MUNICIPAL LAW VS INTERNATIONAL LAW of the land.
of the land. On top of this presumption assurances were made during the oral argument that the Government is
G.R. No. L-2855 July 30, 1949
BORIS MEJOFF, petitioner,
vs.
DIRECTOR OF PRISONS, respondent.
First Assistant Solicitor General Roberto A. Gianzon and Solicitor Lucas Lacson for 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 corpus.1
"The meaning of "reasonable time" depends upon the circumstances, specially the difficulties of obtaining a
passport, the availability of transfortation, the diplomatic arrangements concerned and the efforts displayed to send
the deportee away.2 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
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 pretense of
awaiting a chance for deportation3 or unless the Government admits that itcan not deport him4 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 be deported5 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 justify the issuance of the writ of habeas corpus,6 this petition must be,
and it is hereby denied. So ordered.
Moran, C.J., Ozaeta, Padilla, Montemayor and Reyes, JJ., concur.
Paras, J., I dissent for the same reasons stated in my dissenting opinion in case No. L-2852.
Feria, J., I dissent on the same ground stated in my dissent in case G. R. No. L-2852.
Separate Opinions
PERFECTO, J.,
2855 July 30, 1949
Lessons Applicable: characteristics of human rights, constitutional guarantee that no person shall be deprived of
liberty without due process of law,
Laws Applicable: Bill of Rights
FACTS:
 Boris Mejoff, 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.
 He was arrested on March 18, 1948 as a Japanese spy, by U. S. Army Counter Intelligence Corps. and
later there was an order for his release.
 But on April 5, 1948, the Board of Commissioners of Immigration declared that Mejoff had entered the
Philippines illegally in 1944 and ordered that he be deported on the first available transportation to Russia.
 He was transferred to Cebu Provincial Jail and then Bilibid Prison at Muntinlupa on October, 1948.
 He then filed a petition for writ of habeas corpus on the basis that too long a detention may justify the
issuance of a writ of habeas corpus
ISSUE: W/N the writ of habeas corpus should be granted since he was detained longer than a reasonable time
HELD: NO. Denied.
 The meaning of "reasonable time" depends upon the circumstances, specially the difficulties of obtaining a
passport, the availability of transportation, 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 pretense of awaiting a chance for
deportation or unless the Government admits that it cannot deport him or unless the detainee is being held
for too long a period our courts will not interfere.
 Nevertheless, supposing such precedents apply in this jurisdiction, still we have no sufficient data fairly to
fix a definite deadline.
PERFECTO, J., dissenting: The constitutional guarantee that no person shall be deprived of liberty without due
process of law has been intended to protect all inhabitants or residents who may happen to be under the shadows of
Philippine flag.
Labels: 1949, Case Digest, characteristics of human rights, G.R. No. L-2855, human rights, human rights
law, human rights law case digest, July 30, mejoff v. director of prisons, universal
Newer PostOlder PostHome
G.R. No. L-49112 February 2, 1979
LEOVILLO C. AGUSTIN, petitioner,
vs.
HON. ROMEO F. EDU, in his capacity as Land Transportation Commissioner; HON. JUAN PONCE ENRILE, in
his capacity as Minister of National Defense; HON. ALFREDO L. JUINIO, in his capacity as Minister Of Public
Works, Transportation and Communications; and HON: BALTAZAR AQUINO, in his capacity as Minister of
Public Highways, respondents.
Leovillo C. Agustin Law Office for petitioner.
Solicitor General Estelito P. Mendoza, Assistant Solicitor General Ruben E. Agpalo and Solicitor Amado D. Aquino
for respondents.
FERNANDO, J.:
The validity of a letter of Instruction 1 providing for an early seaming device for motor vehicles is assailed in this
prohibition proceeding as being violative of the constitutional guarantee of due process and, insofar as the rules and
regulations for its implementation are concerned, for transgressing the fundamental principle of non- delegation of
legislative power. The Letter of Instruction is stigmatized by petitioner who is possessed of the requisite standing, as
being arbitrary and oppressive. A temporary restraining order as issued and respondents Romeo F. Edu, Land
Transportation Commissioner Juan Ponce Enrile, Minister of National Defense; Alfredo L. Juinio, Minister of Public
Works, Transportation and Communications; and Baltazar Aquino, Minister of Public Highways; were to answer. That
they did in a pleading submitted by Solicitor General Estelito P. Mendoza. 2 Impressed with a highly persuasive
quality, it makes devoid clear that the imputation of a constitutional infirmity is devoid of justification The Letter of
Instruction on is a valid police power measure. Nor could the implementing rules and regulations issued by
respondent Edu be considered as amounting to an exercise of legislative power. Accordingly, the petition must be
dismissed.
The facts are undisputed. The assailed Letter of Instruction No. 229 of President Marcos, issued on December 2,
1974, reads in full: "[Whereas], statistics show that one of the major causes of fatal or serious accidents in land
transportation is the presence of disabled, stalled or parked motor vehicles along streets or highways without any
appropriate early warning device to signal approaching motorists of their presence; [Whereas], the hazards posed by
such obstructions to traffic have been recognized by international bodies concerned with traffic safety, the 1968
Vienna Convention on Road Signs and Signals and the United Nations Organization (U.N.); [Whereas], the said
Vienna Convention which was ratified by the Philippine Government under P.D. No. 207, recommended the
enactment of local legislation for the installation of road safety signs and devices; [Now, therefore, I, Ferdinand E.
Marcos], President of the Philippines, in the interest of safety on all streets and highways, including expressways or
limited access roads, do hereby direct: 1. That all owners, users or drivers of motor vehicles shall have at all times in
their motor vehicles at least one (1) pair of early warning device consisting of triangular, collapsible reflectorized
plates in red and yellow colors at least 15 cms. at the base and 40 cms. at the sides. 2. Whenever any motor vehicle
is stalled or disabled or is parked for thirty (30) minutes or more on any street or highway, including expressways or
limited access roads, the owner, user or driver thereof shall cause the warning device mentioned herein to be
installed at least four meters away to the front and rear of the motor vehicle staged, disabled or parked. 3. The Land
Transportation Commissioner shall cause Reflectorized Triangular Early Warning Devices, as herein described, to be
prepared and issued to registered owners of motor vehicles, except motorcycles and trailers, charging for each piece
not more than 15 % of the acquisition cost. He shall also promulgate such rules and regulations as are appropriate to
effectively implement this order. 4. All hereby concerned shall closely coordinate and take such measures as are
necessary or appropriate to carry into effect then instruction. 3 Thereafter, on November 15, 1976, it was amended by
Letter of Instruction No. 479 in this wise. "Paragraph 3 of Letter of Instruction No. 229 is hereby amended to read as
follows: 3. The Land transportation Commissioner shall require every motor vehicle owner to procure from any and
present at the registration of his vehicle, one pair of a reflectorized early warning device, as d bed of any brand or
make chosen by mid motor vehicle . The Land Transportation Commissioner shall also promulgate such rule and
regulations as are appropriate to effectively implement this order.'" 4 There was issued accordingly, by respondent
Edu, the implementing rules and regulations on December 10, 1976. 5 They were not enforced as President Marcos
on January 25, 1977, ordered a six-month period of suspension insofar as the installation of early warning device as
a pre-registration requirement for motor vehicle was concerned. 6 Then on June 30, 1978, another Letter of
Instruction 7 the lifting of such suspension and directed the immediate implementation of Letter of Instruction No. 229
as amended. 8 It was not until August 29, 1978 that respondent Edu issued Memorandum Circular No. 32, worded
thus: "In pursuance of Letter of Instruction No. 716, dated June 30, 1978, the implementation of Letter of Instruction
No. 229, as amended by Letter of Instructions No. 479, requiring the use of Early Warning Devices (EWD) on motor
vehicle, the following rules and regulations are hereby issued: 1. LTC Administrative Order No. 1, dated December
10, 1976; shall now be implemented provided that the device may come from whatever source and that it shall have
substantially complied with the EWD specifications contained in Section 2 of said administrative order; 2. In order to
insure that every motor vehicle , except motorcycles, is equipped with the device, a pair of serially numbered
stickers, to be issued free of charge by this Commission, shall be attached to each EWD. The EWD. serial number
shall be indicated on the registration certificate and official receipt of payment of current registration fees of the motor
vehicle concerned. All Orders, Circulars, and Memoranda in conflict herewith are hereby superseded, This Order
shall take effect immediately. 9 It was for immediate implementation by respondent Alfredo L. Juinio, as Minister of
Public Works, transportation, and Communications. 10
Petitioner, after setting forth that he "is the owner of a Volkswagen Beetle Car, Model 13035, already properly
equipped when it came out from the assembly lines with blinking lights fore and aft, which could very well serve as
an early warning device in case of the emergencies mentioned in Letter of Instructions No. 229, as amended, as well
as the implementing rules and regulations in Administrative Order No. 1 issued by the land transportation
Commission," 11 alleged that said Letter of Instruction No. 229, as amended, "clearly violates the provisions and
delegation of police power, [sic] * * *: " For him they are "oppressive, unreasonable, arbitrary, confiscatory, nay
unconstitutional and contrary to the precepts of our compassionate New Society." 12 He contended that they are
"infected with arbitrariness because it is harsh, cruel and unconscionable to the motoring public;" 13 are "one-sided,
onerous and patently illegal and immoral because [they] will make manufacturers and dealers instant millionaires at
the expense of car owners who are compelled to buy a set of the so-called early warning device at the rate of P
56.00 to P72.00 per set." 14 are unlawful and unconstitutional and contrary to the precepts of a compassionate New
Society [as being] compulsory and confiscatory on the part of the motorists who could very well provide a practical
alternative road safety device, or a better substitute to the specified set of EWD's." 15 He therefore prayed for a
judgment both the assailed Letters of Instructions and Memorandum Circular void and unconstitutional and for a
restraining order in the meanwhile.
A resolution to this effect was handed down by this Court on October 19, 1978: "L-49112 (Leovillo C. Agustin v. Hon.
Romeo F. Edu, etc., et al.) — Considering the allegations contained, the issues raised and the arguments adduced in
the petition for prohibition with writ of p prohibitory and/or mandatory injunction, the Court Resolved to (require) the
respondents to file an answer thereto within ton (10) days from notice and not to move to dismiss the petition. The
Court further Resolved to [issue] a [temporary restraining order] effective as of this date and continuing until
otherwise ordered by this Court.16
Two motions for extension were filed by the Office of the Solicitor General and granted. Then on November 15, 1978,
he Answer for respondents was submitted. After admitting the factual allegations and stating that they lacked
knowledge or information sufficient to form a belief as to petitioner owning a Volkswagen Beetle car," they
"specifically deny the allegations and stating they lacked knowledge or information sufficient to form a belief as to
petitioner owning a Volkswagen Beetle Car, 17 they specifically deny the allegations in paragraphs X and XI (including
its subparagraphs 1, 2, 3, 4) of Petition to the effect that Letter of Instruction No. 229 as amended by Letters of
Instructions Nos. 479 and 716 as well as Land transportation Commission Administrative Order No. 1 and its
Memorandum Circular No. 32 violates the constitutional provisions on due process of law, equal protection of law
and undue delegation of police power, and that the same are likewise oppressive, arbitrary, confiscatory, one-sided,
onerous, immoral unreasonable and illegal the truth being that said allegations are without legal and factual basis
and for the reasons alleged in the Special and Affirmative Defenses of this Answer." 18 Unlike petitioner who contented
himself with a rhetorical recital of his litany of grievances and merely invoked the sacramental phrases of
constitutional litigation, the Answer, in demonstrating that the assailed Letter of Instruction was a valid exercise of the
police power and implementing rules and regulations of respondent Edu not susceptible to the charge that there was
unlawful delegation of legislative power, there was in the portion captioned Special and Affirmative Defenses, a
citation of what respondents believed to be the authoritative decisions of this Tribunal calling for application. They
are Calalang v. Williams, 19 Morfe v. Mutuc, 20 and Edu v. Ericta. 21 Reference was likewise made to the 1968 Vienna
Conventions of the United Nations on road traffic, road signs, and signals, of which the Philippines was a signatory
and which was duly ratified. 22 Solicitor General Mendoza took pains to refute in detail, in language calm and
dispassionate, the vigorous, at times intemperate, accusation of petitioner that the assailed Letter of Instruction and
the implementing rules and regulations cannot survive the test of rigorous scrutiny. To repeat, its highly-persuasive
quality cannot be denied.
This Court thus considered the petition submitted for decision, the issues being clearly joined. As noted at the outset,
it is far from meritorious and must be dismissed.
1. The Letter of Instruction in question was issued in the exercise of the police power. That is conceded by petitioner
and is the main reliance of respondents. It is the submission of the former, however, that while embraced in such a
category, it has offended against the due process and equal protection safeguards of the Constitution, although the
latter point was mentioned only in passing. The broad and expansive scope of the police power which was originally
Identified by Chief Justice Taney of the American Supreme Court in an 1847 decision as "nothing more or less than
the powers of government inherent in every sovereignty" 23 was stressed in the aforementioned case of Edu v.
Ericta thus: "Justice Laurel, in the first leading decision after the Constitution came into force, Calalang v. Williams,
Identified police power with state authority to enact legislation that may interfere with personal liberty or property in
order to promote the general welfare. Persons and property could thus 'be subjected to all kinds of restraints and
burdens in order to we the general comfort, health and prosperity of the state.' Shortly after independence in
1948, Primicias v. Fugoso reiterated the doctrine, such a competence being referred to as 'the power to prescribe
regulations to promote the health, morals, peace, education, good order or safety, and general welfare of the people.
The concept was set forth in negative terms by Justice Malcolm in a pre-Commonwealth decision as 'that inherent
and plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety and welfare of
society. In that sense it could be hardly distinguishable as noted by this Court in Morfe v. Mutuc with the totality of
legislative power. It is in the above sense the greatest and most powerful at. tribute of government. It is, to quote
Justice Malcolm anew, 'the most essential, insistent, and at least table powers, I extending as Justice Holmes aptly
pointed out 'to all the great public needs.' Its scope, ever-expanding to meet the exigencies of the times, even to
anticipate the future where it could be done, provides enough room for an efficient and flexible response to
conditions and circumstances thus assuring the greatest benefits. In the language of Justice Cardozo: 'Needs that
were narrow or parochial in the past may be interwoven in the present with the well-being of the nation. What is
critical or urgent changes with the time.' The police power is thus a dynamic agency, suitably vague and far from
precisely defined, rooted in the conception that men in organizing the state and imposing upon its government
limitations to safeguard constitutional rights did not intend thereby to enable an individual citizen or a group of
citizens to obstruct unreasonably the enactment of such salutary measures calculated to communal peace, safety,
good order, and welfare." 24
2. It was thus a heavy burden to be shouldered by petitioner, compounded by the fact that the particular police power
measure challenged was clearly intended to promote public safety. It would be a rare occurrence indeed for this
Court to invalidate a legislative or executive act of that character. None has been called to our attention, an indication
of its being non-existent. The latest decision in point, Edu v. Ericta, sustained the validity of the Reflector Law, 25 an
enactment conceived with the same end in view. Calalang v. Williams found nothing objectionable in a statute, the
purpose of which was: "To promote safe transit upon, and. avoid obstruction on roads and streets designated as
national roads * * *. 26 As a matter of fact, the first law sought to be nullified after the effectivity of the 1935
Constitution, the National Defense Act, 27 with petitioner failing in his quest, was likewise prompted by the imperative
demands of public safety.
3. The futility of petitioner's effort to nullify both the Letter of Instruction and the implementing rules and regulations
becomes even more apparent considering his failure to lay the necessary factual foundation to rebut the presumption
of validity. So it was held in Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila. 28 The
rationale was clearly set forth in an excerpt from a decision of Justice Branders of the American Supreme Court,
quoted in the opinion: "The statute here questioned deals with a subject clearly within the scope of the police power.
We are asked to declare it void on the ground that the specific method of regulation prescribed is unreasonable and
hence deprives the plaintiff of due process of law. As underlying questions of fact may condition the constitutionality
of legislation of this character, the presumption of constitutionality must prevail in the absence of some factual
foundation of record in overthrowing the statute. 29
4. Nor did the Solicitor General as he very well could, rely solely on such rebutted presumption of validity. As was
pointed out in his Answer "The President certainly had in his possession the necessary statistical information and
data at the time he issued said letter of instructions, and such factual foundation cannot be defeated by petitioner's
naked assertion that early warning devices 'are not too vital to the prevention of nighttime vehicular accidents'
because allegedly only 390 or 1.5 per cent of the supposed 26,000 motor vehicle accidents that in 1976 involved
rear-end collisions (p. 12 of petition). Petitioner's statistics is not backed up by demonstrable data on record. As aptly
stated by this Honorable Court: Further: "It admits of no doubt therefore that there being a presumption of validity, the
necessity for evidence to rebut it is unavoidable, unless the statute or ordinance is void on its face, which is not the
case here"' * * *. But even as g the verity of petitioner's statistics, is that not reason enough to require the installation
of early warning devices to prevent another 390 rear-end collisions that could mean the death of 390 or more
Filipinos and the deaths that could likewise result from head-on or frontal collisions with stalled vehicles?" 30 It is quite
manifest then that the issuance of such Letter of Instruction is encased in the armor of prior, careful study by the
Executive Department. To set it aside for alleged repugnancy to the due process clause is to give sanction to
conjectural claims that exceeded even the broadest permissible limits of a pleader's well known penchant for
exaggeration.
5. The rather wild and fantastic nature of the charge of oppressiveness of this Letter of Instruction was exposed in
the Answer of the Solicitor General thus: "Such early warning device requirement is not an expensive redundancy,
nor oppressive, for car owners whose cars are already equipped with 1) blinking lights in the fore and aft of said
motor vehicles,' 2) "battery-powered blinking lights inside motor vehicles," 3) "built-in reflectorized tapes on front and
rear bumpers of motor vehicles," or 4) "well-lighted two (2) petroleum lamps (the Kinke) * * * because: Being
universal among the signatory countries to the said 1968 Vienna Conventions, and visible even under adverse
conditions at a distance of at least 400 meters, any motorist from this country or from any part of the world, who sees
a reflectorized rectangular early seaming device installed on the roads, highways or expressways, will conclude,
without thinking, that somewhere along the travelled portion of that road, highway, or expressway, there is a motor
vehicle which is stationary, stalled or disabled which obstructs or endangers passing traffic. On the other hand, a
motorist who sees any of the aforementioned other built in warning devices or the petroleum lamps will not
immediately get adequate advance warning because he will still think what that blinking light is all about. Is it an
emergency vehicle? Is it a law enforcement car? Is it an ambulance? Such confusion or uncertainty in the mind of
the motorist will thus increase, rather than decrease, the danger of collision. 31
6. Nor did the other extravagant assertions of constitutional deficiency go unrefuted in the Answer of the Solicitor
General "There is nothing in the questioned Letter of Instruction No. 229, as amended, or in Administrative Order No.
1, which requires or compels motor vehicle owners to purchase the early warning device prescribed thereby. All that
is required is for motor vehicle owners concerned like petitioner, to equip their motor vehicles with a pair of this early
warning device in question, procuring or obtaining the same from whatever source. In fact, with a little of industry and
practical ingenuity, motor vehicle owners can even personally make or produce this early warning device so long as enactment of local legislation for the installation of road safety signs and devices; * * * " 35 It cannot be disputed then
the same substantially conforms with the specifications laid down in said letter of instruction and administrative order. that this Declaration of Principle found in the Constitution possesses relevance: "The Philippines * * * adopts the
Accordingly the early warning device requirement can neither be oppressive, onerous, immoral, nor confiscatory, generally accepted principles of international law as part of the law of the land * * *." 36 The 1968 Vienna Convention
much less does it make manufacturers and dealers of said devices 'instant millionaires at the expense of car owners' on Road Signs and Signals is impressed with such a character. It is not for this country to repudiate a commitment to
as petitioner so sweepingly concludes * * *. Petitioner's fear that with the early warning device requirement 'a more which it had pledged its word. The concept of Pacta sunt servanda stands in the way of such an attitude, which is,
subtle racket may be committed by those called upon to enforce it * * * is an unfounded speculation. Besides, that moreover, at war with the principle of international morality.
unscrupulous officials may try to enforce said requirement in an unreasonable manner or to an unreasonable degree,
does not render the same illegal or immoral where, as in the instant case, the challenged Letter of Instruction No.
10. That is about all that needs be said. The rather court reference to equal protection did not even elicit any attempt
229 and implementing order disclose none of the constitutional defects alleged against it.32
on the Part of Petitioner to substantiate in a manner clear, positive, and categorical why such a casual observation
should be taken seriously. In no case is there a more appropriate occasion for insistence on what was referred to as
7 It does appear clearly that petitioner's objection to this Letter of Instruction is not premised on lack of power, the "the general rule" in Santiago v. Far Eastern Broadcasting Co., 37 namely, "that the constitutionality of a law wig not
justification for a finding of unconstitutionality, but on the pessimistic, not to say negative, view he entertains as to its be considered unless the point is specially pleaded, insisted upon, and adequately argued." 38 "Equal protection" is
wisdom. That approach, it put it at its mildest, is distinguished, if that is the appropriate word, by its unorthodoxy. It not a talismanic formula at the mere invocation of which a party to a lawsuit can rightfully expect that success will
bears repeating "that this Court, in the language of Justice Laurel, 'does not pass upon questions of wisdom justice crown his efforts. The law is anything but that.
or expediency of legislation.' As expressed by Justice Tuason: 'It is not the province of the courts to supervise
legislation and keep it within the bounds of propriety and common sense. That is primarily and exclusively a
WHEREFORE, this petition is dismissed. The restraining order is lifted. This decision is immediately executory. No
legislative concern.' There can be no possible objection then to the observation of Justice Montemayor. 'As long as
costs.
laws do not violate any Constitutional provision, the Courts merely interpret and apply them regardless of whether or
not they are wise or salutary. For they, according to Justice Labrador, 'are not supposed to override legitimate policy
and * * * never inquire into the wisdom of the law.' It is thus settled, to paraphrase Chief Justice Concepcion in Castro, C.J., Barredo, Antonio, Santos, Fernandez, Guerrero, Abad Santos, De Castro and Melencio-Herrera,
Gonzales v. Commission on Elections, that only congressional power or competence, not the wisdom of the action concur.
taken, may be the basis for declaring a statute invalid. This is as it ought to be. The principle of separation of powers
has in the main wisely allocated the respective authority of each department and confined its jurisdiction to such a
Makasiar, J, reserves the right to file a separate opinion.
sphere. There would then be intrusion not allowable under the Constitution if on a matter left to the discretion of a
coordinate branch, the judiciary would substitute its own. If there be adherence to the rule of law, as there ought to
be, the last offender should be courts of justice, to which rightly litigants submit their controversy precisely to Aquino J., took no part.
maintain unimpaired the supremacy of legal norms and prescriptions. The attack on the validity of the challenged
provision likewise insofar as there may be objections, even if valid and cogent on is wisdom cannot be sustained. 33
Concepcion J., is on leave.

8. The alleged infringement of the fundamental principle of non-delegation of legislative power is equally without any
support well-settled legal doctrines. Had petitioner taken the trouble to acquaint himself with authoritative Castro, C.J., certifies that Justice Concepcion concurs in their decision.
pronouncements from this Tribunal, he would not have the temerity to make such an assertion. An exempt from the
aforecited decision of Edu v. Ericta sheds light on the matter: "To avoid the taint of unlawful delegation, there must be
a standard, which implies at the very least that the legislature itself determines matters of principle and lays down
fundamental policy. Otherwise, the charge of complete abdication may be hard to repel A standard thus defines
legislative policy, marks its maps out its boundaries and specifies the public agency to apply it. It indicates the
circumstances under which the legislative command is to be effected. It is the criterion by which legislative purpose
may be carried out. Thereafter, the executive or administrative office designated may in pursuance of the above Separate Opinions
guidelines promulgate supplemental rules and regulations. The standard may be either express or implied. If the
former, the non-delegation objection is easily met. The standard though does not have to be spelled out specifically.
It could be implied from the policy and purpose of the act considered as a whole. In the Reflector Law clearly, the
legislative objective is public safety. What is sought to be attained as in Calalang v. Williams is "safe transit upon the
roads.' This is to adhere to the recognition given expression by Justice Laurel in a decision announced not too long TEEHANKEE, J., dissenting:
after the Constitution came into force and effect that the principle of non-delegation "has been made to adapt itself to
the complexities of modern governments, giving rise to the adoption, within certain limits, of the principle of
"subordinate legislation" not only in the United States and England but in practically all modern governments.' He I dissent from the majority's peremptory dismissal of the petition and lifting of the restraining order issued on October
continued: 'Accordingly, with the growing complexity of modern life, the multiplication of the subjects of governmental 19, 1978 against the blanket enforcement of the requirement that all motor vehicles be equipped with the so-called
regulation, and the increased difficulty of administering the laws, there is a constantly growing tendency toward the early warning device, without even hearing the parties in oral argument as generally required by the Court in original
delegation of greater powers by the legislature and toward the approval of the practice by the courts.' Consistency cases of far-reaching consequence such as the case at bar.
with the conceptual approach requires the reminder that what is delegated is authority non-legislative in character,
the completeness of the statute when it leaves the hands of Congress being assumed." 34 Lack of time presents my filing an extended dissent. I only wish to state that the petition advances grave and serious
grounds of assailing "the rules and regulations issued by the Land Transportation Commission under Administrative
9. The conclusion reached by this Court that this petition must be dismissed is reinforced by this consideration. The Order No. 1 and Memorandum Circular No. 32 [which] do not reflect the real intent, noble objectives and spirit of
petition itself quoted these two whereas clauses of the assailed Letter of Instruction: "[Whereas], the hazards posed Letter of Instructions No. 229, as amended by Letter of Instructions Nos. 479 and 716, because it is oppressive,
by such obstructions to traffic have been recognized by international bodies concerned with traffic safety, the 1968 unreasonable, arbitrary, confiscatory, nay unconstitutional and contrary to the precepts of our compassionate New
Vienna Convention on Road Signs and Signals and the United Nations Organization (U.N.); [Whereas], the said Society," because of the following considerations, inter alia:
Vionna Convention, which was ratified by the Philippine Government under P.D. No. 207, recommended the
1. It is oppressive, arbitrary and discriminatory to require owners of motor vehicles with built-in and more effective
and efficient E.W.D.'S such as "a) blinking lights in the fore and aft of said motor vehicles, 1)) battery-powered
blinking lights inside motor vehicles, c) built-in reflectorized tapes on front and rear bumpers of motor vehicles....... to
purchase the E.W.D. specified in the challenged administrative order, whose effectivity and utility have yet to be
demonstrated.
2. The public necessity for the challenged order has yet to be shown. No valid refutation has been made of
petitioner's assertion that the "E.W.D.'s are not too vital to the prevention of nighttime vehicular accidents. Statistics
shows that of the 26,000 motor vehicle accidents that occurred in 1976, only 390 or 1.5 per cent involved rear-end
collisions," as to require the purchase and installation of the questioned E.W.D. for almost 900,000 vehicles
throughout the country;
3. The big financial burden to be imposed on all motorists is staggering, and petitioner's assertion that "as of 1975,
there were at least 865,037 motor vehicles all over the country requiring E.W.D.'S and at the minimum price of
1156.00 per set, this would mean a consumer outlay of P 48,451,872.00, or close to P 50 million for the questioned
E.W.D.'S "stands unchallenged;
4. No real effort has been made to show that there can be practical and less burdensome alternative road safety
devices for stalled vehicles than the prescribed E.W.D., such as the common petroleum lamps "kinke" which can be
placed just as effectively in front of stalled vehicles on the highways; and
5. There is no imperative need for imposing such a bet requirement on all vehicles. The respondents have not shown
that they have availed of the powers and prerogatives vested in their offices such as ridding the country of
dilapidated trucks and vehicles which are the main cause of the deplorable -highway accidents due to stoned
vehicles, establishing an honest and foolproof system of examination and licensing of motor vehicle drivers so as to
ban the reckless and irresponsible and a sustained education campaign to instill safe driving habits and attitudes that
can be carried out for much less than the P 50 million burden that would be imposed by the challenged order.
I do feel that a greater "degree of receptivity and sympathy" could be extended to the petitioner for his civic
mindedness in having filed the present petition g as capricious and unreasonable the "all pervading police power" of
the State instead of throwing the case out of court and leaving the wrong impression that the exercise of police
power insofar as it may affect the life, liberty and property of any person is no longer subject to judicial inquiry.
# Separate Opinions
TEEHANKEE, J., dissenting:
I dissent from the majority's peremptory dismissal of the petition and lifting of the restraining order issued on October
19, 1978 against the blanket enforcement of the requirement that all motor vehicles be equipped with the so-called
early warning device, without even hearing the parties in oral argument as generally required by the Court in original
cases of far-reaching consequence such as the case at bar.
Lack of time presents my filing an extended dissent. I only wish to state that the petition advances grave and serious
grounds of assailing "the rules and regulations issued by the Land Transportation Commission under Administrative
Order No. 1 and Memorandum Circular No. 32 [which] do not reflect the real intent, noble objectives and spirit of
Letter of Instructions No. 229, as amended by Letter of Instructions Nos. 479 and 716, because it is oppressive,
unreasonable, arbitrary, confiscatory, nay unconstitutional and contrary to the precepts of our compassionate New
Society," because of the following considerations, inter alia:
1. It is oppressive, arbitrary and discriminatory to require owners of motor vehicles with built-in and more effective
and efficient E.W.D.'S such as "a) blinking lights in the fore and aft of said motor vehicles, 1)) battery-powered
blinking lights inside motor vehicles, c) built-in reflectorized tapes on front and rear bumpers of motor vehicles....... to
purchase the E.W.D. specified in the challenged administrative order, whose effectivity and utility have yet to be
demonstrated.
2. The public necessity for the challenged order has yet to be shown. No valid refutation has been made of
petitioner's assertion that the "E.W.D.'s are not too vital to the prevention of nighttime vehicular accidents. Statistics
shows that of the 26,000 motor vehicle accidents that occurred in 1976, only 390 or 1.5 per cent involved rear-end
collisions," as to require the purchase and installation of the questioned E.W.D. for almost 900,000 vehicles
throughout the country;
3. The big financial burden to be imposed on all motorists is staggering, and petitioner's assertion that "as of 1975,
there were at least 865,037 motor vehicles all over the country requiring E.W.D.'S and at the minimum price of
1156.00 per set, this would mean a consumer outlay of P 48,451,872.00, or close to P 50 million for the questioned
E.W.D.'S "stands unchallenged;
4. No real effort has been made to show that there can be practical and less burdensome alternative road safety
devices for stalled vehicles than the prescribed E.W.D., such as the common petroleum lamps "kinke" which can be
placed just as effectively in front of stalled vehicles on the highways; and
5. There is no imperative need for imposing such a bet requirement on all vehicles. The respondents have not shown
that they have availed of the powers and prerogatives vested in their offices such as ridding the country of
dilapidated trucks and vehicles which are the main cause of the deplorable -highway accidents due to stoned
vehicles, establishing an honest and foolproof system of examination and licensing of motor vehicle drivers so as to
ban the reckless and irresponsible and a sustained education campaign to instill safe driving habits and attitudes that
can be carried out for much less than the P 50 million burden that would be imposed by the challenged order.
I do feel that a greater "degree of receptivity and sympathy" could be extended to the petitioner for his civic
mindedness in having filed the present petition g as capricious and unreasonable the "all pervading police power" of
the State instead of throwing the case out of court and leaving the wrong impression that the exercise of police
power insofar as it may affect the life, liberty and property of any person is no longer subject to judicial inquiry.
#Footnotes
1 Letter of Instruction No. 229 (1974) as amended by Letter of Instruction No. 479 (1976).
2 He was assisted by Assistant Solicitor Ruben E. Agpalo and Solicitor Amado D. Aquino.
3 Petition, par. III.
4 Ibid, par. IV.
5 Ibid, par. V.
6 Ibid, par. VIII.
7 No. 716.
8 Petition, par. VII.
9 Ibid, par. VIII. 29 Ibid. 867. The excerpt came from O'Gorman and Young v. Hartford Fire Insurance Co., 282
US 251, 328 (1931).
10 Ibid.
30 Answer, par. 18 (a). The excerpt came from Samson v. Mayor of Bacolod City, L-28745;
October 23, 1974; 60 SCRA 267; 270.
11 Ibid, par. IX.

31 Ibid, par. 18 (c).

12 Ibid, par. X.

32 Ibid, par. 18 (d) and (e),

13 Ibid, par. XI.

33 Morfe v. Mutuc, 22 SCRA 424, 450-451. The citation from Justice Laurel may be traced to
14 Ibid, par. X.
Angara v. Electoral Commission, 63 Phil. 139, 160 (1936); from Justice Laurel to People v.
Carlos, 78 Phil. 535, 548 (1947); from Justice Montemayor to Quintos v. Lacson, 97 Phil. 290,
15 Ibid, par. XI. 293 (1955); and from Justice Labrador to Ichong v. Hernandez, 101 Phil. 1155, 1166 (1957).
Chief Justice Concepcion's reiteration of the doctrine, paraphrased in the quoted opinion, was
made by him in Gonzales v. Commission on Elections, L-28196, November 9, 1967, 21 SCRA
16 Resolution of the Court dated October 19, 1978. 774. Cf. Province of Pangasinan v. Secretary of Public Works, 27861, October 3l,1969, 30
SCRA 134.
17 Answer, pars. 1-6.
34 SCRA 481, 497-498. The following cases were also cited. People v. Exconde, 101 Phil. 1125
18 Ibid, par. 8. (1957), and People v. Jolliffe, 105 Phil. 677 (1959).

19 70 Phil. 726 (1940). The opinion was penned by Justice Laurel. 35 Petition, par. III.

20 L-20387, January 31, 1968; 22 SCRA 424. The writer of this opinion is the ponente.
21 L-32096, October 24, 1970, 35 SCRA 481. The writer of this opinion was likewise the
ponente.
36 Article 11, Section 3 of the Constitution reads in full "The 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 all nations.

37 73 Phil. 408 (1941).

22 Answer, par. 18 (a) and (b).

38 Ibid, 412.
23 License Cases, 5 How. 504, 583.

AGUSTIN V. EDU - CASE DIGEST - CONSTITUTIONAL LAW

24 35 SCRA 481, 487-488. There is no need to repeat where Calalang and Morfe are reported.
Primicias v. Fugoso is reported in 80 Phil. 71; Rubi v. Provincial Board, where the first quotation
AGUSTIN V. EDU G.R. No. L-49112 February 2, 1979
from Justice Malcolm came, in 39 Phil. 660, 708 (1919); and Smith Bell and Co. v. Natividad, his
other decision cited, in 40 Phil. 136 (1919); Helvering v. Davis, with Justice Cardozo writing the
opinion, in 301 US 619 (1937). FACTS:

Petitioner, Agustin assails the validity of the Letter of Instruction No. 229 which requires an early warning device to be carried
25 Republic Act No. 5715 (1969). by users of motor vehicles as being violative of the constitutional guarantee of due process and transgresses the fundamental
principle of non-delegation of legislative power.
26 Commonwealth Act No. 548 (1940).
Herein respondent Romeo Edu in his capacity as Land Transportation Commisioner set forth the implementing rules and
regulations of the said instruction.
27 Cf. People v. Lagman 66 Phil. 13 (1938). Even earlier in United States v. Pompeya, 31 Phil.
245 (1915), this Court, by virtue of the police power, held valid a provision of the then Municipal
Code requiring " able-bodied" males in the vicinity between ages to perform patrol duty not ex Petitioner make known that he "is the owner of a Volkswagen Beetle Car, Model 13035, already properly equipped when it
one day each week. came out from the assembly lines with blinking lights fore and aft, which could very well serve as an early warning device in
case of the emergencies mentioned in Letter of Instructions No. 229, as amended, as well as the implementing rules and
regulations in Administrative Order No. 1 issued by the land transportation Commission,"
28 L-24693, July 31, 1967, 20 SCRA 849.
Furthermore, he contends that the law is "one-sided, onerous and patently illegal and immoral because [they] will make
manufacturers and dealers instant millionaires at the expense of car owners who are compelled to buy a set of the so-called
early warning device at the rate of P 56.00 to P72.00 per set." are unlawful and unconstitutional and contrary to the precepts of
a compassionate New Society [as being] compulsory and confiscatory on the part of the motorists who could very well provide
a practical alternative road safety device, or a better substitute to the specified set of Early Warning Device (EWD)."
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.

This instruction, signed by President Marcos, aims to prevent accidents on streets and highways, including expressways or
limited access roads caused by the presence of disabled, stalled or parked motor vehicles without appropriate early warning
devices. The hazards posed by these disabled vehicles are recognized by international bodies concerned with traffic safety. The
Philippines is a signatory of the 1968 Vienna Convention on Road Signs and Signals and the United Nations Organizations and
the said Vienna Convention was ratified by the Philippine Government under PD 207.

ISSUE: G.R. No. 76607 February 26, 1990

WON the LOI 229 is invalid and violated constitutional guarantees of due process.
UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE REEVES, petitioners,
vs.
HELD: HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional Trial Court, Angeles City, ROBERTO T.
VALENCIA, EMERENCIANA C. TANGLAO, AND PABLO C. DEL PILAR, respondents.
NO. 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 G.R. No. 79470 February 26, 1990
clearly intended to promote public safety.
UNITED STATES OF AMERICA, ANTHONY LAMACHIA, T/SGT. USAF, WILFREDO BELSA, PETER ORASCION
It cannot be disputed that the Declaration of Principle found in the Constitution possesses relevance: “The Philippines adopts AND ROSE CARTALLA, petitioners,
the generally accepted principles of international law as part of the law of the nation.” vs.
HON. RODOLFO D. RODRIGO, as Presiding Judge of Branch 7, Regional Trial Court (BAGUIO CITY), La
Thus, as impressed in the 1968 Vienna Convention it is not for this country to repudiate a commitment to which it had pledged Trinidad, Benguet and FABIAN GENOVE, respondents.
its word. Our country’s word was resembled in our own act of legislative ratification of the said Hague and Vienna Conventions
thru P.D. No. 207 . G.R. No. 80018 February 26, 1990

The concept of Pacta sunt servanda stands in the way of such an attitude which is, moreoever, at war with the principle of
UNITED STATES OF AMERICA, TOMI J. KINGI, DARREL D. DYE and STEVEN F. BOSTICK, petitioners,
international morality.
vs.
HON. JOSEFINA D. CEBALLOS, As Presiding Judge, Regional Trial Court, Branch 66, Capas, Tarlac, and
Petition dismissed. LUIS BAUTISTA, respondents.

Agustin vs Edu 88 SCRA 195 G.R. No. 80258 February 26, 1990

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. In compliance 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.
UNITED STATES OF AMERICA, MAJOR GENERAL MICHAEL P. C. CARNS, AIC ERNEST E. RIVENBURGH, AIC
ROBIN BLEVINS, SGT. NOEL A. GONZALES, SGT. THOMAS MITCHELL, SGT. WAYNE L. BENJAMIN, ET
AL., petitioners,
vs.
HON. CONCEPCION S. ALARCON VERGARA, as Presiding Judge, Branch 62 REGIONAL TRIAL COURT,
Angeles City, and RICKY SANCHEZ, FREDDIE SANCHEZ AKA FREDDIE RIVERA, EDWIN MARIANO, AKA
JESSIE DOLORES SANGALANG, ET AL., respondents.
Luna, Sison & Manas Law Office for petitioners.

