thus, as impressed in the 1968 Vienna Convention it is not for this country to repudiate a commitment to which it had pledged its word. Our countrys word was rese mbled in our own act of legislative ratification of the said Hague and Vienna Conventions thru P.D. No. 207 . The concept of Pacta sunt servanda stands in the way of such an attitude which is, moreover, at war with the principle of international morality. In Santiago vs Far Eatern Broadcasting Company , it was held that the constitutionality of the law will not be considered unless the point is specially pleaded, insisted upon and adequately argued. Equal protection is not a talismanic formula at the mere invocation of which a party to a lawsuit can rightfully expect success will crown his efforts. The law is anything but that. Petition is DISMISSED and the restraining order is lifted. US vs GUINTO, 182 SCRA 644 These are cases that have been consolidated because they all involve the doctrine of state immunity. The United States of America was not impleaded in the case at bar but has moved to dismiss on the ground that they are in effect suits against it to which it has not consented. FACTS: 1. USA vs GUINTO (GR No. 76607) The private respondents are suing several officers of the US Air Force in Clark Air Base in connection with the bidding conducted by them for contracts for barber services in the said base, which was won by Dizon. The respondents wanted to cancel the award because they claimed that Dizon had included in his bid an area not included in the invitation to bid, and also, to conduct a rebidding. 2. USA vs RODRIGO (GR No. 79470) Genove filed a complaint for damages for his dismissal as cook in the US Air Force Recreation Center at Camp John Hay Air Station. It had been ascertained after investigation that Genove had poured urine into the soup stock used in cooking the vegetables served to the club customers. The club manager suspended him and thereafter referred the case to a board of arbitrators, which unanimously found him guilty and recommended his dismissal. 3. USA vs CEBALLOS (GR No. 80018) Bautista, a barracks boy in Camp O Donnell, was arrested following a buy -bust operation conducted by petitioners, who were USAF officers and special agents of the Air Force Office. An information was filed against Bautista and at the trial, petitioners testified against him. As a result of the charge, Bautista was dismissed from his employment. He then filed for damages against petitioners claiming that it was because of the latters acts that he lost his job. 4. USA vs VERGARA (GR No. 80258) A complaint for damages was filed by private respondents against petitioners (US military officers) for injuries allegedly sustained by the former when defendants beat them up, handcuffed them and unleashed dogs on them. The petitioners deny this and claim that respondents were arrested for theft but resisted arrest, thus incurring the injuries. ISSUE: Whether or not the defendants were immune from suit under the RP-US Bases Treaty for acts done by them in the performance of their official duties.

RULING: The rule that a State may not be sued without its consent is one of the generally accepted principles of international law that were have adopted as part of the law of our land. Even without such affirmation, we would still be bound by the generally accepted principles of international law under the doctrine of incorporation. Under this doctrine, as accepted by the majority of the states, such principles are deemed incorporated in the law of every civilized state as a condition and consequence of its membership in the society of nations. 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 states for acts allegedly performed by them in the discharge of their duties. The rule is that if the judgment against such officials will require the state itself to perform an affirmative act to satisfy the same, the suit must be regarded as against the state although it has not been formally impleaded. When the government enters into a contract, it is deemed to have descended to the level of the other contracting party and divested of its sovereign immunity from suit with its implied consent. It bears stressing at this point that the aforesaid principle do not confer on the USA a blanket immunity for all acts done by it or its agents in the Philippines. Neither may the other petitioners claim that they are also insulated from suit in this country merely because they have acted as agents of the United States in the discharge of their official functions. There is no question that the USA, like any other state, will be deemed to have impliedly waived its non-suability if it has entered into a contract in its proprietary or private capacity (commercial acts/jure gestionis). It is only when the contract involves its sovereign or governmental capacity (governmental acts/jure imperii) that no such waiver may be implied. In US vs GUINTO, the court finds the barbershops subject to the concessions granted by the US government to be commercial enterprises operated by private persons. The Court would have directly resolved the claims against the defendants as in USA vs RODRIGO, except for the paucity of the record as the evidence of the alleged irregularity in the grant of the barbershop concessions were not available. Accordingly, this case was remanded to the court below for further proceedings. In US vs RODRIGO, the restaurant services offered at the John Hay Air Station partake of the nature of a business enterprise undertaken by the US government in its proprietary capacity, as they were operated for profit, as a commercial and not a governmental activity. Not even the US government can claim such immunity because 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. But, the court still dismissed the complaint against petitioners on the ground that there was nothing arbitrary about the proceedings in the dismissal of Genove, as the petitioners acted quite properly in terminating Genoves employment for his unbelievably nauseating act. In US vs CEBALLOS, it was clear that the petitioners were acting in the exercise of their official functions when they conducted the buy-bust operation and thereafter testified against the complainant. For discharging their duties as agents of the United States, they cannot be directly impleaded for acts imputable to their principal, which has not given its consent to be sued. In US vs VERGARA, the contradictory factual allegations in this case need a closer study of what actually happened. The record was too meager to indicate if the defendants were really discharging their official duties or had actually exceeded their authority when the incident occurred.The needed inquiry must first be made by the lower court so it may assess and resolve the conflicting claims of the parties. NOTE: 1. 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. 2. Jure Gestionis by right of economic or business relations, may be sued. (US vs Guinto) Jure Imperii by right of sovereign power, in the exercise of sovereign functions. No implied consent. (US v. Ruiz, 136 SCRA 487)

G.R. No. 139465

January 18, 2000

SECRETARY OF JUSTICE, petitioner, vs. HON. RALPH C. LANTION, Presiding Judge, Regional Trial Court of Manila, Branch 25, and MARK B. JIMENEZ, respondents. MELO, J.: The individual citizen is but a speck of particle or molecule vis--vis the vast and overwhelming powers of government. His only guarantee against oppression and tyranny are his fundamental liberties under the Bill of Rights which shield him in times of need. The Court is now called to decide whether to uphold a citizen's basic due process rights, or the government's ironclad duties under a treaty. The bugle sounds and this Court must once again act as the faithful guardian of the fundamental writ. The petition at our doorstep is cast against the following factual backdrop:

On January 13, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1069 "Prescribing the Procedure for the Extradition of Persons Who Have Committed Crimes in a Foreign Country". The Decree is founded on: the doctrine of incorporation under the Constitution; the mutual concern for the suppression of crime both in the state where it was committed and the state where the criminal may have escaped; the extradition treaty with the Republic of Indonesia and the intention of the Philippines to enter into similar treaties with other interested countries; and the need for rules to guide the executive department and the courts in the proper implementation of said treaties. On November 13, 1994, then Secretary of Justice Franklin M. Drilon, representing the Government of the Republic of the Philippines, signed in Manila the "Extradition Treaty Between the Government of the Republic of the Philippines and the Government of the United States of America" (hereinafter referred to as the RP-US Extradition Treaty). The Senate, by way of Resolution No. 11, expressed its concurrence in the ratification of said treaty. It also expressed its concurrence in the Diplomatic Notes correcting Paragraph (5)(a), Article 7 thereof (on the admissibility of the documents accompanying an extradition request upon certification by the principal diplomatic or consular officer of the requested state resident in the Requesting State). On June 18, 1999, the Department of Justice received from the Department of Foreign Affairs U.S. Note Verbale No. 0522 containing a request for the extradition of private respondent Mark Jimenez to the United States. Attached to the Note Verbale were the Grand Jury Indictment, the warrant of arrest issued by the U.S. District Court, Southern District of Florida, and other supporting documents for said extradition. Based on the papers submitted, private respondent appears to be charged in the United States with violation of the following provisions of the United States Code (USC): A) 18 USC 371 (Conspiracy to commit offense or to defraud the United States; two [2] counts; Maximum Penalty 5 years on each count); B) 26 USC 7201 (Attempt to evade or defeat tax; four [4] counts; Maximum Penalty 5 years on each count); C) 18 USC 1343 (Fraud by wire, radio, or television; two [2] counts; Maximum Penalty 5 years on each count); D) 18 USC 1001 (False statement or entries; six [6] counts; Maximum Penalty 5 years on each count); E) 2 USC 441f (Election contributions in name of another; thirty-three [33] counts; Maximum Penalty less than one year). (p. 14, Rollo.) On the same day, petitioner issued Department Order No. 249 designating and authorizing a panel of attorneys to take charge of and to handle the case pursuant to Section 5(1) of Presidential Decree No. 1069. Accordingly, the panel began with the "technical evaluation and assessment" of the extradition request and the documents in support thereof. The panel found that the "official English translation of some documents in Spanish were not attached to the request and that there are some other matters that needed to be addressed" (p. 15, Rollo). Pending evaluation of the aforestated extradition documents, private respondent, through counsel, wrote a letter dated July 1, 1999 addressed to petitioner requesting copies of the official extradition request from the U.S. Government, as well as all documents and papers submitted therewith; and that he be given ample time to comment on the request after he shall have received copies of the requested papers. Private respondent also requested that the proceedings on the matter be held in abeyance in the meantime. Later, private respondent requested that preliminary, he be given at least a copy of, or access to, the request of the United States Government, and after receiving a copy of the Diplomatic Note, a period of time to amplify on his request. In response to private respondent's July 1, 1999 letter, petitioner, in a reply-letter dated July 13, 1999 (but received by private respondent only on August 4, 1999), denied the foregoing requests for the following reasons: 1. We find it premature to furnish you with copies of the extradition request and supporting documents from the United States Government, pending evaluation by this Department of the sufficiency of the extradition documents submitted in accordance with the provisions of the extradition treaty and our extradition law. Article 7 of the Extradition Treaty between the Philippines and the United States enumerates the documentary requirements and establishes the procedures under which the documents submitted shall be received and admitted as evidence. Evidentiary requirements under our domestic law are also set forth in Section 4 of P.D. No. 1069. Evaluation by this Department of the aforementioned documents is not a preliminary investigation nor akin to preliminary investigation of criminal cases. We merely determine whether the procedures and requirements under the relevant law and treaty have been complied with by the Requesting Government. The constitutionally guaranteed rights of the accused in all criminal prosecutions are therefore not available. It is only after the filing of the petition for extradition when the person sought to be extradited will be furnished by the court with copies of the petition, request and extradition documents and this Department will not pose any objection to a request for ample time to evaluate said documents. 2. The formal request for extradition of the United States contains grand jury information and documents obtained through grand jury process covered by strict secrecy rules under United States law. The United States had to secure orders from the

concerned District Courts authorizing the United States to disclose certain grand jury information to Philippine government and law enforcement personnel for the purpose of extradition of Mr. Jimenez. Any further disclosure of the said information is not authorized by the United States District Courts. In this particular extradition request the United States Government requested the Philippine Government to prevent unauthorized disclosure of the subject information. This Department's denial of your request is consistent with Article 7 of the RP-US Extradition Treaty which provides that the Philippine Government must represent the interests of the United States in any proceedings arising out of a request for extradition. The Department of Justice under P.D. No. 1069 is the counsel of the foreign governments in all extradition requests. 3. This Department is not in a position to hold in abeyance proceedings in connection with an extradition request. Article 26 of the Vienna Convention on the Law of Treaties, to which we are a party provides that "[E]very treaty in force is binding upon the parties to it and must be performed by them in good faith". Extradition is a tool of criminal law enforcement and to be effective, requests for extradition or surrender of accused or convicted persons must be processed expeditiously. (pp. 77-78, Rollo.) Such was the state of affairs when, on August 6, 1999, private respondent filed with the Regional Trial Court of the National Capital Judicial Region a petition against the Secretary of Justice, the Secretary of Foreign Affairs, and the Director of the National Bureau of Investigation, for mandamus (to compel herein petitioner to furnish private respondent the extradition documents, to give him access thereto, and to afford him an opportunity to comment on, or oppose, the extradition request, and thereafter to evaluate the request impartially, fairly and objectively);certiorari (to set aside herein petitioner's letter dated July 13, 1999); and prohibition (to restrain petitioner from considering the extradition request and from filing an extradition petition in court; and to enjoin the Secretary of Foreign Affairs and the Director of the NBI from performing any act directed to the extradition of private respondent to the United States), with an application for the issuance of a temporary restraining order and a writ of preliminary injunction (pp. 104-105, Rollo). The aforementioned petition was docketed as Civil Case No. 99-94684 and thereafter raffled to Branch 25 of said regional trial court stationed in Manila which is presided over by the Honorable Ralph C. Lantion. After due notice to the parties, the case was heard on August 9, 1999. Petitioner, who appeared in his own behalf, moved that he be given ample time to file a memorandum, but the same was denied. On August 10, 1999, respondent judge issued an order dated the previous day, disposing: WHEREFORE, this Court hereby Orders the respondents, namely: the Secretary of Justice, the Secretary of Foreign Affairs and the Director of the National Bureau of Investigation, their agents and/or representatives to maintain the status quo by refraining from committing the acts complained of; from conducting further proceedings in connection with the request of the United States Government for the extradition of the petitioner; from filing the corresponding Petition with a Regional Trial court; and from performing any act directed to the extradition of the petitioner to the United States, for a period of twenty (20) days from service on respondents of this Order, pursuant to Section 5, Rule 58 of the 1997 Rules of Court. The hearing as to whether or not this Court shall issue the preliminary injunction, as agreed upon by the counsels for the parties herein, is set on August 17, 1999 at 9:00 o'clock in the morning. The respondents are, likewise, ordered to file their written comment and/or opposition to the issuance of a Preliminary Injunction on or before said date. SO ORDERED. (pp. 110-111, Rollo.) Forthwith, petitioner initiated the instant proceedings, arguing that: PUBLIC RESPONDENT ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING THE TEMPORARY RESTRAINING ORDER BECAUSE: I. BY ORDERING HEREIN PETITIONER TO REFRAIN FROM COMMITTING THE ACTS COMPLAINED OF, I.E., TO DESIST FROM REFUSING PRIVATE RESPONDENT ACCESS TO THE OFFICIAL EXTRADITION REQUEST AND DOCUMENTS AND FROM DENYING PRIVATE RESPONDENT AN OPPORTUNITY TO FILE A COMMENT ON, OR OPPOSITION TO, THE REQUEST, THE MAIN PRAYER FOR A WRIT OF MANDAMUSIN THE PETITION FOR MANDAMUS, CERTIORARI AND PROHIBITION WAS, IN EFFECT, GRANTED SO AS TO CONSTITUTE AN ADJUDICATION ON THE MERITS OF THE MANDAMUS ISSUES; II. PETITIONER WAS UNQUALIFIEDLY PREVENTED FROM PERFORMING LEGAL DUTIES UNDER THE EXTRADITION TREATY AND THE PHILIPPINE EXTRADITION LAW; III.

THE PETITION FOR (MANDAMUS), CERTIORARI AND PROHIBITION IS, ON ITS FACE, FORMALLY AND SUBSTANTIALLY DEFICIENT; AND IV. PRIVATE RESPONDENT HAS NO RIGHT IN ESSE THAT NEEDS PROTECTION AND ENFORCEMENT, AND WILL NOT SUFFER ANY IRREPARABLE INJURY. (pp. 19-20, Rollo.) On August 17, 1999, the Court required private respondent to file his comment. Also issued, as prayed for, was a temporary restraining order (TRO) providing: NOW, THEREFORE, effective immediately and continuing until further orders from this Court, You, Respondent Judge Ralph C. Lantion, your agents, representatives or any person or persons acting in your place or stead are hereby ORDERED to CEASE and DESIST from enforcing the assailed order dated August 9, 1999 issued by public respondent in Civil Case No. 9994684. GIVEN by the Honorable HILARIO G. DAVIDE, JR., Chief Justice, Supreme Court of the Philippines, this 17th day of August 1999. (pp. 120-121, Rollo.) The case was heard on oral argument on August 31, 1999, after which the parties, as directed, filed their respective memoranda. From the pleadings of the opposing parties, both procedural and substantive issues are patent. However, a review of these issues as well as the extensive arguments of both parties, compel us to delineate the focal point raised by the pleadings: During the evaluation stage of the extradition proceedings, is private respondent entitled to the two basic due process rights of notice and hearing? An affirmative answer would necessarily render the proceedings at the trial court, moot and academic (the issues of which are substantially the same as those before us now), while a negative resolution would call for the immediate lifting of the TRO issued by this Court dated August 24, 1999, thus allowing petitioner to fast-track the process leading to the filing of the extradition petition with the proper regional trial court. Corollarily, in the event that private respondent is adjudged entitled to basic due process rights at the evaluation stage of the extradition proceedings, would this entitlement constitute a breach of the legal commitments and obligations of the Philippine Government under the RP-US Extradition Treaty? And assuming that the result would indeed be a breach, is there any conflict between private respondent's basic due process rights and the provisions of the RP-US Extradition Treaty? The issues having transcendental importance, the Court has elected to go directly into the substantive merits of the case, brushing aside peripheral procedural matters which concern the proceedings in Civil Case No. 99-94684, particularly the propriety of the filing of the petition therein, and of the issuance of the TRO of August 17, 1999 by the trial court. To be sure, the issues call for a review of the extradition procedure. The RP-US Extradition Treaty which was executed only on November 13, 1994, ushered into force the implementing provisions of Presidential Decree No. 1069, also called as the Philippine Extradition Law. Section 2(a) thereof defines extradition as "the removal of an accused from the Philippines with the object of placing him at the disposal of foreign authorities to enable the requesting state or government to hold him in connection with any criminal investigation directed against him or the execution of a penalty imposed on him under the penal or criminal law of the requesting state or government." The portions of the Decree relevant to the instant case which involves a charged and not convicted individual, are abstracted as follows: The Extradition Request The request is made by the Foreign Diplomat of the Requesting State, addressed to the Secretary of Foreign Affairs, and shall be accompanied by: 1. The original or an authentic copy of the criminal charge and the warrant of arrest issued by the authority of the Requesting State having jurisdiction over the matter, or some other instruments having equivalent legal force; 2. A recital of the acts for which extradition is requested, with the fullest particulars as to the name and identity of the accused, his whereabouts in the Philippines, if known, the acts or omissions complained of, and the time and place of the commission of these acts; 3. The text of the applicable law or a statement of the contents of said law, and the designation or description of the offense by the law, sufficient for evaluation of the request; and 4. Such other documents or information in support of the request. (Sec. 4. Presidential Decree No. 1069.)

Sec. 5 of the Presidential Decree, which sets forth the duty of the Secretary of Foreign Affairs, pertinently provides . . . (1) Unless it appears to the Secretary of Foreign Affairs that the request fails to meet the requirements of this law and the relevant treaty or convention, he shall forward the request together with the related documents to the Secretary of Justice, who shall immediately designate and authorize an attorney in his office to take charge of the case. The above provision shows only too clearly that the executive authority given the task of evaluating the sufficiency of the request and the supporting documents is the Secretary of Foreign Affairs. What then is the coverage of this task? In accordance with Paragraphs 2 and 3, Article 7 of the RP-US Extradition Treaty, the executive authority must ascertain whether or not the request is supported by: 1. Documents, statements, or other types of information which describe the identity and probable location of the person sought; 2. A statement of the facts of the offense and the procedural history of the case; 3. A statement of the provisions of the law describing the essential elements of the offense for which extradition is requested; 4. A statement of the provisions of law describing the punishment for the offense; 5. A statement of the provisions of the law describing any time limit on the prosecution or the execution of punishment for the offense; 6. Documents, statements, or other types of information specified in paragraph 3 or paragraph 4 of said Article, as applicable. (Paragraph 2, Article 7, Presidential Decree No. 1069.) 7. Such evidence as, according to the law of the Requested State, would provide probable cause for his arrest and committal for trial if the offense had been committed there; 8. A copy of the warrant or order of arrest issued by a judge or other competent authority; and 9. A copy of the charging document. (Paragraph 3, ibid.) The executive authority (Secretary of Foreign Affairs) must also see to it that the accompanying documents received in support of the request had been certified by the principal diplomatic or consular officer of the Requested State resident in the Requesting State (Embassy Note No. 052 from U. S. Embassy; Embassy Note No. 951309 from the Department of Foreign Affairs). In this light, Paragraph 3, Article 3 of the Treaty provides that "[e]xtradition shall not be granted if the executive authority of the Requested State determines that the request is politically motivated, or that the offense is a military offense which is not punishable under non-military penal legislation." The Extradition Petition Upon a finding made by the Secretary of Foreign Affairs that the extradition request and its supporting documents are sufficient and complete in form and substance, he shall deliver the same to the Secretary of Justice, who shall immediately designate and authorize an attorney in his office to take charge of the case (Paragraph [1], Section 5, P.D. No. 1069). The lawyer designated shall then file a written petition with the proper regional trial court of the province or city, with a prayer that the court take the extradition request under consideration (Paragraph [2], ibid.). The presiding judge of the regional trial court, upon receipt of the petition for extradition, shall, as soon as practicable, issue an order summoning the prospective extraditee to appear and to answer the petition on the day and hour fixed in the order. The judge may issue a warrant of arrest if it appears that the immediate arrest and temporary detention of the accused will best serve the ends of justice (Paragraph [1], Section 6, ibid.), particularly to prevent the flight of the prospective extraditee. The Extradition Hearing The Extradition Law does not specifically indicate whether the extradition proceeding is criminal, civil, or a special proceeding. Nevertheless, Paragraph [1], Section 9 thereof provides that in the hearing of the extradition petition, the provisions of the Rules of Court, insofar as practicable and not inconsistent with the summary nature of the proceedings, shall apply. During the hearing, Section 8 of the Decree provides that the attorney having charge of the case may, upon application by the Requesting State, represent the latter throughout the proceedings.

Upon conclusion of the hearing, the court shall render a decision granting the extradition and giving the reasons therefor upon a showing of the existence of a prima facie case, or dismiss the petition (Section 10, ibid.). Said decision is appealable to the Court of Appeals, whose decision shall be final and immediately executory (Section 12, ibid.). The provisions of the Rules of Court governing appeal in criminal cases in the Court of Appeals shall apply in the aforementioned appeal, except for the required 15-day period to file brief (Section 13, ibid.). The trial court determines whether or not the offense mentioned in the petition is extraditable based on the application of the dual criminality rule and other conditions mentioned in Article 2 of the RP-US Extradition Treaty. The trial court also determines whether or not the offense for which extradition is requested is a political one (Paragraph [1], Article 3, RP-US Extradition Treaty). With the foregoing abstract of the extradition proceedings as backdrop, the following query presents itself: What is the nature of the role of the Department of Justice at the evaluation stage of the extradition proceedings? A strict observance of the Extradition Law indicates that the only duty of the Secretary of Justice is to file the extradition petition after the request and all the supporting papers are forwarded to him by the Secretary of Foreign Affairs. It is the latter official who is authorized to evaluate the extradition papers, to assure their sufficiency, and under Paragraph [3], Article 3 of the Treaty, to determine whether or not the request is politically motivated, or that the offense is a military offense which is not punishable under non-military penal legislation. Ipso facto, as expressly provided in Paragraph [1], Section 5 of the Extradition Law, the Secretary of Justice has the ministerial duty of filing the extradition papers. However, looking at the factual milieu of the case before us, it would appear that there was failure to abide by the provisions of Presidential Decree No. 1069. For while it is true that the extradition request was delivered to the Department of Foreign Affairs on June 17, 1999, the following day or less than 24 hours later, the Department of Justice received the request, apparently without the Department of Foreign Affairs discharging its duty of thoroughly evaluating the same and its accompanying documents. The statement of an assistant secretary at the Department of Foreign Affairs that his Department, in this regard, is merely acting as a post office, for which reason he simply forwarded the request to the Department of Justice, indicates the magnitude of the error of the Department of Foreign Affairs in taking lightly its responsibilities. Thereafter, the Department of Justice took it upon itself to determine the completeness of the documents and to evaluate the same to find out whether they comply with the requirements laid down in the Extradition Law and the RP-US Extradition Treaty. Petitioner ratiocinates in this connection that although the Department of Justice had no obligation to evaluate the extradition documents, the Department also had to go over them so as to be able to prepare an extradition petition (tsn, August 31, 1999, pp. 24-25). Notably, it was also at this stage where private respondent insisted on the following; (1) the right to be furnished the request and the supporting papers; (2) the right to be heard which consists in having a reasonable period of time to oppose the request, and to present evidence in support of the opposition; and (3) that the evaluation proceedings be held in abeyance pending the filing of private respondent's opposition to the request. The two Departments seem to have misread the scope of their duties and authority, one abdicating its powers and the other enlarging its commission. The Department of Foreign Affairs, moreover, has, through the Solicitor General, filed a manifestation that it is adopting the instant petition as its own, indirectly conveying the message that if it were to evaluate the extradition request, it would not allow private respondent to participate in the process of evaluation. Plainly then, the record cannot support the presumption of regularity that the Department of Foreign Affairs thoroughly reviewed the extradition request and supporting documents and that it arrived at a well-founded judgment that the request and its annexed documents satisfy the requirements of law. The Secretary of Justice, eminent as he is in the field of law, could not privately review the papers all by himself. He had to officially constitute a panel of attorneys. How then could the DFA Secretary or his undersecretary, in less than one day, make the more authoritative determination? The evaluation process, just like the extradition proceedings proper, belongs to a class by itself. It is sui generis. It is not a criminal investigation, but it is also erroneous to say that it is purely an exercise of ministerial functions. At such stage, the executive authority has the power: (a) to make a technical assessment of the completeness and sufficiency of the extradition papers; (b) to outrightly deny the request if on its face and on the face of the supporting documents the crimes indicated are not extraditable; and (c) to make a determination whether or not the request is politically motivated, or that the offense is a military one which is not punishable under non-military penal legislation (tsn, August 31, 1999, pp. 28-29; Article 2 & and Paragraph [3], Article 3, RP-US Extradition Treaty). Hence, said process may be characterized as an investigative or inquisitorial process in contrast to a proceeding conducted in the exercise of an administrative body's quasi-judicial power. In administrative law, a quasi-judicial proceeding involves: (a) taking and evaluation of evidence; (b) determining facts based upon the evidence presented; and (c) rendering an order or decision supported by the facts proved (De Leon, Administrative Law: Text and Cases, 1993 ed., p. 198, citing Morgan vs. United States, 304 U.S. 1). Inquisitorial power, which is also known as examining or investigatory power, is one or the determinative powers of an administrative body which better enables it to exercise its quasijudicial authority (Cruz, Phil. Administrative Law, 1996 ed., p. 26). This power allows the administrative body to inspect the records and premises, and investigate the activities, of persons or entities coming under its jurisdiction (Ibid., p. 27), or to require disclosure of information by means or accounts, records, reports, testimony of witnesses, production of documents, or otherwise (De Leon, op. cit., p. 64). The power of investigation consists in gathering, organizing, and analyzing evidence, which is a useful aid or tool in an administrative agency's performance of its rule-making or quasi-judicial functions. Notably, investigation is indispensable to prosecution. In Ruperto v. Torres (100 Phil. 1098 [1957], unreported), the Court had occasion to rule on the functions of an investigatory body with the sole power of investigation. It does not exercise judicial functions and its power is limited to investigating the facts and

making findings in respect thereto. The Court laid down the test of determining whether an administrative body is exercising judicial functions or merely investigatory functions: Adjudication signifies the exercise of power and authority to adjudicate upon the rights and obligations of the parties before it. Hence, if the only purpose for investigation is to evaluate evidence submitted before it based on the facts and circumstances presented to it, and if the agency is not authorized to make a final pronouncement affecting the parties, then there is an absence of judicial discretion and judgment. The above description in Ruperto applies to an administrative body authorized to evaluate extradition documents. The body has no power to adjudicate in regard to the rights and obligations of both the Requesting State and the prospective extraditee. Its only power is to determine whether the papers comply with the requirements of the law and the treaty and, therefore, sufficient to be the basis of an extradition petition. Such finding is thus merely initial and not final. The body has no power to determine whether or not the extradition should be effected. That is the role of the court. The body's power is limited to an initial finding of whether or not the extradition petition can be filed in court. It is to be noted, however, that in contrast to ordinary investigations, the evaluation procedure is characterized by certain peculiarities. Primarily, it sets into motion the wheels of the extradition process. Ultimately, it may result in the deprivation of liberty of the prospective extraditee. This deprivation can be effected at two stages: First, the provisional arrest of the prospective extraditee pending the submission of the request. This is so because the Treaty provides that in case of urgency, a contracting party may request the provisional arrest of the person sought pending presentation of the request (Paragraph [1], Article 9, RP-US Extradition Treaty), but he shall be automatically discharged after 60 days if no request is submitted (Paragraph 4). Presidential Decree No. 1069 provides for a shorter period of 20 days after which the arrested person could be discharged (Section 20[d]). Logically, although the Extradition Law is silent on this respect, the provisions only mean that once a request is forwarded to the Requested State, the prospective extraditee may be continuously detained, or if not, subsequently rearrested (Paragraph [5], Article 9, RP-US Extradition Treaty), for he will only be discharged if no request is submitted. Practically, the purpose of this detention is to prevent his possible flight from the Requested State. Second, the temporary arrest of the prospective extraditee during the pendency of the extradition petition in court (Section 6, Presidential Decree No. 1069). Clearly, there is an impending threat to a prospective extraditee's liberty as early as during the evaluation stage. It is not only an imagined threat to his liberty, but a very imminent one. Because of these possible consequences, we conclude that the evaluation process is akin to an administrative agency conducting an investigative proceeding, the consequences of which are essentially criminal since such technical assessment sets off or commences the procedure for, and ultimately, the deprivation of liberty of a prospective extraditee. As described by petitioner himself, this is a "tool" for criminal law enforcement (p. 78,Rollo). In essence, therefore, the evaluation process partakes of the nature of a criminal investigation. In a number of cases, we had occasion to make available to a respondent in an administrative case or investigation certain constitutional rights that are ordinarily available only in criminal prosecutions. Further, as pointed out by Mr. Justice Mendoza during the oral arguments, there are rights formerly available only at the trial stage that had been advanced to an earlier stage in the proceedings, such as the right to counsel and the right against self-incrimination (tsn, August 31, 1999, p. 135; Escobedo vs. Illinois, 378 U.S. 478; Gideon vs. Wainwright, 372 U.S. 335; Miranda vs. Arizona, 384 U.S. 436). In Pascual v. Board of Medical Examiners (28 SCRA 344 [1969]), we held that the right against self-incrimination under Section 17, Article III of the 1987 Constitution which is ordinarily available only in criminal prosecutions, extends to administrative proceedings which possess a criminal or penal aspect, such as an administrative investigation of a licensed physician who is charged with immorality, which could result in his loss of the privilege to practice medicine if found guilty. The Court, citing the earlier case of Cabal vs. Kapunan (6 SCRA 1059 [1962]), pointed out that the revocation of one's license as a medical practitioner, is an even greater deprivation than forfeiture of property. Cabal vs. Kapunan (supra) involved an administrative charge of unexplained wealth against a respondent which was filed under Republic Act No. 1379, or the Anti-Graft Law. Again, we therein ruled that since the investigation may result in forfeiture of property, the administrative proceedings are deemed criminal or penal, and such forfeiture partakes the nature of a penalty. There is also the earlier case of Almeda, Sr. vs. Perez (5 SCRA 970 [1962]), where the Court, citing American jurisprudence, laid down the test to determine whether a proceeding is civil or criminal: If the proceeding is under a statute such that if an indictment is presented the forfeiture can be included in the criminal case, such proceeding is criminal in nature, although it may be civil in form; and where it must be gathered from the statute that the action is meant to be criminal in its nature, it cannot be considered as civil. If, however, the proceeding does not involve the conviction of the wrongdoer for the offense charged, the proceeding is civil in nature. The cases mentioned above refer to an impending threat of deprivation of one's property or property right. No less is this true, but even more so in the case before us, involving as it does the possible deprivation of liberty, which, based on the hierarchy of constitutionally protected rights, is placed second only to life itself and enjoys precedence over property, for while forfeited property can be returned or replaced, the time spent in incarceration is irretrievable and beyond recompense. By comparison, a favorable action in an extradition request exposes a person to eventual extradition to a foreign country, thus saliently exhibiting the criminal or penal aspect of the process. In this sense, the evaluation procedure is akin to a preliminary investigation since both procedures may have the same result the arrest and imprisonment of the respondent or the person charged. Similar to the evaluation stage of extradition proceedings, a preliminary investigation, which may result in the filing of an information against the respondent, can possibly lead to his arrest, and to the deprivation of his liberty. Petitioner's reliance on Wright vs. Court of Appeals (235 SCRA 241 [1992]) (p. 8, petitioner's Memorandum) that the extradition treaty is neither a piece of criminal legislation nor a criminal procedural statute is not well-taken.Wright is not authority for petitioner's conclusion that his preliminary processing is not akin to a preliminary investigation. The characterization of a treaty

in Wright was in reference to the applicability of the prohibition against an ex post facto law. It had nothing to do with the denial of the right to notice, information, and hearing. As early as 1884, the United States Supreme Court ruled that "any legal proceeding enforced by public authority, whether sanctioned by age or custom, or newly devised in the discretion of the legislative power, in furtherance of the general public good, which regards and preserved these principles of liberty and justice, must be held to be due process of law" (Hurtado vs. California, 110 U.S. 516). Compliance with due process requirements cannot be deemed non-compliance with treaty commitments. The United States and the Philippines share a mutual concern about the suppression and punishment of crime in their respective jurisdictions. At the same time, both States accord common due process protection to their respective citizens. The due process clauses in the American and Philippine Constitutions are not only worded in exactly identical language and terminology, but more importantly, they are alike in what their respective Supreme Courts have expounded as the spirit with which the provisions are informed and impressed, the elasticity in their interpretation, their dynamic and resilient character which make them capable of meeting every modern problem, and their having been designed from earliest time to the present to meet the exigencies of an undefined and expanding future. The requirements of due process are interpreted in both the United States and the Philippines as not denying to the law the capacity for progress and improvement. Toward this effect and in order to avoid the confines of a legal straitjacket, the courts instead prefer to have the meaning of the due process clause "gradually ascertained by the process of inclusion and exclusion in the course of the decisions of cases as they arise" (Twining vs. New Jersey, 211 U.S. 78). Capsulized, it refers to "the embodiment of the sporting idea of fair play" (Ermita-Malate Hotel and Motel Owner's Association vs. City Mayor of Manila, 20 SCRA 849 [1967]). It relates to certain immutable principles of justice which inhere in the very idea of free government (Holden vs. Hardy, 169 U.S. 366). Due process is comprised of two components substantive due process which requires the intrinsic validity of the law in interfering with the rights of the person to his life, liberty, or property, and procedural due process which consists of the two basic rights of notice and hearing, as well as the guarantee of being heard by an impartial and competent tribunal (Cruz, Constitutional Law, 1993 Ed., pp. 102-106). True to the mandate of the due process clause, the basic rights of notice and hearing pervade not only in criminal and civil proceedings, but in administrative proceedings as well. Non-observance of these rights will invalidate the proceedings. Individuals are entitled to be notified of any pending case affecting their interests, and upon notice, they may claim the right to appear therein and present their side and to refute the position of the opposing parties (Cruz, Phil. Administrative Law, 1996 ed., p. 64). In a preliminary investigation which is an administrative investigatory proceeding, Section 3, Rule 112 of the Rules of Court guarantees the respondent's basic due process rights, granting him the right to be furnished a copy of the complaint, the affidavits, and other supporting documents, and the right to submit counter-affidavits and other supporting documents within ten days from receipt thereof. Moreover, the respondent shall have the right to examine all other evidence submitted by the complainant. These twin rights may, however, be considered dispensable in certain instances, such as: 1. In proceeding where there is an urgent need for immediate action, like the summary abatement of a nuisance per se (Article 704, Civil Code), the preventive suspension of a public servant facing administrative charges (Section 63, Local Government Code, B.P. Blg. 337), the padlocking of filthy restaurants or theaters showing obscene movies or like establishments which are immediate threats to public health and decency, and the cancellation of a passport of a person sought for criminal prosecution; 2. Where there is tentativeness of administrative action, that is, where the respondent is not precluded from enjoying the right to notice and hearing at a later time without prejudice to the person affected, such as the summary distraint and levy of the property of a delinquent taxpayer, and the replacement of a temporary appointee; and 3. Where the twin rights have previously been offered but the right to exercise them had not been claimed. Applying the above principles to the case at bar, the query may be asked: Does the evaluation stage of the extradition proceedings fall under any of the described situations mentioned above? Let us take a brief look at the nature of American extradition proceedings which are quite noteworthy considering that the subject treaty involves the U.S. Government. American jurisprudence distinguishes between interstate rendition or extradition which is based on the Extradition Clause in the U.S. Constitution (Art. IV, 2 cl 2), and international extradition proceedings. In interstate rendition or extradition, the governor of the asylum state has the duty to deliver the fugitive to the demanding state. The Extradition Clause and the implementing statute are given a liberal construction to carry out their manifest purpose, which is to effect the return as swiftly as possible of persons for trial to the state in which they have been charged with crime (31A Am Jur 2d 754-755). In order to achieve extradition of an alleged fugitive, the requisition papers or the demand must be in proper form, and all the elements or jurisdictional facts essential to the extradition must appear on the face of the papers, such as the allegation that the person demanded was in the demanding state at the time the offense charged was committed, and that the person demanded is charged with the commission of the crime or that prosecution has been begun in the demanding state before some court or magistrate (35 C.J.S. 406-407). The extradition documents are then filed with the governor of the asylum state, and must contain such papers and documents prescribed by statute, which

essentially include a copy of the instrument charging the person demanded with a crime, such as an indictment or an affidavit made before a magistrate. Statutory requirements with respect to said charging instrument or papers are mandatory since said papers are necessary in order to confer jurisdiction on the government of the asylum state to effect extradition (35 C.J.S. 408-410). A statutory provision requiring duplicate copies of the indictment , information, affidavit, or judgment of conviction or sentence and other instruments accompanying the demand or requisitions be furnished and delivered to the fugitive or his attorney is directory. However, the right being such a basic one has been held to be a right mandatory on demand (Ibid., p. 410, citing Ex parte Moore, 256 S.W. 2d 103, 158 Tex. Cr. 407 andEx parte Tucker, Cr., 324, S.W.2d 853). In international proceedings, extradition treaties generally provide for the presentation to the executive authority of the Requested State of a requisition or demand for the return of the alleged offender, and the designation of the particular officer having authority to act in behalf of the demanding nation (31A Am Jur 2d 815). In petitioner's memorandum filed on September 15, 1999, he attached thereto a letter dated September 13, 1999 from the Criminal Division of the U.S. Department of Justice, summarizing the U.S. extradition procedures and principles, which are basically governed by a combination of treaties (with special reference to the RP-US Extradition Treaty), federal statutes, and judicial decisions, to wit: 1. All requests for extradition are transmitted through the diplomatic channel. In urgent cases, requests for the provincial arrest of an individual may be made directly by the Philippine Department of Justice to the U.S. Department of Justice, and vice-versa. In the event of a provisional arrest, a formal request for extradition is transmitted subsequently through the diplomatic channel. 2. The Department of State forwards the incoming Philippine extradition request to the Department of Justice. Before doing so, the Department of State prepares a declaration confirming that a formal request has been made, that the treaty is in full force and effect, that under Article 17 thereof the parties provide reciprocal legal representation in extradition proceedings, that the offenses are covered as extraditable offenses under Article 2 thereof, and that the documents have been authenticated in accordance with the federal statute that ensures admissibility at any subsequent extradition hearing. 3. A judge or magistrate judge is authorized to issue a warrant for the arrest of the prospective extraditee (18 U.S.C. 3184). Said judge or magistrate is authorized to hold a hearing to consider the evidence offered in support of the extradition request (Ibid.) 4. At the hearing, the court must determine whether the person arrested is extraditable to the foreign country. The court must also determine that (a) it has jurisdiction over the defendant and jurisdiction to conduct the hearing; (b) the defendant is being sought for offenses for which the applicable treaty permits extradition; and (c) there is probable cause to believe that the defendant is the person sought and that he committed the offenses charged (Ibid.) 5. The judge or magistrate judge is vested with jurisdiction to certify extraditability after having received a "complaint made under oath, charging any person found within his jurisdiction" with having committed any of the crimes provided for by the governing treaty in the country requesting extradition (Ibid.) [In this regard, it is noted that a long line of American decisions pronounce that international extradition proceedings partake of the character of a preliminary examination before a committing magistrate, rather than a trial of the guilt or innocence of the alleged fugitive (31A Am Jur 2d 826).] 6. If the court decides that the elements necessary for extradition are present, it incorporates its determinations in factual findings and conclusions of law and certifies the person's extraditability. The court then forwards this certification of extraditability to the Department of State for disposition by the Secretary of State. The ultimate decision whether to surrender an individual rests with the Secretary of State (18 U.S.C. 3186). 7. The subject of an extradition request may not litigate questions concerning the motives of the requesting government in seeking his extradition. However, a person facing extradition may present whatever information he deems relevant to the Secretary of State, who makes the final determination whether to surrender an individual to the foreign government concerned. From the foregoing, it may be observed that in the United States, extradition begins and ends with one entity the Department of State which has the power to evaluate the request and the extradition documents in the beginning, and, in the person of the Secretary of State, the power to act or not to act on the court's determination of extraditability. In the Philippine setting, it is the Department of Foreign Affairs which should make the initial evaluation of the request, and having satisfied itself on the points earlier mentioned (see pp. 10-12), then forwards the request to the Department of Justice for the preparation and filing of the petition for extradition. Sadly, however, the Department of Foreign Affairs, in the instant case, perfunctorily turned over the request to the Department of Justice which has taken over the task of evaluating the request as well as thereafter, if so warranted, preparing, filing, and prosecuting the petition for extradition. Private respondent asks what prejudice will be caused to the U.S. Government should the person sought to be extradited be given due process rights by the Philippines in the evaluation stage. He emphasizes that petitioner's primary concern is the possible delay in the evaluation process. We agree with private respondent's citation of an American Supreme Court ruling:

The establishment of prompt efficacious procedures to achieve legitimate state ends is a proper state interest worthy of cognizance in constitutional adjudication. But the Constitution recognizes higher values than speed and efficiency . Indeed, one might fairly say of the Bill of Rights in general, and the Due Process Clause, in particular, that they were designed to protect the fragile values of a vulnerable citizenry from the overbearing concern for efficiency and efficacy that may characterize praiseworthy government officials no less, and perhaps more, than mediocre ones. (Stanley vs. Illinois, 404 U.S. 645, 656) The United States, no doubt, shares the same interest as the Philippine Government that no right that of liberty secured not only by the Bills of Rights of the Philippines Constitution but of the United States as well, is sacrificed at the altar of expediency. (pp. 40-41, Private Respondent's Memorandum.) In the Philippine context, this Court's ruling is invoked: One of the basic principles of the democratic system is that where the rights of the individual are concerned, the end does not justify the means. It is not enough that there be a valid objective; it is also necessary that the means employed to pursue it be in keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts. There is no question that not even the strongest moral conviction or the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a person invoking a right guaranteed under Article III of the Constitution is a majority of one even as against the rest of the nation who would deny him that right (Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform, 175 SCRA 343, 375376 [1989]). There can be no dispute over petitioner's argument that extradition is a tool of criminal law enforcement. To be effective, requests for extradition or the surrender of accused or convicted persons must be processed expeditiously. Nevertheless, accelerated or fasttracked proceedings and adherence to fair procedures are, however, not always incompatible. They do not always clash in discord. Summary does not mean precipitous haste. It does not carry a disregard of the basic principles inherent in "ordered liberty." Is there really an urgent need for immediate action at the evaluation stage? At that point, there is no extraditee yet in the strict sense of the word. Extradition may or may not occur. In interstate extradition, the governor of the asylum state may not, in the absence of mandatory statute, be compelled to act favorably (37 C.J.S. 387) since after a close evaluation of the extradition papers, he may hold that federal and statutory requirements, which are significantly jurisdictional, have not been met (31 Am Jur 2d 819). Similarly, under an extradition treaty, the executive authority of the requested state has the power to deny the behest from the requesting state. Accordingly, if after a careful examination of the extradition documents the Secretary of Foreign Affairs finds that the request fails to meet the requirements of the law and the treaty, he shall not forward the request to the Department of Justice for the filing of the extradition petition since non-compliance with the aforesaid requirements will not vest our government with jurisdiction to effect the extradition. In this light, it should be observed that the Department of Justice exerted notable efforts in assuring compliance with the requirements of the law and the treaty since it even informed the U.S. Government of certain problems in the extradition papers (such as those that are in Spanish and without the official English translation, and those that are not properly authenticated). In fact, petitioner even admits that consultation meetings are still supposed to take place between the lawyers in his Department and those from the U.S. Justice Department. With the meticulous nature of the evaluation, which cannot just be completed in an abbreviated period of time due to its intricacies, how then can we say that it is a proceeding that urgently necessitates immediate and prompt action where notice and hearing can be dispensed with? Worthy of inquiry is the issue of whether or not there is tentativeness of administrative action. Is private respondent precluded from enjoying the right to notice and hearing at a later time without prejudice to him? Here lies the peculiarity and deviant characteristic of the evaluation procedure. On one hand there is yet no extraditee, but ironically on the other, it results in an administrative if adverse to the person involved, may cause his immediate incarceration. The grant of the request shall lead to the filing of the extradition petition in court. The "accused" (as Section 2[c] of Presidential Decree No. 1069 calls him), faces the threat of arrest, not only after the extradition petition is filed in court, but even during the evaluation proceeding itself by virtue of the provisional arrest allowed under the treaty and the implementing law. The prejudice to the "accused" is thus blatant and manifest. Plainly, the notice and hearing requirements of administrative due process cannot be dispensed with and shelved aside. Apart from the due process clause of the Constitution, private respondent likewise invokes Section 7 of Article III which reads: Sec. 7. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law. The above provision guarantees political rights which are available to citizens of the Philippines, namely: (1) the right to information on matters of public concern, and (2) the corollary right of access to official records documents. The general right guaranteed by said provision is the right to information on matters of public concern. In its implementation, the right of access to official records is likewise conferred. These cognate or related rights are "subject to limitations as may be provided by law" (Bernas, The 1987 Phil.

