SHELL PHILIPPINES EXPLORATION BV

Vs
EFREN JALOS et al
Facts:
On December 11, 1! "et#t#$ner S%ell P%#l#""#nes E&"l$rat#$n B'V' (S%ell) an* t%e Re"+bl#c $, t%e
P%#l#""#nes entere* #nt$ Ser-#ce .$ntract /0 ,$r t%e e&"l$rat#$n an* e&tract#$n $, "etr$le+m #n
n$rt%1estern Pala1an' T1$ 2ears later, S%ell *#sc$-ere* nat+ral 3as #n t%e .ama3$45alam"a2a area
an* "+rs+e* #ts *e-el$"ment $, t%e 1ell +n*er t%e 5alam"a2a Nat+ral 6as Pr$7ect' T%#s enta#le* t%e
c$nstr+ct#$n an* #nstallat#$n $, a "#"el#ne ,r$m S%ell8s "r$*+ct#$n "lat,$rm t$ #ts 3as "r$cess#n3
"lant #n Batan3as' T%e "#"el#ne s"anne* 9!: ;#l$meters an* cr$sse* t%e Or#ental 5#n*$r$ Sea'

On 5a2 1, <!!/, res"$n*ents E,ren Jal$s, J$-en .am"an3, Arnal*$ 5#7ares, an* =9 $t%er
#n*#-#*+als (Jal$s, et al) ,#le* a c$m"la#nt ,$r *ama3es a3a#nst S%ell be,$re t%e Re3#$nal Tr#al .$+rt
(RT.), Branc% :1, P#namala2an, Or#ental 5#n*$r$' Jal$s, et al cla#me* t%at t%e2 1ere all
s+bs#stence ,#s%ermen ,r$m t%e c$astal baran3a2 $, Bans+*, Or#ental 5#n*$r$ 1%$se l#-el#%$$* 1as
a*-ersel2 a,,ecte* b2 t%e c$nstr+ct#$n an* $"erat#$n $, S%ell8s nat+ral 3as "#"el#ne'

Jal$s, et al cla#me* t%at t%e#r ,#s% catc% became ,e1 a,ter t%e c$nstr+ct#$n $, t%e "#"el#ne'
T%e2 sa#* t%at >t%e "#"el#ne 3reatl2 a,,ecte* b#$3en#call2 %ar*4str+ct+re* c$mm+n#t#es s+c% as c$ral
ree,s an* le* t$ stress t$ t%e mar#ne l#,e #n t%e 5#n*$r$ Sea'?
S%ell m$-e* ,$r *#sm#ssal $, t%e c$m"la#nt'
On 5arc% <:, <!!: t%e RT. *#sm#sse* t%e c$m"la#nt'
.A re7ecte* S%ell8s assert#$n %ence t%#s "et#t#$n ,$r cert#$rar# +n*er R+le :9'
Iss+e:
1' @%et%er $r n$t t%e c$m"la#nt #s a "$ll+t#$n case t%at ,alls 1#t%#n t%e "r#mar2
7+r#s*#ct#$n $, t%e PABA

<' @%et%er $r n$t t%e c$m"la#nt s+,,#c#entl2 alle3es a ca+se $, act#$n a3a#nst S%ellA an*

/' @%et%er $r n$t t%e s+#t #s act+all2 a3a#nst t%e State an* #s barre* +n*er t%e *$ctr#ne $,
state #mm+n#t2'

R+l#n3:
First' T%e c$m"la#nt $, Jal$s, et al *$es n$t +se t%e 1$r* >"$ll+t#$n? #n *escr#b#n3 t%e ca+se
$, t%e alle3e* ,#s% *ecl#ne' @%#le t%e c$m"la#nt *#* n$t s"ec#,#call2 attr#b+te t$ S%ell an2 s"ec#,#c
act $, >"$ll+t#$n,? #t alle3e* t%at >t%e "#"el#ne 3reatl2 a,,ecte* b#$3en#call2 %ar*4str+ct+re*
c$mm+n#t#es s+c% as c$ral ree,s an* le* t$ stress t$ t%e mar#ne l#,e #n t%e 5#n*$r$ Sea' T%#s
c$nst#t+tes >"$ll+t#$n? as *e,#ne* b2 la1'

Sect#$n <(a) $, P'D' 0: *e,#nes >"$ll+t#$n? as >any alteration of the physical, chemical
and biological properties of any water & & & as 1#ll $r #s l#;el2 t$ create $r ren*er s+c% 1ater & & &
%arm,+l, *etr#mental $r #n7+r#$+s t$ "+bl#c %ealt%, sa,et2 $r 1el,are $r 1%#c% 1#ll adversely affect
their utilization ,$r *$mest#c, c$mmerc#al, #n*+str#al, a3r#c+lt+ral, recreat#$nal $r $t%er le3#t#mate
"+r"$ses'?