Issue
Whether or not the Letter of Instruction No. 229 and the subsequent Administrative Order issued is unconstitutional

CRUZ, J.:
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
These cases have been consolidated because they all involve the doctrine of state immunity. The United
States of America was not impleaded in the complaints below but has moved to dismiss on the ground that
they are in effect suits against it to which it has not consented. It is now contesting the denial of its motions
by the respondent judges.
In G.R. No. 76607, the private respondents are suing several officers of the U.S. Air Force stationed in Clark
Air Base in connection with the bidding conducted by them for contracts for barber services in the said
base.
On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange, U.S. Air Force,
solicited bids for such contracts through its contracting officer, James F. Shaw. Among those who submitted
their bids were private respondents Roberto T. Valencia, Emerenciana C. Tanglao, and Pablo C. del Pilar.
Valencia had been a concessionaire inside Clark for 34 years; del Pilar for 12 years; and Tanglao for 50
years.
The bidding was won by Ramon Dizon, over the objection of the private respondents, who claimed that he
had made a bid for four facilities, including the Civil Engineering Area, which was not included in the
invitation to bid.
The private respondents complained to the Philippine Area Exchange (PHAX). The latter, through its
representatives, petitioners Yvonne Reeves and Frederic M. Smouse explained that the Civil Engineering
concession had not been awarded to Dizon as a result of the February 24, 1986 solicitation. Dizon was
already operating this concession, then known as the NCO club concession, and the expiration of the
contract had been extended from June 30, 1986 to August 31, 1986. They further explained that the
solicitation of the CE barbershop would be available only by the end of June and the private respondents
would be notified.
On June 30, 1986, the private respondents filed a complaint in the court below to compel PHAX and the
individual petitioners to cancel the award to defendant Dizon, to conduct a rebidding for the barbershop
concessions and to allow the private respondents by a writ of preliminary injunction to continue operating
the concessions pending litigation. 1
Upon the filing of the complaint, the respondent court issued an ex parte order directing the individual
petitioners to maintain the status quo.
On July 22, 1986, the petitioners filed a motion to dismiss and opposition to the petition for preliminary
injunction on the ground that the action was in effect a suit against the United States of America, which had
not waived its non-suability. The individual defendants, as official employees of the U.S. Air Force, were also
immune from suit.
On the same date, July 22, 1986, the trial court denied the application for a writ of preliminary injunction.
On October 10, 1988, the trial court denied the petitioners' motion to dismiss, holding in part as follows:
From the pleadings thus far presented to this Court by the parties, the Court's attention is
called by the relationship between the plaintiffs as well as the defendants, including the
US Government, in that prior to the bidding or solicitation in question, there was a
binding contract between the plaintiffs as well as the defendants, including the US
Government. By virtue of said contract of concession it is the Court's understanding that
neither the US Government nor the herein principal defendants would become the
employer/s of the plaintiffs but that the latter are the employers themselves of the
barbers, etc. with the employer, the plaintiffs herein, remitting the stipulated percentage
of commissions to the Philippine Area Exchange. The same circumstance would become
in effect when the Philippine Area Exchange opened for bidding or solicitation the
questioned barber shop concessions. To this extent, therefore, indeed a commercial
transaction has been entered, and for purposes of the said solicitation, would necessarily
be entered between the plaintiffs as well as the defendants.
The Court, further, is of the view that Article XVIII of the RP-US Bases Agreement does not
cover such kind of services falling under the concessionaireship, such as a barber shop
concession. 2
On December 11, 1986, following the filing of the herein petition for certiorari and prohibition with preliminary
injunction, we issued a temporary restraining order against further proceedings in the court below. 3
In G.R. No. 79470, Fabian Genove filed a complaint for damages against petitioners Anthony Lamachia, Wilfredo
Belsa, Rose Cartalla and Peter Orascion for his dismissal as cook in the U.S. Air Force Recreation Center at the
John Hay Air Station in Baguio City. It had been ascertained after investigation, from the testimony of Belsa Cartalla
and Orascion, that Genove had poured urine into the soup stock used in cooking the vegetables served to the club
customers. Lamachia, as club manager, suspended him and thereafter referred the case to a board of arbitrators
conformably to the collective bargaining agreement between the Center and its employees. The board unanimously
found him guilty and recommended his dismissal. This was effected on March 5, 1986, by Col. David C. Kimball,
Commander of the 3rd Combat Support Group, PACAF Clark Air Force Base. Genove's reaction was to file Ms
complaint in the Regional Trial Court of Baguio City against the individual petitioners. 4
On March 13, 1987, the defendants, joined by the United States of America, moved to dismiss the complaint,
alleging that Lamachia, as an officer of the U.S. Air Force stationed at John Hay Air Station, was immune from suit
for the acts done by him in his official capacity. They argued that the suit was in effect against the United States,
which had not given its consent to be sued.
This motion was denied by the respondent judge on June 4, 1987, in an order which read in part:
It is the understanding of the Court, based on the allegations of the complaint — which have
been hypothetically admitted by defendants upon the filing of their motion to dismiss — that
although defendants acted initially in their official capacities, their going beyond what their
functions called for brought them out of the protective mantle of whatever immunities they may
have had in the beginning. Thus, the allegation that the acts complained of were illegal, done.
with extreme bad faith and with pre-conceived sinister plan to harass and finally dismiss the
plaintiff, gains significance. 5
The petitioners then came to this Court seeking certiorari and prohibition with preliminary injunction.
In G.R. No. 80018, Luis Bautista, who was employed as a barracks boy in Camp O' Donnell, an extension of Clark
Air Base, was arrested following a buy-bust operation conducted by the individual petitioners herein, namely, Tomi J.
King, Darrel D. Dye and Stephen F. Bostick, officers of the U.S. Air Force and special agents of the Air Force Office
of Special Investigators (AFOSI). On the basis of the sworn statements made by them, an information for violation of
R.A. 6425, otherwise known as the Dangerous Drugs Act, was filed against Bautista in the Regional Trial Court of
Tarlac. The above-named officers testified against him at his trial. As a result of the filing of the charge, Bautista was
dismissed from his employment. He then filed a complaint for damages against the individual petitioners herein
claiming that it was because of their acts that he was removed. 6
During the period for filing of the answer, Mariano Y. Navarro a special counsel assigned to the International Law
Division, Office of the Staff Judge Advocate of Clark Air Base, entered a special appearance for the defendants and
moved for an extension within which to file an "answer and/or other pleadings." His reason was that the Attorney
General of the United States had not yet designated counsel to represent the defendants, who were being sued for
their official acts. Within the extended period, the defendants, without the assistance of counsel or authority from the
U.S. Department of Justice, filed their answer. They alleged therein as affirmative defenses that they had only done
their duty in the enforcement of the laws of the Philippines inside the American bases pursuant to the RP-US Military
Bases Agreement.
On May 7, 1987, the law firm of Luna, Sison and Manas, having been retained to represent the defendants, filed with
leave of court a motion to withdraw the answer and dismiss the complaint. The ground invoked was that the
defendants were acting in their official capacity when they did the acts complained of and that the complaint against
them was in effect a suit against the United States without its consent.
The motion was denied by the respondent judge in his order dated September 11, 1987, which held that the claimed
immunity under the Military Bases Agreement covered only criminal and not civil cases. Moreover, the defendants
had come under the jurisdiction of the court when they submitted their answer.7
Following the filing of the herein petition for certiorari and prohibition with preliminary injunction, we issued on
October 14, 1987, a temporary restraining order. 8
In G.R. No. 80258, a complaint for damages was filed by the private respondents against the herein petitioners
(except the United States of America), for injuries allegedly sustained by the plaintiffs as a result of the acts of the
defendants. 9 There is a conflict of factual allegations here. According to the plaintiffs, the defendants beat them up,
handcuffed them and unleashed dogs on them which bit them in several parts of their bodies and caused extensive
injuries to them. The defendants deny this and claim the plaintiffs were arrested for theft and were bitten by the dogs
because they were struggling and resisting arrest, The defendants stress that the dogs were called off and the
plaintiffs were immediately taken to the medical center for treatment of their wounds.
In a motion to dismiss the complaint, the United States of America and the individually named defendants argued
that the suit was in effect a suit against the United States, which had not given its consent to be sued. The
defendants were also immune from suit under the RP-US Bases Treaty for acts done by them in the performance of
their official functions.
The motion to dismiss was denied by the trial court in its order dated August 10, 1987, reading in part as follows:
The defendants certainly cannot correctly argue that they are immune from suit. The allegations,
of the complaint which is sought to be dismissed, had to be hypothetically admitted and
whatever ground the defendants may have, had to be ventilated during the trial of the case on
the merits. The complaint alleged criminal acts against the individually-named defendants and
from the nature of said acts it could not be said that they are Acts of State, for which immunity
should be invoked. If the Filipinos themselves are duty bound to respect, obey and submit
themselves to the laws of the country, with more reason, the members of the United States
Armed Forces who are being treated as guests of this country should respect, obey and submit
themselves to its laws. 10
and so was the motion for reconsideration. The defendants submitted their answer as required but subsequently filed
their petition for certiorari and prohibition with preliminary injunction with this Court. We issued a temporary
restraining order on October 27, 1987. 11
II
The rule that a state may not be sued without its consent, now expressed in Article XVI, Section 3, of the 1987
Constitution, is one of the generally accepted principles of international law that we have adopted as part of the law
of our land under Article II, Section 2. This latter provision merely reiterates a policy earlier embodied in the 1935 and
1973 Constitutions and also intended to manifest our resolve to abide by the rules of the international community.
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 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. Upon its admission to such society, the state is automatically obligated to comply with these principles in its
relations with other states.
As applied to the local state, the doctrine of state immunity is based on the justification given by Justice Holmes that
"there can be no legal right against the authority which makes the law on which the right depends." 12 There are other
practical reasons for the enforcement of the doctrine. In the case of the foreign state sought to be impleaded in the
local jurisdiction, the added inhibition is expressed in the maxim par in parem, non habet imperium. All states are
sovereign equals and cannot assert jurisdiction over one another. A contrary disposition would, in the language of a
celebrated case, "unduly vex the peace of nations." 13
While the doctrine appears to prohibit only suits against the state without its consent, it is also applicable to
complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties. The
rule is that if the judgment against such officials will require the state itself to perform an affirmative act to satisfy the
same, such as the appropriation of the amount needed to pay the damages awarded against them, the suit must be
regarded as against the state itself although it has not been formally impleaded. 14 In such a situation, the state may
move to dismiss the complaint on the ground that it has been filed without its consent.
The doctrine is sometimes derisively called "the royal prerogative of dishonesty" because of the privilege it grants the
state to defeat any legitimate claim against it by simply invoking its non-suability. That is hardly fair, at least in
democratic societies, for the state is not an unfeeling tyrant unmoved by the valid claims of its citizens. In fact, the
doctrine is not absolute and does not say the state may not be sued under any circumstance. On the contrary, the
rule says that the state may not be sued without its consent, which clearly imports that it may be sued if it consents.
The consent of the state to be sued may be manifested expressly or impliedly. Express consent may be embodied in
a general law or a special law. Consent is implied when the state enters into a contract or it itself commences
litigation.
The general law waiving the immunity of the state from suit is found in Act No. 3083, under which the Philippine
government "consents and submits to be sued upon any moneyed claim involving liability arising from contract,
express or implied, which could serve as a basis of civil action between private parties." In Merritt v. Government of
the Philippine Islands, 15 a special law was passed to enable a person to sue the government for an alleged tort.
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. 16 Waiver is also implied when the
government files a complaint, thus opening itself to a counterclaim. 17
The above rules are subject to qualification. Express consent is effected only by the will of the legislature through the
medium of a duly enacted statute. 18 We have held that not all contracts entered into by the government will operate
as a waiver of its non-suability; distinction must be made between its sovereign and proprietary acts. 19 As for the
filing of a complaint by the government, suability will result only where the government is claiming affirmative relief
from the defendant. 20
In the case of the United States of America, the customary rule of international law on state immunity is expressed
with more specificity in the RP-US Bases Treaty. Article III thereof provides as follows:
It is mutually agreed that the United States shall have the rights, power and authority within the
bases which are necessary for the establishment, use, operation and defense thereof or
appropriate for the control thereof and all the rights, power and authority within the limits of the
territorial waters and air space adjacent to, or in the vicinity of, the bases which are necessary to
provide access to them or appropriate for their control.
The petitioners also rely heavily on Baer v. Tizon, 21 along with several other decisions, to support their position that
they are not suable in the cases below, the United States not having waived its sovereign immunity from suit. It is
emphasized that in Baer, the Court held:
The invocation of the doctrine of immunity from suit of a foreign state without its consent is
appropriate. More specifically, insofar as alien armed forces is concerned, the starting point
is Raquiza v. Bradford, a 1945 decision. In dismissing a habeas corpus petition for the release of
petitioners confined by American army authorities, Justice Hilado speaking for the Court,
cited Coleman v. Tennessee, where it was explicitly declared: 'It is well settled that a foreign
army, permitted to march through a friendly country or to be stationed in it, by permission of its
government or sovereign, is exempt from the civil and criminal jurisdiction of the place.' Two
years later, in Tubb and Tedrow v. Griess, this Court relied on the ruling in Raquiza v. Bradford
and cited in support thereof excerpts from the works of the following authoritative writers: Vattel,
Wheaton, Hall, Lawrence, Oppenheim, Westlake, Hyde, and McNair and Lauterpacht. Accuracy
demands the clarification that after the conclusion of the Philippine-American Military Bases
Agreement, the treaty provisions should control on such matter, the assumption being that there
was a manifestation of the submission to jurisdiction on the part of the foreign power whenever
appropriate. More to the point is Syquia v. Almeda Lopez, where plaintiffs as lessors sued the
Commanding General of the United States Army in the Philippines, seeking the restoration to
them of the apartment buildings they owned leased to the United States armed forces stationed
in the Manila area. A motion to dismiss on the ground of non-suability was filed and upheld by
respondent Judge. The matter was taken to this Court in a mandamus proceeding. It failed. It
was the ruling that respondent Judge acted correctly considering that the 4 action must be
considered as one against the U.S. Government. The opinion of Justice Montemayor continued:
'It is clear that the courts of the Philippines including the Municipal Court of Manila have no
jurisdiction over the present case for unlawful detainer. The question of lack of jurisdiction was
raised and interposed at the very beginning of the action. The U.S. Government has not given its
consent to the filing of this suit which is essentially against her, though not in name. Moreover,
this is not only a case of a citizen filing a suit against his own Government without the latter's
consent but it is of a citizen firing an action against a foreign government without said
government's consent, which renders more obvious the lack of jurisdiction of the courts of his
country. The principles of law behind this rule are so elementary and of such general acceptance
that we deem it unnecessary to cite authorities in support thereof then came Marvel Building
Corporation v. Philippine War Damage Commission, where respondent, a United States Agency
established to compensate damages suffered by the Philippines during World War II was held as
falling within the above doctrine as the suit against it would eventually be a charge against or
financial liability of the United States Government because ... , the Commission has no funds of
its own for the purpose of paying money judgments.' The Syquia ruling was again explicitly relied
upon in Marquez Lim v. Nelson, involving a complaint for the recovery of a motor launch, plus
damages, the special defense interposed being 'that the vessel belonged to the United States
Government, that the defendants merely acted as agents of said Government, and that the
United States Government is therefore the real party in interest.' So it was in Philippine Alien
Property Administration v. Castelo, where it was held that a suit against Alien Property Custodian
and the Attorney General of the United States involving vested property under the Trading with
the Enemy Act is in substance a suit against the United States. To the same effect is Parreno v.
McGranery, as the following excerpt from the opinion of justice Tuazon clearly shows: 'It is a
widely accepted principle of international law, which is made a part of the law of the land (Article
II, Section 3 of the Constitution), that a foreign state may not be brought to suit before the courts
of another state or its own courts without its consent.' Finally, there is Johnson v. Turner, an
appeal by the defendant, then Commanding General, Philippine Command (Air Force, with office
at Clark Field) from a decision ordering the return to plaintiff of the confiscated military payment
certificates known as scrip money. In reversing the lower court decision, this Tribunal, through
Justice Montemayor, relied on Syquia v. Almeda Lopez, explaining why it could not be sustained.
It bears stressing at this point that the above observations do not confer on the United States of America 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 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. This was our ruling
in UnitedStates of America v. Ruiz, 22 where the transaction in question dealt with the improvement of the wharves in
the naval installation at Subic Bay. As this was a clearly governmental function, we held that the contract did not
operate to divest the United States of its sovereign immunity from suit. In the words of Justice Vicente Abad Santos:
The traditional rule of immunity exempts a State from being sued in the courts of another State
without its consent or waiver. This rule is a necessary consequence of the principles of
independence and equality of States. However, the rules of International Law are not petrified;
they are constantly developing and evolving. And because the activities of states have
multiplied, it has been necessary to distinguish them — between sovereign and governmental
acts (jure imperii) and private, commercial and proprietary acts (jure gestionis). The result is that
State immunity now extends only to acts jure imperii The restrictive application of State immunity
is now the rule in the United States, the United kingdom and other states in Western Europe.
xxx xxx xxx
The restrictive application of State immunity is proper only when the proceedings arise out of
commercial transactions of the foreign sovereign, its commercial activities or economic affairs.
Stated differently, a State may be said to have descended to the level of an individual and can
thus be deemed to have tacitly given its consent to be sued only when it enters into business
contracts. It does not apply where the contract relates to the exercise of its sovereign functions.
In this case the projects are an integral part of the naval base which is devoted to the defense of
both the United States and the Philippines, indisputably a function of the government of the
highest order; they are not utilized for nor dedicated to commercial or business purposes.
The other petitioners in the cases before us all aver they have acted in the discharge of their official functions as
officers or agents of the United States. However, this is a matter of evidence. The charges against them may not be
summarily dismissed on their mere assertion that their acts are imputable to the United States of America, which has
not given its consent to be sued. In fact, the defendants are sought to be held answerable for personal torts in which
the United States itself is not involved. If found liable, they and they alone must satisfy the judgment.
In Festejo v. Fernando, 23 a bureau director, acting without any authority whatsoever, appropriated private land and
converted it into public irrigation ditches. Sued for the value of the lots invalidly taken by him, he moved to dismiss
the complaint on the ground that the suit was in effect against the Philippine government, which had not given its
consent to be sued. This Court sustained the denial of the motion and held that the doctrine of state immunity was
not applicable. The director was being sued in his private capacity for a personal tort.
With these considerations in mind, we now proceed to resolve the cases at hand.
III
It is clear from a study of the records of G.R. No. 80018 that the individually-named petitioners therein were acting in
the exercise of their official functions when they conducted the buy-bust operation against the complainant and
thereafter testified against him at his trial. The said petitioners were in fact connected with the Air Force Office of
Special Investigators and were charged precisely with the function of preventing the distribution, possession and use
of prohibited drugs and prosecuting those guilty of such acts. It cannot for a moment be imagined that they were
acting in their private or unofficial capacity when they apprehended and later testified against the complainant. It
follows that 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. As we observed in Sanders v. Veridiano: 24
 Given the official character of the above-described letters, we have to conclude that the the privilege like all other customers as in ordinary restaurants. Although the prices are concededly reasonable and
petitioners were, legally speaking, being sued as officers of the United States government. As relatively low, such services are undoubtedly operated for profit, as a commercial and not a governmental activity.
they have acted on behalf of that government, and within the scope of their authority, it is that
government, and not the petitioners personally, that is responsible for their acts.
The consequence of this finding is that the petitioners cannot invoke the doctrine of state immunity to justify the
dismissal of the damage suit against them by Genove. Such defense will not prosper even if it be established that
The private respondent invokes Article 2180 of the Civil Code which holds the government liable if it acts through a they were acting as agents of the United States when they investigated and later dismissed Genove. For that matter,
special agent. The argument, it would seem, is premised on the ground that since the officers are designated not even the United States government itself can claim such immunity. The reason is that by entering into the
"special agents," the United States government should be liable for their torts. employment contract with Genove in the discharge of its proprietary functions, it impliedly divested itself of its
sovereign immunity from suit.
There seems to be a failure to distinguish between suability and liability and a misconception that the two terms are
synonymous. Suability depends on the consent of the state to be sued, liability on the applicable law and the But these considerations notwithstanding, we hold that the complaint against the petitioners in the court below must
established facts. The circumstance that a state is suable does not necessarily mean that it is liable; on the other still be dismissed. While suable, the petitioners are nevertheless not liable. It is obvious that the claim for damages
hand, it can never be held liable if it does not first consent to be sued. Liability is not conceded by the mere fact that cannot be allowed on the strength of the evidence before us, which we have carefully examined.
the state has allowed itself to be sued. When the state does waive its sovereign immunity, it is only giving the plaintiff
the chance to prove, if it can, that the defendant is liable.
The dismissal of the private respondent was decided upon only after a thorough investigation where it was
established beyond doubt that he had polluted the soup stock with urine. The investigation, in fact, did not stop there.
The said article establishes a rule of liability, not suability. The government may be held liable under this rule only if it Despite the definitive finding of Genove's guilt, the case was still referred to the board of arbitrators provided for in
first allows itself to be sued through any of the accepted forms of consent. the collective bargaining agreement. This board unanimously affirmed the findings of the investigators and
recommended Genove's dismissal. There was nothing arbitrary about the proceedings. The petitioners acted quite
properly in terminating the private respondent's employment for his unbelievably nauseating act. It is surprising that
Moreover, the agent performing his regular functions is not a special agent even if he is so denominated, as in the
he should still have the temerity to file his complaint for damages after committing his utterly disgusting offense.
case at bar. No less important, the said provision appears to regulate only the relations of the local state with its
inhabitants and, hence, applies only to the Philippine government and not to foreign governments impleaded in our
courts. Concerning G.R. No. 76607, we also find that the barbershops subject of the concessions granted by the United
States government are commercial enterprises operated by private person's. They are not agencies of the United
States Armed Forces nor are their facilities demandable as a matter of right by the American servicemen. These
We reject the conclusion of the trial court that the answer filed by the special counsel of the Office of the Sheriff
establishments provide for the grooming needs of their customers and offer not only the basic haircut and shave (as
Judge Advocate of Clark Air Base was a submission by the United States government to its jurisdiction. As we noted
required in most military organizations) but such other amenities as shampoo, massage, manicure and other similar
in Republic v. Purisima, 25 express waiver of immunity cannot be made by a mere counsel of the government but
indulgences. And all for a fee. Interestingly, one of the concessionaires, private respondent Valencia, was even sent
must be effected through a duly-enacted statute. Neither does such answer come under the implied forms of consent
abroad to improve his tonsorial business, presumably for the benefit of his customers. No less significantly, if not
as earlier discussed.
more so, all the barbershop concessionaires are under the terms of their contracts, required to remit to the United
States government fixed commissions in consideration of the exclusive concessions granted to them in their
But even as we are certain that the individual petitioners in G.R. No. 80018 were acting in the discharge of their respective areas.
official functions, we hesitate to make the same conclusion in G.R. No. 80258. The contradictory factual allegations
in this case deserve in our view a closer study of what actually happened to the plaintiffs. The record is too meager
This being the case, the petitioners cannot plead any immunity from the complaint filed by the private respondents in
to indicate if the defendants were really discharging their official duties or had actually exceeded their authority when
the court below. The contracts in question being decidedly commercial, the conclusion reached in the United States
the incident in question occurred. Lacking this information, this Court cannot directly decide this case. The needed
of America v. Ruiz case cannot be applied here.
inquiry must first be made by the lower court so it may assess and resolve the conflicting claims of the parties on the
basis of the evidence that has yet to be presented at the trial. Only after it shall have determined in what capacity the
petitioners were acting at the time of the incident in question will this Court determine, if still necessary, if the doctrine The Court would have directly resolved the claims against the defendants as we have done in G.R. No. 79470,
of state immunity is applicable. except for the paucity of the record in the case at hand. The evidence of the alleged irregularity in the grant of the
barbershop concessions is not before us. This means that, as in G.R. No. 80258, the respondent court will have to
receive that evidence first, so it can later determine on the basis thereof if the plaintiffs are entitled to the relief they
In G.R. No. 79470, private respondent Genove was employed as a cook in the Main Club located at the U.S. Air
seek. Accordingly, this case must also be remanded to the court below for further proceedings.
Force Recreation Center, also known as the Open Mess Complex, at John Hay Air Station. As manager of this
complex, petitioner Lamachia is responsible for eleven diversified activities generating an annual income of $2
million. Under his executive management are three service restaurants, a cafeteria, a bakery, a Class VI store, a IV
coffee and pantry shop, a main cashier cage, an administrative office, and a decentralized warehouse which
maintains a stock level of $200,000.00 per month in resale items. He supervises 167 employees, one of whom was
There are a number of other cases now pending before us which also involve the question of the immunity of the
Genove, with whom the United States government has concluded a collective bargaining agreement.
United States from the jurisdiction of the Philippines. This is cause for regret, indeed, as they mar the traditional
friendship between two countries long allied in the cause of democracy. It is hoped that the so-called "irritants" in
From these circumstances, the Court can assume that the restaurant services offered at the John Hay Air Station their relations will be resolved in a spirit of mutual accommodation and respect, without the inconvenience and
partake of the nature of a business enterprise undertaken by the United States government in its proprietary asperity of litigation and always with justice to both parties.
capacity. Such services are not extended to the American servicemen for free as a perquisite of membership in the
Armed Forces of the United States. Neither does it appear that they are exclusively offered to these servicemen; on
WHEREFORE, after considering all the above premises, the Court hereby renders judgment as follows:
the contrary, it is well known that they are available to the general public as well, including the tourists in Baguio City,
many of whom make it a point to visit John Hay for this reason. All persons availing themselves of this facility pay for
 1. In G.R. No. 76607, the petition is DISMISSED and the respondent judge is directed to 13 De Haber v. Queen of Portugal, 17 Q.B. 171.
proceed with the hearing and decision of Civil Case No. 4772. The temporary restraining order
dated December 11, 1986, is LIFTED.
14 Garcia v. Chief of Staff, 16 SCRA 120.

2. In G.R. No. 79470, the petition is GRANTED and Civil Case No. 829-R(298) is DISMISSED.
15 4 Phil. 311.

3. In G.R. No. 80018, the petition is GRANTED and Civil Case No. 115-C-87 is DISMISSED.
16 Santos v. Santos, 92 Phil. 281; Lyons v. United States of America, 104 Phil. 593.
The temporary restraining order dated October 14, 1987, is made permanent.

17 Froilan v. Pan Oriental Shipping Co., G.R. No. 6060, September 30, 1950.
4. In G.R. No. 80258, the petition is DISMISSED and the respondent court is directed to proceed
with the hearing and decision of Civil Case No. 4996. The temporary restraining order dated
October 27, 1987, is LIFTED. 18 Republic v. Purisima, 78 SCRA 470.

All without any pronouncement as to costs. 19 United States of America v. Ruiz, 136 SCRA 487.

SO ORDERED. 20 Lim v. Brownell, 107 Phil. 345.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, 21 57 SCRA 1.
Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.
22 136 SCRA 487.

23 50 O.G. 1556.
Footnotes
24 162 SCRA 88.
1 Civil Case No. 4772.
25 Supra.
2 Annex "B", Rollo, pp. 36-38.
USA VS GUINTO
3 Rollo, p. 88.
G.R. No. 76607 182 SCRA 644 February 26, 1990
4 Civil Case No. 829-R(298).

UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE REEVES, petitioners,

5 Annex "A", Rollo, p. 38. vs.
HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional Trial Court, Angeles City, ROBERTO T.
6 Civil Case No. 115-C-87. VALENCIA, EMERENCIANA C. TANGLAO, AND PABLO C. DEL PILAR, respondents.

7 Annex "A," Rollo, p. 33.

8 Rollo, p. 69.

9 Civil Case No. 4996. Facts:

10 Annex "A," Rollo, p. 58. The case involves 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.
11 Rollo, p. 181.

12 Kawanakoa v. Polybank, 205 U.S. 349.

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. Among those who submitted their bids were
private respondents Roberto T. Valencia, Emerenciana C. Tanglao, and Pablo C. del Pilar.
The Bidding was won by Ramon Dizon over the objection of the private respondents who claimed that he had made a
bid for 4 facilities, including the Civil Engineering Area which was not included in the invitation to bid.
The private respondents filed a complaint in the court below to compel Philippine Area Exchange (PHAX) and the
individual petitioners to cancel the award to Dizon, to conduct a rebidding for the barbershop concessions and to
allow the private respondents by a writ of preliminary injunction to continue operating the concessions pending
litigation.
The petitioners filed a motion to dismiss and opposition to the petition for preliminary injunction on the ground that
the action was in effect a suit against USA which had not waived its non-suability, but trial court denied the
application for a writ of preliminary injunction.
Issues:
1. Whether or not the action was in effect a suit against United States of America.
2. Whether or not the petitioners were immune from suit under the RP-US Bases Treaty for acts done by them
in the performance of their official duties.
Discussions:
The rule that a state may not be sued without its consent, is one of the generally accepted principles of international
law that we 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 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. Upon its admission to such society, the state is automatically obligated to comply with these
principles in its relations with other states.
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.
Rulings:
1. The court finds the barbershops subject to the concessions granted by the US government to be
commercial enterprises operated by private persons. They are not agencies of the United States Armed
Forces nor are their facilities demandable as a matter of right by the American servicemen. These
establishments provide for the grooming needs of their customers. This being the case, the petitioners
cannot plead any immunity from the complaint filed by the private respondents in the court below.
2. Petitioners states they have acted in the discharge of their official functions as officers or agents of the
United States. They are sought to be held answerable for personal torts in which the United States itself is
not involved. If found liable, they and they alone must satisfy the judgment.
The Court would have directly resolved the claims against the defendants, except for the paucity of the record in the
case at hand. The evidence of the alleged irregularity in the grant of the barbershop concessions is not before the
Court. The respondent court will have to receive that evidence first, so it can later determine on the basis thereof if
the plaintiffs are entitled to the relief they seek. Accordingly, this case must also be remanded to the court below for
further proceedings.
EN BANC
[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.
DECISION
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 citizens basic due process rights, or the governments 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 preliminarily, 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 respondents 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 Departments
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 petitioners 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 oclock 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 MANDAMUS IN 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. 99-94684.
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 respondents 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.
(Section 4, Presidential Decree No. 1069.)
Section 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 bodys 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 of the determinative powers of an administrative body which better enables it to
exercise its quasi-judicial 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 of 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 agencys 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 bodys 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 extraditees 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 ones 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 ones 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.
Petitioners reliance on Wright vs. Court of Appeals (235 SCRA 241 [1992]) (p. 8, Petitioners 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
petitioners 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 preserves 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
Owners 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 respondents 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 proceedings 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 governor of the asylum state to effect the 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 and Ex 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 petitioners 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 provisional 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 persons 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 courts 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 petitioners primary concern is the possible
delay in the evaluation process.
We agree with private respondents 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 Respondents Memorandum.)
In the Philippine context, this Courts 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
individuals 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, 375-376 [1989]).
There can be no dispute over petitioners 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
fast-tracked 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 determination which, 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 and 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 respondents 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 concern 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 respondents
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 all nations." Under the doctrine of incorporation, rules of
international law form part of the law of the land and 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 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 pitted 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 petitioners 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.
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)

A libertarian approach is thus called for under the premises.

Said summary dismissal proceedings are also non-litigious in nature, yet we upheld the due process rights of the respondent.

One will search in vain the RP-US Extradition Treaty, the Extradition Law, as well as American jurisprudence and procedures on
In the case at bar, private respondent does not only face a clear and present danger of loss of property or employment, but of
extradition, for any prohibition against the conferment of the two basic due process rights of notice and hearing during the
liberty itself, which may eventually lead to his forcible banishment to a foreign land. The convergence of petitioners favorable
evaluation stage of the extradition proceedings. We have to consider similar situations in jurisprudence for an application by
action on the extradition request and the deprivation of private respondents liberty is easily comprehensible.
analogy.

We have ruled time and again that this Courts equity jurisdiction, which is aptly described as "justice outside legality," may be
Earlier, we stated that there are similarities between the evaluation process and a preliminary investigation since both procedures
availed of only in the absence of, and never against, statutory law or judicial pronouncements (Smith Bell & Co., Inc. vs. Court
may result in the arrest of the respondent or the prospective extraditee. In the evaluation process, a provisional arrest is even
of Appeals, 267 SCRA 530 [1997]; David-Chan vs. Court of Appeals, 268 SCRA 677 [1997]). The constitutional issue in the
allowed by the Treaty and the Extradition Law (Article 9, RP-US Extradition Treaty; Sec. 20, Presidential Decree No. 1069).
case at bar does not even call for "justice outside legality," since private respondents due process rights, although not guaranteed
Following petitioners theory, because there is no provision of its availability, does this imply that for a period of time, the
by statute or by treaty, are protected by constitutional guarantees. We would not be true to the organic law of the land if we
privilege of the writ of habeas corpus is suspended, despite Section 15, Article III of the Constitution which states that "[t]he
choose strict construction over guarantees against the deprivation of liberty. That would not be in keeping with the principles of
privilege of the writ of habeas corpus shall not be suspended except in cases of invasion or rebellion when the public safety
democracy on which our Constitution is premised.
requires it"? Petitioners 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 Verily, as one traverses treacherous waters of conflicting and opposing currents of liberty and government authority, he must
by reclusion perpetua when evidence of guilt is strong, shall, before conviction, be bailable by sufficient sureties, or be released ever hold the oar of freedom in the stronger arm, lest an errant and wayward course be laid.
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
WHEREFORE, in view of the foregoing premises, the instant petition is hereby DISMISSED for lack of merit. Petitioner is
foreign relations, the aforestated guarantees in the Bill of Rights could thus be subservient thereto?
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
The basic principles of administrative law instruct us that "the essence of due process in administrative proceedings is an rendered moot and academic by this decision, the same is hereby ordered dismissed.
opportunity to explain ones 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.
SO ORDERED. 6/2/00 2:12 PM
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 Davide, Jr., C.J., joins Mr. Justice Puno in his dissent.
guarantees in the enforcement of a law or treaty. Petitioners fears that the Requesting State may have valid objections to the
Requested States non-performance of its commitments under the Extradition Treaty are insubstantial and should not be given
paramount consideration. Bellosillo, Purisima, Buena, and De Leon, Jr., JJ., concur.

How then do we implement the RP-US Extradition Treaty? Do we limit ourselves to the four corners of Presidential Decree No. Puno, J., please see dissent.
1069?
Vitug, J., see separate opinion.
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 Kapunan, and Ynares-Santiago, JJ., see separate concurring opinion.
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 Mendoza, Pardo, and Gonzaga-Reyes, JJ., join dissenting opinion of J. Puno and J. Panganiban.
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 Panganiban, J., please see dissenting opinion.
minimum requirements of due process still operate. As held in GSIS vs. Court of Appeals:
Quisumbing, J., with concurring opinion.
... [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
 Secretary of Justice vs Lantion Extradition Law) and treaty (RP-US Extradition Treaty) have been complied with by the Requesting Government.
Evaluation by the DOJ of the documents is not a preliminary investigation like in criminal cases making the
Doctrine of Incorporation constitutionally guaranteed rights of the accused in criminal prosecution inapplicable.

2. The U.S. requested for the prevention of unauthorized disclosure of the information in the documents.

3. The department is not in position to hold in abeyance proceedings in connection with an extradition request, as
Philippines is bound to Vienna Convention on law of treaties such that every treaty in force is binding upon the
parties.
SECRETARY OF JUSTICE VS LANTION

G.R. No. L-139465 January 18, 2000

Mark Jimenez then filed a petition against the Secretary of Justice. RTC presiding Judge Lantion favored Jimenez. Secretary of
SECRETARY OF JUSTICE, petitioner, Justice was made to issue a copy of the requested papers, as well as conducting further proceedings. Thus, this petition is now at
vs. bar.
HON. RALPH C. LANTION, Presiding Judge, Regional Trial Court of Manila, Branch 25, and MARK B. JIMENEZ,
respondents.

Issue/s:

Whether or not 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-US Extradition Treaty.
Facts:

This is a petition for review of a decision of the Manila Regional Trial Court (RTC). The Department of Justice received a
request from the Department of Foreign Affairs for the extradition of respondent Mark Jimenez to the U.S. The Grand Jury Discussions:
Indictment. The warrant for his arrest, and other supporting documents for said extradition were attached along with the request.
Charges include: The doctrine of incorporation is applied whenever municipal tribunals 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 a local state. Efforts should be
1. Conspiracy to commit offense or to defraud the US done to harmonize them. 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. The
doctrine of incorporation decrees that rules of international law are given equal standing, but are not superior to, national
2. Attempt to evade or defeat tax legislative enactments.

3. Fraud by wire, radio, or television

4. False statement or entries

5. Election contribution in name of another

The Department of Justice (DOJ), through a designated panel proceeded with the technical evaluation and assessment of the
extradition treaty which they found having matters needed to be addressed. Respondent, then requested for copies of all the
documents included in the extradition request and for him to be given ample time to assess it. The Secretary of Justice denied
request on the following grounds:
1. He found it premature to secure him copies prior to the completion of the evaluation. At that point in time, the DOJ
is in the process of evaluating whether the procedures and requirements under the relevant law (PD 1069 Philippine
Ruling/s:
No. The human rights of person, Filipino or foreigner, and the rights of the accused guaranteed in our Constitution should take
precedence over treaty rights claimed by a contracting state. The duties of the government to the individual deserve preferential
consideration when they collide with its treaty obligations to the government of another state. This is so although we recognize
treaties as a source of binding obligations under generally accepted principles of international law incorporated in our
Constitution as part of the law of the land.

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.
Separate Opinions
PERFECTO, J., dissenting:
A military commission was empanelled on December 1, 1948 to try Lt. Gen. Shigenori Kuroda for Violation of the
laws and customs of land warfare.
Melville S. Hussey and Robert Port, American citizens and not authorized by the Supreme Court to practice law were
appointed prosecutor representing the American CIC in the trial of the case.
The commission was empanelled under the authority of Executive Order No. 68 of the President of the Philippines
the validity of which is challenged by petitioner on constitutional grounds. Petitioner has also challenged the
personality of Attorneys Hussey and Port to appear as prosecutors before the commission.
The charges against petitioner has been filed since June 26, 1948 in the name of the people of the Philippines as
accusers.
We will consideration briefly the challenge against the appearance of Attorneys Hussey and Port. It appearing that
they are aliens and have not been authorized by the Supreme Court to practice law there could not be any question
that said person cannot appear as prosecutors in petitioner case as with such appearance they would be practicing
law against the law.
Said violation vanishes however into insignificance at the side of the momentous question involved in the challenge
against the validity of Executive Order No. 68. Said order is challenged on several constitutional ground. To get a
clear idea of the question raised it is necessary to read the whole context of said order which is reproduced as
follows:
EXECUTIVE ORDER NO. 68.
ESTABLISHING A NATIONAL WAR CRIMES OFFICE AND PRESCRIBING RULES AND
REGULATION GOVERNING THE TRIAL OF ACCUSED WAR CRIMINAL.
I, Manuel Roxas president of the Philippines by virtue of the power vested in me by the Constitution and
laws of the Philippines do hereby establish a National War Crimes Office charged with the responsibility of
accomplishing the speedy trial of all Japanese accused of war crimes committed in the Philippines and
prescribe the rules and regulation such trial.
The National War crimes office is established within the office of the Judge Advocate General of the Army
of the Philippines and shall function under the direction supervision and control of the Judge Advocate
General. It shall proceed to collect from all available sources evidence of war crimes committed in the
Philippines from the commencement of hostilities by Japan in December 1941, maintain a record thereof
and bring about the prompt trial maintain a record thereof and bring about the prompt trial of the accused.
The National War Crimes Office shall maintain direct liaison with the Legal Section General Headquarters,
Supreme Commander for the Allied power and shall exchange with the said Office information and
evidence of war crimes.
The following rules and regulation shall govern the trial off person accused as war criminals:
ESTABLISHMENT OF MILITARY COMMISSIONS
(a) General. — person accused as war criminal shall be tried by military commission to be convened by or
under the authority of the Philippines.
II. JURISDICTION
(a) Over Person. — Thee military commission appointed hereunder shall have jurisdiction over all persons
charged with war crimes who are in the custody of the convening authority at the time of the trial.
(b) Over Offenses. — The military commission established hereunder shall have jurisdiction over all
offenses including but not limited to the following:
(1) The planning preparation initiation or waging of a war of aggression or a war in violation of international
treaties agreement or assurance or participation in a common plan or conspiracy for the accomplishment
of any of the foregoing.
(2) Violation of the laws or customs of war. Such violation shall include but not be limited to murder ill-
treatment or deportation to slave labor or for other purpose of civilian population of or in occupied territory;
murder or ill-treatment of prisoners of war or internees or person on the seas or elsewhere; improper (1) Confine each trial strictly to fair and expeditious hearing on the issues raised by the charges, excluding
treatment of hostage; plunder of public or private property wanton destruction of cities towns or village; or irrelevant issues or evidence and preventing any unnecessary delay or interference.
devastation not justified by military necessity.
(2) Deal summarily with any contumacy or contempt, imposing any appropriate punishment therefor.
(3) Murder extermination enslavement deportation and other inhuman acts committed against civilian
population before or during the war or persecution on political racial or religion ground in executive of or in
(3) Hold public session when otherwise decided by the commission.
connection with any crime defined herein whether or not in violation of the local laws.

(4) Hold each session at such time and place as it shall determine, or as may be directed by the convening
III. MEMBERSHIP OF COMMISSIONS
authority.

(a) Appointment. — The members of each military commission shall be appointed by the President of the
(b) Rights of the Accused. — The accused shall be entitled:
Philippines or under authority delegated by him. Alternates may be appointed by the convening authority.
Such shall attend all session of the commission, and in case of illness or other incapacity of any principal
member, an alternate shall take the place of that member. Any vacancy among the members or alternates, (1) To have in advance of the trial a copy of the charges and specifications clearly worded so as to apprise
occurring after a trial has begun, may be filled by the convening authority but the substance of all the accused of each offense charged.
proceeding had evidence taken in that case shall be made known to the said new member or alternate.
This facts shall be announced by the president of the commission in open court.
(2) To be represented, prior to and during trial, by counsel appointed by the convening authority or counsel
of his own choice, or to conduct his own defense.
(b) Number of Members. — Each commission shall consist of not less than three (3) members.
(3) To testify in his own behalf and have his counsel present relevant evidence at the trial in support of his
(c) Qualifications. — The convening authority shall appoint to the commission persons whom he defense, and cross-examine each adverse witness who personally appears before the commission.
determines to be competent to perform the duties involved and not disqualified by personal interest or
prejudice, provided that no person shall be appointed to hear a case in which he personally investigated or
(4) To have the substance of the charges and specifications, the proceedings and any documentary
wherein his presence as a witness is required. One specially qualified member whose ruling is final in so
evidence translated, when he is unable otherwise to understand them.
far as concerns the commission on an objection to the admissibility of evidence offered during the trial.

(c) Witnesses. — The Commission shall have power:

(d) Voting. — Except as to the admissibility of evidence all rulings and finding of the Commission shall be
by majority vote except that conviction and sentence shall be by the affirmative vote of not less than
conviction and sentence shall be by the affirmative vote of not less than two-thirds (2\3) of the member (1) To summon witnesses and require their attendance and testimony; to administer oaths or affirmations
present. to witnesses and other persons and to question witnesses.

(e) Presiding Member. — In the event that the convening authority does not name one of the member as (2) To require the production of documents and other evidentiary material.
the presiding member, the senior officer among the member of the Commission present shall preside.
(3) To delegate the Prosecutors appointed by the convening authority the powers and duties set forth in (1)
IV. PROSECUTORS and (2) above.

(a) Appointment. — The convening authority shall designate one or more person to conduct the
prosecution before each commission.
(b) Duties. — The duties of the prosecutor are:
(1) To prepare and present charges and specifications for reference to a commission.
(2) To prepare cases for trial and to conduct the prosecution before the commission of all cases referred
for trial.
(4) To have evidence taken by a special commissioner appointed by the commission.
(d) Evidence.
(1) The commission shall admit such evidence as in its opinion shall be of assistance in proving or
disproving the charge, or such as in the commission's opinion would have probative value in the mind of a
reasonable man. The commission shall apply the rules of evidence and pleading set forth herein with the
greatest liberality to achieve expeditious procedure. In particular, and without limiting in any way the scope
of the foregoing general rules, the following evidence may be admitted:

(a) Any document, irrespective of its classification, which appears to the commission to have been signed
V. POWER AND PROCEDURE OF COMMISSION
or issued by any officer, department, agency or member of the armed forces of any Government without
proof of the signature or of the issuance of the document.
(a) Conduct of the Trial. — A Commission shall:
(b) Any report which appears to the commission to have been signed or issued by the International Red
Cross or a member of any medical service personnel, or by any investigator or intelligence officer, or by
any other person whom commission considers as possessing knowledge of the matters contained in the
report.
(c) Affidavits, depositions or other signed statements.
(d) Any diary, letter to other document, including sworn statements, appearing to the commission to contain
information relating to the charge.
(e) A copy of any document or other secondary evidence of the contents, if the original is not immediately
available.
(2) The commission shall take judicial notice of facts of common knowledge, official government
documents of any nation, and the proceedings, records and findings of military or other agencies of any of
the United Nation.
(3) A commission may require the prosecution and the defense to make a preliminary offer of proof
whereupon the commission may rule in advance on the admissibility of such evidence.
(4) The official position of the accused shall not absolve him from responsibility nor be considered in
mitigation of punishment. Further action pursuant to an order of the accused's superior, or of his
Government, shall not constitute a defense, but may be considered in mitigation of punishment if the
commission determines that justice so requires.
(5) All purposed confessions or statements of the accused shall bee admissible in evidence without any
showing that they were voluntarily made. If it is shown that such confession or statement was procured by
mean which the commission believe to have been of such a character that may have caused the accused
to make a false statement the commission may strike out or disregard any such portion thereof as was so
procured.
(e) Trial Procedure. — The proceedings of each trial shall be conducted substantially as follows unless
modified by the commission to suit the particular circumstances:
(1) Each charge and specification shall be read or its substance stated in open court.
(2) The presiding member shall ask each accused whether he pleads "Guilty" or "Not guilty."
(3) The prosecution shall make its opening statement."(4) The presiding member may at this or any other
time require the prosecutor to state what evidence he proposes to submit to the commission and the
commission thereupon may rule upon the admissibility of such evidence.
(4) The witnesses and other evidence for the prosecution shall be heard or presented. At the close of the
case for the prosecution, the commission may, on motion of the defense for a finding of not guilty, consider
and rule whether he evidence before the commission may defer action on any such motion and permit or
require the prosecution to reopen its case and produce any further available evidence.
(5) The defense may make an opening statement prior to presenting its case. The presiding member may,
at this any other time require the defense to state what evidence it proposes to submit to the commission
where upon the commission may rule upon the admissibility of such evidence.
(6) The witnesses and other evidence for the defense shall be heard or presented. Thereafter, the
prosecution and defense may introduce such evidence in rebuttal as the commission may rule as being
admissible.
(7) The defense and thereafter the prosecution shall address the commission.
(8) The commission thereafter shall consider the case in closed session and unless otherwise directed by
the convening authority, announce in open court its judgment and sentence if any. The commission may
state the reason on which judgment is based.
( f ) Record of Proceedings. — Each commission shall make a separate record of its proceeding in the trial
of each case brought before it. The record shall be prepared by the prosecutor under the direction of the
commission and submitted to the defense counsel. The commission shall be responsible for its accuracy.
Such record, certified by the presiding member of the commission or his successor, shall be delivered to
the convening authority as soon as possible after the trial.
(g) Sentence. — The commission may sentence an accused, upon conviction to death by hanging or
shooting, imprisonment for life or for any less term, fine or such other punishment as the commission shall
determine to be proper.
(h) Approval of Sentence. — No. sentence of a military commission shall be carried into effect until
approved by the chief off Staff: Provided, That no sentence of death or life imprisonment shall be carried
into execution until confirmed by the President of the Philippines. For the purpose of his review the Chief of
Staff shall create a Board of Review to be composed of not more than three officers none of whom shall be
on duty with or assigned to the Judge Advocate General's Office. The Chief of Staff shall have authority to
approve, mitigate remit in whole or in part, commute, suspend, reduce or otherwise alter the sentence
imposed, or (without prejudice to the accused) remand the case for rehearing before a new military
commission; but he shall not have authority to increase the severity of the sentence. Except as herein
otherwise provided the judgment and sentence of a commission shall final and not subject to review by
any other tribunal.
VI. RULE-MAKING POWER
Supplementary Rule and Forms. — Each commission shall adopt rules and forms to govern its procedure,
not inconsistent with the provision of this Order, or such rules and forms as may be prescribed by the
convening authority]or by the President of the Philippines.
VII. The amount of amount of seven hundred thousand pesos is hereby set aside out of the appropriations
for the Army of the Philippines for use by the National War Crimes Office in the accomplishment of its
mission as hereinabove set forth, and shall be expended in accordance with the recommendation of the
Judge Advocate General as approved by the President. The buildings, fixtures, installations, messing, and
billeting equipment and other property herefore used by then Legal Section, Manila Branch, of the General
Headquarters, Supreme Commander for the Allied Power, which will be turned over by the United States
Army to the Philippines Government through the Foreign Liquidation Commission and the Surplus
Property Commission are hereby specification reserved for use off the National War Crimes Office.
Executive Order No. 64, dated August 16, 1945, is hereby repealed.
Done in the City of Manila, this 29th day of July in the year of Our Lord, nineteen hundred and forty-seven,
and of the Independence of the Philippines, the second.