Constitution A Reviewer-Primer, 1997 ed., p. 104) and rely on the premise that ultimately it is an informed and critical public opinion which alone can protect the values of democratic government (Ibid.). Petitioner argues that the matters covered by private respondent's letter-request dated July 1, 1999 do not fall under the guarantee of the foregoing provision since the matters contained in the documents requested are not of public concern. On the other hand, private respondent argues that the distinction between matters vested with public interest and matters which are of purely private interest only becomes material when a third person, who is not directly affected by the matters requested, invokes the right to information. However, if the person invoking the right is the one directly affected thereby, his right to information becomes absolute. The concept of matters of public concerns escapes exact definition. Strictly speaking, every act of a public officer in the conduct of the governmental process is a matter of public concern (Bernas, The 1987 Constitution of the Republic of the Philippines, 1996 ed., p. 336). This concept embraces a broad spectrum of subjects which the public may want to know, either because these directly affect their lives or simply because such matters arouse the interest of an ordinary citizen (Legaspi v. Civil Service Commission, 150 SCRA 530 [1987]). Hence, the real party in interest is the people and any citizen has "standing". When the individual himself is involved in official government action because said action has a direct bearing on his life, and may either cause him some kind of deprivation or injury, he actually invokes the basic right to be notified under Section 1 of the Bill of Rights and not exactly the right to information on matters of public concern. As to an accused in a criminal proceeding, he invokes Section 14, particularly the right to be informed of the nature and cause of the accusation against him. The right to information is implemented by the right of access to information within the control of the government (Bernas, The 1987 Constitution of the Republic of the Philippines, 1996 ed., p. 337). Such information may be contained in official records, and in documents and papers pertaining to official acts, transactions, or decisions. In the case at bar, the papers requested by private respondent pertain to official government action from the U.S. Government. No official action from our country has yet been taken. Moreover, the papers have some relation to matters of foreign relations with the U.S. Government. Consequently, if a third party invokes this constitutional provision, stating that the extradition papers are matters of public concern since they may result in the extradition of a Filipino, we are afraid that the balance must be tilted, at such particular time, in favor of the interests necessary for the proper functioning of the government. During the evaluation procedure, no official governmental action of our own government has as yet been done; hence the invocation of the right is premature. Later, and in contrast, records of the extradition hearing would already fall under matters of public concern, because our government by then shall have already made an official decision to grant the extradition request. The extradition of a fellow Filipino would be forthcoming. We now pass upon the final issue pertinent to the subject matter of the instant controversy: Would private respondent's entitlement to notice and hearing during the evaluation stage of the proceedings constitute a breach of the legal duties of the Philippine Government under the RP-Extradition Treaty? Assuming the answer is in the affirmative, is there really a conflict between the treaty and the due process clause in the Constitution? First and foremost, let us categorically say that this is not the proper time to pass upon the constitutionality of the provisions of the RP-US Extradition Treaty nor the Extradition Law implementing the same. We limit ourselves only to the effect of the grant of the basic rights of notice and hearing to private respondent on foreign relations. The rule of pacta sunt servanda, one of the oldest and most fundamental maxims of international law, requires the parties to a treaty to keep their agreement therein in good faith. The observance of our country's legal duties under a treaty is also compelled by Section 2, Article II of the Constitution which provides that "[t]he 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 nations." Under the doctrine of incorporation, rules of international law form part of the law of the and land no further legislative action is needed to make such rules applicable in the domestic sphere (Salonga & Yap, Public International Law, 1992 ed., p. 12). The doctrine of incorporation is applied whenever municipal tribunals (or local courts) are confronted with situations in which there appears to be a conflict between a rule of international law and the provisions of the constitution or statute of the local state. Efforts should first be exerted to harmonize them, so as to give effect to both since it is to be presumed that municipal law was enacted with proper regard for the generally accepted principles of international law in observance of the observance of the Incorporation Clause in the above-cited constitutional provision (Cruz, Philippine Political Law, 1996 ed., p. 55). In a situation, however, where the conflict is irreconcilable and a choice has to be made between a rule of international law and municipal law, jurisprudence dictates that municipal law should be upheld by the municipal courts (Ichong vs. Hernandez, 101 Phil. 1155 [1957]; Gonzales vs. Hechanova, 9 SCRA 230 [1963]; In re: Garcia, 2 SCRA 984 [1961]) for the reason that such courts are organs of municipal law and are accordingly bound by it in all circumstances (Salonga & Yap, op. cit., p. 13). The fact that international law has been made part of the law of the land does not pertain to or imply the primacy of international law over national or municipal law in the municipal sphere. The doctrine of incorporation, as applied in most countries, decrees that rules of international law are given equal standing with, but are not superior to, national legislative enactments. Accordingly, the principle lex posterior derogat priori takes effect a treaty may repeal a statute and a statute may repeal a treaty. In states where the constitution is the highest law of the land, such as the Republic of the Philippines, both statutes and treaties may be invalidated if they are in conflict with the constitution ( Ibid.). In the case at bar, is there really a conflict between international law and municipal or national law? En contrario, these two components of the law of the land are not pined against each other. There is no occasion to choose which of the two should be

upheld. Instead, we see a void in the provisions of the RP-US Extradition Treaty, as implemented by Presidential Decree No. 1069, as regards the basic due process rights of a prospective extraditee at the evaluation stage of extradition proceedings. From the procedures earlier abstracted, after the filing of the extradition petition and during the judicial determination of the propriety of extradition, the rights of notice and hearing are clearly granted to the prospective extraditee. However, prior thereto, the law is silent as to these rights. Reference to the U.S. extradition procedures also manifests this silence. Petitioner interprets this silence as unavailability of these rights. Consequently, he describes the evaluation procedure as an "ex parte technical assessment" of the sufficiency of the extradition request and the supporting documents. We disagree. In the absence of a law or principle of law, we must apply the rules of fair play. An application of the basic twin due process rights of notice and hearing will not go against the treaty or the implementing law. Neither the Treaty nor the Extradition Law precludes these rights from a prospective extraditee. Similarly, American jurisprudence and procedures on extradition pose no proscription. In fact, in interstate extradition proceedings as explained above, the prospective extraditee may even request for copies of the extradition documents from the governor of the asylum state, and if he does, his right to be supplied the same becomes a demandable right (35 C.J.S. 410). Petitioner contends that the United States requested the Philippine Government to prevent unauthorized disclosure of confidential information. Hence, the secrecy surrounding the action of the Department of Justice Panel of Attorneys. The confidentiality argument is, however, overturned by petitioner's revelation that everything it refuses to make available at this stage would be obtainable during trial. The Department of Justice states that the U.S. District Court concerned has authorized the disclosure of certain grand jury information. If the information is truly confidential, the veil of secrecy cannot be lifted at any stage of the extradition proceedings. Not even during trial. A libertarian approach is thus called for under the premises. One will search in vain the RP-US Extradition Treaty, the Extradition Law, as well as American jurisprudence and procedures on extradition, for any prohibition against the conferment of the two basic due process rights of notice and hearing during the evaluation stage of the extradition proceedings. We have to consider similar situations in jurisprudence for an application by analogy. Earlier, we stated that there are similarities between the evaluation process and a preliminary investigation since both procedures may result in the arrest of the respondent or the prospective extraditee. In the evaluation process, a provisional arrest is even allowed by the Treaty and the Extradition Law (Article 9, RP-US Extradition Treaty; Sec. 20, Presidential Decree No. 1069). Following petitioner's theory, because there is no provision of its availability, does this imply that for a period of time, the privilege of the writ of habeas corpus is suspended, despite Section 15, Article III of the Constitution which states that "[t]he privilege of the writ or habeas corpus shall not be suspended except in cases of invasion or rebellion when the public safety requires it"? Petitioner's theory would also infer that bail is not available during the arrest of the prospective extraditee when the extradition petition has already been filed in court since Presidential Decree No. 1069 does not provide therefor, notwithstanding Section 13, Article III of the Constitution which provides that "[a]ll persons, except those charged with offenses punishable by reclusion perpetua when evidence of guilt is strong, shall, before conviction, be bailable by sufficient sureties, or be released on recognizance as may be provided by law. The right to bail shall not be impaired even when the privilege of the writ of habeas corpus is suspended. . ." Can petitioner validly argue that since these contraventions are by virtue of a treaty and hence affecting foreign relations, the aforestated guarantees in the Bill of Rights could thus be subservient thereto? The basic principles of administrative law instruct us that "the essence of due process in administrative proceeding is an opportunity to explain one's side or an opportunity to seek reconsideration of the actions or ruling complained of (Mirano vs. NLRC, 270 SCRA 96 [1997]; Padilla vs. NLRC, 273 SCRA 457 [1997]; PLDT vs. NLRC, 276 SCRA 1 [1997]; Helpmate, Inc. vs. NLRC, 276 SCRA 315 [1997]; Aquinas School vs. Magnaye, 278 SCRA 602 [1997]; Jamer vs. NLRC, 278 SCRA 632 [1997]). In essence, procedural due process refers to the method or manner by which the law is enforced (Corona vs. United Harbor Pilots Association of the Phils., 283 SCRA 31 [1997]). This Court will not tolerate the least disregard of constitutional guarantees in the enforcement of a law or treaty. Petitioner's fears that the Requesting State may have valid objections to the Requested State's non-performance of its commitments under the Extradition Treaty are insubstantial and should not be given paramount consideration. How then do we implement the RP-US Extradition Treaty? Do we limit ourselves to the four corners of Presidential Decree No. 1069? Of analogous application are the rulings in Government Service Insurance System vs. Court of Appeals (201 SCRA 661 [1991]) and Go vs. National Police Commission (271 SCRA 447 [1997]) where we ruled that in summary proceedings under Presidential Decree No. 807 (Providing for the Organization of the Civil Service Commission in Accordance with Provisions of the Constitution, Prescribing its Powers and Functions and for Other Purposes), and Presidential Decree No. 971 (Providing Legal Assistance for Members of the Integrated National Police who may be charged for Service-Connected Offenses and Improving the Disciplinary System in the Integrated National Police, Appropriating Funds Therefor and for other purposes), as amended by Presidential Decree No. 1707, although summary dismissals may be effected without the necessity of a formal investigation, the minimum requirements of due process still operate. As held in GSIS vs. Court of Appeals: . . . [I]t is clear to us that what the opening sentence of Section 40 is saying is that an employee may be removed or dismissed even without formal investigation, in certain instances. It is equally clear to us that an employee must be

informed of the charges preferred against him, and that the normal way by which the employee is so informed is by furnishing him with a copy of the charges against him. This is a basic procedural requirement that a statute cannot dispense with and still remain consistent with the constitutional provision on due process. The second minimum requirement is that the employee charged with some misfeasance or malfeasance must have a reasonable opportunity to present his side of the matter, that is to say, his defenses against the charges levelled against him and to present evidence in support of his defenses. . . . (at p. 671) Said summary dismissal proceedings are also non-litigious in nature, yet we upheld the due process rights of the respondent. In the case at bar, private respondent does not only face a clear and present danger of loss of property or employment, but of liberty itself, which may eventually lead to his forcible banishment to a foreign land. The convergence of petitioner's favorable action on the extradition request and the deprivation of private respondent's liberty is easily comprehensible. We have ruled time and again that this Court's equity jurisdiction, which is aptly described as "justice outside legality," may be availed of only in the absence of, and never against, statutory law or judicial pronouncements (Smith Bell & Co., Inc. vs. Court of Appeals, 267 SCRA 530 [1997]; David-Chan vs. Court of Appeals, 268 SCRA 677 [1997]). The constitutional issue in the case at bar does not even call for "justice outside legality," since private respondent's due process rights, although not guaranteed by statute or by treaty, are protected by constitutional guarantees. We would not be true to the organic law of the land if we choose strict construction over guarantees against the deprivation of liberty. That would not be in keeping with the principles of democracy on which our Constitution is premised. Verily, as one traverses treacherous waters of conflicting and opposing currents of liberty and government authority, he must ever hold the oar of freedom in the stronger arm, lest an errant and wayward course be laid. WHEREFORE, in view of the foregoing premises, the instant petition is hereby DISMISSED for lack of merit. Petitioner is ordered to furnish private respondent copies of the extradition request and its supporting papers, and to grant him a reasonable period within which to file his comment with supporting evidence. The incidents in Civil Case No. 99-94684 having been rendered moot and academic by this decision, the same is hereby ordered dismissed. SO ORDERED. By virtue of an extradition treaty between the US and the Philippines, the US requested for the extradition of Mark Jimenez for violations of US tax and election laws. Pending evaluation of the extradition documents by the Philippine government, Jimenez requested for copies of the US extradition request. The Secetary of Justice denied that request. ISSUE: During the evaluation stage of the extradition proceedings, is private respondent entitled to the two basic due process rights of notice and hearing? HELD: Private respondent is bereft of the right to notice and hearing during the evaluation stage of the extradition process. Extradition is a proceeding sui generis. It is not a criminal proceeding which will call into operation all the rights of an accused guaranteed by the Bill of Rights. The process of extradition does not involve the determination of the guilt or innocence of an accused. His guilt or innocence will be adjudged in the court of the state where he will be extradited. Dissent (original decision): Under the extradition treaty, the prospective extraditee may be provisionally arrested pending the submission of the request. Because of this possible consequence, the evaluation process is akin to an administrative agency conducting an investigative proceeding, and partakes of the nature of a criminal investigation. Thus, the basic due process rights of notice and hearing are indispensable. Assuming that the extradition treaty does not allow for such rights, the Constitutional right to procedural due process must override treaty obligations. When there is a conflict between international law obligations and the Constitution, the Constitution must prevail.

G.R. No. L-2662

March 26, 1949

SHIGENORI KURODA, petitioner, vs. Major General RAFAEL JALANDONI, Brigadier General CALIXTO DUQUE, Colonel MARGARITO TORALBA, Colonel IRENEO BUENCONSEJO, Colonel PEDRO TABUENA, Major FEDERICO ARANAS, MELVILLE S. HUSSEY and ROBERT PORT, respondents. Pedro Serran, Jose G. Lukban, and Liberato B. Cinco for petitioner. Fred Ruiz Castro Federico Arenas Mariano Yengco, Jr., Ricardo A. Arcilla and S. Melville Hussey for respondents. MORAN, C.J.: Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial Army and Commanding General of the Japanese Imperial Forces in The Philippines during a period covering 19433 and 19444 who is now charged before a military Commission convened by the Chief of Staff of the Armed forces of the Philippines with having unlawfully disregarded and failed "to discharge his duties as such command, permitting them to commit brutal atrocities and other high crimes against noncombatant civilians and prisoners of the Imperial Japanese Forces in violation of the laws and customs of war" comes before this Court seeking to establish the

illegality of Executive Order No. 68 of the President of the Philippines: to enjoin and prohibit respondents Melville S. Hussey and Robert Port from participating in the prosecution of petitioner's case before the Military Commission and to permanently prohibit respondents from proceeding with the case of petitioners. In support of his case petitioner tenders the following principal arguments. First. "That Executive Order No. 68 is illegal on the ground that it violates not only the provision of our constitutional law but also our local laws to say nothing of the fact (that) the Philippines is not a signatory nor an adherent to the Hague Convention on Rules and Regulations covering Land Warfare and therefore petitioners is charged of 'crimes' not based on law, national and international." Hence petitioner argues "That in view off the fact that this commission has been empanelled by virtue of an unconstitutional law an illegal order this commission is without jurisdiction to try herein petitioner." Second. That the participation in the prosecution of the case against petitioner before the Commission in behalf of the United State of America of attorneys Melville Hussey and Robert Port who are not attorneys authorized by the Supreme Court to practice law in the Philippines is a diminution of our personality as an independent state and their appointment as prosecutor are a violation of our Constitution for the reason that they are not qualified to practice law in the Philippines. Third. That Attorneys Hussey and Port have no personality as prosecution the United State not being a party in interest in the case. Executive Order No. 68, establishing a National War Crimes Office prescribing rule and regulation governing the trial of accused war criminals, was issued by the President of the Philippines on the 29th days of July, 1947 This Court holds that this order is valid and constitutional. Article 2 of our Constitution provides in its section 3, that The Philippines renounces war as an instrument of national policy and adopts the generally accepted principles of international law as part of the of the nation. In accordance with the generally accepted principle of international law of the present day including the Hague Convention the Geneva Convention and significant precedents of international jurisprudence established by the United Nation all those person military or civilian who have been guilty of planning preparing or waging a war of aggression and of the commission of crimes and offenses consequential and incidental thereto in violation of the laws and customs of war, of humanity and civilization are held accountable therefor. Consequently in the promulgation and enforcement of Execution Order No. 68 the President of the Philippines has acted in conformity with the generally accepted and policies of international law which are part of the our Constitution. The promulgation of said executive order is an exercise by the President of his power as Commander in chief of all our armed forces as upheld by this Court in the case of Yamashita vs. Styer (L-129, 42 Off. Gaz., 664) 1 when we said War is not ended simply because hostilities have ceased. After cessation of armed hostilities incident of war may remain pending which should be disposed of as in time of war. An importance incident to a conduct of war is the adoption of measure by the military command not only to repel and defeat the enemies but to seize and subject to disciplinary measure those enemies who in their attempt to thwart or impede our military effort have violated the law of war. ( Ex parte Quirin 317 U.S., 1; 63 Sup. Ct., 2.) Indeed the power to create a military commission for the trial and punishment of war criminals is an aspect of waging war. And in the language of a writer a military commission has jurisdiction so long as a technical state of war continues. This includes the period of an armistice or military occupation up to the effective of a treaty of peace and may extend beyond by treaty agreement. (Cowles Trial of War Criminals by Military Tribunals, America Bar Association Journal June, 1944.) Consequently, the President as Commander in Chief is fully empowered to consummate this unfinished aspect of war namely the trial and punishment of war criminal through the issuance and enforcement of Executive Order No. 68. Petitioner argues that respondent Military Commission has no Jurisdiction to try petitioner for acts committed in violation of the Hague Convention and the Geneva Convention because the Philippines is not a signatory to the first and signed the second only in 1947. It cannot be denied that the rules and regulation of the Hague and Geneva conventions form, part of and are wholly based on the generally accepted principals of international law. In facts these rules and principles were accepted by the two belligerent nation the United State and Japan who were signatories to the two Convention, Such rule and principles therefore form part of the law of our nation even if the Philippines was not a signatory to the conventions embodying them for our Constitution has been deliberately general and extensive in its scope and is not confined to the recognition of rule and principle of international law as continued inn treaties to which our government may have been or shall be a signatory. Furthermore when the crimes charged against petitioner were allegedly committed the Philippines was under the sovereignty of United States and thus we were equally bound together with the United States and with Japan to the right and obligation contained in the treaties between the belligerent countries. These rights and obligation were not erased by our assumption of full sovereignty. If at all our emergency as a free state entitles us to enforce the right on our own of trying and punishing those who committed crimes against crimes against our people. In this connection it is well to remember what we have said in the case of Laurel vs. Misa (76 Phil., 372):

. . . The change of our form government from Commonwealth to Republic does not affect the prosecution of those charged with the crime of treason committed during then Commonwealth because it is an offense against the same sovereign people. . . . By the same token war crimes committed against our people and our government while we were a Commonwealth are triable and punishable by our present Republic. Petitioner challenges the participation of two American attorneys namely Melville S. Hussey and Robert Port in the prosecution of his case on the ground that said attorney's are not qualified to practice law in Philippines in accordance with our Rules of court and the appointment of said attorneys as prosecutors is violative of our national sovereignty. In the first place respondent Military Commission is a special military tribunal governed by a special law and not by the Rules of court which govern ordinary civil court. It has already been shown that Executive Order No. 68 which provides for the organization of such military commission is a valid and constitutional law. There is nothing in said executive order which requires that counsel appearing before said commission must be attorneys qualified to practice law in the Philippines in accordance with the Rules of Court. In facts it is common in military tribunals that counsel for the parties are usually military personnel who are neither attorneys nor even possessed of legal training. Secondly the appointment of the two American attorneys is not violative of our nation sovereignty. It is only fair and proper that United States, which has submitted the vindication of crimes against her government and her people to a tribunal of our nation should be allowed representation in the trial of those very crimes. If there has been any relinquishment of sovereignty it has not been by our government but by the United State Government which has yielded to us the trial and punishment of her enemies. The least that we could do in the spirit of comity is to allow them representation in said trials. Alleging that the United State is not a party in interest in the case petitioner challenges the personality of attorneys Hussey and Port as prosecutors. It is of common knowledge that the United State and its people have been equally if not more greatly aggrieved by the crimes with which petitioner stands charged before the Military Commission. It can be considered a privilege for our Republic that a leader nation should submit the vindication of the honor of its citizens and its government to a military tribunal of our country. The Military Commission having been convened by virtue of a valid law with jurisdiction over the crimes charged which fall under the provisions of Executive Order No. 68, and having said petitioner in its custody, this Court will not interfere with the due process of such Military commission. For all the foregoing the petition is denied with costs de oficio. Paras, Feria, Pablo, Bengzon, Tuason, Montemayor and Reyes, JJ., concur.

I.

THE FACTS Petitioner Shigenori Kuroda, the Commanding General of the Japanese Imperial Forces in the Philippines during the

Japanese occupation, was charged before the Philippine Military Commission of war crimes. He questioned the constitutionality of E.O. No. 68 that created the National War Crimes Office and prescribed rules on the trial of accused war criminals. He contended the Philippines is not a signatory to the Hague Convention on Rules and Regulations covering Land Warfare and therefore he is charged of crimes not based on law, national and international. II. THE ISSUES Was E.O. No. 68 valid and constitutional? III. THE RULING [The Court DENIED the petition and upheld the validity and constitutionality of E.O. No. 68.] YES, E.O. No. 68 valid and constitutional. Article 2 of our Constitution provides in its section 3, that The Philippines renounces war as an instrument of national policy and adopts the generally accepted principles of international law as part of the law of the nation. In accordance with the generally accepted principle of international law of the present day including the Hague Convention the Geneva Convention and significant precedents of international jurisprudence established by the United Nation all those person military or civilian who have been guilty of planning preparing or waging a war of aggression and of the commission of crimes and

offenses consequential and incidental thereto in violation of the laws and customs of war, of humanity and civilization are held accountable therefor. Consequently in the promulgation and enforcement of Execution Order No. 68 the President of the Philippines has acted in conformity with the generally accepted and policies of international law which are part of the our Constitution. xxx xxx xxx

Petitioner argues that respondent Military Commission has no jurisdiction to try petitioner for acts committed in violation of the Hague Convention and the Geneva Convention because the Philippines is not a signatory to the first and signed the second only in 1947. It cannot be denied that the rules and regulation of the Hague and Geneva conventions form, part of and are wholly based on the generally accepted principals of international law. In facts these rules and principles were accepted by the two belligerent nations the United State and Japan who were signatories to the two Convention. Such rule and principles therefore form part of the law of our nation even if the Philippines was not a signatory to the conventions embodying them for our Constitution has been deliberately general and extensive in its scope and is not confined to the recognition of rule and principle of international law as contained in treaties to which our government may have been or shall be a signatory.

G.R. No. 89651 November 10, 1989 DATU FIRDAUSI I.Y. ABBAS, DATU BLO UMPAR ADIONG, DATU MACALIMPOWAC DELANGALEN, CELSO PALMA, ALI MONTANA BABAO, JULMUNIR JANNARAL, RASHID SABER, and DATU JAMAL ASHLEY ABBAS, representing the other taxpayers of Mindanao, petitioners, vs. COMMISSION ON ELECTIONS, and HONORABLE GUILLERMO C. CARAGUE, DEPARTMENT SECRETARY OF BUDGET AND MANAGEMENT, respondents. G.R. No. 89965 November 10, 1989 ATTY. ABDULLAH D. MAMA-O, petitioner, vs. HON. GUILLERMO CARAGUE, in his capacity as the Secretary of the Budget, and the COMMISSION ON ELECTIONS, respondents. CORTES, J.: The present controversy relates to the plebiscite in thirteen (13) provinces and nine (9) cities in Mindanao and Palawan, scheduled for November 19, 1989, in implementation of Republic Act No. 6734, entitled "An Act Providing for an Organic Act for the Autonomous Region in Muslim Mindanao." These consolidated petitions pray that the Court: (1) enjoin the Commission on Elections (COMELEC) from conducting the plebiscite and the Secretary of Budget and Management from releasing funds to the COMELEC for that purpose; and (2) declare R.A. No. 6734, or parts thereof, unconstitutional . After a consolidated comment was filed by Solicitor General for the respondents, which the Court considered as the answer, the case was deemed submitted for decision, the issues having been joined. Subsequently, petitioner Mama-o filed a "Manifestation with Motion for Leave to File Reply on Respondents' Comment and to Open Oral Arguments," which the Court noted. The arguments against R.A. 6734 raised by petitioners may generally be categorized into either of the following: (a) that R.A. 6734, or parts thereof, violates the Constitution, and (b) that certain provisions of R.A. No. 6734 conflict with the Tripoli Agreement. The Tripoli Agreement, more specifically, the Agreement Between the government of the Republic of the Philippines of the Philippines and Moro National Liberation Front with the Participation of the Quadripartie Ministerial Commission Members of the Islamic Conference and the Secretary General of the Organization of Islamic Conference" took effect on December 23, 1976. It provided for "[t]he establishment of Autonomy in the southern Philippines within the realm of the sovereignty and territorial 2 integrity of the Republic of the Philippines" and enumerated the thirteen (13) provinces comprising the "areas of autonomy." In 1987, a new Constitution was ratified, which the for the first time provided for regional autonomy, Article X, section 15 of the charter provides that "[t]here shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing common and distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics within the framework of this Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines." To effectuate this mandate, the Constitution further provides:
1

Sec. 16. The President shall exercise general supervision over autonomous regions to ensure that the laws are faithfully executed. Sec. 17. All powers, functions, and responsibilities not granted by this Constitution or by law to the autonomous regions shall be vested in the National Government. Sec. 18. The Congress shall enact an organic act for each autonomous region with the assistance and participation of the regional consultative commission composed of representatives appointed by the President from a list of nominees from multisectoral bodies. The organic act shall define the basic structure of government for the region consisting of the executive and representative of the constituent political units. The organic acts shall likewise provide for special courts with personal, family, and property law jurisdiction consistent with the provisions of this Constitution and national laws. The creation of the autonomous region shall be effective when approved by majority of the votes cast by the constituent units in a plebiscite called for the purpose, provided that only the provinces, cities, and geographic areas voting favorably in such plebiscite shall be included in the autonomous region. Sec. 19 The first Congress elected under this Constitution shall, within eighteen months from the time of organization of both Houses, pass the organic acts for the autonomous regions in Muslim Mindanao and the Cordilleras. Sec. 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws, the organic act of autonomous regions shall provide for legislative powers over: (1) Administrative organization; (2) Creation of sources of revenues; (3) Ancestral domain and natural resources; (4) Personal, family, and property relations; (5) Regional urban and rural planning development; (6) Economic, social and tourism development; (7) Educational policies; (8) Preservation and development of the cultural heritage; and (9) Such other matters as may be authorized by law for the promotion of the general welfare of the people of the region. Sec. 21. The preservation of peace and order within the regions shall be the responsibility of the local police agencies which shall be organized, maintained, supervised, and utilized in accordance with applicable laws. The defense and security of the region shall be the responsibility of the National Government. Pursuant to the constitutional mandate, R.A. No. 6734 was enacted and signed into law on August 1, 1989. 1. The Court shall dispose first of the second category of arguments raised by petitioners, i.e. that certain provisions of R.A. No. 6734 conflict with the provisions of the Tripoli Agreement. Petitioners premise their arguments on the assumption that the Tripoli Agreement is part of the law of the land, being a binding international agreement . The Solicitor General asserts that the Tripoli Agreement is neither a binding treaty, not having been entered into by the Republic of the Philippines with a sovereign state and ratified according to the provisions of the 1973 or 1987 Constitutions, nor a binding international agreement. We find it neither necessary nor determinative of the case to rule on the nature of the Tripoli Agreement and its binding effect on the Philippine Government whether under public international or internal Philippine law. In the first place, it is now the Constitution itself that provides for the creation of an autonomous region in Muslim Mindanao. The standard for any inquiry into the validity of R.A. No. 6734 would therefore be what is so provided in the Constitution. Thus, any conflict between the provisions of R.A. No. 6734 and the provisions of the Tripoli Agreement will not have the effect of enjoining the implementation of the Organic Act. Assuming for the sake of argument that the Tripoli Agreement is a binding treaty or international agreement, it would then constitute part of the law of the land. But as internal law it would not be superior to R.A. No. 6734, an enactment of the Congress of the Philippines, rather it would be in the same class as the latter [SALONGA, PUBLIC INTERNATIONAL LAW 320 (4th ed., 1974), citing Head Money Cases, 112 U.S. 580 (1884) and Foster v. Nelson, 2 Pet. 253 (1829)]. Thus, if at all, R.A. No. 6734 would be amendatory of the Tripoli

Agreement, being a subsequent law. Only a determination by this Court that R.A. No. 6734 contravened the Constitution would 3 result in the granting of the reliefs sought. 2. The Court shall therefore only pass upon the constitutional questions which have been raised by petitioners. Petitioner Abbas argues that R.A. No. 6734 unconditionally creates an autonomous region in Mindanao, contrary to the aforequoted provisions of the Constitution on the autonomous region which make the creation of such region dependent upon the outcome of the plebiscite. In support of his argument, petitioner cites Article II, section 1(1) of R.A. No. 6734 which declares that "[t]here is hereby created the Autonomous Region in Muslim Mindanao, to be composed of provinces and cities voting favorably in the plebiscite called for the purpose, in accordance with Section 18, Article X of the Constitution." Petitioner contends that the tenor of the above provision makes the creation of an autonomous region absolute, such that even if only two provinces vote in favor of autonomy, an autonomous region would still be created composed of the two provinces where the favorable votes were obtained. The matter of the creation of the autonomous region and its composition needs to be clarified. Firs, the questioned provision itself in R.A. No. 6734 refers to Section 18, Article X of the Constitution which sets forth the conditions necessary for the creation of the autonomous region. The reference to the constitutional provision cannot be glossed over for it clearly indicates that the creation of the autonomous region shall take place only in accord with the constitutional requirements. Second, there is a specific provision in the Transitory Provisions (Article XIX) of the Organic Act, which incorporates substantially the same requirements embodied in the Constitution and fills in the details, thus: SEC. 13. The creation of the Autonomous Region in Muslim Mindanao shall take effect when approved by a majority of the votes cast by the constituent units provided in paragraph (2) of Sec. 1 of Article II of this Act in a plebiscite which shall be held not earlier than ninety (90) days or later than one hundred twenty (120) days after the approval of this Act: Provided, That only the provinces and cities voting favorably in such plebiscite shall be included in the Autonomous Region in Muslim Mindanao. The provinces and cities which in the plebiscite do not vote for inclusion in the Autonomous Region shall remain the existing administrative determination, merge the existing regions. Thus, under the Constitution and R.A. No 6734, the creation of the autonomous region shall take effect only when approved by a majority of the votes cast by the constituent units in a plebiscite, and only those provinces and cities where a majority vote in favor of the Organic Act shall be included in the autonomous region. The provinces and cities wherein such a majority is not attained shall not be included in the autonomous region. It may be that even if an autonomous region is created, not all of the thirteen (13) provinces and nine (9) cities mentioned in Article II, section 1 (2) of R.A. No. 6734 shall be included therein. The single plebiscite contemplated by the Constitution and R.A. No. 6734 will therefore be determinative of (1) whether there shall be an autonomous region in Muslim Mindanao and (2) which provinces and cities, among those enumerated in R.A. No. 6734, shall compromise it. [See III RECORD OF THE CONSTITUTIONAL COMMISSION 482-492 (1986)]. As provided in the Constitution, the creation of the Autonomous region in Muslim Mindanao is made effective upon the approval "by majority of the votes cast by the constituent units in a plebiscite called for the purpose" [Art. X, sec. 18]. The question has been raised as to what this majority means. Does it refer to a majority of the total votes cast in the plebiscite in all the constituent units, or a majority in each of the constituent units, or both? We need not go beyond the Constitution to resolve this question. If the framers of the Constitution intended to require approval by a majority of all the votes cast in the plebiscite they would have so indicated. Thus, in Article XVIII, section 27, it is provided that "[t]his Constitution shall take effect immediately upon its ratification by a majority of the votes cast in a plebiscite held for the purpose ... Comparing this with the provision on the creation of the autonomous region, which reads: The creation of the autonomous region shall be effective when approved by majority of the votes cast by the constituent units in a plebiscite called for the purpose, provided that only provinces, cities and geographic areas voting favorably in such plebiscite shall be included in the autonomous region. [Art. X, sec, 18, para, 2]. it will readily be seen that the creation of the autonomous region is made to depend, not on the total majority vote in the plebiscite, but on the will of the majority in each of the constituent units and the proviso underscores this. for if the intention of the framers of the Constitution was to get the majority of the totality of the votes cast, they could have simply adopted the same phraseology as that used for the ratification of the Constitution, i.e. "the creation of the autonomous region shall be effective when approved by a majority of the votes cast in a plebiscite called for the purpose." It is thus clear that what is required by the Constitution is a simple majority of votes approving the organic Act in individual constituent units and not a double majority of the votes in all constituent units put together, as well as in the individual constituent units. More importantly, because of its categorical language, this is also the sense in which the vote requirement in the plebiscite provided under Article X, section 18 must have been understood by the people when they ratified the Constitution.

Invoking the earlier cited constitutional provisions, petitioner Mama-o, on the other hand, maintains that only those areas which, to his view, share common and distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics should be properly included within the coverage of the autonomous region. He insists that R.A. No. 6734 is unconstitutional because only the provinces of Basilan, Sulu, Tawi-Tawi, Lanao del Sur, Lanao del Norte and Maguindanao and the cities of Marawi and Cotabato, and not all of the thirteen (13) provinces and nine (9) cities included in the Organic Act, possess such concurrence in historical and cultural heritage and other relevant characteristics. By including areas which do not strictly share the same characteristics. By including areas which do not strictly share the same characteristic as the others, petitioner claims that Congress has expanded the scope of the autonomous region which the constitution itself has prescribed to be limited. Petitioner's argument is not tenable. The Constitution lays down the standards by which Congress shall determine which areas should constitute the autonomous region. Guided by these constitutional criteria, the ascertainment by Congress of the areas that share common attributes is within the exclusive realm of the legislature's discretion. Any review of this ascertainment would have to go into the wisdom of the law. This the Court cannot do without doing violence to the separation of governmental powers. [Angara v. Electoral Commission, 63 Phil 139 (1936); Morfe v. Mutuc, G.R. No. L-20387, January 31, 1968, 22 SCRA 424]. After assailing the inclusion of non-Muslim areas in the Organic Act for lack of basis, petitioner Mama-o would then adopt the extreme view that other non-Muslim areas in Mindanao should likewise be covered. He argues that since the Organic Act covers several non-Muslim areas, its scope should be further broadened to include the rest of the non-Muslim areas in Mindanao in order for the other non-Muslim areas denies said areas equal protection of the law, and therefore is violative of the Constitution. Petitioner's contention runs counter to the very same constitutional provision he had earlier invoked. Any determination by Congress of what areas in Mindanao should compromise the autonomous region, taking into account shared historical and cultural heritage, economic and social structures, and other relevant characteristics, would necessarily carry with it the exclusion of other areas. As earlier stated, such determination by Congress of which areas should be covered by the organic act for the autonomous region constitutes a recognized legislative prerogative, whose wisdom may not be inquired into by this Court. Moreover, equal protection permits of reasonable classification [People v. Vera, 65 Phil. 56 (1963); Laurel v. Misa, 76 Phil. 372 (1946); J.M. Tuason and Co. v. Land tenure Administration, G.R. No. L-21064, February 18, 1970, 31 SCRA 413]. In Dumlao v. Commission on Elections G.R. No. 52245, January 22, 1980, 95 SCRA 392], the Court ruled that once class may be treated differently from another where the groupings are based on reasonable and real distinctions. The guarantee of equal protection is thus not infringed in this case, the classification having been made by Congress on the basis of substantial distinctions as set forth by the Constitution itself. Both petitions also question the validity of R.A. No. 6734 on the ground that it violates the constitutional guarantee on free exercise of religion [Art. III, sec. 5]. The objection centers on a provision in the Organic Act which mandates that should there be any conflict between the Muslim Code [P.D. No. 1083] and the Tribal Code (still be enacted) on the one had, and the national law on the other hand, the Shari'ah courts created under the same Act should apply national law. Petitioners maintain that the islamic law (Shari'ah) is derived from the Koran, which makes it part of divine law. Thus it may not be subjected to any "man-made" national law. Petitioner Abbas supports this objection by enumerating possible instances of conflict between provisions of the Muslim Code and national law, wherein an application of national law might be offensive to a Muslim's religious convictions. As enshrined in the Constitution, judicial power includes the duty to settle actual controversies involving rights which are legally demandable and enforceable. [Art. VIII, Sec. 11. As a condition precedent for the power to be exercised, an actual controversy between litigants must first exist [Angara v. Electoral Commission, supra; Tan v. Macapagal, G.R. No. L-34161, February 29, 1972, 43 SCRA 677]. In the present case, no actual controversy between real litigants exists. There are no conflicting claims involving the application of national law resulting in an alleged violation of religious freedom. This being so, the Court in this case may not be called upon to resolve what is merely a perceived potential conflict between the provisions the Muslim Code and national law. Petitioners also impugn the constitutionality of Article XIX, section 13 of R.A. No. 6734 which, among others, states: . . . Provided, That only the provinces and cities voting favorably in such plebiscite shall be included in the Autonomous Region in Muslim Mindanao. The provinces and cities which in the plebiscite do not vote for inclusion in the Autonomous Region shall remain in the existing administrative regions: Provided, however, that the President may, by administrative determination, merge the existing regions. According to petitioners, said provision grants the President the power to merge regions, a power which is not conferred by the Constitution upon the President. That the President may choose to merge existing regions pursuant to the Organic Act is challenged as being in conflict with Article X, Section 10 of the Constitution which provides: No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary substantially altered, except in accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected. It must be pointed out that what is referred to in R.A. No. 6734 is the merger of administrative regions, i.e. Regions I to XII and the National Capital Region, which are mere groupings of contiguous provinces for administrative purposes [Integrated Reorganization Plan (1972), which was made as part of the law of the land by Pres. dec. No. 1, Pres. Dec. No. 742]. Administrative regions are not territorial and political subdivisions like provinces, cities, municipalities and barangays [see Art. X, sec. 1 of the Constitution]. While the power to merge administrative regions is not expressly provided for in the Constitution, it is a power which has traditionally been lodged with the President to facilitate the exercise of the power of general supervision over local governments [see Art. X, sec.