T%e "$1er an* e&"ert#se nee*e* t$ *eterm#ne s+c% #ss+e l#es 1#t% t%e PAB' T%e *e,#n#t#$n $,
t%e term >"$ll+t#$n? #tsel, c$nn$tes t%e nee* ,$r s"ec#al#Be* ;n$1le*3e an* s;#lls, tec%n#cal an*
sc#ent#,#c, #n *eterm#n#n3 t%e "resence, t%e ca+se, an* t%e e,,ects $, "$ll+t#$n' T%ese ;n$1le*3e an*
s;#lls are n$t 1#t%#n t%e c$m"etence $, $r*#nar2 c$+rts' .$nseC+entl2, res$rt m+st ,#rst be ma*e t$
t%e PAB, 1%#c% #s t%e a3enc2 "$ssesse* $, e&"ert#se #n *eterm#n#n3 "$ll+t#$n4relate* matters'

Second. T$ s+sta#n a m$t#$n t$ *#sm#ss ,$r lac; $, ca+se $, act#$n, %$1e-er, t%e c$m"la#nt
m+st s%$1 t%at t%e cla#m ,$r rel#e, *$es n$t e&#st an* n$t $nl2 t%at t%e cla#m 1as *e,ect#-el2 state*
$r #s amb#3+$+s, #n*e,#n#te $r +ncerta#n'

Here, all t%e elements $, a ca+se $, act#$n are "resent' F#rst, Jal$s, et al +n*$+bte*l2 %a* t%e
r#3%t t$ t%e "re,erent#al +se $, mar#ne an* ,#s%#n3 res$+rces 1%#c% #s 3+arantee* b2 n$ less t%an t%e
.$nst#t+t#$n' Sec$n*, S%ell %a* t%e c$rrelat#-e *+t2 t$ re,ra#n ,r$m acts $r $m#ss#$ns t%at c$+l*
#m"a#r Jal$s, et al8s +se an* en7$2ment $, t%e b$+nt#es $, t%e seas' Lastl2, S%ell8s c$nstr+ct#$n an*
$"erat#$n $, t%e "#"el#ne, 1%#c% #s an act $, "%2s#cal #ntr+s#$n #nt$ t%e mar#ne en-#r$nment, #s sa#* t$
%a-e *#sr+"te* an* #m"a#re* t%e nat+ral %ab#tat $, ,#s% an* res+lte* #n c$ns#*erable re*+ct#$n $, ,#s%
catc% an* #nc$me ,$r Jal$s, et al'

T%e r+les *$ n$t reC+#re t%at t%e c$m"la#nt establ#s% #n *eta#l t%e ca+sal l#n; bet1een t%e
c$nstr+ct#$n an* $"erat#$n $, t%e "#"el#ne, $n t%e $ne %an*, an* t%e ,#s% *ecl#ne an* l$ss $, #nc$me,
$n t%e $t%er %an*, #t be#n3 s+,,#c#ent t%at t%e c$m"la#nt states t%e +lt#mate ,acts $n 1%#c% #t bases #ts
cla#m ,$r rel#e,' T%e test ,$r *eterm#n#n3 t%e s+,,#c#enc2 $, a ca+se $, act#$n rests $n 1%et%er t%e
c$m"la#nt alle3es ,acts 1%#c%, #, tr+e, 1$+l* 7+st#,2 t%e rel#e, *eman*e*' In t%#s case, a -al#*
7+*3ment ,$r *ama3es can be ma*e #n ,a-$r $, Jal$s, et al, #, t%e c$nstr+ct#$n an* $"erat#$n $, t%e
"#"el#ne #n*ee* ca+se* ,#s% *ecl#ne an* e-ent+all2 le* t$ t%e ,#s%ermen8s l$ss $, #nc$me, as alle3e*
#n t%e c$m"la#nt'

Third. S%ell #s n$t an a3ent $, t%e Re"+bl#c $, t%e P%#l#""#nes' It #s b+t a ser-#ce c$ntract$r
,$r t%e e&"l$rat#$n an* *e-el$"ment $, $ne $, t%e c$+ntr28s nat+ral 3as reser-es' @%#le t%e Re"+bl#c
a""$#nte* S%ell as t%e e&cl+s#-e "art2 t$ c$n*+ct "etr$le+m $"erat#$ns #n t%e .ama3$45alam"a2$
area +n*er t%e State8s ,+ll c$ntr$l an* s+"er-#s#$n, #t *$es n$t ,$ll$1 t%at S%ell %as bec$me t%e
State8s >a3ent? 1#t%#n t%e mean#n3 $, t%e la1'

S%ell8s ma#n +n*erta;#n3 +n*er Ser-#ce .$ntract /0 #s t$ >"er,$rm all "etr$le+m $"erat#$ns
an* "r$-#*e all necessar2 tec%n$l$32 an* ,#nance? as 1ell as $t%er c$nnecte* ser-#ces t$ t%e
P%#l#""#ne 3$-ernment' S%ell8s "r#mar2 $bl#3at#$n +n*er t%e c$ntract #s n$t t$ re"resent t%e
P%#l#""#ne 3$-ernment ,$r t%e "+r"$se $, transact#n3 b+s#ness 1#t% t%#r* "ers$ns' Rat%er, #ts
c$ntract+al c$mm#tment #s t$ *e-el$" an* mana3e "etr$le+m $"erat#$ns $n be%al, $, t%e State'
It #s n$t #mm+ne ,r$m s+#t an* ma2 be s+e* ,$r cla#ms e-en 1#t%$+t t%e State8s c$nsent'