MANUEL ROXAS
President of the Philippines
By the President:
EMILIO ABELLO
Chief of the Executive Office
EXECUTIVE LEGISLATION
Executive Order No. 68 is a veritable piece of Legislative measure, without the benefit of congressional enactment.
The first question that is trust at our face spearheading a group of other no less important question, is whether or not
the President of the Philippines may exercise the legislative power expressly vested in Congress by the Constitution.
.
The Constitution provides:
The Legislative powers shall be vested in a Congress of the Philippines which shall consist of a Senate
and House of Representatives. (Section 1, Article VI.)
While there is no express provision in the fundamental law prohibiting the exercise of legislative power by agencies
other than Congress, a reading of the whole context of the Constitution would dispel any doubt as to the
constitutional intent that the legislative power is to be exercised exclusively by Congress, subject only to the veto
power of the President of the President of the Philippines, to the specific provision which allow the president of the
Philippines to suspend the privileges of the writ of habeas corpus and to place any part of the Philippines under
martial law, and to the rule-making power expressly vested by the Constitution in the Supreme Court.
There cannot be any question that the member of the Constitutional Convention were believers in the tripartite
system of government as originally enunciated by Aristotle, further elaborated by Montequieu and accepted and
practiced by modern democracies, especially the United State of America, whose Constitution, after which ours has
been patterned, has allocated the three power of government — legislative, executive, judicial — to distinct and
separate department of government.
Because the power vested by our Constitution to the several department of the government are in the nature of
grants, not recognition of pre-existing power, no department of government may exercise any power or authority not
expressly granted by the Constitution or by law by virtue express authority of the Constitution.
Executive Order No. 68 establishes a National War Crimes Office and the power to establish government office is
essentially legislative.
The order provides that person accused as war criminals shall be tried by military commissions. Whether such a
provision is substantive or adjective, it is clearly legislative in nature. It confers upon military commissions jurisdiction
to try all persons charge with war crimes. The power to define and allocate jurisdiction for the prosecution of person
accused of any crime is exclusively vested by the Constitution in Congress. .
It provides rules of procedure for the conduct of trial of trial. This provision on procedural subject constitutes a
usurpation of the rule-making power vested by Constitution in the Supreme Court.
It authorized military commission to adopt additional rule of procedure. If the President of the Philippines cannot
exercise the rule -making power vested by the Constitution in the Supreme Court, he cannot, with more reason,
delegate that power to military commission.
It appropriates the sum of P7000,000 for the expenses of the National War Crimes office established by the said
Executive Order No. 68. This constitutes another usurpation of legislative power as the power to vote appropriations
belongs to Congress.
Executive Order No. 68., is, therefore, null and void, because, though it the President of the Philippines usurped
power expressly vested by the Constitution in Congress and in the Supreme Court.
Challenged to show the constitutional or legal authority under which the President issued Executive Order No. 68,
respondent could not give any definite answer. They attempted, however, to suggest that the President of the
Philippines issued Executive Order No. 68 under the emergency power granted to him by Commonwealth Act No.
600, as amended by Commonwealth Act No. 620, and Commonwealth Act No. 671, both of which are transcribed
below:
COMMONWEALTH ACT NO. 600.
AN ACT DECLARING A STATE OF EMERGENCY AND AUTHORIZING THE PRESIDENT TO
PROMULGATE RULES AND REGULATION TO SAFEGUARD THE INTEGRITY OF THE
PHILIPPINES AND TO INSURE THE TRANQUILITY OF ITS INHABITANTS.
Be it enacted by the National Assembly of the Philippines:
SECTION 1. The existence of war in many parts of the world has created a national emergency which
makes it necessary to invest the President of the Philippines with extraordinary power in order to
safeguard the integrity of the Philippines and to insure the tranquility of its inhabitants, by suppressing
espionage, lawlessness, and all subversive to the people adequate shelter and clothing and sufficient food
supply, and by providing means for the speedy evacuation of the civilian population the establishment of
an air protective service and the organization of volunteer guard units, and to adopt such other measures
as he may deem necessary for the interest of the public. To carry out this policy the President is authorized
to promulgate rules and regulations which shall have the force and effect off law until the date of
adjournment of the next regulation which shall have the force and effect of law until the date of
adjournment of the next regular session of the First Congress of the Philippines, unless sooner amended
or repealed by the Congress of Philippines. Such rules and regulation may embrace the following objects:
(1) to suppress espionage and other subversive activities; (2) to require all able-bodied citizens (a) when
not engaged in any lawful occupation, to engage in farming or other productive activities or (b) to perform
such services as may bee necessary in the public interest; (3) to take over farm lands in order to prevent
or shortage of crops and hunger and destitution; (4) to take over industrial establishment in order to insure
adequate production, controlling wages and profits therein; (5) to prohibit lockouts and strikes whenever
necessary to prevent the unwarranted suspension of work in productive enterprises or in the interest of
national security; (6) to regulate the normal hours of work for wage-earning and salaried employees in
industrial or business undertakings of all kinds; (7) to insure an even distribution of labor among the
productive enterprises; (8) to commandership and other means of transportation in order to maintain, as
much as possible, adequate and continued transportation facilities; (9) to requisition and take over any
public service or enterprise for use or operation by the Government;(10) to regulate rents and the prices of
articles or commodities of prime necessity, both imported and locally produced or manufactured; and (11)
to prevent, locally or generally, scarcity, monopolization, hoarding injurious speculations, and private
control affecting the supply, distribution and movement of foods, clothing, fuel, fertilizer, chemical, building,
material, implements, machinery, and equipment required in agriculture and industry, with power to
requisition these commodities subject to the payment of just compensation. (As amended by Com. Act No.
620.)
SEC. 2. For the purpose of administering this Act and carrying out its objective, the President may
designate any officer, without additional compensation, or any department, bureau, office, or
instrumentality of the National Government.
SEC. 3. Any person, firm, or corporation found guilty of the violation of any provision of this Act or of this
Act or any of the rules or regulations promulgated by the President under the authority of section one of
this Act shall be punished by imprisonment of not more than ten years or by a fine of not more than ten
thousand pesos, or by both. If such violation is committed by a firm or corporation, the manager, managing
director, or person charge with the management of the business of such firm, or corporation shall be
criminally responsible therefor.
SEC. 4. The President shall report to the national Assembly within the first ten days from the date of the
opening of its next regular session whatever action has been taken by him under the authority herein
granted.
SEC. 5. To carry out the purposed of this Act, the President is authorized to spend such amounts as may
be necessary from the sum appropriated under section five Commonwealth Act Numbered four hundred
and ninety-eight.
SEC. 6. If any province of this Act shall be declared by any court of competent jurisdiction to be
unconstitutional and void, such declaration shall not invalidate the remainder of this Act.
SEC. 7. This Act shall take upon its approval.
Approved, August 19, 1940.
COMMONWEALTH ACT NO. 671
AN ACT DECLARING A STATE OF TOTAL EMERGENCY AS A RESULT OF WAR INVOLVING
THE PHILIPPINES AND AUTHORIZING THE PRESIDENT TO PROMULGATE RULE AND
REGULATIONS TO MEET SUCH EMERGENCY.
Be it enacted the National Assembly of the Philippines;
SECTION 1. The existed of war between the United State and other countries of Europe and Asia, which
involves the Philippines, makes it necessary to invest the President with extraordinary powers in order to
meet the resulting emergency.
SEC. 2. Pursuant to the provision of Article VI, section 16, of the Constitution, the President is hereby
authorized, during the existence of the emergency, to promulgate such rules and regulation as he may
deem necessary to carry out the national policy declared in section 1 hereof. Accordingly, he is, among
other things, empowered (a) to transfer the seat of the Government or any of its subdivisions, branches,
department, offices, agencies or instrumentalities; (b) to reorganize the Government of the Commonwealth
including the determination of the order of precedence of the heads of the Executive Department; (c) to
create new subdivision, branches, departments, offices, agency or instrumentalities of government and to
abolish any of those already existing; (d) to continue in force laws and appropriation which would lapse or
otherwise became inoperative, and to modify or suspend the operation or application of those of an
administrative character; (e) to imposed new taxes or to increase, reduce, suspend, or abolish those in
existence; (f) to raise funds through the issuance of bonds or otherwise, and to authorize the expensive of
the proceeds thereof; (g) to authorize the National, provincial, city or municipal governments to incur in
overdrafts for purposes that he may approve; (h) to declare the suspension of the collection of credits or
the payment of debts; and (i) to exercise such other power as he may deem necessary to enable the
Government to fulfill its responsibilities and to maintain and enforce its authority.
SEC. 3. The President of the Philippines report thereto all the rules and regulation promulgated by him
under the power herein granted.
SEC. 4. This Act shall take effect upon its approval and the rules and regulations. promulgated hereunder
shall be in force and effect until the Congress of the Philippines shall otherwise provide.
Approved December 16, 1941.
The above Acts cannot validly be invoked, Executive Order No. 68 was issued on July 29, 1947. Said Acts had
elapsed upon the liberation of the Philippines form the Japanese forces or, at the latest, when the surrender of Japan
was signed in Tokyo on September 2, 1945.
When both Acts were enacted by the Second National Assembly, we happened to have taken direct part in their
consideration and passage, not only as one of the members of said legislative body as chairman of the Committee
on Third Reading population Known as the "Little Senate." We are, therefore in a position to state that said measures
were enacted by the second national Assembly for the purpose of facing the emergency of impending war and of the
Pacific War that finally broke out with the attack of Pearl Harbor on December 7, 1941. We approved said
extraordinary measures, by which under the exceptional circumstances then prevailing legislative power were
delegated to the President of the Philippines, by virtue of the following provisions of the Constitution:
In time of war or other national emergency, the Congress may by law authorize the President, for a limited
period and subject to such restrictions as it may prescribe to promulgate rules and regulations to carry out
declared national policy. (Article VI, section 26.)
It has never been the purpose of the National Assembly to extend the delegation beyond the emergency created by
the war as to extend it farther would be violative of the express provision of the Constitution. We are of the opinion
that there is no doubt on this question.; but if there could still be any the same should be resolved in favor of the
presumption that the National Assembly did not intend to violate the fundamental law.
The absurdity of the contention that the emergency Acts continued in effect even after the surrender of Japan can
not be gainsaid. Only a few months after liberation and even before the surrender of Japan, or since the middle of
1945, the Congress started to function normally. In the hypothesis that the contention can prevail, then, since 1945,
that is, four years ago, even after the Commonwealth was already replaced by the Republic of the Philippines with
the proclamation of our Independence, two district, separate and independence legislative organs, — Congress and
the President of the Philippines — would have been and would continue enacting laws, the former to enact laws of
every nature including those of emergency character, and the latter to enact laws, in the form of executive orders,
under the so-called emergency powers. The situation would be pregnant with dangers to peace and order to the
rights and liberties of the people and to Philippines democracy.
Should there be any disagreement between Congress and the President of the Philippines, a possibility that no one
can dispute the President of the Philippines may take advantage of he long recess of Congress (two-thirds of every
year ) to repeal and overrule legislative enactments of Congress, and may set up a veritable system of dictatorship,
absolutely repugnant to the letter and spirit of the Constitution.
Executive Order No. 68 is equally offensive to the Constitution because it violates the fundamental guarantees of the
due process and equal protection of the law. It is especially so, because it permit the admission of many kinds
evidence by which no innocent person can afford to get acquittal and by which it is impossible to determine whether
an accused is guilty or not beyond all reasonable doubt.
The rules of evidence adopted in Executive Order No. 68 are a reproduction of the regulation governing the trial of
twelve criminal, issued by General Douglas Mac Arthur, Commander in Chief of the United State Armed Forces in
Western Pacific, for the purpose of trying among other, General Yamashita and Homma. What we said in our
concurring and dissenting opinion to the decision promulgated on December 19, 1945, in the Yamashita case, L-129,
and in our concurring and dissenting opinion to the resolution of January 23, 1946 in disposing the Homma case, L-
244, are perfectly applicable to the offensive rules of evidence in Executive Order No. 68. Said rules of evidence are
repugnant to conscience as under them no justice can expected.
For all the foregoing, conformably with our position in the Yamashita and Homma cases, we vote to declare
Executive Order No. 68 null and void and to grant petition.
Kurado vs Jalandoni
Doctrine of Incorporation
KURADO VS JALANDONI
G.R. No. L-2662 83 Phil 171 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.
Facts:
Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial Army and Commanding General of the
Japanese Imperial Forces in The Philippines during Second World War. He was 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”.
The said military commission was empaneled under the authority of Executive Order 68 of the President of the
Philippines.
Kuroda challenged the validity of Executive Order 68. His arguments, were as follows:
(1) Executive Order 68 is illegal on the ground that it violates not only the provisions of our constitutional law but
also our local laws.
(2) Military Commission has no Jurisdiction to try him 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 and,
therefore, he is charged with “crime” not based on law, national or international
(3) Hussey and Port have no personality as prosecutors in this case because they 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.
Issue/s:
Whether or not Executive Order 68 had violated the provisions of our constitutional law
Discussions:
The provision of Article 2 Sec 3 states that “The Philippines renounces war as an instrument of national policy, adopts
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”. Every State is, by reason of its membership in the
family of nations, bound by the generally accepted principles of international law, which are considered to be
automatically part of its own laws.
Ruling/s:
No. Executive Order 68 has not violated the provision of our constitutional law. The tribunal has jurisdiction to try
Kuroda. This executive order is in accordance with Article 2 Sec 3, of Constitution. It is in accordance with generally
accepted principles of international law including the Hague Convention and Geneva Convention, and
other international jurisprudence established by the UN, including the principle that all persons (military or civilian)
guilty of plan, preparing, waging a war of aggression and other offenses in violation of laws and customs of war.
 The Philippines may not be a signatory to the 2 conventions at that time but the rules and regulations of both are
wholly based on the generally accepted principles of international law. They were accepted even by the 2 belligerent
with the Participation of the Quadripartie Ministerial Commission Members of the Islamic Conference and the Secretary General of the Organization of Isla
nations (US and Japan) Conference" took effect on December 23, 1976. It provided for "[t]he establishment of Autonomy in the southern Philippines within the realm of the soverei
territorial integrity of the Republic of the Philippines" and enumerated the thirteen (13) provinces comprising the "areas of autonomy." 2
Furthermore, the Phil. Military Commission is a special military tribunal and rules as to parties and representation are
not governed by the rules of court but the provision of this special law. 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
created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing com
distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics within the framework of this Constitution and t
sovereignty as well as territorial integrity of the Republic of the Philippines."

To effectuate this mandate, the Constitution further provides:

November 10, 1989
Sec. 16. The President shall exercise general supervision over autonomous regions to ensure that the laws are faithfully exe
SI I.Y. ABBAS, DATU BLO UMPAR ADIONG, DATU MACALIMPOWAC DELANGALEN, CELSO PALMA, ALI MONTANA BABAO, JULMUNIR
ASHID SABER, and DATU JAMAL ASHLEY ABBAS, representing the other taxpayers of Mindanao, petitioners,
Sec. 17. All powers, functions, and responsibilities not granted by this Constitution or by law to the autonomous regions sha
the National Government.
ON ELECTIONS, and HONORABLE GUILLERMO C. CARAGUE, DEPARTMENT SECRETARY OF BUDGET AND MANAGEMENT,

Sec. 18. The Congress shall enact an organic act for each autonomous region with the assistance and participation of the re
November 10, 1989
consultative commission composed of representatives appointed by the President from a list of nominees from multisectora
organic act shall define the basic structure of government for the region consisting of the executive and representative of the
AH D. MAMA-O, petitioner, political units. The organic acts shall likewise provide for special courts with personal, family, and property law jurisdiction co
the provisions of this Constitution and national laws.
RMO CARAGUE, in his capacity as the Secretary of the Budget, and the COMMISSION ON ELECTIONS, respondents.
The creation of the autonomous region shall be effective when approved by majority of the votes cast by the constituent uni
Amora, Alejandro-Abbas & Associates for petitioners in G.R. Nos. 89651 and 89965. plebiscite called for the purpose, provided that only the provinces, cities, and geographic areas voting favorably in such pleb
included in the autonomous region.
ma-o for and in his own behalf in 89965.
Sec. 19 The first Congress elected under this Constitution shall, within eighteen months from the time of organization of bot
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 o
regions shall provide for legislative powers over:

ntroversy relates to the plebiscite in thirteen (13) provinces and nine (9) cities in Mindanao and Palawan, 1 scheduled for November 19, 1989, in (1) Administrative organization;
of Republic Act No. 6734, entitled "An Act Providing for an Organic Act for the Autonomous Region in Muslim Mindanao."

(2) Creation of sources of revenues;

ated petitions pray that the Court: (1) enjoin the Commission on Elections (COMELEC) from conducting the plebiscite and the Secretary of Budget and
om releasing funds to the COMELEC for that purpose; and (2) declare R.A. No. 6734, or parts thereof, unconstitutional .
(3) Ancestral domain and natural resources;
ated comment was filed by Solicitor General for the respondents, which the Court considered as the answer, the case was deemed submitted for
sues having been joined. Subsequently, petitioner Mama-o filed a "Manifestation with Motion for Leave to File Reply on Respondents' Comment and to (4) Personal, family, and property relations;
ments," which the Court noted.
(5) Regional urban and rural planning development;
against R.A. 6734 raised by petitioners may generally be categorized into either of the following:
(6) Economic, social and tourism development;
34, or parts thereof, violates the Constitution, and
(7) Educational policies;
provisions of R.A. No. 6734 conflict with the Tripoli Agreement.
(8) Preservation and development of the cultural heritage; and
ement, more specifically, the Agreement Between the government of the Republic of the Philippines of the Philippines and Moro National Liberation Front
 (9) Such other matters as may be authorized by law for the promotion of the Thus,
generalunder
welfare
the of
Constitution
the peopleand
of the
R.A. No 6734, the creation of the autonomous region shall take effect only when approved by a majority of the votes cast
region. 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 r
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
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 contem
Sec. 21. The preservation of peace and order within the regions shall be the responsibility of the local police agencies which shall be
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 prov
organized, maintained, supervised, and utilized in accordance with applicable laws. The defense and security of the region shall be the
cities, among those enumerated in R.A. No. 6734, shall compromise it. [See III RECORD OF THE CONSTITUTIONAL COMMISSION 482-492 (1986)].
responsibility of the National Government.

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 c
constitutional mandate, R.A. No. 6734 was enacted and signed into law on August 1, 1989.
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 ma
total votes cast in the plebiscite in all the constituent units, or a majority in each of the constituent units, or both?
all 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
nt.
We need not go beyond the Constitution to resolve this question.

mise their arguments on the assumption that the Tripoli Agreement is part of the law of the land, being a binding international agreement . The Solicitor
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 Artic
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
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 p
e provisions of the 1973 or 1987 Constitutions, nor a binding international agreement.
Comparing this with the provision on the creation of the autonomous region, which reads:

er necessary nor determinative of the case to rule on the nature of the Tripoli Agreement and its binding effect on the Philippine Government whether
The creation of the autonomous region shall be effective when approved by majority of the votes cast by the constituent uni
ernational 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
plebiscite called for the purpose, provided that only provinces, cities and geographic areas voting favorably in such plebiscit
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
included in the autonomous region. [Art. X, sec, 18, para, 2].
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
t 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
No. 6734, an enactment of the Congress of the Philippines, rather it would be in the same class as the latter [SALONGA, it will readily
PUBLIC
be seenINTERNATIONAL
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 ma
d., 1974), citing Head Money Cases, 112 U.S. 580 (1884) and Foster v. Nelson, 2 Pet. 253 (1829)]. Thus, if at all, theR.A.
constituent
No. 6734units
wouldandbethe
amendatory
proviso underscores
of this. for if the intention of the framers of the Constitution was to get the majority of the totality of the votes
ement, being a subsequent law. Only a determination by this Court that R.A. No. 6734 contravened the Constitution couldwould
haveresult
simply
in adopted
the granting
the same
of the phraseology as that used for the ratification of the Constitution, i.e. "the creation of the autonomous region shall be e
approved by a majority of the votes cast in a plebiscite called for the purpose."

all therefore only pass upon the constitutional questions which have been raised by petitioners. 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 doub
the votes in all constituent units put together, as well as in the individual constituent units.
s argues that R.A. No. 6734 unconditionally creates an autonomous region in Mindanao, contrary to the aforequoted provisions of the Constitution on the
gion which make the creation of such region dependent upon the outcome of the plebiscite. More importantly, because of its categorical language, this is also the sense in which the vote requirement in the plebiscite provided under Article X, sectio
been understood by the people when they ratified the Constitution.
s 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
e composed of provinces and cities voting favorably in the plebiscite called for the purpose, in accordance with Section
Invoking 18,the
Article
earlier
X of
cited
theconstitutional
Constitution."provisions, petitioner Mama-o, on the other hand, maintains that only those areas which, to his view, share common
nds that the tenor of the above provision makes the creation of an autonomous region absolute, such that even ifhistorical
only twoandprovinces
culturalvote
heritage,
in favor
economic
of and social structures, and other relevant characteristics should be properly included within the coverage of the au
utonomous region would still be created composed of the two provinces where the favorable votes were obtained. 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 Magu
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 his
cultural heritage and other relevant characteristics. By including areas which do not strictly share the same characteristics. By including areas which do no
e creation of the autonomous region and its composition needs to be clarified.
the same characteristic as the others, petitioner claims that Congress has expanded the scope of the autonomous region which the constitution itself has p

oned 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
gion. The reference to the constitutional provision cannot be glossed over for it clearly indicates that the creation of the autonomous region shall take place
Petitioner's argument is not tenable. The Constitution lays down the standards by which Congress shall determine which areas should constitute the auton
with the constitutional requirements. Second, there is a specific provision in the Transitory Provisions (Article XIX) of the Organic Act, which incorporates
Guided by these constitutional criteria, the ascertainment by Congress of the areas that share common attributes is within the exclusive realm of the legisla
e same requirements embodied in the Constitution and fills in the details, thus:
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
governmental powers. [Angara v. Electoral Commission, 63 Phil 139 (1936); Morfe v. Mutuc, G.R. No. L-20387, January 31, 1968, 22 SCRA 424].
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)
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-
days or later than one hundred twenty (120) days after the approval of this Act: Provided, That only the provinces and cities voting
Mindanao should likewise be covered. He argues that since the Organic Act covers several non-Muslim areas, its scope should be further broadened to in
favorably in such plebiscite shall be included in the Autonomous Region in Muslim Mindanao. The provinces and cities which in the
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
plebiscite do not vote for inclusion in the Autonomous Region shall remain the existing administrative determination, merge the existing
regions.
Petitioner's contention runs counter to the very same constitutional provision he had earlier invoked. Any determination by Congress of what areas in Mind
compromise the autonomous region, taking into account shared historical and cultural heritage, economic and social structures, and other relevant charac
 y with it the exclusion of other areas. As earlier stated, such determination by Congress of which areas should be
government
covered bywould
the organic
in effect
actdelay
for the
the creation of the autonomous region.
gion constitutes a recognized legislative prerogative, whose wisdom may not be inquired into by this Court.
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 v
l protection permits of reasonable classification [People v. Vera, 65 Phil. 56 (1963); Laurel v. Misa, 76 Phil. 372 (1946);
constituent
J.M. units
Tuasonin the
andscheduled
Co. v. Land plebiscite, the creation of the autonomous region immediately takes effect delay the creation of the autonomous region.
ration, 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],
that once class may be treated differently from another where the groupings are based on reasonable and real distinctions. The guarantee of equal
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 vo
s 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.
constituent units in the scheduled plebiscite, the creation of the autonomous region immediately takes effect. The questioned provisions in R.A. No. 6734 r
oversight Committee to supervise the transfer do not provide for a different date of effectivity. Much less would the organization of the Oversight Committee
lso question the validity of R.A. No. 6734 on the ground that it violates the constitutional guarantee on free exerciseimpediment
of religion
to [Art.
the operation
III, sec. 5].ofThe
the Organic Act, for such is evidently aimed at effecting a smooth transition period for the regional government. The constitu
s on a provision in the Organic Act which mandates that should there be any conflict between the Muslim Code [P.D. objection
No. 1083]
on thisand
pointthethus
Tribal
cannot
Codebe(still
sustained as there is no bases therefor.
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
(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
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 3
jection by enumerating possible instances of conflict between provisions of the Muslim Code and national law, wherein an application of national law
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,
ve to a Muslim's religious convictions.
thereof, unconstitutional must clearly establish the basis for such a declaration. otherwise, their petition must fail. Based on the grounds raised by petitione
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, ther
the Constitution, judicial power includes the duty to settle actual controversies involving rights which are legally demandable and enforceable. [Art. VIII,
ondition precedent for the power to be exercised, an actual controversy between litigants must first exist [Angara v. Electoral Commission,
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
WHEREFORE, the petitions are DISMISSED for lack of merit.
plication 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
eived potential conflict between the provisions the Muslim Code and national law.

impugn the constitutionality of Article XIX, section 13 of R.A. No. 6734 which, among others, states:
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Griño-Aquino, Medialdea and Regalado, JJ., concur.
. . . 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 J.,
Melencio-Herrera, remain
is onin the existing
leave.
administrative regions: Provided, however, that the President may, by administrative determination, merge the existing regions.

titioners, said provision grants the President the power to merge regions, a power which is not conferred by the Constitution upon the President. That the
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

1 Art. in
II, Sec 1(2) of R.A. No. 6734 provides that "[t]he plebiscite shall be conducted in the provinces of Basilan, Cotabato, D
No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary substantially altered, except
accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in aLanao del Norte, Lanao del Sur, Maguindanao, Palawan, South Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zamboanga del
plebiscite
Zamboanga del Sur, and the cities of Cotabato, Dapitan, Dipolog, General Santos, Iligan, Marawi, Pagadian, Puerto Princes
in the political units directly affected.
Zamboanga."

ed 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
of contiguous provinces for administrative purposes [Integrated Reorganization Plan (1972), which was made as part of the law of the land by 2Pres. The dec.
provinces enumerated in the Tripoli Agreement are the same ones mentioned in R.A. No. 6734.
c. No. 742]. Administrative regions are not territorial and political subdivisions like provinces, cities, municipalities and barangays [see Art. X, sec. 1 of the
hile the power to merge administrative regions is not expressly provided for in the Constitution, it is a power which has traditionally been lodged3 with
Withthe
regard to the controversy regarding the alleged inconsistencies between R.A. No. 6734 and the Tripoli Agreement, it
ilitate 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
enlightening to quote from the statement of Senator Aquilino Pimentel, Jr., the principal sponsor of R.A. No. 6734:
esident to merge administrative regions with the constitutional provision requiring a plebiscite in the merger of local government units because the
a plebiscite in a merger expressly applies only to provinces, cities, municipalities or barangays, not to administrative regions.
xxx xxx xxx

wise question the validity of provisions in the Organic Act which create an Oversight Committee to supervise the transfer to the autonomous region of the
The assertion
riations, and properties vested upon the regional government by the organic Act [Art. XIX, Secs. 3 and 4]. Said provisions mandate that the transfer of that the organic Act is a "betrayal" of the Tripoli Agreement is actually misplaced, to say the least. Misplaced b
government offices and their properties to the regional government shall be made pursuant to a schedule prescribed by the Oversight Committee, overlooks
and the fact that the Organic Act incorporates, at least, 99 percent of the provisions of the Tripoli Agreement. Misplace
er should be accomplished within six (6) years from the organization of the regional government. because it gratuitously assumes that the Tripoli Agreement can bring more benefits to the people of Mulim Mindanao than th

The
petitioners that such provisions are unconstitutional because while the Constitution states that the creation of the autonomous region shall take truth of the matter is that the Organic Act addresses the basis demands of the Muslim, tribal and Christian populations o
effect
n a plebiscite, the requirement of organizing an Oversight committee tasked with supervising the transfer of powers and properties to the regional of autonomy in a far more reasonable, realistic and immediate manner than the Tripoli Agreement ever sought to do.
area

The Organic Act is, therefore, a boon to, not a betrayal, of the interest of the people of Muslim Mindanao.
xxx xxx xxx
[Consolidated Comment, p. 26].
oject - Arellano Law Foundation
Abbas vs Comelec (179 SCRA 287)
Posted on June 30, 2013 by winnieclaire
S
tandard
Facts: 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.
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.
Held: 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.
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.
[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.
DECISION
BELLOSILLO, J.:
The Filipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges, and
concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos,[1] is
invoked 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 and performance of the Manila
Hotel.[2] 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 x x x x
b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS x x x x
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 the Government
Corporate Counsel) are obtained.[3]
Pending the declaration of Renong Berhard 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 Berhad. [4] In a subsequent letter dated 10 October 1995 petitioner sent a
managers check issued by Philtrust Bank for Thirty-three Million Pesos (P33,000,000.00) as Bid Security to match
the bid of the Malaysian Group, Messrs. Renong Berhad x x x x[5] 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 national patrimony.[6]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 Constitution, applies.[7]
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 per share.[8]
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) x
x x x Thus, for the said provision to operate, there must be existing laws to lay down conditions under which
business may be done.[9]
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 patrimony of 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 paramount law of the nation. [10] 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 which all private rights must be
determined and all public authority administered. [11] 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 departments of the governmental machinery and securing certain fundamental
and inalienable rights of citizens.[12] 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 is
referred to the legislature for action.[13]
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 self-executing, the legislature would have the
power to ignore and practically nullify the mandate of the fundamental law. [14] This can be cataclysmic. That is why
the prevailing view is, as it has always been, that -
x x x x in case of doubt, the Constitution should be considered self-executing rather than non-self-executing x x x x 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 by simply refusing to pass the needed implementing
statute.[15]
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 capital, qualifications on the setting up of other financial
structures, et cetera (underscoring supplied by respondents).
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO. Yes.[16]
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
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 self-executing 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 make it more available.[17] 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 and third paragraphs of the same section which undoubtedly are not self-executing. [18] 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
may be self-executing in one part and non-self-executing in another. [19]
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 enforceable rights - are simply not in point. Basco v. Philippine Amusements and
Gaming Corporation[20] speaks of constitutional provisions on personal dignity, [21] the sanctity of family life,[22] the vital
role of the youth in nation-building, [23] the promotion of social justice,[24] and the values of education.[25]Tolentino v.
Secretary of Finance[26] refers to constitutional provisions on social justice and human rights [27] and on education.
[28]
Lastly, Kilosbayan, Inc. v. Morato[29] cites provisions on the promotion of general welfare, [30] the sanctity of family
life,[31] the vital role of the youth in nation-building [32] and the promotion of total human liberation and development.
[33]
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
legislations must be based. Res ipsa loquitur.
On the other hand, 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 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 our rich natural
resources but also to the cultural heritage of our 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.[35] 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 1930s. It was the site of the festivities during the inauguration of the Philippine
Commonwealth. Dubbed as the Official Guest House of the Philippine Government it plays host to dignitaries and
official visitors who are accorded the traditional Philippine hospitality.[36]
The history of the hotel has been chronicled in the book The Manila Hotel: The Heart and Memory of a City.
[37]
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 for their final stand. Thereafter, in the 1950s and 1960s, 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 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
the Filipino First Policy provision is not applicable 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.[38]
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.
xxxx
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]
xxxx
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 entities
fully-controlled by Filipinos.[40]
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 GIVE
PREFERENCE TO QUALIFIED FILIPINOS. This embodies the so-called Filipino First policy.That
means that Filipinos should be given preference in the grant of concessions, privileges and rights
covering the national patrimony.[42]
The exchange of views in the sessions of the Constitutional Commission regarding the subject provision was
still further clarified by Commissioner Nolledo[43] -
Paragraph 2 of Section 10 explicitly mandates the Pro-Filipino bias in all economic concerns. It is better known as the FILIPINO
FIRST Policy x x x x This provision was never found in previous Constitutions x x x x
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 counterproductive 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.
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 Hotel.[44]
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 executive is confronted by a constitutional command. That is not how
constitutional government operates.[45]
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 transaction of the State and therefore subject to the constitutional command.[46]
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 [i]f 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 share. [47] 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 strongerreason 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 petitioners 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 x x x x in connection with a temporary injunction
issued by the Courts 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 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 winds of unfair and ill-informed criticism.[48]
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 sacrosanct in any economic policy as to draw itself beyond
judicial review when the Constitution is involved.[49]
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 nationalism.[50]
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 soul - a
place with a history of grandeur; a most historical setting that has played a part in the shaping of a country.[51]
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 nations 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 if Manila Hotel - and all that it
 [16]
stands for - is sold to a non-Filipino? How much of national pride will vanish if the nations cultural heritage is Record of the Constitutional Commission, Vol. 3, 22 August 1986, p. 608.
entrusted to a foreign entity? On the other hand, how much dignity will be preserved and realized if the national
[17]
patrimony is safekept in the hands of a qualified, zealous and well-meaning Filipino? This is the plain and simple 16 Am Jur 2d 283-284.
meaning of the Filipino First Policyprovision of the Philippine Constitution. And this Court, heeding the clarion call of [18]
Sec. 10, first par., reads: The Congress shall, upon recommendation of the economic and planning agency, when
the Constitution and accepting the duty of being the elderly watchman of the nation, will continue to respect and
the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per
protect the sanctity of the Constitution.
centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain
WHEREFORE, respondents GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL areas of investments. The Congress shall enact measures that will encourage the formation and operation of
CORPORATION, COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE enterprises whose capital is wholly owned by Filipinos.
COUNSEL are directed to CEASE and DESIST from selling 51% of the shares of the Manila Hotel Corporation to
Sec. 10, third par., reads: The State shall regulate and exercise authority over foreign investments within its national
RENONG BERHAD, and to ACCEPT the matching bid of petitioner MANILA PRINCE HOTEL CORPORATION to
jurisdiction and in accordance with its national goals and priorities.
purchase the subject 51% of the shares of the Manila Hotel Corporation at P44.00 per share and thereafter to
execute the necessary agreements and documents to effect the sale, to issue the necessary clearances and to do [19]
State ex rel. Miller v. OMalley, 342 Mo 641, 117 SW2d 319.
such other acts and deeds as may be necessary for the purpose.
[20]
G.R. No. 91649, 14 May 1991, 197 SCRA 52.
SO ORDERED.
[21]
Sec. 11, Art. II (Declaration of Principles and State Policies), provides that [t]he State values the dignity of every
Regalado, Davide, Jr., Romero, Kapunan, Francisco, and Hermosisima, Jr., JJ, concur. human person and guarantees full respect for human rights.
Narvasa, C.J., (Chairman), and Melo, J., joins J. Puno in his dissent.
Padilla, J., see concurring opinion. [22]
Sec. 12, Art. II, provides that [t]he State recognizes the sanctity of family life and shall protect and strengthen the
Vitug, J., see separate concurring opinion family as a basic autonomous social institution. It shall equally protect the life of the mother and the life of
Mendoza, J., see concurring opinion the unborn from conception. The natural and primary right and duty of parents in the rearing of the youth
Torres, J., with separate opinion for civic efficiency and the development of moral character shall receive the support of the government.
Puno, J., see dissent.
[23]
Panganiban J., with separate dissenting opinion. Sec. 13, Art. II, provides that [t]he State recognizes the vital role of the youth in nation-building and shall promote
and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth
patriotism and nationalism, and encourage their involvement in public and civic affairs.
[24]
Sec. 1, Art. XIII (Social Justice and Human Rights), provides that [t]he Congress shall give highest priority to the
enactment of measures that protect and enhance the right of all the people to human dignity, reduce social,
[1]
See Sec. 10, par. 2, Art. XII, 1987 Constitution. economic and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for
the common good.
[2]
Par. I. Introduction and Highlights, Guidelines and Procedures: Second Prequalifications and Public Bidding of the
MHC Privatization; Annex A, Consolidated Reply to Comments of Respondents; Rollo, p.142. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.
[3]
Par. V. Guidelines for the Public Bidding, Id., pp. 153-154. Sec. 2, Art. XIII, provides that [t]he promotion of social justice shall include the commitment to create economic
opportunities based on freedom of initiative and self-reliance.
[4]
Annex A, Petition for Prohibition and Mandamus with Temporary Restraining Order; Rollo, pp.13-14.
[25]
Sec. 2, Art. XIV (Education, Science and Technology, Arts, Culture, and Sports), provides that [t]he State shall:
[5]
Annex B, Petition for Prohibition and Mandamus with Temporary Restraining Order; Id., p.15.
(1) Establish, maintain, and support a complete, adequate, and integrated system of education relevant to the needs
[6]
Petition for Prohibition and Mandamus with Temporary Restraining Order, pp. 5-6; Id., pp.6-7. of the people and society;
[7] (2) Establish and maintain a system of free public education in the elementary and high school levels. Without
Consolidated Reply to Comments of Respondents, p. 17; Id., p.133. limiting the natural right of parents to rear their children, elementary education is compulsory for all children of school
[8]
Par. V. J. 1,Guidelines for Public Bidding, Guidelines and Procedures: Second Prequalifications and Public Bidding age;
of the MHC Privatization, Annex A, Consolidated Reply to Comments of Respondents; Id., p. 154. (3) Establish and maintain a system of scholarship grants, student loan programs, subsidies, and other incentives
which shall be available to deserving students in both public and private schools, especially to the underprivileged;
[9]
Respondents Joint Comment with Urgent Motion to Lift Temporary Restraining Order, p.9; Rollo, p. 44. (4) Encourage non-formal, informal, and indigenous learning, independent, and out-of-school study
programs particularly those that respond to community needs; and
[10]
Marbury v. Madison, 5 U.S. 138 (1803).
(5) Provide adult citizens, the disabled, and out-of-school youth with training in civics, vocational efficiency, and other
[11]
11 Am Jur. 606. skills.
[12]
16 Am Jur. 2d 281. [26]
G.R. No. 115455, 25 August 1994, 235 SCRA 630.
[13]
Id., p. 282. [27]
See Note 25.
[14]
See Note 12. [28]
Sec. 1, Art. XIV, provides that [t]he State shall protect and promote the right of all citizens to quality education at
[15]
all levels of education and shall take appropriate steps to make such education accessible to all.
Cruz, Isagani A., Constitutional Law, 1993 ed., pp. 8-10.
[29]
G.R. No. 118910, 17 July 1995.
[30] [48]
Sec. 5, Art. II (Declaration of Principles and State Policies), provides that [t]he maintenance of peace and order, Keynote Address at the ASEAN Regional Symposium on Enforcement of Industrial Property Rights held 23
the protection of life, liberty, and property, and the promotion of the general welfare are essential for the October 1995 at New World Hotel, Makati City.
enjoyment by all the people of the blessings of democracy.
[49]
Speech of Senior Associate Justice Teodoro R. Padilla at the Induction of Officers and Directors of the
[31]
See Note 23. PHILCONSA for 1996 held 16 January 1996 at the Sky-Top, Hotel Intercontinental, Makati City.
[32] [50]
See Note 24. Memorandum of Authorities submitted by former Chief Justice Enrique M. Fernando, p.5.
[33] [51]
Sec. 17, Art. II, provides that [t]he State shall give priority to education, science and technology, arts, culture, and 8 March 1996 issue of Philippine Daily Inquirer, p. B13.
sports to foster patriotism and nationalism, accelerate social progress, and promote total human liberation
and development.
[34]
Nolledo, Jose N., The New Constitution of the Philippines Annotated, 1990 ed., p. 72.
[35] MANILA PRINCE HOTEL, petitioner v GSIS, respondent (DIGEST)
Websters Third New International Dictionary, 1986 ed., p. 1656.
G.R. No. 122156; February 3, 1997
[36]
The guest list of the Manila Hotel includes Gen. Douglas MacArthur, the Duke of Windsor, President Richard TOPIC: Non-Self Executing v Self Executing Constitutional Provisions
Nixon of U.S.A., Emperor Akihito of Japan, President Dwight Eisenhower of U.S.A, President Nguyen Van
Thieu of Vietnam, President Park Chung Hee of Korea, Prime Minister Richard Holt of Australia, Prime
Minister Keith Holyoake of New Zealand, President Lyndon Johnson of U.S.A., President Jose Lopez
Portillo of Mexico, Princess Margaret of England, Prime Minister Malcolm Fraser of Australia, Prime
Minister Yasuhiro Nakasone of Japan, Prime Minister Pierre Elliot Trudeau of Canada, President Raul
Alfonsin of Argentina, President Felipe Gonzalez of Spain, Prime Minister Noboru Takeshita of Japan,
Prime Minister Hussain Muhammad Ershad of Bangladesh, Prime Minister Bob Hawke of Australia, Prime
Minister Yasuhiro Nakasone of Japan, Premier Li Peng of China, Sultan Hassanal Bolkiah of Brunei,
President Ramaswami Venkataraman of India, Prime Minister Go Chok Tong of Singapore, Prime Minister FACTS:
Enrique Silva Cimma of Chile, Princess Chulaborn and Mahacharri Sirindhorn of Thailand, Prime Minister The Government Service Insurance System (GSIS) decided to sell through public bidding 30% to 51% of the issued
Tomiichi Murayama of Japan, Sultan Azlan Shah and Raja Permaisuri Agong of Malaysia, President Kim and outstanding shares of the Manila Hotel (MHC).
Young Sam of Korea, Princess Infanta Elena of Spain, President William Clinton of U.S.A., Prime Minister
Mahathir Mohamad of Malaysia, King Juan Carlos I and Queen Sofia of Spain, President Carlos Saul
Menem of Argentina, Prime Ministers Chatichai Choonhavan and Prem Tinsulanonda of Thailand, Prime
Minister Benazir Bhutto of Pakistan, President Vaclav Havel of Czech Republic, Gen. Norman In a close bidding, two bidders participated: Manila Prince Hotel Corporation (MPHC), a Filipino corporation, which
Schwarzkopf of U.S.A., President Ernesto Perez Balladares of Panama, Prime Minister Adolfas offered to buy 51% of the MHC at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its
Slezevicius of Lithuania, President Akbar Hashemi Rafsanjani of Iran, President Askar Akayev of hotel operator, which bid for the same number of shares at P44.00 per share, or P2.42 more than the bid of
Kyrgyztan, President Ong Teng Cheong of Singapore, President Frei Ruiz Tagle of Chile, President Le Duc petitioner.
Anh of Vietnam, and Prime Minister Julius Chan of Papua New Guinea, see Memorandum for Petitioner,
pp. 16-19.
[37]
Authored by Beth Day Romulo. Pending the declaration of Renong Berhard as the winning bidder and the execution of the contracts, the MPHC
matched the bid price in a letter to GSIS. MPHC sent a manager’s check to the GSIS in a subsequent letter, which
[38]
See Note 9, pp.15-16; Rollo, pp. 50-51. GSIS refused to accept. On 17 October 1995, perhaps apprehensive that GSIS has disregarded the tender of the
[39]
matching bid, MPHC came to the Court on prohibition and mandamus.
Record of the Constitutional Commission, Vol. 3, 22 August 1986, p. 607.
[40]
Id., p. 612.
[41] Petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the Manila Hotel has
Id., p. 616.
been identified with the Filipino nation and has practically become a historical monument which
[42]
Id., p. 606. reflects the vibrancy of Philippine heritage and culture.
Respondents assert that Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a statement of principle
[43]
Nolledo, J.N., The New Constitution of the Philippines Annotated, 1990 ed., pp.930-931. and policy since it is not a self-executing provision and requires implementing legislation(s).
ISSUE:
[44]
Bidders were required to have at least one of the these qualifications to be able to participate in the bidding Whether the provisions of the Constitution, particularly Article XII Section 10, are self-executing.
process; see Note 2.
[45]
Memorandum of Fr. Joaquin G. Bernas, S.J., p.6.
[46]
RULING:
Id., pp. 3-4. Yes. Sec 10, Art. XII of the 1987 Constitution is a self-executing provision.
[47]
See Note 8.
A provision which lays down a general principle, such as those found in Article 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.
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 self-executing, the legislature would have the power to ignore and practically nullify
the mandate of the fundamental law.
In fine, Section 10, second paragraph, 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
rules for its enforcement. From its very words the provision does not require any legislation to put it in
operation.
[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.
DECISION
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 third-millennium 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 in Marrakesh, Morocco and the ratification of the WTO Agreement by
its members.[1]
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
x x x, (the reduction of) costs and uncertainty associated with exporting x x x, 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 x x x (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 prescribe Philippine integration into a global economy that is liberalized,
deregulated and privatized? These are the main questions raised in this petition for certiorari, prohibition
and mandamus 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 Agreement on Textiles and Clothing
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
Agreement on Technical Barriers to Trade
14, 1994.

Agreement on Trade-Related Investment Measures

The Facts Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994

On April 15, 1994, Respondent Rizalino Navarro, then Secretary of the Department of Trade and Industry Agreement on Implementation of Article VII of the General on Tariffs and Trade 1994
(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 Agreement on Pre-Shipment Inspection
Act, for brevity).

By signing the Final Act,[2] Secretary Navarro on behalf of the Republic of the Philippines, agreed: Agreement on Rules of Origin

(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities, with a view to Agreement on Imports Licensing Procedures
seeking approval of the Agreement in accordance with their procedures; and
Agreement on Subsidies and Coordinating Measures
(b) to adopt the Ministerial Declarations and Decisions.
Agreement on Safeguards
On August 12, 1994, the members of the Philippine Senate received a letter dated August 11, 1994 from the
President of the Philippines,[3] stating among others that the Uruguay Round Final Act is hereby submitted to the Annex 1B: General Agreement on Trade in Services and Annexes
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 Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights
Philippines[4] 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 ANNEX 2
pursuant to Section 21, Article VII of the Constitution.
Understanding on Rules and Procedures Governing the Settlement of Disputes
On December 9, 1994, the President of the Philippines certified the necessity of the immediate adoption of P.S.
1083, a resolution entitled Concurring in the Ratification of the Agreement Establishing the World Trade Organization.
[5]
ANNEX 3

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 Organization. [6] The text of the WTO Agreement is written on pages 137 et
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
Trade Policy Review Mechanism
On December 16, 1994, the President of the Philippines signed[7] 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.

Agreement on Agriculture 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 Services. In his Memorandum dated May 13, 1996, [8] the Solicitor General describes
Agreement on the Application of Sanitary and these two latter documents as follows:

Phytosanitary Measures
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 stationed in Geneva, Switzerland, to submit a paper, hereafter referred
to as Bautista Paper,[9] 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 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 following:[10]
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 respondent-members 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
petitions 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 matters.[11]
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?
liberalization as a policy espoused by said international body. Neither will it rule on the propriety of the governments
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.