4 of the Constitution]. There is no conflict between the power of the President to merge administrative regions with the constitutional provision requiring a plebiscite in the merger of local government units because the requirement of a plebiscite in a merger expressly applies only to provinces, cities, municipalities or barangays, not to administrative regions. Petitioners likewise question the validity of provisions in the Organic Act which create an Oversight Committee to supervise the transfer to the autonomous region of the powers, appropriations, and properties vested upon the regional government by the organic Act [Art. XIX, Secs. 3 and 4]. Said provisions mandate that the transfer of certain national government offices and their properties to the regional government shall be made pursuant to a schedule prescribed by the Oversight Committee, and that such transfer should be accomplished within six (6) years from the organization of the regional government. It is asserted by petitioners that such provisions are unconstitutional because while the Constitution states that the creation of the autonomous region shall take effect upon approval in a plebiscite, the requirement of organizing an Oversight committee tasked with supervising the transfer of powers and properties to the regional government would in effect delay the creation of the autonomous region. Under the Constitution, the creation of the autonomous region hinges only on the result of the plebiscite. if the Organic Act is approved by majority of the votes cast by constituent units in the scheduled plebiscite, the creation of the autonomous region immediately takes effect delay the creation of the autonomous region. Under the constitution, the creation of the autonomous region hinges only on the result of the plebiscite. if the Organic Act is approved by majority of the votes cast by constituent units in the scheduled plebiscite, the creation of the autonomous region immediately takes effect. The questioned provisions in R.A. No. 6734 requiring an oversight Committee to supervise the transfer do not provide for a different date of effectivity. Much less would the organization of the Oversight Committee cause an impediment to the operation of the Organic Act, for such is evidently aimed at effecting a smooth transition period for the regional government. The constitutional objection on this point thus cannot be sustained as there is no bases therefor. Every law has in its favor the presumption of constitutionality [Yu Cong Eng v. Trinidad, 47 Phil. 387 (1925); Salas v. Jarencio, G.R. No. L-29788, August 30, 1979, 46 SCRA 734; Morfe v. Mutuc, supra; Peralta v. COMELEC, G.R. No. L-47771, March 11, 1978, 82 SCRA 30]. Those who petition this Court to declare a law, or parts thereof, unconstitutional must clearly establish the basis for such a declaration. otherwise, their petition must fail. Based on the grounds raised by petitioners to challenge the constitutionality of R.A. No. 6734, the Court finds that petitioners have failed to overcome the presumption. The dismissal of these two petitions is, therefore, inevitable. WHEREFORE, the petitions are DISMISSED for lack of merit. SO ORDERED. G.R. No. 122156 February 3, 1997 MANILA PRINCE HOTEL petitioner, vs. GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL, respondents. The FiIipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges, and concessions covering the 1 national economy and patrimony, the State shall give preference to qualified Filipinos , is in oked by petitioner in its bid to acquire 51% of the shares of the Manila Hotel Corporation (MHC) which owns the historic Manila Hotel. Opposing, respondents maintain that the provision is not self-executing but requires an implementing legislation for its enforcement. Corollarily, they ask whether the 51% shares form part of the national economy and patrimony covered by the protective mantle of the Constitution. The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to the privatization program of the Philippine Government under Proclamation No. 50 dated 8 December 1986, decided to sell through public bidding 30% to 51% of the issued and outstanding shares of respondent MHC. The winning bidder, or the eventual "strategic partner," is to provide management expertise and/or an international marketing/reservation system, and financial support to strengthen the profitability 2 and performance of the Manila Hotel. In a close bidding held on 18 September 1995 only two (2) bidders participated: petitioner Manila Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of the MHC or 15,300,000 shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel operator, which bid for the same number of shares at P44.00 per share, or P2.42 more than the bid of petitioner. Pertinent provisions of the bidding rules prepared by respondent GSIS state I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC 1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 (reset to November 3, 1995) or the Highest Bidder will lose the right to purchase the Block of Shares and GSIS will instead offer the Block of Shares to the other Qualified Bidders:

a. The Highest Bidder must negotiate and execute with the GSIS/MHC the Management Contract, International Marketing/Reservation System Contract or other type of contract specified by the Highest Bidder in its strategic plan for the Manila Hotel. . . . b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS . . . . K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER The Highest Bidder will be declared the Winning Bidder/Strategic Partner after the following conditions are met: a. Execution of the necessary contracts with GSIS/MHC not later than October 23, 1995 (reset to November 3, 1995); and b. Requisite approvals from the GSIS/MHC and COP (Committee on Privatization)/OGCC (Office of 3 the Government Corporate Counsel) are obtained. Pending the declaration of Renong Berhad as the winning bidder/strategic partner and the execution of the necessary contracts, petitioner in a letter to respondent GSIS dated 28 September 1995 matched the bid price of P44.00 per share tendered by Renong 4 Berhad. In a subsequent letter dated 10 October 1995 petitioner sent a manager's check issued by Philtrust Bank for Thirty-three 5 Million Pesos (P33.000.000.00) as Bid Security to match the bid of the Malaysian Group, Messrs . Renong Berhad . . . which respondent GSIS refused to accept. On 17 October 1995, perhaps apprehensive that respondent GSIS has disregarded the tender of the matching bid and that the sale of 51% of the MHC may be hastened by respondent GSIS and consummated with Renong Berhad, petitioner came to this Court on prohibition and mandamus. On 18 October 1995 the Court issued a temporary restraining order enjoining respondents from perfecting and consummating the sale to the Malaysian firm. On 10 September 1996 the instant case was accepted by the Court En Banc after it was referred to it by the First Division. The case was then set for oral arguments with former Chief Justice Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., as amici curiae. In the main, petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the Manila Hotel has been identified with the Filipino nation and has practically become a historical monument which reflects the vibrancy of Philippine heritage and culture. It is a proud legacy of an earlier generation of Filipinos who believed in the nobility and sacredness of independence and its power and capacity to release the full potential of the Filipino people. To all intents and purposes, it has become a part of the 6 national patrimony. Petitioner also argues that since 51% of the shares of the MHC carries with it the ownership of the business of the hotel which is owned by respondent GSIS, a government-owned and controlled corporation, the hotel business of respondent GSIS being a part of the tourism industry is unquestionably a part of the national economy. Thus, any transaction involving 51% of the shares of stock of the MHC is clearly covered by the term national economy, to which Sec. 10, second par., Art. XII, 1987 7 Constitution, applies. It is also the thesis of petitioner that since Manila Hotel is part of the national patrimony and its business also unquestionably part of the national economy petitioner should be preferred after it has matched the bid offer of the Malaysian firm. For the bidding rules mandate that if for any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price 8 per share. Respondents except. They maintain that: First, Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a statement of principle and policy since it is not a self-executing provision and requires implementing legislation(s) . . . Thus, for the said provision 9 to Operate, there must be existing laws "to lay down conditions under which business may be done." Second, granting that this provision is self-executing, Manila Hotel does not fall under the term national patrimony which only refers to lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna and all marine wealth in its territorial sea, and exclusive marine zone as cited in the first and second paragraphs of Sec. 2, Art. XII, 1987 Constitution. According to respondents, while petitioner speaks of the guests who have slept in the hotel and the events that have transpired therein which make the hotel historic, these alone do not make the hotel fall under the patrimonyof the nation. What is more, the mandate of the Constitution is addressed to the State, not to respondent GSIS which possesses a personality of its own separate and distinct from the Philippines as a State. Third, granting that the Manila Hotel forms part of the national patrimony, the constitutional provision invoked is still inapplicable since what is being sold is only 51% of the outstanding shares of the corporation, not the hotel building nor the land upon which the building stands. Certainly, 51% of the equity of the MHC cannot be considered part of the national patrimony. Moreover, if the disposition of the shares of the MHC is really contrary to the Constitution, petitioner should have questioned it right from the beginning and not after it had lost in the bidding. Fourth, the reliance by petitioner on par. V., subpar. J. 1., of the bidding rules which provides that if for any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per share , is misplaced. Respondents postulate that the privilege of submitting a matching bid has not yet arisen since it only takes place if for any reason, the Highest

Bidder cannot be awarded the Block of Shares. Thus the submission by petitioner of a matching bid is premature since Renong Berhad could still very well be awarded the block of shares and the condition giving rise to the exercise of the privilege to submit a matching bid had not yet taken place. Finally, the prayer for prohibition grounded on grave abuse of discretion should fail since respondent GSIS did not exercise its discretion in a capricious, whimsical manner, and if ever it did abuse its discretion it was not so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. Similarly, the petition for mandamus should fail as petitioner has no clear legal right to what it demands and respondents do not have an imperative duty to perform the act required of them by petitioner. We now resolve. A constitution is a system of fundamental laws for the governance and administration of a nation. It is supreme, imperious, absolute and unalterable except by the authority from which it emanates. It has been defined as the fundamental and 10 paramount law of the nation. It prescribes the permanent framework of a system of government, assigns to the different departments their respective powers and duties, and establishes certain fixed principles on which government is founded. The fundamental conception in other words is that it is a supreme law to which all other laws must conform and in accordance with 11 which all private rights must be determined and all public authority administered. Under the doctrine of constitutional supremacy, if a law or contract violates any norm of the constitution that law or contract whether promulgated by the legislative or by the executive branch or entered into by private persons for private purposes is null and void and without any force and effect. Thus, since the Constitution is the fundamental, paramount and supreme law of the nation, it is deemed written in every statute and contract. Admittedly, some constitutions are merely declarations of policies and principles. Their provisions command the legislature to enact laws and carry out the purposes of the framers who merely establish an outline of government providing for the different 12 departments of the governmental machinery and securing certain fundamental and inalienable rights of citizens. A provision which lays down a general principle, such as those found in Art. II of the 1987 Constitution, is usually not self-executing. But a provision which is complete in itself and becomes operative without the aid of supplementary or enabling legislation, or that which supplies sufficient rule by means of which the right it grants may be enjoyed or protected, is self-executing. Thus a constitutional provision is self-executing if the nature and extent of the right conferred and the liability imposed are fixed by the constitution itself, so that they can be determined by an examination and construction of its terms, and there is no language indicating that the subject 13 is referred to the legislature for action. As against constitutions of the past, modern constitutions have been generally drafted upon a different principle and have often become in effect extensive codes of laws intended to operate directly upon the people in a manner similar to that of statutory enactments, and the function of constitutional conventions has evolved into one more like that of a legislative body. Hence, unless it is expressly provided that a legislative act is necessary to enforce a constitutional mandate, the presumption now is that all provisions of the constitution are self-executing If the constitutional provisions are treated as requiring legislation instead of self14 executing, the legislature would have the power to ignore and practically nullify the mandate of the fundamental law. This can be cataclysmic. That is why the prevailing view is, as it has always been, that . . . in case of doubt, the Constitution should be considered self-executing rather than non-self-executing . . . . Unless the contrary is clearly intended, the provisions of the Constitution should be considered self-executing, as a contrary rule would give the legislature discretion to determine when, or whether, they shall be effective. These provisions would be subordinated to the will of the lawmaking body, which could make them entirely meaningless 15 by simply refusing to pass the needed implementing statute. Respondents argue that Sec. 10, second par., Art. XII, of the 1987 Constitution is clearly not self-executing, as they quote from discussions on the floor of the 1986 Constitutional Commission MR. RODRIGO. Madam President, I am asking this question as the Chairman of the Committee on Style. If the wording of "PREFERENCE" is given to QUALIFIED FILIPINOS," can it be understood as a preference to qualified Filipinos vis-a-vis Filipinos who are not qualified. So, why do we not make it clear? To qualified Filipinos as against aliens? THE PRESIDENT. What is the question of Commissioner Rodrigo? Is it to remove the word "QUALIFIED?". MR. RODRIGO. No, no, but say definitely "TO QUALIFIED FILIPINOS" as against whom? As against aliens or over aliens? MR. NOLLEDO. Madam President, I think that is understood. We use the word "QUALIFIED" because the existing laws or prospective laws will always lay down conditions under which business may be done. For example, qualifications on the setting up of other financial structures, et cetera (emphasis supplied by respondents) MR. RODRIGO. It is just a matter of style. MR. NOLLEDO Yes,
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Quite apparently, Sec. 10, second par., of Art XII is couched in such a way as not to make it appear that it is non-self-executing but simply for purposes of style. But, certainly, the legislature is not precluded from enacting other further laws to enforce the constitutional provision so long as the contemplated statute squares with the Constitution. Minor details may be left to the legislature without impairing the self-executing nature of constitutional provisions. In self-executing constitutional provisions, the legislature may still enact legislation to facilitate the exercise of powers directly granted by the constitution, further the operation of such a provision, prescribe a practice to be used for its enforcement, provide a convenient remedy for the protection of the rights secured or the determination thereof, or place reasonable safeguards around the exercise of the right. The mere fact that legislation may supplement and add to or prescribe a penalty for the violation of a selfexecuting constitutional provision does not render such a provision ineffective in the absence of such legislation. The omission from a constitution of any express provision for a remedy for enforcing a right or liability is not necessarily an indication that it was not intended to be self-executing. The rule is that a self-executing provision of the constitution does not necessarily exhaust legislative power on the subject, but any legislation must be in harmony with the constitution, further the exercise of constitutional right and 17 make it more available. Subsequent legislation however does not necessarily mean that the subject constitutional provision is not, by itself, fully enforceable. Respondents also argue that the non-self-executing nature of Sec. 10, second par., of Art. XII is implied from the tenor of the first 18 and third paragraphs of the same section which undoubtedly are not self-executing. The argument is flawed. If the first and third paragraphs are not self-executing because Congress is still to enact measures to encourage the formation and operation of enterprises fully owned by Filipinos, as in the first paragraph, and the State still needs legislation to regulate and exercise authority over foreign investments within its national jurisdiction, as in the third paragraph, then a fortiori, by the same logic, the second paragraph can only be self-executing as it does not by its language require any legislation in order to give preference to qualified Filipinos in the grant of rights, privileges and concessions covering the national economy and patrimony. A constitutional provision 19 may be self-executing in one part and non-self-executing in another. Even the cases cited by respondents holding that certain constitutional provisions are merely statements of principles and policies, which are basically not self-executing and only placed in the Constitution as moral incentives to legislation, not as judicially 20 enforceable rights are simply not in point. Basco v. Philippine Amusements and Gaming Corporation speaks of constitutional 21 22 23 provisions on personal dignity, the sanctity of family life, the vital role of the youth in nation-building the promotion of social 24 25 26 justice, and the values of education. Tolentino v. Secretary of Finance refers to the constitutional provisions on social justice 27 28 29 and human rights and on education. Lastly, Kilosbayan, Inc. v. Morato cites provisions on the promotion of general 30 31 32 welfare, the sanctity of family life, the vital role of the youth in nation-building and the promotion of total human liberation 33 and development. A reading of these provisions indeed clearly shows that they are not judicially enforceable constitutional rights but merely guidelines for legislation. The very terms of the provisions manifest that they are only principles upon which the legislations must be based. Res ipsa loquitur. On the other hand, Sec. 10, second par., Art. XII of the of the 1987 Constitution is a mandatory, positive command which is complete in itself and which needs no further guidelines or implementing laws or rules for its enforcement. From its very words the provision does not require any legislation to put it in operation. It is per se judicially enforceable When our Constitution mandates that [i]n the grant of rights, privileges, and concessions covering national economy and patrimony, the State shall give preference to qualified Filipinos, it means just that qualified Filipinos shall be preferred. And when our Constitution declares that a right exists in certain specified circumstances an action may be maintained to enforce such right notwithstanding the absence of any legislation on the subject; consequently, if there is no statute especially enacted to enforce such constitutional right, such right enforces itself by its own inherent potency and puissance, and from which all legislations must take their bearings. Where there is a right there is a remedy. Ubi jus ibi remedium. As regards our national patrimony, a member of the 1986 Constitutional Commission
34

explains

The patrimony of the Nation that should be conserved and developed refers not only to out rich natural resources but also to the cultural heritage of out race. It also refers to our intelligence in arts, sciences and letters. Therefore, we should develop not only our lands, forests, mines and other natural resources but also the mental ability or faculty of our people. We agree. In its plain and ordinary meaning, the term patrimony pertains to heritage. When the Constitution speaks of national patrimony, it refers not only to the natural resources of the Philippines, as the Constitution could have very well used the term natural resources, but also to the cultural heritage of the Filipinos. Manila Hotel has become a landmark a living testimonial of Philippine heritage. While it was restrictively an American hotel when it first opened in 1912, it immediately evolved to be truly Filipino, Formerly a concourse for the elite, it has since then become the venue of various significant events which have shaped Philippine history. It was called the Cultural Center of the 1930's. It was the site of the festivities during the inauguration of the Philippine Commonwealth. Dubbed as the Official Guest House of the Philippine 36 Government. it plays host to dignitaries and official visitors who are accorded the traditional Philippine hospitality. The history of the hotel has been chronicled in the book The Manila Hotel: The Heart and Memory of a City. During World War II the hotel was converted by the Japanese Military Administration into a military headquarters. When the American forces returned to recapture Manila the hotel was selected by the Japanese together with Intramuros as the two (2) places fro their final stand. Thereafter, in the 1950's and 1960's, the hotel became the center of political activities, playing host to almost every political convention. In 1970 the hotel reopened after a renovation and reaped numerous international recognitions, an acknowledgment of
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the Filipino talent and ingenuity. In 1986 the hotel was the site of a failed coup d' etat where an aspirant for vice-president was "proclaimed" President of the Philippine Republic. For more than eight (8) decades Manila Hotel has bore mute witness to the triumphs and failures, loves and frustrations of the Filipinos; its existence is impressed with public interest; its own historicity associated with our struggle for sovereignty, independence and nationhood. Verily, Manila Hotel has become part of our national economy and patrimony. For sure, 51% of the equity of the MHC comes within the purview of the constitutional shelter for it comprises the majority and controlling stock, so that anyone who acquires or owns the 51% will have actual control and management of the hotel. In this instance, 51% of the MHC cannot be disassociated from the hotel and the land on which the hotel edifice stands. Consequently, we cannot sustain respondents' claim that theFilipino First Policy provision is not applicable since what is being sold is only 51% of the outstanding 38 shares of the corporation, not the Hotel building nor the land upon which the building stands . The argument is pure sophistry. The term qualified Filipinos as used in Our Constitution also includes corporations at least 60% of which is owned by Filipinos. This is very clear from the proceedings of the 1986 Constitutional Commission THE PRESIDENT. Commissioner Davide is recognized. MR. DAVIDE. I would like to introduce an amendment to the Nolledo amendment. And the amendment would consist in substituting the words "QUALIFIED FILIPINOS" with the following: "CITIZENS OF THE PHILIPPINES OR CORPORATIONS OR ASSOCIATIONS WHOSE CAPITAL OR CONTROLLING STOCK IS WHOLLY OWNED BY SUCH CITIZENS. xxx xxx xxx MR. MONSOD. Madam President, apparently the proponent is agreeable, but we have to raise a question. Suppose it is a corporation that is 80-percent Filipino, do we not give it preference? MR. DAVIDE. The Nolledo amendment would refer to an individual Filipino. What about a corporation wholly owned by Filipino citizens? MR. MONSOD. At least 60 percent, Madam President. MR. DAVIDE. Is that the intention? MR. MONSOD. Yes, because, in fact, we would be limiting it if we say that the preference should only be 100-percent Filipino. MR: DAVIDE. I want to get that meaning clear because "QUALIFIED FILIPINOS" may refer only to individuals and not to juridical personalities or entities. MR. MONSOD. We agree, Madam President.
39

xxx xxx xxx MR. RODRIGO. Before we vote, may I request that the amendment be read again. MR. NOLLEDO. The amendment will read: "IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS." And the word "Filipinos" here, as intended by the proponents, will include not only individual Filipinos but also Filipino-controlled entities or 40 entities fully-controlled by Filipinos. The phrase preference to qualified Filipinos was explained thus MR. FOZ. Madam President, I would like to request Commissioner Nolledo to please restate his amendment so that I can ask a question. MR. NOLLEDO. "IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS." MR FOZ. In connection with that amendment, if a foreign enterprise is qualified and a Filipino enterprise is also qualified, will the Filipino enterprise still be given a preference? MR. NOLLEDO. Obviously.

MR. FOZ. If the foreigner is more qualified in some aspects than the Filipino enterprise, will the Filipino still be preferred? MR. NOLLEDO. The answer is "yes." MR. FOZ. Thank you,
41

Expounding further on the Filipino First Policy provision Commissioner Nolledo continues MR. NOLLEDO. Yes, Madam President. Instead of "MUST," it will be "SHALL THE STATE SHALL GlVE PREFERENCE TO QUALIFIED FILIPINOS. This embodies the so-called "Filipino First" policy. That means that Filipinos should be 42 given preference in the grant of concessions, privileges and rights covering the national patrimony. The exchange of views in the sessions of the Constitutional Commission regarding the subject provision was still further clarified by 43 Commissioner Nolledo Paragraph 2 of Section 10 explicitly mandates the "Pro-Filipino" bias in all economic concerns. It is better known as the FILIPINO FIRST Policy . . . This provision was never found in previous Constitutions . . . . The term "qualified Filipinos" simply means that preference shall be given to those citizens who can make a viable contribution to the common good, because of credible competence and efficiency. It certainly does NOT mandate the pampering and preferential treatment to Filipino citizens or organizations that are incompetent or inefficient, since such an indiscriminate preference would be counter productive and inimical to the common good. In the granting of economic rights, privileges, and concessions, when a choice has to be made between a "qualified foreigner" end a "qualified Filipino," the latter shall be chosen over the former." Lastly, the word qualified is also determinable. Petitioner was so considered by respondent GSIS and selected as one of the qualified bidders. It was pre-qualified by respondent GSIS in accordance with its own guidelines so that the sole inference here is that petitioner has been found to be possessed of proven management expertise in the hotel industry, or it has significant equity ownership in another hotel company, or it has an overall management and marketing proficiency to successfully operate the Manila 44 Hotel. The penchant to try to whittle away the mandate of the Constitution by arguing that the subject provision is not self-executory and requires implementing legislation is quite disturbing. The attempt to violate a clear constitutional provision by the government itself is only too distressing. To adopt such a line of reasoning is to renounce the duty to ensure faithfulness to the Constitution. For, even some of the provisions of the Constitution which evidently need implementing legislation have juridical life of their own and can be the source of a judicial remedy. We cannot simply afford the government a defense that arises out of the failure to enact further enabling, implementing or guiding legislation. In fine, the discourse of Fr. Joaquin G. Bernas, S.J., on constitutional government is apt The executive department has a constitutional duty to implement laws, including the Constitution, even before Congress acts provided that there are discoverable legal standards for executive action. When the executive acts, it must be guided by its own understanding of the constitutional command and of applicable laws. The responsibility for reading and understanding the Constitution and the laws is not the sole prerogative of Congress. If it were, the executive would have to ask Congress, or perhaps the Court, for an interpretation every time the 45 executive is confronted by a constitutional command. That is not how constitutional government operates. Respondents further argue that the constitutional provision is addressed to the State, not to respondent GSIS which by itself possesses a separate and distinct personality. This argument again is at best specious. It is undisputed that the sale of 51% of the MHC could only be carried out with the prior approval of the State acting through respondent Committee on Privatization. As correctly pointed out by Fr. Joaquin G. Bernas, S.J., this fact alone makes the sale of the assets of respondents GSIS and MHC a "state action." In constitutional jurisprudence, the acts of persons distinct from the government are considered " state action" covered by the Constitution (1) when the activity it engages in is a "public function;" (2) when the government is so significantly involved with the private actor as to make the government responsible for his action; and, (3) when the government has approved or authorized the action. It is evident that the act of respondent GSIS in selling 51% of its share in respondent MHC comes under the second and third categories of "state action." Without doubt therefore the transaction. although entered into by respondent GSIS, is in fact a 46 transaction of the State and therefore subject to the constitutional command. When the Constitution addresses the State it refers not only to the people but also to the government as elements of the State. After all, government is composed of three (3) divisions of power legislative, executive and judicial. Accordingly, a constitutional mandate directed to the State is correspondingly directed to the three(3) branches of government. It is undeniable that in this case the subject constitutional injunction is addressed among others to the Executive Department and respondent GSIS, a government instrumentality deriving its authority from the State. It should be stressed that while the Malaysian firm offered the higher bid it is not yet the winning bidder. The bidding rules expressly provide that the highest bidder shall only be declared the winning bidder after it has negotiated and executed the necessary contracts, and secured the requisite approvals. Since the " Filipino First Policy provision of the Constitution bestows preference on

qualified Filipinos the mere tending of the highest bid is not an assurance that the highest bidder will be declared the winning bidder. Resultantly, respondents are not bound to make the award yet, nor are they under obligation to enter into one with the highest bidder. For in choosing the awardee respondents are mandated to abide by the dictates of the 1987 Constitution the provisions of which are presumed to be known to all the bidders and other interested parties. Adhering to the doctrine of constitutional supremacy, the subject constitutional provision is, as it should be, impliedly written in the bidding rules issued by respondent GSIS, lest the bidding rules be nullified for being violative of the Constitution. It is a basic principle in constitutional law that all laws and contracts must conform with the fundamental law of the land. Those which violate the Constitution lose their reason for being. Paragraph V. J. 1 of the bidding rules provides that [if] for any reason the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per 47 share. Certainly, the constitutional mandate itself is reason enough not to award the block of shares immediately to the foreign bidder notwithstanding its submission of a higher, or even the highest, bid. In fact, we cannot conceive of a stronger reason than the constitutional injunction itself. In the instant case, where a foreign firm submits the highest bid in a public bidding concerning the grant of rights, privileges and concessions covering the national economy and patrimony, thereby exceeding the bid of a Filipino, there is no question that the Filipino will have to be allowed to match the bid of the foreign entity. And if the Filipino matches the bid of a foreign firm the award should go to the Filipino. It must be so if we are to give life and meaning to the Filipino First Policy provision of the 1987 Constitution. For, while this may neither be expressly stated nor contemplated in the bidding rules, the constitutional fiat is, omnipresent to be simply disregarded. To ignore it would be to sanction a perilous skirting of the basic law. This Court does not discount the apprehension that this policy may discourage foreign investors. But the Constitution and laws of the Philippines are understood to be always open to public scrutiny. These are given factors which investors must consider when venturing into business in a foreign jurisdiction. Any person therefore desiring to do business in the Philippines or with any of its agencies or instrumentalities is presumed to know his rights and obligations under the Constitution and the laws of the forum. The argument of respondents that petitioner is now estopped from questioning the sale to Renong Berhad since petitioner was well aware from the beginning that a foreigner could participate in the bidding is meritless. Undoubtedly, Filipinos and foreigners alike were invited to the bidding. But foreigners may be awarded the sale only if no Filipino qualifies, or if the qualified Filipino fails to match the highest bid tendered by the foreign entity. In the case before us, while petitioner was already preferred at the inception of the bidding because of the constitutional mandate, petitioner had not yet matched the bid offered by Renong Berhad. Thus it did not have the right or personality then to compel respondent GSIS to accept its earlier bid. Rightly, only after it had matched the bid of the foreign firm and the apparent disregard by respondent GSIS of petitioner's matching bid did the latter have a cause of action. Besides, there is no time frame for invoking the constitutional safeguard unless perhaps the award has been finally made. To insist on selling the Manila Hotel to foreigners when there is a Filipino group willing to match the bid of the foreign group is to insist that government be treated as any other ordinary market player, and bound by its mistakes or gross errors of judgment, regardless of the consequences to the Filipino people. The miscomprehension of the Constitution is regrettable. Thus we would rather remedy the indiscretion while there is still an opportunity to do so than let the government develop the habit of forgetting that the Constitution lays down the basic conditions and parameters for its actions. Since petitioner has already matched the bid price tendered by Renong Berhad pursuant to the bidding rules, respondent GSIS is left with no alternative but to award to petitioner the block of shares of MHC and to execute the necessary agreements and documents to effect the sale in accordance not only with the bidding guidelines and procedures but with the Constitution as well. The refusal of respondent GSIS to execute the corresponding documents with petitioner as provided in the bidding rules after the latter has matched the bid of the Malaysian firm clearly constitutes grave abuse of discretion. The Filipino First Policy is a product of Philippine nationalism. It is embodied in the 1987 Constitution not merely to be used as a guideline for future legislation but primarily to be enforced; so must it be enforced. This Court as the ultimate guardian of the Constitution will never shun, under any reasonable circumstance, the duty of upholding the majesty of the Constitution which it is tasked to defend. It is worth emphasizing that it is not the intention of this Court to impede and diminish, much less undermine, the influx of foreign investments. Far from it, the Court encourages and welcomes more business opportunities but avowedly sanctions the preference for Filipinos whenever such preference is ordained by the Constitution. The position of the Court on this matter could have not been more appropriately articulated by Chief Justice Narvasa As scrupulously as it has tried to observe that it is not its function to substitute its judgment for that of the legislature or the executive about the wisdom and feasibility of legislation economic in nature, the Supreme Court has not been spared criticism for decisions perceived as obstacles to economic progress and development . . . in connection with a temporary injunction issued by the Court's First Division against the sale of the Manila Hotel to a Malaysian Firm and its partner, certain statements were published in a major daily to the effect that injunction "again demonstrates that the Philippine legal system can be a major obstacle to doing business here. Let it be stated for the record once again that while it is no business of the Court to intervene in contracts of the kind referred to or set itself up as the judge of whether they are viable or attainable, it is its bounden duty to make sure that they do not violate the Constitution or the laws, or are not adopted or implemented with grave abuse of

discretion amounting to lack or excess of jurisdiction. It will never shirk that duty, no matter how buffeted by 48 winds of unfair and ill-informed criticism. Privatization of a business asset for purposes of enhancing its business viability and preventing further losses, regardless of the character of the asset, should not take precedence over non-material values. A commercial, nay even a budgetary, objective should not be pursued at the expense of national pride and dignity. For the Constitution enshrines higher and nobler non-material values. Indeed, the Court will always defer to the Constitution in the proper governance of a free society; after all, there is nothing so 49 sacrosanct in any economic policy as to draw itself beyond judicial review when the Constitution is involved. Nationalism is inherent, in the very concept of the Philippines being a democratic and republican state, with sovereignty residing in the Filipino people and from whom all government authority emanates. In nationalism, the happiness and welfare of the people must be the goal. The nation-state can have no higher purpose. Any interpretation of any constitutional provision must adhere to such basic concept. Protection of foreign investments, while laudible, is merely a policy. It cannot override the demands of 50 nationalism. The Manila Hotel or, for that matter, 51% of the MHC, is not just any commodity to be sold to the highest bidder solely for the sake of privatization. We are not talking about an ordinary piece of property in a commercial district. We are talking about a historic relic that has hosted many of the most important events in the short history of the Philippines as a nation. We are talking about a hotel where heads of states would prefer to be housed as a strong manifestation of their desire to cloak the dignity of the highest state function to their official visits to the Philippines. Thus the Manila Hotel has played and continues to play a significant role as an authentic repository of twentieth century Philippine history and culture. In this sense, it has become truly a reflection of the Filipino 51 soul a place with a history of grandeur; a most historical setting that has played a part in the shaping of a country . This Court cannot extract rhyme nor reason from the determined efforts of respondents to sell the historical landmark this Grand Old Dame of hotels in Asia to a total stranger. For, indeed, the conveyance of this epic exponent of the Filipino psyche to alien hands cannot be less than mephistophelian for it is, in whatever manner viewed, a veritable alienation of a nation's soul for some pieces of foreign silver. And so we ask: What advantage, which cannot be equally drawn from a qualified Filipino, can be gained by the Filipinos Manila Hotel and all that it stands for is sold to a non-Filipino? How much of national pride will vanish if the nation's cultural heritage is entrusted to a foreign entity? On the other hand, how much dignity will be preserved and realized if the national patrimony is safekept in the hands of a qualified, zealous and well-meaning Filipino? This is the plain and simple meaning of the Filipino First Policy provision of the Philippine Constitution. And this Court, heeding the clarion call of the Constitution and accepting the duty of being the elderly watchman of the nation, will continue to respect and protect the sanctity of the Constitution. WHEREFORE, respondents GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL are directed to CEASE and DESIST from selling 51% of the shares of the Manila Hotel Corporation to RENONG BERHAD, and to ACCEPT the matching bid of petitioner MANILA PRINCE HOTEL CORPORATION to purchase the subject 51% of the shares of the Manila Hotel Corporation at P44.00 per share and thereafter to execute the necessary clearances and to do such other acts and deeds as may be necessary for purpose. SO ORDERED. -----------------------------------------------------------------------------Pursuant to the privatization program of the government, GSIS decided to sell 30-51% of the Manila Hotel Corporation. Two bidders participated, MPH and Malaysian Firm Renong Berhad. MPHs bid was at P41.58/per share while RBs bid was at P44.00/share. RB was the highest bidder hence it was logically considered as the winning bidder but is yet to be declared so. Pending declaration, MPH matches RBs bid and invoked the Filipino First policy enshrined under par. 2, Sec. 10, Art. 12 of the 1987 Constitution* *, but GSIS refused to accept. In turn MPH filed a TRO to avoid the perfection/consummation of the sale to RB. RB then assailed the TRO issued in favor of MPH arguing among others that: 1. 2. Par. 2, Sec. 10, Art. 12 of the 1987 Constitution needs an implementing law because it is merely a statement of principle and policy (not self-executing); Even if said passage is self-executing, Manila Hotel does not fall under national patrimony.

ISSUE: Whether or not RB should be admitted as the highest bidder and hence be proclaimed as the legit buyer of shares. HELD: No. MPH should be awarded the sale pursuant to Art 12 of the 1987 Const. This is in light of the Filipino First Policy. Par. 2, Sec. 10, Art. 12 of the 1987 Constitution is self executing. The Constitution is the fundamental, paramount and supreme law of the nation, it is deemed written in every statute and contract. Manila Hotel falls under national patrimony. Patrimony in its plain and ordinary meaning pertains to heritage. When the Constitution speaks of national patrimony, it refers not only to the natural resources of the Philippines, as the Constitution could have very well used the term natural resources, but also to the cultural heritage of the Filipinos. It also refers to our intelligence in arts, sciences and letters. Therefore, we should develop not only our lands, forests, mines and other natural resources but also the mental ability or faculty of our people. Note that, for more than 8 decades (9 now) Manila Hotel has bore mute witness to the triumphs and failures, loves and frustrations of the Filipinos; its existence is impressed with public interest; its own historicity associated with our struggle for sovereignty, independence and nationhood.

Herein resolved as well is the term Qualified Filipinos which not only pertains to individuals but to corporations as well and other juridical entities/personalities. The term qualified Filipinos simply means that preference shall be given to those citizen s who can make a viable contribution to the common good, because of credible competence and efficiency. It certainly does NOT mandate the pampering and preferential treatment to Filipino citizens or organizations that are incompetent or inefficient, since such an indiscriminate preference would be counter productive and inimical to the common good. In the granting of economic rights, privileges, and concessions, when a choice has to be made between a qualified foreigner and a qualified Filipino, the latter shall be chosen over the former. **Section 10. The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos. In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities. G.R. No. 118295 May 2, 1997 WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as members of the Philippine Senate and as taxpayers; GREGORIO ANDOLANA and JOKER ARROYO as members of the House of Representatives and as taxpayers; NICANOR P. PERLAS and HORACIO R. MORALES, both as taxpayers; CIVIL LIBERTIES UNION, NATIONAL ECONOMIC PROTECTIONISM ASSOCIATION, CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES, LIKAS-KAYANG KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL RECONSTRUCTION MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG PILIPINAS, INC., and PHILIPPINE PEASANT INSTITUTE, in representation of various taxpayers and as non-governmental organizations, petitioners, vs. EDGARDO ANGARA, ALBERTO ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON ALVAREZ, AGAPITO AQUINO, RODOLFO BIAZON, NEPTALI GONZALES, ERNESTO HERRERA, JOSE LINA, GLORIA. MACAPAGAL-ARROYO, ORLANDO MERCADO, BLAS OPLE, JOHN OSMEA, SANTANINA RASUL, RAMON REVILLA, RAUL ROCO, FRANCISCO TATAD and FREDDIE WEBB, in their respective capacities as members of the Philippine Senate who concurred in the ratification by the President of the Philippines of the Agreement Establishing the World Trade Organization; SALVADOR ENRIQUEZ, in his capacity as Secretary of Budget and Management; CARIDAD VALDEHUESA, in her capacity as National Treasurer; RIZALINO NAVARRO, in his capacity as Secretary of Trade and Industry; ROBERTO SEBASTIAN, in his capacity as Secretary of Agriculture; ROBERTO DE OCAMPO, in his capacity as Secretary of Finance; ROBERTO ROMULO, in his capacity as Secretary of Foreign Affairs; and TEOFISTO T. GUINGONA, in his capacity as Executive Secretary, respondents. PANGANIBAN, J.: The emergence on January 1, 1995 of the World Trade Organization, abetted by the membership thereto of the vast majority of countries has revolutionized international business and economic relations amongst states. It has irreversibly propelled the world towards trade liberalization and economic globalization. Liberalization, globalization, deregulation and privatization, the thirdmillennium buzz words, are ushering in a new borderless world of business by sweeping away as mere historical relics the heretofore traditional modes of promoting and protecting national economies like tariffs, export subsidies, import quotas, quantitative restrictions, tax exemptions and currency controls. Finding market niches and becoming the best in specific industries in a market-driven and export-oriented global scenario are replacing age-old "beggar-thy-neighbor" policies that unilaterally protect weak and inefficient domestic producers of goods and services. In the words of Peter Drucker, the well-known management guru, "Increased participation in the world economy has become the key to domestic economic growth and prosperity." Brief Historical Background To hasten worldwide recovery from the devastation wrought by the Second World War, plans for the establishment of three multilateral institutions inspired by that grand political body, the United Nations were discussed at Dumbarton Oaks and Bretton Woods. The first was the World Bank (WB) which was to address the rehabilitation and reconstruction of war-ravaged and later developing countries; the second, the International Monetary Fund (IMF) which was to deal with currency problems; and the third, the International Trade Organization (ITO), which was to foster order and predictability in world trade and to minimize unilateral protectionist policies that invite challenge, even retaliation, from other states. However, for a variety of reasons, including its non-ratification by the United States, the ITO, unlike the IMF and WB, never took off. What remained was only GATT the General Agreement on Tariffs and Trade. GATT was a collection of treaties governing access to the economies of treaty adherents with no institutionalized body administering the agreements or dependable system of dispute settlement. After half a century and several dizzying rounds of negotiations, principally the Kennedy Round, the Tokyo Round and the Uruguay Round, the world finally gave birth to that administering body the World Trade Organization with the signing of the "Final Act" 1 in Marrakesh, Morocco and the ratification of the WTO Agreement by its members.

Like many other developing countries, the Philippines joined WTO as a founding member with the goal, as articulated by President Fidel V. Ramos in two letters to the Senate (infra), of improving "Philippine access to foreign markets, especially its major trading partners, through the reduction of tariffs on its exports, particularly agricultural and industrial products." The President also saw in the WTO the opening of "new opportunities for the services sector . . . , (the reduction of) costs and uncertainty associated with exporting . . . , and (the attraction of) more investments into the country." Although the Chief Executive did not expressly mention it in his letter, the Philippines and this is of special interest to the legal profession will benefit from the WTO system of dispute settlement by judicial adjudication through the independent WTO settlement bodies called (1) Dispute Settlement Panels and (2) Appellate Tribunal. Heretofore, trade disputes were settled mainly through negotiations where solutions were arrived at frequently on the basis of relative bargaining strengths, and where naturally, weak and underdeveloped countries were at a disadvantage. The Petition in Brief Arguing mainly (1) that the WTO requires the Philippines "to place nationals and products of member-countries on the same footing as Filipinos and local products" and (2) that the WTO "intrudes, limits and/or impairs" the constitutional powers of both Congress and the Supreme Court, the instant petition before this Court assails the WTO Agreement for violating the mandate of the 1987 Constitution to "develop a self-reliant and independent national economy effectively controlled by Filipinos . . . (to) give preference to qualified Filipinos (and to) promote the preferential use of Filipino labor, domestic materials and locally produced goods." Simply stated, does the Philippine Constitution prohibit Philippine participation in worldwide trade liberalization and economic globalization? Does it proscribe Philippine integration into a global economy that is liberalized, deregulated and privatized? These are the main questions raised in this petition for certiorari, prohibition andmandamus under Rule 65 of the Rules of Court praying (1) for the nullification, on constitutional grounds, of the concurrence of the Philippine Senate in the ratification by the President of the Philippines of the Agreement Establishing the World Trade Organization (WTO Agreement, for brevity) and (2) for the prohibition of its implementation and enforcement through the release and utilization of public funds, the assignment of public officials and employees, as well as the use of government properties and resources by respondent-heads of various executive offices concerned therewith. This concurrence is embodied in Senate Resolution No. 97, dated December 14, 1994. The Facts On April 15, 1994, Respondent Rizalino Navarro, then Secretary of The Department of Trade and Industry (Secretary Navarro, for brevity), representing the Government of the Republic of the Philippines, signed in Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay Round of Multilateral Negotiations (Final Act, for brevity). By signing the Final Act, Secretary Navarro on behalf of the Republic of the Philippines, agreed: (a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities, with a view to seeking approval of the Agreement in accordance with their procedures; and (b) to adopt the Ministerial Declarations and Decisions. On August 12, 1994, the members of the Philippine Senate received a letter dated August 11, 1994 from the President of the 3 Philippines, stating among others that "the Uruguay Round Final Act is hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the Constitution." On August 13, 1994, the members of the Philippine Senate received another letter from the President of the Philippines likewise dated August 11, 1994, which stated among others that "the Uruguay Round Final Act, the Agreement Establishing the World Trade Organization, the Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial Services are hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the Constitution." On December 9, 1994, the President of the Philippines certified the necessity of the immediate adoption of P.S. 1083, a resolution 5 entitled "Concurring in the Ratification of the Agreement Establishing the World Trade Organization." On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which "Resolved, as it is hereby resolved, that the Senate concur, as it hereby concurs, in the ratification by the President of the Philippines of the Agreement Establishing the World Trade 6 Organization." The text of the WTO Agreement is written on pages 137et seq. of Volume I of the 36-volume Uruguay Round of Multilateral Trade Negotiations and includes various agreements and associated legal instruments (identified in the said Agreement as Annexes 1, 2 and 3 thereto and collectively referred to as Multilateral Trade Agreements, for brevity) as follows: ANNEX 1 Annex 1A: Multilateral Agreement on Trade in Goods General Agreement on Tariffs and Trade 1994 Agreement on Agriculture Agreement on the Application of Sanitary and Phytosanitary Measures Agreement on Textiles and Clothing Agreement on Technical Barriers to Trade Agreement on Trade-Related Investment Measures
4 2

Agreement on Implementation of Article VI of he General Agreement on Tariffs and Trade 1994 Agreement on Implementation of Article VII of the General on Tariffs and Trade 1994 Agreement on Pre-Shipment Inspection Agreement on Rules of Origin Agreement on Imports Licensing Procedures Agreement on Subsidies and Coordinating Measures Agreement on Safeguards Annex 1B: General Agreement on Trade in Services and Annexes Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights ANNEX 2 Understanding on Rules and Procedures Governing the Settlement of Disputes ANNEX 3 Trade Policy Review Mechanism On December 16, 1994, the President of the Philippines signed the Instrument of Ratification, declaring: NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the Republic of the Philippines, after having seen and considered the aforementioned Agreement Establishing the World Trade Organization and the agreements and associated legal instruments included in Annexes one (1), two (2) and three (3) of that Agreement which are integral parts thereof, signed at Marrakesh, Morocco on 15 April 1994, do hereby ratify and confirm the same and every Article and Clause thereof. To emphasize, the WTO Agreement ratified by the President of the Philippines is composed of the Agreement Proper and "the associated legal instruments included in Annexes one (1), two (2) and three (3) of that Agreement which are integral parts thereof." On the other hand, the Final Act signed by Secretary Navarro embodies not only the WTO Agreement (and its integral annexes aforementioned) but also (1) the Ministerial Declarations and Decisions and (2) the Understanding on Commitments in Financial 8 Services. In his Memorandum dated May 13, 1996, the Solicitor General describes these two latter documents as follows: The Ministerial Decisions and Declarations are twenty-five declarations and decisions on a wide range of matters, such as measures in favor of least developed countries, notification procedures, relationship of WTO with the International Monetary Fund (IMF), and agreements on technical barriers to trade and on dispute settlement. The Understanding on Commitments in Financial Services dwell on, among other things, standstill or limitations and qualifications of commitments to existing non-conforming measures, market access, national treatment, and definitions of non-resident supplier of financial services, commercial presence and new financial service. On December 29, 1994, the present petition was filed. After careful deliberation on respondents' comment and petitioners' reply thereto, the Court resolved on December 12, 1995, to give due course to the petition, and the parties thereafter filed their respective memoranda. The court also requested the Honorable Lilia R. Bautista, the Philippine Ambassador to the United Nations 9 stationed in Geneva, Switzerland, to submit a paper, hereafter referred to as "Bautista Paper," for brevity, (1) providing a historical background of and (2) summarizing the said agreements. During the Oral Argument held on August 27, 1996, the Court directed: (a) the petitioners to submit the (1) Senate Committee Report on the matter in controversy and (2) the transcript of proceedings/hearings in the Senate; and (b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine treaties signed prior to the Philippine adherence to the WTO Agreement, which derogate from Philippine sovereignty and (2) copies of the multi-volume WTO Agreement and other documents mentioned in the Final Act, as soon as possible. After receipt of the foregoing documents, the Court said it would consider the case submitted for resolution. In a Compliance dated September 16, 1996, the Solicitor General submitted a printed copy of the 36-volume Uruguay Round of Multilateral Trade Negotiations, and in another Compliance dated October 24, 1996, he listed the various "bilateral or multilateral treaties or
7

international instruments involving derogation of Philippine sovereignty." Petitioners, on the other hand, submitted their Compliance dated January 28, 1997, on January 30, 1997. The Issues In their Memorandum dated March 11, 1996, petitioners summarized the issues as follows: A. Whether the petition presents a political question or is otherwise not justiciable. B. Whether the petitioner members of the Senate who participated in the deliberations and voting leading to the concurrence are estopped from impugning the validity of the Agreement Establishing the World Trade Organization or of the validity of the concurrence. C. Whether the provisions of the Agreement Establishing the World Trade Organization contravene the provisions of Sec. 19, Article II, and Secs. 10 and 12, Article XII, all of the 1987 Philippine Constitution. D. Whether provisions of the Agreement Establishing the World Trade Organization unduly limit, restrict and impair Philippine sovereignty specifically the legislative power which, under Sec. 2, Article VI, 1987 Philippine Constitution is "vested in the Congress of the Philippines"; E. Whether provisions of the Agreement Establishing the World Trade Organization interfere with the exercise of judicial power. F. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to lack or excess of jurisdiction when they voted for concurrence in the ratification of the constitutionally-infirm Agreement Establishing the World Trade Organization. G. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to lack or excess of jurisdiction when they concurred only in the ratification of the Agreement Establishing the World Trade Organization, and not with the Presidential submission which included the Final Act, Ministerial Declaration and Decisions, and the Understanding on Commitments in Financial Services. On the other hand, the Solicitor General as counsel for respondents "synthesized the several issues raised by petitioners into the 10 following": 1. Whether or not the provisions of the "Agreement Establishing the World Trade Organization and the Agreements and Associated Legal Instruments included in Annexes one (1), two (2) and three (3) of that agreement" cited by petitioners directly contravene or undermine the letter, spirit and intent of Section 19, Article II and Sections 10 and 12, Article XII of the 1987 Constitution. 2. Whether or not certain provisions of the Agreement unduly limit, restrict or impair the exercise of legislative power by Congress. 3. Whether or not certain provisions of the Agreement impair the exercise of judicial power by this Honorable Court in promulgating the rules of evidence. 4. Whether or not the concurrence of the Senate "in the ratification by the President of the Philippines of the Agreement establishing the World Trade Organization" implied rejection of the treaty embodied in the Final Act. By raising and arguing only four issues against the seven presented by petitioners, the Solicitor General has effectively ignored three, namely: (1) whether the petition presents a political question or is otherwise not justiciable; (2) whether petitioner-members of the Senate (Wigberto E. Taada and Anna Dominique Coseteng) are estopped from joining this suit; and (3) whether the respondentmembers of the Senate acted in grave abuse of discretion when they voted for concurrence in the ratification of the WTO Agreement. The foregoing notwithstanding, this Court resolved to deal with these three issues thus: (1) The "political question" issue being very fundamental and vital, and being a matter that probes into the very jurisdiction of this Court to hear and decide this case was deliberated upon by the Court and will thus be ruled upon as the first issue; (2) The matter of estoppel will not be taken up because this defense is waivable and the respondents have effectively waived it by not pursuing it in any of their pleadings; in any event, this issue, even if ruled in respondents' favor, will not cause the petition's dismissal as there are petitioners other than the two senators, who are not vulnerable to the defense of estoppel; and (3) The issue of alleged grave abuse of discretion on the part of the respondent senators will be taken up as an integral part of the disposition of the four issues raised by the Solicitor General. During its deliberations on the case, the Court noted that the respondents did not question the locus standi of petitioners. Hence, they are also deemed to have waived the benefit of such issue. They probably realized that grave constitutional issues, expenditures

of public funds and serious international commitments of the nation are involved here, and that transcendental public interest requires that the substantive issues be met head on and decided on the merits, rather than skirted or deflected by procedural 11 matters. To recapitulate, the issues that will be ruled upon shortly are: (1) DOES THE PETITION PRESENT A JUSTICIABLE CONTROVERSY? OTHERWISE STATED, DOES THE PETITION INVOLVE A POLITICAL QUESTION OVER WHICH THIS COURT HAS NO JURISDICTION? (2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF THE PHILIPPINE CONSTITUTION? (3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT, RESTRICT, OR IMPAIR THE EXERCISE OF LEGISLATIVE POWER BY CONGRESS? (4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE EXERCISE OF JUDICIAL POWER BY THIS COURT IN PROMULGATING RULES ON EVIDENCE? (5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND ITS ANNEXES SUFFICIENT AND/OR VALID, CONSIDERING THAT IT DID NOT INCLUDE THE FINAL ACT, MINISTERIAL DECLARATIONS AND DECISIONS, AND THE UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES? The First Issue: Does the Court Have Jurisdiction Over the Controversy? In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the petition no doubt raises a justiciable controversy. Where an action of the legislative branch is seriously alleged to have infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute. "The question thus posed is judicial rather than political. 12 The duty (to adjudicate) remains to assure that the supremacy of the Constitution is upheld." Once a "controversy as to the application or interpretation of a constitutional provision is raised before this Court (as in the instant case), it becomes a legal issue 13 which the Court is bound by constitutional mandate to decide." The jurisdiction of this Court to adjudicate the matters follows:
14

raised in the petition is clearly set out in the 1987 Constitution,

15

as

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. The foregoing text emphasizes the judicial department's duty and power to strike down grave abuse of discretion on the part of any 16 branch or instrumentality of government including Congress. It is an innovation in our political law. As explained by former Chief 17 Justice Roberto Concepcion, "the judiciary is the final arbiter on the question of whether or not a branch of government or any of its officials has acted without jurisdiction or in excess of jurisdiction or so capriciously as to constitute an abuse of discretion amounting to excess of jurisdiction. This is not only a judicial power but a duty to pass judgment on matters of this nature." As this Court has repeatedly and firmly emphasized in many cases, it will not shirk, digress from or abandon its sacred duty and authority to uphold the Constitution in matters that involve grave abuse of discretion brought before it in appropriate cases, committed by any officer, agency, instrumentality or department of the government. As the petition alleges grave abuse of discretion and as there is no other plain, speedy or adequate remedy in the ordinary course of law, we have no hesitation at all in holding that this petition should be given due course and the vital questions raised therein ruled upon under Rule 65 of the Rules of Court. Indeed, certiorari, prohibition andmandamus are appropriate remedies to raise constitutional issues and to review and/or prohibit/nullify, when proper, acts of legislative and executive officials. On this, we have no equivocation. We should stress that, in deciding to take jurisdiction over this petition, this Court will not review the wisdom of the decision of the President and the Senate in enlisting the country into the WTO, or pass upon the merits of trade liberalization as a policy espoused by said international body. Neither will it rule on the propriety of the government's economic policy of reducing/removing tariffs, taxes, subsidies, quantitative restrictions, and other import/trade barriers. Rather, it will only exercise its constitutional duty "to determine whether or not there had been a grave abuse of discretion amounting to lack or excess of jurisdiction" on the part of the Senate in ratifying the WTO Agreement and its three annexes. Second Issue: The WTO Agreement and Economic Nationalism This is the lis mota, the main issue, raised by the petition.
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Petitioners vigorously argue that the "letter, spirit and intent" of the Constitution mandating "economic nationalism" are violated by the so-called "parity provisions" and "national treatment" clauses scattered in various parts not only of the WTO Agreement and its annexes but also in the Ministerial Decisions and Declarations and in the Understanding on Commitments in Financial Services. Specifically, the "flagship" constitutional provisions referred to are Sec 19, Article II, and Secs. 10 and 12, Article XII, of the Constitution, which are worded as follows: Article II DECLARATION OF PRINCIPLES AND STATE POLICIES xxx xxx xxx Sec. 19. The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos. xxx xxx xxx Article XII NATIONAL ECONOMY AND PATRIMONY xxx xxx xxx Sec. 10. . . . The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos. In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. xxx xxx xxx Sec. 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive. Petitioners aver that these sacred constitutional principles are desecrated by the following WTO provisions quoted in their 19 memorandum: a) In the area of investment measures related to trade in goods (TRIMS, for brevity): Article 2 National Treatment and Quantitative Restrictions. 1. Without prejudice to other rights and obligations under GATT 1994, no Member shall apply any TRIM that is inconsistent with the provisions of Article II or Article XI of GATT 1994. 2. An illustrative list of TRIMS that are inconsistent with the obligations of general elimination of quantitative restrictions provided for in paragraph I of Article XI of GATT 1994 is contained in the Annex to this Agreement." (Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay Round, Legal Instruments, p. 22121, emphasis supplied). The Annex referred to reads as follows: ANNEX Illustrative List 1. TRIMS that are inconsistent with the obligation of national treatment provided for in paragraph 4 of Article III of GATT 1994 include those which are mandatory or enforceable under domestic law or under administrative rulings, or compliance with which is necessary to obtain an advantage, and which require: (a) the purchase or use by an enterprise of products of domestic origin or from any domestic source, whether specified in terms of particular products, in terms of volume or value of products, or in terms of proportion of volume or value of its local production; or

(b) that an enterprise's purchases or use of imported products be limited to an amount related to the volume or value of local products that it exports. 2. TRIMS that are inconsistent with the obligations of general elimination of quantitative restrictions provided for in paragraph 1 of Article XI of GATT 1994 include those which are mandatory or enforceable under domestic laws or under administrative rulings, or compliance with which is necessary to obtain an advantage, and which restrict: (a) the importation by an enterprise of products used in or related to the local production that it exports; (b) the importation by an enterprise of products used in or related to its local production by restricting its access to foreign exchange inflows attributable to the enterprise; or (c) the exportation or sale for export specified in terms of particular products, in terms of volume or value of products, or in terms of a preparation of volume or value of its local production. (Annex to the Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay Round Legal Documents, p. 22125, emphasis supplied). The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows: The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favorable than that accorded to like products of national origin in respect of laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use, the provisions of this paragraph shall not prevent the application of differential internal transportation charges which are based exclusively on the economic operation of the means of transport and not on the nationality of the product." (Article III, GATT 1947, as amended by the Protocol Modifying Part II, and Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in relation to paragraph 1(a) of the General Agreement on Tariffs and Trade 1994, Vol. 1, Uruguay Round, Legal Instruments p. 177, emphasis supplied). (b) In the area of trade related aspects of intellectual property rights (TRIPS, for brevity) : Each Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals with regard to the protection of intellectual property. . . (par. 1 Article 3, Agreement on Trade-Related Aspect of Intellectual Property rights, Vol. 31, Uruguay Round, Legal Instruments, p. 25432 (emphasis supplied) (c) In the area of the General Agreement on Trade in Services : National Treatment 1. In the sectors inscribed in its schedule, and subject to any conditions and qualifications set out therein, each Member shall accord to services and service suppliers of any other Member, in respect of all measures affecting the supply of services, treatment no less favourable than it accords to its own like services and service suppliers. 2. A Member may meet the requirement of paragraph I by according to services and service suppliers of any other Member, either formally suppliers of any other Member, either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers. 3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of completion in favour of services or service suppliers of the Member compared to like services or service suppliers of any other Member. (Article XVII, General Agreement on Trade in Services, Vol. 28, Uruguay Round Legal Instruments, p. 22610 emphasis supplied). It is petitioners' position that the foregoing "national treatment" and "parity provisions" of the WTO Agreement "place nationals and products of member countries on the same footing as Filipinos and local products," in contravention of the "Filipino First" policy of the Constitution. They allegedly render meaningless the phrase "effectively controlled by Filipinos." The constitutional conflict becomes more manifest when viewed in the context of the clear duty imposed on the Philippines as a WTO member to ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed 20 agreements. Petitioners further argue that these provisions contravene constitutional limitations on the role exports play in national development and negate the preferential treatment accorded to Filipino labor, domestic materials and locally produced goods.

On the other hand, respondents through the Solicitor General counter (1) that such Charter provisions are not self-executing and merely set out general policies; (2) that these nationalistic portions of the Constitution invoked by petitioners should not be read in isolation but should be related to other relevant provisions of Art. XII, particularly Secs. 1 and 13 thereof; (3) that read properly, the cited WTO clauses do not conflict with Constitution; and (4) that the WTO Agreement contains sufficient provisions to protect developing countries like the Philippines from the harshness of sudden trade liberalization. We shall now discuss and rule on these arguments. Declaration of Principles Not Self-Executing By its very title, Article II of the Constitution is a "declaration of principles and state policies." The counterpart of this article in the 21 22 1935 Constitution is called the "basic political creed of the nation" by Dean Vicente Sinco. These principles in Article II are not 23 intended to be self-executing principles ready for enforcement through the courts. They are used by the judiciary as aids or as guides in the exercise of its power of judicial review, and by the legislature in its enactment of laws. As held in the leading case 24 of Kilosbayan, Incorporated vs. Morato, the principles and state policies enumerated in Article II and some sections of Article XII are not "self-executing provisions, the disregard of which can give rise to a cause of action in the courts. They do not embody judicially enforceable constitutional rights but guidelines for legislation." In the same light, we held in Basco vs. Pagcor thus:
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that broad constitutional principles need legislative enactments to implement the,

On petitioners' allegation that P.D. 1869 violates Sections 11 (Personal Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice it to state also that these are merely statements of principles and policies. As such, they are basically not self-executing, meaning a law should be passed by Congress to clearly define and effectuate such principles. In general, therefore, the 1935 provisions were not intended to be self-executing principles ready for enforcement through the courts. They were rather directives addressed to the executive and to the legislature. If the executive and the legislature failed to heed the directives of the article, the available remedy was not judicial but political. The electorate could express their displeasure with the failure of the executive and the legislature through the language of the ballot. (Bernas, Vol. II, p. 2). The reasons for denying a cause of action to an alleged infringement of board constitutional principles are sourced from basic considerations of due process and the lack of judicial authority to wade "into the uncharted ocean of social and economic policy 26 making." Mr. Justice Florentino P. Feliciano in his concurring opinion in Oposa vs. Factoran, Jr., explained these reasons as follows: My suggestion is simply that petitioners must, before the trial court, show a more specific legal right a right cast in language of a significantly lower order of generality than Article II (15) of the Constitution that is or may be violated by the actions, or failures to act, imputed to the public respondent by petitioners so that the trial court can validly render judgment grating all or part of the relief prayed for. To my mind, the court should be understood as simply saying that such a more specific legal right or rights may well exist in our corpus of law, considering the general policy principles found in the Constitution and the existence of the Philippine Environment Code, and that the trial court should have given petitioners an effective opportunity so to demonstrate, instead of aborting the proceedings on a motion to dismiss. It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable legal right, rather than a constitutional or statutory policy, for at least two (2) reasons. One is that unless the legal right claimed to have been violated or disregarded is given specification in operational terms, defendants may well be unable to defend themselves intelligently and effectively; in other words, there are due process dimensions to this matter. The second is a broader-gauge consideration where a specific violation of law or applicable regulation is not alleged or proved, petitioners can be expected to fall back on the expanded conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution which reads: Sec. 1. . . . Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. (Emphasis supplied) When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to health" are combined with remedial standards as broad ranging as "a grave abuse of discretion amounting to lack or excess of jurisdiction," the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of

social and economic policy making. At least in respect of the vast area of environmental protection and management, our courts have no claim to special technical competence and experience and professional qualification. Where no specific, operable norms and standards are shown to exist, then the policy making departments the legislative and executive departments must be given a real and effective opportunity to fashion and promulgate those norms and standards, and to implement them before the courts should intervene. Economic Nationalism Should Be Read with Other Constitutional Mandates to Attain Balanced Development of Economy On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying down general principles relating to the national economy and patrimony, should be read and understood in relation to the other sections in said article, especially Secs. 1 and 13 thereof which read: Sec. 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all especially the underprivileged. The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices. In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. . . . xxx xxx xxx Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity. As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of national economic development, as follows: 1. A more equitable distribution of opportunities, income and wealth; 2. A sustained increase in the amount of goods and services provided by the nation for the benefit of the people; and 3. An expanding productivity as the key to raising the quality of life for all especially the underprivileged. With these goals in context, the Constitution then ordains the ideals of economic nationalism (1) by expressing preference in favor 27 of qualified Filipinos "in the grant of rights, privileges and concessions covering the national economy and patrimony" and in the use of "Filipino labor, domestic materials and locally-produced goods"; (2) by mandating the State to "adopt measures that help 28 make them competitive; and (3) by requiring the State to "develop a self-reliant and independent national economy effectively 29 controlled by Filipinos." In similar language, the Constitution takes into account the realities of the outside world as it requires the pursuit of "a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality 30 ad reciprocity"; and speaks of industries "which are competitive in both domestic and foreign markets" as well as of the protection of "Filipino enterprises against unfair foreign competition and trade practices." It is true that in the recent case of Manila Prince Hotel vs. Government Service Insurance System , et al., this Court held that "Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in itself and which needs no further guidelines or implementing laws or rule for its enforcement. From its very words the provision does not require any legislation to put it in operation. It is per se judicially enforceable." However, as the constitutional provision itself states, it is enforceable only in regard to "the grants of rights, privileges and concessions covering national economy and patrimony" and not to every aspect of trade and commerce. It refers to exceptions rather than the rule. The issue here is not whether this paragraph of Sec. 10 of Art. XII is self-executing or not. Rather, the issue is whether, as a rule, there are enough balancing provisions in the Constitution to allow the Senate to ratify the Philippine concurrence in the WTO Agreement. And we hold that there are. All told, while the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, at the same time, it recognizes the need for business exchange with the rest of the world on the bases of equality and reciprocity and limits protection of 32 Filipino enterprises only against foreign competition and trade practices that are unfair. In other words, the Constitution did not intend to pursue an isolationist policy. It did not shut out foreign investments, goods and services in the development of the Philippine economy. While the Constitution does not encourage the unlimited entry of foreign goods, services and investments into the country, it does not prohibit them either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on foreign competition that is unfair. WTO Recognizes Need to Protect Weak Economies
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Upon the other hand, respondents maintain that the WTO itself has some built-in advantages to protect weak and developing economies, which comprise the vast majority of its members. Unlike in the UN where major states have permanent seats and veto powers in the Security Council, in the WTO, decisions are made on the basis of sovereign equality, with each member's vote equal in weight to that of any other. There is no WTO equivalent of the UN Security Council. WTO decides by consensus whenever possible, otherwise, decisions of the Ministerial Conference and the General Council shall be taken by the majority of the votes cast, except in cases of interpretation of the Agreement or waiver of the obligation of a member which would require three fourths vote. Amendments would require two thirds vote in general. Amendments to MFN provisions and the Amendments provision will require assent of all members. Any member may withdraw from the Agreement upon the expiration of six months from the date of 33 notice of withdrawals. Hence, poor countries can protect their common interests more effectively through the WTO than through one-on-one negotiations with developed countries. Within the WTO, developing countries can form powerful blocs to push their economic agenda more decisively than outside the Organization. This is not merely a matter of practical alliances but a negotiating strategy rooted in law. Thus, the basic principles underlying the WTO Agreement recognize the need of developing countries like the Philippines to "share in the growth in international tradecommensurate with the needs of their economic development." These basic principles are found in 34 the preamble of the WTO Agreement as follows: The Parties to this Agreement, Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development, Recognizing further that there is need for positive efforts designed to ensure that developing countries, and especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development, Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international trade relations, Resolved, therefore, to develop an integrated, more viable and durable multilateral trading system encompassing the General Agreement on Tariffs and Trade, the results of past trade liberalization efforts, and all of the results of the Uruguay Round of Multilateral Trade Negotiations, Determined to preserve the basic principles and to further the objectives underlying this multilateral trading system, . . . (emphasis supplied.) Specific WTO Provisos Protect Developing Countries So too, the Solicitor General points out that pursuant to and consistent with the foregoing basic principles, the WTO Agreement grants developing countries a more lenient treatment, giving their domestic industries some protection from the rush of foreign competition. Thus, with respect to tariffs in general, preferential treatment is given to developing countries in terms of the amount of tariff reduction and the period within which the reduction is to be spread out . Specifically, GATT requires an average tariff reduction rate of 36% for developed countries to be effected within a period of six (6) years while developing countries including the Philippines are required to effect an average tariff reduction of only 24% within ten (10) years . In respect to domestic subsidy, GATT requires developed countries to reduce domestic support to agricultural products by 20% over six (6) years, as compared to only 13% for developing countries to be effected within ten (10) years . In regard to export subsidy for agricultural products, GATT requires developed countries to reduce their budgetary outlays for export subsidy by 36% and export volumes receiving export subsidy by 21% within a period of six (6) years. For developing countries, however, the reduction rate is only two-thirds of that prescribed for developed countries and a longer period of ten (10) years within which to effect such reduction. Moreover, GATT itself has provided built-in protection from unfair foreign competition and trade practices including anti-dumping measures, countervailing measures and safeguards against import surges. Where local businesses are jeopardized by unfair foreign competition, the Philippines can avail of these measures. There is hardly therefore any basis for the statement that under the WTO, local industries and enterprises will all be wiped out and that Filipinos will be deprived of control of the economy. Quite the contrary, the weaker situations of developing nations like the Philippines have been taken into account; thus, there would be no basis to say that in joining the WTO, the respondents have gravely abused their discretion. True, they have made a bold decision to steer the ship of state into the yet uncharted sea of economic liberalization. But such decision cannot be set aside on the ground of

grave abuse of discretion, simply because we disagree with it or simply because we believe only in other economic policies. As earlier stated, the Court in taking jurisdiction of this case will not pass upon the advantages and disadvantages of trade liberalization as an economic policy. It will only perform its constitutional duty of determining whether the Senate committed grave abuse of discretion. Constitution Does Not Rule Out Foreign Competition Furthermore, the constitutional policy of a "self-reliant and independent national economy" does not necessarily rule out the entry of foreign investments, goods and services. It contemplates neither "economic seclusion" nor "mendicancy in the international community." As explained by Constitutional Commissioner Bernardo Villegas, sponsor of this constitutional policy: Economic self-reliance is a primary objective of a developing country that is keenly aware of overdependence on external assistance for even its most basic needs. It does not mean autarky or economic seclusion ; rather, it means avoiding mendicancy in the international community. Independence refers to the freedom from undue foreign control of the national economy, especially in such strategic industries as in the development of natural resources 36 and public utilities. The WTO reliance on "most favored nation," "national treatment," and "trade without discrimination" cannot be struck down as unconstitutional as in fact they are rules of equality and reciprocity that apply to all WTO members. Aside from envisioning a trade 37 policy based on "equality and reciprocity," the fundamental law encourages industries that are "competitive in both domestic and foreign markets," thereby demonstrating a clear policy against a sheltered domestic trade environment, but one in favor of the gradual development of robust industries that can compete with the best in the foreign markets. Indeed, Filipino managers and Filipino enterprises have shown capability and tenacity to compete internationally. And given a free trade environment, Filipino entrepreneurs and managers in Hongkong have demonstrated the Filipino capacity to grow and to prosper against the best offered under a policy of laissez faire. Constitution Favors Consumers, Not Industries or Enterprises The Constitution has not really shown any unbalanced bias in favor of any business or enterprise, nor does it contain any specific pronouncement that Filipino companies should be pampered with a total proscription of foreign competition. On the other hand, respondents claim that WTO/GATT aims to make available to the Filipino consumer the best goods and services obtainable anywhere in the world at the most reasonable prices. Consequently, the question boils down to whether WTO/GATT will favor the general welfare of the public at large. Will adherence to the WTO treaty bring this ideal (of favoring the general welfare) to reality? Will WTO/GATT succeed in promoting the Filipinos' general welfare because it will as promised by its promoters expand the country's exports and generate more employment? Will it bring more prosperity, employment, purchasing power and quality products at the most reasonable rates to the Filipino public? The responses to these questions involve "judgment calls" by our policy makers, for which they are answerable to our people during appropriate electoral exercises. Such questions and the answers thereto are not subject to judicial pronouncements based on grave abuse of discretion. Constitution Designed to Meet Future Events and Contingencies No doubt, the WTO Agreement was not yet in existence when the Constitution was drafted and ratified in 1987. That does not mean however that the Charter is necessarily flawed in the sense that its framers might not have anticipated the advent of a borderless world of business. By the same token, the United Nations was not yet in existence when the 1935 Constitution became effective. Did that necessarily mean that the then Constitution might not have contemplated a diminution of the absoluteness of sovereignty when the Philippines signed the UN Charter, thereby effectively surrendering part of its control over its foreign relations to the decisions of various UN organs like the Security Council? It is not difficult to answer this question. Constitutions are designed to meet not only the vagaries of contemporary events. They should be interpreted to cover even future and unknown circumstances. It is to the credit of its drafters that a Constitution can withstand the assaults of bigots and infidels but at the same time bend with the refreshing winds of change necessitated by 38 unfolding events. As one eminent political law writer and respected jurist explains: The Constitution must be quintessential rather than superficial, the root and not the blossom, the base and framework only of the edifice that is yet to rise. It is but the core of the dream that must take shape, not in a twinkling by mandate of our delegates, but slowly "in the crucible of Filipino minds and hearts," where it will in time develop its sinews and gradually gather its strength and finally achieve its substance. In fine, the Constitution cannot, like the goddess Athena, rise full-grown from the brow of the Constitutional Convention, nor can it conjure by mere fiat an
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instant Utopia. It must grow with the society it seeks to re-structure and march apace with the progress of the race, drawing from the vicissitudes of history the dynamism and vitality that will keep it, far from becoming a petrified rule, a pulsing, living law attuned to the heartbeat of the nation . Third Issue: The WTO Agreement and Legislative Power The WTO Agreement provides that "(e)ach Member shall ensure the conformity of its laws, regulations and administrative 39 procedures with its obligations as provided in the annexed Agreements." Petitioners maintain that this undertaking "unduly limits, restricts and impairs Philippine sovereignty, specifically the legislative power which under Sec. 2, Article VI of the 1987 Philippine Constitution is vested in the Congress of the Philippines. It is an assault on the sovereign powers of the Philippines because this means that Congress could not pass legislation that will be good for our national interest and general welfare if such legislation will not conform with the WTO Agreement, which not only relates to the trade in goods . . . but also to the flow of investments and 40 money . . . as well as to a whole slew of agreements on socio-cultural matters . . . More specifically, petitioners claim that said WTO proviso derogates from the power to tax, which is lodged in the Congress. And while the Constitution allows Congress to authorize the President to fix tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts, such authority is subject to "specified limits and . . . such limitations and restrictions" as Congress 42 may provide, as in fact it did under Sec. 401 of the Tariff and Customs Code. Sovereignty Limited by International Law and Treaties This Court notes and appreciates the ferocity and passion by which petitioners stressed their arguments on this issue. However, while sovereignty has traditionally been deemed absolute and all-encompassing on the domestic level, it is however subject to restrictions and limitations voluntarily agreed to by the Philippines, expressly or impliedly, as a member of the family of nations. Unquestionably, the Constitution did not envision a hermit-type isolation of the country from the rest of the world. In its Declaration of Principles and State Policies, the Constitution "adopts the generally accepted principles of international law as part of the law of 43 the land, and adheres to the policy of peace, equality, justice, freedom, cooperation and amity, with all nations." By the doctrine of incorporation, the country is bound by generally accepted principles of international law, which are considered to be 44 automatically part of our own laws. One of the oldest and most fundamental rules in international law is pacta sunt servanda international agreements must be performed in good faith. "A treaty engagement is not a mere moral obligation but creates a legally binding obligation on the parties . . . A state which has contracted valid international obligations is bound to make in its 45 legislations such modifications as may be necessary to ensure the fulfillment of the obligations undertaken." By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations may surrender some aspects of their state power in exchange for greater benefits granted by or derived from a convention or pact. After all, states, like individuals, live with coequals, and in pursuit of mutually covenanted objectives and benefits, they also commonly agree to limit the exercise of their otherwise absolute rights. Thus, treaties have been used to record agreements between States concerning such widely diverse matters as, for example, the lease of naval bases, the sale or cession of territory, the termination of war, the regulation of conduct of hostilities, the formation of alliances, the regulation of commercial relations, the settling of claims, 46 the laying down of rules governing conduct in peace and the establishment of international organizations. The sovereignty of a state therefore cannot in fact and in reality be considered absolute. Certain restrictions enter into the picture: (1) limitations imposed by the very nature of membership in the family of nations and (2) limitations imposed by treaty stipulations. As aptly put by John F. Kennedy, "Today, no nation can build its destiny alone. The age of self-sufficient nationalism is over. The age of 47 interdependence is here." UN Charter and Other Treaties Limit Sovereignty Thus, when the Philippines joined the United Nations as one of its 51 charter members, it consented to restrict its sovereign rights 47 under the "concept of sovereignty as auto-limitation." -A Under Article 2 of the UN Charter, "(a)ll members shall give the United Nations every assistance in any action it takes in accordance with the present Charter, and shall refrain from giving assistance to any state against which the United Nations is taking preventive or enforcement action." Such assistance includes payment of its corresponding share not merely in administrative expenses but also in expenditures for the peace-keeping operations of the organization. In its advisory opinion of July 20, 1961, the International Court of Justice held that money used by the United Nations Emergency Force in the Middle East and in the Congo were "expenses of the United Nations" under Article 17, paragraph 2, of the UN Charter. Hence, all its members must bear their corresponding share in such expenses. In this sense, the Philippine Congress is restricted in its power to appropriate. It is compelled to appropriate funds whether it agrees with such peace-keeping expenses or not. So too, under Article 105 of the said Charter, the UN and its representatives enjoy diplomatic privileges and immunities, thereby limiting again the exercise of sovereignty of members within their own territory. Another example: although "sovereign equality" and "domestic jurisdiction" of all members are set forth as underlying principles in the UN Charter, such provisos are however subject to enforcement measures decided by the Security Council for the maintenance of international peace and security under Chapter VII of the Charter. A final example: under Article 103, "(i)n the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other international agreement, their obligation under the present charter shall prevail," thus unquestionably denying the Philippines as a member the sovereign power to make a choice as to which of conflicting obligations, if any, to honor.
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Apart from the UN Treaty, the Philippines has entered into many other international pacts both bilateral and multilateral that involve limitations on Philippine sovereignty. These are enumerated by the Solicitor General in his Compliance dated October 24, 1996, as follows: (a) Bilateral convention with the United States regarding taxes on income, where the Philippines agreed, among others, to exempt from tax, income received in the Philippines by, among others, the Federal Reserve Bank of the United States, the Export/Import Bank of the United States, the Overseas Private Investment Corporation of the United States. Likewise, in said convention, wages, salaries and similar remunerations paid by the United States to its citizens for labor and personal services performed by them as employees or officials of the United States are exempt from income tax by the Philippines. (b) Bilateral agreement with Belgium, providing, among others, for the avoidance of double taxation with respect to taxes on income. (c) Bilateral convention with the Kingdom of Sweden for the avoidance of double taxation. (d) Bilateral convention with the French Republic for the avoidance of double taxation. (e) Bilateral air transport agreement with Korea where the Philippines agreed to exempt from all customs duties, inspection fees and other duties or taxes aircrafts of South Korea and the regular equipment, spare parts and supplies arriving with said aircrafts. (f) Bilateral air service agreement with Japan, where the Philippines agreed to exempt from customs duties, excise taxes, inspection fees and other similar duties, taxes or charges fuel, lubricating oils, spare parts, regular equipment, stores on board Japanese aircrafts while on Philippine soil. (g) Bilateral air service agreement with Belgium where the Philippines granted Belgian air carriers the same privileges as those granted to Japanese and Korean air carriers under separate air service agreements. (h) Bilateral notes with Israel for the abolition of transit and visitor visas where the Philippines exempted Israeli nationals from the requirement of obtaining transit or visitor visas for a sojourn in the Philippines not exceeding 59 days. (i) Bilateral agreement with France exempting French nationals from the requirement of obtaining transit and visitor visa for a sojourn not exceeding 59 days. (j) Multilateral Convention on Special Missions, where the Philippines agreed that premises of Special Missions in the Philippines are inviolable and its agents can not enter said premises without consent of the Head of Mission concerned. Special Missions are also exempted from customs duties, taxes and related charges. (k) Multilateral convention on the Law of Treaties. In this convention, the Philippines agreed to be governed by the Vienna Convention on the Law of Treaties. (l) Declaration of the President of the Philippines accepting compulsory jurisdiction of the International Court of Justice. The International Court of Justice has jurisdiction in all legal disputes concerning the interpretation of a treaty, any question of international law, the existence of any fact which, if established, would constitute a breach "of international obligation." In the foregoing treaties, the Philippines has effectively agreed to limit the exercise of its sovereign powers of taxation, eminent domain and police power. The underlying consideration in this partial surrender of sovereignty is the reciprocal commitment of the other contracting states in granting the same privilege and immunities to the Philippines, its officials and its citizens. The same reciprocity characterizes the Philippine commitments under WTO-GATT. International treaties, whether relating to nuclear disarmament, human rights, the environment, the law of the sea, or trade, constrain domestic political sovereignty through the assumption of external obligations. But unless anarchy in international relations is preferred as an alternative, in most cases we accept that the benefits of the reciprocal obligations involved outweigh the costs associated with any loss of political sovereignty. (T)rade treaties that structure relations by reference to durable, well-defined substantive norms and objective dispute resolution procedures reduce the risks of larger countries exploiting raw economic power to bully smaller countries, by subjecting power relations to some form of legal ordering. In addition, smaller countries typically stand to gain disproportionately from trade liberalization. This is due to the simple fact that liberalization will provide access to a larger set of potential new trading relationship than in case of the larger country gaining enhanced success to the 48 smaller country's market. The point is that, as shown by the foregoing treaties, a portion of sovereignty may be waived without violating the Constitution, based on the rationale 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 . . . cooperation and amity with all nations."

Fourth Issue: The WTO Agreement and Judicial Power Petitioners aver that paragraph 1, Article 34 of the General Provisions and Basic Principles of the Agreement on Trade-Related 49 Aspects of Intellectual Property Rights (TRIPS) intrudes on the power of the Supreme Court to promulgate rules concerning 50 pleading, practice and procedures. To understand the scope and meaning of Article 34, TRIPS,
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it will be fruitful to restate its full text as follows: Article 34

Process Patents: Burden of Proof 1. For the purposes of civil proceedings in respect of the infringement of the rights of the owner referred to in paragraph 1 (b) of Article 28, if the subject matter of a patent is a process for obtaining a product, the judicial authorities shall have the authority to order the defendant to prove that the process to obtain an identical product is different from the patented process. Therefore, Members shall provide, in at least one of the following circumstances, that any identical product when produced without the consent of the patent owner shall, in the absence of proof to the contrary, be deemed to have been obtained by the patented process: (a) if the product obtained by the patented process is new; (b) if there is a substantial likelihood that the identical product was made by the process and the owner of the patent has been unable through reasonable efforts to determine the process actually used. 2. Any Member shall be free to provide that the burden of proof indicated in paragraph 1 shall be on the alleged infringer only if the condition referred to in subparagraph (a) is fulfilled or only if the condition referred to in subparagraph (b) is fulfilled. 3. In the adduction of proof to the contrary, the legitimate interests of defendants in protecting their manufacturing and business secrets shall be taken into account. From the above, a WTO Member is required to provide a rule of disputable (not the words "in the absence of proof to the contrary") presumption that a product shown to be identical to one produced with the use of a patented process shall be deemed to have been obtained by the (illegal) use of the said patented process, (1) where such product obtained by the patented product is new, or (2) where there is "substantial likelihood" that the identical product was made with the use of the said patented process but the owner of the patent could not determine the exact process used in obtaining such identical product. Hence, the "burden of proof" contemplated by Article 34 should actually be understood as the duty of the alleged patent infringer to overthrow such presumption. Such burden, properly understood, actually refers to the "burden of evidence" (burden of going forward) placed on the producer of the identical (or fake) product to show that his product was produced without the use of the patented process. The foregoing notwithstanding, the patent owner still has the "burden of proof" since, regardless of the presumption provided under paragraph 1 of Article 34, such owner still has to introduce evidence of the existence of the alleged identical product, the fact that it is "identical" to the genuine one produced by the patented process and the fact of "newness" of the genuine product or the fact of "substantial likelihood" that the identical product was made by the patented process. The foregoing should really present no problem in changing the rules of evidence as the present law on the subject, Republic Act No. 165, as amended, otherwise known as the Patent Law, provides a similar presumption in cases of infringement of patented design or utility model, thus: Sec. 60. Infringement. Infringement of a design patent or of a patent for utility model shall consist in unauthorized copying of the patented design or utility model for the purpose of trade or industry in the article or product and in the making, using or selling of the article or product copying the patented design or utility model. Identity or substantial identity with the patented design or utility model shall constitute evidence of copying. (emphasis supplied) Moreover, it should be noted that the requirement of Article 34 to provide a disputable presumption applies only if (1) the product obtained by the patented process in NEW or (2) there is a substantial likelihood that the identical product was made by the process and the process owner has not been able through reasonable effort to determine the process used. Where either of these two provisos does not obtain, members shall be free to determine the appropriate method of implementing the provisions of TRIPS within their own internal systems and processes. By and large, the arguments adduced in connection with our disposition of the third issue derogation of legislative power will apply to this fourth issue also. Suffice it to say that the reciprocity clause more than justifies such intrusion, if any actually exists. Besides, Article 34 does not contain an unreasonable burden, consistent as it is with due process and the concept of adversarial dispute settlement inherent in our judicial system.