(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT, RESTRICT, OR IMPAIR
Second Issue: The WTO Agreement and Economic Nationalism
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?
This is the lis mota, the main issue, raised by the petition.
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:
The First Issue: Does the Court Have Jurisdiction Over the Controversy?
Article II

In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the
DECLARATION OF PRINCIPLES AND STATE POLICIES
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. The duty (to adjudicate) remains to assure that the xx xx xx xx
supremacy of the Constitution is upheld.[12] 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 which the Court is
Sec. 19. The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.
bound by constitutional mandate to decide.[13]

The jurisdiction of this Court to adjudicate the matters [14] raised in the petition is clearly set out in the 1987 xx xx xx xx
Constitution,[15] as follows:

Article XII
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. NATIONAL ECONOMY AND PATRIMONY

The foregoing text emphasizes the judicial departments duty and power to strike down grave abuse of xx xx xx xx
discretion on the part of any branch or instrumentality of government including Congress. It is an innovation in our
political law.[16] As explained by former Chief Justice Roberto Concepcion, [17] the judiciary is the final arbiter on the Sec. 10. x x x. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is
question of whether or not a branch of government or any of its officials has acted without jurisdiction or in excess of wholly owned by Filipinos.
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.
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference
As this Court has repeatedly and firmly emphasized in many cases, [18] it will not shirk, digress from or abandon to qualified Filipinos.
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.
xx xx xx xx
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 Sec. 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt
the vital questions raised therein ruled upon under Rule 65 of the Rules of Court. Indeed, certiorari, prohibition measures that help make them competitive.
and mandamus 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.
Petitioners aver that these sacred constitutional principles are desecrated by the following WTO provisions
We should stress that, in deciding to take jurisdiction over this petition, this Court will not review the wisdom of quoted in their memorandum:[19]
the decision of the President and the Senate in enlisting the country into the WTO, or pass upon the merits of trade
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 III 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 enterprises 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 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 agreements. [20] 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 the 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 1935 Constitution [21] is called the basic political creed of the nation by Dean Vicente Sinco.[22] These
principles in Article II are not intended to be self-executing principles ready for enforcement through the courts.
[23]
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 of Kilosbayan, Incorporated vs. Morato,[24] 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.
[25]
In the same light, we held in Basco vs. Pagcor that broad constitutional principles need legislative
enactments to implement them, thus:
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 broad 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 making. Mr. Justice Florentino P. Feliciano in his concurring opinion in Oposa vs.
Factoran, Jr.,[26] 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 granting 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:
Section 1. x x x
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. (Emphases 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:
Section 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. x x x
xxxxxxxxx
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 of qualified Filipinos in the grant of rights, privileges and concessions covering the national
economy and patrimony[27] and in the use of Filipino labor, domestic materials and locally-produced goods; (2) by
mandating the State to adopt measures that help make them competitive; [28] and (3) by requiring the State to develop
a self-reliant and independent national economy effectively controlled by Filipinos. [29] 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 and reciprocity;
[30]
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.,[31] 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 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. 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 Filipino enterprises only against foreign competition and trade
practices that are unfair.[32] 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
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 members 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 notice of withdrawals. [33]
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
trade commensurate with the needs of their economic development. These basic principles are found in the
preamble[34] 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 worlds 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, x x
x. (underscoring 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 [35] 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 and public utilities. [36]
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 policy based on equality and reciprocity, [37] 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 countrys 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 unfolding events. As one eminent political law writer and respected
jurist[38] 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 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 procedures with its obligations as provided in the annexed Agreements. [39] 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 x x x but also to the flow of investments and money x x x as well as to a
whole slew of agreements on socio-cultural matters x x x.[40]
More specifically, petitioners claim that said WTO proviso derogates from the power to tax, which is lodged in
the Congress.[41] 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 x x x such limitations and restrictions as Congress may provide, [42] 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 the land, and adheres to the policy
of peace, equality, justice, freedom, cooperation and amity, with all nations." [43] By the doctrine of incorporation, the
country is bound by generally accepted principles of international law, which are considered to be automatically part
of our own laws.[44] 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 x x x. A state which has contracted valid international obligations is
bound to make in its legislations such modifications as may be necessary to ensure the fulfillment of the obligations
undertaken.[45]
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, the laying down of
rules governing conduct in peace and the establishment of international organizations. [46] 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 interdependence is here.[47]
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 under the concept of sovereignty as auto-limitation. 47-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.
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 smaller countrys market.[48]
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 x x x 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 Aspects of Intellectual Property Rights (TRIPS) [49]intrudes on the power of the Supreme Court to
promulgate rules concerning pleading, practice and procedures.[50]
To understand the scope and meaning of Article 34, TRIPS,[51] 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 (note 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. (underscoring 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 is 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 in legislation and rules of procedure will not be substantial.[52]
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 the Senate [53] which enumerated what
constitutes the Final Act should have been the subject of concurrence of the Senate.
A final act, sometimes called protocol de clture, 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 and signed by the plenipotentiaries attending the conference. [54] 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 Uruguay Round of Multilateral Trade
Negotiations is contained in just one page[55] 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 objectives of this Agreement.[56]
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 course of business.[57]
On the other hand, the WTO Agreement itself expresses what multilateral agreements are deemed included as
its integral parts,[58] as follows:
Article II
Scope of the WTO
1. The WTO shall provide the common institutional framework 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 25, 1994. After reading the letter of President Ramos dated August 11, 1994, [59] the senators
of the Republic minutely dissected what the Senate was concurring in, as follows: [60]
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 yesterdays session and I dont 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
Courts 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 jurisdiction.[61] 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 evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at
all in contemplation of law.[62] Failure on the part of the petitioner to show grave abuse of discretion will result in the
dismissal of the petition.[63]
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 Senates processes, this Court cannot find any cogent reason to impute grave abuse of discretion to
the Senates exercise of its power of concurrence in the WTO Agreement granted it by Sec. 21 of Article VII of the
Constitution.[64]
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[65] 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.
Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza, Francisco,
Hermosisima, Jr., and Torres, Jr., JJ., concur.
Padilla, and Vitug, JJ., in the result.
[1]
In Annex A of her Memorandum, dated August 8, 1996, received by this Court on August 12, 1996, Philippine
Ambassador to the United Nations, World Trade Organization and other international organizations Lilia R. Bautista
(hereafter referred to as Bautista Paper) submitted a 46-year Chronology of GATT as follows:
1947 The birth of GATT. On 30 October 1947, the General Agreement on Tariffs and Trade
(GATT) was signed by 23 nations at the Palais des Nations in Geneva. The
Agreement contained tariff concessions agreed to in the first multilateral trade
negotiations and a set of rules designed to prevent these concessions from being
frustrated by restrictive trade measures.
The 23 founding contracting parties were members of the Preparatory Committee established by
the United Nations Economic and Social Council in 1946 to draft the charter of the
International Trade Organization (ITO). The ITO was envisaged as the final leg of a
triad of post-War economic agencies (the other two were the International Monetary
Fund and the International Bank for Reconstruction - later the World Bank).
In parallel with this task, the Committee members decided to negotiate tariff concessions among
themselves. From April to October 1947, the participants completed some 123
negotiations and established 20 schedules containing the tariff reductions and
bindings which became an integral part of GATT. These schedules resulting from the
first Round covered some 45,000 tariff concessions and about $10 billion in trade.
GATT was conceived as an interim measure that put into effect the commercial-policy provisions
of the ITO. In November, delegations from 56 countries met in Havana, Cuba, to
consider the ITO draft as a whole. After long and difficult negotiations, some 53
countries signed the Final Act authenticating the text of the Havana Charter in March
1948. There was no commitment, however, from governments to ratification and, in
the end, the ITO was stillborn, leaving GATT as the only international instrument
governing the conduct of world trade.
1948 Entry into force. On 1 January 1948, GATT entered into force. The 23 founding members
were: Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba,
Czechoslovakia, France, India, Lebanon, Luxemburg, Netherlands, New Zealand,
Norway, Pakistan, Southern Rhodesia, Syria, South Africa, United Kingdom and
United States. The first Session of the contracting parties was held from February to
March in Havana, Cuba. The secretariat of the Interim Commission for the ITO, which
served as the ad hoc secretariat of GATT, move from lake Placid, New York, to
Geneva. The Contracting Parties held their second session in Geneva from August to
September.
1949 Second Round at Annecy. During the second Round of trade negotiations, held from
April to August at Annecy, France, the contracting parties exchange some 5,000 tariff
concession. At their third Session, they also dealt with the accession of ten more
countries.
1950 Third Round At Torquay. From September 1950 to April 1951, the contracting parties
exchange some 8,700 tariff concessions in the English town, yielding tariff reduction of
about 25 per cent in relation to the 1948 level. Four more countries acceded to
GATT. During the fifth Session of the Contracting Parties, the United States indicated
that the ITO Charter would not be re-submitted to the US congress; this, in effect,
meant that ITO would not come into operation.
1956 Fourth Round at Geneva. The fourth Round was completed in May and produce some
$2.5 billion worth of tariff reductions. At the beginning of the year, the GATT
commercial policy course for officials of developing countries was inaugurated.
1958 The Haberler Report. GATT published Trends in International Trade in October. Known as
the "Haberler Report" in honour of Professor Gottfried Haberler, the chairman of the
panel of imminent economist, it provided initial guidelines for the work of GATT. The
Contracting Parties at their 13th Sessions, attended by Ministers, subsequently
established 3 committees in GATT: Committee I to convene a further tariff negotiating
conference; Committee II To review the agricultural policies of member governments
and Committee III to tackle the problems facing developing countries in their
trade. The establishment of the European Economic Community during the previous
year also demanded large scale tariff negotiation under Article XXIV 6 of the General
Agreement.
1960 The Dillon Round. The fifth Round opened in September and was divided into two
phases: the first was concerned with EEC members states for the creation of a single
schedule of concessions for the Community based on its Common External Tariff; and
the second was a further general round of tariff negotiations. Named in honor of US
Under-Secretary of State Douglas Dillon who proposed the negotiations, the Round
was concluded in July 1962 and resulted in about 4,400 tariff concessions covering
$4.9 billion of trade.
1961 The Short-Term Arrangement covering cotton textiles was agreed as an exception to the
GATT rules. The arrangement permitted the negotiation of quota restrictions affecting
the exports of cotton-producing countries. In 1962 the "Short Term " Arrangement
become the "Long term" Arrangement, lasting until 1974 when the Multifibre
Arrangement entered into force.
1964 The Kennedy Round. Meeting at Ministerial Level, a Trade Negotiations Committee
formally opened the Kennedy Round in May. In June 1967, the Round's Final Act was
signed by some 50 participating countries which together accounted for 75 per cent of
world trade. For the first time, negotiation departed from product-by-product approach
used in the previous Rounds to an across-the-board or linear method of cutting tariffs
for industrial goods. The working hypothesis of a 50 per cent target cut in tariff levels
was achieved in many areas. Concessions covered an estimated total value of trade
of about $40 billion. Separate agreements were reached on grains, chemical products
and a Code on Anti-Dumping.
1965 A New Chapter. The early 1960s marked the accession to the General Agreement of
many newly-independent developing countries. In February, the Contracting Parties,
meeting in a special session, adopted the text of Part IV on Trade and
Development. The additional chapter to the GATT required developed countries to
accord high priority to the reduction of trade barriers to products of developing
countries. A committee on Trade and Development was established to oversee the
functioning of the new GATT provisions. In the preceding year, GATT had established
the International Trade Center (ITC) to help developing countries in trade promotion
and identification of potential markets. Since 1968, the ITC had been jointly operated
by GATT and the UN Conference on Trade and Development (UNCTAD).
1973 The Tokyo Round. The seventh Round was launched by Ministers in September at the
Japanese capital. Some 99 countries participated in negotiating a comprehensive
body of agreements covering both tariff and non-tariff matters. At the end of the Round
in November 1979, participants exchange tariff reduction and bindings which covered
more than $300 billion of trade. As a result of these cuts, the weighted average tariff
on manufactured goods in the world's nine major Industrial Markets declined from 7.0
to 4.7 per cent. Agreements were reached in the following areas; subsidies and
countervailing measures, technical barriers to trade, import licensing procedures,
government procurement, customs valuation, a revised anti-dumping code, trade in
bovine meat, trade in daily products and trade in civil aircraft. The first concrete result
of the Round was the reduction of import duties and other trade barriers by industrial
countries on tropical products exported by developing countries.
1974 On 1 January 1974, the Arrangement Regarding International Trade in textiles, otherwise
known as the Multifibre Arrangement (MFA), entered into force. Its superseded the
arrangement that had been governing trade in cotton textiles since 1961. The MFA
seeks to promote the expansion and progressive liberalization of trade in textile
product while at the same time avoiding disruptive effects in individual markets in lines
of production. The MFA was extended in 1978, 1982, 1986, 1991 and 1992. MFA
members account for most of the world exports of textiles and clothing which in 1986
amounted to US$128 billion.
1982 Ministerial Meeting. Meeting for the first time in nearly ten years, the GATT Ministers in
November at Geneva reaffirmed the validity of GATT rules for the conduct of
international trade and committed themselves to combating protectionist
pressures. They also established a wide-ranging work programme for the GATT which
was to laid down the ground work for a new Round. 1986 The Uruguay Round. The
GATT Trade Ministers meeting at Punta del Este, Uruguay, launched the eighth Round
of Trade Negotiations on 20 September. The Punta del Este, declarations, while
representing a single political undertaking, was divided into two section. The First
covered negotiations on Trade in goods and the second initiated negotiation on trade
in services. In the area of trade in goods, the Ministers committed themselves to
a "standstill" on new trade measures inconsistent with their GATT obligations and to a
"rollback" programme aimed at phasing out existing inconsistent measures. Envisaged
to last four years, negotiations started in early February 1987 in the following areas:
tariffs, non-tariff measures, tropical products, natural resource-based products, textiles
and clothing, agriculture, subsidies, safeguards, trade-related aspects of intellectual
property rights including trade in counterfeit goods, in trade- related investment
measures. The work of other groups included a review of GATT articles, the GATT
dispute-settlement procedure, the Tokyo Round agreements, as well as functioning of
the GATT system as a whole.
1994 "GATT 1994" is the updated version of GATT 1947 and takes into account the substantive and
institutional changes negotiated in the Uruguay Round. GATT 1994 is an integral part of the
World Trade Organization established on 1 January 1995. It is agreed that there be a one year
transition period during which certain GATT 1947 bodies and commitments would co-exist with
those of the World Trade Organization."
[2]
The Final Act was signed by representatives of 125 entities, namely Algeria, Angola, Antigua and Barbuda,
Argentine Republic, Australia, Republic of Austria, State of Bahrain, Peoples Republic of Bangladesh,
Barbados, The Kingdom of Belgium, Belize, Republic of Benin, Bolivia, Botswana, Brazil, Brunei
Darussalam, Burkina Faso, Burundi, Cameroon, Canada, Central African Republic, Chad, Chile, Peoples
Republic of China, Colombia, Congo, Costa Rica, Republic of Cote dIvoire, Cuba, Cyprus, Czech
Republic, Kingdom of Denmark, Commonwealth of Dominica, Dominican Republic, Arab Republic of
Egypt, El Salvador, European Communities, Republic of Fiji, Finland, French Republic, Gabonese
Republic, Gambia, Federal Republic of Germany, Ghana, Hellenic Republic, Grenada, Guatemala,
Republic of Guinea-Bissau, Republic of Guyana, Haiti, Honduras, Hong Kong, Hungary, Iceland, India,
Indonesia, Ireland, State of Israel, Italian Republic, Jamaica, Japan, Kenya, Korea, State of Kuwait,
Kingdom of Lesotho, Principality of Liechtenstein, Grand Duchy of Luxembourg, Macau, Republic of
Madagascar, Republic of Malawi, Malaysia, Republic of Maldives, Republic of Mali, Republic of Malta,
Islamic Republic of Mauritania, Republic of Mauritius, United Mexican States, Kingdom of Morocco,
Republic of Mozambique, Union of Myanmar, Republic of Namibia, Kingdom of the Netherlands, New
Zealand, Nicaragua, Republic of Niger, Federal Republic of Nigeria, Kingdom of Norway, Islamic Republic
of Pakistan, Paraguay, Peru, Philippines, Poland, Portuguese Republic, State of Qatar, Romania,
Rwandese Republic, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Senegal, Sierra
Leone, Singapore, Slovak Republic, South Africa, Kingdom of Spain, Democratic Socialist Republic of Sri
Lanka, Republic of Surinam, Kingdom of Swaziland, Kingdom of Sweden, Swiss Confederation, United
Republic of Tanzania, Kingdom of Thailand, Togolese Republic, Republic of Trinidad and Tobago, Tunisia,
Turkey, Uganda, United Arab Emirates, United Kingdom of Great Britain and Northern Ireland, United
States of America, Eastern Republic of Uruguay, Venezuela, Republic of Zaire, Republic of Zambia,
Republic of Zimbabwe; see pp. 6-25, Vol. 1, Uruguay Round of Multilateral Trade Negotiations.
[3]
11 August 1994
The Honorable Members
Senate
Through Senate President Edgardo Angara
Manila
Ladies and Gentlemen:
I have the honor to forward herewith an authenticated copy of the Uruguay Round Final Act signed by Department of
Trade and Industry Secretary Rizalino S. Navarro for the Philippines on 15 April 1994 in Marrakesh,
Morocco.
The Uruguay Round Final Act aims to liberalize and expand world trade and strengthen the interrelationship between
trade and economic policies affecting growth and development.
The Final Act will improve Philippine access to foreign markets, especially its major trading partners through the
reduction of tariffs on its exports particularly agricultural and industrial products. These concessions may
 be availed of by the Philippines, only if it is a member of the World Trade Organization. By GATT
estimates, the Philippines can acquire additional export revenues from $2.2 to $2.7 Billion annually under
Uruguay Round.This will be on top of the normal increase in exports that the Philippines may experience.
The Final Act will also open up new opportunities for the services sector in such areas as the movement of
personnel, (e.g. professional services and construction services), cross-border supply (e.g. computer-
related services), consumption abroad (e.g. tourism, convention services, etc.) and commercial presence.
The clarified and improved rules and disciplines on anti-dumping and countervailing measures will also benefit
Philippine exporters by reducing the costs and uncertainty associated with exporting while at the same
time providing a means for domestic industries to safeguard themselves against unfair imports.
Likewise, the provision of adequate protection for intellectual property rights is expected to attract more investments
into the country and to make it less vulnerable to unilateral actions by its trading partners (e.g. Sec. 301 of
the United States Omnibus Trade Law).
In view of the foregoing, the Uruguay Round Final Act is hereby submitted to the Senate for its concurrence pursuant
to Section 21, Article VII of the Constitution.
A draft of a proposed Resolution giving its concurrence to the aforesaid Agreement is enclosed.
Very truly yours,
(SGD.) FIDEL V. RAMOS
[4]
11 August 1994
The Honorable Members
Senate
Through Senate President Edgardo Angara
Manila
Ladies and Gentlemen:
I have the honor to forward herewith an authenticated copy of the Uruguay Round Final Act
signed by Department of Trade and Industry Secretary Rizalino S. Navarro for the Philippines on 13 April
1994 in Marrakech (sic), Morocco.
Members of the trade negotiations committee, which included the Philippines, agreed that the
Agreement Establishing the World Trade Organization, the Ministerial Declarations and Decisions, and the
Understanding on Commitments in Financial Services embody the results of their negotiations and form an
integral part of the Uruguay Round Final Act.
By signing the Uruguay Round Final Act, the Philippines, through Secretary Navarro, agreed:
(a) To submit the Agreement Establishing the World Trade Organization to the Senate for its concurrence pursuant to
Section 21, Article VII of the Constitution; and
(b) To adopt the Ministerial Declarations and Decisions.
The Uruguay Round Final Act aims to liberalize and expand world trade and strengthen the interrelationship between
trade and economic policies affecting growth and development.
The Final Act will improve Philippine access to foreign markets, especially its major trading
partners through the reduction of tariffs on its exports particularly agricultural and industrial
products. These concessions may be availed of by the Philippines, only if it is a member of the World
Trade Organization. By GATT estimates, the Philippines can acquire additional export revenues from $2.2
to $2.7 Billion annually under Uruguay Round. This will be on top of the normal increase in the exports that
the Philippines may experience.
The Final Act will also open up new opportunities for the services sector in such areas as the
movement of personnel, (e.g., professional services and construction services), cross-border supply (e.g.,
computer-related services), consumption abroad (e.g., tourism, convention services, etc.) and commercial
presence.
The clarified and improved rules and disciplines on anti-dumping and countervailing measures
will also benefit Philippine exporters by reducing the costs and uncertainty associated with exporting while
at the same time providing a means for domestic industries to safeguard themselves against unfair
imports.
Likewise, the provision of adequate protection for intellectual property rights is expected to
attract more investments into the country and to make it a less vulnerable to unilateral actions by its
trading partners (e.g., Sec. 301 of the United States Omnibus Trade Law).
In view of the foregoing, 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, as embodied in the Uruguay Round Final Act and forming and integral part thereof are
hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the Constitution.
A draft of a proposed Resolution giving its concurrence to the aforesaid Agreement is enclosed.
Very truly yours,
(SGD.) FIDEL V. RAMOS
[5]
December 9, 1994
HON. EDGARDO J. ANGARA
Senate President
Senate, Manila
Dear Senate President Angara:
Pursuant to the provisions of Sec. 26 (2) Article VI of the Constitution, I hereby certify to the
necessity of the immediate adoption of P.S. 1083, entitled:
CONCURRING IN THE RATIFICATION OF THE AGREEMENT ESTABLISHING THE WORLD TRADE
ORGANIZATION
to meet a public emergency consisting of the need for immediate membership in the WTO in order to
assure the benefits to the Philippine economy arising from such membership.
Very truly yours,
(SGD.) FIDEL V. RAMOS
[6]
Attached as Annex A, Petition; rollo, p. 52. P.S. 1083 is the forerunner of assailed Senate Resolution No. 97. It was
prepared by the Committee of the Whole on the General Agreement on Tariffs and Trade chaired by Sen.
Blas F. Ople and co-chaired by Sen. Gloria Macapagal-Arroyo; see Annex C, Compliance of petitioners
dated January 28, 1997.
[7]
The Philippines is thus considered an original or founding member of WTO, which as of July 26, 1996 had 123
members as follows: Antigua and Barbuda, Argentina, Australia, Austria, Bahrain, Bangladesh, Barbados,
Belgium, Belize, Benin, Bolivia, Botswana, Brazil, Brunei Darussalam, Burkina Faso, Burundi, Cameroon,
Canada, Central African Republic, Chili, Colombia, Costa Rica, Cote dIvoire, Cuba, Cyprus, Czech
Republic, Denmark, Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, European
Community, Fiji, Finland, France, Gabon, Germany, Ghana, Greece, Grenada, Guatemala, Guinea,
Guinea Bissau, Guyana, Haiti, Honduras, Hongkong, Hungary, Iceland, India, Indonesia, Ireland, Israel,
Italy, Jamaica, Japan, Kenya, Korea, Kuwait, Lesotho, Liechtenstein, Luxembourg, Macau, Madagascar,
Malawi, Malaysia, Maldives, Mali, Malta, Mauritania, Mauritius, Mexico, Morocco, Mozambique, Myanmar,
 [30]
Namibia, Netherlands -- for the Kingdom in Europe and for the Netherlands Antilles, New Zealand, Sec. 13, Art. XII.
Nicaragua, Nigeria, Norway, Pakistan, Papua New Guinea, Paraguay, Peru, Philippines, Poland, Portugal,
[31]
Qatar, Romania, Rwanda, Saint Kitts and Nevis, Saint Lucia, Saint Vincent & the Grenadines, Senegal, G.R. No. 122156, February 3, 1997, pp. 13-14.
Sierra Leone, Singapore, Slovak Republic, Slovenia, Solomon Islands, South Africa, Spain, Sri Lanka, [32]
Sec. 1, Art. XII.
Surinam, Swaziland, Sweden, Switzerland, Tanzania, Thailand, Togo, Trinidad and Tobago, Tunisia,
Turkey, Uganda, United Arab Emirates, United Kingdom, United States, Uruguay, Venezuela, Zambia, and [33]
Bautista Paper, p. 19.
Zimbabwe. See Annex A, Bautista Paper, infra.
[34]
[8]
Preamble, WTO Agreement p. 137, Vol. 1, Uruguay Round of Multilateral Trade Negotiations. Underscoring
Page 6; rollo, p. 261. supplied.
[9]
In compliance, Ambassador Bautista submitted to the Court on August 12, 1996, a Memorandum (the Bautista [35]
Sec. - 19, Article II, Constitution.
Paper) consisting of 56 pages excluding annexes. This is the same document mentioned in footnote no. 1.
[36]
[10]
III Records of the Constitutional Commission 252.
Memorandum for Respondents, p. 13; rollo, p. 268.
[37]
[11]
Sec. 13, Article XII, Constitution.
Cf. Kilosbayan, Incorporated vs. Morato, 246 SCRA 540, July 17, 1995 for a discussion on locus standi. See also
the Concurring Opinion of Mr. Justice Vicente V. Mendoza in Tatad vs. Garcia, Jr., 243 SCRA 473, April 6, [38]
Justice Isagani A. Cruz, Philippine Political Law, 1995 Ed., p. 13, quoting his own article entitled, A Quintessential
1995, as well as Kilusang Mayo Uno Labor Center vs. Garcia, Jr., 239 SCRA 386, 414, December 23, Constitution earlier published in the San Beda Law Journal, April 1972; underscoring supplied.
1994.
[39]
Par. 4, Article XVI (Miscellaneous Provisions), WTO Agreement, p.146, Vol. 1, Uruguay Round of Multilateral
[12]
Aquino, Jr. vs. Ponce Enrile, 59 SCRA 183, 196, September 17, 1974, cited in Bondoc vs. Pineda, 201 SCRA 792, Trade Negotiations.
795, September 26, 1991.
[40]
Memorandum for the Petitioners, p. 29; rollo, p. 219.
[13]
Guingona, Jr. vs. Gonzales, 219 SCRA 326, 337, March 1, 1993.
[41]
Sec. 24, Article VI, Constitution.
[14]
See Tanada and Macapagal vs. Cuenco, et al., 103 Phil. 1051 for a discussion on the scope of political question.
[42]
Subsection (2), Sec. 28, Article, VI Constitution.
[15]
Section 1, Article VIII, (par. 2).
[43]
Sec. 2, Article II, Constitution.
[16]
In a privilege speech on May 17, 1993, entitled Supreme Court -- Potential Tyrant? Senator Arturo Tolentino
[44]
concedes that this new provision gives the Supreme Court a duty to intrude into the jurisdiction of the Cruz, Philippine Political Law, 1995 Ed., p. 55.
Congress or the President. [45]
Salonga and Yap, op cit 305.
[17]
I Record of the Constitutional Commission 436. [46]
Salonga, op. cit., p. 287.
[18]
Cf. Daza vs. Singson, 180 SCRA 496, December 21, 1989. [47]
Quoted in Paras and Paras, Jr., International Law and World Politics, 1994 Ed., p. 178.
[19]
Memorandum for Petitioners, pp. 14-16; rollo, pp. 204-206. 47-A
Reagan vs. Commission of Internal Revenue, 30 SCRA 968, 973, December 27, 1969.
[20]
Par. 4, Article XVI, WTO Agreement, Uruguay Round of Multilateral Trade Negotiations, Vol. 1, p. 146. [48]
Trebilcock and Howse. The Regulation of International Trade, p. 14, London, 1995, cited on p. 55-56, Bautista
[21]
Also entitled Declaration of Principles. The nomenclature in the 1973 Charter is identical with that in the 1987s. Paper.
[49]
[22]
Philippine Political Law, 1962 Ed., p. 116. Uruguay Round of Multilateral Trade Negotiations, Vol. 31, p. 25445.
[50]
[23]
Bernas, The Constitution of the Philippines: A Commentary, Vol. II, 1988 Ed., p. 2. In the very recent case of Item 5, Sec. 5, Article VIII, Constitution.
Manila Prince Hotel vs. GSIS, G.R. No. 122156, February 3, 1997, p. 8, it was held that A provision which [51]
lays down a general principle, such as those found in Art. II of the 1987 Constitution, is usually not self- Uruguay Round of Multilateral Trade Negotiations, Vol. 31, p. 25445.
executing. [52]
Bautista Paper, p. 13.
[24]
246 SCRA 540, 564, July 17, 1995. See also Tolentino vs. Secretary of Finance, G.R. No. 115455 and [53]
See footnote 3 of the text of this letter.
consolidated cases, August 25, 1995.
[54]
[25] Salonga and Yap, op cit., pp. 289-290.
197 SCRA 52, 68, May 14, 1991.
[55]
[26] The full text, without the signatures, of the Final Act is as follows:
224 SCRA 792, 817, July 30, 1993.
[27] Final Act Embodying the Results of the
Sec. 10, Article XII.
Uruguay Round of Multilateral Trade Negotiations
[28]
Sec. 12, Article XII. 1. Having met in order to conclude the Uruguay Round of Multilateral Trade Negotiations, representatives of the
governments and of the European Communities, members of the Trade Negotiations
[29]
Sec. 19, Art. II. Committee, agree that the Agreement Establishing the World Trade Organization (referred to in the Final
Act as the WTO Agreement), the Ministerial Declarations and Decisions, and the Understanding on
 Commitments in Financial Services, as annexed hereto, embody the results of their negotiations and form Justiciable Question; Theory of Auto-Limitation; Declaration of Principles and State Policies
an integral part of this Final Act.
2. By signing to the present Final Act, the representatives agree.
(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.
3. The representatives agree on the desirability of acceptance of the WTO Agreement by all participants in the
Uruguay Round of Multilateral Trade Negotiations (hereinafter referred to as participants) with a view to its
entry into force by 1 January 1995, or as early as possible thereafter. Not later than late 1994, Ministers TANADA VS ANGARA
will meet, in accordance with the final paragraph of the Punta del Este Ministerial Declarations, to decide
on the international implementation of the results, including the timing of their entry into force. G.R. No. 118295 May 2, 1997
4. The representatives agree that the WTO Agreement shall be opened for acceptance as a whole, by signature or
otherwise, by all participants pursuant to Article XIV thereof. The acceptance and entry into force of a
Plurilateral Trade Agreement included in Annex 4 of the WTO Agreement shall be governed by the
provisions of that Plurilateral Trade Agreement.
5. Before accepting the WTO Agreement, participants which are not contracting parties to the General Agreement on
Wigberto E. Tanada et al, in representation of various taxpayers and as non-governmental organizations, petitioners,
Tariffs and Trade must first have concluded negotiations for their accession to the General Agreement and
become contracting parties thereto. For participants which are not contracting parties to the general
Agreement as of the date of the Final Act, the Schedules are not definitive and shall be subsequently vs.
completed for the purpose of their accession to the General Agreement and acceptance of the WTO
Agreement.
6. This Final Act and the Texts annexed hereto shall be deposited with the Director-General to the CONTRACTING EDGARDO ANGARA, et al, respondents.
PARTIES to the General Agreement on Tariffs and Trade who shall promptly furnish to each participant a
certified copy thereof.

DONE at Marrakesh this fifteenth day of April One thousand nine hundred and ninety-four, in a single copy, in the
English, French and Spanish languages, each text being authentic."
[56]
Bautista Paper, p. 16.
Facts:
[57]
Bautista Paper, p. 16.
[58]
Uruguay Round of Multilateral Trade Negotiations, Vol. I, pp. 137-138. This is a case petition by Sen. Wigberto Tanada, together with other lawmakers, taxpayers, and various NGO’s to
[59]
nullify the Philippine ratification of the World Trade Organization (WTO) Agreement.
See footnote 3 for complete text.
[60]
Taken from pp. 63-85, Respondent Memorandum.
[61]
Zarate vs. Olegario, G.R. No. 90655, October 7, 1996.
Petitioners believe that this will be detrimental to the growth of our National Economy and against to the “Filipino
[62]
San Sebastian College vs. Court of Appeals, 197 SCRA 138, 144, May 15, 1991; Commissioner of Internal First” policy. The WTO opens access to foreign markets, especially its major trading partners, through the reduction of
Revenue vs. Court of Tax Appeals, 195 SCRA 444, 458 March 20, 1991; Simon vs. Civil Service tariffs on its exports, particularly agricultural and industrial products. Thus, provides new opportunities for the service
Commission, 215 SCRA 410, November 5, 1992; Bustamante vs. Commissioner on Audit, 216 SCRA 134,
sector cost and uncertainty associated with exporting and more investment in the country. These are the predicted
136, November 27, 1992.
benefits as reflected in the agreement and as viewed by the signatory Senators, a “free market” espoused by WTO.
[63]
Paredes vs. Civil Service Commission, 192 SCRA 84, 94, December 4, 1990.
[64]
Sec. 21. 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.
[65] Petitioners also contends that it is in conflict with the provisions of our constitution, since the said Agreement is an
Readers Digest, December 1996 issue, p. 28.
assault on the sovereign powers of the Philippines because it meant that Congress could not pass legislation that
would be good for national interest and general welfare if such legislation would not conform to the WTO
Agreement.

anada vs Angara

Issues:
 1. Whether or not the petition present a justiciable controversy.
2. 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.
3. Whether or not certain provisions of the Agreement unduly limit, restrict or impair the exercise of
legislative power by Congress.
4. Whether or not certain provisions of the Agreement impair the exercise of judicial power by this Honorable
Court in promulgating the rules of evidence.
5. 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.
Discussions:
 1987 Constitution states that 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.
 Although the Constitution mandates to develop a self-reliant and independent national economy controlled
by Filipinos, does not necessarily rule out the entry of foreign investments, goods and services. It
contemplates neither “economic seclusion” nor “mendicancy in the international community.” 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. 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. Which 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 trade commensurate with the needs of their economic
development.”
 In its Declaration of Principles and State Policies, the Constitution “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. By the doctrine of incorporation, the country is bound by
generally accepted principles of international law, which are considered to be automatically part of our own
laws. A state which has contracted valid international obligations is bound to make in its legislations such
modifications as may be necessary to ensure the fulfillment of the obligations undertaken. Paragraph 1,
Article 34 of the General Provisions and Basic Principles of the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS) may intrudes on the power of the Supreme Court to promulgate rules
concerning pleading, practice and procedures. With regard to Infringement of a design patent, WTO
members shall be free to determine the appropriate method of implementing the provisions of TRIPS within
their own internal systems and processes.
 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. 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.
Rulings:
1. 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. As explained by former Chief 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.”
2. 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 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.
3. 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. As shown by the foregoing treaties Philippines has entered, 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.”
4. The provision in Article 34 of WTO agreement 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.
5. 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. Moreover, the Senate was well-
aware of what it was concurring in as shown by the members’ deliberation on August 25, 1994. After reading
the letter of President Ramos dated August 11, 1994, the senators of the Republic minutely dissected what
the Senate was concurring in.

SOURCES OF INTERNATIONAL LAW
Republic of the Philippines, petitioner, vs. Sandiganbayan, Major General Josephus Q. Ramas and Elizabeth
Dimaano, respondents.
DECISION
CARPIO, J.:
The Case
Before this Court is a petition for review on certiorari seeking to set aside the Resolutions of the
Sandiganbayan (First Division)[1] dated 18 November 1991 and 25 March 1992 in Civil Case No. 0037. The first
Resolution dismissed petitioners Amended Complaint and ordered the return of the confiscated items to respondent
Elizabeth Dimaano, while the second Resolution denied petitioners Motion for Reconsideration. Petitioner prays for
the grant of the reliefs sought in its Amended Complaint, or in the alternative, for the remand of this case to the
Sandiganbayan (First Division) for further proceedings allowing petitioner to complete the presentation of its
evidence.
Antecedent Facts
Immediately upon her assumption to office following the successful EDSA Revolution, then President Corazon
C. Aquino issued Executive Order No. 1 (EO No. 1) creating the Presidential Commission on Good Government
(PCGG). EO No. 1 primarily tasked the PCGG to recover all ill-gotten wealth of former President Ferdinand E.
Marcos, his immediate family, relatives, subordinates and close associates. EO No. 1 vested the PCGG with the
power (a) to conduct investigation as may be necessary in order to accomplish and carry out the purposes of this
order and the power (h) to promulgate such rules and regulations as may be necessary to carry out the purpose of
this order. Accordingly, the PCGG, through its then Chairman Jovito R. Salonga, created an AFP Anti-Graft Board
(AFP Board) tasked to investigate reports of unexplained wealth and corrupt practices by AFP personnel, whether in
the active service or retired.[2]
Based on its mandate, the AFP Board investigated various reports of alleged unexplained wealth of
respondent Major General Josephus Q. Ramas (Ramas). On 27 July 1987, the AFP Board issued a Resolution on its
findings and recommendation on the reported unexplained wealth of Ramas. The relevant part of the Resolution
reads:
III. FINDINGS and EVALUATION:
Evidence in the record showed that respondent is the owner of a house and lot located at 15-Yakan St., La Vista, Quezon
City. He is also the owner of a house and lot located in Cebu City. The lot has an area of 3,327 square meters.
The value of the property located in Quezon City may be estimated modestly at P700,000.00.
The equipment/items and communication facilities which were found in the premises of Elizabeth Dimaano and were
confiscated by elements of the PC Command of Batangas were all covered by invoice receipt in the name of CAPT. EFREN
SALIDO, RSO Command Coy, MSC, PA. These items could not have been in the possession of Elizabeth Dimaano if not given
for her use by respondent Commanding General of the Philippine Army.
Aside from the military equipment/items and communications equipment, the raiding team was also able to confiscate money in
the amount of P2,870,000.00 and $50,000 US Dollars in the house of Elizabeth Dimaano on 3 March 1986.
Affidavits of members of the Military Security Unit, Military Security Command, Philippine Army, stationed at Camp Eldridge,
Los Baos, Laguna, disclosed that Elizabeth Dimaano is the mistress of respondent. That respondent usually goes and stays and
sleeps in the alleged house of Elizabeth Dimaano in Barangay Tengga, Itaas, Batangas City and when he arrives, Elizabeth
Dimaano embraces and kisses respondent. That on February 25, 1986, a person who rode in a car went to the residence of
Elizabeth Dimaano with four (4) attache cases filled with money and owned by MGen Ramas.
Sworn statement in the record disclosed also that Elizabeth Dimaano had no visible means of income and is supported by
respondent for she was formerly a mere secretary.
Taking in toto the evidence, Elizabeth Dimaano could not have used the military equipment/items seized in her house on March
3, 1986 without the consent of respondent, he being the Commanding General of the Philippine Army. It is also impossible for
Elizabeth Dimaano to claim that she owns the P2,870,000.00 and $50,000 US Dollars for she had no visible source of income.
This money was never declared in the Statement of Assets and Liabilities of respondent. There was an intention to cover the
existence of these money because these are all ill-gotten and unexplained wealth.Were it not for the affidavits of the members of
the Military Security Unit assigned at Camp Eldridge, Los Baos, Laguna, the existence and ownership of these money would
have never been known.
The Statement of Assets and Liabilities of respondent were also submitted for scrutiny and analysis by the Boards
consultant. Although the amount of P2,870,000.00 and $50,000 US Dollars were not included, still it was disclosed that
respondent has an unexplained wealth of P104,134. 60.
IV. CONCLUSION:
In view of the foregoing, the Board finds that a prima facie case exists against respondent for ill-gotten and unexplained wealth
in the amount of P2,974,134.00 and $50,000 US Dollars.
V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be prosecuted and tried for violation of RA 3019, as
amended, otherwise known as Anti-Graft and Corrupt Practices Act and RA 1379, as amended, otherwise known as The Act for
the Forfeiture of Unlawfully Acquired Property.[3]
Thus, on 1 August 1987, the PCGG filed a petition for forfeiture under Republic Act No. 1379 (RA No.
1379) [4] against Ramas.
Before Ramas could answer the petition, then Solicitor General Francisco I. Chavez filed an Amended
Complaint naming the Republic of the Philippines (petitioner), represented by the PCGG, as plaintiff and Ramas as
defendant. The Amended Complaint also impleaded Elizabeth Dimaano (Dimaano) as co-defendant.
The Amended Complaint alleged that Ramas was the Commanding General of the Philippine Army until 1986.
On the other hand, Dimaano was a confidential agent of the Military Security Unit, Philippine Army, assigned as a
clerk-typist at the office of Ramas from 1 January 1978 to February 1979. The Amended Complaint further alleged On 18 November 1991, the Sandiganbayan rendered a resolution, the dispositive portion of which states:
that Ramas acquired funds, assets and properties manifestly out of proportion to his salary as an army officer and his
other income from legitimately acquired property by taking undue advantage of his public office and/or using his
WHEREFORE, judgment is hereby rendered dismissing the Amended Complaint, without pronouncement as to costs. The
power, authority and influence as such officer of the Armed Forces of the Philippines and as a subordinate and close
counterclaims are likewise dismissed for lack of merit, but the confiscated sum of money, communications equipment, jewelry
associate of the deposed President Ferdinand Marcos.[5]
and land titles are ordered returned to Elizabeth Dimaano.
The Amended Complaint also alleged that the AFP Board, after a previous inquiry, found reasonable ground to The records of this case are hereby remanded and referred to the Hon. Ombudsman, who has primary jurisdiction over the
believe that respondents have violated RA No. 1379. [6] The Amended Complaint prayed for, among others, the forfeiture cases under R.A. No. 1379, for such appropriate action as the evidence warrants. This case is also referred to the
forfeiture of respondents properties, funds and equipment in favor of the State. Commissioner of the Bureau of Internal Revenue for a determination of any tax liability of respondent Elizabeth Dimaano in
connection herewith.
Ramas filed an Answer with Special and/or Affirmative Defenses and Compulsory Counterclaim to the
Amended Complaint. In his Answer, Ramas contended that his property consisted only of a residential house at La
SO ORDERED.
Vista Subdivision, Quezon City, valued at P700,000, which was not out of proportion to his salary and other
legitimate income. He denied ownership of any mansion in Cebu City and the cash, communications equipment and
other items confiscated from the house of Dimaano. On 4 December 1991, petitioner filed its Motion for Reconsideration.

Dimaano filed her own Answer to the Amended Complaint. Admitting her employment as a clerk-typist in the
office of Ramas from January-November 1978 only, Dimaano claimed ownership of the monies, communications
equipment, jewelry and land titles taken from her house by the Philippine Constabulary raiding team.
After termination of the pre-trial,[7] the court set the case for trial on the merits on 9-11 November 1988.
In answer to the Motion for Reconsideration, private respondents filed a Joint Comment/Opposition to which
petitioner filed its Reply on 10 January 1992.
On 25 March 1992, the Sandiganbayan rendered a Resolution denying the Motion for Reconsideration.

On 9 November 1988, petitioner asked for a deferment of the hearing due to its lack of preparation for trial and
the absence of witnesses and vital documents to support its case. The court reset the hearing to 17 and 18 April Ruling of the Sandiganbayan
1989.

On 13 April 1989, petitioner filed a motion for leave to amend the complaint in order to charge the delinquent
properties with being subject to forfeiture as having been unlawfully acquired by defendant Dimaano alone x x x.[8] The Sandiganbayan dismissed the Amended Complaint on the following grounds:

Nevertheless, in an order dated 17 April 1989, the Sandiganbayan proceeded with petitioners presentation of
evidence on the ground that the motion for leave to amend complaint did not state when petitioner would file the (1.) The actions taken by the PCGG are not in accordance with the rulings of the Supreme Court in Cruz, Jr. v.
amended complaint. The Sandiganbayan further stated that the subject matter of the amended complaint was on its Sandiganbayan[10] and Republic v. Migrino[11] which involve the same issues.
face vague and not related to the existing complaint. The Sandiganbayan also held that due to the time that the case
had been pending in court, petitioner should proceed to present its evidence. (2.) No previous inquiry similar to preliminary investigations in criminal cases was conducted against Ramas and
Dimaano.
After presenting only three witnesses, petitioner asked for a postponement of the trial.

On 28 September 1989, during the continuation of the trial, petitioner manifested its inability to proceed to trial (3.) The evidence adduced against Ramas does not constitute a prima facie case against him.
because of the absence of other witnesses or lack of further evidence to present. Instead, petitioner reiterated its
motion to amend the complaint to conform to the evidence already presented or to change the averments to show
that Dimaano alone unlawfully acquired the monies or properties subject of the forfeiture. (4.) There was an illegal search and seizure of the items confiscated.

The Sandiganbayan noted that petitioner had already delayed the case for over a year mainly because of its
many postponements. Moreover, petitioner would want the case to revert to its preliminary stage when in fact the
case had long been ready for trial. The Sandiganbayan ordered petitioner to prepare for presentation of its additional The Issues
evidence, if any.