So too, since the Philippine is a signatory to most international conventions on patents, trademarks and copyrights, the adjustment 52 in legislation and rules of procedure will not be substantial. Fifth Issue: Concurrence Only in the WTO Agreement and Not in Other Documents Contained in the Final Act Petitioners allege that the Senate concurrence in the WTO Agreement and its annexes but not in the other documents referred to in the Final Act, namely the Ministerial Declaration and Decisions and the Understanding on Commitments in Financial Services is defective and insufficient and thus constitutes abuse of discretion. They submit that such concurrence in the WTO Agreement alone is flawed because it is in effect a rejection of the Final Act, which in turn was the document signed by Secretary Navarro, in representation of the Republic upon authority of the President. They contend that the second letter of the President to 53 the Senate which enumerated what constitutes the Final Act should have been the subject of concurrence of the Senate. "A final act, sometimes called protocol de cloture, is an instrument which records the winding up of the proceedings of a diplomatic conference and usually includes a reproduction of the texts of treaties, conventions, recommendations and other acts agreed upon 54 and signed by the plenipotentiaries attending the conference." It is not the treaty itself. It is rather a summary of the proceedings of a protracted conference which may have taken place over several years. The text of the "Final Act Embodying the Results of the 55 Uruguay Round of Multilateral Trade Negotiations" is contained in just one page in Vol. I of the 36-volume Uruguay Round of Multilateral Trade Negotiations. By signing said Final Act, Secretary Navarro as representative of the Republic of the Philippines undertook: (a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities with a view to seeking approval of the Agreement in accordance with their procedures; and (b) to adopt the Ministerial Declarations and Decisions. The assailed Senate Resolution No. 97 expressed concurrence in exactly what the Final Act required from its signatories, namely, concurrence of the Senate in the WTO Agreement. The Ministerial Declarations and Decisions were deemed adopted without need for ratification. They were approved by the ministers by virtue of Article XXV: 1 of GATT which provides that representatives of the members can meet "to give effect to those provisions of this Agreement which invoke joint action, and generally with a view to facilitating the operation and furthering the 56 objectives of this Agreement." The Understanding on Commitments in Financial Services also approved in Marrakesh does not apply to the Philippines. It applies only to those 27 Members which "have indicated in their respective schedules of commitments on standstill, elimination of monopoly, expansion of operation of existing financial service suppliers, temporary entry of personnel, free transfer and processing of information, and national treatment with respect to access to payment, clearing systems and refinancing available in the normal 57 course of business." On the other hand, the WTO Agreement itself expresses what multilateral agreements are deemed included as its integral 58 parts, as follows: Article II Scope of the WTO 1. The WTO shall provide the common institutional frame-work for the conduct of trade relations among its Members in matters to the agreements and associated legal instruments included in the Annexes to this Agreement. 2. The Agreements and associated legal instruments included in Annexes 1, 2, and 3, (hereinafter referred to as "Multilateral Agreements") are integral parts of this Agreement, binding on all Members. 3. The Agreements and associated legal instruments included in Annex 4 (hereinafter referred to as "Plurilateral Trade Agreements") are also part of this Agreement for those Members that have accepted them, and are binding on those Members. The Plurilateral Trade Agreements do not create either obligation or rights for Members that have not accepted them. 4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A (hereinafter referred to as "GATT 1994") is legally distinct from the General Agreement on Tariffs and Trade, dated 30 October 1947, annexed to the Final Act adopted at the conclusion of the Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, as subsequently rectified, amended or modified (hereinafter referred to as "GATT 1947"). It should be added that the Senate was well-aware of what it was concurring in as shown by the members' deliberation on August 59 25, 1994. After reading the letter of President Ramos dated August 11, 1994, the senators 60 of the Republic minutely dissected what the Senate was concurring in, as follows:

THE CHAIRMAN: Yes. Now, the question of the validity of the submission came up in the first day hearing of this Committee yesterday. Was the observation made by Senator Taada that what was submitted to the Senate was not the agreement on establishing the World Trade Organization by the final act of the Uruguay Round which is not the same as the agreement establishing the World Trade Organization? And on that basis, Senator Tolentino raised a point of order which, however, he agreed to withdraw upon understanding that his suggestion for an alternative solution at that time was acceptable. That suggestion was to treat the proceedings of the Committee as being in the nature of briefings for Senators until the question of the submission could be clarified. And so, Secretary Romulo, in effect, is the President submitting a new . . . is he making a new submission which improves on the clarity of the first submission? MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be no misunderstanding, it was his intention to clarify all matters by giving this letter. THE CHAIRMAN: Thank you. Can this Committee hear from Senator Taada and later on Senator Tolentino since they were the ones that raised this question yesterday? Senator Taada, please. SEN. TAADA: Thank you, Mr. Chairman. Based on what Secretary Romulo has read, it would now clearly appear that what is being submitted to the Senate for ratification is not the Final Act of the Uruguay Round, but rather the Agreement on the World Trade Organization as well as the Ministerial Declarations and Decisions, and the Understanding and Commitments in Financial Services. I am now satisfied with the wording of the new submission of President Ramos . SEN. TAADA. . . . of President Ramos, Mr. Chairman. THE CHAIRMAN. Thank you, Senator Taada. Can we hear from Senator Tolentino? And after him Senator Neptali Gonzales and Senator Lina. SEN. TOLENTINO, Mr. Chairman, I have not seen the new submission actually transmitted to us but I saw the draft of his earlier, and I think it now complies with the provisions of the Constitution, and with the Final Act itself . The Constitution does not require us to ratify the Final Act. It requires us to ratify the Agreement which is now being submitted. The Final Act itself specifies what is going to be submitted to with the governments of the participants. In paragraph 2 of the Final Act, we read and I quote : By signing the present Final Act, the representatives agree : (a) to submit as appropriate the WTO Agreement for the consideration of the respective competent authorities with a view to seeking approval of the Agreement in accordance with their procedures. In other words, it is not the Final Act that was agreed to be submitted to the governments for ratification or acceptance as whatever their constitutional procedures may provide but it is the World Trade Organization Agreement. And if that is the one that is being submitted now, I think it satisfies both the Constitution and the Final Act itself . Thank you, Mr. Chairman. THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales. SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of record . And they had been adequately reflected in the journal of yesterday's session and I don't see any need for repeating the same . Now, I would consider the new submission as an act ex abudante cautela . THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to make any comment on this? SEN. LINA. Mr. President, I agree with the observation just made by Senator Gonzales out of the abundance of question. Then the new submission is, I believe, stating the obvious and therefore I have no further comment to make. Epilogue

In praying for the nullification of the Philippine ratification of the WTO Agreement, petitioners are invoking this Court's constitutionally imposed duty "to determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction" on the part of the Senate in giving its concurrence therein via Senate Resolution No. 97. Procedurally, a writ of certiorari grounded on grave abuse of discretion may be issued by the Court under Rule 65 of the Rules of Court when it is amply shown that petitioners have no other plain, speedy and adequate remedy in the ordinary course of law. By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of 61 jurisdiction. Mere abuse of discretion is not enough. It must be grave abuse of discretion as when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to amount to an 62 evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. Failure on the 63 part of the petitioner to show grave abuse of discretion will result in the dismissal of the petition. In rendering this Decision, this Court never forgets that the Senate, whose act is under review, is one of two sovereign houses of Congress and is thus entitled to great respect in its actions. It is itself a constitutional body independent and coordinate, and thus its actions are presumed regular and done in good faith. Unless convincing proof and persuasive arguments are presented to overthrow such presumptions, this Court will resolve every doubt in its favor. Using the foregoing well-accepted definition of grave abuse of discretion and the presumption of regularity in the Senate's processes, this Court cannot find any cogent reason to impute grave abuse of discretion to the Senate's exercise of its power of concurrence in the WTO Agreement granted it by Sec. 21 of Article VII of 64 the Constitution. It is true, as alleged by petitioners, that broad constitutional principles require the State to develop an independent national economy effectively controlled by Filipinos; and to protect and/or prefer Filipino labor, products, domestic materials and locally produced goods. But it is equally true that such principles while serving as judicial and legislative guides are not in themselves sources of causes of action. Moreover, there are other equally fundamental constitutional principles relied upon by the Senate which mandate the pursuit of a "trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity" and the promotion of industries "which are competitive in both domestic and foreign markets," thereby justifying its acceptance of said treaty. So too, the alleged impairment of sovereignty in the exercise of legislative and judicial powers is balanced by the adoption of the generally accepted principles of international law as part of the law of the land and the adherence of the Constitution to the policy of cooperation and amity with all nations. That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its consent to the WTO Agreement thereby making it "a part of the law of the land" is a legitimate exercise of its sovereign duty and power. We find no "patent and gross" arbitrariness or despotism "by reason of passion or personal hostility" in such exercise. It is not impossible to surmise that this Court, or at least some of its members, may even agree with petitioners that it is more advantageous to the national interest to strike down Senate Resolution No. 97. But that is not a legal reason to attribute grave abuse of discretion to the Senate and to nullify its decision. To do so would constitute grave abuse in the exercise of our own judicial power and duty. Ineludably, what the Senate did was a valid exercise of its authority. As to whether such exercise was wise, beneficial or viable is outside the realm of judicial inquiry and review. That is a matter between the elected policy makers and the people. As to whether the nation should join the worldwide march toward trade liberalization and economic globalization is a matter that our people should determine in electing their policy makers. After all, the WTO Agreement allows withdrawal of membership, should this be the political desire of a member. The eminent futurist John Naisbitt, author of the best seller Megatrends, predicts an Asian Renaissance where "the East will become the dominant region of the world economically, politically and culturally in the next century." He refers to the "free market" espoused by WTO as the "catalyst" in this coming Asian ascendancy. There are at present about 31 countries including China, Russia and Saudi Arabia negotiating for membership in the WTO. Notwithstanding objections against possible limitations on national sovereignty, the WTO remains as the only viable structure for multilateral trading and the veritable forum for the development of international trade law. The alternative to WTO is isolation, stagnation, if not economic self-destruction. Duly enriched with original membership, keenly aware of the advantages and disadvantages of globalization with its on-line experience, and endowed with a vision of the future, the Philippines now straddles the crossroads of an international strategy for economic prosperity and stability in the new millennium. Let the people, through their duly authorized elected officers, make their free choice. WHEREFORE, the petition is DISMISSED for lack of merit. SO ORDERED. Tanada vs angara GR 118295 Facts: the instant case is a petition for certiorari,prohibition and mandamus filed bby petitioner to contest the constitutionality of joinuing the WTO which was concurred upon by majority of the Senate. Petioner contends that it is in conflict with the provisions of our constitution, specifically Art,11 sec 19, and art 12, sec 10. Issue: whether or not such affiliation is prohibited by our constitution Held: art 2 of the constitution, the principles stated herein are not self-executingg. They are used by the judiciary as aids or as guidelines in the exercise of its power of judicial review, and by the legislature in its enactments of laws. They are not sources for causes of action.
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Furthermore, the treaty is in harmony with the generally accepted principles of international law as part of the law of the land and the adherence of the amity with all nations. The deliberation and voting of the senate, voluntarily and overwhelmingly gave its consent to the WTO agreement, thereby making it a part of the law of the land. The petition is dismissed for lack of merit. PEOPLE OF THE PHILIPPINES, Petitioner, Promulgated: - versus July 23, 2008 BENJAMIN KOKOY T. ROMUALDEZ and THE SANDIGANBAYAN (FIRST DIVISION), Respondents.

x----------------------------------------------------------------------------------------------x DECISION BRION, J.: We resolve the Petition for Certiorari filed under Rule 65 of the Revised Rules of Court by the People of the Philippines [1] [2] (People), assailing the Resolutions dated 22 June 2004 and 23 November 2004 of the Sandiganbayan in CRIMINAL CASE NO. 26916 entitled People of the Philippines versus Benjamin Kokoy Romualdez, on the ground of grave abuse of discretion and/or lack or excess of jurisdiction. The first assailed Resolution granted the motion to quash filed by private respondent Benjamin Kokoy Romualdez (Romualdez); the second assailed Resolution, on the other hand, denied the Peoples motion for reconsideration of the first assailed Resolution. ANTECEDENTS The Office of the Ombudsman (Ombudsman) charged Romualdez before the Sandiganbayan with violation of Section 3 (e) of Republic Act No. 3019 (RA 3019), as amended, otherwise known as the Anti-Graft and Corrupt Practices Act. The [3] Information reads: That on or about and during the period from 1976 to February 1986 or sometime prior or subsequent thereto, in the City of Manila, Philippines, and within the jurisdiction of this Honorable Court, accused Benjamin Kokoy Romualdez, a public officer being then the Provincial Governor of the Province of Leyte, while in the performance of his official function, committing the offense in relation to his Office, did then and there willfully, unlawfully and criminally with evident bad faith, cause undue injury to the Government in the following manner: accused public officer being then the elected Provincial Governor of Leyte and without abandoning said position, and using his influence with his brother-in-law, then President Ferdinand E. Marcos, had himself appointed and/or assigned as Ambassador to foreign countries, particularly the Peoples Republic of China (Peking), Kingdom of Saudi Arabia (Jeddah), and United States of America (Washington D.C.), knowing fully well that such appointment and/or assignment is in violation of the existing laws as the Office of the Ambassador or Chief of Mission is incompatible with his position as Governor of the Province of Leyte, thereby enabling himself to collect dual compensation from both the Department of Foreign Affairs and the Provincial Government of Leyte in the amount of Two Hundred Seventy-six Thousand Nine Hundred Eleven Dollars and 56/100 (US $276,911.56), US Currency or its equivalent amount of Five Million Eight Hundred Six Thousand Seven Hundred Nine Pesos and 50/100 (P5,806,709.50) and Two Hundred Ninety-three Thousand Three Hundred Forty-eight Pesos and 86/100 (P293,348.86) both Philippine Currencies, respectively, to the damage and prejudice of the Government in the aforementioned amount of P5,806,709.50. CONTRARY TO LAW. [4] Romualdez moved to quash the information on two grounds, namely: (1) that the facts alleged in the information do not constitute the offense with which the accused was charged; and (2) that the criminal action or liability has been extinguished by prescription. He argued that the acts imputed against him do not constitute an offense because: (a) the cited provision of the law applies only to public officers charged with the grant of licenses, permits, or other concessions, and the act charged receiving dual compensation is absolutely irrelevant and unrelated to the act of granting licenses, permits, or other concessions; and (b) there can be no damage and prejudice to the Government considering that he actually rendered services for the dual positions of Provincial Governor of Leyte and Ambassador to foreign countries. To support his prescription argument, Romualdez posited that the 15-year prescription under Section 11 of RA 3019 had lapsed since the preliminary investigation of the case for an offense committed on or about and during the period from 1976 to February 1986 commenced only in May 2001 after a Division of the Sandiganbayan referred the matter to the Office of the Ombudsman. He argued that there was no interruption of the prescriptive period for the offense because the proceedings undertaken under the 1987 complaint filed with the Presidential Commission on Good Government ( PCGG) were null and void pursuant to the [5] [6] Supreme Courts ruling in Cojuangco Jr. v. PCGG and Cruz Jr [sic]. He likewise argued that the Revised Penal Code [7] provision that prescription does not run when the offender is absent from the Philippines should not apply to his case, as he was charged with an offense not covered by the Revised Penal Code; the law on the prescription of offenses punished under special laws (Republic Act No. 3326) does not contain any rule similar to that found in the Revised Penal Code.

The People opposed the motion to quash on the argument that Romualdez is misleading the court in asserting that Section 3 (e) of RA 3019 does not apply to him when Section 2 (b) of the law states that corrupt practices may be committed by public officers who include elective and appointive officials and employees, permanent or temporary, whether in the classified or unclassified or [8] exempt service receiving compensation, even nominal, from the government. On the issue of prescription, the People argued that Section 15, Article XI of the Constitution provides that the right of the State to recover properties unlawfully acquired by public officials or employees, from them or from their nominees or transferees, shall not be barred by prescription, laches or estoppel, and [9] that prescription is a matter of technicality to which no one has a vested right. Romualdez filed a Reply to this Opposition. The Sandiganbayan granted Romualdez motion to quash in the first Resolution assailed in this petition. The Sandiganbayan stated: We find that the allegation of damage and prejudice to the Government in the amount of P5,806,709.50 representing the accuseds compensation is without basis, absent a showing that the accused did not actually render services for his two concurrent positions as Provincial Governor of the Province of Leyte and as Ambassador to the Peoples Republic of China, Kingdom of Saudi Arabia, a nd United States of America. The accused alleges in the subject Motion that he actually rendered services to the government. To receive compensation for actual services rendered would not come within the ambit of improper or illegal use of funds or properties of the government; nor would it constitute unjust enrichment tantamount to the damage and prejudice of the government. Jurisprudence has established what evident bad faith and gross negligence entail, thus: In order to be held guilty of violating Section 3 (e), R. A. No. 3019, the act of the accused that caused undue injury must have been done with evident bad faith or with gross inexcusable negligence. But bad faith per se is not enough for one to be held liable under the law, the bad faith must be evident. xxx xxx xxx

xxx. Gross negligence is characterized by the want of even slight care, acting or omitting to act in a willful or omitting to act in a willful or intentional manner displaying a conscious indifference to consequences as far as other persons may be affected. (Emphasis supplied) The accused may have been inefficient as a public officer by virtue of his holding of two concurrent positions, but such inefficiency is not enough to hold him criminally liable under the Information charged against him, given the elements of the crime and the standards set by the Supreme Court quoted above. At most, any liability arising from the holding of both positions by the accused may be administrative in nature. xxx However, as discussed above, the Information does not sufficiently aver how the act of receiving dual compensation resulted to undue injury to the government so as to make the accused liable for violation of Section [10] 3 (e) of R.A. No. 3019. The Sandiganbayan found no merit in Romualdez prescription argument. The People moved to reconsider this Resolution, citing reversible errors that the Sandiganbayan committed in its [11] ruling. Romualdez opposed the Peoples motion, but also moved for a partial reconsideration of the Resolutions ruling on [12] [13] prescription. The People opposed Romualdez motion for partial reconsideration. Thereafter, the Sandiganbayan denied via the second assailed Resolution the Peoples motion for reconsideration under the following terms The Court held in its Resolution of June 22, 2004, and so maintains and sustains, that assuming the averments of the foregoing information are hypothetically admitted by the accused, it would not constitute the offense of violation of Section 3 (e) of RA 3019 as the elements of (a) causing undue injury to any party, including the government, by giving unwarranted benefits, advantage or preference to such parties, and (b) that the public officer acted with manifest partiality, evident bad faith or gross inexcusable negligence, are wanting. As it is, a perusal of the information shows that pertinently, accused is being charged for: (a) having himself appointed as ambassador to various posts while serving as governor of the Province of Leyte and (b) for collecting dual compensation for said positions. As to the first, the Court finds that accused cannot be held criminally liable, whether or not he had himself appointed to the position of the ambassador while concurrently holding the position of provincial governor, because the act of appointment is something that can only be imputed to the appointing authority. Even assuming that the appointee influenced the appointing authority, the appointee only makes a passive participation by entering into the appointment, unless it is alleged that he acted in conspiracy with his appointing authority, which, however, is not so claimed by the prosecution in the instant case. Thus, even if the accuseds appointment was contrary to law or the constitution, it is the appointing authority that should be responsible
[14]

therefor because it is the latter who is the doer of the alleged wrongful act. In fact, under the rules on payment of compensation, the appointing authority responsible for such unlawful employment shall be personally liable for the pay that would have accrued had the appointment been lawful. As it is, the appointing authority herein, then President Ferdinand E. Marcos has been laid to rest, so it would be incongruous and illogical to hold his appointee, herein accused, liable for the appointment. Further, the allegation in the information that the accused collected compensation in the amounts of Five Million Eight Hundred Six Thousand Seven Hundred Nine Pesos and 50/100 (P5,806,709.50) and Two Hundred Ninety-three Thousand Three Hundred Forty Eight Pesos and 86/100 (P293,348.86) cannot sustain the theory of the prosecution that the accused caused damage and prejudice to the government, in the absence of any contention that receipt of such was tantamount to giving unwarranted benefits, advantage or preference to any party and to acting with manifest partiality, evident bad faith or gross inexcusable negligence. Besides receiving compensation is an incident of actual services rendered, hence it cannot be construed as injury or damage to the government. It likewise found no merit in Romualdez motion for partial reconsideration. THE PETITION AND THE PARTIES SUBMISSIONS The People filed the present petition on the argument that the Sandiganbayan committed grave abuse of discretion in quashing the Information based on the reasons it stated in the assailed Resolutions, considering that: a. Romualdez cannot be legally appointed as an ambassador of the Republic of the Philippines during his incumbency as Governor of the Province of Leyte; thus, to draw salaries for the two positions is to cause undue injury to the government under Section 3 (e) of RA 3019; b. Romualdez cannot receive compensation for his illegal appointment as Ambassador of the Republic of the Philippines and for his services in this capacity; thus, to so pay him is to make illegal payment of public funds and cause undue injury to the government under Section 3 (e) of RA 3019; and c. The Sandiganbayan went beyond the ultimate facts required in charging a violation of Section 3 (e) of RA 3019 and delved into matters yet to be proven during trial. Required to comment on the petition, Romualdez filed a Motion to Dismiss with Comment Ad Cautelam. He argued that the filing of the present Rule 65 petition is improper, as a petition filed under Rule 45, instead of Rule 65, of the Revised Rules of Court is the proper remedy, considering that the assailed Resolutions are appealable. He cited in support of this contention the ruling that an order granting a motion to quash, unlike one of denial, is a final order; it is not merely interlocutory and is therefore imm ediately [16] appealable. He further argued that the present petition was belatedly filed, as the People filed it beyond the 15-day reglementary filing period for a Rule 45 petition. On the substantive issues raised in the petition, he argued that the factual averments in the Information do not constitute the offense charged and that the criminal action or liability has been extinguished by prescription. The People, on the other hand, asserted in reply that while a petition for certiorari under Rule 65 may be availed of only when there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law, or that certiorari is not a substitute for the lost remedy of an appeal, the rule may be relaxed when the issue raised is purely legal, when public interest is involved, and in case of urgency. It also argued that certiorari may also be availed of where an appeal would be slow, inadequate, and insufficient; and that it is within this Courts power to suspend or exempt a particular case from the operation of the r ules when its strict application will frustrate rather than promote justice. Thus, the People asked for a review of the case based on substantial justice and the claimed merits of the instant petition. Romualdez countered in his Rejoinder that the assailed Resolutions, being final, can no longer be questioned, re-opened, or reviewed; that public policy and sound practice demand that at the risk of occasional errors, judgments of courts become final and irrevocable at some definite date fixed by law. Citing the express provision of Section 7 of Republic Act No. 1606, as amended by Republic Act No. 8249 (which provides that decisions and final orders of the Sandiganbayan shall be appealable to the Supreme Court by petition for review on certiorari raising pure questions of law in accordance with Rule 45 of the Rules of Court) , he argued that certiorari cannot be availed of because of the availability of appeal. These submissions bring to the fore the threshold issue of whether the present petition may be given due course given the Rule 65 mode of review that the People used. As will be seen below, our examination of this threshold issue leads to the consideration of the grave abuse of discretion issue. OUR RULING The Threshold Issue The Sandiganbayan ruling granting Romuldez motion to quash the Information shall, upon finality, close and terminate the [19] proceedings against Romuldez; hence, it is a final ruling that disposes of the case and is properly reviewable by appeal. The appeal, as Romualdez correctly maintains, is through Section 7 of Presidential Decree No. 1606 (as amended by Section 5 of Republic Act No. 8249), which provides that decisions and final orders of the Sandiganbayan are appealable to the Supreme Court by petition for review on certiorari raising pure questions of law in accordance with Rule 45.
[18] [17] [15]

Significantly, the People does not deny at all that the mode of review to question a Sandiganbayan final ruling is by way of Rule 45, as the above cited provision requires. It only posits that this requirement does not foreclose the use of a Rule 65 petition for certiorari premised on grave abuse of discretion when the issue is purely legal, when public interest is involved, or in case of urgency. In short, the People asks us to relax the application of the rules on the modes of review. The purpose and occasion for the use of Rules 45 and 65 as modes of review are clearly established under the Rules of [20] [21] Court and related jurisprudence. Rule 45 provides for the broad process of appeal to the Supreme Court on pure errors of law committed by the lower court. Rule 65, on the other hand, provides a completely different basis for review through the extraordinary writ of certiorari. The writ is extraordinary because it solely addresses lower court actions rendered without or in excess of jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction. By express provision, Rule 65 is the proper remedy when there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law. Thus, the remedies of appeal and certiorari are mutually exclusive and not alternative or successive; certiorari is not allowed when a party to a case fails to appeal a judgment or final order despite the availability of that remedy; a petition for certiorari cannot likewise be a substitute for [22] a lost appeal. Cases on the choice between the Rule 45 and Rule 65 modes of review are not novel. Because of the spirit of liberality that [23] [24] pervades the Rules of Court and the interest of substantial justice that we have always believed should be upheld, we have had occasions to relax the strict rules regulating these modes of review. However, these occasions are few and far between and have always been attended by exceptional circumstances; otherwise, the exceptions would displace the general rule, rendering useless the distinctions painstakingly established through the years to foster procedural orderliness. In Filoteo v. Sandiganbayan we allowed a Rule 65 petition, notwithstanding that the proper remedy is a Rule 45 appeal, to review a Sandiganbayan Decision in view of the importance of the issues raised in the case. We similarly allowed a review under [26] [27] Rule 65 in Republic v. Sandiganbayan (Third Division) and Republic v. Sandiganbayan (Special First Division) cases on ill-gotten wealth on the reasoning that the nature of the cases was endowed with public interest and involved public policy concerns. In the latter Republic v. Sandiganbayan case, we added that substantial justice to the Filipino people and to all parties concerned, not mere legalisms or perfection of form, should be relentlessly and firmly pursued. In the past, we have likewise allowed a similar treatment [28] on the showing that an appeal was an inadequate remedy. That we can single out for special treatment cases involving grave abuse of discretion is supported by no less than thesecond paragraph of Article VIII, Section 1 of the 1987 Constitution which provides: Judicial power includes the duty of the courts of justice to settle actual controversy involving rights which are legally demandable and enforceable, and to determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. Under this provision, action on grave abuse of discretion is not only a power we can exercise; more than this, it is a duty wemust discharge. In the spirit embodied in this constitutional provision and in the interest of substantial justice, we will not hesitate to deviate from the strict application of our procedural rules when grave abuse of discretion amounting to lack or excess of jurisdiction is properly and substantially alleged in a petition filed after the lapse of the period for appeal under Rule 45 but prior to the lapse of the period for filing a Rule 65 petition . Conceptually, no major deviation from the rules in fact transpires in doing this. Under [29] established jurisprudence, decisions and rulings rendered without or with lack or excess of jurisdiction are null and void, subject [30] only to the procedural limits on the right to question them provided under Rule 65. It is for this reason that a decision that lapses to finality fifteen (15) days after its receipt can still be questioned, within sixty (60) days therefrom, on jurisdictional grounds, although the decision has technically lapsed to finality. The only deviation in terms of strict application of the Rules is from what we have discussed above regarding the basic nature of a petition for certiorari as expressly laid down by Rule 65; it is available only when there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, and thus is not allowed as a [31] substitute when a party fails to appeal a judgment or final order despite the availability of that remedy. Under these terms, if the Sandiganbayan merely legally erred while acting within the confines of its jurisdiction, then its ruling, even if erroneous, is properly the subject of a petition for review on certiorari under Rule 45, and any Rule 65 petition subsequently filed will be for naught. The Rule 65 petition brought under these circumstances is then being used as a substitute for a lost appeal. If, on the other hand, the Sandiganbayan ruling is attended by grave abuse of discretion amounting to lack or excess of jurisdiction, then this ruling is fatally defective on jurisdictional ground and we should allow it to be questioned within the period for filing a petition for certiorari under Rule 65, notwithstanding the lapse of the period of appeal under Rule 45. To reiterate, the rulings jurisdictional defect and the demands of substantial justice that we believe should receive primacy over the strict application of rules of procedure, require that we so act. The Grave Abuse of Discretion Issue Romualdez motion to quash that gave rise to the present case was anchored on Section 3 (a) of Rule 117 of the Revised Rules of Court which provides: Section 3. Grounds. - The accused may move to quash the complaint or information on any of the following grounds: (a) That the facts charged do not constitute an offense; xxxx
[25]

The determinative test in appreciating a motion to quash under this rule is the sufficiency of the averments in the information, that is, whether the facts alleged, if hypothetically admitted, would establish the essential elements of the offense as defined by law [32] without considering matters aliunde. As Section 6, Rule 117 of the Rules of Criminal Procedure requires, the information only [33] [34] needs to state the ultimate facts; the evidentiary and other details can be provided during the trial.

The legal provision under which Romuldez stands charged Section 3 (e) of RA 3019 on the other hand provides: Sec. 3. Corrupt practices by public officers. In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practice of any public officer and are hereby declared to be unlawful: xxxx (e) causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices of government corporations charged with the grant of licenses or permits or other concessions. [35] Reduced to its elements, a violation under this provision requires that: 1. The accused must be a public officer discharging administrative, judicial or official functions; 2. He must have acted with manifest partiality, evident bad faith or inexcusable negligence in the discharge of his functions; and

His action caused undue injury to any party, including the government, or gave a private party unwarranted benefits, advantage or preference. Whether the Sandiganbayan acted correctly, or committed errors of law while in the exercise of its jurisdiction, or gravely abused its discretion in quashing the information, are to be determined based on the application of the standards in evaluating a motion to quash, in light of the elements and terms of the offense with which the accused stands charged. The Sandiganbayan acts correctly or commits errors of law depending on its conclusions if based solely on the four corners of the information as [36] jurisprudence mandates, independently of any evidence whether prima facie or conclusive, and hypothetically assuming the truth of all the allegations in the Information it rules on whether all the elements of the offense as defined by law are present. On the other hand, it acts with grave abuse of discretion if its ruling is a capricious or whimsical exercise of judgment equivalent to lack of jurisdiction; or if it rules in an arbitrary or despotic manner by reason of passion or personal hostility; or if it acts in a manner so patent and gross as to amount to an evasion of positive duty, or to a virtual refusal to perform the duty enjoined, or to action [37] outside the contemplation of law. Our reading of the Information, based on the elements of the offense, shows us that the first element of the offense is reflected in the allegation that the accused BENJAMIN KOKOY ROMUALDEZ, a public officer being then the Provincial Governor of the Province of Leyte, while in the performance of his official function, committing the offense in relation to his Office . In plain terms, the accused was then a public officer discharging official functions. The second element appears in the averment that the accused willfully, unlawfully and criminally with evident bad faith and the more particular averment that accused public officer being then the elected Provincial Governor of Leyte and without abandoning said position, and using his influence with his brother-in-law, then President Ferdinand E. Marcos, had himself appointed and/or assigned as Ambassador to foreign countries, particularly the Peoples Republic of China (Peking), Kingdom of Saudi Arabia (Jeddah), and United States of America (Washington D.C.), knowing fully well that such appointment and/or assignment is in violation of the existing laws as the Office of the Ambassador or Chief of Mission is incompatible with his position as Governor of the Province of Leyte. In short, while being the elected Governor and in evident bad faith, he had himself appointed to the incompatible position of ambassador. Finally, the last element corresponds to the allegation that the accused cause[d] undue injury to the Government , supported further by the particular allegation thereby enabling himself to collect dual compensation from both the Department of Foreign Affairs and the Provincial Government of Leyte in the amount of Two Hundred Seventy-six thousand Nine Hundred Eleven Dollars and 56/100 (US $276,911.56), US Currency or its equivalent amount of Five Million Eight Hundred Six Thousand Seven Hundred Nine Pesos and 50/100 (P5,806,709.50) and Two Hundred Ninety-three Thousand Three Hundred Forty-eight Pesos and 86/100 (P293,348.86) both Philippine Currencies, respectively, to the damage and prejudice of the Government in the aforementioned amount of P5,806,709.50. Thus, attended by and as a result of the second element, the accused caused undue injury to the government by collecting dual compensation from the two incompatible positions he occupied. In its first Resolution, the Sandiganbayan concluded that (1) the allegation of damage and prejudice to the Government . . . is without basis, absent a showing that the accused did not actually render services for his two concurrent positions. . . and that (2) [T]he accused alleges in the subject Motion that he actually rendered service to the government. To receive compensation for

3.

actual services rendered would not come within the ambit of improper or illegal use of funds or properties. After citing jurisprudence defining evident bad faith and gross negligence, it went on to state that (3) the accused may have been inefficient as a public officer by virtue of his holding of two concurrent positions, but such inefficiency is not enough to hold him criminally liable under the Information charged against him, given the elements of the crime and the standards set by the Supreme Court . At most, [39] any liability arising from the holding of both positions by the accused may be administrative in nature. [underscoring supplied] In the second Resolution, on the other hand, the Sandiganbayan concluded: (1) on the allegation that Romualdez had himself appointed as Ambassador while concurrently serving as Provincial Governor, that it finds that accused cannot be held criminally liable, whether or not he had himself appointed to the position because the act of appointment is something that can only be imputed to the appointing authority Even assuming that the appointee influenced the appointing authority, the appoi ntee only makes a passive participation by entering into the appointment, unless it is alleged that he acted in conspiracy with his [40] appointing authority ; and (2) on the matter of dual compensation, that the allegation cannot sustain the theory of the prosecution that the accused caused damage and prejudice to the government, in the absence of any contention that receipt of such was tantamount to giving unwarranted benefits, advantage or preference to any party and to acting with manifest partiality, evident bad faith or gross excusable negligence; besides, receiving compensation is an incident of actual services rendered, hence it cannot [41] be construed as injury or damage to the government . To put our discussions in perspective, we are not here primarily engaged in evaluating the motion to quash that Romualdez filed with the Sandiganbayan. Rather, we are evaluating on the basis of the standards we have defined above the propriety of the action of the Sandiganbayan in quashing the Information against Romualdez. Based on these considerations, we hold that the Sandiganbayans actions grossly violated the defined stand ards. Its conclusions are based on considerations that either not appropriate in evaluating a motion to quash; are evidentiary details not required to be stated in an Information; are matters of defense that have no place in an Information; or are statements amounting to rulings on the merits that a court cannot issue before trial. To illustrate, in the first Resolution, the Sandiganbayan saw no basis for the allegation of damage and prejudice for the failure of the Information to state that Romualdez did not render service in the two positions which he occupied. The element of the offense material to the damage and prejudice that the Sandiganbayan refers to is the undue injury caused to the government by Romualdez receipt of compensation for the incompatible positions that he could not simultaneously occupy. The allegation of undue injury in the Information, consisting of the extent of the injury and how it was caused, is complete. Beyond this allegation are matters that are already in excess of what a proper Information requires. To restate the rule, an Information only needs to state the ultimate facts constituting the offense, not the finer details of why and how the illegal acts alleged amounted to undue injury or damage matters that are appropriate for the trial. Specifically, how the two positions of Romualdez were incompatible with each other and whether or not he can legally receive compensation for his two incompatible positions are matters of detail that the prosecution should adduce at the trial to flesh out the ultimate facts alleged in the Information. Whether or not compensation has been earned through proper and commensurate service is a matter in excess of the ultimate facts the Information requires and is one that Romualdez, not the Information, should invoke or introduce into the case as a matter of defense. From another perspective, the Sandiganbayans view that the Information should have alleged that services were not rendered assumes that Romualdez can occupy two government positions and can secure compensation from both positions if services were rendered. At the very least, these are legally erroneous assumptions that are contrary to what the then prevailing laws provided. Article XII (B), Section 4 of the 1973 Constitution provides that: Unless otherwise provided by law, no elective official shall be eligible for appointment to any office or position during his tenure except as Member of the Cabinet. On the other hand, Presidential Decree No. 807 Providing for the Organization of the Civil Service Commission states in its Section 44 that Limitation on Appointment. No elective official shall be eligible for appointment to any office or position during his term of office. On the matter of double compensation, the 1973 Constitution likewise has a specific provision Article XV, Section 5 which states: SEC. 5. No elective or appointive public officer or employee shall receive additional or double compensation unless specifically authorized by law, nor accept, without the consent of the Batasang Pambansa, any present, emolument, office or title of any kind from any foreign state. Neither the Sandiganbayan nor Romuladez has pointed to any law, and we are not aware of any such law, that would exempt Romualdez from the prohibition of the above-cited provisions.

[38]

In the context of ruling on a motion to quash, the allegation that services were not rendered that the Sandiganbayan wished to require, not being a fact material to the elements of the offense, is an extraneous matter that is inappropriate for the Sandiganbayan to consider for inclusion in the Information. That the Sandiganbayan has a fixation on this approach is patent from a reading of the second assailed Resolution when the Sandiganbayan, following the same line of thought, once more insisted that receiving compensation is an incident of actual services rendered, hence it cannot be construed as injury or damage to the government. Thus again, the Sandiganbayan grossly erred in the same manner it did in the first Resolution. For the Sandiganbayan to assume, too, and to conclude, that there was no damage and prejudice since there was no illegality in being compensated for actual services rendered, is to pass upon the merits of the case a task premature for the Sandiganbayan to undertake at the motion-to-quash stage of the case. In so doing, the Sandiganbayan prematurely ruled on at least two matters. First, the Sandiganbayan either assumed as correct, or admitted for purposes of the motion to quash, the defense allegation that Romualdez rendered services, when this is a disputed evidentiary matter that can only be established at the trial. Second, and as already mentioned above, the legal status of the receipt of compensation for each of two incompatible offices is, at best, legally debatable. The Sandiganbayan repeated this premature ruling on the merits of the case in its subsequent statement in the first Resolution that the accused may have been inefficient as a public officer by virtue of his holding of two concurrent positions, but such inefficiency is not enough to hold him criminally liable under the Information charged against him, given the elements of the crime and the standards set by the Supreme Court At most, any liability a rising from the holding of both [42] positions by the accused may be administrative in nature. Worse than the premature ruling it made in the above-quoted conclusion was the patent speculation that the Sandiganbayan undertook in considering inefficiency and arriving at its conclusion. Still much worse was its misreadingof what a violation of Section 3(e), R.A. 3019 involves. Correctly understood, it is not the holding of two concurrent positions or the attendant efficiency in the handling of these positions, but the causing of undue injury to the governmentthat is at the core of a Section 3(e) violation. The same misreading was evident when the Sandiganbayan stated in its second Resolution that the accused cannot be held criminally liable, whether or not he had himself appointed to the position of the ambassador, while concurrent ly holding the position of provincial governor, because the act of appointment is something that can only be imputed to the appointing authority. The Sandiganbayan fared no better and similarly gravely abused its discretion in the second Resolution when it concluded that that there could be no damage and prejudice to the government in the absence of any contention that receipt of such was tantamount to giving unwarranted benefits, advantage or preference to any party and to acting with manifest partiality, evident bad faith or gross excusable negligence. That no allegation of giving unwarranted benefits, advantage or preference to any party appears in the Information is due obviously to the fact that this allegation is not necessary. Giving a private party unwarranted benefits, advantage or preference is not an element that must necessarily be alleged to complete the recital of how Section 3 (e) is violated because it is only one of two alternative modes of violating this provision, the other being causing undue injury to any party, including the government. In short, the Information is complete solely on the basis of the undue injury allegation. Even a cursory examination of the Information would show that an allegation of evident bad faith was expressly made, complete with a statement of how the bad faith was manifested, that is, being then the elected Provincial Governor of Leyte and without abandoning such position, and using his influence with his brother-in-law, then President Ferdinand E. Marcos, [Romualdez] had himself appointed and/or assigned as Ambassador to foreign countries.... Whether this allegation can be successfully proven by evidence or established through an analysis of the nature of the power of appointment remains to be seen after trial, not at the motion-to-quash stage of the case. At this earlier stage, all that is required is for this allegation to be an ultimate fact directly providing for an element of the offense. In light of all these, we conclude that the Sandiganbayan grossly and egregiously erred in the considerations it made and in the conclusions it arrived at when it quashed the Information against Romualdez, to the point of acting outside its jurisdiction through the grave abuse of discretion that attended its actions. Its errors are so patent and gross as to amount to action outside the contemplation of law. Thus, the declaration of the nullity of the assailed Sandiganbayan Resolutions is in order. WHEREFORE, premises considered, we hereby GRANT the petition and accordingly ANNUL the Sandiganbayans Resolutions dated 22 June 2004 and 23 November 2004 in CRIM. CASE NO. 26916 entitled People of thePhilippines versus Benjamin Kokoy Romualdez. The Sandiganbayan is hereby ORDERED TO PROCEED with the trial on the merits of the case on the basis of the Information filed. Costs against the private respondent Benjamin Kokoy Romualdez. SO ORDERED.

NICARAGUA VS. USA, ICJ REPORTS 1986 Facts of the Case: In July 1979 the Government of President Somoza collapsed following an armed opposition led by the Frente Sandinista de Liberacibn Nacional (FSLN) . The new government installed by FSLN began to encounter armed opposition from supporters of the former Somoza Government and ex-members of the National Guard. The US initially supportive of the new government changed its attitude when, according to the US, it found that Nicaragua was providing logistical support and weapons to guerrillas in El Salvador. In April 1981 it terminated US aid to Nicaragua and in September 1981, according to Nicaragua, the US decided to plan and undertake activities directed against Nicaragua. The armed opposition to the new Government was conducted mainly by (1) Fuerza Democratica Nicaragense (FDN), which operated along the border with Honduras, and (2)Alianza Revolucionaria Democratica (ARDE), which operated along the border with Costa Rica, (see map of the region). Initial support to these groups fighting against the Nicaraguan Government (called contras) was covert. Later, the US officially acknowledged its support (for example: In 1983 budgetary legislation enacted by the United States Congress made specific provision for funds to be used by United States intelligence agencies for supporting directly or indirectly military or paramilitary operations in Nicaragua). Nicaragua also alleged that the US is effectively in control of thecontras, the US devised their strategy and directed their tactics and that they were paid for and directly controlled by US personal and some attacks were carried out by US military with the aim to overthrow the Government of Nicaragua. Attacks against Nicaragua included the mining of Nicaraguan ports and attacks on ports, oil installations and a naval base. Nicaragua alleged that US aircrafts flew over Nicaraguan territory to gather intelligence, supply to the contras in the field and to intimidate the population. Questions before the Court: 1. Did the US breach its customary international law obligation not to intervene in the affairs of another State when it trained, armed, equipped and financed the contra forces or encouraged, supported and aided the military and paramilitary activities against Nicaragua? 2. Did the US breach its customary international law obligation not to use force against another State when it directly attacked Nicaragua in 1983 1984 and when its activities in bullet point 1 above resulted in the use of force? 3. Can the military and paramilitary activities that the US undertook in and against Nicaragua be justified as collective selfdefence? 4. Did the US breach its customary international law obligation not to violate the sovereignty of another State when it directed or authorized its aircrafts to fly over Nicaraguan territory and by acts referred to in bullet point 2 above? 5. Did the US breach its customary international law obligations not to violate the sovereignty of another State, not to intervene in its affairs, not to use force against another State and not to interrupt peaceful maritime commerce when it laid mines in the internal waters and the territorial sea of Nicaragua?

ICJ decision: US violated CIL in relation to bullet points 2, 3, 4 and 5 above. The Court rejected the US justification of collective selfdefence and held that US violated the prohibition on the use of force. Relevant Findings of the Court: The US breached its customary international law obligation not to use force against another State: (1) when it directly attacked Nicaragua in 1983 1984; and (2) when its activities with the contra forces resulted in the threat or use of force. See paras 187 201. The Court held that: The prohibition on the use of force is a principle that can be found in Article 2(4) of the UN Charter and in customary international law (CIL). 2. Use of force can be: (1) most grave forms of the use of force (i.e. those that constitute an armed attack) and (2) less grave forms of use of force (i.e. organizing, instigating, assisting or participating in acts of civil strife and terrorist acts i n another State when the acts referred to involve a threat or use of force). 3. The US violated the CIL prohibition on the use of force when it laid mines in Nicaraguan ports and attacked its ports, oil installations and a naval base. If however, the force was used in collective self- defence, then the US was justified in the use of force (see below on self-defence). 4. The US violated the CIL prohibition on the use of force when it assisted the contras by organizing or encouraging the organization of irregular forces and armed bands for incursion into the territory of another state and participating in acts of civil strifein another State and when these acts involved the threat or use of force. 5. The supply of funds to the contras does not violate the prohibition on the use of force. while the arming and training of the contras can certainly be said to involve the threat or use of force against Nicaragua the Court considers that the mere supply of funds to thecontras, while undoubtedly an act of intervention in the internal affairs of Nicaragua does not in itself amount to a use of force. (para 227) What is an armed attack? An armed attack includes (1) action by regular armed forces across an international border; and (2) the sending by or on behalf of a State of armed bands, groups, irregulars or mercenaries, which carry out acts of armed force against another State of such gravity as to amount to (inter alia) an actual armed attack conducted by regular forces, or its substantial involvement therein [the second point is taken from Article 3 (g) of the UNGA Resolution 3314 (XXIX) on the Definition of Aggression]. 1.

Mere frontier incidents are not considered as an armed attack unless because of its scale and effects it would have been classified as an armed attack if it was carried out by regular forces. Assistance to rebels in the form of provision of weapons or logistical support does not constitute an armed attack it can be regarded as a threat or use of force, or an intervention in the interna1 or external affairs of other States(see para 195, 230). Under Article 51 of the UN Charter and under CIL self-defence is only available against a use of force that amounts to an armed attack (para 211).

US cannot justify the military and paramilitary activities that it undertook in and against Nicaragua as collective self-defence. 1. CIL allows for exceptions to the prohibition on the use of force including the right of individual or collective self-defence. US asserted that the Charter itself acknowledges the existence of this CIL right when it talks of the inherent right of a State (para.193). 2. When a State claims that it used force in collective self-defence, the Court will look into two aspects : (1) whether the circumstances required for the exercise of self-defence existed and (2) whether the steps taken by the State, which was acting in self-defence, corresponds to the requirements of international law (i.e. necessity and proportionality). 3. Several criteria must be met for a State to exercise the right of individual or collective self-defence: (1) A State must have been the victim of an armed attack; (2) This State must declare itself as a victim of an armed attack; [NB: the assessment whether an armed attack took place nor not is done by the state who was subjected to the attack. A third State cannot exercise a right of collective self-defence based its (the third States) own assessment]; and (3) in the case of collective self-defence the victim State must request for assistance (there is no rule permitting the exercise of collective self-defence in the absence of a request by the State which regards itself as the victim of an armed attack); (4) the State does not, under CIL, have the same obligation as under Article 51 of the UN Charter to report to the Security Council that an armed attack happened but the absence of a report may be one of the factors indicating whether the State in question was itself convinced that it was acting in self-defence (see below). Para 200: At this point, the Court may consider whether in customary international law there is any requirement corresponding to that found in the treaty law of the United Nations Charter, by which the State claiming to use the right of individual or collective selfdefence must report to an international body, empowered to determine the conformity with international law of the measures which the State is seeking to justify on that basis. Thus Article 51 of the United Nations Charter requires that measures taken by States in exercise of this right of self-defence must be immediately reported to the Security Council. As the Court has observed above (paragraphs 178 and 188), a principle enshrined in a treaty, if reflected in customary international law, may well be so unencumbered with the conditions and modalities surrounding it in the treaty. Whatever influence the Charter may have had on customary international law in these matters, it is clear that in customary international law it is not a condition of the lawfulness of the use of force in self-defence that a procedure so closely dependent on the content of a treaty commitment and of the institutions established by it, should have been followed. On the other hand, if self-defence is advanced as a justification for measures which would otherwise be in breach both of the principle of customary international law and of that contained in the Charter, it is to be expected that the conditions of the Charter should be respected. Thus for the purpose of enquiry into the customary law position, the absence of a report may be one of the factors indicating whether the State in question was itself convinced that it was acting in self-defence (emphasis added)(See also paras 232 -236). 4. The Court looked extensively into the conduct of Nicaragua, El Salvador, Costa Rica and Honduras in determining whether an armed attack was undertaken by Nicaragua against the three countries which in turn would necessitate self-defence (paras 230 236) . The Court referred to statements made by El Salvador, Costa Rica, Honduras and the US before the Security Council. None of the countries who were allegedly subject to an armed attack by Nicaragua (1) declared themselves as a victim of an armed attack or request assistance from the US in self-defence at the time when the US was allegedly acting in collective self-defence; and (2) the US did not claim that it was acting under Article 51 of the UN Charter and it did not report that it was so acting to the Security Council. US cannot justify its use of force as collective self-defence. 5. The criteria with regard to necessity and proportionality, that is necessary when using force in self-defence was also not fulfilled (para 237).

The US breached its CIL obligation not to intervene in the affairs of another State when it trained, armed, equipped and financed the contra forces or encouraged, supported and aided the military and paramilitary activities against Nicaragua. 1. The principle of non- intervention means that every State has a right to conduct its affairs without outside interference I.e it forbids States or groups of States to intervene directly or indirectly in internal or external affairs of other States. . This is a corollary of the principle of sovereign equality of States. A prohibited intervention must accordingly be one bearing on matters in which each State is permitted, by the principle of State sovereignty to decide freely. One of these is the choice of a political, economic, social and cultural system, and the formulation of foreign policy. Intervention is wrongful when it uses methods of coercion in regard to such choices, which must remain free ones. The element of coercion, which defines, and indeed forms the very essence of, prohibited intervention, is particularly obvious in the case of an intervention which uses force, either in the direct form of military action, or in the indirect form of support for subversive or terrorist armed activities within another State (para 205). 2. Nicaragua stated that the activities of the US was aimed at (1) overthrowing the government of Nicaragua and (2) substantially damaging the economy and weakening the political system so as to coerce the Government of Nicaragua to accept US political demands. The Court held: first, that the United States intended, by its support of the contras, to coerce the Government of Nicaragua in respect of matters in which each State is permitted, by the principle of State sovereignty, to decide freely (see paragraph 205 above) ; and secondly

that the intention of the contras themselves was to overthrow the present Government of Nicaragua The Court considers that in international law, if one State, with a view to the coercion of another State, supports and assists armed bands in that State whose purpose is to overthrow the government of that State, that amounts to an intervention by the one State in the internal affairs of the other, whether or not the political objective of the State giving such support and assistance is equally far reaching. 3. The financial support, training, supply of weapons, intelligence and logistic support given by the US to the contras was a breach of the principle of non-interference. no such general right of intervention, in support of an opposition within another State, exists in contemporary international law, even if such a request for assistance is made by an opposition group of that State (see para 246 for more). 4. Interesting, however, the Court also held that providing humanitarian aid to persons or forces in another country, whatever their political affiliations or objectives, cannot be regarded as unlawful intervention, or as in any other way contrary to international law (para 242). 5. In the event one State intervenes in the affairs of another State, the second State has a right to intervene in a manner that is short of an armed attack (210). While an armed attack would give rise to an entitlement to collective self -defence, a use of force of a lesser degree of gravity cannot as the Court has already observed (paragraph 21 1 above). produce any entitlement to take collective countermeasures involving the use of force. The acts of which Nicaragua is accused, even assuming them to have been established and imputable to that State, could only have justified proportionate counter-measures on the part of the State which had been the victim of these acts, namely El Salvador, Honduras or Costa Rica. They could not justify counter-measures taken by a third State, the United States, and particularly could not justify intervention involving the use of force. The US breached its customary international law obligation not to violate the sovereignty of another State when it directed or authorized its aircrafts to fly over Nicaraguan territory and when it laid mines in the internal waters of Nicaragua and its territorial sea. The basic concept of State sovereignty in CIL is found in Article 2(1) of the UN Charter. State sovereignty extends to its internal waters, territorial sea and the air space above its territory. The US violated CIL when it laid mines in the territorial sea and internal waters of Nicaragua and when it carried out unauthorized overflights over Nicaraguan airspace by aircrafts belong to or under the control of the US. PORTUGAL VS INDIA IN PDF FACTROY AT CHORZOW (GERMANY v POLAND) [2] The Government of the German Reich, by an Application instituting proceedings filed with the Registry of the Court on February 8th, 1927, in conformity with Article 40 of the Statute and Article 35 of the Rules of Court, has submitted to the Permanent Court of International Justice a suit concerning the reparation which, in the contention of the Government of the Reich, is due by the Polish Government to the Oberschlesische Stickstoffwerke A.-G. (hereinafter designated as the Oberschlesische) and Bayerische Stickstoffwerke A.-G. (hereinafter designated as the Bayerische), by reason of the attitude adopted by that Government towards those Companies at the time when it took possession of the nitrate factory situated at Chorzw, which attitude had been declared by the Court in Judgment No. 7 (May 25th, 1926) not to have been in conformity with the provisions of Article 6 and the following articles of the Convention concerning Upper Silesia concluded at Geneva on May 15th, 1922, between Germany and Poland (hereinafter described as the Geneva Convention). [3] It is submitted in the Application: (1) that by reason of its attitude in respect of the Oberschlesische Stickstoffwerke and Bayerische Stickstoffwerke Companies, which attitude has been declared by the Court not to have been in conformity with the provisions of Article 6 and the following articles of the Geneva Convention, the Polish Government is under an obligation to make good the consequent injury sustained by the aforesaid Companies from July 3rd, 1922, until the date of the judgment sought; (2) that the amount of the compensation to be paid by the Polish Government is 59.400.000 Reichsmarks for the injury caused to the Oberschlesische Stickstoffwerke Company and 16.775.200 Reichsmarks for the injury to the Bayerische Stickstoffwerke Company; (3) in regard to the method of payment: (a) that the Polish Government should pay within one month from the date of judgment, the compensation due to the Oberschlesische Stickstoffwerke Company for the taking [p6] possession of the working capital (raw material, finished and halfmanufactured products, stores, etc.) and the compensation due to the Bayerische Stickstoffwerke Company for the period of exploitation from July 3rd, 1922, to the date of judgment; (b) that the Polish Government should pay the sums remaining unpaid by April 15th, 1928, at latest; (c) that, from the date of judgment, interest at 6% per annum should be paid by the Polish Government; (d) that, the payments mentioned under (a)-(c) should be made without deduction to the account of the two Companies with the Deutsche Bank at Berlin; (e) that, until June 30th, 1931, no nitrated lime and no nitrate of ammonia should be exported to Germany, to the United States of America, to France or to Italy. [4] In the Case filed with the Court on March 2nd, 1927, in accordance with Article 35 of the Rules, the Applicant amended his conclusions as follows: (1) that by reason of its attitude in respect of the Oberschlesische Stickstoffwerke and Bayerische Stickstoffwerke Companies, which

attitude has been declared by the Court not to have been in conformity with the provisions of Article 6 and the following articles of the Geneva Convention, the Polish Government is under an obligation to make good the consequent injury sustained by the aforesaid Companies from July 3rd, 1922, until the date of the judgment sought; (2) that the amount of the compensation to be paid by the Polish Government is 75.920.000 Reichsmarks, plus the present value of the working capital (raw materials, finished and half-manufactured products, stores, etc.) taken over on July 3rd, 1922, for the injury caused to the Oberschlesische Stickstoffwerke Company and 20.179.000 Reichsmarks for the injury caused to the Bayerische Stickstoffwerke Company; (3) that until June 30th, T93i, no nitrated lime and no nitrate of ammonia should be exported to Germany, to the United States of America, to France or to Italy; (4) in regard to the method of payment: (a) that the Polish Government should pay, within one month from the date of judgment, the compensation due to the Oberschlesische Stickstoffwerke Company for the taking [p7] possession of the working capital and the compensation due to the Bayerische Stickstoffwerke Company for the period of exploitation from July 3rd, 1922, to the date of judgment; (b) that the Polish Government should pay the remaining sums by April 15th, 1928, at latest; in the alternative, that, in so far as the payment may be effected in instalments, the Polish Government shall deliver, within one month from the date of judgment, bills of exchange for the amounts of the instalments, including interest, payable on the respective dates on which they fall due to the Oberschlesische Stickstoffwerke Company and to the Bayerische Stickstoffwerke Company; (c) that from the date of judgment, interest at 6 % per annum should be paid by the Polish Government; (d) that the Polish Government is not entitled to set off, against the above mentioned claim for indemnity of the German Government, its claim in respect of social insurances in Upper Silesia; that it may not make use of any other set-off against the above-mentioned claim for indemnity; and that the payments mentioned under (a)-(c) should be made without any deduction to the account of the two Companies with the Deutsche Bank at Berlin. [5] The Application instituting proceedings was, in accordance with Article 40 of the Statute, communicated to the Polish Government on February 8th, 1927; whereupon that Government, after having received on March 3rd, 1927, the German Case in the suit, on April 14th, 1927, filed with the Registry of the Court in conformity with Articles 34 and 38 of the Rules, a Preliminary Objection, accompanied by a Preliminary Counter-Case in the suit concerning the factory at Chorzw (indemnities). [6] The Preliminary Objection denying the Court's jurisdiction to hear the suit brought before it, submitted that the Court should, "without entering into the merits, declare that it had, no jurisdiction". [7] In accordance with Article 38 of the Rules, the German Government was invited to present, before June 1st, 1927, a written statement setting out its observations and conclusions in regard to the objection to the jurisdiction. [8] On April 25th, however, the German Government transmitted to the Polish Government a memorandum in which the former Government arguing that, even if the Court declined jurisdiction [p8] on the basis of Article 23 of the Geneva Convention, it would have jurisdiction under Article 1 of the Germano-Polish Arbitration Treaty initialled at Locarno on October 16th, 1925-suggested that the five following questions concerning the case of the factory at Chorzw should be referred by mutual consent and by means of a special agreement to the Court: (1) Up to what amount is the Polish Government bound to make compensation for the injury caused by its attitude to the Oberschlesische and Bayerische Companies? (2) Is the German Government justified in claiming, over and above the pecuniary compensation, that the exportation of nitrate of lime, nitrate of ammonia, etc., to Germany, the United States of America, France and Italy, should cease? (3) What are the appropriate methods of payment for the settlement of the indemnity fixed in accordance with (1)? (4) At what rate should the sums in question bear interest until paid in full? (5) Can the Polish Government set off against these sums claims in respect of social insurances in Upper Silesia, or any other claim; must the sums to be paid by the Polish Government under (1), (3) and (4), be paid in ready money and without deduction? [9] The text of this memorandum was transmitted on April 29th by the German Minister at The Hague to the Registrar of the Court. [10] The Polish Government replied to it by a memorandum dated May 14th, of which the text was communicated to the Registrar of the Court both by the German Minister (note of June 1st, 1927) and by the Polish Minister at The Hague (note of June 2nd, 1927). In this memorandum, the Polish Government, observing amongst. other things, that it was unable to share the opinion of the German Government as to the relevance of the Germano-Polish Treaty of arbitration in regard to the present case, declined the proposal made on behalf of the German Government. [11] The German Government, therefore, filed on June 1st a reply to the Preliminary Objection of the Polish Government. [12] Since, under Article 38 of the Rules, the further proceedings had to be oral, the Court, in the course of public sittings held on June 22nd, 24th and 25th, 1927, heard the statements, replies and rejoinder presented by Messrs. Sobolewski and Politis, Agent and [p9] Counsel respectively for the Polish Government, and Kaufmann, Agent for the German Government. The Facts [13] The facts relevant to the present case are set out as follows in Judgment No. 6 given by the Court on August 25th, 1925: [14] On March 5th, 1915, a contract was concluded between the Chancellor of the German Empire, on behalf of the Reich, and the Bayerische Stickstoffwerke A.-G. of Trostberg, Upper Bavaria, by which contract this Company undertook "to establish for the Reich

and to begin forthwith the construction of", amongst other things, a nitrate factory at Chorzw in Upper Silesia. The necessary lands were to be acquired on behalf of the Reich and entered in its name in the land register. The machinery and equipment were to be in accordance with the patents and licences of the Company and the experience gained by it, and the Company undertook to manage the factory until March 31st, 1941, making use of all patents, licences, experience gained, innovations and improvements, as also of all supply and delivery contracts of which it had the benefit. For this purpose a special section of the Company was to be formed, which was, to a certain extent, to be subject to the supervision of the Reich which had the right to a share of the surplus resulting from the working of the factory during each financial year. The Reich had the right, commencing on March 31st, 1926, to terminate the contract for the management of the factory by the Company on March 31st of any year upon giving fifteen month's notice. The contract could be terminated as early as March 31st, 1921, always on condition of fifteen month's notice being given, if the Reich's share of the surplus did not reach a fixed level. [15] On December 24th, 1919, a series of legal instruments were signed and legalized at Berlin with a view to the formation of a new Company, the Oberschlesische Stickstoffwerke A.-G., and the sale by the Reich to that Company of the factory at Chorzw, that is to say, the whole of the land, buildings and installations belonging thereto, with all accessories, reserves, raw material, equipment and stocks. The management and working were to remain in the hands of the Bayerische Stickstoffwerke Company, which, for this purpose, was to utilize its patents, licences, experience gained and contracts. These relations between the two Companies were confirmed by means of letters dated December 24th and 28th, 1919, exchanged between them. The Oberschlesische Stickstoffwerke Company was duly entered on January 29th, 1920, at the Amtsgericht of Knigshtte, in the Chorzw land register, as owner of the landed property constituting the nitrate factory of Chorzw. [p10] [16] On July 1st, 1922, this Court, which had become Polish, gave a decision to the effect that the registration in question was null and void and was to be cancelled, the pre-existing position being restored, and that the property rights of the lands in question were to be registered in the name of the Polish Treasury. This decision, which cited Article 256 of the Treaty of Versailles and the Polish law and decree of July 14th, 1920, and June 16th, 1922, was put into effect the same day. [17] On July 3rd, 1922, M. Ignatz Moscicki, who was delegated with full powers to take charge of the factory at Chorzw by a Polish ministerial decree of June 24th, 1922, took possession of the factory and took over the management in accordance with the terms of the decree. The German Government contends and the Polish Government admits that the said delegate, in undertaking the control of the working of the factory, at the same time took possession of the movable property, patents, licences, etc. [18] On November 10th, 1922, the Oberschlesische Stickstoffwerke Company brought an action before the Germano-Polish Mixed Arbitral Tribunal at Paris. It called upon that Court "to allow the claim submitted by the Oberschlesische Stickstoffwerke Aktiengesellschaft, and to order the Polish Government, the Respondent in the suit, to restore the factory, to make any other reparation which the Court may see fit to fix and to pay the costs of the action". [19] In its reply to this application, the Polish Government asked the Court to declare that it had no jurisdiction (in the alternative to non-suit the Applicant). [20] The suit was admitted to be ready for hearing on October 15th, 1923. It is, however, still pending. [21] Furthermore, the Oberschlesische Stickstoffwerke Company brought an action before the Civil Court of Kattowitz. It asked that Court "to order the Respondent to inform the Applicant as to the movable property found at the Chorzw nitrate factories at 11 a.m. on the morning of July 3rd, 1922, when the working of those factories was resumed by the Respondent; to state what debts it had collected; to restore to the Applicant or to the Bayerische Stickstoffwerke Company such movable property, or, should this be impossible, the equivalent value, and also to repay to the Applicant or to the Bayerische Stickstoffwerke Company the amount of the debts collected". [22] This action is still before that Court, which, however, decided on December 7th, 1923, that there was no pendency, as notice of the action had not yet been served on the Procurature gnrale at Warsaw. [p11] [23] In regard to this suit, the German Government stated in its "Observations" filed on July 9th, 1925, that the application made to the Court of Katovice was mainly intended to serve as a basis for claiming, under Article 588 of the Geneva Convention, the reference of the suit to the Upper Silesian Arbitral Tribunal, but that the Court rejected this claim. [24] These suits were pending, when, on May 15th, 1925, Germany filed in the Permanent Court of International Justice an Application praying the Court to adjudge (1) that Articles 2 and 5 of the Polish law of July 14th, 1920, constituted a measure of liquidation of the property, rights and interests involved, (2) that this liquidation was not in conformity with Articles 92 and 297 of the Peace Treaty of Versailles, (3) that it was contrary to Article 6 and subsequent articles of the German-Polish Convention concluded at Geneva on May 15th, 1922 ; and finally to state (4) what the attitude of Poland should have been under the Treaties mentioned. [25] Article 297 of the Versailles Treaty relates to the liquidation by the Allied and Associated Powers of property, rights and interests belonging at the date of the coming into force of the Treaty to German nationals, or companies controlled by them, within the territories, colonies, possessions and protectorates of such Powers, including territories ceded to them by the Treaty, and, while stipulating that the liquidation shall be carried out in accordance with the laws of the Allied or Associated State concerned, Article 297 lays down certain rules. which connect the subject with that of reparations. [26] Article 92 of the Treaty of Versailles, however, in accordance with Article 297h of that Treaty, expressly provides that the property, rights and interests of German nationals shall not be liquidated under Article 297 by the Polish Government, except on

condition (1) that the proceeds of the liquidation shall be paid direct to the owner, and (2) that if, on the owner's application, the Mixed Arbitral Tribunal ... or an arbitrator appointed by it, is satisfied that the conditions of the sale or measures taken by the Polish Government outside its general legislation were unfairly prejudicial to the price obtained, they shall have discretion to award to the owner equitable compensation to be paid by the Polish Government. [p12] [27] Poland, in answer to the German Application, asked the Court to hold either (1) that it had no jurisdiction of the suit, or (2) that the Application could not be entertained until the German-Polish Mixed Arbitral Tribunal, at Paris, had given judgment. [28] Without repeating provisions of the Statute relating to the jurisdiction of the Court, it suffices to say that the Court's jurisdiction was, in the present instance, invoked upon the stipulations of Article 23 of the Geneva Convention. This article, consisting of two paragraphs, reads: 1. Si des divergences d'opinion, rsultant de l'interprtation et de l'application des articles 6 22 , s'levaient entre le Gouvernement allemand et le Gouvernement polonais, elles seraient soumises la dcision de la Cour permanente de Justice internationale. 2. Il n'est port aucune atteinte la comptence du Tribunal arbitral mixte germano -polonais rsultant des dispositions du Trait de paix de Versailles [FN1]." --------------------------------------------------------------------------------------------------------------------[FN1] This text, which is the sole and authoritative text of the article, may be translated into English as follows: "1. Should differences of opinion, resulting from the interpretation and the application of Articles 6 to 22, arise between the German and the Polish Governments, they should be submitted to the decision of the Permanent Court of International Justice. "2. The jurisdiction of the German-Polish Mixed Arbitral Tribunal under the provisions of the Peace Treaty of Versailles is in no way impaired." --------------------------------------------------------------------------------------------------------------------[29] On the objection taken by Poland to the Court's jurisdiction, the Court, in its Judgment No. 6, August 23th, 1925, held: (1) That the Court's jurisdiction under Article 23 was not affected by the fact that the rights claimed were contested on the strength of provisions of other treaties as well as on those of Articles 6 to 22 of the Geneva Convention. (2) That the suits pending before the German-Polish Mixed Arbitral Tribunal at Paris and the Civil Court at Katovice, did not prevent the Court from exercising its jurisdiction under Article 23. (3) That the plea to the jurisdiction should be dismissed. Judgment on the merits was reserved. [30] Before proceeding to the judgment later rendered by the Court on the merits, it is essential briefly to summarize the provisions [p13] of Articles 6 to 22 of the Geneva Convention so far as they are involved in the pending case. [31] Article 6 provides that Poland may expropriate in Upper Silesia major industrial undertakings, conformably to the provisions of Articles 7 to 23 of the Convention; but that, with this exception, the property, rights and interests of German nationals, or of companies controlled by them, cannot be liquidated. By Article 7 this right of expropriation may be exercised, in accordance with the provisions of Articles 92 and 297 of the Versailles Treaty, during fifteen years from the date of the transfer of sovereignty, "if, on the request of the Polish Government, this measure has been recognized by the Mixed Commission as being indispensable to the maintenance of the exploitation", the Mixed Commission thus referred to being an international tribunal for the establishment of which provision is made by Article 562 of the Convention. Article 8 deals with the subject of expropriation after the fifteen-year period above mentioned. The stipulations of Articles 9 to 11 it is unnecessary here to particularize. Articles 12 to 16 relate to the expropriation of large rural estates. Article 19, paragraph 1, assures to the Polish Government the right from time to time to inquire into the real ownership of a major industry or a large rural estate, and into the real control of a company appearing as owner. If the Polish Government reaches the conclusion that the owner is really a German national, or that the Company is really controlled by such nationals, and if, after receiving notice, the interested Party contends that the facts are not as stated, the latter, during a month after the date of the notice, may appeal to the German-Polish Mixed Arbitral Tribunal which may provisionally suspend the procedure for expropriation. [32] After the delivery by the Court of Judgment No. 6, the German Government amended the submissions made in its Application, so that, as the submissions finally stood, the Court was asked to give judgment: (1) That the application of the Polish law of July 14th, 1920, in Polish Upper Silesia, decreed by the law of June 16th, 1922, constituted a measure of liquidation within the meaning of Article 6 and the following articles of the Geneva Convention, and that, [p14] as it did not conform to those articles, any more than to Articles 92 and 297 of the Versailles Treaty, to which the Convention expressly referred, such application was illegal. (2) That the attitude of the Polish Government towards the Oberschlesische and the Bayerische was not in conformity with the above-mentioned articles of the Geneva Convention, and, should this be held to be so, that the Court would state what attitude would have been in conformity with them. [33] In reply, the Polish Government asked the Court (1) To non-suit the Applicant as regarded submission No. 1. (2) To find that it was not necessary to decide as to the conformity or non-conformity of the attitude of the Polish Government with Article 6 and the following articles of the Geneva Convention, since no measure of liquidation had been taken by that Government.

[34] Issue being thus joined, the Court, at its tenth (extraordinary) session, heard the case on the merits, and rendered judgment. [35] In this Judgment No.7 (May 25th, 1926) the provisions of the Polish law of July 14th, 1920, are analyzed and set forth in detail. The subject matter of this law is the "transfer of the rights of the German Treasury and of members of reigning German houses to the Treasury of the State of Poland". Article 1 directs the Polish Courts automatically to substitute in the land registers of the former Prussian provinces the name of the Polish Treasury for that of "the Crown, the German Reich, the States of Germany, the ex-Emperor of Germany or other members of reigning houses", entered after November 11th, 1918, as owners or as possessors of real rights. Article 2, paragraph 1, directs the Polish Courts, where such persons or institutions had, after November 11th, 1918, alienated or charged the landed property, or requested or consented to the cession, cancellation or modification of real rights, to restore the registers to their condition on that date. Article 5 authorizes the Polish Treasury to require the eviction of persons who, as the result of a contract concluded with one of the persons or institutions mentioned in Article 1 remained in occupation of the property after the law came into force. [p15] [36] The Court held: (1) That Articles 2 and 5 were incompatible with the provisions of the Geneva Convention, and that Poland had invoked no title of international law which would permit Articles 2 and 5 of the law of July 14th to be regarded as constituting the exercise of a right overcoming the obligations ensuing from Head III of the Geneva Convention; (2) That, in the transfer of the factory to the Oberschlesische, there was no misuse by Germany of the right of alienation of property in the plebiscite area; that the alienation was a genuine transaction effected in good faith and was not designed to be detrimental to Poland's rights and that the Oberschlesische's right of ownership must be regarded as established, and could have been disputed only before a competent tribunal; (3) That the property and operating rights claimed by the Bayerische were also valid', and had been violated by Poland's action ; (4) That expropriation without compensation was contrary to Head III of the Geneva Convention; and that the application of the law of July 14th, 1920, was contrary to Article 6 and subsequent articles of the Geneva Convention, and that the Court had express and definite jurisdiction of the subject matter by Article 23 of that Convention. [37] In conclusion, the Court held: (1) That the application of Articles 2 and 5 of the law of July 14th, 1920, decreed by the law of June 16th, 1922, constituted, as to German nationals or companies controlled by them, within Part I, Head III, of the Geneva Convention, an infraction of Article 6 and the following articles of that Convention; (2) That the attitude of the Polish Government toward both Companies was not in conformity with those articles, but that the Court was not called upon to state what attitude would have been in conformity with them. [38] It was on the basis of this decision of the Court that negotiations were undertaken by the two Governments for an amicable settlement of the claims of both Companies by the payment of pecuniary damages. [p16] [39] Following upon the judgment of May 25th, 1926, the German Government, on June 25th of the same year, sent to the Polish Government a note in which it requested that Government "to take the steps necessary to establish a situation conforming to the judgment both in fact and in law". These steps should, in the view of the German Government, comprise three different features: (1) the re-entry in the land registers of the Court of K6nigshiitte of the Oberschlesische as owners of the real estate constituting the Chorzw factory; (2) the restoration of the factory as an industrial enterprise to the Bayerische; (3) the payment to these two Companies of an indemnity, the amount of which to be fixed by direct negotiations between the two Governments. [40] The Polish Government replied to this note on September 9th, 1926, the German Government having in the meantime asked the Polish Government whether it did not intend to reply and whether it would prefer that the question should be settled by the institution of new proceedings before the Court. The Polish reply was to the effect that the Warsaw Government was disposed "to settle by means of an agreement with the Berlin Government all questions in dispute with regard to the Chorzw factory". But the Polish Government stated in regard to the claim for the restoration of the factory that it was unable to comply for reasons of fact and of law; it also made reservations as regards the validity, in municipal law, of the entry of the Oberschlesische in the land register. Finally, it suggested that it would be better "having regard to the nature of the matter" that representatives of the interested Companies should directly approach the management of the factory and that the two Governments should only intervene if agreement could not be reached in this manner. In a subsequent note, dated October 18th, the Polish Government, whilst, maintaining that the disputed questions were questions of private law, agreed that delegates of the two Governments should also take part in the negotiations. [41] In these circumstances, the German Government proposed in a note dated October 30th, that the negotiations should be begun at Berlin on November 15th. Believing that it could be said that differences of opinion still existed between the two Governments "in regard to the legal principles established by the Court's judg[17]ment" of May 25th, 1926, the German Government reserved the right to appeal to the Court in regard to the execution of that judgment, should these differences of opinion subsist during the negotiations and make such appeal necessary. [42] The Polish Government, whilst agreeing to enter into negotiations at Berlin on November 22nd, maintained the standpoint taken in its previous notes.

[43] The negotiations had been in progress since November 22nd, 1926, when, on January 19th, 1977, the German Delegation sent to the Polish Delegation a note setting out two alternative proposals for a compromise, which proposals, leaving aside the question of restitution, solely related to the amount of the indemnities and the method of payment: payment was to be effected by the issue on the date of signature of the agreement, it concluded, of bills of exchange payable at different dates; in the event of the payments not being made within the times specified, the German Government reserved the right once more to have recourse to the Court Should one of the two proposals be accepted, the existing differences of opinion would be regarded as disposed of. But if not, the German Government declared itself ready to reopen negotiations, but the possibility of further negotiations would not prevent the German Government from referring the existing differences of opinion to the Court; in the judicial proceedings that Government would not of course be bound by the proposals for a compromise which it had made. To the note was attached a memorandum in regard to the position of negotiations on January 14th, 1927; this memorandum made it clear, amongst other things, that the reason why the German Government had abandoned its original claim for the restitution of the factory was that it had come to the conclusion that the Chorzw factory, in its present condition, no longer corresponded to the factory as it was before the taking over in 1922, and that the German Government reserved the right, should the Polish reply to the German proposals be too long delayed, to bring the matter before the Court so that it might be included in the list for the Court's twelfth session, it being always possible to withdraw the Application, should an agreement be reached within a relatively short time. The reply of the Polish Government, dated February 1st, accepted more or less completely the amounts suggested by the German Government for the indemnities-the Polish Government proposing for the amounts to be paid subsequently to the Bayeri[18]sche, bills of exchange issued by the Chorzw factory-but it stated that the Polish Government was not willing to meet the wishes of the German Government in regard to the issue of bills of exchange for the Oberschlesische, particularly for the reason that, as it contended, it possessed claims on the German Government for various amounts, one of which, in respect of social insurances in Upper Silesia, had been fixed by the League of Nations at 25 million Reichsmarks, and that, this being so, in the view of the Polish Government, it was essential to set off the respective claims against each other. It should be noted that, in its reply, the Polish Government proposed the resumption of negotiations in regard, amongst other things, to the "possible filing of an Application with the Court", a point which, according to that Government, "had not yet been discussed". Should the German Government not accept the Polish proposals, the Polish Government would not consider itself bound by them. [44] The German Government, by a note dated February 8th, 1927, then informed the Polish Government that the points of view of the two Governments seemed so different that it appeared impossible to avoid recourse to an international tribunal, and that therefore the German Minister at The Hague had received instructions to file an Application with the Court. In its note, the German Government also drew attention to the fact that, throughout the whole of the negotiations, the German Delegation had emphasized that, failing an agreement, appeal to the Court would be inevitable. The Law [45] As has already been indicated, the Applicant has, in his Case on the merits, made submissions which constitute an amendment of the submissions made in the Application. [46] Since this amendment has been effected in the first document of the written proceedings, in a suit brought by Application-i.e. at a time when, in accordance with Article 38 of the Rules, the Respondent still retains a completely free hand to file preliminary objections-no exception can be taken to it. Moreover, the Respondent, in his preliminary plea, has referred to the Applicant's submissions as formulated in the Case and not as formulated in the Application. It is, therefore, the submissions as formulated in the Case that the Court has now before it. [p19] [47] The submissions formulated in the Application were based, is apart from the above-mentioned provisions of the Statute and Rules of Court, exclusively upon the jurisdictional clause contained in Article 23 of the Geneva Convention. The basis of the amended submissions set out in the Case remains unchanged. [48] It is true that, in this document, the German Government has referred to the Germano-Polish, Arbitration Treaty initialled at Locarno on October 16th, 1925. The only object, however, of this reference is, as shown by the context, to establish that, in the contention of the German Government, a certain claim which Poland may have against Germany cannot, without the consent of the other Party, be set off extrajudicially against any indemnities which may be awarded by the Court in the present case, especially having regard to the procedure instituted by the above-mentioned Treaty. This reference therefore cannot serve to modify the source from which, according to the Application, the Court derives jurisdiction. [49] The same reasoning applies a fortiori with regard to the statement made in Court by the Agent for the German Government to the effect that even if the arbitration clause contained in Article 23 of the Geneva Convention does not apply in the present case, the Court would have jurisdiction under the Arbitration Treaty of Locarno "if it were applicable in this case"; for this statement which was, moreover, made at a very late stage, can hardly have been intended to do more than affirm a more or less theoretical opinion in regard to the interpretation of that Treaty. [50] The Court, therefore, holds that the submissions set out above have been laid before it solely under Article 23 of the Geneva Convention. [51] Before proceeding to set out the reasons for which it must overrule the preliminary objection taken by Poland to its jurisdiction to deal with these submissions, the Court would observe that, for the purposes of this statement of reasons, as also for the purposes of its future judgment on the merits, it cannot take account of declarations, admissions or proposals which the Parties may have made in the course of direct negotiations which have taken place between them, declarations which, moreover, have been made without prejudice in the event of the points under discussion forming the subject of judicial proceedings. For the negotiations in question have not, as acknowledged by the representatives before the Court of the Parties themselves, led to an agreement between them. [p20]

*** [52] It is common ground that the Application of February 8th, 1927, and the submissions of the German Case of March 2nd, 1927, relate to reparations alleged to be due by the Polish Government for acts set out in the German Application of May 15th, 1925, and which the Court, in Judgment No.7, has declared not to be in conformity with Articles 6 to 22 of the Geneva Convention. Poland denies that the jurisdiction, which the Court, by Judgment No. 6, decided that it possessed in regard to the above-mentioned Application of May 15th, 1925, also covers the new Application of February 8th, 1927, and the submissions in the Case of March 2nd, 1927. [53] The position of the Polish Government is mainly based on the two following contentions: 1. that Article 23, paragraph 1, of the Geneva Convention, which gives the Court jurisdiction for "differences of opinion, resulting from the interpretation and the application of Articles 6 to 22", which may arise between the German Government and the Polish Government, does not contemplate differences in regard to reparations claimed for violation of those articles; 2. that the Geneva Convention has instituted special jurisdictions for claims which private persons might assert in the event of the suppression or diminution of their rights, and that the existence of these jurisdictions would affect that of the Court even if Article 23, paragraph 1, of the Geneva Convention could be construed as including differences of opinion in regard to reparations amongst those relating to the application of Articles 6 to 22; therefore, the interested Parties should themselves have recourse to the jurisdictions in question. * [54] In the first place, the meaning and scope of paragraph 1 of Article 23 must be considered, for it is upon this clause and upon this clause only that the Court's jurisdiction in the present case rests. [55] The Court, by Judgments Nos. 6 and 7, has recognized that differences relating to the application of Articles 6 to 22 include not only those relating to the question whether the application of a [p21] particular clause has or has not been correct, but also those bearing upon the applicability of these articles, that is to say, upon any act or omission creating a situation contrary to the said articles. It is a principle of international law that the breach of an engagement involves an obligation to make reparation in an adequate form. Reparation therefore is the indispensable complement of a failure to apply a convention and there is no necessity for this to be stated in the convention itself. Differences relating to reparations, which may be due by reason of failure to apply a convention, are consequently differences relating to its application. [56] Now, Poland maintains that the words "differences of opinion, resulting from . . . the application" in Article 23 cannot have the meaning just indicated, but that they must be construed as covering merely the question whether, in a given case, the application of Articles 6 to 22 is or is not correct, to the exclusion of any differences in regard to reparations. [57] In this connection, the Polish Government, in support of its contention that paragraph 1 of Article 23 of the Geneva Convention should be restrictively construed, has traced the development of general treaties of arbitration during the last fifty years, comprising (1) the so-called clause compromissoire (arbitration clause) introduced into commercial and other treaties during the last twentyfive years of the XIXth century and subsequently, by which the contracting Parties agreed to submit to arbitration any differences as to the interpretation or application of the particular treaties; (2) general treaties for the compulsory arbitration of certain specified categories of disputes, concluded since 1900, and (3) treaties and clauses for the arbitration of pecuniary claims. It is needless to say that paragraph 1 of Article 23 is an example of the first of these three classes of agreements. [58] Counsel for Poland admitted in Court, for the sake of the argument, that the clause compromissoire was originally interpreted as including claims for reparation; but he maintained that, because of later developments, the clause must now be interpreted as excluding such claims. The Court is unable to share this view. By the Convention for the Pacific Settlement of International Disputes, concluded at The Hague in 1899, although no exceptions [p22] were made in the provisions relative to "arbitral justice" included in the first Chapter of Head IV of that Convention, arbitration was not in any case made obligatory. An active movement was then begun for the conclusion of treaties by which the submission of differences would be made obligatory, treaties already foreshadowed by Article 19 of the said Convention. The attainment of this object, so far as concerns general questions of legal right and obligation, was found to be feasible by including only certain classes of questions, and subjecting even these to reservations. On the other hand, it had, ever since the end of the XVIIIth century, been found to be possible to conclude agreements for the submission of pecuniary claims to arbitration without reserve. These facts appear to be logically fatal to the inference sought to be drawn from them, for they clearly show that, in the opinion of governments, the differences concerning which reserves were deemed to be necessary were those relating to legal rights and obligations and not those relating to pecuniary reparation. To say, therefore, that the clause compromissoire, while confessedly providing for the submission of questions of right and obligation, must now be restrictively interpreted as excluding pecuniary reparation, would be contrary to the fundamental conceptions by which the movement in favour of general arbitration has been characterized. [59] Moreover, apart from the question whether expressions used in conventions between other Powers and at different periods can be taken into account in interpreting the intention of the signatories of the Geneva Convention, the Court holds that, in view of the fundamental difference between the nature of arbitration clauses (clauses compromissoire) and the object of the classification of disputes in general arbitration agreements, no conclusion can be drawn from the terminology of the one class of provisions in respect of the other. [60] The classification of international disputes which would be most in point in the present case is undoubtedly the classification adopted in Article 13 of the Covenant of the League of Nations, and reappearing in Article 36 of the Court's Statute. For these

instruments, which are very close to the Geneva Convention in point of time, constitute collective treaties of peculiar importance as they mark [p22] a step forward towards the realization of compulsory arbitration. But the classification which they contain would, in the Courts opinion, lead to the conclusion that the expression "differences of opinion resulting from the interpretation and application" in Article 23 of the Geneva Convention, should be construed as including questions relating to reparations. It is true that the Covenant and the Statute mention separately, in the first place, "disputes as to the interpretation of a treaty" and, in the fourth place, those relating to "the nature or extent of the reparation" ; but they also mention, in the third place, as a separate category, disputes relating to "the existence of any fact which, if established, would constitute a breach of an international obligation". Now it is established by Judgments Nos. 6 and 7 that the Court has jurisdiction to decide whether a breach of Articles 6 to 22, has taken place or not. The decision whether there has been a breach of an engagement involves no doubt a more important jurisdiction than a decision as to the nature or extent of reparation due for a breach of an international engagement the existence of which is already established. If Article 23, paragraph 1, covers the disputes mentioned in the first and third categories by the two provisions above mentioned, it would be difficult to understand why failing an express provision to that effect it should not cover the less important disputes mentioned in the fourth category. [61] Poland has, also drawn the Court's attention to the Convention which, acting also in the name of the Free City of Danzig, she concluded with Germany in 1921, - i.e. at a time not far removed from the conclusion of the Geneva Convention in regard to freedom of transit between Eastern Prussia and the rest of Germany. Articles 11 and 12 of this Convention provide for the establishment of an arbitral tribunal to which each High Contracting Party may refer "disputes which may arise either in the interpretation or in the application" of the Convention. Poland observes that Article 11, the first paragraph of which establishes the jurisdiction just referred to, contains a special paragraph to the effect that the tribunal will have jurisdiction if necessary, to decide as to the reparation to be made by the Party which may have been responsible for a breach of the provisions of the Convention. Whatever may have been the reasons which led the Parties expressly to mention jurisdiction in regard to reparations in addition to that respecting interpretation and application, the fact that a convention explicitly [p24] confirms the conception generally adopted in regard to arbitration clauses, cannot be construed to mean that the same Parties, when employing in another convention the wording ordinarily used in conventions of this kind, have, by so doing, given evidence of an intention contrary to that which is to be presumed when interpreting an arbitration clause in a convention. [62] It follows from the above that Article 23, paragraph 1, which constitutes a typical arbitration clause (clause compromissoire), contemplates all differences of opinion resulting from the interpretation and application of a certain number of articles of a convention. In using the expression "differences of opinion resulting from the interpretation and application", the contracting Parties seem to have had in mind not so much the subject of such differences as their source, and this would justify the inclusion of differences relating to reparations amongst those concerning the application, even if the notion of the application of a convention did not cover reparations for possible violation. [63] Having regard to the fact that Counsel for the Polish Government has laid stress on the literal meaning of the word "application", the Court thinks it well to remark that in judgment No. 5 -which has been cited before it in this connection by the said Counsel it observed not only that "application" is a wider, more elastic and less rigid term than "execution", but also that "execution .... is a form of application". It follows that Judgment No. 5 cannot be cited to support a restrictive interpretation of the term "application". [64] For the interpretation of Article 23, account must be taken not only of the historical development of arbitration treaties, as well as of the terminology of such treaties, and of the grammatical and logical meaning of the words used, but also and more especially of the function which, in the intention of the contracting Parties, is to be attributed to this provision. The Geneva Convention provides numerous means of redress to secure the observation of its clauses and it does so in ways varying according to the subjects dealt with under the different Heads, Parts or other subdivisions of the Convention. Article 23 contains provisions of this kind in so far as concerns Articles 6 to 22 which form the greater portion of Head III of the First Part. [p25] [65] The object of these methods of obtaining redress-and that of Article 23 in particular-seems to be to avert the possibility that, in consequence of the existence of a persistent difference of opinion between the contracting Parties as to the interpretation or application of the Convention, the interests respect for which it is designed to ensure, may be compromised. An interpretation which would confine the Court simply to recording that the Convention had been incorrectly applied or that it had not been applied, without being able to lay down the conditions for the re-establishment of the treaty rights affected, would be contrary to what would, prima facie, be the natural object of the clause; for a jurisdiction of this kind, instead of settling a dispute once and for all, would leave open the possibility of further disputes. [66] This conclusion, which is deduced from the object of a clause like Article 23, and, in general, of any arbitration clause, could only be defeated, either by the employment of terms sufficiently clear to show a contrary intention on the part of the contracting Parties, or by the tact that the Convention had established a special jurisdiction for claims in respect of reparation due for the violation of the provisions in question, or had made some other arrangement regarding them. [67] It follows from what has been said in regard to the meaning and scope of the words "differences of opinion resulting from the interpretation and application of Articles 6 to 22" that the terms of Article 23, first paragraph, do not establish the existence of any such contrary intention. It now remains to consider the scope of Article 23, paragraph 2, and Article 22 of the Geneva Convention. * [68] The Polish Government contends in the second place that there are other tribunals before which the injured companies could assert their right to an indemnity and that, in these circumstances, the German Government cannot, by substituting itself for these companies, disturb the jurisdictional system established by the Geneva Convention.