During the trial on 23 March 1990, petitioner again admitted its inability to present further evidence. Giving
Petitioner raises the following issues:
petitioner one more chance to present further evidence or to amend the complaint to conform to its evidence, the
Sandiganbayan reset the trial to 18 May 1990. The Sandiganbayan, however, hinted that the re-setting was without A. RESPONDENT COURT SERIOUSLY ERRED IN CONCLUDING THAT PETITIONERS
prejudice to any action that private respondents might take under the circumstances. EVIDENCE CANNOT MAKE A CASE FOR FORFEITURE AND THAT THERE
WAS NO SHOWING OF CONSPIRACY, COLLUSION OR RELATIONSHIP BY
However, on 18 May 1990, petitioner again expressed its inability to proceed to trial because it had no further
CONSANGUINITY OR AFFINITY BY AND BETWEEN RESPONDENT RAMAS
evidence to present. Again, in the interest of justice, the Sandiganbayan granted petitioner 60 days within which to
AND RESPONDENT DIMAANO NOTWITHSTANDING THE FACT THAT SUCH
file an appropriate pleading. The Sandiganbayan, however, warned petitioner that failure to act would constrain the
CONCLUSIONS WERE CLEARLY UNFOUNDED AND PREMATURE, HAVING
court to take drastic action.
BEEN RENDERED PRIOR TO THE COMPLETION OF THE PRESENTATION
Private respondents then filed their motions to dismiss based on Republic v. Migrino.[9] The Court held OF THE EVIDENCE OF THE PETITIONER.
in Migrino that the PCGG does not have jurisdiction to investigate and prosecute military officers by reason of mere
B. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE ACTIONS TAKEN
position held without a showing that they are subordinates of former President Marcos.
BY THE PETITIONER, INCLUDING THE FILING OF THE ORIGINAL
 COMPLAINT AND THE AMENDED COMPLAINT, SHOULD BE STRUCK OUT
IN LINE WITH THE RULINGS OF THE SUPREME COURT IN CRUZ, JR. v.
SANDIGANBAYAN, 194 SCRA 474 AND REPUBLIC v. MIGRINO, 189 SCRA
289, NOTWITHSTANDING THE FACT THAT:
1. The cases of Cruz, Jr. v. Sandiganbayan, supra, and Republic v. Migrino, supra, are clearly
not applicable to this case;
2. Any procedural defect in the institution of the complaint in Civil Case No. 0037 was cured
and/or waived by respondents with the filing of their respective answers with
counterclaim; and
3. The separate motions to dismiss were evidently improper considering that they were filed
after commencement of the presentation of the evidence of the petitioner and even
before the latter was allowed to formally offer its evidence and rest its case;
C. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE ARTICLES AND
THINGS SUCH AS SUMS OF MONEY, COMMUNICATIONS EQUIPMENT,
JEWELRY AND LAND TITLES CONFISCATED FROM THE HOUSE OF
RESPONDENT DIMAANO WERE ILLEGALLY SEIZED AND THEREFORE
EXCLUDED AS EVIDENCE.[12]
The Courts Ruling
First Issue: PCGGs Jurisdiction to Investigate Private Respondents
This case involves a revisiting of an old issue already decided by this Court in Cruz, Jr. v.
Sandiganbayan[13] and Republic v. Migrino.[14]
The primary issue for resolution is whether the PCGG has the jurisdiction to investigate and cause the filing of
a forfeiture petition against Ramas and Dimaano for unexplained wealth under RA No. 1379.
We hold that PCGG has no such jurisdiction.
The PCGG created the AFP Board to investigate the unexplained wealth and corrupt practices of AFP
personnel, whether in the active service or retired.[15] The PCGG tasked the AFP Board to make the necessary
recommendations to appropriate government agencies on the action to be taken based on its findings. [16] The PCGG
gave this task to the AFP Board pursuant to the PCGGs power under Section 3 of EO No. 1 to conduct investigation
as may be necessary in order to accomplish and to carry out the purposes of this order. EO No. 1 gave the PCGG
specific responsibilities, to wit:
SEC. 2. The Commission shall be charged with the task of assisting the President in regard to the following matters:
(a) The recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his immediate
family, relatives, subordinates and close associates, whether located in the Philippines or abroad,
including the takeover and sequestration of all business enterprises and entities owned or controlled by
them, during his administration, directly or through nominees, by taking undue advantage of their
public office and/ or using their powers, authority, influence, connections or relationship.
(b) The investigation of such cases of graft and corruption as the President may assign to the Commission from
time to time.
x x x.
The PCGG, through the AFP Board, can only investigate the unexplained wealth and corrupt practices of AFP
personnel who fall under either of the two categories mentioned in Section 2 of EO No. 1. These are: (1) AFP
personnel who have accumulated ill-gotten wealth during the administration of former President Marcos by being the
latters immediate family, relative, subordinate or close associate, taking undue advantage of their public office or
using their powers, influence x x x;[17] or (2) AFP personnel involved in other cases of graft and corruption provided
the President assigns their cases to the PCGG.[18]
Petitioner, however, does not claim that the President assigned Ramas case to the PCGG. Therefore, Ramas
case should fall under the first category of AFP personnel before the PCGG could exercise its jurisdiction over
him. Petitioner argues that Ramas was undoubtedly a subordinate of former President Marcos because of his
position as the Commanding General of the Philippine Army. Petitioner claims that Ramas position enabled him to
receive orders directly from his commander-in-chief, undeniably making him a subordinate of former President
Marcos.
We hold that Ramas was not a subordinate of former President Marcos in the sense contemplated under EO
No. 1 and its amendments.
Mere position held by a military officer does not automatically make him a subordinate as this term is used in
EO Nos. 1, 2, 14 and 14-A absent a showing that he enjoyed close association with former President
Marcos. Migrino discussed this issue in this wise:
A close reading of EO No. 1 and related executive orders will readily show what is contemplated within the term
subordinate. The Whereas Clauses of EO No. 1 express the urgent need to recover the ill-gotten wealth amassed by former
President Ferdinand E. Marcos, his immediate family, relatives, and close associates both here and abroad.
EO No. 2 freezes all assets and properties in the Philippines in which former President Marcos and/or his wife, Mrs. Imelda
Marcos, their close relatives, subordinates, business associates, dummies, agents, or nominees have any interest or participation.
Applying the rule in statutory construction known as ejusdem generis that is-
[W]here general words follow an enumeration of persons or things by words of a particular and specific meaning, such general
words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same kind or
class as those specifically mentioned [Smith, Bell & Co, Ltd. vs. Register of Deeds of Davao, 96 Phil. 53, 58, citing Black on
Interpretation of Laws, 2ndEd., 203].
[T]he term subordinate as used in EO Nos. 1 & 2 refers to one who enjoys a close association with former President Marcos
and/or his wife, similar to the immediate family member, relative, and close associate in EO No. 1 and the close relative,
business associate, dummy, agent, or nominee in EO No. 2.
xxx
It does not suffice, as in this case, that the respondent is or was a government official or employee during the administration of
former President Marcos. There must be a prima facie showing that the respondent unlawfully accumulated wealth by virtue
of his close association or relation with former Pres. Marcos and/or his wife. (Emphasis supplied)
Ramas position alone as Commanding General of the Philippine Army with the rank of Major General [19] does
not suffice to make him a subordinate of former President Marcos for purposes of EO No. 1 and its
amendments. The PCGG has to provide a prima facie showing that Ramas was a close associate of former
President Marcos, in the same manner that business associates, dummies, agents or nominees of former President
Marcos were close to him. Such close association is manifested either by Ramas complicity with former President
Marcos in the accumulation of ill-gotten wealth by the deposed President or by former President Marcos
acquiescence in Ramas own accumulation of ill-gotten wealth if any.
This, the PCGG failed to do.
Petitioners attempt to differentiate the instant case from Migrino does not convince us. Petitioner argues that
unlike in Migrino, the AFP Board Resolution in the instant case states that the AFP Board conducted the
investigation pursuant to EO Nos. 1, 2, 14 and 14-A in relation to RA No. 1379. Petitioner asserts that there is a
presumption that the PCGG was acting within its jurisdiction of investigating crony-related cases of graft and
corruption and that Ramas was truly a subordinate of the former President. However, the same AFP Board
Resolution belies this contention. Although the Resolution begins with such statement, it ends with the following
recommendation:
V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be prosecuted and tried for violation of RA 3019, as
amended, otherwise known as Anti-Graft and Corrupt Practices Act and RA 1379, as amended, otherwise known as The Act for
the Forfeiture of Unlawfully Acquired Property.[20]
Thus, although the PCGG sought to investigate and prosecute private respondents under EO Nos. 1, 2, 14 and 14-
A, the result yielded a finding of violation of Republic Acts Nos. 3019 and 1379 without any relation to EO Nos. 1, 2,
14 and 14-A. This absence of relation to EO No. 1 and its amendments proves fatal to petitioners case. EO No. 1
created the PCGG for a specific and limited purpose, and necessarily its powers must be construed to address such
specific and limited purpose.
Moreover, the resolution of the AFP Board and even the Amended Complaint do not show that the properties
Ramas allegedly owned were accumulated by him in his capacity as a subordinate of his commander-in-
chief. Petitioner merely enumerated the properties Ramas allegedly owned and suggested that these properties
were disproportionate to his salary and other legitimate income without showing that Ramas amassed them because
of his close association with former President Marcos. Petitioner, in fact, admits that the AFP Board resolution does
not contain a finding that Ramas accumulated his wealth because of his close association with former President
Marcos, thus:
10. While it is true that the resolution of the Anti-Graft Board of the New Armed Forces of the Philippines did not
categorically find a prima facie evidence showing that respondent Ramas unlawfully accumulated wealth by virtue of his
close association or relation with former President Marcos and/or his wife, it is submitted that such omission was not
fatal. The resolution of the Anti-Graft Board should be read in the context of the law creating the same and the objective of the
investigation which was, as stated in the above, pursuant to Republic Act Nos. 3019 and 1379 in relation to Executive Order
Nos. 1, 2, 14 and 14-a;[21] (Emphasis supplied)
Such omission is fatal. Petitioner forgets that it is precisely a prima facie showing that the ill-gotten wealth was
accumulated by a subordinate of former President Marcos that vests jurisdiction on PCGG. EO No. 1[22] clearly
premises the creation of the PCGG on the urgent need to recover all ill-gotten wealth amassed by former President
Marcos, his immediate family, relatives, subordinates and close associates. Therefore, to say that such omission was
not fatal is clearly contrary to the intent behind the creation of the PCGG.
In Cruz, Jr. v. Sandiganbayan,[23] the Court outlined the cases that fall under the jurisdiction of the PCGG
pursuant to EO Nos. 1, 2,[24] 14,[25] 14-A:[26]
A careful reading of Sections 2(a) and 3 of Executive Order No. 1 in relation with Sections 1, 2 and 3 of Executive Order No. 14,
shows what the authority of the respondent PCGG to investigate and prosecute covers:
(a) the investigation and prosecution of the civil action for the recovery of ill-gotten wealth under Republic Act
No. 1379, accumulated by former President Marcos, his immediate family, relatives, subordinates
and close associates, whether located in the Philippines or abroad, including the take-over or
sequestration of all business enterprises and entities owned or controlled by them, during his
administration, directly or through his nominees, by taking undue advantage of their public office
and/or using their powers, authority and influence, connections or relationships; and
(b) the investigation and prosecution of such offenses committed in the acquisition of said ill-gotten wealth as
contemplated under Section 2(a) of Executive Order No. 1.
However, other violations of the Anti-Graft and Corrupt Practices Act not otherwise falling under the foregoing
categories, require a previous authority of the President for the respondent PCGG to investigate and prosecute in
accordance with Section 2 (b) of Executive Order No. 1. Otherwise, jurisdiction over such cases is vested in the
Ombudsman and other duly authorized investigating agencies such as the provincial and city prosecutors, their
assistants, the Chief State Prosecutor and his assistants and the state prosecutors. (Emphasis supplied)
The proper government agencies, and not the PCGG, should investigate and prosecute forfeiture petitions not
falling under EO No. 1 and its amendments. The preliminary investigation of unexplained wealth amassed on or
before 25 February 1986 falls under the jurisdiction of the Ombudsman, while the authority to file the corresponding
forfeiture petition rests with the Solicitor General.[27] The Ombudsman Act or Republic Act No. 6770 (RA No. 6770)
vests in the Ombudsman the power to conduct preliminary investigation and to file forfeiture proceedings involving
unexplained wealth amassed after 25 February 1986.[28]
After the pronouncements of the Court in Cruz, the PCGG still pursued this case despite the absence of
a prima facie finding that Ramas was a subordinate of former President Marcos. The petition for forfeiture filed with
the Sandiganbayan should be dismissed for lack of authority by the PCGG to investigate respondents since there is
no prima facie showing that EO No. 1 and its amendments apply to respondents. The AFP Board Resolution and
even the Amended Complaint state that there are violations of RA Nos. 3019 and 1379. Thus, the PCGG should
have recommended Ramas case to the Ombudsman who has jurisdiction to conduct the preliminary investigation of
ordinary unexplained wealth and graft cases. As stated in Migrino:
[But] in view of the patent lack of authority of the PCGG to investigate and cause the prosecution of private respondent for
violation of Rep. Acts Nos. 3019 and 1379, the PCGG must also be enjoined from proceeding with the case, without prejudice to
any action that may be taken by the proper prosecutory agency. The rule of law mandates that an agency of government be
allowed to exercise only the powers granted to it.
Petitioners argument that private respondents have waived any defect in the filing of the forfeiture petition by
submitting their respective Answers with counterclaim deserves no merit as well.
Petitioner has no jurisdiction over private respondents. Thus, there is no jurisdiction to waive in the first
place. The PCGG cannot exercise investigative or prosecutorial powers never granted to it. PCGGs powers are
specific and limited. Unless given additional assignment by the President, PCGGs sole task is only to recover the ill-
gotten wealth of the Marcoses, their relatives and cronies. [29] Without these elements, the PCGG cannot claim
jurisdiction over a case.
Private respondents questioned the authority and jurisdiction of the PCGG to investigate and prosecute their
cases by filing their Motion to Dismiss as soon as they learned of the pronouncement of the Court in Migrino. This
case was decided on 30 August 1990, which explains why private respondents only filed their Motion to Dismiss on 8
October 1990.Nevertheless, we have held that the parties may raise lack of jurisdiction at any stage of the
proceeding.[30] Thus, we hold that there was no waiver of jurisdiction in this case. Jurisdiction is vested by law and not
by the parties to an action.[31]
Consequently, the petition should be dismissed for lack of jurisdiction by the PCGG to conduct the preliminary
investigation. The Ombudsman may still conduct the proper preliminary investigation for violation of RA No. 1379,
and if warranted, the Solicitor General may file the forfeiture petition with the Sandiganbayan. [32] The right of the State
to forfeit unexplained wealth under RA No. 1379 is not subject to prescription, laches or estoppel.[33]
 Second Issue: Propriety of Dismissal of Case
Before Completion of Presentation of Evidence
Petitioner also contends that the Sandiganbayan erred in dismissing the case before completion of the
presentation of petitioners evidence.
We disagree.
Based on the findings of the Sandiganbayan and the records of this case, we find that petitioner has only itself
to blame for non-completion of the presentation of its evidence. First, this case has been pending for four years
before the Sandiganbayan dismissed it. Petitioner filed its Amended Complaint on 11
August 1987, and only began to present its evidence on 17 April 1989. Petitioner had almost two years to prepare its
evidence. However, despite this sufficient time, petitioner still delayed the presentation of the rest of its evidence by
filing numerous motions for postponements and extensions. Even before the date set for the presentation of its
evidence, petitioner filed, on 13 April 1989, a Motion for Leave to Amend the Complaint. [34]The motion sought to
charge the delinquent properties (which comprise most of petitioners evidence) with being subject to forfeiture as
having been unlawfully acquired by defendant Dimaano alone x x x.
The Sandiganbayan, however, refused to defer the presentation of petitioners evidence since petitioner did not
state when it would file the amended complaint. On 18 April 1989, the Sandiganbayan set the continuation of the
presentation of evidence on 28-29 September and 9-11 October 1989, giving petitioner ample time to prepare its
evidence. Still, on 28 September 1989, petitioner manifested its inability to proceed with the presentation of its
evidence. The Sandiganbayan issued an Order expressing its view on the matter, to wit:
The Court has gone through extended inquiry and a narration of the above events because this case has been ready for trial for
over a year and much of the delay hereon has been due to the inability of the government to produce on scheduled dates for pre-
trial and for trial documents and witnesses, allegedly upon the failure of the military to supply them for the preparation of the
presentation of evidence thereon. Of equal interest is the fact that this Court has been held to task in public about its alleged
failure to move cases such as this one beyond the preliminary stage, when, in view of the developments such as those of today,
this Court is now faced with a situation where a case already in progress will revert back to the preliminary stage, despite a five-
month pause where appropriate action could have been undertaken by the plaintiff Republic.[35]
On 9 October 1989, the PCGG manifested in court that it was conducting a preliminary investigation on the
unexplained wealth of private respondents as mandated by RA No. 1379. [36]The PCGG prayed for an additional four
months to conduct the preliminary investigation. The Sandiganbayan granted this request and scheduled the
presentation of evidence on 26-29 March 1990. However, on the scheduled date, petitioner failed to inform the court
of the result of the preliminary investigation the PCGG supposedly conducted. Again, the Sandiganbayan gave
petitioner until 18 May 1990 to continue with the presentation of its evidence and to inform the court of what lies
ahead insofar as the status of the case is concerned x x x. [37] Still on the date set, petitioner failed to present its
evidence. Finally, on 11 July 1990, petitioner filed its Re-Amended Complaint. [38] The Sandiganbayan correctly
observed that a case already pending for years would revert to its preliminary stage if the court were to accept the
Re-Amended Complaint.
Based on these circumstances, obviously petitioner has only itself to blame for failure to complete the
presentation of its evidence. The Sandiganbayan gave petitioner more than sufficient time to finish the presentation
of its evidence. The Sandiganbayan overlooked petitioners delays and yet petitioner ended the long-string of delays
with the filing of a Re-Amended Complaint, which would only prolong even more the disposition of the case.
Moreover, the pronouncements of the Court in Migrino and Cruz prompted the Sandiganbayan to dismiss the
case since the PCGG has no jurisdiction to investigate and prosecute the case against private respondents. This
alone would have been sufficient legal basis for the Sandiganbayan to dismiss the forfeiture case against private
respondents.
Thus, we hold that the Sandiganbayan did not err in dismissing the case before completion of the presentation
of petitioners evidence.
Third Issue: Legality of the Search and Seizure
Petitioner claims that the Sandiganbayan erred in declaring the properties confiscated from Dimaanos house
as illegally seized and therefore inadmissible in evidence. This issue bears a significant effect on petitioners case
since these properties comprise most of petitioners evidence against private respondents. Petitioner will not have
much evidence to support its case against private respondents if these properties are inadmissible in evidence.
On 3 March 1986, the Constabulary raiding team served at Dimaanos residence a search warrant captioned
Illegal Possession of Firearms and Ammunition. Dimaano was not present during the raid but Dimaanos cousins
witnessed the raid. The raiding team seized the items detailed in the seizure receipt together with other
items not included in the search warrant. The raiding team seized these items: one baby armalite rifle with
two magazines; 40 rounds of 5.56 ammunition; one pistol, caliber .45; communications equipment, cash consisting
of P2,870,000 and US$50,000, jewelry, and land titles.
Petitioner wants the Court to take judicial notice that the raiding team conducted the search and seizure on
March 3, 1986 or five days after the successful EDSA revolution.[39]Petitioner argues that a revolutionary government
was operative at that time by virtue of Proclamation No. 1 announcing that President Aquino and Vice President
Laurel were taking power in the name and by the will of the Filipino people. [40] Petitioner asserts that the revolutionary
government effectively withheld the operation of the 1973 Constitution which guaranteed private respondents
exclusionary right.
Moreover, petitioner argues that the exclusionary right arising from an illegal search applies only beginning 2
February 1987, the date of ratification of the 1987 Constitution. Petitioner contends that all rights under the Bill of
Rights had already reverted to its embryonic stage at the time of the search. Therefore, the government may
confiscate the monies and items taken from Dimaano and use the same in evidence against her since at the time of
their seizure, private respondents did not enjoy any constitutional right.
Petitioner is partly right in its arguments.
The EDSA Revolution took place on 23-25 February 1986. As succinctly stated in President Aquinos
Proclamation No. 3 dated 25 March 1986, the EDSA Revolution was done in defiance of the provisions of the
1973 Constitution.[41] The resulting government was indisputably a revolutionary government bound by no
constitution or legal limitations except treaty obligations that the revolutionary government, as the de
jure government in the Philippines, assumed under international law.
The correct issues are: (1) whether the revolutionary government was bound by the Bill of Rights of the 1973
Constitution during the interregnum, that is, after the actual and effective take-over of power by the revolutionary
government following the cessation of resistance by loyalist forces up to 24 March 1986 (immediately before the
adoption of the Provisional Constitution); and (2) whether the protection accorded to individuals under the
International Covenant on Civil and Political Rights (Covenant) and the Universal Declaration of Human Rights
(Declaration) remained in effect during the interregnum.
We hold that the Bill of Rights under the 1973 Constitution was not operative during the interregnum. However,
we rule that the protection accorded to individuals under the Covenant and the Declaration remained in effect during
the interregnum.
During the interregnum, the directives and orders of the revolutionary government were the supreme law
because no constitution limited the extent and scope of such directives and orders. With the abrogation of the 1973
Constitution by the successful revolution, there was no municipal law higher than the directives and orders of the
revolutionary government. Thus, during the interregnum, a person could not invoke any exclusionary right under a
Bill of Rights because there was neither a constitution nor a Bill of Rights during the interregnum. As the Court
explained in Letter of Associate Justice Reynato S. Puno:[42]
A revolution has been defined as the complete overthrow of the established government in any country or state by those who
were previously subject to it or as a sudden, radical and fundamental change in the government or political system, usually
effected with violence or at least some acts of violence. In Kelsen's book, General Theory of Law and State, it is defined as that
which occurs whenever the legal order of a community is nullified and replaced by a new order . . . a way not prescribed by the
first order itself.
It was through the February 1986 revolution, a relatively peaceful one, and more popularly known as the people power
revolution that the Filipino people tore themselves away from an existing regime. This revolution also saw the unprecedented
rise to power of the Aquino government.
From the natural law point of view, the right of revolution has been defined as an inherent right of a people to cast out their
rulers, change their policy or effect radical reforms in their system of government or institutions by force or a general uprising
when the legal and constitutional methods of making such change have proved inadequate or are so obstructed as to be
unavailable. It has been said that the locus of positive law-making power lies with the people of the state and from there is
derived the right of the people to abolish, to reform and to alter any existing form of government without regard to the existing
constitution.
xxx
It is widely known that Mrs. Aquinos rise to the presidency was not due to constitutional processes; in fact, it was achieved in
violation of the provisions of the 1973 Constitution as a Batasang Pambansa resolution had earlier declared Mr. Marcos as
the winner in the 1986 presidential election. Thus it can be said that the organization of Mrs. Aquinos Government which was
met by little resistance and her control of the state evidenced by the appointment of the Cabinet and other key officers of the
administration, the departure of the Marcos Cabinet officials, revamp of the Judiciary and the Military signaled the point where
the legal system then in effect, had ceased to be obeyed by the Filipino. (Emphasis supplied)
To hold that the Bill of Rights under the 1973 Constitution remained operative during the interregnum would
render void all sequestration orders issued by the Philippine Commission on Good Government (PCGG) before the
adoption of the Freedom Constitution. The sequestration orders, which direct the freezing and even the take-over of
private property by mere executive issuance without judicial action, would violate the due process and search and
seizure clauses of the Bill of Rights.
During the interregnum, the government in power was concededly a revolutionary government bound by no
constitution. No one could validly question the sequestration orders as violative of the Bill of Rights because there
was no Bill of Rights during the interregnum. However, upon the adoption of the Freedom Constitution, the
sequestered companies assailed the sequestration orders as contrary to the Bill of Rights of the Freedom
Constitution.
In Bataan Shipyard & Engineering Co. Inc. vs. Presidential Commission on Good Government,
[43]
petitioner Baseco, while conceding there was no Bill of Rights during the interregnum, questioned the continued
validity of the sequestration orders upon adoption of the Freedom Constitution in view of the due process clause in
its Bill of Rights. The Court ruled that the Freedom Constitution, and later the 1987 Constitution, expressly
recognized the validity of sequestration orders, thus:
If any doubt should still persist in the face of the foregoing considerations as to the validity and propriety of sequestration, freeze
and takeover orders, it should be dispelled by the fact that these particular remedies and the authority of the PCGG to issue them
have received constitutional approbation and sanction. As already mentioned, the Provisional or Freedom Constitution
recognizes the power and duty of the President to enact measures to achieve the mandate of the people to . . . (r)ecover ill-gotten
properties amassed by the leaders and supporters of the previous regime and protect the interest of the people through orders of
sequestration or freezing of assets or accounts. And as also already adverted to, Section 26, Article XVIII of the 1987
Constitution treats of, and ratifies the authority to issue sequestration or freeze orders under Proclamation No. 3 dated March 25,
1986.
The framers of both the Freedom Constitution and the 1987 Constitution were fully aware that the
sequestration orders would clash with the Bill of Rights. Thus, the framers of both constitutions had to include
specific language recognizing the validity of the sequestration orders. The following discourse by Commissioner
Joaquin G. Bernas during the deliberations of the Constitutional Commission is instructive:
FR. BERNAS: Madam President, there is something schizophrenic about the arguments in defense of the present amendment.
For instance, I have carefully studied Minister Salongas lecture in the Gregorio Araneta University Foundation, of
which all of us have been given a copy. On the one hand, he argues that everything the Commission is doing is
traditionally legal. This is repeated by Commissioner Romulo also. Minister Salonga spends a major portion of his
lecture developing that argument. On the other hand, almost as an afterthought, he says that in the end what matters
are the results and not the legal niceties, thus suggesting that the PCGG should be allowed to make some legal
shortcuts, another word for niceties or exceptions.
Now, if everything the PCGG is doing is legal, why is it asking the CONCOM for special protection? The answer
is clear. What they are doing will not stand the test of ordinary due process, hence they are asking for protection,
for exceptions. Grandes malos, grandes remedios, fine, as the saying stands, but let us not say grandes malos,
grande y malos remedios. That is not an allowable extrapolation. Hence, we should not give the exceptions asked
for, and let me elaborate and give three reasons:
First, the whole point of the February Revolution and of the work of the CONCOM is to hasten constitutional
normalization. Very much at the heart of the constitutional normalization is the full effectivity of the Bill of Rights.
We cannot, in one breath, ask for constitutional normalization and at the same time ask for a temporary halt to the
full functioning of what is at the heart of constitutionalism. That would be hypocritical; that would be a repetition
of Marcosian protestation of due process and rule of law. The New Society word for that is backsliding. It is tragic
when we begin to backslide even before we get there.
Second, this is really a corollary of the first. Habits tend to become ingrained. The committee report asks for
extraordinary exceptions from the Bill of Rights for six months after the convening of Congress, and Congress may
even extend this longer.
Good deeds repeated ripen into virtue; bad deeds repeated become vice. What the committee report is asking for is
that we should allow the new government to acquire the vice of disregarding the Bill of Rights.
Vices, once they become ingrained, become difficult to shed. The practitioners of the vice begin to think that they
have a vested right to its practice, and they will fight tooth and nail to keep the franchise. That would be an
unhealthy way of consolidating the gains of a democratic revolution.
Third, the argument that what matters are the results and not the legal niceties is an argument that is very
disturbing. When it comes from a staunch Christian like Commissioner Salonga, a Minister, and repeated verbatim
by another staunch Christian like Commissioner Tingson, it becomes doubly disturbing and even
discombobulating. The argument makes the PCGG an auctioneer, placing the Bill of Rights on the auction block. If
the price is right, the search and seizure clause will be sold. Open your Swiss bank account to us and we will award
you the search and seizure clause. You can keep it in your private safe.
Alternatively, the argument looks on the present government as hostage to the hoarders of hidden wealth. The
hoarders will release the hidden health if the ransom price is paid and the ransom price is the Bill of Rights,
specifically the due process in the search and seizure clauses. So, there is something positively revolving about
either argument. The Bill of Rights is not for sale to the highest bidder nor can it be used to ransom captive dollars.
This nation will survive and grow strong, only if it would become convinced of the values enshrined in the
Constitution of a price that is beyond monetary estimation.
For these reasons, the honorable course for the Constitutional Commission is to delete all of Section 8 of the
committee report and allow the new Constitution to take effect in full vigor. If Section 8 is deleted, the PCGG has
two options. First, it can pursue the Salonga and the Romulo argument that what the PCGG has been doing has
been completely within the pale of the law. If sustained, the PCGG can go on and should be able to go on, even
without the support of Section 8. If not sustained, however, the PCGG has only one honorable option, it must bow
to the majesty of the Bill of Rights.
The PCGG extrapolation of the law is defended by staunch Christians. Let me conclude with what another
Christian replied when asked to toy around with the law. From his prison cell, Thomas More said, "I'll give the
devil benefit of law for my nations safety sake. I ask the Commission to give the devil benefit of law for our
nations sake. And we should delete Section 8.
Thank you, Madam President. (Emphasis supplied)
Despite the impassioned plea by Commissioner Bernas against the amendment
excepting sequestration orders from the Bill of Rights, the Constitutional Commission still adopted the amendment as
Section 26,[44] Article XVIII of the 1987 Constitution. The framers of the Constitution were fully aware that absent
Section 26, sequestration orders would not stand the test of due process under the Bill of Rights.
Thus, to rule that the Bill of Rights of the 1973 Constitution remained in force during the interregnum, absent a
constitutional provision excepting sequestration orders from such Bill of Rights, would clearly render all sequestration
orders void during the interregnum. Nevertheless, even during the interregnum the Filipino people continued to enjoy,
under the Covenant and the Declaration, almost the same rights found in the Bill of Rights of the 1973 Constitution.
 The revolutionary government, after installing itself as the de jure government, assumed responsibility for the
States good faith compliance with the Covenant to which the Philippines is a signatory. Article 2(1) of the Covenant
requires each signatory State to respect and to ensure to all individuals within its territory and subject to its
jurisdiction the rights[45] recognized in the present Covenant. Under Article 17(1) of the Covenant, the revolutionary
government had the duty to insure that [n]o one shall be subjected to arbitrary or unlawful interference with his
privacy, family, home or correspondence.
Q. You said you found money instead of weapons, do you know the reason why your team seized
this money instead of weapons?
A. I think the overall team leader and the other two officers assisting him decided to bring along
also the money because at that time it was already dark and they felt most secured if they
will bring that because they might be suspected also of taking money out of those items,
your Honor.[49]

The Declaration, to which the Philippines is also a signatory, provides in its Article 17(2) that [n]o one shall be
arbitrarily deprived of his property. Although the signatories to the Declaration did not intend it as a legally binding Cross-examination
document, being only a declaration, the Court has interpreted the Declaration as part of the generally accepted Atty. Banaag
principles of international law and binding on the State. [46] Thus, the revolutionary government was also obligated
under international law to observe the rights[47] of individuals under the Declaration. Q. Were you present when the search warrant in connection with this case was applied before the
Municipal Trial Court of Batangas, Branch 1?
The revolutionary government did not repudiate the Covenant or the Declaration during the interregnum.
A. Yes, sir.
Whether the revolutionary government could have repudiated all its obligations under the Covenant or the
Declaration is another matter and is not the issue here. Suffice it to say that the Court considers the Declaration as Q. And the search warrant applied for by you was for the search and seizure of five (5) baby
part of customary international law, and that Filipinos as human beings are proper subjects of the rules of armalite rifles M-16 and five (5) boxes of ammunition?
international law laid down in the Covenant. The fact is the revolutionary government did not repudiate the Covenant A. Yes, sir.
or the Declaration in the same way it repudiated the 1973 Constitution. As the de jure government, the revolutionary
government could not escape responsibility for the States good faith compliance with its treaty obligations under
international law. xxx

It was only upon the adoption of the Provisional Constitution on 25 March 1986 that the directives and orders
AJ AMORES
of the revolutionary government became subject to a higher municipal law that, if contravened, rendered such
directives and orders void. The Provisional Constitution adopted verbatim the Bill of Rights of the 1973 Constitution.
[48]
The Provisional Constitution served as a self-limitation by the revolutionary government to avoid abuses of the Q. Before you applied for a search warrant, did you conduct surveillance in the house of Miss
absolute powers entrusted to it by the people. Elizabeth Dimaano?
A. The Intelligence Operatives conducted surveillance together with the MSU elements, your
During the interregnum when no constitution or Bill of Rights existed, directives and orders issued by Honor.
government officers were valid so long as these officers did not exceed the authority granted them by the
revolutionary government. The directives and orders should not have also violated the Covenant or the Q. And this party believed there were weapons deposited in the house of Miss Elizabeth
Declaration. In this case, the revolutionary government presumptively sanctioned the warrant since the revolutionary Dimaano?
government did not repudiate it. The warrant, issued by a judge upon proper application, specified the items to be A. Yes, your Honor.
searched and seized. The warrant is thus valid with respect to the items specifically described in the warrant.
Q. And they so swore before the Municipal Trial Judge?
However, the Constabulary raiding team seized items not included in the warrant. As admitted by petitioners A. Yes, your Honor.
witnesses, the raiding team confiscated items not included in the warrant, thus:
Q. But they did not mention to you, the applicant for the search warrant, any other properties or
contraband which could be found in the residence of Miss Elizabeth Dimaano?
Direct Examination of Capt. Rodolfo Sebastian A. They just gave us still unconfirmed report about some hidden items, for instance, the
AJ AMORES communications equipment and money. However, I did not include that in the application
for search warrant considering that we have not established concrete evidence about
Q. According to the search warrant, you are supposed to seize only for weapons. What else, that. So when
aside from the weapons, were seized from the house of Miss Elizabeth Dimaano?
Q. So that when you applied for search warrant, you had reason to believe that only weapons
A. The communications equipment, money in Philippine currency and US dollars, some jewelries, were in the house of Miss Elizabeth Dimaano?
land titles, sir. A. Yes, your Honor.[50]

Q. Now, the search warrant speaks only of weapons to be seized from the house of Elizabeth
xxx
Dimaano. Do you know the reason why your team also seized other properties not
mentioned in said search warrant?
A. During the conversation right after the conduct of said raid, I was informed that the reason why Q. You stated that a .45 caliber pistol was seized along with one armalite rifle M-16 and how many
they also brought the other items not included in the search warrant was because the ammunition?
money and other jewelries were contained in attach cases and cartons with markings A. Forty, sir.
Sony Trinitron, and I think three (3) vaults or steel safes. Believing that the attach cases
and the steel safes were containing firearms, they forced open these containers only to Q. And this became the subject of your complaint with the issuing Court, with the fiscals office
find out that they contained money. who charged Elizabeth Dimaano for Illegal Possession of Firearms and Ammunition?
A. Yes, sir.
xxx Q. Do you know what happened to that case?
 A. I think it was dismissed, sir.

Q. In the fiscals office?

A. Yes, sir.

Q. Because the armalite rifle you seized, as well as the .45 caliber pistol had a Memorandum [1]
Composed of Justices Regino Hermosisima, Jr., Francis Garchitorena and Cipriano del Rosario.
Receipt in the name of Felino Melegrito, is that not correct?
[2]
A. I think that was the reason, sir. Republic v. Migrino, G.R. No. 89483, 30 August 1990, 189 SCRA 289.
[3]
Q. There were other articles seized which were not included in the search warrant, like for Records of the Sandiganbayan [hereinafter Records], pp. 53-55.
instance, jewelries. Why did you seize the jewelries? [4]
A. I think it was the decision of the overall team leader and his assistant to bring along also the An Act Declaring Forfeiture in Favor of the State Any Property Found to Have Been Unlawfully Acquired by Any
jewelries and other items, sir. I do not really know where it was taken but they brought Public Officer or Employee and Providing for the Proceedings Therefor.
along also these articles. I do not really know their reason for bringing the same, but I just [5]
Records, p. 14.
learned that these were taken because they might get lost if they will just leave this
behind. [6]
Ibid., p.16.
[7]
Ibid., p. 166.
xxx
[8]
Ibid., p. 286.
Q. How about the money seized by your raiding team, they were not also included in the search [9]
warrant? Supra, note 2.
A. Yes sir, but I believe they were also taken considering that the money was discovered to be [10]
G.R. No. 94595, 26 February 1991, 194 SCRA 474.
contained in attach cases. These attach cases were suspected to be containing pistols or
other high powered firearms, but in the course of the search the contents turned out to be [11]
Supra, note 2.
money. So the team leader also decided to take this considering that they believed that if
[12]
they will just leave the money behind, it might get lost also. Rollo, p. 21.
[13]
Q. That holds true also with respect to the other articles that were seized by your raiding team, Supra, note 10.
like Transfer Certificates of Title of lands? [14]
A. Yes, sir. I think they were contained in one of the vaults that were opened.[51] Supra, note 2.
[15]
It is obvious from the testimony of Captain Sebastian that the warrant did not include the monies, Republic v. Migrino, supra, note 2.
communications equipment, jewelry and land titles that the raiding team confiscated.The search warrant did not [16]
Supra, note 2.
particularly describe these items and the raiding team confiscated them on its own authority. The raiding team had no
legal basis to seize these items without showing that these items could be the subject of warrantless search and [17]
Republic v. Migrino, supra, note 2.
seizure.[52] Clearly, the raiding team exceeded its authority when it seized these items.
[18]
Republic v. Sandiganbayan, G.R. No. 115906, 29 September 1994, 237 SCRA 242.
The seizure of these items was therefore void, and unless these items are contraband per se,[53] and they are
not, they must be returned to the person from whom the raiding seized them. However, we do not declare that such [19]
Presidential Decree No. 1769 Amending PD 360 dated December 30, 1973 adjusting the authorized grades in the
person is the lawful owner of these items, merely that the search and seizure warrant could not be used as basis to command and staff structure of the AFP dated 12 January 1981. The ranking is as follows:
seize and withhold these items from the possessor. We thus hold that these items should be returned immediately to
Dimaano. Chief of Staff, AFP General (0-10)

WHEREFORE, the petition for certiorari is DISMISSED. The questioned Resolutions of the Sandiganbayan Vice Chief of Staff, AFP Lt. General (0-9)
dated 18 November 1991 and 25 March 1992 in Civil Case No. 0037, remanding the records of this case to the
Ombudsman for such appropriate action as the evidence may warrant, and referring this case to the Commissioner Commander of Major Services, AFP Maj. General (0-8)
of the Bureau of Internal Revenue for a determination of any tax liability of respondent Elizabeth Dimaano, are xxx.
AFFIRMED.
[20]
Records, pp. 54-55.
SO ORDERED.
[21]
Rollo, p. 27.
Bellosillo, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr. and Azcuna, JJ., concur.
Davide, Jr., C.J., in the result. I concur with Mr. Justice Vitug in his concurring opinion. [22]
WHEREAS, vast resources of the government have been amassed by former President Ferdinand E. Marcos, his
Puno and Vitug, JJ., see separate opinion immediate family, relatives and close associates both here and abroad;
Panganiban, J., in the result.
Quisumbing and Sandoval-Gutierrez, JJ., on official leave. WHEREAS, there is an urgent need to recover all ill-gotten wealth;
Ynares-Santiago, J., in the result. I concur in the separate opinion of J. Reynato Puno.
Tinga, J., separate opinion reserved. xxx
[23]
Supra, note 10.
[24]
Regarding the Funds, Moneys, Assets, and Properties Illegally Acquired or Misappropriated by Former President A sequestration or freeze order shall be issued only upon showing of a prima facie case. The order and the list of the
Marcos, Mrs. Imelda Marcos, their Close Relatives, Subordinates, Business Associates, Dummies, Agents sequestered or frozen properties shall forthwith be registered with the proper court. For orders issued
or Nominees dated 12 March 1986. before the ratification of this Constitution, the corresponding judicial action or proceeding shall be filed
within six months from its ratification. For those issued after such ratification, the judicial action or
[25]
Defining the Jurisdiction over Cases Involving the Ill-gotten Wealth of Former President Ferdinand E. Marcos, proceeding shall be commenced within six months from the issuance thereof.
Mrs. Imelda R. Marcos, Members of their Immediate Family, Close Relatives, Subordinates, and/or
Business Associates, Dummies, Agents and Nominees dated 7 May 1986. The sequestration or freeze order is deemed automatically lifted if no judicial action or proceeding is commenced as
herein provided.
[26]
Amending Executive Order No. 14 dated 18 August 1986.
[45]
Among the rights of individuals recognized in the Covenant are: (1) No one shall be arbitrarily deprived of his life
[27]
Republic v. Sandiganbayan, G.R. No. 90529, 16 August 1991, 200 SCRA 667. [Article 6(1)]; (2) No one shall be subjected to torture or to cruel, inhuman or degrading treatment or
[28] punishment. [Article 7]; (3) Everyone has the right to liberty and security of person. No one shall be
Section 15 (11), RA No. 6770. subjected to arbitrary arrest or detention. No one shall be deprived of his liberty except on such grounds
[29]
Republic v. Migrino, supra, note 2. and in accordance with such procedures as are established by law. Anyone arrested or detained on a
criminal charge shall be brought promptly before a judge or other officer authorized by law to exercise
[30]
Cudia v. CA, 348 Phil. 190 (1998). judicial power and shall be entitled to trial within a reasonable time or to release [Article 9(1 & 3)]; (4)
Anyone who is arrested shall be informed, at the time of the arrest, of the reasons for his arrest and shall
[31]
Monsanto v. Zerna, G.R. No. 142501, 7 December 2001, 371 SCRA 664; Republic v. Estipular, G.R. No. 136588, be promptly informed of the charges against him [Article 9(2)]; (5) Everyone lawfully within the territory of a
20 July 2000, 336 SCRA 333. State shall, within that territory, have the right to liberty of movement and freedom to choose his residence.
[32]
Everyone shall be free to leave any country, including his own. No one shall be arbitrarily deprived of the
Republic v. Migrino, supra, note 2. right to enter his own country [Article 12(1, 2 & 3)]; (6) Everyone charged with a criminal offense shall have
[33] the right to be presumed innocent until proved guilty according to law [Article 14(2)]; (7) Everyone shall
Cojuangco, Jr. v. Presidential Commission on Good Govt., G.R. Nos. 92319-20, 2 October 1990, 190 SCRA 226.
have the right of freedom of thought, conscience and religion [Article 18(1)]; (8) Everyone shall have the
[34]
Records, p. 285. right to hold opinions without interference. Everyone shall have the right to freedom of expression [Article
19(1 & 2)]; (9) The right of peaceful assembly shall be recognized [Article 21]; (10) Everyone shall have the
[35]
Records, p. 347. right of freedom of association with others [Article 22(1)]; (11) All persons are equal before the law and are
entitled without any discrimination to the equal protection of the law [Article 26].
[36]
Ibid., p. 346.
[46]
Andreu v. Commissioner of Immigration, 90 Phil. 347 (1951); Chirskoff v. Commissioner of Immigration, 90 Phil.
[37]
Ibid., p. 395. 256 (1951); Borovsky v. Commissioner of Immigration, 90 Phil. 107 (1951); Mejoff v. Director of Prisons, 90
[38]
Phil. 70 (1951).
Ibid., p. 422.
[47]
[39]
Among the rights enshrined in the Declaration are: (1) Everyone has the right to own property alone or in
Rollo, p. 34. association with others [Article 17(1)]; (2) Everyone has the right to take part in the government of his
[40]
Ibid. country, directly or through freely chosen representatives [Article 21(1)]; (3) Everyone has the right to work,
to free choice of employment, to just and favorable conditions of work and to protection against
[41]
Proclamation No. 3, Provisional Constitution of the Republic of the Philippines, provides: unemployment [Article 23(1)].
[48]
WHEREAS, the new government under President Corazon C. Aquino was installed through a direct exercise of the Section 1, Article I of the Provisional Constitution provides: The provisions of xxx ARTICLE IV (Bill of Rights) xxx
power of the Filipino people assisted by units of the New Armed Forces of the Philippines; of the 1973 Constitution, as amended, remain in force and effect and are hereby adopted in toto as part
of this provisional Constitution. (Emphasis supplied)
WHEREAS, the heroic action of the people was done in defiance of the provisions of the 1973 Constitution, as
[49]
amended; TSN, 18 April 1989, pp. 115-117.
[50]
xxx. (Emphasis supplied) Ibid., pp. 136-138.
[51]
See also Estrada v. Desierto, G.R. No. 146710-15 and G.R. No. 146738, 3 April 2001, 356 SCRA 108; Mun. of San Ibid., pp. 144-146.
Juan, Metro Manila v. Court of Appeals, 345 Phil. 220 (1997). [52]
Five generally accepted exceptions to the rule against warrantless search and seizure have been judicially
[42]
A.M. No. 90-11-2697-CA, 29 June 1992, 210 SCRA 589. formulated as follows: (1) search incidental to a lawful arrest, (2) search of moving vehicles, (3) seizure of
evidence in plain view, (4) customs searches, and (5) waiver by the accused themselves of their right
[43]
No. L-75885, 27 May 1987, 150 SCRA 181. against unreasonable search and seizure. (People v. Que Ming Kha, G.R. No. 133265, 31 May
[44]
2002; Caballes v. Court of Appeals, G.R. No. 136292, 15 January 2002; People v. Lacerna, G.R. No.
Section 26, Article XVIII of the 1987 Constitution provides: 109250, 5 September 1997, 278 SCRA 561).
[53]
People v. Lim, G.R. No. 141699, 7 August 2002; Del Rosario v. People, G.R. No. 142295, 31 May 2001, 358
SCRA 373.
Sec. 26. The authority to issue sequestration or freeze orders under Proclamation No. 3 dated March 25, 1986 in
relation to the recovery of ill-gotten wealth shall remain operative for not more than eighteen months after
the ratification of this Constitution. However, in the national interest, as certified by the President, the
Congress may extend said period.
 Republic vs. Sandiganbayan, G.R. No. 104768, July 21, 2003
SEPT EM BER 12, 2018
Facts:
Immediately upon her assumption to office following the successful EDSA Revolution, then President Corazon C. Aquino issued
Executive Order No. 1 (“EO No. 1”) creating the Presidential Commission on Good Government (“PCGG”). EO No. 1 primarily
tasked the PCGG to recover all ill-gotten wealth of former President Ferdinand E. Marcos, his immediate family, relatives,
subordinates and close associates. Accordingly, the PCGG, through its then Chairman Jovito R. Salonga, created an AFP Anti-
Graft Board (“AFP Board”) tasked to investigate reports of unexplained wealth and corrupt practices by AFP personnel, whether
in the active service or retired.
Based on its mandate, the AFP Board investigated various reports of alleged unexplained wealth of respondent Major General
Josephus Q. Ramas (“Ramas”). Later, the AFP Board issued a Resolution on its findings and recommendation on the reported
unexplained wealth of Ramas.
On 3 March 1986, the Constabulary raiding team served at Dimaano’s residence a search warrant captioned “Illegal Possession
of Firearms and Ammunition.” The raiding team seized the items detailed in the seizure receipt together with other items
not included in the search warrant. The raiding team seized firearms, jewelry, and land titles.
Thus, on 1 August 1987, the PCGG filed a petition for forfeiture under Republic Act No. 1379 (“RA No. 1379”) against Ramas.
The complaint was amended to include Elizabeth Dimaano, the alleged mistress of Ramas, as co-defendant.
The Amended Complaint further alleged that Ramas “acquired funds, assets and properties manifestly out of proportion to his
salary as an army officer and his other income from legitimately acquired property by taking undue advantage of his public
office and/or using his power, authority and influence as such officer of the Armed Forces of the Philippines and as a subordinate
and close associate of the deposed President Ferdinand Marcos.” The Amended Complaint prayed for, among others, the
forfeiture of respondents’ properties, funds and equipment in favor of the State.
Trial ensured. However, the Sandiganbayan subsequently dismissed the complaint because there was an illegal search and
seizure of the items confiscated, among others.
Hence, this appeal.
Petitioner wants the Court to take judicial notice that the raiding team conducted the search and seizure “on March 3, 1986 or
five days after the successful EDSA revolution.” Petitioner argues that a revolutionary government was operative at that time by
virtue of Proclamation No. 1 announcing that President Aquino and Vice President Laurel were “taking power in the name and
by the will of the Filipino people.” Petitioner asserts that the revolutionary government effectively withheld the operation of the
1973 Constitution which guaranteed private respondents’ exclusionary right.
Moreover, petitioner argues that the exclusionary right arising from an illegal search applies only beginning 2 February 1987, the
date of ratification of the 1987 Constitution. Petitioner contends that all rights under the Bill of Rights had already reverted to its
embryonic stage at the time of the search. Therefore, the government may confiscate the monies and items taken from Dimaano
and use the same in evidence against her since at the time of their seizure, private respondents did not enjoy any constitutional
right.
Issue:
Whether or not the search of Dimaano’s home was legal
Held:
The search and seizure of Dimaano’s home were NOT legal.
The Bill of Rights under the 1973 Constitution was not operative during the interregnum.
The EDSA Revolution took place on 23-25 February 1986. As succinctly stated in President Aquino’s Proclamation No. 3 dated
25 March 1986, the EDSA Revolution was “done in defiance of the provisions of the 1973 Constitution.“ The resulting
government was indisputably a revolutionary government bound by no constitution or legal limitations except treaty obligations
that the revolutionary government, as the de jure government in the Philippines, assumed under international law.
During the interregnum, the directives and orders of the revolutionary government were the supreme law because no constitution
limited the extent and scope of such directives and orders. With the abrogation of the 1973 Constitution by the successful
revolution, there was no municipal law higher than the directives and orders of the revolutionary government. Thus, during the
interregnum, a person could not invoke any exclusionary right under a Bill of Rights because there was neither a constitution nor
a Bill of Rights during the interregnum.
To hold that the Bill of Rights under the 1973 Constitution remained operative during the interregnum would render void all
sequestration orders issued by the Philippine Commission on Good Government (“PCGG”) before the adoption of the Freedom
Constitution. The sequestration orders, which direct the freezing and even the take-over of private property by mere executive
issuance without judicial action, would violate the due process and search and seizure clauses of the Bill of Rights.
During the interregnum, the government in power was concededly a revolutionary government bound by no constitution. No one
could validly question the sequestration orders as violative of the Bill of Rights because there was no Bill of Rights during the
interregnum.
The protection accorded to individuals under the International Covenant on Civil and Political Rights (ICCPR) and the
Universal Declaration of Human Rights (UDHR) remained in effect during the interregnum.
Nevertheless, even during the interregnum the Filipino people continued to enjoy, under the ICCPR and the UDHR, almost the
same rights found in the Bill of Rights of the 1973 Constitution.
The revolutionary government, after installing itself as the de jure government, assumed responsibility for the State’s good faith
compliance with the ICCPR to which the Philippines is a signatory. Article 2(1) of the ICCPR requires each signatory State “to
respect and to ensure to all individuals within its territory and subject to its jurisdiction the rights recognized in the present
ICCPR.” Under Article 17(1) of the ICCPR, the revolutionary government had the duty to insure that “[n]o one shall be
subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence.”
The UDHR, to which the Philippines is also a signatory, provides in its Article 17(2) that “[n]o one shall be arbitrarily deprived
of his property.” Although the signatories to the UDHR did not intend it as a legally binding document, being only a UDHR, the
Court has interpreted the UDHR as part of the generally accepted principles of international law and binding on the State. Thus,
the revolutionary government was also obligated under international law to observe the rights of individuals under the UDHR.
The revolutionary government did not repudiate the ICCPR or the UDHR during the interregnum. Whether the revolutionary
government could have repudiated all its obligations under the ICCPR or the UDHR is another matter and is not the issue here.
Suffice it to say that the Court considers the UDHR as part of customary international law, and that Filipinos as human beings
are proper subjects of the rules of international law laid down in the ICCPR. The fact is the revolutionary government did not
repudiate the ICCPR or the UDHR in the same way it repudiated the 1973 Constitution. As the de jure government, the
revolutionary government could not escape responsibility for the State’s good faith compliance with its treaty obligations under
international law.
It was only upon the adoption of the Provisional Constitution on 25 March 1986 that the directives and orders of the
revolutionary government became subject to a higher municipal law that, if contravened, rendered such directives and orders
void. The Provisional Constitution adopted verbatim the Bill of Rights of the 1973 Constitution. The Provisional Constitution
served as a self-limitation by the revolutionary government to avoid abuses of the absolute powers entrusted to it by the people.
During the interregnum when no constitution or Bill of Rights existed, directives and orders issued by government officers were
valid so long as these officers did not exceed the authority granted them by the revolutionary government. The directives and
orders should not have also violated the ICCPR or the UDHR. In this case, the revolutionary government presumptively
sanctioned the warrant since the revolutionary government did not repudiate it. The warrant, issued by a judge upon proper
application, specified the items to be searched and seized. The warrant is thus valid with respect to the items specifically
described in the warrant.
It is obvious from the testimony of Captain Sebastian that the warrant did not include the monies, communications equipment,
jewelry and land titles that the raiding team confiscated. The search warrant did not particularly describe these items and the
raiding team confiscated them on its own authority. The raiding team had no legal basis to seize these items without showing that
these items could be the subject of warrantless search and seizure. Clearly, the raiding team exceeded its authority when it seized
these items.
The seizure of these items was therefore void, and unless these items are contraband per se, and they are not, they must be
returned to the person from whom the raiding seized them. However, we do not declare that such person is the lawful owner of
these items, merely that the search and seizure warrant could not be used as basis to seize and withhold these items from the
possessor. We thus hold that these items should be returned immediately to Dimaano.
Full case available here.
For a discussion on Revolutionary governments, click here.
G.R. No. 221697
MARY GRACE NATIVIDAD S. POE-LLAMANZARES, Petitioners,
vs.
COMELEC AND ESTRELLA C. ELAMPARO Respondents.
x-----------------------x
G.R. No. 221698-700
MARY GRACE NATIVIDAD S. POE-LLAMANZARES, Petitioners,
vs.
COMELEC, FRANCISCO S. TATAD, ANTONIO P. CONTRERAS AND AMADO D. VALDEZ Respondents.
DECISION
PEREZ, J.:
Before the Court are two consolidated petitions under Rule 64 in relation to Rule 65 of the Rules of Court with
extremely urgent application for an ex parte issuance of temporary restraining order/status quo ante order and/or writ
of preliminary injunction assailing the following: (1) 1 December 2015 Resolution of the Commission on Elections
(COMELEC) Second Division; (2) 23 December 2015 Resolution of the COMELEC En Banc, in SPA No. 15-001
(DC); (3) 11 December 2015 Resolution of the COMELEC First Division; and ( 4) 23 December 2015 Resolution of
the COMELEC En Banc, in SPA No. 15-002 (DC), SPA No. 15-007 (DC) and SPA No. 15-139 (DC) for having been
issued without jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction.
The Facts
Mary Grace Natividad S. Poe-Llamanzares (petitioner) was found abandoned as a newborn infant in the Parish
Church of Jaro, Iloilo by a certain Edgardo Militar (Edgardo) on 3 September 1968. Parental care and custody over
petitioner was passed on by Edgardo to his relatives, Emiliano Militar (Emiliano) and his wife. Three days after, 6
September 1968, Emiliano reported and registered petitioner as a foundling with the Office of the Civil Registrar of
Iloilo City (OCR-Iloilo). In her Foundling Certificate and Certificate of Live Birth, the petitioner was given the name
"Mary Grace Natividad Contreras Militar." 1
When petitioner was five (5) years old, celebrity spouses Ronald Allan Kelley Poe (a.k.a. Fenando Poe, Jr.) and
Jesusa Sonora Poe (a.k.a. Susan Roces) filed a petition for her adoption with the Municipal Trial Court (MTC) of San
Juan City. On 13 May 1974, the trial court granted their petition and ordered that petitioner's name be changed from
"Mary Grace Natividad Contreras Militar" to "Mary Grace Natividad Sonora Poe." Although necessary notations were
made by OCR-Iloilo on petitioner's foundling certificate reflecting the court decreed adoption, 2 the petitioner's
adoptive mother discovered only sometime in the second half of 2005 that the lawyer who handled petitioner's
adoption failed to secure from the OCR-Iloilo a new Certificate of Live Birth indicating petitioner's new name and the
name of her adoptive parents. 3 Without delay, petitioner's mother executed an affidavit attesting to the lawyer's
omission which she submitted to the OCR-Iloilo. On 4 May 2006, OCR-Iloilo issued a new Certificate of Live Birth in
the name of Mary Grace Natividad Sonora Poe.4
Having reached the age of eighteen (18) years in 1986, petitioner registered as a voter with the local COMELEC
Office in San Juan City. On 13 December 1986, she received her COMELEC Voter's Identification Card for Precinct
No. 196 in Greenhills, San Juan, Metro Manila.5
On 4 April 1988, petitioner applied for and was issued Philippine Passport No. F927287 6 by the Department of
Foreign Affairs (DFA). Subsequently, on 5 April 1993 and 19 May 1998, she renewed her Philippine passport and
respectively secured Philippine Passport Nos. L881511 and DD156616.7
Initially, the petitioner enrolled and pursued a degree in Development Studies at the University of the Philippines 8 but
she opted to continue her studies abroad and left for the United States of America (U.S.) in 1988. Petitioner
graduated in 1991 from Boston College in Chestnuts Hill, Massachusetts where she earned her Bachelor of Arts
degree in Political Studies.9
On 27 July 1991, petitioner married Teodoro Misael Daniel V. Llamanzares (Llamanzares), a citizen of both the
Philippines and the U.S., at Sanctuario de San Jose Parish in San Juan City. 10 Desirous of being with her husband
who was then based in the U.S., the couple flew back to the U.S. two days after the wedding ceremony or on 29 July
1991. 11
While in the U.S., the petitioner gave birth to her eldest child Brian Daniel (Brian) on 16 April 1992. 12 Her two
daughters Hanna MacKenzie (Hanna) and Jesusa Anika (Anika) were both born in the Philippines on 10 July 1998
and 5 June 2004, respectively. 13
 14
On 18 October 2001, petitioner became a naturalized American citizen. She obtained U.S. Passport No.
017037793 on 19 December 2001. 15
On 8 April 2004, the petitioner came back to the Philippines together with Hanna to support her father's candidacy for
President in the May 2004 elections. It was during this time that she gave birth to her youngest daughter Anika. She
returned to the U.S. with her two daughters on 8 July 2004. 16
After a few months, specifically on 13 December 2004, petitioner rushed back to the Philippines upon learning of her
father's deteriorating medical condition. 17 Her father slipped into a coma and eventually expired. The petitioner
stayed in the country until 3 February 2005 to take care of her father's funeral arrangements as well as to assist in
the settlement of his estate.18
According to the petitioner, the untimely demise of her father was a severe blow to her entire family. In her earnest
desire to be with her grieving mother, the petitioner and her husband decided to move and reside permanently in the
Philippines sometime in the first quarter of 2005.19 The couple began preparing for their resettlement including
notification of their children's schools that they will be transferring to Philippine schools for the next
semester;20coordination with property movers for the relocation of their household goods, furniture and cars from the
U.S. to the Philippines;21 and inquiry with Philippine authorities as to the proper procedure to be followed in bringing
their pet dog into the country.22 As early as 2004, the petitioner already quit her job in the U.S.23
Finally, petitioner came home to the Philippines on 24 May 200524 and without delay, secured a Tax Identification
Number from the Bureau of Internal Revenue. Her three (3) children immediately followed 25 while her husband was
forced to stay in the U.S. to complete pending projects as well as to arrange the sale of their family home there. 26
The petitioner and her children briefly stayed at her mother's place until she and her husband purchased a
condominium unit with a parking slot at One Wilson Place Condominium in San Juan City in the second half of
2005.27 The corresponding Condominium Certificates of Title covering the unit and parking slot were issued by the
Register of Deeds of San Juan City to petitioner and her husband on 20 February 2006.28 Meanwhile, her children of
school age began attending Philippine private schools.
On 14 February 2006, the petitioner made a quick trip to the U.S. to supervise the disposal of some of the family's
remaining household belongings.29 She travelled back to the Philippines on 11 March 2006.30
In late March 2006, petitioner's husband officially informed the U.S. Postal Service of the family's change and
abandonment of their address in the U.S.31 The family home was eventually sold on 27 April 2006.32 Petitioner's
husband resigned from his job in the U.S. in April 2006, arrived in the country on 4 May 2006 and started working for
a major Philippine company in July 2006.33
In early 2006, petitioner and her husband acquired a 509-square meter lot in Corinthian Hills, Quezon City where
they built their family home34 and to this day, is where the couple and their children have been residing.35 A Transfer
Certificate of Title covering said property was issued in the couple's name by the Register of Deeds of Quezon City
on 1June 2006.
On 7 July 2006, petitioner took her Oath of Allegiance to the Republic of the Philippines pursuant to Republic Act
(R.A.) No. 9225 or the Citizenship Retention and Re-acquisition Act of 2003.36 Under the same Act, she filed with the
Bureau of Immigration (BI) a sworn petition to reacquire Philippine citizenship together with petitions for derivative
citizenship on behalf of her three minor children on 10 July 2006.37 As can be gathered from its 18 July 2006 Order,
the BI acted favorably on petitioner's petitions and declared that she is deemed to have reacquired her Philippine
citizenship while her children are considered as citizens of the Philippines.38 Consequently, the BI issued
Identification Certificates (ICs) in petitioner's name and in the names of her three (3) children. 39
Again, petitioner registered as a voter of Barangay Santa Lucia, San Juan City on 31 August 2006.40 She also
secured from the DFA a new Philippine Passport bearing the No. XX4731999.41 This passport was renewed on 18
March 2014 and she was issued Philippine Passport No. EC0588861 by the DFA. 42
On 6 October 2010, President Benigno S. Aquino III appointed petitioner as Chairperson of the Movie and Television
Review and Classification Board (MTRCB).43 Before assuming her post, petitioner executed an "Affidavit of
Renunciation of Allegiance to the United States of America and Renunciation of American Citizenship" before a
notary public in Pasig City on 20 October 2010,44 in satisfaction of the legal requisites stated in Section 5 of R.A. No.
9225.45 The following day, 21 October 2010 petitioner submitted the said affidavit to the BI46 and took her oath of
office as Chairperson of the MTRCB.47 From then on, petitioner stopped using her American passport.48
On 12 July 2011, the petitioner executed before the Vice Consul of the U.S. Embassy in Manila an "Oath/Affirmation
of Renunciation of Nationality of the United States."49 On that day, she accomplished a sworn questionnaire before
the U.S. Vice Consul wherein she stated that she had taken her oath as MTRCB Chairperson on 21 October 2010
with the intent, among others, of relinquishing her American citizenship.50 In the same questionnaire, the petitioner
stated that she had resided outside of the U.S., specifically in the Philippines, from 3 September 1968 to 29 July
1991 and from May 2005 to present.51
On 9 December 2011, the U.S. Vice Consul issued to petitioner a "Certificate of Loss of Nationality of the United
States" effective 21 October 2010.52
On 2 October 2012, the petitioner filed with the COMELEC her Certificate of Candidacy (COC) for Senator for the
2013 Elections wherein she answered "6 years and 6 months" to the question "Period of residence in the Philippines
before May 13, 2013."53 Petitioner obtained the highest number of votes and was proclaimed Senator on 16 May
2013. 54
On 19 December 2013, petitioner obtained Philippine Diplomatic Passport No. DE0004530. 55
On 15 October 2015, petitioner filed her COC for the Presidency for the May 2016 Elections. 56 In her COC, the
petitioner declared that she is a natural-born citizen and that her residence in the Philippines up to the day before 9
May 2016 would be ten (10) years and eleven (11) months counted from 24 May 2005.57 The petitioner attached to
her COC an "Affidavit Affirming Renunciation of U.S.A. Citizenship" subscribed and sworn to before a notary public in
Quezon City on 14 October 2015. 58
Petitioner's filing of her COC for President in the upcoming elections triggered the filing of several COMELEC cases
against her which were the subject of these consolidated cases.
Origin of Petition for Certiorari in G.R. No. 221697
A day after petitioner filed her COC for President, Estrella Elamparo (Elamparo) filed a petition to deny due course or
cancel said COC which was docketed as SPA No. 15-001 (DC) and raffled to the COMELEC Second Division. 59She
is convinced that the COMELEC has jurisdiction over her petition.60 Essentially, Elamparo's contention is that
petitioner committed material misrepresentation when she stated in her COC that she is a natural-born Filipino
citizen and that she is a resident of the Philippines for at least ten (10) years and eleven (11) months up to the day
before the 9 May 2016 Elections.61
On the issue of citizenship, Elamparo argued that petitioner cannot be considered as a natural-born Filipino on
account of the fact that she was a foundling.62 Elamparo claimed that international law does not confer natural-born
status and Filipino citizenship on foundlings.63 Following this line of reasoning, petitioner is not qualified to apply for
reacquisition of Filipino citizenship under R.A. No. 9225 for she is not a natural-born Filipino citizen to begin
with.64Even assuming arguendo that petitioner was a natural-born Filipino, she is deemed to have lost that status
when she became a naturalized American citizen.65 According to Elamparo, natural-born citizenship must be
continuous from birth.66
On the matter of petitioner's residency, Elamparo pointed out that petitioner was bound by the sworn declaration she
made in her 2012 COC for Senator wherein she indicated that she had resided in the country for only six ( 6) years
and six ( 6) months as of May 2013 Elections. Elamparo likewise insisted that assuming arguendo that petitioner is
qualified to regain her natural-born status under R.A. No. 9225, she still fell short of the ten-year residency
requirement of the Constitution as her residence could only be counted at the earliest from July 2006, when she
reacquired Philippine citizenship under the said Act. Also on the assumption that petitioner is qualified to reacquire
lost Philippine Citizenship, Elamparo is of the belief that she failed to reestablish her domicile in the Philippines. 67
Petitioner seasonably filed her Answer wherein she countered that:
(1) the COMELEC did not have jurisdiction over Elamparo's petition as it was actually a petition for quo
warranto which could only be filed if Grace Poe wins in the Presidential elections, and that the Department
of Justice (DOJ) has primary jurisdiction to revoke the BI's July 18, 2006 Order;
(2) the petition failed to state a cause of action because it did not contain allegations which, if
hypothetically admitted, would make false the statement in her COC that she is a natural-born Filipino
citizen nor was there any allegation that there was a willful or deliberate intent to misrepresent on her part;
(3) she did not make any material misrepresentation in the COC regarding her citizenship and residency
qualifications for:
a. the 1934 Constitutional Convention deliberations show that foundlings were considered
citizens;
b. foundlings are presumed under international law to have been born of citizens of the place
where they are found;
c. she reacquired her natural-born Philippine citizenship under the provisions of R.A. No. 9225;
d. she executed a sworn renunciation of her American citizenship prior to the filing of her COC
for President in the May 9, 2016 Elections and that the same is in full force and effect and has
not been withdrawn or recanted;
e. the burden was on Elamparo in proving that she did not possess natural-born status;
f. residence is a matter of evidence and that she reestablished her domicile in the Philippines as
early as May 24, 2005;
g. she could reestablish residence even before she reacquired natural-born citizenship under
R.A. No. 9225;
h. statement regarding the period of residence in her 2012 COC for Senator was an honest
mistake, not binding and should give way to evidence on her true date of reacquisition of
domicile;
i. Elamparo's petition is merely an action to usurp the sovereign right of the Filipino people to
decide a purely political question, that is, should she serve as the country's next leader.68
After the parties submitted their respective Memoranda, the petition was deemed submitted for resolution.
On 1 December 2015, the COMELEC Second Division promulgated a Resolution finding that petitioner's COC, filed
for the purpose of running for the President of the Republic of the Philippines in the 9 May 2016 National and Local
Elections, contained material representations which are false. The fallo of the aforesaid Resolution reads:
WHEREFORE, in view of all the foregoing considerations, the instant Petition to Deny Due Course to or Cancel
Certificate of Candidacy is hereby GRANTED. Accordingly, the Certificate of Candidacy for President of the Republic
of the Philippines in the May 9, 2016 National and Local Elections filed by respondent Mary Grace Natividad Sonora
Poe Llamanzares is hereby CANCELLED.69
Motion for Reconsideration of the 1 December 2015 Resolution was filed by petitioner which the COMELEC En
Banc resolved in its 23 December 2015 Resolution by denying the same.70
Origin of Petition for Certiorari in G.R. Nos. 221698-700
This case stemmed from three (3) separate petitions filed by Francisco S. Tatad (Tatad), Antonio P. Contreras
(Contreras) and Amado D. Valdez (Valdez) against petitioner before the COMELEC which were consolidated and
raffled to its First Division.
In his petition to disqualify petitioner under Rule 25 of the COMELEC Rules of Procedure, 71 docketed as SPA No. 15-
002 (DC), Tatad alleged that petitioner lacks the requisite residency and citizenship to qualify her for the
Presidency.72
Tatad theorized that since the Philippines adheres to the principle of jus sanguinis, persons of unknown parentage,
particularly foundlings, cannot be considered natural-born Filipino citizens since blood relationship is determinative of
natural-born status.73 Tatad invoked the rule of statutory construction that what is not included is excluded. He
averred that the fact that foundlings were not expressly included in the categories of citizens in the 193 5 Constitution
is indicative of the framers' intent to exclude them.74 Therefore, the burden lies on petitioner to prove that she is a
natural-born citizen.75
Neither can petitioner seek refuge under international conventions or treaties to support her claim that foundlings
have a nationality.76 According to Tatad, international conventions and treaties are not self-executory and that local
legislations are necessary in order to give effect to treaty obligations assumed by the Philippines. 77 He also stressed
that there is no standard state practice that automatically confers natural-born status to foundlings.78
Similar to Elamparo's argument, Tatad claimed that petitioner cannot avail of the option to reacquire Philippine
citizenship under R.A. No. 9225 because it only applies to former natural-born citizens and petitioner was not as she
was a foundling.79
Referring to petitioner's COC for Senator, Tatad concluded that she did not comply with the ten (10) year residency
requirement.80 Tatad opined that petitioner acquired her domicile in Quezon City only from the time she renounced
her American citizenship which was sometime in 2010 or 2011.81 Additionally, Tatad questioned petitioner's lack of
intention to abandon her U.S. domicile as evinced by the fact that her husband stayed thereat and her frequent trips
to the U.S.82
In support of his petition to deny due course or cancel the COC of petitioner, docketed as SPA No. 15-139 (DC),
Valdez alleged that her repatriation under R.A. No. 9225 did not bestow upon her the status of a natural-born
citizen.83 He advanced the view that former natural-born citizens who are repatriated under the said Act reacquires
only their Philippine citizenship and will not revert to their original status as natural-born citizens. 84
He further argued that petitioner's own admission in her COC for Senator that she had only been a resident of the
Philippines for at least six (6) years and six (6) months prior to the 13 May 2013 Elections operates against her.
Valdez rejected petitioner's claim that she could have validly reestablished her domicile in the Philippines prior to her
reacquisition of Philippine citizenship. In effect, his position was that petitioner did not meet the ten (10) year
residency requirement for President.
Unlike the previous COMELEC cases filed against petitioner, Contreras' petition, 85 docketed as SPA No. 15-007
(DC), limited the attack to the residency issue. He claimed that petitioner's 2015 COC for President should be
cancelled on the ground that she did not possess the ten-year period of residency required for said candidacy and
that she made false entry in her COC when she stated that she is a legal resident of the Philippines for ten (10)
years and eleven (11) months by 9 May 2016.86 Contreras contended that the reckoning period for computing
petitioner's residency in the Philippines should be from 18 July 2006, the date when her petition to reacquire
Philippine citizenship was approved by the BI.87 He asserted that petitioner's physical presence in the country before
18 July 2006 could not be valid evidence of reacquisition of her Philippine domicile since she was then living here as
an American citizen and as such, she was governed by the Philippine immigration laws.88
a period of ten (10) years and eleven (11) months as of the day of the elections on 9 May 2016. The COMELEC First
Division concluded that she is not qualified for the elective position of President of the Republic of the Philippines.
The dispositive portion of said Resolution reads:
WHEREFORE, premises considered, the Commission RESOLVED, as it hereby RESOLVES, to GRANT the
Petitions and cancel the Certificate of Candidacy of MARY GRACE NATIVIDAD SONORA POE-LLAMANZARES for
the elective position of President of the Republic of the Philippines in connection with the 9 May 2016 Synchronized
Local and National Elections.
Petitioner filed a motion for reconsideration seeking a reversal of the COMELEC First Division's Resolution. On 23
December 2015, the COMELEC En Banc issued a Resolution denying petitioner's motion for reconsideration.

In her defense, petitioner raised the following arguments:
First, Tatad's petition should be dismissed outright for failure to state a cause of action. His petition did not invoke
grounds proper for a disqualification case as enumerated under Sections 12 and 68 of the Omnibus Election
Code.89 Instead, Tatad completely relied on the alleged lack of residency and natural-born status of petitioner which
are not among the recognized grounds for the disqualification of a candidate to an elective office.90
Second, the petitions filed against her are basically petitions for quo warranto as they focus on establishing her
ineligibility for the Presidency.91 A petition for quo warranto falls within the exclusive jurisdiction of the Presidential
Electoral Tribunal (PET) and not the COMELEC.92
Alarmed by the adverse rulings of the COMELEC, petitioner instituted the present petitions for certiorari with urgent
prayer for the issuance of an ex parte temporary restraining order/status quo ante order and/or writ of preliminary
injunction. On 28 December 2015, temporary restraining orders were issued by the Court enjoining the COMELEC
and its representatives from implementing the assailed COMELEC Resolutions until further orders from the Court.
The Court also ordered the consolidation of the two petitions filed by petitioner in its Resolution of 12 January 2016.
Thereafter, oral arguments were held in these cases.
The Court GRANTS the petition of Mary Grace Natividad S. Poe-Llamanzares and to ANNUL and SET ASIDE the:
1. Resolution dated 1 December 2015 rendered through its Second Division, in SPA No. 15-001 (DC),
entitled Estrella C. Elamparo, petitioner, vs. Mary Grace Natividad Sonora Poe-Llamanzares.

Third, the burden to prove that she is not a natural-born Filipino citizen is on the respondents. 93 Otherwise stated,
2. Resolution dated 11 December 2015, rendered through its First Division, in the consolidated cases SPA
she has a presumption in her favor that she is a natural-born citizen of this country.
No. 15-002 (DC) entitled Francisco S. Tatad, petitioner, vs. Mary Grace Natividad Sonora Poe-
Llamanzares, respondent; SPA No. 15-007 (DC) entitled Antonio P. Contreras, petitioner, vs. Mary Grace
Fourth, customary international law dictates that foundlings are entitled to a nationality and are presumed to be Natividad Sonora Poe-Llamanzares, respondent; and SPA No. 15-139 (DC) entitled Amado D. Valdez,
citizens of the country where they are found.94 Consequently, the petitioner is considered as a natural-born citizen of petitioner, v. Mary Grace Natividad Sonora Poe-Llamanzares, respondent.
the Philippines.95
3. Resolution dated 23 December 2015 of the Commission En Banc, upholding the 1 December 2015
Fifth, she claimed that as a natural-born citizen, she has every right to be repatriated under R.A. No. 9225 or the Resolution of the Second Division.
right to reacquire her natural-born status.96 Moreover, the official acts of the Philippine Government enjoy the
presumption of regularity, to wit: the issuance of the 18 July 2006 Order of the BI declaring her as natural-born
4. Resolution dated 23 December 2015 of the Commission En Banc, upholding the 11 December 2015
citizen, her appointment as MTRCB Chair and the issuance of the decree of adoption of San Juan RTC.97 She
Resolution of the First Division.
believed that all these acts reinforced her position that she is a natural-born citizen of the Philippines. 98

The procedure and the conclusions from which the questioned Resolutions emanated are tainted with grave abuse
Sixth, she maintained that as early as the first quarter of 2005, she started reestablishing her domicile of choice in
of discretion amounting to lack of jurisdiction. The petitioner is a QUALIFIED CANDIDATE for President in the 9 May
the Philippines as demonstrated by her children's resettlement and schooling in the country, purchase of a
2016 National Elections.
condominium unit in San Juan City and the construction of their family home in Corinthian Hills. 99

The issue before the COMELEC is whether or not the COC of petitioner should be denied due course or cancelled
Seventh, she insisted that she could legally reestablish her domicile of choice in the Philippines even before she
"on the exclusive ground" that she made in the certificate a false material representation. The exclusivity of the
renounced her American citizenship as long as the three determinants for a change of domicile are complied
ground should hedge in the discretion of the COMELEC and restrain it from going into the issue of the qualifications
with.100She reasoned out that there was no requirement that renunciation of foreign citizenship is a prerequisite for
of the candidate for the position, if, as in this case, such issue is yet undecided or undetermined by the proper
the acquisition of a new domicile of choice.101
authority. The COMELEC cannot itself, in the same cancellation case, decide the qualification or lack thereof of the
candidate.
Eighth, she reiterated that the period appearing in the residency portion of her COC for Senator was a mistake made
in good faith.102
We rely, first of all, on the Constitution of our Republic, particularly its provisions in Article IX, C, Section 2:

In a Resolution103 promulgated on 11 December 2015, the COMELEC First Division ruled that petitioner is not a
Section 2. The Commission on Elections shall exercise the following powers and functions:
natural-born citizen, that she failed to complete the ten (10) year residency requirement, and that she committed
material misrepresentation in her COC when she declared therein that she has been a resident of the Philippines for
 (1) Enforce and administer all laws and regulations relative to the conduct of an election,
plebiscite, initiative, referendum, and recall.
(2) Exercise exclusive original jurisdiction over all contests relating to the elections, returns, and
qualifications of all elective regional, provincial, and city officials, and appellate jurisdiction over
all contests involving elective municipal officials decided by trial courts of general jurisdiction, or
involving elective barangay officials decided by trial courts of limited jurisdiction.
Decisions, final orders, or rulings of the Commission on election contests involving elective
municipal and barangay offices shall be final, executory, and not appealable.
(3) Decide, except those involving the right to vote, all questions affecting elections, including
determination of the number and location of polling places, appointment of election officials and
inspectors, and registration of voters.
(4) Deputize, with the concurrence of the President, law enforcement agencies and
instrumentalities of the Government, including the Armed Forces of the Philippines, for the
exclusive purpose of ensuring free, orderly, honest, peaceful, and credible elections.
(5) Register, after sufficient publication, political parties, organizations, or coalitions which, in
addition to other requirements, must present their platform or program of government; and
accredit citizens' arms of the Commission on Elections. Religious denominations and sects shall
not be registered. Those which seek to achieve their goals through violence or unlawful means,
or refuse to uphold and adhere to this Constitution, or which are supported by any foreign
government shall likewise be refused registration.
Financial contributions from foreign governments and their agencies to political parties,
organizations, coalitions, or candidates related to elections constitute interference in national
affairs, and, when accepted, shall be an additional ground for the cancellation of their
registration with the Commission, in addition to other penalties that may be prescribed by law.
(6) File, upon a verified complaint, or on its own initiative, petitions in court for inclusion or
exclusion of voters; investigate and, where appropriate, prosecute cases of violations of election
laws, including acts or omissions constituting election frauds, offenses, and malpractices.
(7) Recommend to the Congress effective measures to minimize election spending, including
limitation of places where propaganda materials shall be posted, and to prevent and penalize all
forms of election frauds, offenses, malpractices, and nuisance candidacies.
(8) Recommend to the President the removal of any officer or employee it has deputized, or the
imposition of any other disciplinary action, for violation or disregard of, or disobedience to its
directive, order, or decision.
(9) Submit to the President and the Congress a comprehensive report on the conduct of each
election, plebiscite, initiative, referendum, or recall.
Not any one of the enumerated powers approximate the exactitude of the provisions of Article VI, Section 17 of the
same basic law stating that:
The Senate and the House of Representatives shall each have an Electoral Tribunal which shall be the
sole judge of all contests relating to the election, returns, and qualifications of their respective Members.
Each Electoral Tribunal shall be composed of nine Members, three of whom shall be Justices of the
Supreme Court to be designated by the Chief Justice, and the remaining six shall be Members of the
Senate or the House of Representatives, as the case may be, who shall be chosen on the basis of
proportional representation from the political parties and the parties or organizations registered under the
party-list system represented therein. The senior Justice in the Electoral Tribunal shall be its Chairman.
or of the last paragraph of Article VII, Section 4 which provides that:
The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the election, returns,
and qualifications of the President or Vice-President, and may promulgate its rules for the purpose.
The tribunals which have jurisdiction over the question of the qualifications of the President, the Vice-President,
Senators and the Members of the House of Representatives was made clear by the Constitution. There is no such
provision for candidates for these positions.
Can the COMELEC be such judge?
The opinion of Justice Vicente V. Mendoza in Romualdez-Marcos v. Commission on Elections,104 which was
affirmatively cited in the En Banc decision in Fermin v. COMELEC105 is our guide. The citation in Fermin reads:
Apparently realizing the lack of an authorized proceeding for declaring the ineligibility of candidates, the COMELEC
amended its rules on February 15, 1993 so as to provide in Rule 25 § 1, the following:
Grounds for disqualification. - Any candidate who does not possess all the qualifications of a
candidate as provided for by the Constitution or by existing law or who commits any act declared
by law to be grounds for disqualification may be disqualified from continuing as a candidate.
The lack of provision for declaring the ineligibility of candidates, however, cannot be supplied by a mere rule. Such
an act is equivalent to the creation of a cause of action which is a substantive matter which the COMELEC, in the
exercise of its rule-making power under Art. IX, A, §6 of the Constitution, cannot do it. It is noteworthy that the
Constitution withholds from the COMELEC even the power to decide cases involving the right to vote, which
essentially involves an inquiry into qualifications based on age, residence and citizenship of voters. [Art. IX, C, §2(3)]
The assimilation in Rule 25 of the COMELEC rules of grounds for ineligibility into grounds for disqualification is
contrary to the evident intention of the law. For not only in their grounds but also in their consequences are
proceedings for "disqualification" different from those for a declaration of "ineligibility." "Disqualification" proceedings,
as already stated, are based on grounds specified in § 12 and §68 of the Omnibus Election Code and in §40 of the
Local Government Code and are for the purpose of barring an individual from becoming a candidate or from
continuing as a candidate for public office. In a word, their purpose is to eliminate a candidate from the race either
from the start or during its progress. "Ineligibility," on the other hand, refers to the lack of the qualifications prescribed
in the Constitution or the statutes for holding public office and the purpose of the proceedings for declaration of
ineligibility is to remove the incumbent from office.
Consequently, that an individual possesses the qualifications for a public office does not imply that he is not
disqualified from becoming a candidate or continuing as a candidate for a public office and vice versa. We have this
sort of dichotomy in our Naturalization Law. (C.A. No. 473) That an alien has the qualifications prescribed in §2 of the
Law does not imply that he does not suffer from any of [the] disqualifications provided in §4.
Before we get derailed by the distinction as to grounds and the consequences of the respective proceedings, the
importance of the opinion is in its statement that "the lack of provision for declaring the ineligibility of candidates,
however, cannot be supplied by a mere rule". Justice Mendoza lectured in Romualdez-Marcos that:
Three reasons may be cited to explain the absence of an authorized proceeding for determining before election the
qualifications of a candidate.
First is the fact that unless a candidate wins and is proclaimed elected, there is no necessity for determining his
eligibility for the office. In contrast, whether an individual should be disqualified as a candidate for acts constituting
election offenses (e.g., vote buying, over spending, commission of prohibited acts) is a prejudicial question which
should be determined lest he wins because of the very acts for which his disqualification is being sought. That is why
it is provided that if the grounds for disqualification are established, a candidate will not be voted for; if he has been
voted for, the votes in his favor will not be counted; and if for some reason he has been voted for and he has won,
either he will not be proclaimed or his proclamation will be set aside.
Second is the fact that the determination of a candidates' eligibility, e.g., his citizenship or, as in this case, his
domicile, may take a long time to make, extending beyond the beginning of the term of the office. This is amply
demonstrated in the companion case (G.R. No. 120265, Agapito A. Aquino v. COMELEC) where the determination
of Aquino's residence was still pending in the COMELEC even after the elections of May 8, 1995. This is contrary to
the summary character proceedings relating to certificates of candidacy. That is why the law makes the receipt of
certificates of candidacy a ministerial duty of the COMELEC and its officers. The law is satisfied if candidates state in
their certificates of candidacy that they are eligible for the position which they seek to fill, leaving the determination of
their qualifications to be made after the election and only in the event they are elected. Only in cases involving
charges of false representations made in certificates of candidacy is the COMELEC given jurisdiction.
Third is the policy underlying the prohibition against pre-proclamation cases in elections for President, Vice
President, Senators and members of the House of Representatives. (R.A. No. 7166, § 15) The purpose is to
preserve the prerogatives of the House of Representatives Electoral Tribunal and the other Tribunals as "sole
judges" under the Constitution of the election, returns and qualifications of members of Congress of the President
and Vice President, as the case may be.106
To be sure, the authoritativeness of the Romualdez pronouncements as reiterated in Fermin, led to the amendment
through COMELEC Resolution No. 9523, on 25 September 2012 of its Rule 25. This, the 15 February1993 version of
Rule 25, which states that:
Grounds for disqualification. -Any candidate who does not possess all the qualifications of a candidate as provided
for by the Constitution or by existing law or who commits any act declared by law to be grounds for disqualification
may be disqualified from continuing as a candidate.107
was in the 2012 rendition, drastically changed to:
Grounds. - Any candidate who, in action or protest in which he is a party, is declared by final decision of a competent
court, guilty of, or found by the Commission to be suffering from any disqualification provided by law or the
Constitution.
A Petition to Disqualify a Candidate invoking grounds for a Petition to Deny to or Cancel a Certificate of Candidacy or
Petition to Declare a Candidate as a Nuisance Candidate, or a combination thereof, shall be summarily dismissed.
Clearly, the amendment done in 2012 is an acceptance of the reality of absence of an authorized proceeding for
determining before election the qualifications of candidate. Such that, as presently required, to disqualify a candidate
there must be a declaration by a final judgment of a competent court that the candidate sought to be disqualified "is
guilty of or found by the Commission to be suffering from any disqualification provided by law or the Constitution."
Insofar as the qualification of a candidate is concerned, Rule 25 and Rule 23 are flipsides of one to the other.
Both do not allow, are not authorizations, are not vestment of jurisdiction, for the COMELEC to determine the
qualification of a candidate. The facts of qualification must beforehand be established in a prior proceeding before an
authority properly vested with jurisdiction. The prior determination of qualification may be by statute, by executive
order or by a judgment of a competent court or tribunal.
If a candidate cannot be disqualified without a prior finding that he or she is suffering from a disqualification "provided
by law or the Constitution," neither can the certificate of candidacy be cancelled or denied due course on grounds of
false representations regarding his or her qualifications, without a prior authoritative finding that he or she is not
qualified, such prior authority being the necessary measure by which the falsity of the representation can be found.
The only exception that can be conceded are self-evident facts of unquestioned or unquestionable veracity and
judicial confessions. Such are, anyway, bases equivalent to prior decisions against which the falsity of representation
can be determined.
The need for a predicate finding or final pronouncement in a proceeding under Rule 23 that deals with, as in this
case, alleged false representations regarding the candidate's citizenship and residence, forced the COMELEC to rule
essentially that since foundlings108 are not mentioned in the enumeration of citizens under the 1935
Constitution,109 they then cannot be citizens. As the COMELEC stated in oral arguments, when petitioner admitted
that she is a foundling, she said it all. This borders on bigotry. Oddly, in an effort at tolerance, the COMELEC, after
saying that it cannot rule that herein petitioner possesses blood relationship with a Filipino citizen when "it is certain
that such relationship is indemonstrable," proceeded to say that "she now has the burden to present evidence to
prove her natural filiation with a Filipino parent."
The fact is that petitioner's blood relationship with a Filipino citizen is DEMONSTRABLE.
At the outset, it must be noted that presumptions regarding paternity is neither unknown nor unaccepted in Philippine
Law. The Family Code of the Philippines has a whole chapter on Paternity and Filiation.110 That said, there is more
than sufficient evider1ce that petitioner has Filipino parents and is therefore a natural-born Filipino. Parenthetically,
the burden of proof was on private respondents to show that petitioner is not a Filipino citizen. The private
respondents should have shown that both of petitioner's parents were aliens. Her admission that she is a foundling
did not shift the burden to her because such status did not exclude the possibility that her parents were Filipinos,
especially as in this case where there is a high probability, if not certainty, that her parents are Filipinos.
The factual issue is not who the parents of petitioner are, as their identities are unknown, but whether such parents
are Filipinos. Under Section 4, Rule 128:
Sect. 4. Relevancy, collateral matters - Evidence must have such a relation to the fact in issue as to induce belief in
its existence or no-existence. Evidence on collateral matters shall not be allowed, except when it tends in any
reasonable degree to establish the probability of improbability of the fact in issue.
The Solicitor General offered official statistics from the Philippine Statistics Authority (PSA) 111 that from 1965 to 1975,
the total number of foreigners born in the Philippines was 15,986 while the total number of Filipinos born in the
country was 10,558,278. The statistical probability that any child born in the Philippines in that decade is natural-born
Filipino was 99.83%. For her part, petitioner presented census statistics for Iloilo Province for 1960 and 1970, also
from the PSA. In 1960, there were 962,532 Filipinos and 4,734 foreigners in the province; 99.62% of the population
were Filipinos. In 1970, the figures were 1,162,669 Filipinos and 5,304 foreigners, or 99.55%. Also presented were
figures for the child producing ages (15-49). In 1960, there were 230,528 female Filipinos as against 730 female
foreigners or 99.68%. In the same year, there were 210,349 Filipino males and 886 male aliens, or 99.58%. In 1970,
there were 270,299 Filipino females versus 1, 190 female aliens, or 99.56%. That same year, there were 245,740
Filipino males as against only 1,165 male aliens or 99.53%. COMELEC did not dispute these figures. Notably,
Commissioner Arthur Lim admitted, during the oral arguments, that at the time petitioner was found in 1968, the
majority of the population in Iloilo was Filipino.112
Other circumstantial evidence of the nationality of petitioner's parents are the fact that she was abandoned as an
infant in a Roman Catholic Church in Iloilo City.1âwphi1 She also has typical Filipino features: height, flat nasal
bridge, straight black hair, almond shaped eyes and an oval face.
There is a disputable presumption that things have happened according to the ordinary course of nature and the As pointed out by petitioner as well as the Solicitor General, the deliberations of the 1934 Constitutional Convention
ordinary habits of life.113 All of the foregoing evidence, that a person with typical Filipino features is abandoned in show that the framers intended foundlings to be covered by the enumeration. The following exchange is recorded:
Catholic Church in a municipality where the population of the Philippines is overwhelmingly Filipinos such that there
would be more than a 99% chance that a child born in the province would be a Filipino, would indicate more than
Sr. Rafols: For an amendment. I propose that after subsection 2, the following is inserted: "The natural children of a
ample probability if not statistical certainty, that petitioner's parents are Filipinos. That probability and the evidence on
foreign father and a Filipino mother not recognized by the father.
which it is based are admissible under Rule 128, Section 4 of the Revised Rules on Evidence.