[69] The Court feels that it must consider this point, not only because Counsel for Poland have cited the general principle with regard to recourse to tribunals accessible to private persons, but also and more especially in relation to the terms of Article 23, paragraph 2, of the Geneva Convention. [p26] [70] It must first of all be observed that any Jurisdiction which the Polish Courts may have does not enter into account. For the act on the part of the Polish Government, which the Court has held not to be in conformity with the Geneva Convention, consisted in the application of Articles 2 and 5 of the Polish law of July 14th, 1920, introduced into Polish Upper Silesia by the law of June 16th, 1922, which application, in the opinion of the Court (Judgment No. 7), is in itself a measure contrary to Article 6 and the following articles of the Convention. The Court of Huta Krolewska (Knigshtte) effected this application by ordering the entry in the land register of the Polish Treasury as owner of the factory in place of the Oberschlesische. Accordingly, Poland has not argued that the Polish Courts have jurisdiction in regard to reparation. [71] The tribunals to be taken into account are therefore those contemplated by the Geneva Convention itself, namely, the Upper Silesian Arbitral Tribunal and the Germano-Polish Mixed Arbitral Tribunal. The Agent and Counsel for the Polish Government spoke sometimes of the one and sometimes of the other of these tribunals, without specifying which of them would be competent in the particular case nor whether both of them would be so competent. [72] The question whether the jurisdiction of these tribunals might prevent the exercise of the jurisdiction bestowed upon the Court by paragraph 1 of Article 23 of the Geneva Convention was brought up before the Court during the proceedings in regard to the jurisdiction in the suit submitted to the Court by the German Government's Application of May 15th, 1925. The Polish Government indeed submitted that that Application could not be entertained until the Germano-Polish Mixed Arbitral Tribunal had delivered judgment in the case concerning the same factory of Chorzw brought by the Oberschlesische on November 10th, 1922, before that Tribunal. The Polish Government also argued that, as it was a question of an alleged destruction of vested rights, the Upper Silesian Tribunal might have jurisdiction under Article 5 of the Convention. [73] Some of the reasons for which the Court, in Judgment No. 6, overruled this plea that the suit could not be entertained-for instance the argument relating to the fact that the Parties are not the same-might to some extent be applicable also in the present case. It should however be observed that the position is not the same,[p27] more especially in view of the fact that the German Application ,of May 15th, 1925, only asked the Court for a declaratory judgment between States, which only the Court could give, whereas the present Application seeks an indemnity which is not necessarily different from that which the Companies on whose behalf it is ,claimed, might obtain from another tribunal, assuming that there was one which was competent. For this reason, the Court will not be content merely to refer to Judgment No. 6 and will once more examine the question in relation to the special conditions in which it presents itself on this occasion. [74] Before undertaking this examination, the Court feels called upon to call to mind the following: In Judgment No. 7 it held that, as the expropriation allowed under Head III of the Geneva Convention, is a derogation from the rules generally applied as regards the treatment of foreigners and from the principle of respect for vested rights, and this derogation is itself of a strictly exceptional character, -any other measure affecting the property, rights and interests of German nationals contemplated in Head III and not supported by some special authority having precedence over the Convention, and which oversteps the limits of generally accepted international law, is incompatible with the regime established by the Convention. The seizure of the property, rights and interests belonging to the Oberschlesische and Bayerische was precisely a measure of this kind. It is in this sense that the measures taken by the Polish Government in respect of the above-mentioned Companies are, in the Court's opinion, contrary to Head III of the Geneva Convention, and this in spite of the fact that they do not, properly speaking, fall within the expropriations or liquidations regulated under that Head. The measures in question are therefore of a special nature; and it is only in relation to those measures, thus ,qualified, and to the regime established in Upper Silesia, that it must be considered whether the dispossessed Companies could apply either to the Upper Silesian Arbitral Tribunal or to the German Polish Mixed Arbitral Tribunal for reparation of the injury sustained. [75] The Polish Government argues that the Upper Silesian Tribunal has jurisdiction on the basis of Article 3 of the Geneva Convention. This article, which is the last of Head II of the Convention, is as follows: [p28] La question de savoir si et dans queue mesure une indemnit pour la suppression ou la diminution de droits acquis doit tre paye par l'tat, sera directement tranche par le Tribunal arbitral sur plainte de l'ayant droit. *FN1+ --------------------------------------------------------------------------------------------------------------------[FN1] This text, which is the sole and authoritative text of the article, may be translated into English as follows: "The question whether and to what extent an indemnity for the suppression or diminution of vested rights must be paid by the State, will be directly decided by the Arbitral Tribunal upon the complaint of the interested Party." --------------------------------------------------------------------------------------------------------------------[76] In the Court's opinion, it is impossible to accept this proposition. Whatever the scope and limits of the jurisdiction conferred on the Upper Silesian Tribunal by this article may be in other respects, the fact remains that this jurisdiction relates to the subject matter dealt with in Head II of the Convention which concerns the protection of vested rights. Now the Court, in Judgment No. 7, has decided that the dispossession of the Oberschlesische and Bayerische was a violation of Head III and it has decided thus even though it may be true that any violation of this Head, which constitutes an exception to the general principle of respect for vested rights, is at the same time necessarily a violation of Head II also. It follows that the competent tribunals can only be those provided for by Head Ill. This is also borne out by the fact that the Upper Silesian Arbitral Tribunal, under Article 5, can only allow pecuniary indemnities; now it is certain that Head Ill of the Convention is mainly designed to preserve the status quo in Polish Upper Silesia and therefore that, whenever possible, restitutio in pristinum is the natural redress of any violation of, or failure to observe, the

provisions therein contained. [77] The jurisdiction of the Germano-Polish Mixed Arbitral Tribunal derived from the Treaty of Peace of Versailles, is expressly reserved by Article 23, paragraph 2. [78] In order to understand this provision, it should be remembered that Head Ill of the Geneva Convention has not abolished, although it limits in several respects, the liquidation regime instituted by the Treaty of Versailles, and that some provisions of that Treaty concerning that regime have been expressly declared applicable in Polish Upper Silesia. Thus Articles 7 and 8 of the Geneva Convention refer to Articles 92 and 297 of the Treaty. [p29] [79] These articles, amongst other things, allow private persons to appeal to the Mixed Arbitral Tribunal. The right to do so is given to the interested Party in the event of the conditions of sale or measures taken by the liquidating government outside its ordinary legislation being unfairly prejudicial to the price ; the Tribunal may then grant the interested Party a reasonable indemnity which is to be paid by the liquidating government. [80] As the Geneva Convention was intended to secure to German nationals in Polish Upper Silesia treatment more favourable than that resulting from the Treaty of Versailles, there could be no question of abolishing or diminishing the guarantees given by the Treaty to persons liable to have their property liquidated. Again, the jurisdiction bestowed upon the Court by Article 23, paragraph 1, which has no equivalent under the liquidation regime of the Treaty of Versailles, might have left some doubt as to whether the means of obtaining redress open to interested Parties under the Treaty of Versailles would remain open notwithstanding. Cases of the same kind as those contemplated by the provisions of that Treaty concerning the regime of liquidation are certainly possible, even in connection with the expropriations or liquidations authorized by the Geneva Convention. It was therefore natural expressly to reserve the right possessed by private persons to appeal in such cases to the Mixed Arbitral Tribunal : this is what paragraph 2 of Article 23 does. [81] The Court has also not omitted to examine Article 22 of the Geneva Convention, in so far as it bestows jurisdiction upon the Germano-Polish Mixed Arbitral Tribunal. It is however clear that this article also contemplates regular expropriations effected within the limits fixed by the preceding articles. That this is the case is proved by, amongst other things, the fact that the contingency contemplated in the article is that of a claim for damages greater than the indemnity fixed; the case is therefore one of expropriation, in the proper sense of the term, and the jurisdiction given to the Mixed Arbitral Tribunal does not differ from that bestowed upon it by Articles 92 and 297 of the Treaty of Versailles. [82] This being so, there would seem to be no doubt that neither this provision nor Article 23, paragraph 2, expressly contemplates acts of the kind for which the German Government claims an indemnity on behalf of the dispossessed Companies. As has already been stated, these acts constitute special measures [p30] which fall outside the normal operation of Articles 6 to 22 of the Geneva Convention, whereas the jurisdiction reserved by Article 23, paragraph 2, assumes the application of those articles. In the present case reparation is the outcome, not of the application of Articles 6 to 22, but of acts contrary to the provisions of those articles. [83] It has not escaped the Court that the Oberschlesische supported the action brought by it before the Germano-Polish Mixed Arbitral Tribunal upon, amongst other things, Article 305 of the Treaty of Versailles. This cannot, however, affect the conclusion just arrived at by the Court, The aim of Article 305 to which, besides, neither the Agent nor Counsel for the Polish Government have made any allusion is to secure to interested Parties the possibility of having recourse to the Mixed Arbitral Tribunal, even if measures contrary to the terms of the Treaty of Versailles have been embodied in a judgment. Whatever construction in other respects the Mixed Arbitral Tribunals have placed or may place upon this article, with which construction the Court wishes in no way to interfere, the Court, when it has to define its jurisdiction in relation to that of another tribunal, cannot allow its own competency to give way unless confronted with a clause which it considers sufficiently clear to prevent the. possibility of a negative conflict of jurisdiction involving the danger of a denial of justice. The Court does not consider that, in regard to the applicability of Article 305 to the situation of the Oberschlesische, all possible doubt is eliminated ; it would observe, however, that it is not called upon to decide this point. Furthermore, it should be noted that the Polish Government, in regard to the action brought by the Oberschlesische before the Germano-Polish Mixed Arbitral Tribunal on November 10th, 1922, filed a plea to the jurisdiction on the ground, amongst others, that Article 305 was not considered as applicable in that case. [84] There is, moreover, another reason which the Court feels called upon to invoke in order to show that the jurisdiction of the Mixed Arbitral Tribunal cannot be urged in this case in opposition to the jurisdiction conferred on the Court by Article 23 of the Geneva Convention. [85] A careful examination of the provisions of Head III of the Geneva Convention brings out-as the Court has already had occasion to point out in Judgment No. 7 that one of the fundamental principles [p31] upon which this Head is based, as regards procedure, is that no dispossession may be effected without previous notice to the real or apparent owner, affording him an opportunity of being heard before the competent tribunal. It is certain having regard to the promulgation by the Polish Government of the laws of July 14th, 1920, and of June 16th, 1922, and to the application given to those laws-that in this case such a procedure has not been adopted, for the dispossession of the Companies concerned had, in the Polish Government's contention, taken place outside the framework of the Geneva Convention. Consequently, the Polish Government cannot in this particular case require the interested Parties to look for redress of the injury sustained by them to the tribunals which might have been open to them if the Convention had been applied. For, thereafter, the utmost that the interested Parties could obtain from these tribunals would be reparation for the wrong, whereas, if that procedure had been followed out, the wrong would perhaps never have occurred. [86] From what has been said, it follows that once dispossession has taken place without previous investigation of the right of ownership, the possible undertaking of this investigation in order to justify such dispossession after it has taken place, cannot undo the fact that a breach of the Geneva Convention has already taken place, or affect the Court's jurisdiction.

[87] It is, moreover, a principle generally accepted in the jurisprudence of international arbitration, as well as by municipal courts, that one Party cannot avail himself of the fact that the other has not fulfilled some obligation or has not had recourse to some means of redress, if the former Party has, by some illegal act, prevented the latter from fulfilling the obligation in question, or from having recourse to the tribunal which would have been open, to him. [88] If, against what has just been stated by the Court, it were contended that the measures taken by the Polish Government in regard to the Oberschlesische and Bayerische did not constitute expropriation within the meaning of Head III of the Geneva Convention, the Court would be called upon to repeat what it has already had occasion to say not only in Judgment No. 7, but also in the present Judgment, namely, that if expropriation in consideration of an indemnity is prohibited by that Head, a fortiori is a seizure, without compensation to the interested Parties, prohibited. [p32] [89] It has been argued repeatedly in the course of the present proceedings that in case of doubt the Court should decline jurisdiction. It is true that the Court's Jurisdiction is always a limited one, existing only in so far as States have accepted it; consequently, the Court will, in the event of an objection - or when it has automatically to consider the question only affirm its jurisdiction provided that the force of the arguments militating in favour of it is preponderant. The fact that weighty arguments can be advanced to support the contention that it has no jurisdiction cannot of itself create a doubt calculated to upset its jurisdiction. When considering whether it has jurisdiction or not, the Court's aim is always to ascertain whether an intention on the part of the Parties exists to confer jurisdiction upon it. The question as to the existence of a doubt nullifying its jurisdiction need not be considered when, as in the present case, this intention can be demonstrated in a manner convincing to the Court. **** [90] It follows from the foregoing considerations that the Court affirms its jurisdiction and reserves the suit for judgment on the merits in so far as the first of the submissions of the Case of March 2nd, 1927, is concerned, that is to say, as regards the question whether, "by reason of its attitude in respect of the Oberschlesische and Bayerische, which attitude has been declared by the Court not to have been in conformity with the provisions of Article 6 and the following articles of the Geneva Convention, the Polish Government is under an obligation to make good the consequent injury sustained by the aforesaid Companies from July 3rd, 1922, until the date of the judgment sought". [91] The other submissions (Nos. 2-4) of the Case relate to the amount of the indemnities to be paid by Poland, a prohibition of export affecting certain products and, finally, the method of payment. The Court's right to deal with these points and to grant or refuse the German Government's claim, follows from the fact of its jurisdiction to hear the claim for reparation. [92] Whilst denying that the Court has jurisdiction to deal with claims seeking reparation for a breach of Articles 6 to 22 of the Geneva Convention, Poland, in her preliminary Counter-Gase, has in the alternative submitted certain objections in regard, particularly, to [p33] the German submission concerning a prohibition of export and to the other submission to the effect that Poland should not be allowed to set off, against any amount which may be due as reparation, a claim which she has against Germany under the decision of the Council of the League of Nations of December 9th, 1924. The Court is not called upon to give a decision on these points at this stage of the proceedings; they belong to the merits of the suit. [93] Consideration of the question of the forms of reparation which are admissible in this case and of the methods of payment indicated would presuppose that the Court had satisfied itself of the existence of an obligation to make reparation and of the existence, nature and extent of the injury resulting from an attitude contrary to Articles 6 to 22. [94] As regards conclusion No. 4 (d) of the German Case, the question whether Poland could, if the case arise, assert a claim to set off against her debt to Germany any debt due to her by Germany remains therefore entirely reserved. [95] For These Reasons, the Court, having heard both Parties, by ten votes to three, 1. dismisses the plea made by the Polish Government requesting the Court to declare that it has no jurisdiction to deal with the suit brought by the German Government on February 8th, 1927, and reserves this suit for judgment on the merits; 2. instructs the President to fix the times for the deposit of the Counter-Case, Reply and Rejoinder on the merits. [96] Done in French and English, the French text being authoritative, at the Peace Palace, The Hague, this twenty-sixth day of [p34] July, nineteen hundred and twenty-seven, in three copies, one of which is to be placed in the archives of the Court, and the others to be forwarded to the Agents of the applicant and respondent Parties respectively. (Signed) Max Huber, President. (Signed) . Hammarskjld, Registrar. [97] M. Ehrlich, Polish National judge, availing himself of the right conferred on him by Article 57 of the Statute, has delivered the separate opinion which follows hereafter. (Initialled) M. H. (Initialled) A. H. [p35] Dissenting Opinion By M. Ehrlich

[98] I, regret to find myself in disagreement with certain aspects of the judgment which has just been delivered. I. [Jurisdiction Over Submission 1] [99] While the Court has, in principle, jurisdiction to decide on submission No. 1, I do not think that the Court can consider that submission in the present case. [100] It followed from Judgment No. 7, without the necessity of an explicit statement, that the Polish Government was bound to make reparation for any damage which may actually and unlawfully have been inflicted; is a result of the attitude of the Polish Government declared by that judgment not to have been in conformity with certain stipulations of the Geneva Convention. This is a consequence of the principle that the violation of an international obligation entails the duty of reparation, a principle so generally accepted that in the classification of international disputes of a legal character, embodied in Article 13 of the Covenant of the League of Nations, and in Article 36 of the Statute of the Court (of which classification more will be said presently), there is no special class of disputes as to the duty of making reparation for a breach of an international obligation, as distinguished from disputes concerning the existence of a fact which, if established, would constitute a breach of an international obligation: this latter class of disputes obviously includes the former. Both the applicant and the respondent Governments appear to have understood Judgment No. 7 in the sense just outlined, and, as the Case sets out they actually entered into negotiations with a view to determining the reparation due to the two Companies; the Polish Government even suggested that the negotiations be carried on directly with the Companies concerned. [101] Since the jurisdiction of the Court in the present case is based on Article 23, paragraph 1, of the Geneva Convention which stipulates that: [p36] [Translation] "Should divergences of opinion resulting from the interpretation and from the application of Articles 6 to 22 arise between the German Government and the Polish Government, they should be submitted to the decision of the Permanent Court of International Justice.[FN1]"', it follows that the Court has no jurisdiction where there is no divergence of opinion. Now, the Case says: [Translation] "Thus there is no more a divergence of opinion between the two Governments that the reparation should be made, in principle, by way of a pecuniary indemnity.[FN2]" --------------------------------------------------------------------------------------------------------------------*FN1+ "Si des divergences d'opinion, rsultant de linterprtation et de l'application des articles 6 22, s'levaient entre le Gouvernement allemand et le Gouvernement polonais, elles seraient soumises la dcision de la Cour permanente de Justice internationale." [FN2] "Ainsi, il n'existe plus de divergence d'opinion entre les deux Gouvernements que la rparation doit tre faite, en principe, par la voie d'une indemnisation pcuniaire." --------------------------------------------------------------------------------------------------------------------[102] The principle of reparation seems, therefore, admitted; for there is not even a divergence of opinion as to the further question, what form reparation should take. [103] The jurisdiction of the Court in any given case cannot be taken to rest on facts contrary to what is alleged by the Applicant. In the present case, a lack of such a divergence in the matter of submission No. 1 appears from the statements of the applicant Government. [104] The conclusion to be drawn is not weakened by the fact that submission No. 1 asks for the determination of the time limits of the damage; for these are the logical time limits within which the damage must lie, whether or not the Court has jurisdiction to estimate it. Nobody can be made responsible for any damage before it has arisen, and a court in estimating damage will consider those of its aspects which, at the time of estimating, it will be in a position to appreciate. II. [Jurisdiction Over Submissions 2-4] [105] The judgment which has just been delivered holds that the jurisdiction of the Court to entertain submissions Nos. 2-4 of the [p37] Case, follows from the jurisdiction to decide upon the demand for reparation. [106] Yet in international law jurisdiction to decide, in principle, that a violation of an international engagement has taken place and that, consequently, reparation is due, is distinct from jurisdiction to determine the nature and extent of reparation in general and the amount of a pecuniary indemnity in particular. [107] I agree that the classification of international disputes (of a legal character) which would be of most importance in the present case, is the classification adopted in Article 13 of the Covenant of the League of Nations, and reappearing in Article 36 of the Statute of the Court. Article 36 of the Statute provides that a State may accept the jurisdiction of the Court: ... in all or any of the classes of legal disputes concerning:

(a) the interpretation of a treaty ; (b) any question of international law; (c) the existence of any fact which, if established, would constitute a breach of an international obligation; (d) the nature or extent of the reparation to be made for the breach of an international obligation." [108] It is quite possible that a State should accept the optional clause, for instance, as to disputes belonging to class (c) only, or to classes (a) and (c). The State in question would not thereby accept, and would not be presumed to accept, the jurisdiction of the Court as to class (d). The classes were understood to be distinct, and jurisdiction to decide disputes belonging to one class cannot be assumed to imply jurisdiction to decide disputes belonging to another class. In the present case, jurisdiction under Article 23, paragraph 1, of the Geneva Convention, relates only to disputes which would fall, as was submitted by the respondent Government, into classes (a) and (c). [109] Neither can jurisdiction to decide disputes belonging to one class be deduced from jurisdiction to decide disputes belonging to another class, by estimating the relative importance of both classes; for the estimate will depend, like every question of the relative importance of things, on the criterion adopted as basis of the comparison. And even if a comparison could be made with [p38] the help of a universally accepted criterion, it could still not be inferred that jurisdiction concerning the more important class of disputes implies jurisdiction concerning a different, though less important class. For the Parties might purposely have conferred on a courtand most of all on this Court-the competence to settle the most important disputes, without wishing to burden the Court with disputes of less importance, particularly since, by deciding on the interpretation of a treaty stipulation or on the correctness of its application, the Court could probably point the way for the solution, or prevention, of a number of disputes, while the question of reparation might have to be considered in each individual case. [110] It seems, indeed, to have been an established practice long before the adoption of the Covenant of the League of Nations and of the Statute of the Court, in cases in which an arbitral tribunal was to deal with the questions of the amount of reparation or the mode of payment, as distinguished from or in addition to a divergence of opinion as to the interpretation of a treaty or as to a violation of a treaty or of a rule of general international law, to specify such powers of the tribunal in the compromis. III. [Jurisdiction To Assess Damages And Mode of Payment] [111] While jurisdiction to assess the damages and to fix the mode of payment does not, in international law, follow automatically from jurisdiction to establish the fact that a treaty has not been applied, although it should have been applied, it is necessary to consider whether the Parties to the Geneva Convention did not intend to confer upon the Court that jurisdiction. [112] Two preliminary remarks must be made. [113] First, the answer to the question just formulated turns, not on the interpretation of any of Articles 6 to 22 of the Geneva Convention, but on the interpretation of Article 23 itself ; for the question is, whether Article 23, paragraph 1, should be read as conferring on the Court jurisdiction to decide what reparation is due to individuals from the Polish State (this is the correct term used in Article 3 of the Convention) if the Polish Government fails to act in conformity with Articles 6 to 22. [p39] [114] Secondly, the intention to confer upon the Court such a jurisdiction must be ascertainable either from the wording of the compromise clause or at least from the circumstances in which the clause was drawn up, and it must be ascertainable in a way which demonstrates that the force of the arguments militating in favour of the Court's jurisdiction is preponderant. [115] No affirmative answer to the question of the Court's jurisdiction in the matter of submissions 2-4 can be gleaned from Article 23. The words "interpretation and application" do not, by themselves, imply such an affirmative answer. They refer to processes, of which one, interpretation, is that of determining the meaning of a rule, while the other, application, is, in one sense, that of determining the consequences which the rule attaches to the occurrence of a given fact; in another sense, application is the action of bringing about the consequences which, according to a rule, should follow a fact. Disputes concerning interpretation or application are, therefore, disputes as to the meaning of a rule or as to whether the, consequences which the rule attaches to a fact, should follow in a given case. Now, Articles 6 to 22 of the Geneva Convention do not prescribe any specific consequences which should follow if the Polish Government were to disregard the rule laid down in Article 6. Therefore, although such a disregard would be a violation of the. Convention, yet the determination of the nature and the extent of the reparation would not be the settlement of a dispute concerning the interpretation or application of Articles 6 to 22. [116] The word "resulting from", used in Article 23, although different from the words "concerning", "in the matter of", generally used in compromise clauses in connection with the words "interpretation and application", does not give to Article 23 a different meaning, which would prevent it from remaining a typical compromise clause. For every divergence of opinion "in the matter of" interpretation or application is, in a sense, a divergence of opinion "resulting from" interpretation or application, since, until each side has arrived at an opinion as a result of the process of interpretation 'or application of the treaty (application in the sense of determining the consequences which the treaty attaches to the occurrence of a fact), there can be no divergence of opinion in the matter of interpretation or application. The word "resulting" connects [p40] the divergence of opinion with its nearest cause, i.e. the process of interpretation or application. [117] One might be tempted to maintain that since non-application, i.e., failure to bring about the consequences which a rule attaches to a fact, is bad application, and since bad application is a kind of application (in the second sense), therefore divergences of opinion, in the matter of reparation to be made for such non-application are divergences of opinion resulting from application. Yet non-application is not application. If the treaty contains rules concerning such reparation, the determination of such reparation is clearly application (in the first sense) of the treaty. But if the treaty does not contain such rules, divergences of opinion in the matter of reparation due for violations of the treaty are divergences of opinion in the matter of general, as distinguished from

conventional, international law. [118] Since, therefore, the words "interpretation and application" do not necessarily relate to the determination of the nature and extent of reparation for the violation of a treaty, it follows that to base such a jurisdiction on Article 23 would require an extensive interpretation, where as not to deduce such a jurisdiction from that article would imply the natural and not a restrictive interpretation. In other words, a presumption must be taken to exist, not for, but against deducing that jurisdiction from Article 23. The presumption would, of course, be defeated if it could be shown that at the time of the Geneva Convention, or shortly before that time, the meaning of the compromise clause was generally understood to be such as the clause has now been declared to have. But nothing has been brought to the attention of the Court to prove conclusively that the clause "interpretation and application" was considered in the practice of nations, during the last quarter of the nineteenth or in the twentieth century, up to the time of the Geneva Convention, to comprise jurisdiction in the matter of the determination of the nature and extent of reparation for the violation of the treaty in question. In particular, no such deduction can be made from the Postal Convention, to which reference was made, but which establishes a specific case of responsibility of the postal administrations. [p41] [119] On the other hand, it is not easy to defeat the inference from the Russian Explanatory Memorandum which accompanied the Russian project for an arbitration convention in 1899 and which divides all possible international conflicts into two groups, one of them comprising cases in which [Translation] "one State demands from another an indemnity of a material kind for damages and losses caused to itself or to its nationals by the acts of the defendant State or of its nationals, which it considers not to be in conformity wit h the law,*FN1+ while the other group comprises cases in which [Translation] "one State demands from the other that it exercise or do not exercise certain specified attributes of the Sovereign Power, that it do or do not do certain specified acts which do not relate to material interests". [FN2] --------------------------------------------------------------------------------------------------------*FN1+ Un Etat demande a un autre une indemnisation matrielle pour dommages et pertes causes a lui -mme ou a ses ressortissants par des actes de lEtat dfendeur ou de ses ressortissants quil juge ntre pas conformes au droit. *FN2+ Un Etat demande a un autre dexercer ou de ne pas exercer certaines attributions dtermines du Pouvoir souverain, de faire ou de ne pas faire certains actes dtermines ne touchant pas a des intrts dordre matriel. --------------------------------------------------------------------------------------------------------[120] It is to the latter group that belong, among other disputes, the disputes concerning the interpretation and application of treaties, some of which were enumerated in the Russian project itself. While ultimately the Conference of 1899 did not adopt the principle of obligatory arbitration, even for the cases originally suggested by the Russian project, the Committee proposals accepted, in principle, the Russian division, and in all the history of the proceedings of the committees of the Conference, there seems to be nothing to suggest that the division outlined in the Russian explanatory note was not considered correct. It is difficult, therefore, to admit that the group of disputes concerning interpretation and application of treaties was supposed to include ipso facto disputes concerning the amount of damages to be paid in case of the violation of such treaties. [p42] [121] In view, however, of the judgment now delivered, any treaty henceforward concluded, containing a compromise clause similar to that of Article 23 of the Geneva Convention, will have to be interpreted in the light of this judgment. IV. [Jurisdiction to Interpret an Article and a Consequence of a Fact] [122] The question arises whether it is permissible to interpret Article 23, paragraph 1, of the Geneva Convention as conferring upon the Court jurisdiction to decide only (1) how an article should be interpreted and (2) whether, in a given case, the consequences which should follow from a given fact have followed, without giving the Court the further power of deciding what reparation is due and in what way it should be made. The answer to this question was given by the Court in Judgment No. 7, when it dealt with the question of declaratory judgments. Moreover, while in the law of various countries it is possible to observe the development of the institution of declaratory judgments, in international relations a judgment of this Court, establishing the fact that a violation of a treaty has occurred, has no less power of settling a dispute than a subsequent judgment determining the amount of damages to be paid. V. [Exclusive Jurisdiction] [123] Next it must be considered whether the general construction of Part I of the Geneva Convention does not make it imperative to assume that the Court, and no other tribunal, has jurisdiction in cases like the present. The decision contained in Judgment No. 6 is of course binding, so far as the question, which was then before the Court, is concerned. As to the question which has now been raised, it seems that Heads I - III of Part I of the Convention form one whole. Head Il lays down the general principle of respect for acquired rights. Head III, while maintaining the principle, permits of certain exceptions. It is possible, but it is not a priori necessary to suppose that the general remedies under Head II, which lays down the rule, should not be available in cases falling under Head III, which, while admitting exceptions, confirms the same rule. [p43] [124] Both interpretations being admissible, it seems that there is a presumption in favour of that interpretation which (1) allows the individual to apply to a tribunal for the protection of his rights, without making that protection depend on a decision of the government, and (2) diminishes the amount of litigation, and therefore of disputes, between States.

[125] Of course, from now on, the judgment now passed must be considered as determining the question in a way which could only be changed by a new agreement of both Parties. VI. [Jurisdiction Inferred From Contemporanea Expositio] [126] It remains to consider whether an intention of the Parties to the Geneva Convention to confer the jurisdiction in question on the Court may not be inferred from a contemporanea expositio, to be gathered, in the words of Sir Robert Phillimore, from the acts of the Parties which preceded, accompanied, and followed soon after the making of the treaty. [127] On behalf of the respondent Government, attention was drawn to Article II of a Convention concluded by Poland with Germany on April 21st, 1921, i.e. about a year before the conclusion of the Geneva Convention. That article provides that: "Each High Contracting Party shall be entitled to refer any disputes which may arise either as to the interpretation or the application of the present Convention, to the decision of a permanent tribunal of arbitration .... "The Tribunal shall decide all disputes on the basis of the provisions of this Convention, and on the general principles of law, and of equity. "It shall be competent to decide the amount, if any, of compensation to be made to the injured Party by the Party found guilty of any infraction of the provisions of this Convention." [128] Since both Conventions were concluded by the same Parties within a short space of time, the fact of the omission in the later Convention of a clause which, in the earlier, supplemented the statement of the jurisdiction conferred on the tribunal in question, [p44] seems to convey an indication that the omission was intentional and that it was not desired to produce the effects which the clause inserted in the earlier, but not in the later Convention, was to produce. [129] As to the attitude of the Parties after the conclusion of the Geneva Convention, which is valuable as an indication of the views of the Parties regarding the clause in question and as calculated to throw light on the intention of the Parties at the time of the conclusion of the Convention, an inference may be drawn from the fact that the action which was brought by the German Government against the Polish Government in 1925 and which led to judgments Nos. 6 and 7, was stated, on behalf of the German Government, in the pleadings, not to demand restitution or indemnity and to have been limited to a demand for a declaration, for this reason, among others, that doubts might possibly arise whether the Jurisdiction under Article 23 relative to divergences of opinion "concerning" the interpretation and application of certain stipulations would also comprise reparation on account of an interpretation or application not in conformity with those stipulations. It was added that while the German Government believed that in principle such a jurisdiction should be considered as established, it did not desire to burden its Application with this delicate problem. [130] It would appear, therefore, that as late as 1925 the German Government was not convinced of the undeniable correctness of the interpretation now suggested. Nothing has been alleged before the Court in the present proceedings to suggest that the Polish Government has admitted the correctness of such an interpretation of Article 23. The inference from this attitude of both Parties is that they had at the time of the conclusion of the Geneva Convention no intention to give to Article 23 a meaning such as is now suggested. [131] I agree, however, that in the question of the jurisdiction of the Court and of the tribunals of the Geneva Convention, the present judgment will henceforth be binding, (Signed) Ludwik Ehrlich. FEDERAL REPUBLIC OF GERMANY v DENMARK AND v NETHERLANDS

Facts West Germany, the Netherlands and Denmark wanted to determine where the maritime borders of their countries were. West Germany wanted to use the just and equitable idea and the Netherlands and Denmark wanted to use the equidistance/special circumstances principals in the 1958 Geneva Convention on the Continental Shelf. Applying the equidistance principle would cut off ocean access to West Germany while greatly increasing the area under Danish and Dutch control. Issue 1. What principles and rules of international law are applicable to the delimitation of the continental shelf in the North Sea between the parties?

Decision Equidistance principle is not customary law, and thus the parties must come to an equitable settlement of the appropriate boundaries.

Reasons Majority The majority spent a significant amount of the decision considering what constitutes a customary rule of law. They considered three ways the equidistance rule could be customary law: 1. 2. 3. the rule predated the Convention and was simply codified; the Convention crystallized equidistance as a rule of customary law; or the rule became custom in light of subsequent state practice.

They also identify three elements necessary for an element to constitute a customary rule of law: 1. 2. 3. the provision must be of a norm-creating character such that it could be regarded as forming the basis of a general rule of law; the provision must be a settled practice based on the acts of state actors; and the provision must be such, or be carried out in such a way, as to be evidence of a subjective belief that this practice is rendered obligatory by the existence of a rule of law requiring it, i.e. opinio juris.

Applying this reasoning to the facts, both Denmark and the Netherlands had admitted at the hearing that the law in this area had not yet settled at the time of the Convention, but they both felt the law had crystallized when the Convention came into force. Article 6 of the Convention stated that equidistance was the secondary method to be used in delimitation, which seemed to contradict the idea of it as a general rule of law, plus there was a facility for making reservations to Article 6, making it difficult to conclude it was now crystallized by the Convention. On subsequent state practice, the majority found fifteen examples where equidistance was used, more than half between states subject to the Convention. They stressed strongly, however, that even were there far more examples of the use of equidistance, the subjective belief that the states were doing so out of obligation must be present. Finding then that equidistance was not a rule of customary law, the majority ruled that equitable principles must be utilized in negotiations between the parties to delineate the boundaries. The Court delivered judgment, by 11 votes to 6, in the North Sea Continental Shelf cases. The dispute, which was submitted to the Court on 20 February 1967, related to the delimitation of the continental shelf between the Federal Republic of Germany and Denmark on the one hand, and between the Federal Republic of Germany and the Netherlands on the other. The Parties asked the Court to state the principles and rules of international law applicable, and undertook thereafter to carry out the delimitations on that basis. The Court rejected the contention of Denmark and the Netherlands to the effect that the delimitations in question had to be carried out in accordance with the principle of equidistance as defined in Article 6 of the 1958 Geneva Convention on the Continental Shelf, holding: - that the Federal Republic, which had not ratified the Convention, was not legally bound by the provisions of Article 6; - that the equidistance principle was not a necessary consequence of the general concept of continental shelf rights, and was not a rule of customary international law. The Court also rejected the contentions of the Federal Republic in so far as these sought acceptance of the principle of an apportionment of the continental shelf into just and equitable shares. It held that each Party had an original right to those areas of the continental shelf which constituted the natural prolongation of its land territory into and under the sea. It was not a question of apportioning or sharing out those areas, but of delimiting them. The Court found that the boundary lines in question were to be drawn by agreement between the Parties and in accordance with equitable principles, and it indicated certain factors to be taken into consideration for that purpose. It was now for the Parties to negotiate on the basis of such principles, as they have agreed to do. The proceedings, relating to the delimitation as between the Parties of the areas of the North Sea continental shelf appertaining to each of them, were instituted on 20 February 1967 by the communication to the Registry of the Court of two Special Agreements, between Denmark and the Federal Republic and the Federal Republic and the Netherlands respectively. By an Order of 26 April 1968, the Court joined the proceedings in the two cases. The Court decided the two cases in a single Judgment, which it adopted by eleven votes to six. Amongst the Members of the Court concurring in the Judgment, Judge Sir Muhammad Zafrulla Khan appended a declaration; and President Bustamante y Rivero and Judges Jessup, Padilla Nervo and Ammoun appended separate opinions. In the case of the non-concurring Judges, a declaration of his dissent was appended by Judge Bengzon; and Vice-President Koretsky, together with Judges Tanaka, Morelli and Lachs, and Judge ad hoc Sorensen, appended dissenting opinions. In its Judgment, the Court examined in the context of the delimitations concerned the problems relating to the legal r gime of the continental shelf raised by the contentions of the Parties. The Facts and the Contentions of the Parties (paras. 1-17 of the Judgment) The two Special Agreements had asked the Court to declare the principles and rules of international law applicable to the delimitation as between the Parties of the areas of the North Sea continental shelf appertaining to each of them beyond the partial boundaries in the immediate vicinity of the coast already determined between the Federal Republic and the Netherlands by an agreement of 1 December 1964 and between the Federal Republic and Denmark by an agreement of 9 June 1965.The Court was not asked actually to delimit the further boundaries involved, the Parties undertaking in their respective Special Agreements to effect such delimitation by agreement in pursuance of the Court's decision. The waters of the North Sea were shallow, the whole seabed, except for the Norwegian Trough, consisting of continental shelf at a depth of less than 200 metres. Most of it had already been delimited between the coastal States concerned. The Federal Republic

and Denmark and the Netherlands, respectively, had, however, been unable to agree on the prolongation of the partial boundaries referred to above, mainly because Denmark and the Netherlands had wished this prolongation to be effected on the basis of the equidistance principle, whereas the Federal Republic had considered that it would unduly curtail what the Federal Republic believed should be its proper share of continental shelf area, on the basis of proportionality to the length of its North Sea coastline. Neither of the boundaries in question would by itself produce this effect, but only both of them together - an element regarded by Denmark and the Netherlands as irrelevant to what they viewed as being two separate delimitations, to be carried out without reference to the other. A boundary based on the equidistance principle, i.e., an "equidistance line", left to each of the Parties concerned all those portions of the continental shelf that were nearer to a point on its own coast than they were to any point on the coast of the other Party. In the case of a concave or recessing coast such as that of the Federal Republic on the North Sea, the effect of the equidistance method was to pull the line of the boundary inwards, in the direction of the concavity. Consequently, where two equidistance lines were drawn, they would, if the curvature were pronounced, inevitably meet at a relatively short distance from the coast, thus "cutting off" the coastal State from the area of the continental shelf outside. In contrast, the effect of convex or outwardly curving coasts, such as were, to a moderate extent, those of Denmark and the Netherlands, was to cause the equidistance lines to leave the coasts on divergent courses, thus having a widening tendency on the area of continental shelf off that coast. It had been contended on behalf of Denmark and the Netherlands that the whole matter was governed by a mandatory rule of law which, reflecting the language of Article 6 of the Geneva Convention on the Continental Shelf of 29 April 1958, was designated by them as the "equidistance-special circumstances" rule. That rule was to the effect that in the absence of agreement by the parties to employ another method, all continental shelf boundaries had to be drawn by means of an equidistance line unless "special circumstances" were recognized to exist. According to Denmark and the Netherlands, the configuration of the German North Sea coast did not of itself constitute, for either of the two boundary lines concerned, a special circumstance. The Federal Republic, for its part, had contended that the correct rule, at any rate in such circumstances as those of the North Sea, was one according to which each of the States concerned should have a "just and equitable share" of the available continental shelf, in proportion to the length of its sea-frontage. It had also contended that in a sea shaped as is the North Sea, each of the States concerned was entitled to a continental shelf area extending up to the central point of that sea, or at least extending to its median line. Alternatively, the Federal Republic had claimed that if the equidistance method were held to bc applicable, the configuration of the German North Sea coast constituted a special circumstance such as to justify a departure from that method of delimitation in this particular case. The Apportionment Theory Rejected (paras. 18-20 of the Judgment) The Court felt unable to accept, in the particular form it had taken, the first contention put forward on behalf of the Federal Republic. Its task was to delimit, not to apportion the areas concerned. The process of delimitation involved establishing the boundaries of an area already, in principle, appertaining to the coastal State and not the determination de novo of such an area. The doctrine of the just and equitable share was wholly at variance with the most fundamental of all the rules of law relating to the continental shelf, namely, that the rights of the coastal State in respect of the area of continental shelf constituting a natural prolongation of its land territory under the sea existed ipso facto and ab initio, by virtue of its sovereignty over the land. That right was inherent. In order to exercise it, no special legal acts had to be performed. It followed that the notion of apportioning an as yet undelimited area considered as a whole (which underlay the doctrine of the just and equitable share) was inconsistent with the basic concept of continental shelf entitlement. Non-Applicability of Article 6 of the 1958 Continental Shelf Convention (paras. 21-36 of the Judgment) The Court then turned to the question whether in delimiting those areas the Federal Republic was under a legal obligation to accept the application of the equidistance principle. While it was probably true that no other method of delimitation had the same combination of practical convenience and certainty of application, those factors did not suffice of themselves to convert what was a method into a rule of law. Such a method would have to draw its legal force from other factors than the existence of those advantages. The first question to be considered was whether the 1958 Geneva Convention on the Continental Shelf was binding for all the Parties in the case. Under the formal provisions of the Convention, it was in force for any individual State that had signed it within the time-limit provided, only if that State had also subsequently ratified it. Denmark and the Netherlands had both signed and ratified the Convention and were parties to it, but the Federal Republic, although one of the signatories of the Convention, had never ratified it, and was consequently not a party. It was admitted on behalf of Denmark and the Netherlands that in the circumstances the Convention could not, as such, be binding on the Federal Republic. But it was contended that the r gime of Article 6 of the Convention had become binding on the Federal Republic, because, by conduct, by public statements and proclamations, and in other ways, the Republic had assumed the obligations of the Convention. It was clear that only a very definite, very consistent course of conduct on the part of a State in the situation of the Federal Republic could justify upholding those contentions. When a number of States drew up a convention specifically providing for a particular method by which the intention to become bound by the rgime of the convention was to be manifested, it was not lightly to be presumed that a State which had not carried out those formalities had nevertheless somehow become bound in another way. Furthermore, had the Federal Republic ratified the Geneva Convention, it could have entered a reservation to Article 6, by reason of the faculty to do so conferred by Article 12 of the Convention. Only the existence of a situation of estoppel could lend substance to the contention of Denmark and the Netherlands - i.e., if the Federal Republic were now precluded from denying the applicability of the conventional r gime, by reason of past conduct, declarations, etc., which not only clearly and consistently evinced acceptance of that r gime, but also had caused Denmark or the Netherlands, in reliance on such conduct, detrimentally to change position or suffer some prejudice. Of this there was no evidence. Accordingly, Article 6 of the Geneva Convention was not, as such, applicable to the delimitations involved in the present proceedings. The Equidistance Principle Not Inherent in the Basic Doctrine of the Continental Shelf (paras. 37-59 of the Judgment) It had been maintained by Denmark and the Netherlands that the Federal Republic was in any event, and quite apart from the Geneva Convention, bound to accept delimitation on an equidistance basis, since the use of that method was a rule of general or customary international law, automatically binding on the Federal Republic.