xxxx
To assume otherwise is to accept the absurd, if not the virtually impossible, as the norm. In the words of the Solicitor
General:
President:
[We] would like to request a clarification from the proponent of the amendment. The gentleman refers to natural
Second. It is contrary to common sense because foreigners do not come to the Philippines so they can get pregnant
children or to any kind of illegitimate children?
and leave their newborn babies behind. We do not face a situation where the probability is such that every foundling
would have a 50% chance of being a Filipino and a 50% chance of being a foreigner. We need to frame our
questions properly. What are the chances that the parents of anyone born in the Philippines would be foreigners? Sr. Rafols:
Almost zero. What are the chances that the parents of anyone born in the Philippines would be Filipinos? 99.9%. To all kinds of illegitimate children. It also includes natural children of unknown parentage, natural or illegitimate
children of unknown parents.
According to the Philippine Statistics Authority, from 2010 to 2014, on a yearly average, there were 1,766,046
children born in the Philippines to Filipino parents, as opposed to 1,301 children in the Philippines of foreign parents. Sr. Montinola:
Thus, for that sample period, the ratio of non-Filipino children to natural born Filipino children is 1:1357. This means For clarification. The gentleman said "of unknown parents." Current codes consider them Filipino, that is, I refer to
that the statistical probability that any child born in the Philippines would be a natural born Filipino is 99.93%. the Spanish Code wherein all children of unknown parentage born in Spanish territory are considered Spaniards,
because the presumption is that a child of unknown parentage is the son of a Spaniard. This may be applied in the
Philippines in that a child of unknown parentage born in the Philippines is deemed to be Filipino, and there is no
From 1965 to 1975, the total number of foreigners born in the Philippines is 15,986 while the total number of Filipinos
need ...
born in the Philippines is 15,558,278. For this period, the ratio of non-Filipino children is 1:661. This means that the
statistical probability that any child born in the Philippines on that decade would be a natural born Filipino is 99.83%.
Sr. Rafols:
There is a need, because we are relating the conditions that are [required] to be Filipino.
We can invite statisticians and social anthropologists to crunch the numbers for us, but I am confident that the
statistical probability that a child born in the Philippines would be a natural born Filipino will not be affected by
whether or not the parents are known. If at all, the likelihood that a foundling would have a Filipino parent might even Sr. Montinola:
be higher than 99.9%. Filipinos abandon their children out of poverty or perhaps, shame. We do not imagine But that is the interpretation of the law, therefore, there is no [more] need for amendment.
foreigners abandoning their children here in the Philippines thinking those infants would have better economic
opportunities or believing that this country is a tropical paradise suitable for raising abandoned children. I certainly
Sr. Rafols:
doubt whether a foreign couple has ever considered their child excess baggage that is best left behind.
The amendment should read thus:
"Natural or illegitimate of a foreign father and a Filipino mother recognized by one, or the children of unknown
To deny full Filipino citizenship to all foundlings and render them stateless just because there may be a theoretical parentage."
chance that one among the thousands of these foundlings might be the child of not just one, but two, foreigners is
downright discriminatory, irrational, and unjust. It just doesn't make any sense. Given the statistical certainty - 99.9%
Sr. Briones:
- that any child born in the Philippines would be a natural born citizen, a decision denying foundlings such status is
The amendment [should] mean children born in the Philippines of unknown parentage.
effectively a denial of their birthright. There is no reason why this Honorable Court should use an improbable
hypothetical to sacrifice the fundamental political rights of an entire class of human beings. Your Honor, constitutional
interpretation and the use of common sense are not separate disciplines. Sr. Rafols:
The son of a Filipina to a Foreigner, although this [person] does not recognize the child, is not unknown.
As a matter of law, foundlings are as a class, natural-born citizens. While the 1935 Constitution's enumeration is
silent as to foundlings, there is no restrictive language which would definitely exclude foundlings either. Because of President:
silence and ambiguity in the enumeration with respect to foundlings, there is a need to examine the intent of the Does the gentleman accept the amendment or not?
framers. In Nitafan v. Commissioner of Internal Revenue,114 this Court held that:
Sr. Rafols:
The ascertainment of that intent is but in keeping with the fundamental principle of constitutional I do not accept the amendment because the amendment would exclude the children of a Filipina with a foreigner
construction that the intent of the framers of the organic law and of the people adopting it should be given who does not recognize the child. Their parentage is not unknown and I think those of overseas Filipino mother and
effect. The primary task in constitutional construction is to ascertain and thereafter assure the realization of father [whom the latter] does not recognize, should also be considered as Filipinos.
the purpose of the framers and of the people in the adoption of the Constitution. It may also be safely
assumed that the people in ratifying the Constitution were guided mainly by the explanation offered by the
framers.115 President:
The question in order is the amendment to the amendment from the Gentleman from Cebu, Mr. Briones.
Sr. Busion:
Mr. President, don't you think it would be better to leave this matter in the hands of the Legislature?
Sr. Roxas:
Mr. President, my humble opinion is that these cases are few and far in between, that the constitution need [not]
refer to them. By international law the principle that children or people born in a country of unknown parents are
citizens in this nation is recognized, and it is not necessary to include a provision on the subject exhaustively. 116
Though the Rafols amendment was not carried out, it was not because there was any objection to the notion that
persons of "unknown parentage" are not citizens but only because their number was not enough to merit specific
mention. Such was the account,117 cited by petitioner, of delegate and constitution law author Jose Aruego who said:
During the debates on this provision, Delegate Rafols presented an amendment to include as Filipino
citizens the illegitimate children with a foreign father of a mother who was a citizen of the Philippines, and
also foundlings; but this amendment was defeated primarily because the Convention believed that the
cases, being too few to warrant the inclusion of a provision in the Constitution to apply to them, should be
governed by statutory legislation. Moreover, it was believed that the rules of international law were already
clear to the effect that illegitimate children followed the citizenship of the mother, and that foundlings
followed the nationality of the place where they were found, thereby making unnecessary the inclusion in
the Constitution of the proposed amendment.
This explanation was likewise the position of the Solicitor General during the 16 February 2016 Oral Arguments:
We all know that the Rafols proposal was rejected. But note that what was declined was the proposal for a textual
and explicit recognition of foundlings as Filipinos. And so, the way to explain the constitutional silence is by saying
that it was the view of Montinola and Roxas which prevailed that there is no more need to expressly declare
foundlings as Filipinos.
Obviously, it doesn't matter whether Montinola's or Roxas' views were legally correct. Framers of a constitution can
constitutionalize rules based on assumptions that are imperfect or even wrong. They can even overturn existing
rules. This is basic. What matters here is that Montinola and Roxas were able to convince their colleagues in the
convention that there is no more need to expressly declare foundlings as Filipinos because they are already
impliedly so recognized.
In other words, the constitutional silence is fully explained in terms of linguistic efficiency and the avoidance of
redundancy. The policy is clear: it is to recognize foundlings, as a class, as Filipinos under Art. IV, Section 1 (3) of the
1935 Constitution. This inclusive policy is carried over into the 1973 and 1987 Constitution. It is appropriate to invoke
a famous scholar as he was paraphrased by Chief Justice Fernando: the constitution is not silently silent, it is silently
vocal. 118
The Solicitor General makes the further point that the framers "worked to create a just and humane society," that
"they were reasonable patriots and that it would be unfair to impute upon them a discriminatory intent against
foundlings." He exhorts that, given the grave implications of the argument that foundlings are not natural-born
Filipinos, the Court must search the records of the 1935, 1973 and 1987 Constitutions "for an express intention to
deny foundlings the status of Filipinos. The burden is on those who wish to use the constitution to discriminate
against foundlings to show that the constitution really intended to take this path to the dark side and inflict this across
the board marginalization."
We find no such intent or language permitting discrimination against foundlings. On the contrary, all three
Constitutions guarantee the basic right to equal protection of the laws. All exhort the State to render social justice. Of
special consideration are several provisions in the present charter: Article II, Section 11 which provides that the
"State values the dignity of every human person and guarantees full respect for human rights," Article XIII, Section 1
which mandates Congress to "give highest priority to the enactment of measures that protect and enhance the right
of all the people to human dignity, reduce social, economic, and political inequalities x x x" and Article XV, Section 3
which requires the State to defend the "right of children to assistance, including proper care and nutrition, and special
protection from all forms of neglect, abuse, cruelty, exploitation, and other conditions prejudicial to their
development." Certainly, these provisions contradict an intent to discriminate against foundlings on account of their
unfortunate status.
Domestic laws on adoption also support the principle that foundlings are Filipinos. These laws do not provide that
adoption confers citizenship upon the adoptee. Rather, the adoptee must be a Filipino in the first place to be
adopted. The most basic of such laws is Article 15 of the Civil Code which provides that "[l]aws relating to family
rights, duties, status, conditions, legal capacity of persons are binding on citizens of the Philippines even though
living abroad." Adoption deals with status, and a Philippine adoption court will have jurisdiction only if the adoptee is
a Filipino. In Ellis and Ellis v. Republic,119 a child left by an unidentified mother was sought to be adopted by aliens.
This Court said:
In this connection, it should be noted that this is a proceedings in rem, which no court may entertain unless it has
jurisdiction, not only over the subject matter of the case and over the parties, but also over the res, which is the
personal status of Baby Rose as well as that of petitioners herein. Our Civil Code (Art. 15) adheres to the theory that
jurisdiction over the status of a natural person is determined by the latter's nationality. Pursuant to this theory, we
have jurisdiction over the status of Baby Rose, she being a citizen of the Philippines, but not over the status of the
petitioners, who are foreigners.120 (Underlining supplied)
Recent legislation is more direct. R.A. No. 8043 entitled "An Act Establishing the Rules to Govern the Inter-Country
Adoption of Filipino Children and For Other Purposes" (otherwise known as the "Inter-Country Adoption Act of
1995"), R.A. No. 8552, entitled "An Act Establishing the Rules and Policies on the Adoption of Filipino Children and
For Other Purposes" (otherwise known as the Domestic Adoption Act of 1998) and this Court's A.M. No. 02-6-02-SC
or the "Rule on Adoption," all expressly refer to "Filipino children" and include foundlings as among Filipino children
who may be adopted.
It has been argued that the process to determine that the child is a foundling leading to the issuance of a foundling
certificate under these laws and the issuance of said certificate are acts to acquire or perfect Philippine citizenship
which make the foundling a naturalized Filipino at best. This is erroneous. Under Article IV, Section 2 "Natural-born
citizens are those who are citizens of the Philippines from birth without having to perform any act to acquire or
perfect their Philippine citizenship." In the first place, "having to perform an act" means that the act must be
personally done by the citizen. In this instance, the determination of foundling status is done not by the child but by
the authorities.121 Secondly, the object of the process is the determination of the whereabouts of the parents, not the
citizenship of the child. Lastly, the process is certainly not analogous to naturalization proceedings to acquire
Philippine citizenship, or the election of such citizenship by one born of an alien father and a Filipino mother under
the 1935 Constitution, which is an act to perfect it.
In this instance, such issue is moot because there is no dispute that petitioner is a foundling, as evidenced by a
Foundling Certificate issued in her favor.122 The Decree of Adoption issued on 13 May 1974, which approved
petitioner's adoption by Jesusa Sonora Poe and Ronald Allan Kelley Poe, expressly refers to Emiliano and his wife,
Rosario Militar, as her "foundling parents," hence effectively affirming petitioner's status as a foundling. 123
Foundlings are likewise citizens under international law. Under the 1987 Constitution, an international law can
become part of the sphere of domestic law either by transformation or incorporation. The transformation method
requires that an international law be transformed into a domestic law through a constitutional mechanism such as
local legislation.124 On the other hand, generally accepted principles of international law, by virtue of the incorporation
clause of the Constitution, form part of the laws of the land even if they do not derive from treaty obligations.
Generally accepted principles of international law include international custom as evidence of a general practice
accepted as law, and general principles of law recognized by civilized nations.125 International customary rules are
accepted as binding as a result from the combination of two elements: the established, widespread, and consistent
practice on the part of States; and a psychological element known as the opinionjuris sive necessitates (opinion as to
law or necessity). Implicit in the latter element is a belief that the practice in question is rendered obligatory by the
existence of a rule of law requiring it.126 "General principles of law recognized by civilized nations" are principles
"established by a process of reasoning" or judicial logic, based on principles which are "basic to legal systems
generally,"127 such as "general principles of equity, i.e., the general principles of fairness and justice," and the
"general principle against discrimination" which is embodied in the "Universal Declaration of Human Rights, the
International Covenant on Economic, Social and Cultural Rights, the International Convention on the Elimination of
All Forms of Racial Discrimination, the Convention Against Discrimination in Education, the Convention (No. 111)
Concerning Discrimination in Respect of Employment and Occupation."128 These are the same core principles which
underlie the Philippine Constitution itself, as embodied in the due process and equal protection clauses of the Bill of
Rights.129
Universal Declaration of Human Rights ("UDHR") has been interpreted by this Court as part of the generally
accepted principles of international law and binding on the State. 130 Article 15 thereof states:
1. Everyone has the right to a nationality.
2. No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality.
The Philippines has also ratified the UN Convention on the Rights of the Child (UNCRC). Article 7 of the UNCRC
imposes the following obligations on our country:
Article 7
1. The child shall be registered immediately after birth and shall have the right from birth to a name, the right to
acquire a nationality and as far as possible, the right to know and be cared for by his or her parents.
2. States Parties shall ensure the implementation of these rights in accordance with their national law and their
obligations under the relevant international instruments in this field, in particular where the child would otherwise be
stateless.
In 1986, the country also ratified the 1966 International Covenant on Civil and Political Rights (ICCPR). Article 24
thereof provide for the right of every child "to acquire a nationality:"
Article 24
1. Every child shall have, without any discrimination as to race, colour, sex, language, religion, national or social
origin, property or birth, the right, to such measures of protection as are required by his status as a minor, on the part
of his family, society and the State.
2. Every child shall be registered immediately after birth and shall have a name.
3. Every child has the right to acquire a nationality.
The common thread of the UDHR, UNCRC and ICCPR is to obligate the Philippines to grant nationality from birth
and ensure that no child is stateless. This grant of nationality must be at the time of birth, and it cannot be
accomplished by the application of our present naturalization laws, Commonwealth Act No. 473, as amended, and
R.A. No. 9139, both of which require the applicant to be at least eighteen (18) years old.
The principles found in two conventions, while yet unratified by the Philippines, are generally accepted principles of
international law. The first is Article 14 of the 1930 Hague Convention on Certain Questions Relating to the Conflict of
Nationality Laws under which a foundling is presumed to have the "nationality of the country of birth," to wit:
Article 14
A child whose parents are both unknown shall have the nationality of the country of birth. If the child's parentage is
established, its nationality shall be determined by the rules applicable in cases where the parentage is known.
A foundling is, until the contrary is proved, presumed to have been born on the territory of the State in which it was
found. (Underlining supplied)
The second is the principle that a foundling is presumed born of citizens of the country where he is found, contained
in Article 2 of the 1961 United Nations Convention on the Reduction of Statelessness:
Article 2
A foundling found in the territory of a Contracting State shall, in the absence of proof to the contrary, be considered to
have been born within the territory of parents possessing the nationality of that State.
That the Philippines is not a party to the 1930 Hague Convention nor to the 1961 Convention on the Reduction of
Statelessness does not mean that their principles are not binding. While the Philippines is not a party to the 1930
Hague Convention, it is a signatory to the Universal Declaration on Human Rights, Article 15(1) ofwhich 131effectively
affirms Article 14 of the 1930 Hague Convention. Article 2 of the 1961 "United Nations Convention on the Reduction
of Statelessness" merely "gives effect" to Article 15(1) of the UDHR. 132 In Razon v. Tagitis, 133 this Court noted that
the Philippines had not signed or ratified the "International Convention for the Protection of All Persons from
Enforced Disappearance." Yet, we ruled that the proscription against enforced disappearances in the said convention
was nonetheless binding as a "generally accepted principle of international law." Razon v. Tagitis is likewise notable
for declaring the ban as a generally accepted principle of international law although the convention had been ratified
by only sixteen states and had not even come into force and which needed the ratification of a minimum of twenty
states. Additionally, as petitioner points out, the Court was content with the practice of international and regional state
organs, regional state practice in Latin America, and State Practice in the United States.
Another case where the number of ratifying countries was not determinative is Mijares v. Ranada, 134 where
only four countries had "either ratified or acceded to"135 the 1966 "Convention on the Recognition and Enforcement of
Foreign Judgments in Civil and Commercial Matters" when the case was decided in 2005. The Court also pointed
out that that nine member countries of the European Common Market had acceded to the Judgments Convention.
The Court also cited U.S. laws and jurisprudence on recognition of foreign judgments. In all, only the practices of
fourteen countries were considered and yet, there was pronouncement that recognition of foreign judgments was
widespread practice.
Our approach in Razon and Mijares effectively takes into account the fact that "generally accepted principles of
international law" are based not only on international custom, but also on "general principles of law recognized by
civilized nations," as the phrase is understood in Article 38.1 paragraph (c) of the ICJ Statute. Justice, fairness,
equity and the policy against discrimination, which are fundamental principles underlying the Bill of Rights and which
are "basic to legal systems generally,"136 support the notion that the right against enforced disappearances and the
recognition of foreign judgments, were correctly considered as "generally accepted principles of international law"
under the incorporation clause.
Petitioner's evidence137 shows that at least sixty countries in Asia, North and South America, and Europe have
passed legislation recognizing foundlings as its citizen. Forty-two (42) of those countries follow the jus
sanguinis regime. Of the sixty, only thirty-three (33) are parties to the 1961 Convention on Statelessness; twenty-six
(26) are not signatories to the Convention. Also, the Chief Justice, at the 2 February 2016 Oral Arguments pointed
out that in 166 out of 189 countries surveyed (or 87.83%), foundlings are recognized as citizens. These
circumstances, including the practice of jus sanguinis countries, show that it is a generally accepted principle of
international law to presume foundlings as having been born of nationals of the country in which the foundling is
found.
Current legislation reveals the adherence of the Philippines to this generally accepted principle of international law. In
particular, R.A. No. 8552, R.A. No. 8042 and this Court's Rules on Adoption, expressly refer to "Filipino children." In
all of them, foundlings are among the Filipino children who could be adopted. Likewise, it has been pointed that the
DFA issues passports to foundlings. Passports are by law, issued only to citizens. This shows that even the executive
department, acting through the DFA, considers foundlings as Philippine citizens.
Adopting these legal principles from the 1930 Hague Convention and the 1961 Convention on Statelessness is
rational and reasonable and consistent with the jus sanguinis regime in our Constitution. The presumption of natural-
born citizenship of foundlings stems from the presumption that their parents are nationals of the Philippines. As the
empirical data provided by the PSA show, that presumption is at more than 99% and is a virtual certainty.
In sum, all of the international law conventions and instruments on the matter of nationality of foundlings were
designed to address the plight of a defenseless class which suffers from a misfortune not of their own making. We
cannot be restrictive as to their application if we are a country which calls itself civilized and a member of the
community of nations. The Solicitor General's warning in his opening statement is relevant:
.... the total effect of those documents is to signify to this Honorable Court that those treaties and conventions were
drafted because the world community is concerned that the situation of foundlings renders them legally invisible. It
would be tragically ironic if this Honorable Court ended up using the international instruments which seek to protect
and uplift foundlings a tool to deny them political status or to accord them second-class citizenship. 138
The COMELEC also ruled139 that petitioner's repatriation in July 2006 under the provisions of R.A. No. 9225 did not
result in the reacquisition of natural-born citizenship. The COMELEC reasoned that since the applicant must perform
an act, what is reacquired is not "natural-born" citizenship but only plain "Philippine citizenship."
The COMELEC's rule arrogantly disregards consistent jurisprudence on the matter of repatriation statutes in general
and of R.A. No. 9225 in particular.
In the seminal case of Bengson Ill v. HRET, 140 repatriation was explained as follows:
Moreover, repatriation results in the recovery of the original nationality. This means that a naturalized Filipino who
lost his citizenship will be restored to his prior status as a naturalized Filipino citizen. On the other hand, if he was
originally a natural-born citizen before he lost his Philippine citizenship, he will be restored to his former status as a
natural-born Filipino.
R.A. No. 9225 is a repatriation statute and has been described as such in several cases. They include Sobejana-
Condon v. COMELEC141 where we described it as an "abbreviated repatriation process that restores one's Filipino
citizenship x x x." Also included is Parreno v. Commission on Audit,142 which cited Tabasa v. Court of
Appeals,143where we said that "[t]he repatriation of the former Filipino will allow him to recover his natural-born
citizenship. Parreno v. Commission on Audit144 is categorical that "if petitioner reacquires his Filipino citizenship
(under R.A. No. 9225), he will ... recover his natural-born citizenship."
The COMELEC construed the phrase "from birth" in the definition of natural citizens as implying "that natural-born
citizenship must begin at birth and remain uninterrupted and continuous from birth." R.A. No. 9225 was obviously
passed in line with Congress' sole prerogative to determine how citizenship may be lost or reacquired. Congress saw
it fit to decree that natural-born citizenship may be reacquired even if it had been once lost. It is not for the
COMELEC to disagree with the Congress' determination.
More importantly, COMELEC's position that natural-born status must be continuous was already rejected in Bengson
III v. HRET145 where the phrase "from birth" was clarified to mean at the time of birth: "A person who at the time of his
birth, is a citizen of a particular country, is a natural-born citizen thereof." Neither is "repatriation" an act to "acquire or
perfect" one's citizenship. In Bengson III v. HRET, this Court pointed out that there are only two types of citizens
under the 1987 Constitution: natural-born citizen and naturalized, and that there is no third category for repatriated
citizens:
It is apparent from the enumeration of who are citizens under the present Constitution that there are only two classes
of citizens: (1) those who are natural-born and (2) those who are naturalized in accordance with law. A citizen who is
not a naturalized Filipino, ie., did not have to undergo the process of naturalization to obtain Philippine citizenship,
necessarily is a natural-born Filipino. Noteworthy is the absence in said enumeration of a separate category for
persons who, after losing Philippine citizenship, subsequently reacquire it. The reason therefor is clear: as to such
persons, they would either be natural-born or naturalized depending on the reasons for the loss of their citizenship
and the mode prescribed by the applicable law for the reacquisition thereof. As respondent Cruz was not required by
law to go through naturalization proceedings in order to reacquire his citizenship, he is perforce a natural-born
Filipino. As such, he possessed all the necessary qualifications to be elected as member of the House of
Representatives.146
The COMELEC cannot reverse a judicial precedent. That is reserved to this Court. And while we may always revisit a
doctrine, a new rule reversing standing doctrine cannot be retroactively applied. In Morales v. Court of Appeals and
Jejomar Erwin S. Binay, Jr.,147 where we decreed reversed the condonation doctrine, we cautioned that it "should be
prospective in application for the reason that judicial decisions applying or interpreting the laws of the Constitution,
until reversed, shall form part of the legal system of the Philippines." This Court also said that "while the future may
ultimately uncover a doctrine's error, it should be, as a general rule, recognized as good law prior to its
abandonment. Consequently, the people's reliance thereupon should be respected." 148
Lastly, it was repeatedly pointed out during the oral arguments that petitioner committed a falsehood when she put in
the spaces for "born to" in her application for repatriation under R.A. No. 9225 the names of her adoptive parents,
and this misled the BI to presume that she was a natural-born Filipino. It has been contended that the data required
were the names of her biological parents which are precisely unknown.
This position disregards one important fact - petitioner was legally adopted. One of the effects of adoption is "to
sever all legal ties between the biological parents and the adoptee, except when the biological parent is the spouse
of the adoptee."149 Under R.A. No. 8552, petitioner was also entitled to an amended birth certificate "attesting to the
fact that the adoptee is the child of the adopter(s)" and which certificate "shall not bear any notation that it is an
amended issue."150 That law also requires that "[a]ll records, books, and papers relating to the adoption cases in the
files of the court, the Department [of Social Welfare and Development], or any other agency or institution participating
in the adoption proceedings shall be kept strictly confidential." 151 The law therefore allows petitioner to state that her
adoptive parents were her birth parents as that was what would be stated in her birth certificate anyway. And given
the policy of strict confidentiality of adoption records, petitioner was not obligated to disclose that she was an
adoptee.
Clearly, to avoid a direct ruling on the qualifications of petitioner, which it cannot make in the same case for
cancellation of COC, it resorted to opinionatedness which is, moreover, erroneous. The whole process undertaken
by COMELEC is wrapped in grave abuse of discretion.
On Residence
The tainted process was repeated in disposing of the issue of whether or not petitioner committed false material
representation when she stated in her COC that she has before and until 9 May 2016 been a resident of the
Philippines for ten (10) years and eleven (11) months.
Petitioner's claim that she will have been a resident for ten (10) years and eleven (11) months on the day before
the 2016 elections, is true.
The Constitution requires presidential candidates to have ten (10) years' residence in the Philippines before the day
of the elections. Since the forthcoming elections will be held on 9 May 2016, petitioner must have been a resident of
the Philippines prior to 9 May 2016 for ten (10) years. In answer to the requested information of "Period of Residence
in the Philippines up to the day before May 09, 2016," she put in "10 years 11 months" which according to her
pleadings in these cases corresponds to a beginning date of 25 May 2005 when she returned for good from the U.S.
When petitioner immigrated to the U.S. in 1991, she lost her original domicile, which is the Philippines. There are
three requisites to acquire a new domicile: 1. Residence or bodily presence in a new locality; 2. an intention to
remain there; and 3. an intention to abandon the old domicile.152 To successfully effect a change of domicile, one
must demonstrate an actual removal or an actual change of domicile; a bona fide intention of abandoning the former
place of residence and establishing a new one and definite acts which correspond with the purpose. In other words,
there must basically be animus manendi coupled with animus non revertendi. The purpose to remain in or at the
domicile of choice must be for an indefinite period of time; the change of residence must be voluntary; and the
residence at the place chosen for the new domicile must be actual.153
Petitioner presented voluminous evidence showing that she and her family abandoned their U.S. domicile and
relocated to the Philippines for good. These evidence include petitioner's former U.S. passport showing her arrival on
24 May 2005 and her return to the Philippines every time she travelled abroad; e-mail correspondences starting in
March 2005 to September 2006 with a freight company to arrange for the shipment of their household items
weighing about 28,000 pounds to the Philippines; e-mail with the Philippine Bureau of Animal Industry inquiring how
to ship their dog to the Philippines; school records of her children showing enrollment in Philippine schools starting
June 2005 and for succeeding years; tax identification card for petitioner issued on July 2005; titles for condominium
and parking slot issued in February 2006 and their corresponding tax declarations issued in April 2006; receipts
dated 23 February 2005 from the Salvation Army in the U.S. acknowledging donation of items from petitioner's
family; March 2006 e-mail to the U.S. Postal Service confirming request for change of address; final statement from
the First American Title Insurance Company showing sale of their U.S. home on 27 April 2006; 12 July 2011 filled-up
questionnaire submitted to the U.S. Embassy where petitioner indicated that she had been a Philippine resident
since May 2005; affidavit from Jesusa Sonora Poe (attesting to the return of petitioner on 24 May 2005 and that she
and her family stayed with affiant until the condominium was purchased); and Affidavit from petitioner's husband
(confirming that the spouses jointly decided to relocate to the Philippines in 2005 and that he stayed behind in the
U.S. only to finish some work and to sell the family home).
The foregoing evidence were undisputed and the facts were even listed by the COMELEC, particularly in its
Resolution in the Tatad, Contreras and Valdez cases.
However, the COMELEC refused to consider that petitioner's domicile had been timely changed as of 24 May 2005.
At the oral arguments, COMELEC Commissioner Arthur Lim conceded the presence of the first two requisites,
namely, physical presence and animus manendi, but maintained there was no animus non-revertendi.154 The
COMELEC disregarded the import of all the evidence presented by petitioner on the basis of the position that the
earliest date that petitioner could have started residence in the Philippines was in July 2006 when her application
under R.A. No. 9225 was approved by the BI. In this regard, COMELEC relied on Coquilla v. COMELEC,155 Japzon
v. COMELEC156 and Caballero v. COMELEC. 157 During the oral arguments, the private respondents also
added Reyes v. COMELEC.158 Respondents contend that these cases decree that the stay of an alien former Filipino
cannot be counted until he/she obtains a permanent resident visa or reacquires Philippine citizenship, a visa-free
entry under a balikbayan stamp being insufficient. Since petitioner was still an American (without any resident visa)
until her reacquisition of citizenship under R.A. No. 9225, her stay from 24 May 2005 to 7 July 2006 cannot be
counted.
But as the petitioner pointed out, the facts in these four cases are very different from her situation. In Coquilla v.
COMELEC,159 the only evidence presented was a community tax certificate secured by the candidate and his
declaration that he would be running in the elections. Japzon v. COMELEC160 did not involve a candidate who
wanted to count residence prior to his reacquisition of Philippine citizenship. With the Court decreeing that residence
is distinct from citizenship, the issue there was whether the candidate's acts after reacquisition sufficed to establish
residence. In Caballero v. COMELEC, 161 the candidate admitted that his place of work was abroad and that he only
visited during his frequent vacations. In Reyes v. COMELEC,162 the candidate was found to be an American citizen
who had not even reacquired Philippine citizenship under R.A. No. 9225 or had renounced her U.S. citizenship. She
was disqualified on the citizenship issue. On residence, the only proof she offered was a seven-month stint as
provincial officer. The COMELEC, quoted with approval by this Court, said that "such fact alone is not sufficient to
prove her one-year residency."
It is obvious that because of the sparse evidence on residence in the four cases cited by the respondents, the Court
had no choice but to hold that residence could be counted only from acquisition of a permanent resident visa or from
reacquisition of Philippine citizenship. In contrast, the evidence of petitioner is overwhelming and taken together
leads to no other conclusion that she decided to permanently abandon her U.S. residence (selling the house, taking
the children from U.S. schools, getting quotes from the freight company, notifying the U.S. Post Office of the
abandonment of their address in the U.S., donating excess items to the Salvation Army, her husband resigning from
U.S. employment right after selling the U.S. house) and permanently relocate to the Philippines and actually re-
established her residence here on 24 May 2005 (securing T.I.N, enrolling her children in Philippine schools, buying
property here, constructing a residence here, returning to the Philippines after all trips abroad, her husband getting
employed here). Indeed, coupled with her eventual application to reacquire Philippine citizenship and her family's
actual continuous stay in the Philippines over the years, it is clear that when petitioner returned on 24 May 2005 it
was for good.
In this connection, the COMELEC also took it against petitioner that she had entered the Philippines visa-free as
a balikbayan. A closer look at R.A. No. 6768 as amended, otherwise known as the "An Act Instituting a Balikbayan
Program," shows that there is no overriding intent to treat balikbayans as temporary visitors who must leave after
one year. Included in the law is a former Filipino who has been naturalized abroad and "comes or returns to the
Philippines." 163 The law institutes a balikbayan program "providing the opportunity to avail of the necessary training
to enable the balikbayan to become economically self-reliant members of society upon their return to the
country"164in line with the government's "reintegration program."165 Obviously, balikbayans are not ordinary transients.
Given the law's express policy to facilitate the return of a balikbayan and help him reintegrate into society, it would be
an unduly harsh conclusion to say in absolute terms that the balikbayan must leave after one year. That visa-free
period is obviously granted him to allow him to re-establish his life and reintegrate himself into the community before
he attends to the necessary formal and legal requirements of repatriation. And that is exactly what petitioner did - she
reestablished life here by enrolling her children and buying property while awaiting the return of her husband and
then applying for repatriation shortly thereafter.
No case similar to petitioner's, where the former Filipino's evidence of change in domicile is extensive and
overwhelming, has as yet been decided by the Court. Petitioner's evidence of residence is unprecedented. There is
no judicial precedent that comes close to the facts of residence of petitioner. There is no indication in Coquilla v.
COMELEC,166 and the other cases cited by the respondents that the Court intended to have its rulings there apply to
a situation where the facts are different. Surely, the issue of residence has been decided particularly on the facts-of-
the case basis.
To avoid the logical conclusion pointed out by the evidence of residence of petitioner, the COMELEC ruled that
petitioner's claim of residence of ten (10) years and eleven (11) months by 9 May 2016 in her 2015 COC was false
because she put six ( 6) years and six ( 6) months as "period of residence before May 13, 2013" in her 2012 COC for
Senator. Thus, according to the COMELEC, she started being a Philippine resident only in November 2006. In doing
so, the COMELEC automatically assumed as true the statement in the 2012 COC and the 2015 COC as false.
As explained by petitioner in her verified pleadings, she misunderstood the date required in the 2013 COC as the
period of residence as of the day she submitted that COC in 2012. She said that she reckoned residency from April-
May 2006 which was the period when the U.S. house was sold and her husband returned to the Philippines. In that
regard, she was advised by her lawyers in 2015 that residence could be counted from 25 May 2005.
Petitioner's explanation that she misunderstood the query in 2012 (period of residence before 13 May 2013) as
inquiring about residence as of the time she submitted the COC, is bolstered by the change which the COMELEC
itself introduced in the 2015 COC which is now "period of residence in the Philippines up to the day before May 09,
2016." The COMELEC would not have revised the query if it did not acknowledge that the first version was vague.
That petitioner could have reckoned residence from a date earlier than the sale of her U.S. house and the return of
her husband is plausible given the evidence that she had returned a year before. Such evidence, to repeat, would
include her passport and the school records of her children.
It was grave abuse of discretion for the COMELEC to treat the 2012 COC as a binding and conclusive admission
against petitioner. It could be given in evidence against her, yes, but it was by no means conclusive. There is
precedent after all where a candidate's mistake as to period of residence made in a COC was overcome by
evidence. In Romualdez-Marcos v. COMELEC,167 the candidate mistakenly put seven (7) months as her period of
residence where the required period was a minimum of one year. We said that "[i]t is the fact of residence, not a
statement in a certificate of candidacy which ought to be decisive in determining whether or not an individual has
satisfied the constitutions residency qualification requirement." The COMELEC ought to have looked at the evidence
presented and see if petitioner was telling the truth that she was in the Philippines from 24 May 2005. Had the
COMELEC done its duty, it would have seen that the 2012 COC and the 2015 COC both correctly stated
the pertinent period of residency.
The COMELEC, by its own admission, disregarded the evidence that petitioner actually and physically returned here
on 24 May 2005 not because it was false, but only because COMELEC took the position that domicile could be
established only from petitioner's repatriation under R.A. No. 9225 in July 2006. However, it does not take away the
fact that in reality, petitioner had returned from the U.S. and was here to stay permanently, on 24 May 2005. When
she claimed to have been a resident for ten (10) years and eleven (11) months, she could do so in good faith.
For another, it could not be said that petitioner was attempting to hide anything. As already stated, a petition for quo
warranto had been filed against her with the SET as early as August 2015. The event from which the COMELEC
pegged the commencement of residence, petitioner's repatriation in July 2006 under R.A. No. 9225, was an
established fact to repeat, for purposes of her senatorial candidacy.
Notably, on the statement of residence of six (6) years and six (6) months in the 2012 COC, petitioner recounted that
this was first brought up in the media on 2 June 2015 by Rep. Tobias Tiangco of the United Nationalist Alliance.
Petitioner appears to have answered the issue immediately, also in the press. Respondents have not disputed
petitioner's evidence on this point. From that time therefore when Rep. Tiangco discussed it in the media, the stated
period of residence in the 2012 COC and the circumstances that surrounded the statement were already matters of
public record and were not hidden.
Petitioner likewise proved that the 2012 COC was also brought up in the SET petition for quo warranto. Her Verified
Answer, which was filed on 1 September 2015, admitted that she made a mistake in the 2012 COC when she put in
six ( 6) years and six ( 6) months as she misunderstood the question and could have truthfully indicated a longer
period. Her answer in the SET case was a matter of public record. Therefore, when petitioner accomplished her
COC for President on 15 October 2015, she could not be said to have been attempting to hide her erroneous
statement in her 2012 COC for Senator which was expressly mentioned in her Verified Answer.
The facts now, if not stretched to distortion, do not show or even hint at an intention to hide the 2012 statement and
have it covered by the 2015 representation. Petitioner, moreover, has on her side this Court's pronouncement that:
Concededly, a candidate's disqualification to run for public office does not necessarily constitute material
misrepresentation which is the sole ground for denying due course to, and for the cancellation of, a COC. Further, as
already discussed, the candidate's misrepresentation in his COC must not only refer to a material fact (eligibility and
qualifications for elective office), but should evince a deliberate intent to mislead, misinform or hide a fact which
would otherwise render a candidate ineligible. It must be made with an intention to deceive the electorate as to one's
qualifications to run for public office.168
In sum, the COMELEC, with the same posture of infallibilism, virtually ignored a good number of evidenced dates all
of which can evince animus manendi to the Philippines and animus non revertedi to the United States of America.
The veracity of the events of coming and staying home was as much as dismissed as inconsequential, the focus
having been fixed at the petitioner's "sworn declaration in her COC for Senator" which the COMELEC said "amounts
to a declaration and therefore an admission that her residence in the Philippines only commence sometime in
November 2006"; such that "based on this declaration, [petitioner] fails to meet the residency requirement for
President." This conclusion, as already shown, ignores the standing jurisprudence that it is the fact of residence, not
the statement of the person that determines residence for purposes of compliance with the constitutional requirement
of residency for election as President. It ignores the easily researched matter that cases on questions of residency
have been decided favorably for the candidate on the basis of facts of residence far less in number, weight and
substance than that presented by petitioner.169 It ignores, above all else, what we consider as a primary reason why
petitioner cannot be bound by her declaration in her COC for Senator which declaration was not even considered by
the SET as an issue against her eligibility for Senator. When petitioner made the declaration in her COC for Senator
that she has been a resident for a period of six (6) years and six (6) months counted up to the 13 May 2013
Elections, she naturally had as reference the residency requirements for election as Senator which was satisfied by
her declared years of residence. It was uncontested during the oral arguments before us that at the time the
declaration for Senator was made, petitioner did not have as yet any intention to vie for the Presidency in 2016 and
that the general public was never made aware by petitioner, by word or action, that she would run for President in
2016. Presidential candidacy has a length-of-residence different from that of a senatorial candidacy. There are facts
of residence other than that which was mentioned in the COC for Senator. Such other facts of residence have never
been proven to be false, and these, to repeat include:
[Petitioner] returned to the Philippines on 24 May 2005. (petitioner's] husband however stayed in the USA to finish
pending projects and arrange the sale of their family home.
Meanwhile [petitioner] and her children lived with her mother in San Juan City. [Petitioner] enrolled Brian in Beacon
School in Taguig City in 2005 and Hanna in Assumption College in Makati City in 2005. Anika was enrolled in
Learning Connection in San Juan in 2007, when she was already old enough to go to school.
In the second half of 2005, [petitioner] and her husband acquired Unit 7F of One Wilson Place Condominium in San
Juan. [Petitioner] and her family lived in Unit 7F until the construction of their family home in Corinthian Hills was
completed.
Sometime in the second half of 2005, [petitioner's] mother discovered that her former lawyer who handled
[petitioner's] adoption in 1974 failed to secure from the Office of the Civil Registrar of Iloilo a new Certificate of Live
Birth indicating [petitioner's] new name and stating that her parents are "Ronald Allan K. Poe" and "Jesusa L.
Sonora."
In February 2006, [petitioner] travelled briefly to the US in order to supervise the disposal of some of the family's
remaining household belongings.1a\^/phi1 [Petitioner] returned to the Philippines on 11 March 2006.
In late March 2006, [petitioner's] husband informed the United States Postal Service of the family's abandonment of
their address in the US.
The family home in the US was sole on 27 April 2006.
In April 2006, [petitioner's] husband resigned from his work in the US. He returned to the Philippines on 4 May 2006
and began working for a Philippine company in July 2006.
In early 2006, [petitioner] and her husband acquired a vacant lot in Corinthian Hills, where they eventually built their
family home.170
In light of all these, it was arbitrary for the COMELEC to satisfy its intention to let the case fall under the exclusive
ground of false representation, to consider no other date than that mentioned by petitioner in her COC for Senator.
All put together, in the matter of the citizenship and residence of petitioner for her candidacy as President of the
Republic, the questioned Resolutions of the COMELEC in Division and En Banc are, one and all, deadly diseased
with grave abuse of discretion from root to fruits.
WHEREFORE, the petition is GRANTED. The Resolutions, to wit:
1. dated 1 December 2015 rendered through the COMELEC Second Division, in SPA No. 15-001 (DC),
entitled Estrella C. Elamparo, petitioner, vs. Mary Grace Natividad Sonora Poe-Llamanzares, respondent, stating I join J. Caguioa's Opinion
LUCAS P. BERSAMIN
that: DIOSDADO M. PERALTA
Associate Justice
Associate Justice
[T]he Certificate of Candidacy for President of the Republic of the Philippines in the May 9, 2016 National and Local
Elections filed by respondent Mary Grace Natividad Sonora Poe-Llamanzares is hereby GRANTED. Pls. see Dissenting Opinion
JOSE CATRAL MENDOZA
MARIANO C. DEL CASTILLO
Associate Justice
Associate Justice
2. dated 11 December 2015, rendered through the COMELEC First Division, in the consolidated cases SPA No. 15-
002 (DC) entitled Francisco S. Tatad, petitioner, vs. Mary Grace Natividad Sonora Poe-Llamanzares,
respondent; SPA No. 15-007 (DC) entitled Antonio P. Contreras, petitioner, vs. Mary Grace Natividad Sonora Poe- (I concur with the Dissenting Opinion of Justice
See Dissenting Opinion
Llamanzares, respondent; and SPA No. 15-139 (DC) entitled Amado D. Valdez, petitioner, v. Mary Grace Natividad Perlas-Bernabe)
ESTELA M. PERLAS-BERNABE
Sonora Poe-Llamanzares, respondent; stating that: BIENVENIDO L. REYES
Associate Justice
Associate Justice
WHEREFORE, premises considered, the Commission RESOLVED, as it hereby RESOLVES, to GRANT the
petitions and cancel the Certificate of Candidacy of MARY GRACE NATIVIDAD SONORA POE-LLAMANZARES for See Separate Concurring Opinion See Concurring Opinion
the elective position of President of the Republic of the Philippines in connection with the 9 May 2016 Synchronized MARVIC M.V.F. LEONEN FRANCIS H. JARDELEZA
Local and National Elections. Associate Justice Associate Justice

3. dated 23 December 2015 of the COMELEC En Banc, upholding the 1 December 2015 Resolution of the Second
Division stating that: See Concurring Opinion
ALFREDO BENJAMIN S. CAGUIOA
Associate Justice
WHEREFORE, premises considered, the Commission RESOLVED, as it hereby RESOLVES, to DENY the Verified
Motion for Reconsideration of SENATOR MARY GRACE NATIVIDAD SONORA POE-LLAMANZARES. The
Resolution dated 11 December 2015 of the Commission First Division is AFFIRMED. C E RTI F I CATI O N

4. dated 23 December 2015 of the COMELEC En Banc, upholding the 11 December 2015 Resolution of the First Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision
Division. had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

are hereby ANNULED and SET ASIDE. Petitioner MARY GRACE NATIVIDAD SONORA POE-LLAMANZARES MARIA LOURDES P.A. SERENO
is DECLARED QUALIFIED to be a candidate for President in the National and Local Elections of 9 May 2016. Chief Justice

SO ORDERED.

JOSE PORTUGAL PEREZ

Associate Justice Footnotes

WE CONCUR: 1
Petition for Certiorari in G.R. Nos. 221698-700, pp. 15-16; COMELEC First Division Resolution dated 11
December 2015 in SPA No. 15-002 (DC), SPA No. 15-007 (DC) and SPA No. 15-139 (DC), p. 2.
See Concurring Opinion
MARIA LOURDES P.A. SERENO 2
Petition for Certiorari, id. at 16-17;
Chief Justice
3
COMELEC First Division Resolution, supra note 1 at 4.
See Dissenting Opinion Please see Concurring Opinion
ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR. 4
Petition for Certiorari, supra note 1 at 22.
Associate Justice Associate Justice
5
Id. at 17; Comment (on the Petition for Certiorari in G.R. No. 221697) filed by respondent COMELEC
Please see Separate Dissenting Opinion See Dissenting opinion dated 11January 2016, p. 6.
TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION
Associate Justice Associate Justice 6
Petition for Certiorari, id.; id. at 7.
7 30
Id. at 18. Id.; id.

8 31
Supra note 6. Id.; id.

9 32
Id. Id.; id.

10 33
COMELEC First Division Resolution, supra note 1 at 3. Id. at 23-24; COMELEC First Division Resolution, supra note 1 at 5.

11 34
Petition for Certiorari, supra note 1 at 17. Id. at 24; id.

12 35
Id. at 18. Id.

13 36
Id. Supra note 34.

14 37
COMELEC First Division Resolution, supra note 10. Petition for Certiorari, supra note 1 at 25; COMELEC First Division Resolution, supra note 1 at 5.

15 38
Id. Id. at 25-26; id.

16 39
Supra note 1 at 17-18. Id. at 26; id.

17 40
COMELEC First Division Resolution, supra note 10. Id.; id.

18 41
Id. Id.; id.

19 42
Id. Id. at 32; id. at 6.

20 43
Petition for Certiorari, supra note 1 at 20. Supra note 39.

21 44
Id. Petition for Certiorari, supra note 1 at 26-27; COMELEC First Division Resolution, supra note 1 at 5.

22 45
Supra note 3. Section 5, R.A. No. 9225 states:

23
Supra note 20. SEC. 5. Civil and Political Rights and Liabilities. - Those who retain or re-acquire Philippine
citizenship under this Act shall enjoy full civil and political rights and be subject to all attendant
24 liabilities and responsibilities under existing laws of the Philippines and the following conditions:
Supra note 3.

25 xx xx
Supra note 20.

26 3. Those appointed to any public office shall subscribe and swear to an oath of allegiance to the
Supra note 3.
Republic of the Philippines and its duly constituted authorities prior to their assumption of office:
Provided, That they renounce their oath of allegiance to the country where they took that oath;
27
Petition for Certiorari, supra note 4.
xx xx
28
Id.
46
Petition for Certiorari, supra note 1 at 27.
29
Id. at 23; COMELEC First Division Resolution, supra note 3.
47
Id. at 29.
48 71
Supra note 46; supra note 1 at 6. Section 1 of Rule 25 of the COMELEC Rules of Procedure, as amended, states:

49
Petition for Certiorari, supra note 1 at 30; id. Rule 25 - Disqualification of Candidates

50
Id. Section 1. Grounds. - Any candidate who, in an action or protest in which he is a party, is
declared by final decision of a competent court, guilty of, or found by the Commission to be
51 suffering from any disqualification provided by law or the Constitution.
Supra note 48.

52 A Petition to Disqualify a Candidate invoking grounds for a Petition to Deny to or Cancel a

Petition for Certiorari, supra note 1 at 31; COMELEC First Division Resolution, supra note 1 at 6.
Certificate of Candidacy or Petition to Declare a Candidate as a Nuisance Candidate, or a
combination thereof, shall be summarily dismissed.
53
Comment, supra note 5 at 9.
72
Petition to Disqualify dated 19 October 2015 filed by Tatad in SPA No. 15-002 (DC), p. 9.
54
Petition for Certiorari, supra note 1 at 31.
73
Id., at 9 and 14.
55
Id. at 32; Comment, supra note 53 at 10.
74
Id. at 10.
56
Id.; COMELEC First Division Resolution, supra note 1 at 6.
75
Id. at 12.
57
Id.; id. at 7.
76
Id. at 11.
58
Id.; id.
77
COMELEC First Division Resolution, supra note 1 at 8.
59
Comment (on the Petition in G.R. No. 221697) filed by respondent Elamparo, dated January 6, 2016, p.
7. 78
Id.
60
COMELEC Second Division Resolution dated December 1, 2015 in SPA No. 15-001 (DC), p. 7. 79
Petition to Disqualify, supra note 72 at 11.
61
Id. at 7-8. 80
Id. at 21.
62
Supra note 60. 81
Id.
63
Id. 82
Id.
64
Id. at 8. 83
Supra note I at 8.
65
Id. 84
Id.
66
Petition for Certiorari in GR. No. 221697, p. 7. 85
Contreras' petition is a petition for cancellation of Grace Poe's COC under Section 78 of the Omnibus
Election Code which states that:
67
Supra note 64.
Sec. 78. Petition to deny due course to or cancel a certificate of candidacy. - A verified petition
68
Petition for Certiorari, supra note 65 at 8; COMELEC Second Division Resolution, supra note 60 at 8-11. seeking to deny due course or to cancel a certificate of candidacy may be filed by the person
exclusively on the ground that any material representation contained therein as required under
69 Section 74 hereof is false. The petition may be filed at any time not later than twenty-five days
COMELEC Second Division Resolution, supra note 60 at 34. from the time of the filing of the certificate of candidacy and shall be decided, after due notice
and hearing, not later than fifteen days before the election.
70
Comment, supra note 59 at 10.
86 99
Petition for Cancellation of Grace Poe's COC dated 17 October 2015 filed by Contreras in SPA No. 15- Id.at 9-10.
007 (DC), pp. 2-4.
100
Id.at 10.
87
Id. at 3; Petition for Certiorari, supra note l at 13.
101
Id.
88
Id. at 3-4.
102
Id.
89
Sections 12 and 68 of the Omnibus Election Code provide:
103
The 11 December 2015 Resolution of the COMELEC First Division was concurred in by Commissioners
Sec. 12. Disqualifications. -Any person who has been declared by competent authority insane or Louie Tito F. Guia and Ma. Rowena Amelia V. Guanzon. Presiding Commissioner Christian Robert S. Lim
incompetent, or has been sentenced by final judgment for subversion, insurrection, rebellion or issued a Separate Dissenting Opinion.
for any offense for which he has been sentenced to a penalty of more than eighteen months or
for a crime involving moral turpitude, shall be disqualified to be a candidate and to hold any 104
318 Phil. 329 (1995).
office, unless he has been given plenary pardon or granted amnesty.
105
595 Phil. 449 (2008).
This disqualifications to be a candidate herein provided shall be deemed removed upon the
declaration by competent authority that said insanity or incompetence had been removed or
after the expiration of a period of five years from his service of sentence, unless within the same 106
Romualdez-Marcos v. COMELEC, supra note 104 at 396-397.
period he again becomes disqualified.
107
Id. at 397-398; Fermin v. COMELEC, supra note 105 at 471-472.
Sec. 68. Disqualifications. - Any candidate who, in an action or protest in which he is a party is
declared by final decision of a competent court guilty of, or found by the Commission of having 108
In A.M. No. 02-6-02-SC, Resolution Approving The Proposed Rule on Adoption (Domestic and Inter-
(a) given money or other material consideration to influence, induce or corrupt the voters or
Country), effective 22 August 2002, "foundling" is defined as "a deserted or abandoned infant or child
public officials performing electoral functions; (b) committed acts of terrorism to enhance his
whose parents, guardian or relatives are unknown; or a child committed to an orphanage or charitable or
candidacy; (c) spent in his election campaign an amount in excess of that allowed by this Code;
similar institution with unknown facts of birth and parentage and registered in the Civil Register as a
(d) solicited, received or made any contribution prohibited under Sections 89, 95, 96, 97 and
"foundling."
104; or (e) violated any of Sections 80, 83, 85, 86 and 261, paragraphs d, e, k, v, and cc, sub-
paragraph 6, shall be disqualified from continuing as a candidate, or if he has been elected, from
holding the office. Any person who is a permanent resident of or an immigrant to a foreign 109
Article IV-Citizenship.
country shall not be qualified to run for any elective office under this Code, unless said person
has waived his status as permanent resident or immigrant of a foreign country in accordance
with the residence requirement provided for in the election laws. Sec. I. The following are citizens of the Philippines:

90
COMELEC First Division Resolution, supra note 1 at 12. (1) Those who are citizens of the Philippine Islands at the time of the adoption of this
Constitution,
91
Id. at 10.
(2) Those born in the Philippine Islands of foreign parents who, before the adoption of
this Constitution, had been elected to public office in the Philippine Islands.
92
Id.
(3) Those whose fathers are citizens of the Philippines.
93
Id. at 9.
(4) Those whose mothers are citizens of the Philippines and, upon reaching the age of
94
Id. majority, elect Philippine citizenship.