One argument advanced by them in support of this contention, which might be termed the a priori argument, started from the position that the rights of the coastal State to its continental shelf areas were based on its sovereignty over the land domain, of which the shelf area was the natural prolongation under the sea. From this notion of appurtenance was derived the view, which the Court accepted, that the coastal State's rights existed ipso facto and ab initio. Denmark and the Netherlands claimed that the test of appurtenance must be "proximity": all those parts of the shelf being considered as appurtenant to a particular coastal State which were closer to it than they were to any point on the coast of another State. Hence, delimitation had to be effected by a method which would leave to each one of the States concerned all those areas that were nearest to its own coast. As only an equidistance line would do this, only such a line could be valid, it was contended. This view had much force; the greater part of a State's continental shelf areas would normally in fact be nearer to its coasts than to any other. But the real issue was whether it followed that every part of the area concerned must be placed in that way. The Court did not consider this to follow from the notion of proximity, which was a somewhat fluid one. More fundamental was the concept of the continental shelf as being the natural prolongation of the land domain. Even if proximity might afford one of the tests to be applied, and an important one in the right conditions, it might not necessarily be the only, nor in all circumstances the most appropriate, one. Submarine areas did not appertain to the coastal State merely because they were near it, nor did their appurtenance depend on any certainty of delimitation as to their boundaries. What conferred the ipso jure title was the fact that the submarine areas concerned might be deemed to be actually part of its territory in the sense that they were a prolongation of its land territory under the sea. Equidistance clearly could not be identified with the notion of natural prolongation, since the use of the equidistance method would frequently cause areas which were the natural prolongation of the territory of one State to be attributed to another. Hence, the notion of equidistance was not an inescapable a priori accompaniment of basic continental shelf doctrine. A review of the genesis of the equidistance method of delimitation confirmed the foregoing conclusion. The "Truman Proclamation" issued by the Government of the United States on 28 September 1945 could be regarded as a starting point of the positive law on the subject, and the chief doctrine it enunciated, that the coastal State had an original, natural and exclusive right to the continental shelf off its shores, had come to prevail over all others and was now reflected in the1958 Geneva Convention. With regard to the delimitation of boundaries between the continental shelves of adjacent States, the Truman Proclamation had stated that such boundaries "shall be determined by the United States and the State concerned in accordance with equitable principles". These two concepts, of delimitation by mutual agreement and delimitation in accordance with equitable principles, had underlain all the subsequent history of the subject. It had been largely on the recommendation of a committee of experts that the principle of equidistance for the delimitation of continental shelf boundaries had been accepted by the United Nations International Law Commission in the text it had laid before the Geneva Conference of 1958 on the Law of the Sea which had adopted the Continental Shelf Convention. It could legitimately be assumed that the experts had been actuated by considerations not of legal theory but of practical convenience and cartography. Moreover, the article adopted by the Commission had given priority to delimitation by agreement and had contained an exception in favour of "special circumstances". The Court consequently considered that Denmark and the Netherlands inverted the true order of things and that, far from an equidistance rule having been generated by an antecedent principle of proximity inherent in the whole concept of continental shelf appurtenance, the latter was rather a rationalization of the former The Equidistance Principle Not a Rule of Customary International Law (paras. 60-82 of the Judgment) The question remained whether through positive law processes the equidistance principle must now be regarded as a rule of customary international law. Rejecting the contentions of Denmark and the Netherlands, the Court considered that the principle of equidistance, as it figured in Article 6 of the Geneva Convention, had not been proposed by the International Law Commission as an emerging rule of customary international law. This Article could not be said to have reflected or crystallized such a rule. This was confirmed by the fact that any State might make reservations in respect of Article 6, unlike Articles 1, 2 and 3, on signing, ratifying or acceding to the Convention. While certain other provisions of the Convention, although relating to matters that lay within the field of received customary law, were also not excluded from the faculty of reservation, they all related to rules of general maritime law very considerably antedating the Convention which were only incidental to continental shelf rights as such, and had been mentioned in the Convention simply to ensure that they were not prejudiced by the exercise of continental shelf rights. Article 6, however, related directly to continental shelf rights as such, and since it was not excluded from the faculty of reservation, it was a legitimate inference that it was not considered to reflect emergent customary law. It had been argued on behalf of Denmark and the Netherlands that even if at the date of the Geneva Convention no rule of customary international law existed in favour of the equidistance principle, such a rule had nevertheless come into being since the Convention, partly because of its own impact, and partly on the basis of subsequent State practice. In order for this process to occur it was necessary that Article 6 of the Convention should, at all events potentially, be of a norm-creating character. Article 6 was so framed, however, as to put the obligation to make use of the equidistance method after a primary obligation to effect delimitation by agreement. Furthermore, the part played by the notion of special circumstances in relation to the principle of equidistance, the controversies as to the exact meaning and scope of that notion, and the faculty of making reservations to Article 6 must all raise doubts as to the potentially norm-creating character of that Article. Furthermore, while a very widespread and representative participation in a convention might show that a conventional rule had become a general rule of international law, in the present case the number of ratifications and accessions so far was hardly sufficient. As regards the time element, although the passage of only a short period of time was not necessarily a bar to the formation of a new rule of customary international law on the basis of what was originally a purely conventional rule, it was indispensable that State practice during that period, including that of States whose interests were specially affected, should have been both extensive and virtually uniform in the sense of the provision invoked and should have occurred in such a way as to show a general recognition that a rule of law was involved. Some 15 cases had been cited in which the States concerned had agreed to draw or had drawn the boundaries concerned according to the principle of equidistance, but there was no evidence that they had so acted because they had felt legally compelled to draw them in that way by reason of a rule of customary law. The cases cited were inconclusive and insufficient evidence of a settled practice. The Court consequently concluded that the Geneva Convention was not in its origins or inception declaratory of a mandatory rule of customary international law enjoining the use of the equidistance principle, its subsequent effect had not been constitutive of such a rule, and State practice up to date had equally been insufficient for the purpose.

The Principles and Rules of Law Applicable (paras. 83-101 of the Judgment) The legal situation was that the Parties were under no obligation to apply the equidistance principle either under the 1958 Convention or as a rule of general or customary international law. It consequently became unnecessary for the Court to consider whether or not the configuration of the German North Sea coast constituted a "special circumstance". It remained for the Court, however, to indicate to the Parties the principles and rules of law in the light of which delimitation was to be effected. The basic principles in the matter of delimitation, deriving from the Truman Proclamation, were that it must be the object of agreement between the States concerned and that such agreement must be arrived at in accordance with equitable principles. The Parties were under an obligation to enter into negotiations with a view to arriving at an agreement and not merely to go through a formal process of negotiation as a sort of prior condition for the automatic application of a certain method of delimitation in the absence of agreement; they were so to conduct themselves that the negotiations were meaningful, which would not be the case when one of them insisted upon its own position without contemplating any modification of it. This obligation was merely a special application of a principle underlying all international relations, which was moreover recognized in Article 33 of the Charter of the United Nations as one of the methods for the peaceful settlement of international disputes. The Parties were under an obligation to act in such a way that in the particular case, and taking all the circumstances into account, equitable principles were applied. There was no question of the Court's decision being ex aequo et bono. It was precisely a rule of law that called for the application of equitable principles, and in such cases as the present ones the equidistance method could unquestionably lead to inequity. Other methods existed and might be employed, alone or in combination, according to the areas involved. Although the Parties intended themselves to apply the principles and rules laid down by the Court some indication was called for of the possible ways in which they might apply them. For all the foregoing reasons, the Court found in each case that the use of the equidistance method of delimitation was not obligatory as between the Parties; that no other single method of delimitation was in all circumstances obligatory; that delimitation was to be effected by agreement in accordance with equitable principles and taking account of all relevant circumstances, in such a way as to leave as much as possible to each Party all those parts of the continental shelf that constituted a natural prolongation of its land territory, without encroachment on the natural prolongation of the land territory of the other; and that, if such delimitation produced overlapping areas, they were to be divided between the Parties in agreed proportions, or, failing agreement, equally, unless they decided on a regime of joint jurisdiction, user, or exploitation. In the course of negotiations, the factors to be taken into account were to include: the general configuration of the coasts of the Parties, as well as the presence of any special or unusual features; so far as known or readily ascertainable, the physical and geological structure and natural resources of the continental shelf areas involved, the element of a reasonable degree of proportionality between the extent of the continental shelf areas appertaining to each State and the length of its coast measured in the general direction of the coastline, taking into account the effects, actual or prospective, of any other continental shelf delimitations in the same region. JEFFREY LIANG (HUEFENG), petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent. RESOLUTION YNARES-SANTIAGO, J.: This resolves petitioners Motion for Reconsideration of our Decision dated January 28, 2000, denying the petition for review. The Motion is anchored on the following arguments: 1) THE DFAS DETERMINATION OF IMMUNITY IS A POLITICAL QUESTION TO BE MADE BY THE EXECUTIVE BRANCH OF THE GOVERNMENT AND IS CONCLUSIVE UPON THE COURTS. 2) THE IMMUNITY OF INTERNATIONAL ORGANIZATIONS IS ABSOLUTE. 3) THE IMMUNITY EXTENDS TO ALL STAFF OF THE ASIAN DEVELOPMENT BANK (ADB). 4) DUE PROCESS WAS FULLY AFFORDED THE COMPLAINANT TO REBUT THE DFA PROTOCOL. 5) THE DECISION OF JANUARY 28, 2000 ERRONEOUSLY MADE A FINDING OF FACT ON THE MERITS, NAMELY, THE SLANDERING OF A PERSON WHICH PREJUDGED PETITIONERS CASE BEFORE THE METROPOLITAN TRIAL COURT (MTC) MANDALUYONG. 6) THE VIENNA CONVENTION ON DIPLOMATIC RELATIONS IS NOT APPLICABLE TO THIS CASE. This case has its origin in two criminal Informations for grave oral defamation filed against petitioner, a Chinese national who was employed as an Economist by the Asian Development Bank (ADB), alleging that on separate occasions on January 28 and January 31, 1994, petitioner allegedly uttered defamatory words to Joyce V. Cabal, a member of the clerical staff of ADB. On April 13, 1994, the Metropolitan Trial Court of Mandaluyong City, acting pursuant to an advice from the Department of Foreign Affairs that petitioner enjoyed immunity from legal processes, dismissed the criminal Informations against him. On a petition for certiorari and mandamus filed by the People, the Regional Trial Court of Pasig City, Branch 160, annulled and set aside the order of the [2] Metropolitan Trial Court dismissing the criminal cases. Petitioner, thus, brought a petition for review with this Court. On January 28, 2000, we rendered the assailed Decision denying the petition for review. We ruled, in essence, that the immunity granted to officers and staff of the ADB is not absolute; it is limited to acts performed in an official capacity. Furthermore, we held that the immunity cannot cover the commission of a crime such as slander or oral defamation in the name of official duty. On October 18, 2000, the oral arguments of the parties were heard. This Court also granted the Motion for Intervention of the Department of Foreign Affairs. Thereafter, the parties were directed to submit their respective memorandum.
[1]

For the most part, petitioners Motion for Reconsideration deals with the diplomatic immunity of the ADB, its officials and staff, from legal and judicial processes in the Philippines, as well as the constitutional and political bases thereof. It should be made clear that nowhere in the assailed Decision is diplomatic immunity denied, even remotely. The issue in this case, rather, boils down to whether or not the statements allegedly made by petitioner were uttered while in the performance of his official functions, in order for this case to fall squarely under the provisions of Section 45 (a) of the Agreement Between the Asian Development Bank and the Government of the Republic of the Philippines Regarding the Headquarters of the Asian Development Bank, to wit: Officers ands 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. After a careful deliberation of the arguments raised in petitioners and intervenors Motions for Reconsideration, we find no cogent reason to disturb our Decision of January 28, 2000. As we have stated therein, the slander of a person, by any stretch, cannot be considered as falling within the purview of the immunity granted to ADB officers and personnel. Petitioner argues that the Decision had the effect of prejudging the criminal case for oral defamation against him. We wish to stress that it did not. What we merely stated therein is that slander, in general, cannot be considered as an act performed in an official capacity. The issue of whether or not petitioners utterances constituted oral d efamation is still for the trial court to determine. WHEREFORE, in view of the foregoing, the Motions for Reconsideration filed by petitioner and intervenor Department of Foreign Affairs are DENIED with FINALITY. SO ORDERED.

FACTS: 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 MeTC of Mandaluyong City with two counts of oral defamation. Petitioner was arrested by virtue of a warrant issued by the MeTC. After fixing petitioners bail, 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 DFA stating that petitioner is c overed by immunity from legal process under section 45 of the Agreement between the ADB and the Philippine Government regarding the Headquarters of the ADB 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 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 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, the petitioner elevated the case to the SC 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 case. ISSUES: (1) Whether or not the petitioners case is covered with immunity from legal process with regard to Section 45 of the Agreement between the ADB and the Philippine Govt. (2) Whether or not the conduct of preliminary investigation was imperative. HELD: (1) NO. The petitioners case is not covered by the immunity. Courts cannot blindly adhere to the communication from the DFA that the petitioner is covered by any immunity. It has no binding effect in courts. The court needs to protect the right to due process not only of the accused but also of the prosecution. Secondly, the immunity under Section 45 of the Agreement is not absolute, but subject to the exception that the acts must be done in official capacity. Hence, 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. (2) NO. Preliminary Investigation is not a matter of right in cases cognizable by the MeTC such as this case. Being purely a statutory right, preliminary investigation may be invoked only when specifically granted by law. The rule on criminal procedure is clear that no preliminary investigation is required in cases falling within the jurisdiction of the MeTC. Hence, SC denied the petition.
G.R. No. 101949 December 1, 1994 THE HOLY SEE, petitioner, vs. THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the Regional Trial Court of Makati, Branch 61 and STARBRIGHT SALES ENTERPRISES, INC., respondents.

QUIASON, J.: This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse and set aside the Orders dated June 20, 1991 and September 19, 1991 of the Regional Trial Court, Branch 61, Makati, Metro Manila in Civil Case No. 90-183. The Order dated June 20, 1991 denied the motion of petitioner to dismiss the complaint in Civil Case No. 90-183, while the Order dated September 19, 1991 denied the motion for reconsideration of the June 20,1991 Order. Petitioner is the Holy See who exercises sovereignty over the Vatican City in Rome, Italy, and is represented in the Philippines by the Papal Nuncio. Private respondent, Starbright Sales Enterprises, Inc., is a domestic corporation engaged in the real estate business. This petition arose from a controversy over a parcel of land consisting of 6,000 square meters (Lot 5-A, Transfer Certificate of Title No. 390440) located in the Municipality of Paraaque, Metro Manila and registered in the name of petitioner. Said Lot 5-A is contiguous to Lots 5-B and 5-D which are covered by Transfer Certificates of Title Nos. 271108 and 265388 respectively and registered in the name of the Philippine Realty Corporation (PRC). The three lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr., acting as agent to the sellers. Later, Licup assigned his rights to the sale to private respondent. In view of the refusal of the squatters to vacate the lots sold to private respondent, a dispute arose as to who of the parties has the responsibility of evicting and clearing the land of squatters. Complicating the relations of the parties was the sale by petitioner of Lot 5-A to Tropicana Properties and Development Corporation (Tropicana). I On January 23, 1990, private respondent filed a complaint with the Regional Trial Court, Branch 61, Makati, Metro Manila for annulment of the sale of the three parcels of land, and specific performance and damages against petitioner, represented by the Papal Nuncio, and three other defendants: namely, Msgr. Domingo A. Cirilos, Jr., the PRC and Tropicana (Civil Case No. 90-183). The complaint alleged that: (1) on April 17, 1988, Msgr. Cirilos, Jr., on behalf of petitioner and the PRC, agreed to sell to Ramon Licup Lots 5-A, 5-B and 5-D at the price of P1,240.00 per square meters; (2) the agreement to sell was made on the condition that earnest money of P100,000.00 be paid by Licup to the sellers, and that the sellers clear the said lots of squatters who were then occupying the same; (3) Licup paid the earnest money to Msgr. Cirilos; (4) in the same month, Licup assigned his rights over the property to private respondent and informed the sellers of the said assignment; (5) thereafter, private respondent demanded from Msgr. Cirilos that the sellers fulfill their undertaking and clear the property of squatters; however, Msgr. Cirilos informed private respondent of the squatters' refusal to vacate the lots, proposing instead either that private respondent undertake the eviction or that the earnest money be returned to the latter; (6) private respondent counterproposed that if it would undertake the eviction of the squatters, the purchase price of the lots should be reduced from P1,240.00 to P1,150.00 per square meter; (7) Msgr. Cirilos returned the earnest money of P100,000.00 and wrote private respondent giving it seven days from receipt of the letter to pay the original purchase price in cash; (8) private respondent sent the earnest money back to the sellers, but later discovered that on March 30, 1989, petitioner and the PRC, without notice to private respondent, sold the lots to Tropicana, as evidenced by two separate Deeds of Sale, one over Lot 5-A, and another over Lots 5-B and 5-D; and that the sellers' transfer certificate of title over the lots were cancelled, transferred and registered in the name of Tropicana; (9) Tropicana induced petitioner and the PRC to sell the lots to it and thus enriched itself at the expense of private respondent; (10) private respondent demanded the rescission of the sale to Tropicana and the reconveyance of the lots, to no avail; and (11) private respondent is willing and able to comply with the terms of the contract to sell and has actually made plans to develop the lots into a townhouse project, but in view of the sellers' breach, it lost profits of not less than P30,000.000.00. Private respondent thus prayed for: (1) the annulment of the Deeds of Sale between petitioner and the PRC on the one hand, and Tropicana on the other; (2) the reconveyance of the lots in question; (3) specific performance of the agreement to sell between it and the owners of the lots; and (4) damages. On June 8, 1990, petitioner and Msgr. Cirilos separately moved to dismiss the complaint petitioner for lack of jurisdiction based on sovereign immunity from suit, and Msgr. Cirilos for being an improper party. An opposition to the motion was filed by private respondent. On June 20, 1991, the trial court issued an order denying, among others, petitioner's motion to dismiss after finding that petitioner "shed off [its] sovereign immunity by entering into the business contract in question" ( Rollo, pp. 20-21). On July 12, 1991, petitioner moved for reconsideration of the order. On August 30, 1991, petitioner filed a "Motion for a Hearing for the Sole Purpose of Establishing Factual Allegation for claim of Immunity as a Jurisdictional Defense." So as to facilitate the determination of its defense of sovereign immunity, petitioner prayed that a hearing be conducted to allow it to establish certain facts upon which the said defense is based. Private respondent opposed this motion as well as the motion for reconsideration.

On October 1, 1991, the trial court issued an order deferring the resolution on the motion for reconsideration until after trial on the merits and directing petitioner to file its answer (Rollo, p. 22). Petitioner forthwith elevated the matter to us. In its petition, petitioner invokes the privilege of sovereign immunity only on its own behalf and on behalf of its official representative, the Papal Nuncio. On December 9, 1991, a Motion for Intervention was filed before us by the Department of Foreign Affairs, claiming that it has a legal interest in the outcome of the case as regards the diplomatic immunity of petitioner, and that it "adopts by reference, the allegations contained in the petition of the Holy See insofar as they refer to arguments relative to its claim of sovereign immunity from suit" (Rollo, p. 87). Private respondent opposed the intervention of the Department of Foreign Affairs. In compliance with the resolution of this Court, both parties and the Department of Foreign Affairs submitted their respective memoranda. II A preliminary matter to be threshed out is the procedural issue of whether the petition for certiorari under Rule 65 of the Revised Rules of Court can be availed of to question the order denying petitioner's motion to dismiss. The general rule is that an order denying a motion to dismiss is not reviewable by the appellate courts, the remedy of the movant being to file his answer and to proceed with the hearing before the trial court. But the general rule admits of exceptions, and one of these is when it is very clear in the records that the trial court has no alternative but to dismiss the complaint (Philippine National Bank v. Florendo, 206 SCRA 582 [1992]; Zagada v. Civil Service Commission, 216 SCRA 114 [1992]. In such a case, it would be a sheer waste of time and energy to require the parties to undergo the rigors of a trial. The other procedural question raised by private respondent is the personality or legal interest of the Department of Foreign Affairs to intervene in the case in behalf of the Holy See (Rollo, pp. 186-190). 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 that effect instead of submitting a "suggestion" (O'Connell, I 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 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. InWorld 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. III The burden of the petition is that respondent trial court has no jurisdiction over petitioner, being a foreign state enjoying sovereign immunity. On the other hand, private respondent insists that the doctrine of non-suability is not anymore absolute and that petitioner has divested itself of such a cloak when, of its own free will, it entered into a commercial transaction for the sale of a parcel of land located in the Philippines. A. The Holy See Before we determine the issue of petitioner's non-suability, a brief look into its status as a sovereign state is in order.

Before the annexation of the Papal States by Italy in 1870, the Pope was the monarch and he, as the Holy See, was considered a subject of International Law. With the loss of the Papal States and the limitation of the territory under the Holy See to an area of 108.7 acres, the position of the Holy See in International Law became controversial (Salonga and Yap, Public International Law 36-37 [1992]). 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 Lateran Treaty established the statehood of the Vatican City "for the purpose of assuring to the Holy See absolute and visible independence and of guaranteeing to it indisputable sovereignty also in the field of international relations" (O'Connell, I International Law 311 [1965]). In view of the wordings of the Lateran Treaty, it is difficult to determine whether the statehood is vested in the Holy See or in the Vatican City. Some writers even suggested that the treaty created two international persons the Holy See and Vatican City (Salonga and Yap, supra, 37). The Vatican City fits into none of the established categories of states, and the attribution to it of "sovereignty" must be made in a sense different from that in which it is applied to other states (Fenwick, International Law 124-125 [1948]; Cruz, International Law 37 [1991]). In a community of national states, the Vatican City represents an entity organized not for political but for ecclesiastical purposes and international objects. Despite its size and object, the Vatican City has an independent government of its own, with the Pope, who is also head of the Roman Catholic Church, as the Holy See or Head of State, in conformity with its traditions, and the demands of its mission in the world. Indeed, the world-wide interests and activities of the Vatican City are such as to make it in a sense an "international state" (Fenwick, supra., 125; Kelsen, Principles of International Law 160 [1956]). One authority wrote that the recognition of the Vatican City as a state has significant implication that it is possible for any entity pursuing objects essentially different from those pursued by states to be invested with international personality (Kunz, The Status of the Holy See in International Law, 46 The American Journal of International Law 308 [1952]). Inasmuch as the Pope prefers to conduct foreign relations and enter into transactions as the Holy See and not in the name of the Vatican City, one can conclude that in the Pope's own view, it is the Holy See that is the international person. The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. The Holy See, through its Ambassador, the Papal Nuncio, has had diplomatic representations with the Philippine government since 1957 ( Rollo, p. 87). This appears to be the universal practice in international relations. B. Sovereign Immunity As expressed in Section 2 of Article II of the 1987 Constitution, we have adopted the generally accepted principles of International Law. Even without this affirmation, such principles of International Law are deemed incorporated as part of the law of the land as a condition and consequence of our admission in the society of nations (United States of America v. Guinto, 182 SCRA 644 [1990]). 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 (United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and Defensor-Santiago, Public International Law 194 [1984]). Some states passed legislation to serve as guidelines for the executive or judicial determination when an act may be considered as jure gestionis. The United States passed the Foreign Sovereign Immunities Act of 1976, which defines a commercial activity as "either a regular course of commercial conduct or a particular commercial transaction or act." Furthermore, the law declared that the "commercial character of the activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose." The Canadian Parliament enacted in 1982 an Act to Provide For State Immunity in Canadian Courts. The Act defines a "commercial activity" as any particular transaction, act or conduct or any regular course of conduct that by reason of its nature, is of a "commercial character." 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]; (2) the conduct of

public bidding for the repair of a wharf at a United States Naval Station (United States of America v. Ruiz, supra.); and (3) the change of employment status of base employees (Sanders v. Veridiano, 162 SCRA 88 [1988]). 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]); and (2) the bidding for the operation of barber shops in Clark Air Base in Angeles City (United States of America v. Guinto, 182 SCRA 644 [1990]). The operation of the restaurants and other facilities open to the general public is undoubtedly for profit as a commercial and not a governmental activity. By entering into the employment contract with the cook in the discharge of its proprietary function, the United States government impliedly divested itself of its sovereign immunity from suit. In the absence of legislation defining what activities and transactions shall be considered "commercial" and as constituting acts jure gestionis, we have to come out with our own guidelines, tentative they may be. 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. As held in United States of America v. Guinto, (supra): There is no question that the United States of America, like any other state, will be deemed to have impliedly waived its non-suability if it has entered into a contract in its proprietary or private capacity. It is only when the contract involves its sovereign or governmental capacity that no such waiver may be implied. 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. Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. The donation was made not for commercial purpose, but for the use of petitioner to construct thereon the official place of residence of the Papal Nuncio. The right of a foreign sovereign to acquire property, real or personal, in a receiving state, necessary for the creation and maintenance of its diplomatic mission, is recognized in the 1961 Vienna Convention on Diplomatic Relations (Arts. 20-22). This treaty was concurred in by the Philippine Senate and entered into force in the Philippines on November 15, 1965. In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the civil and administrative jurisdiction of the receiving state over any real action relating to private immovable property situated in the territory of the receiving state which the envoy holds on behalf of the sending state for the purposes of the mission. If this immunity is provided for a diplomatic envoy, with all the more reason should immunity be recognized as regards the sovereign itself, which in this case is the Holy See. The decision to transfer the property and the subsequent disposal thereof are likewise clothed with a governmental character. Petitioner did not sell Lot 5-A for profit or gain. It merely wanted to dispose off the same because the squatters living thereon made it almost impossible for petitioner to use it for the purpose of the donation. The fact that squatters have occupied and are still occupying the lot, and that they stubbornly refuse to leave the premises, has been admitted by private respondent in its complaint ( Rollo, pp. 26, 27). The issue of petitioner's non-suability can be determined by the trial court without going to trial in the light of the pleadings, particularly the admission of private respondent. Besides, the privilege of sovereign immunity in this case was sufficiently established by the Memorandum and Certification of the Department of Foreign Affairs. As the department tasked with the conduct of the Philippines' foreign relations (Administrative Code of 1987, Book IV, Title I, Sec. 3), the Department of Foreign Affairs has formally intervened in this case and officially certified that the Embassy of the Holy See is a duly accredited diplomatic mission to the Republic of the Philippines exempt from local jurisdiction and entitled to all the rights, privileges and immunities of a diplomatic mission or embassy in this country (Rollo, pp. 156-157). The determination of the executive arm of government that a state or instrumentality is entitled to sovereign or diplomatic immunity is a political question that is conclusive upon the courts (International Catholic Migration Commission v. Calleja, 190 SCRA 130 [1990]). Where the plea of immunity is recognized and affirmed by the executive branch, it is the duty of the courts to accept this claim so as not to embarrass the executive arm of the government in conducting the country's foreign relations (World Health Organization v. Aquino, 48 SCRA 242 [1972]). As in International Catholic Migration Commission and in World Health Organization, we abide by the certification of the Department of Foreign Affairs. Ordinarily, the procedure would be to remand the case and order the trial court to conduct a hearing to establish the facts alleged by petitioner in its motion. In view of said certification, such procedure would however be pointless and unduly circuitous (Ortigas & Co. Ltd. Partnership v. Judge Tirso Velasco, G.R. No. 109645, July 25, 1994). IV

Private respondent is not left without any legal remedy for the redress of its grievances. Under both Public International Law and Transnational Law, a person who feels aggrieved by the acts of a foreign sovereign can ask his own government to espouse his cause through diplomatic channels. Private respondent can ask the Philippine government, through the Foreign Office, to espouse its claims against the Holy See. Its first task is to persuade the Philippine government to take up with the Holy See the validity of its claims. Of course, the Foreign Office shall first make a determination of the impact of its espousal on the relations between the Philippine government and the Holy See (Young, Remedies of Private Claimants Against Foreign States, Selected Readings on Protection by Law of Private Foreign Investments 905, 919 [1964]). Once the Philippine government decides to espouse the claim, the latter ceases to be a private cause. According to the Permanent Court of International Justice, the forerunner of the International Court of Justice: By taking up the case of one of its subjects and by reporting to diplomatic action or international judicial proceedings on his behalf, a State is in reality asserting its own rights its right to ensure, in the person of its subjects, respect for the rules of international law (The Mavrommatis Palestine Concessions, 1 Hudson, World Court Reports 293, 302 [1924]). WHEREFORE, the petition for certiorari is GRANTED and the complaint in Civil Case No. 90-183 against petitioner is DISMISSED. SO ORDERED. G.R. No. L-14279 October 31, 1961 THE COMMISSIONER OF CUSTOMS and THE COLLECTOR OF CUSTOMS, petitioners,vs. EASTERN SEA TRADING, respondent. Office of the Solicitor General for petitioners.Valentin Gutierrez for respondent. CONCEPCION, J.: Petition for review of a judgment of the Court of Tax Appeals reversing a decision of the Commissioner of Customs. Respondent Eastern Sea Trading was the consignee of several shipments of onion and garlic which arrived at the Port of Manila from August 25 to September 7, 1954. Some shipments came from Japan and others from Hong Kong. In as much as none of the shipments had the certificate required by Central Bank Circulars Nos. 44 and 45 for the release thereof, the goods thus imported were seized and subjected to forfeiture proceedings for alleged violations of section 1363(f) of the Revised Administrative Code, in relation to the aforementioned circularsof the Central Bank. In due course, the Collector of Customs of Manila rendered a decision on September 4, 1956, declaring said goods forfeited to the Government andthe goods having been, in the meantime, released to the consignees on surety bonds, filed by the same, as principal, and the Alto Surety & Insurance Co., Inc., as surety, in compliance with orders of the Court of First Instance of Manila, in Civil Cases Nos. 23942 and 23852 thereof directing that the amounts of said bonds be paid, by said principal and surety, jointly and severally, to the Bureau of Customs, within thirty (30) days from notice. On appeal taken by the consignee, said decision was affirmed by the Commissioner of Customs on December 27, 1956. Subsequently, the consignee sought a review of the decision of said two(2) officers by the Court of Tax Appeals, which reversed the decision of the Commissioner of Customs and ordered that the aforementioned bonds be cancelled and withdrawn. Hence, the present petition of the Commissioner of Customs for review of the decision of the Court of Tax Appeals. The latter is based upon the following premises, namely: that the Central Bank has no authority to regulate transactions not involving foreign exchange; that the shipments in question are in the nature of "no-dollar" imports; that, as such, the aforementioned shipments do not involve foreign exchange; that, insofar as a Central Bank license and a certificate authorizing the importation or release of the goods under consideration are required by Central Bank Circulars Nos. 44 and 45, the latter are null and void; and that the seizure and forfeiture of the goods imported from Japan cannot be justified under Executive Order No. 328, not only because the same seeks to implement an executive agreement extending the effectivity of our Trades and Financial Agreements with Japanwhich (executive agreement), it believed, is of dubious validity, but, also, because there is no governmental agency authorized to issue the import license required by the aforementioned executive order. The authority of the Central Bank to regulate no-dollar imports and the validity of the aforementioned Circulars Nos. 44, and 45 have already been passed upon and repeatedly upheld by this Court (Pascual vs. Commissioner of Customs, L-10979 [June 30, 1959]; Acting Commissioner of Customs vs. Leuterio, L-9142 [October 17, 1959] Commissioner of Customs vs. Pascual, L-9836 [November 18, 1959]; Commissioner of Customs vs. Serree Investment Co., L-12007 [May 16, 1960]; Commissioner of Customs vs. Serree Investment Co., L-14274[November 29, 1960]), for the reason that the broad powers of the Central Bank, under its charter, to maintain our monetary stability and to preserve the international value of our currency, under section 2 of Republic Act No. 265, in relation to section 14 of said Act authorizing the bank to issue such rules and regulations as it may consider necessary for the effective discharge of the responsibilities and the exercise of the powers assigned to the Monetary Board and to the Central Bank connote the authority to regulate no-dollar imports, owing to the influence and effect that the same may and do have upon the stability of our peso and its international value.

The Court of Tax Appeals entertained doubts on the legality of the executive agreement sought to be implemented by Executive Order No. 328, owing to the fact that our Senate had not concurred in the making of said executive agreement. The concurrence of said House of Congress is required by our fundamental law in the making of "treaties" (Constitution of the Philippines, Article VII, Section 10[7]), which are, however, distinct and different from "executive agreements," which may be validly entered into without such concurrence. Treaties are formal documents which require ratification with the approval of two thirds of the Senate. Executive agreements become binding through executive action without the need of a vote by the Senate or by Congress. xxx xxx xxx . . . 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. xxx xxx xxx Agreements with respect to the registration of trade-marks have been concluded by the Executive with various countries under the Act of Congress of March 3, 1881 (21 Stat.502). Postal conventions regulating the reciprocal treatment of mail matters, money orders, parcel post, etc., have been concluded by the Postmaster General with various countries under authorization by Congress beginning with the Act of February 20, 1792(1 Stat. 232, 239). Ten executive agreements were concluded by the President pursuant to the McKinley Tariff Act of 1890 (26 Stat. 567, 612), and nine such agreements were entered into under the Dingley Tariff Act 1897 (30 Stat. 151, 203, 214). A very much larger number of agreements, along the lines of the one with Rumania previously referred to, providing for most-favored-nation treatment in customs and related matters have been entered into since the passage of the Tariff Act of 1922, not by direction of the Act but in harmony with it. xxx xxx xxx 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 arrangementsof a more or less temporary nature usually take the form of executive agreements. xxx xxx xxx Furthermore, the United States Supreme Court has expressly recognized the validity and constitutionality of executive agreements entered into without Senate approval. (39Columbia 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. 670675; Hyde on International Law[Revised Edition], Vol. 2, pp. 1405, 1416-1418; Willoughby on the U.S. Constitutional 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). (Emphasis supplied.) In this connection, Francis B. Sayre, former U.S. High Commissioner to the Philippines, said in his work on "The Constitutionality of Trade Agreement Acts": Agreements concluded by the President which fall short of treaties are commonly referred to as executive agreements and are no less common in our scheme of government than are the more formal instrumentstreaties and conventions. They sometimes take the form of exchanges of notes and at other times that of more formal documents denominated "agreements" time or "protocols". The point where ordinary correspondence between this and other governments ends and agreementswhether denominated executive agreements or exchanges of notes or otherwisebegin, may sometimes be difficult of ready ascertainment. It would be useless to undertake to discuss here the large variety of executive agreements as such, concluded from time to time. Hundreds of executive agreements, other than those entered into under the trade-agreements act, have been negotiated with foreign governments. . . . It would seem to be sufficient, in order to show that the trade agreements under the act of 1934are not anomalous in character, that they are not treaties, and that they have abundant precedent in our history, to refer to certain classes of agreements heretofore entered into by the Executive without the approval of the Senate. They cover such subjects as the inspection of vessels, navigation dues, income tax on shipping profits, the admission of civil aircraft, customs matters, and commercial relations generally, international claims, postal matters, the registration of trademarks and copyrights, etcetera. Some of them were concluded not by specific congressional authorization but in conformity with policies declared in acts of Congress with respect to the general subject matter, such as tariff acts; while still others, particularly those with respect of the settlement of claims against foreign governments, were concluded independently of any legislation." (39Columbia Law Review, pp. 651, 755.) The validity of the executive agreement in question is thus patent. In fact, the so-called Parity Rights provided for in the Ordinance Appended to our Constitution were, prior thereto, the subject of an executive agreement, made without the concurrence of twothirds (2/3) of the Senate of the United States. Lastly, the lower court held that it would be unreasonable to require from respondent-appellee an import license when the Import Control Commission was no longer in existence and, hence, there was, said court believed, no agency authorized to issue the aforementioned license. This conclusion is untenable, for the authority to issue the aforementioned licenses was not vested exclusively upon the Import Control Commission or Administration. Executive Order No. 328provided for export or import licenses "from the Central Bank of the Philippines or the Import Control Administration" or Commission. Indeed, the latter was created only to perform the task of implementing certain objectives of the Monetary Board and the Central Bank, which otherwise had to be undertaken by these two (2) agencies. Upon the abolition of said Commission, the duty to provide means and ways for the accomplishment of said

objectives had merely to be discharged directly by the Monetary Board and the Central Bank, even if the aforementioned Executive Order had been silent thereon. WHEREFORE, the decision appealed from is hereby reversed and another one shall be entered affirming that of the Commissioner of Customs, with cost against respondents defendant-appellee, Eastern Sea Trading. It is so ordered. [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. [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. [G.R. No. 138587. October 10, 2000] TEOFISTO T. GUINGONA, JR., RAUL S. ROCO, and SERGIO R. OSMEA 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. [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. [G.R. No. 138698. October 10, 2000] JOVITO R. SALONGA, WIGBERTO TAADA, ZENAIDA QUEZON-AVENCEA, 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 [1] aircraft. 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 [2] bases in the Philippines. 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 complemen ting 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 [3] draft text, which in turn resulted to a final series of conferences and negotiations 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 [5] [6] the Senate of the Philippines, the Instrument of Ratification, the letter of the President 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 [7] consideration and recommendation. Thereafter, joint public hearings were held by the two Committees. On May 3, 1999, the Committees submitted Proposed Senate Resolution No. 443 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 of its [10] members. Senate Resolution No. 443 was then re-numbered as Senate Resolution No. 18. 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 au thority, 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 regis tered, but shall have appropriate markings. Article V
[9] [8]

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 compet ence, 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 others 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 t hrough 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. [11] Via these consolidated 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 petitioners 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 [12] of the VFA. Petitioners, on the other hand, counter that the validity or invalidity of the VFA is a matter of transcendental [13] importance which justifies their standing. A party bringing a suit challenging the constitutionality of a law, act, or statute must show not only that the law is inval id, 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 [14] complained of. 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 [15] involves the exercise by Congress of its taxing or spending powers. On this point, it bears stressing that a taxpayers suit refers to a [16] case where the act complained of directly involves the illegal disbursement of public funds derived from taxation. Thus, in Bugnay [17] Const. & Development Corp. vs. Laron , 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 Taada, 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 [18] Enriquez, 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 th e 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 [19] Governors authorizing its National President to commence the present action.

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 [20] have done in the early Emergency Powers Cases, 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, Daza vs. Singson, and Basco vs. Phil. [23] Amusement and Gaming Corporation, where we emphatically held: Considering however the importance to the public of the case at bar, and in keeping with the Courts 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., 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, [25] which enjoins upon the departments of the government a becoming respect for each others acts, this Court nevertheless resolves to take cognizance of the instant petitions.
APPLICABLE CONSTITUTIONAL PROVISION [24] [21] [22]

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 conce rning 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 twothirds (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 [26] enactment. In Leveriza vs. Intermediate Appellate Court, we enunciated: x x x that another basic principle of statutory construction mandates that general legislation must giv e 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 [28] or clearly signifies disassociation and independence of one thing from the others included in the enumeration, 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 [29] everything. (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.
[27]

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. 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 [31] actually twenty-three (23) incumbent Senators at the time the voting was made, 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 shoul d 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 [32] acknowledges the agreement as a treaty. To require the other contracting state, the United States of America in this case, to [33] submit the VFA to the United States Senate for concurrence pursuant to its Constitution, 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 [34] the sense they have in common use. Moreover, it is inconsequential whether the United States treats the VFA only as an executive agreement because, under [35] international law, an executive agreement is as binding as a treaty. 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 [36] instruments, and whatever its particular designation. 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 [37] little more than mere description. 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 [38] concerned, as long as the negotiating functionaries have remained within their powers. International law continues to make no [39] distinction between treaties and executive agreements: they are equally binding obligations upon nations. In our jurisdiction, we have recognized the binding effect of executive agreements even without the concurrence of the Senate [40] or Congress. In Commissioner of Customs vs. Eastern Sea Trading, 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
[30]

Furthermore, the United States Supreme Court has expressly recognized the validity and constitutionality of executive agreem ents 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 [41] as we are concerned, we will accept it as a treaty. The records reveal that the United States Government, through Ambassador Thomas C. Hubbard, has stated that the United [42] States government has fully committed to living up to the terms of the VFA. 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 nations 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 [43] be, through which the formal acceptance of the treaty is proclaimed. 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 [44] ratification appears from the full powers of its representative, or was expressed during the negotiation. In our jurisdiction, the power to ratify is vested in the President and not, as commonly believed, in the legislature. The role of [45] the Senate is limited only to giving or withholding its consent, or concurrence, to the ratification. 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 [46] international law, to be bound by the terms of the agreement. Thus, no less than Section 2, Article II of the Constitution, 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 [47] that our government, Constitution and laws will carry out our international obligation. 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 inter national [48] law, and it may not invoke provisions in its constitution or its laws as an excuse for failure to perform this duty. 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 [49] international tribunals.
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, [50] 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. 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 nations foreign policy; his dominance in [51] the field of foreign relations is (then) conceded. Wielding vast powers an influence, his conduct in the external affairs of the [52] nation, as Jefferson describes, is executive altogether."

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 [53] Senate cannot intrude, and Congress itself is powerless to invade it . 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 Courts 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 [54] political questions such as those which arise in the field of foreign relations. The High Tribunals 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 powerIt has no power to look into what it thin ks is [55] apparent error. As to the power to concur with treaties, the constitution lodges the same with the Senate alone. Thus, once the [56] Senate 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; 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 nations 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. I. THE FACTS
[57]

The Republic of the Philippines and the United States of America entered into an agreement called the Visiting Forces Agreement (VFA). The agreement was treated as a treaty by the Philippine government and was ratified by then-President Joseph Estrada with the concurrence of 2/3 of the total membership of the Philippine Senate. The VFA defines the treatment of U.S. troops and personnel visiting the Philippines. It provides for the guidelines to govern such visits, and further defines the rights of the U.S. and the Philippine governments in the matter of criminal jurisdiction, movement of vessel and aircraft, importation and exportation of equipment, materials and supplies. Petitioners argued, inter alia, that the VFA violates 25, Article XVIII of the 1987 Constitution, which provides that foreign military bases, troops, or facilities shall not be allowed in the Philippines except under a treaty duly concurred in by the Senate . . . and recognized as a treaty by the other contracting State. II. THE ISSUE Was the VFA unconstitutional?

III. THE RULING [The Court DISMISSED the consolidated petitions, held that the petitioners did not commit grave abuse of discretion, and sustained the constitutionality of the VFA.] NO, the VFA is not unconstitutional. 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 . . . the provision in [in 25, Article XVIII] requiring ratification by a majority of the votes cast in a national referendum being unnecessary since Congress has not required it. xxx xxx xxx

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. 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, 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. 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. 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. xxx xxx xxx

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. 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.

United States v. Curtiss-Wright Export Corp


Brief Fact Summary. The Defendant, Curtiss-Wright (Defendant), a weapons manufacturer, was convicted of selling arms to warring nations in South America in violation of an Executive Order that was made pursuant to a Joint Resolution of Congress. Synopsis of Rule of Law. The non-delegation doctrine does not bar Congress from delegating great authority and discretion to the President of the United States (the President) in the conduct of foreign affairs. Facts. Congress passed a Joint Resolution authorizing the President to ban the sales of arms to countries involved in the border dispute between Bolivia and Paraguay. The President immediately made an Executive Order banning such sales. The Defendant was indicted for conspiracy to sell fifteen machine guns to Bolivia in violation of the Joint Resolution and the Executive Order. Issue. May Congress delegate law-making authority to the President in matters of foreign affairs? Held. Yes, the President has broad authority to conduct foreign affairs. Discussion. There is a fundamental difference in the role of government in foreign affairs and domestic affairs. The federal government has both constitutional and inherent authority to conduct foreign affairs as it sees fit. The President is the United States sole representative to foreign nations. In order to achieve the United States foreign policy aims, the President is better a ble than Congress to judge conditions that exist in foreign nations and is afforded substantial discretion and wide latitude in those decisions. The President has confidential information as well as consular, diplomatic and foreign affairs officers to help in his decision.

FERDINAND E. MARCOS vs. HON. RAUL MANGLAPUS (177 SCRA 668) Case Digest Facts: After Ferdinand Marcos was deposed from the presidency, he and his family fled to Hawaii. Now in his deathbed, petitioners are asking the court to order the respondents to issue their travel documents and enjoin the implementation of the Presidents decision to bar their return to the Philippines. Petitioners contend under the provision of the Bill of Rights that the President is without power to impair their liberty of abode because only a court may do so within the limits prescribed by law. Nor, according to the petitioners, may the President impair their right to travel because no law has authorized her to do so. Issue: Does the president have the power to bar the Marcoses from returning to the Philippines? Ruling: The President has the obligation, under the Constitution to protect the people, promote their welfare and advance national interest. This case calls for the exercise of the Presidents power as protector of the p eace. The president is not only clothed with extraordinary powers in times of emergency, but is also tasked with day-to-day problems of maintaining peace and order and ensuring domestic tranquility in times when no foreign foe appears on the horizon. The documented history of the efforts of the Marcoses and their followers to destabilize the country bolsters the conclusion that their return at this time would only exacerbate and intensify the violence directed against the state and instigate more chaos. The State, acting through the Government, is not precluded from taking preemptive actions against threats to its existence if, though still nascent they are perceived as apt to become serious and direct protection of the people is the essence of the duty of the government. The Supreme Court held that the President did not act arbitrarily or with grave abuse of discretion in determining the return of the petitioners at the present time and under present circumstances poses a serious threat to national interest and welfare prohibiting their return to the Philippines. The petition is DISMISSED.

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