95
Id. (5) Those who are naturalized in accordance with law.

96
Id. Section 2. Philippine citizenship may be lost or reacquired in the manner provided by law.

97
Id. 110
Article 163 to 182, Title VI of Executive Order No. 209, otherwise known as The Family Code of the
Philippines, which took effect on 4 August 1988.
98
Id.
111 131
Statistics from the PSA or its predecessor agencies are admissible evidence. See Herrera v. "Everyone has the right to a nationality."
COMELEC, 376 Phil. 443 (I 999) and Bagabuyo v. COMELEC, 593 Phil. 678 (2008). In the latter case, the
Court even took judicial notice of the figures. 132
See Introductory Note to the United Nations Convention on the Reduction of Statelessness issued by
the United Nations High Commissioner on Refugees.
112
Transcipt of Stenographic Notes, 9 February 2016, p. 40.
133
Supra note 124.
113
Section 3 (y), Rule 131.
134
Supra note 126.
114
236 Phil. 307 (1987).
135
Id. at 392; See footnote No. 55 of said case.
115
Id. at314-315.
136
Pharmaceutical and Health Care Assoc. of the Philippines v. Duque III, supra note 127.
116
English translation of the Spanish original presented in the petitioner's pleadings before the COMELEC
and this Court. The COMELEC and private respondents have not disputed the accuracy and correctness 137
See Exhibits 38 and 39-series.
of the translation.
138
117 Opening Statement of the Solicitor General, p. 6.
I Jose M. Aruego, The Framing of the Philippine Constitution 209 (1949).
139
118 First Division resolution dated 11 December 2015, upheld in toto by the COMELEC En Banc.
TSN, 16 February 2016, pp. 20-21.
140
119 409 Phil. 633, 649 (2001).
117 Phil. 976 (1963).
141
120 692 Phil. 407, 420 (2012).
Id. at 978-979.
142
121 551 Phil. 368, 381 (2007).
See Section 5 of the RA No. 8552: "Location of Unknown Parent(s). - It shall be the duty of the
Department or the child-caring agency which has custody of the child to exert all efforts to locate his/her
unknown biological parent(s). If such efforts fail, the child shall be registered as a foundling and 143
53 I Phil. 407, 417 (2006).
subsequently be the subject of legal proceedings where he/she shall be declared abandoned."
(Underlining supplied) 144
Supra note 142.
122
See Exhibit "l" in SPA No. 15-001 (DC) and SPA No. 15-00 (DC). 145
Supra note 140 at 646.
123
See Exhibit "2" in SPA No. 15-001 (DC) and SPA No. 15-00 (DC). 146
Id. at 651.
124
Razon, Jr. v. Tagitis, 621 Phil. 536, 600 (2009) citing Pharmaceutical and Health Care Assoc. of the 147
G.R. No. 217126-27, 10 November 2015.
Philippines v. Duque III, 561 Phil. 386, 398 (2007).

148
125 Id.
Article 38.1, paragraphs (b) and (c) of the Statute of the International Court of Justice.

149
126 Implementing Rules and Regulations of Republic Act No. 8552, Art. VI, Sec. 33.
Mijares v. Ranada, 495 Phil. 372, 395 (2005).

150
127 Republic Act No. 8552 (1998), Sec. 14.
Pharmaceutical and Health Care Assoc. of the Philippines v. Duque III, 561 Phil. 386, 400 (2007).

151
128 Republic Act No. 8552 (1998), Sec. 15.
International School Alliance of Educators v. Quisumbing, 388 Phil. 661, 672-673 (2000).

152
129 Fernandez v. House of Representatives Electoral Tribunal, 623 Phil. 628, 660 (2009) citing Japzon v.
CONSTITUTION, Art. III, Sec. 1.
COMELEC, 596 Phil. 354, 370-372 (2009) further citing Papandayan, Jr. v. COMELEC, 430 Phil. 754, 768-
770 (2002) further further citing Romualdez v. RTC, Br. 7, Tacloban City, G.R. No. 104960, 14 September
130
Rep. of the Philippines v. Sandiganbayan, 454 Phil. 504, 545 (2003). 1993, 226 SCRA408, 415.
 153
Domino v. COMELEC, 369 Phil. 798, 819 (1999). Perez, J.:
FACTS:
154
TSN, 16 February 2016, p. 120.
In her COC for Presidency on the May 2016 elections, Grace Poe declared that she is a natural-born citizen of the
155
434 Phil. 861 (2002). Philippines and that her residence up to day before May 9, 2016 would be 10 years and 11 months counted from May
24, 2005.
156
596 Phil. 354 (2009).

157
Grace Poe was born in 1968., found as newborn infant in Jaro,Iloilo and was legally adopted by RONALD ALLAN
G.R. No. 209835, 22 September 2015. KELLY POE (FPJ) and JESUS SONORA POE (SUSAN ROCES) in 1974. She immigrated to the US in 1991 after her
marriage to Theodore Llamanzares who was then based at the US. Grace Poe then became a naturalized American
158
G.R. No. 207264, 25 June 2013, 699 SCRA 522. citizen in 2001.

159
Supra note 155.
On December 2004, he returned to the Philippines due to his father’s deteriorating medical condition, who then
eventually demice on February 3,2005. She then quitted her job in the US to be with her grieving mother and finally
160
Supra note 156. went home for good to the Philippines on MAY 24, 2005.

161
Supra note 157.
On JULY 18, 2006, the BI granted her petition declaring that she had reacquired her Filipino citizenship under RA
162
9225. She registered as a voter and obtained a new Philippine Passport.
Supra note 158.

163
Republic Act No. 6768 (1989), as amended, Sec. 2(a). In 2010, before assuming her post as appointes Chairperson of the MTRCB , she renounced her American
citizenship to satisfy the RA 9225 requirements as to Reacquistion of Filipino Citizenship. From then on, she stopped
164 using her American passport.
Republic Act No. 6768 (1989), as amended, Sec. I.

165
Republic Act No. 6768 (1989), as amended, Sec. 6. Petitions were filed before the COMELEC to deny or cancel her candidacy on the ground particularly among others,
that she cannot be considered a natural born Filipino citizen since she was a FOUNDLING and that her bioligical
166
Supra note 155. parents cannot be proved as Filipinos. The Comelec en banccancelled her candidacy on the ground that she is in
want of citizenship and residence requirements and that she committed misrepresentation in her COC.
167
Supra note 104 at 326. (Emphasis supplied)
On CERTIORARI, the SUPREME COURT, reversed the ruling and held a vote of 9-6 that POE is qualified as
168
Ugdoracion, Jr. v. COMELEC, 575 Phil. 253, 265-266 (2008). candidate for Presidency.

169
In Mitra v. COMELEC, et al., [636 Phil. 753 (2010)], It was ruled that the residence requirement can be
complied with through an incremental process including acquisition of business interest in the pertinent ISSUES:
place and lease of feedmill building as residence.

170
(1) Whether or not Grace Poe- Llamanzares is a natural- born Filipino citizen
COMELEC Resolution dated 11 December2015 in SPA No. 15-002 (DC), pp. 4-5.

MARY GRACE NATIVIDAD S POE- LLAMANZARES vs. (2) Whether or not Poe satisfies the 10-year residency requirement.

COMELEC,et al.
HELD:

GR Nos. 221697 , GR No. 221698-700

YES. GRACE POE is considerably a natural-born Filipino Citizen. For that, she satisfied the constitutional reqt that
only natural-born Filipinos may run for Presidency.
March 8,2016
(1) there is high probability that Poe’s parents are Filipinos, as being shown in her physical features which are typical
of Filipinos, aside from the fact that she was found as an infant in Jaro, Iloilo, a municipality wherein there is 99%
probability that residents there are Filipinos, consequently providing 99% chance that Poe’s bilogical parents are
Filipinos. Said probability and circumstancial evidence are admissible under Rule 128, Sec 4 of the Rules on
Evidence.
(2) The SC pronounced that FOUNDLINGS are as a class, natural born- citizens as based on the deliberations of the
1935 Constitutional Convention, wherein though its enumeration is silent as to foundlings, there is no restrictive
language either to definitely exclude the foundlings to be natural born citizens.
while her husband stayed in theUS. She and her family stayed with her mother until she and husband was able
to purchase acondominium in San Juan sometime February 2006. On February 14, 2006, Poe returned to
theUS to dispose the other family belongings. She travelled back in March 2006. In early 2006, Poeand
husband acquired a property in Corinthian Hills in Quezon City where they built their familyhome.On July 7,
2006, Poe took her Oath of Allegiance to the Republic of the Philippines pursuant to R.A.9225. On July 10,
2006, she filed a sworn petition to reacquire Philippine citizenship together with

(3) That Foundlings are automatically conferred with the natural-born citizenship as to the country where they are
being found, as covered and supported by the UN Convention Law.

As to the residency issue, Grace Poe satisfied the 10-year residency because she satisfied the requirements
of ANIMUS MANENDI (intent to remain permanently) coupled with ANIMUS NON REVERTENDI (intent of
not returning to US) in acquiring a new domicile in the Philippines. Starting May 24,2005, upon returning to the
Philippines, Grace Poe presented overwhelming evidence of her actual stay and intent to abandon permanently her
domicile in the US, coupled with her eventual application to reacquire Filipino Citizenship under RA 9225. Hence,
her candidacy for Presidency was granted by the SC.

Case Digest of Llamzares v. COMELEC (Main Decision)Vena V. Verga

1
MaryGracePoe-LlamanzaresvsCOMELECetalG.R.NO.221697221698-700J.Perez
FACTS:
Grace Poe (Poe) was found abandoned in a church in Jaro Iloilo sometime 1968. Parental care waspassed to the
relatives of Edgardo Militar, the person who found the child. The relatives thenreported and registered the
child as a founding with the Civil Registrar of Iloilo. The child was thennamed Mary Grace Militar. The child
was subsequently adopted by Fernando Poe, Jr and Susan
Roces sometime in 1974. Necessary annotations were placed in the child’s foundling certificate
but it was only in 2005 that Susan Roces discovered that their lawyer failed to secure a new
Certificate of Live Birth indicating Poe’s new
name as well as the name of the adoptive parents.Roces then submitted an affidavit and in 2006, a Certificate
of Live Birth in the name of Mary GracePoe was released by the Civil Registry of Iloilo.At the age of 18, Poe
was registered as a voter of San Juan. In 1988, she was issued a Philippinepassport. In 1991, Poe married
Teodoro Llamanzares and flew to the US right after the wedding.She then gave birth to her eldest child in
the US. In 2001, Poe became a naturalized AmericanCitizen and she obtained a US Passport that same year.
In April 2004, Poe came back to the Philippines in order to support her father’s candidacy. It was
at this time that she gave birth to her youngest daughter. She then returned to the US in July 2004with her
two daughte
rs. Poe returned in December 2004 after learning of her father’s
deteriorating condition. The latter died and Poe stayed until February 2005 to take care of thefuneral
arrangements.Poe stated that she wanted to be with her grieving mother hence, she and her husband
decidedto move and reside permanently in the Philippines sometime first quarter of 2005. They prepared
for resettlement including notification of their children’s schools, coordination with property
movers and inquiry with Philippine authorities as to how they can bring their pet dog. Accordingto Poe, as early
as 2004, she already quit her job in the US.Poe came home on May 24, 2005 and immediately secured a TIN
Case Digest of Llamzares v. COMELEC (Main Decision)Vena V. Verga
2
petitions for derivative citizenship on behalf of her three children. The Bureau of Immigrationacted in favor
of the petition on July 18, 2006. She and her children were then considered dualcitizens. Poe then registered
as voter in August 2006 and secured a Philippine passport thereafter.On October 6, 2010, she was appointed
as Chairperson of the MTRCB. Before assuming her post,she executed an Affidavit of Renunciation of
Allegiance to the US before a notary public in PasigCity on October 20, 2010. The following day, she
submitted the Affidavit to the Bureau ofImmigration and took her oath as MTRCB Chairperson. According to
Poe, she stopped using herAmerican passport from then on.On July 12, 2011, Poe executed an
Oath/Affirmation of Renunciation of Nationality of the USbefore the Vice Consul of the US Embassy in
Manila. On December 9, 2011, the US Vice Consulissued a Certificate of Loss of Nationality of the
US effective October 21, 2010.On October 2, 2012, Poe filed with COMELEC her Certificate of Candidacy for
Senator stating thatshe was a resident of the Philippines for a period of 6 years and 6 months before May 13,
2013.She was then proclaimed a Senator on May 16, 2013.On October 15, 2015, Poe filed her COC for
the Presidency for the May 2016 elections. Shedeclared that she is a natural born and her residence in the
Philippine up to the day before electionwould be 10 years and 11 months counted from May 24,
2005.Several petitions were filed against Poe alleging that (1) she committed materialmisrepresentation in her
COC when she stated that she is a resident of the Philippines for at least10 years 11 months up to the day
before May 9, 2016 Elections, (2) she is not natural bornconsidering that Poe is a foundling. It was argued
that international law does not confer naturalborn status and Filipino citizenship to foundlings hence, she is
not qualified to apply forreacquisition of Filipino citizenship under R.A.9225 as she is not a natural citizen to
begin with.Assuming that Poe was a natural born citizen, she lost it when she became a US Citizen.In addition,
one of the petitioners, Francisco Tatad, theorized that:
1.
Philippines adhere to the principle of
jussanguinis
and hence persons of unknownparentage, particularly foundlings, are not natural born Filipino citizens.
2.
The issue before the COMELEC is whether the COC should be denied due course ‘on the exclusiveground’ that
she made in the certificate a false material representation. COMELEC should restra
initself from going into the issue of qualifications of the candidate. It cannot, in the samecancellation case,
decide the qualification or lack thereof of a candidate. Not one of theenumerated powers of the COMELEC as
stated in Article IX C, Sec. 2 of the Constitution grants thecommission the power to determine the
qualifications of a candidate. Such powers are grantedto the Electoral Tribunal as stated in Article VI Section
17 and the Supreme Court under Article VII,Section 4 of the Constitution.Insofar as the qualification of a
candidate is concerned, Rule 25 and Rule 23 of the COMELEC rulesdo not allow, are not authorization and are
not vestment of jurisdiction for the COMELEC todetermine the qualification of a candidate. The facts of
qualification must first be established in aprior proceeding before an authority vested with jurisdiction. Prior
determination of qualificationmay be by statute, by an executive order or by a judgment of a competent court
or tribunal.

Using statutory construction, considering that foundlings were not expressly included inthe categories of
citizens in the 1935 Constitution, the framers are said to have theintention to exclude them3.

International conventions are not self-executory hence, local legislations are necessary togive effect to
obligations assumed by the Philippines.4.

There is no standard practice that automatically confers natural born status to foundlings.

Case Digest of Llamzares v. COMELEC (Main Decision)Vena V. Verga

3
Petitioner Valdez alleged that Poe’s repatriation under R.A 9225 did not bestow upon her the
status of a natural born citizen as those who repatriates only acquires Philippine citizenship andnot their
original status as natural born citizens.Poe countered these petitions by alleging that:1.

The grounds invoked by the petitioners were not proper grounds for a disqualification caseas enumerated
under Section 12 and 68 of the Omnibus Election Code.2.

What the petitioners filed focus on establishing her ineligibility, hence, they fall within theexclusive
jurisdiction of the Presidential Electoral Tribunal, not the COMELEC.3. NICARAGUA VS THE UNITED STATES: USE OF FORCE AND SELF-DEFENSE (1 OF 3)

The July 18, 2006 Order of the Bureau of Immigration declaring her as natural born, herappointment as
MTRCB Chair and the issuance of the decree of adoption reinforced herposition as a natural born citizen4.
International Court of Justice Contentious Case: Case Concerning the Military and Paramilitary Activities In and
As early as first quarter of 2005, she started to reestablish her domicile in the Philippinesand that she can Against Nicaragua (Nicaragua vs United States)
reestablish her domicile of choice even before she renounced herAmerican citizenship.5.
Year of Decision: 1986.
The period of residency as stated in her COC for senator was a mistake in good faith.COMELEC ruled against
the petitioner resolving that she is not a natural born citizen and that shefailed to complete the 10 year Note: This post will discuss the International Court of Justice’s (ICJ) discussions on the use of force and self-defence. If you
residency requirement. Hence, the present petition for would like to read about the ICJ’s discussions on jurisdictional issues relating to the multilateral treaty reservation of the United
certiorari States and the ICJ’s reliance on customary law, please click here.
before the Supreme Court.
For a diagram on some of the points discussed here, click here. It is recommended to use the diagram alongside this blog post.
ISSUESANDRATIO:1 Whether the COMELEC has jurisdiction to disqualify POE
The procedure and the conclusions from which the Resolutions of the COMELEC emanated aretainted with
grave abuse of discretion amounting to lack of jurisdiction.
Overview:

The case involved military and paramilitary activities carried out by the United States against Nicaragua from 1981 to 1984.
Nicaragua asked the Court to find that these activities violated international law.

Facts of the Case:

In July 1979, the Government of President Somoza was replaced by a government installed by Frente Sandinista de
Liberacion Nacional (FSLN). Supporters of the former Somoza Government and former members of the National Guard
opposed the new government. The US – initially supportive of the new government – changed its attitude when, according to the
United States, it found that Nicaragua was providing logistical support and weapons to guerrillas in El Salvador. In April 1981
the United States stopped its aid to Nicaragua and in September 1981, according to Nicaragua, the United States “decided to plan
and undertake activities directed against Nicaragua”.

The armed activities against the new Government was carried out mainly by (1) Fuerza Democratica Nicaragüense (FDN),
which operated along the border with Honduras, and (2) Alianza Revolucionaria Democratica (ARDE), which operated along
the border with Costa Rica. Initial US support to these groups fighting against the Nicaraguan Government (called “contras”)
was covert. Later, the United States 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 United States is effectively in control of the contras, the United States devised their strategy and
directed their tactics, and that the contras were paid for and directly controlled by the United States. Nicaragua also alleged that
some attacks against Nicaragua were carried out, directly, by the United States military – with the aim to overthrow the
Government of Nicaragua. Attacks against Nicaragua included the mining of Nicaraguan ports, and other attacks on ports, oil
installations, and a naval base. Nicaragua alleged that aircrafts belonging to the United States flew over Nicaraguan territory to
gather intelligence, supply to the contras in the field, and to intimidate the population.

The United States did not appear before the ICJ at the merit stages, after refusing to accept the ICJ’s jurisdiction to decide the
case. The United States at the jurisdictional phase of the hearing, however, stated that it relied on an inherent right of collective
self-defence guaranteed in A. 51 of the UN Charter when it provided “upon request proportionate and appropriate assistance…”
to Costa Rica, Honduras, and El Salvador in response to Nicaragua’s acts of aggression against those countries (paras 126, 128). F1: Map of Nicaragua, Costa Rica, Honduras and El Salvador. Source: Google Earth

Questions before the Court:

1. Did the United States violate 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 when it encouraged, supported, and
aided the military and paramilitary activities against Nicaragua?

2. Did the United States violate its customary international law obligation not to use force against another State, when
it directly attacked Nicaragua in 1983 and 1984 and when its activities in point (1) above resulted in the use of force?

3. Can the military and paramilitary activities that the United States undertook in and against Nicaragua be justified as
collective self-defence?

4. Did the United States breach its customary international law obligation not to violate the sovereignty of another
State, when it directed or authorized its aircrafts to fly over the territory of Nicaragua and because of acts referred to
in (2) above?
 5. Did the United States 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 in the territorial sea of Nicaragua?
The Court’s Decision:
(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 (sic) armed
force against another State of such gravity as to amount to (inter alia) an actual armed attack conducted by regular forces, or its
(the State’s) substantial involvement therein”.

The United States violated customary international law in relation to (1), (2), (4) and (5) above. On (3), the Court found that the Note also that that he second point somewhat resembles Article 3(g) of the UNGA Resolution 3314 (XXIX) on the Definition of
United States could not rely on collective self-defence to justify its use of force against Nicaragua. Aggression.

Relevant Findings of the Court: The Court further held that:

1. The Court held that the United States violated its customary international law obligation not to use force against  Mere frontier incidents will not considered as armed attacks, unless, because of its scale and effects, it would have
another State when its activities with the contras resulted in the threat or use of force (see paras 191-201). been classified as an armed attack had it been carried out by regular forces.

The Court held that:  Assistance to rebels by providing weapons or logistical support did not constitute an armed attack. Instead, it can
be regarded as a threat or use of force or an intervention in the internal or external affairs of other States (see paras
195, 230).
 The prohibition on the use of force is found both in Article 2(4) of the Charter of the United Nations (UN
Charter) and in customary international law.
 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).
 In a controversial finding the Court sub-classified the use of force as:

(1) “most grave forms of the use of force” (i.e. those that constitute an armed attack); and
(2) “other less grave forms” of the use of force (i.e. organizing, instigating, assisting, or participating in acts of civil strife and
terrorist acts in another State – when the acts referred to involve a threat or use of force, but not amounting to an armed attack).
(Para 191),
 The United States violated the customary international law prohibition on the use of force when it laid mines in
Nicaraguan ports. It also violated this prohibition when it attacked Nicaraguan ports, oil installations, and a naval
base (see below). The United States could only justify its action on the basis of collective self-defence, if certain
criteria were met (these criteria are discussed below).
Note: In in the ICJ’s Case Concerning Oil Platforms and the ICJ’s Advisory Opinion on the Legal Consequences of of the
Construction of a Wall in the Occupied Palestinian Territory (hereinafter called the Palestine wall case) the ICJ confirmed the
definition of an “armed attack” as proposed in the Nicaragua case. Draft Articles on State Responsibility, prepared by the
International Law Commission, provides significant guidance as to when acts of non-State actors may be attributed to States.
These articles, together with recent State practice relating attacks on terrorists operating from other countries may have
widened the scope of an armed attack, and consequently, the right of self defence, envisaged by the ICJ. (for example,
see discussion surrounding the United States’ attacks in Afghanistan and Iraq) See also a paper by Max Plank Institute on this
topic (2017).

 The United States violated the customary international law 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 participated “in acts of civil strife…in another State” and when these acts involved
the threat or use of force.

 The supply of funds to the contras did not violate the prohibition on the use of force. On the contrary, Nicaragua had
previously argued before the Court that the United States determined the timing of offensives against
Nicaragua when it provided funds to the contras. The Court held that “…it does not follow that each provision of
funds by the United States was made to set in motion a particular offensive, and that that offensive was planned by
the United States.” The Court held further that the arming and training of the contras and the supply of funds, in
itself, only amounted to acts of intervention in the internal affairs of Nicaragua and did not violate the prohibition on
the use of force (para 227) (again, this aspect will be discussed in detail below).

2. The Court held that the United States violated its customary international law obligation not to use force against
another State when it directly attacked Nicaragua in 1983 and 1984 (see paras 187 – 201).

Note: A controversial but interesting aspect of the Court’s judgement was its definition of an armed attack. The Court held that
an armed attack included:

F 2. The most serious use of force and its consequences. Full diagram is here.
3. The Court held that the United States could not justify its military and paramilitary activities on the basis of
collective self-defence.
Note that Article 51 of the UN Charter sets out the treaty based requirements on the exercise of the right of self-defense. It states:
“Nothing in the present Charter shall impair the inherent right of individual or collectiveself-defence if an armed
attack occurs against a Member of the United Nations, until the Security Council has taken measures necessary to maintain
international peace and security. Measures taken by Members in the exercise of this right of self-defence shall be immediately
reported to the Security Council.”
The Court held that:
 Customary international law allows for exceptions to the prohibition on the use of force, which includes the right to
individual or collective self-defence (see here for a difference between individual and collective self defense). The
United States, at an earlier stage of the proceedings, had also agreed that the UN Charter acknowledges the
existence of this customary international law right when it talks of the “inherent” right under Article 51 of the
Charter (para.193).
 When a State claims that it used force in collective self-defence, the Court would examine the following:
(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.
 Under international law, several requirements 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) That State must declare itself as a victim of an armed attack. The assessment on whether an armed attack had taken place or
not, is done by the State who was subjected to the attack. A third State cannot exercise a right of collective self-defence based
that third State’s own assessment;
(3) In the case of collective self-defence, the victim State must request for assistance. The Court held that “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) A State that is attacked, does not, under customary international law, 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 Court held that “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 paras 200,
232 -236).
“…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 (See paras 200, 232 -236)”.
 The Court, then, looked extensively into the conduct of Nicaragua, El Salvador, Costa Rica, and Honduras to
determine if (1) an armed attack was undertaken by Nicaragua against the three countries, which in turn would (2)
necessitate those countries to act in self-defence against Nicaragua (paras 230 – 236). The Court noted that
(1) none of the countries who were allegedly subject to an armed attack by Nicaragua declared themselves as
victims of an armed attack; (2) they did not request assistance from the United States to exercise its right of self-
defence; (3) the United States did not claim that when it used force, it was acting under Article 51 of the UN Charter;
and (4) the United States did not report that it was acting in self-defense to the Security Council. The Court
concluded that, based on the above, the United States cannot justify its use of force as collective self-defence.
 In any event, the Court held that the criteria relating to necessity and proportionality, that is required to be
met when using force in self-defence – were also not fulfilled (para 237).
4. The Court held that the United States 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.
The Court held that:
 The principle of non-intervention requires that every State has a right to conduct its affairs without outside
interference. In other words, the principle “…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. The
Court held that:
“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).”
 Nicaragua stated that the activities of the United States were aimed to overthrow the government of Nicaragua, to
substantially damage the economy and to weaken the political system with the aim to coerce the Government of
Nicaragua to accept various political demands of the United States. The Court concluded that:
“…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.”
 The financial support, training, supply of weapons, intelligence and logistic support given by the United States to the
contras violated the principle of non-interference. “…(N)o 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).
F 3. The prohibition on non intervention. For full diagram, click here.
 However, in a controversial finding, the Court held that the United States did not devise the strategy, direct the
tactics of the contras or exercise control on them in manner so as to make their acts committed in violation of
international law imputable to the United States (see in this respect “Determining US responsibility for contra
operations under international law” 81 AMJIL 86). The Court concluded that “a number of military and paramilitary
operations of the contras were decided and planned, if not actually by United States advisers, then at least in close
collaboration with them, and on the basis of the intelligence and logistic support which the United States was able
to offer, particularly the supply aircraft provided to the contras by the United States” but not all contra operations
reflected strategy and tactics wholly devised by the United States.
“…the various forms of assistance provided to the contras by the United States have been crucial to the pursuit of their activities,
but is insufficient to demonstrate their complete dependence on United States aid. On the other hand, it indicates that in the
initial years of United States assistance the contra force was so dependent. However, whether the United States Government at
any stage devised the strategy and directed the tactics of the contras depends on the extent to which the United States made use
of the potential for control inherent in that dependence. The Court already indicated that it has insufficient evidence to reach a
finding on this point. It is a fortiori unable to determine that the contra force may be equated for legal purposes with the forces of
the United States…The Court has taken the view (paragraph 110 above) that United States participation, even if preponderant or
decisive, in the financing, organizing, training, supplying and equipping of the contras, the selection of its military or
paramilitary targets, and the planning of the whole of its operation, is still insufficient in itself, on the basis of the evidence in the
possession of the Court, for the purpose of attributing to the United States the acts committed by the contras in the course of their
military or paramilitary operations in Nicaragua. All the forms of United States participation mentioned above, and even the
general control by the respondent State over a force with a high degree of dependency on it, would not in themselves mean,
without further evidence, that the United States directed or enforced the perpetration of the acts contrary to human rights and
humanitarian law alleged by the applicant State. Such acts could well be committed by members of the contras without the
control of the United States. For this conduct to give rise to legal responsibility of the United States, it would in principle have to
be proved that that State had effective control of the military or paramilitary.”
 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).
 In the event one State intervenes in the affairs of another State, the victim 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 211 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 judgment including separate opinions of individual judges and summaries of the judgment and orders

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INTERNATIONAL COURT OF JUSTICE,

Judgment of 27 June 1986,

CASE CONCERNING MILITARY AND PARAMILITARY ACTIVITIES

IN AND AGAINST NICARAGUA

(NICARAGUA v. UNITED STATES OF AMERICA),

MERITS

[...]

80. [...] The Court finds it established that, on a date in late 1983 or early 1984, the President of the United
States authorized a United States government agency to lay mines in Nicaraguan ports; that in early 1984
mines were laid in or close to the ports of El Bluff, Corinto and Puerto Sandino, either in Nicaraguan
internal waters or in its territorial sea or both, by persons in the pay and acting on the instructions of that
agency, under the supervision and with the logistic support of United States agents; that neither before the
laying of the mines, nor subsequently, did the United States Government issue any public and official
F 4. The less grave forms of use of force and its consequences. Full diagram is here. warning to international shipping of the existence and location of the mines; and that personal and
material injury was caused by the explosion of the mines [...].

5. The United States violated 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 Court examined evidence and found that in early 1984 mines were laid in or close to ports of the territorial sea
or internal waters of Nicaragua “by persons in the pay or acting ion the instructions” of the United States and acting
under its supervision with its logistical support. The United States did not issue any warning on the location or
existence of mines and this resulted in injuries and increases in maritime insurance rates.
[...]
 The Court found that the United States also carried out high-altitude reconnaissance flights over Nicaraguan
territory and certain low-altitude flights, complained of as causing sonic booms. It held that a State’s sovereignty
extends to its internal waters, its territorial sea, and the airspace above its territory. The United States violated
customary international law when it laid mines in the territorial sea and internal waters of Nicaragua and when it
carried out unauthorised overflights over Nicaraguan airspace by aircrafts that belong to or was under the control of
the United States..
 with a high degree of dependency on it, would not in themselves mean, without further evidence, that the
Material on the Nicaragua case
Nicaragua vs United States: Summary Diagram for Use of Force (Full diagram in PDF)
99. The Court finds at all events that from 1981 until September 30, 1984 the United States Government was
providing funds for military and paramilitary activities by the contras [the armed opposition to the
government of Nicaragua] in Nicaragua, and thereafter for “humanitarian assistance”. [...]
115. [...]The United States participation, even if preponderant or decisive, in the financing, organizing, training,
supplying and equipping of the contras, the selection of its military or paramilitary targets, and the
planning of the whole of its operation, is still insufficient in itself, on the basis of the evidence in the
possession of the Court, for the purpose of attributing to the United States the acts committed by
the contras in the course of their military or paramilitary operations in Nicaragua. All the forms of United
States participation mentioned above, and even the general control by the respondent State over a force
United States directed or enforced the perpetration of the acts contrary to human rights and humanitarian
law alleged by the applicant State. Such acts could well be committed by members of the contras without
the control of the United States. For this conduct to give rise to legal responsibility of the United States, it
would in principle have to be proved that State had effective control of the military or paramilitary
operations in the course of which the alleged violations were committed.
 116. The Court does not consider that the assistance given by the United States to the contras warrants the
conclusion that these forces are subject to the United States to such an extent that any acts they have
committed are imputable to that State. It takes the view that the contras remain responsible for their acts,
and that the United States is not responsible for the acts of the contras, but for its own conduct vis-à-vis
Nicaragua, including conduct related to the acts of the contras. What the court has to investigate is not the
complaints relating to alleged violations of humanitarian law by the contras, regarded by Nicaragua as
imputable to the United States, but rather unlawful acts for which the United States may be responsible
directly in connection with the activities of the contras. The lawfulness or otherwise of such acts of the
United States is a question different from the violations of humanitarian law of which the contras may or
may not have been guilty. It is for this reason that the Court does not have to determine whether the
violations of humanitarian law attributed to the contraswere in fact committed by them. At the same time,
the question whether the United States Government was, or must have been, aware at the relevant time
that allegations of breaches of humanitarian law were being made against the contras is relevant to an
assessment of the lawfulness of the action of the United States. In this respect, the material facts are
primarily those connected with the issue in 1983 of a manual of psychological operations.
117. Nicaragua has in fact produced in evidence before the Court two publications which it claims were
prepared by the CIA and supplied to the contras in 1983. The first of these, in Spanish, is
entitled “Operaciones sicológicas en guerra de guerrillas” (Psychological Operations in Guerrilla
Warfare), by “Tayacan”, the certified copy supplied to the Court carries no publisher’s name or date. In its
Preface, the publication is described as
“a manual for training of guerrillas in psychological operations, and its application to the concrete case of the
Christian and democratic crusade being waged in Nicaragua by the Freedom Commandos”. [...]
122. The Court concludes that in 1983 an agency of the United States Government supplied to the FDN a
manual on psychological guerrilla warfare which, while expressly discouraging indiscriminate violence
against civilians, considered the possible necessity of shooting civilians who were attempting to leave a
town; and advised the “neutralization” for propaganda purposes of local judges, officials or notables after
the semblance of trial in the presence of the population. The text supplied to the contras also advised the
use of professional criminals to perform unspecified “jobs”, and the use of provocation at mass
demonstrations to produce violence on the part of the authorities so as to make “martyrs”. [...]
[Because of a reservation made by the US in accepting the jurisdiction of the ICJ, the Court could not apply
multilateral treaties to the facts of the case.]
174. [...] The Court would observe that, according to the United States argument, it should refrain from
applying the rules of customary international law because they have been “subsumed” and “supervened” by
those of international treaty law, and especially those of the United Nations Charter. Thus the United
States apparently takes the view that the existence of principles in the United Nations Charter precludes
the possibility that similar rules might exist independently in customary international law, either because
existing customary rules had been incorporated into the Charter, or because the Charter influenced the
later adoption of customary rules with a corresponding content.
175. The Court does not consider that, in the areas of law relevant to the present dispute, it can be claimed that
all the customary rules which may be invoked have a content exactly identical to that of the rules contained
in the treaties which cannot be applied by virtue of the United States reservation. On a number of points,
the areas governed by the two sources of law do not exactly overlap, and the substantive rules in which they
are framed are not identical in content. But in addition, even if a treaty norm and a customary norm
relevant to the present dispute were to have exactly the same content, this would not be a reason for the
Court to take the view that the operation of the treaty process must necessarily deprive the customary
norm of its separate applicability. Nor can the multilateral treaty reservation be interpreted as meaning
that, once applicable to a given dispute, it would exclude the application of any rule of customary
international law the content of which was the same as, or analogous to, that of the treaty law rule which
had caused the reservation to become effective.
176. [...] The Court therefore finds that Article 51 of the Charter is only meaningful on the basis that there is a
“natural” or “inherent” right of self-defence, and it is hard to see how this can be other than of a customary
nature, even if its present content has been confirmed and influenced by the Charter. Moreover the
Charter, having itself recognized the existence of this right, does not go on to regulate directly all aspects of
its content. For example, it does not contain any specific rule whereby self-defence would warrant only
measures which are proportional to the armed attack and necessary to respond to it, a rule well established
in customary international law. [...]
177. [...] The existence of identical rules in international treaty law and customary law has been clearly
recognized by the Court in the North Sea Continental Shelf cases. To a large extent, those cases turned on
the question whether a rule enshrined in a treaty also existed as a customary rule, either because the treaty
had merely codified the custom, or caused it to “crystallize”, or because it had influenced its subsequent
adoption. The Court [...] considered it to be clear that certain other articles of the treaty in question
“were ... regarded as reflecting, or as crystallizing, received or at least emergent rules of customary
international law” (I.C.J. Reports 1969, p. 39, para. 63). [...]
178. There are a number of reasons for considering that, even if two norms belonging to two sources of
international law appear identical in content, and even if the States in question are bound by these rules
both on the level of treaty-law and on that of customary international law, these norms retain a separate
existence. This is so from the standpoint of their applicability. In a legal dispute affecting two States, one of
them may argue that the applicability of a treaty rule to its own conduct depends on the other State’s
conduct in respect of the application of other rules, on other subjects, also included in the same treaty. [...]
Rules which are identical in treaty law and in customary international law are also distinguishable by
reference to the methods of interpretation and application. A State may accept a rule contained in a treaty
not simply because it favours the application of the rule itself, but also because the treaty establishes what
that State regards as desirable institutions or mechanisms to ensure implementation of the rule. Thus, if
that rule parallels a rule of customary international law, two rules of the same content are subject to
separate treatment as regards the organs competent to verify their implementation, depending on whether
they are customary rules or treaty rules. The present dispute illustrates this point. [...]
181. [...] Far from having constituted a marked departure from a customary international law which still exists
unmodified, the Charter gave expression in this field to principles already present in customary
international law, and that law has in the subsequent four decades developed under the influence of the
Charter, to such an extent that a number of rules contained in the Charter have acquired a status
independent of it. [...]
182. The Court concludes that it should exercise the jurisdiction conferred upon it by the United States
declaration of acceptance under Article 36, paragraph 2, of the Statute, to determine the claims of
Nicaragua based upon customary international law [...].
185. In the present dispute, the Court, while exercising its jurisdiction only in respect of the application of the
customary rules of non-use of force and non-intervention, cannot disregard the fact that the Parties are
bound by these rules as a matter of treaty law and of customary international law. Furthermore, in the
present case, apart from the treaty commitments binding the Parties to the rules in question, there are
various instances of their having expressed recognition of the validity thereof as customary international
law in other ways. It is therefore in the light of this “subjective element” – the expression used by the Court
in its 1969 Judgement in the North Sea Continental Shelf cases (I.C.J. Reports 1969, p. 44) – that the
Court has to appraise the relevant practice.
186. It is not to be expected that in the practice of States the application of the rules in question should have
been perfect, in the sense that States should have refrained, with complete consistency, from the use of
force or from intervention in each other’s internal affairs. The Court does not consider that, for a rule to be
 established as customary, the corresponding practice must be in absolutely rigorous conformity with the
rule. In order to deduce the existence of customary rules, the Court deems it sufficient that the conduct of
States should, in general, be consistent with such rules, and that instances of States conduct inconsistent
with a given rule should generally have been treated as breaches of that rule, not as indications of the
recognition of a new rule. If a State acts in a way prima facie incompatible with a recognized rule, but
defends its conduct by appealing to exceptions or justifications contained within the rule itself, then
whether or not the State’s conduct is in fact justifiable on that basis, the significance of that attitude is to
confirm rather than to weaken the rule. [...]
207. [...] The significance for the Court of cases of State conduct prima facie inconsistent with the principle of
non-intervention lies in the nature of the ground offered as justification. Reliance by a State on a novel
right or an unprecedented exception to the principle might, if shared in principle by other States, tend
towards a modification of customary international law. In fact however the Court finds that States have not
justified their conduct by reference to a new right of intervention or a new exception to the principle of its
prohibition. [...]
[...]
Judgment - para. 215 to 292
219. The conflict between the contras’ forces and those of the Government of Nicaragua is an armed conflict
215. The Court has noted above (paragraph 77 in fine) that the United States did not issue any
warning or notification of the presence of the mines which had been laid in or near the ports of Nicaragua.
Yet even in time of war, the Convention relative to the laying of automatic submarine contact mines of
October 18, 1907 (the Hague Convention No. VIII) provides that “every possible precaution must be taken
for the security of peaceful shipping” and belligerents are bound
“to notify the danger zones as soon as military exigencies permit, by a notice addressed to ship owners,
which must also be communicated to the Governments through the diplomatic channel” (Art. 3).
220. The Court considers that there is an obligation on the United States Government, in the terms of Article 1
Neutral Powers which lay mines off their own coasts must issue a similar notification, in advance (Art. 4).
It has already been made clear above that in peacetime for one State to lay mines in the internal or
territorial water of another is an unlawful act; but in addition, if a State lays mines in any waters whatever
in which the vessels of another State have rights of access or passage, and fails to give any warning or
notification whatsoever, in disregard of the security of peaceful shipping,
it commits a breach of the principles of humanitarian law underlying the specific provisions of Convention
No. VIII of 1907. Those principles were expressed by the Court in the Corfu Channel case as follows
“certain general and well recognized principles, namely: elementary considerations of humanity, even
more exacting in peace than in war” (I.C.J. Reports 1949, p. 22).
242. The Court therefore finds that the support given by the United States, up to the end of September 1984, to
216. This last consideration leads the Court on to examination of the international humanitarian law applicable
to the dispute. Clearly, use of force may in some circumstances raise questions of such law. [...]
218. [...] The conduct of the United States may be judged according to the fundamental general
principles of humanitarian law; in its view, the Geneva Conventions are in some respects a development,
and in other respects no more than the expression, of such principles. It is significant in this respect that,
according to the terms of the Conventions, the denunciation of one of them “shall in no way impair the
obligations which the Parties to the conflict shall remain bound to fulfil by virtue of the principles of the
law of nations, as they result from the usage established among civilized peoples, from the laws of
humanity and the dictates of the public conscience” (Convention I, Art. 63; Convention II, Art.
62; Convention III, Art. 142; Convention IV, Art. 158).
Article 3 which is common to all four Geneva Conventions of August 12, 1949 defines certain rules to be
applied in the armed conflicts of a non-international character. There is no doubt that, in the event of
international armed conflicts, these rules also constitute a minimum yardstick, in addition to the more
elaborate rules which are also to apply to international conflicts; and they are rules which, in the Court’s
opinion, reflect what the Court in 1949 called “elementary considerations of humanity” (Corfu Channel,
Merits, I.C.J. Reports 1949, p. 22; paragraph 215 above). The Court may therefore find them applicable to
the present dispute, and is thus not required to decide what role the United States multilateral treaty
reservation might otherwise play in regard to the treaties in question.
[In his separate opinion, I.C.J. Reports 1986, p. 183, Roberto Ago writes on this point: “6. [...] I am bound
to express serious reservations with regard to the seeming facility with which the Court – while expressly
denying that all the customary rules are identical in content to the rule in the treaties (para. 175) – has
nevertheless concluded in respect of certain key matters that there is a virtual identity of content as
between customary international law and the law enshrined in certain major multilateral treaties
concluded on a universal or regional plane. [...] I am moreover most reluctant to be persuaded that any
broad identity of content exists between the Geneva Conventions and certain ‘fundamental general
principles of humanitarian law’, which, according to the Court, were pre-existent in customary law, to
which the Conventions ‘merely give expression’ (para. 220) or of which they are at most ‘in some respects
a development’ (para. 218). Fortunately, after pointing out that the Applicant has not relied on the four
Geneva Conventions of 12 August 1949, the Court has shown caution in regard to the consequences of
applying this idea, which in itself is debatable.”]
which is “not of an international character”. The acts of the contras towards the Nicaraguan Government
are therefore governed by the law applicable to conflicts of that character; whereas the actions of the
United States in and against Nicaragua fall under the legal rules relating to international conflicts. Because
the minimum rules applicable to international and to non-international conflicts are identical, there is no
need to address the question whether those actions must be looked at in the context of the rules which
operate for the one or for the other category of conflict. The relevant principles are to be looked for in the
provisions of Article 3 of each of the four Conventions of August 12, 1949, the text of which, identical in
each Convention, expressly refers to conflict not having an international character.
of the Geneva Conventions, to “respect” the Conventions and even “to ensure respect” for them “in all
circumstances”, since such an obligation does not derive only from the Conventions themselves, but from
the general principles of humanitarian law to which the Conventions merely give specific expression. The
United States is thus under an obligation not to encourage persons or groups engaged in the conflict in
Nicaragua to act in violation of the provisions of Article 3 common to the four 1949 Geneva Conventions,
which reads as follows:
[Here the full text of this Article is quoted] [...]
the military and paramilitary activities of the contras in Nicaragua, by financial support, training, supply of
weapons, intelligence and logistic support, constitutes a clear breach of the principle of non-intervention.
The Court has however taken note that, with effect from the beginning of the United States governmental
financial year 1985, namely 1 October 1984, the United States Congress has restricted the use of the funds
appropriated for assistance to the contras to “humanitarian assistance” [...]. There can be no doubt that the
provision of strictly 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. The characteristics of such aid were indicated in the first and second of the fundamental
principles declared by the Twentieth International Conference of the Red Cross, that
“The Red Cross, born of desire to bring assistance without discrimination to the wounded on the
battlefield, endeavours – in its international and national capacity – to prevent and alleviate human
suffering wherever it may be found. Its purpose is to protect life and health and to ensure respect for the
human being. It promotes mutual understanding, friendship, co-operation and lasting peace amongst all
peoples”
 and that
“It makes no discrimination as to nationality, race, religious beliefs, class or political opinions. It
endeavours only to relieve suffering, giving priority to the most urgent cases of distress.”
243. The United States legislation which limited aid to the contras to humanitarian assistance however also
defined what was meant by such assistance, namely:
“the provision of food, clothing, medicine, and other humanitarian assistance, and it does not include the
provision of weapons, weapons systems, ammunition, or other equipment, vehicles, or material which can
be used to inflict serious bodily harm or death” [...].
It is also to be noted that, while the United States Congress has directed that the CIA and Department of
Defense are not to administer any of the funds voted, it was understood that intelligence information might
be “shared” with the contras. Since the Court has no information as to the interpretation in fact given to
the Congress decision, or as to whether intelligence information is in fact still being supplied to
the contras, it will limit itself to a declaration as to how the law applies in this respect. An essential feature
of truly humanitarian aid is that it is given “without discrimination” of any kind. In view of the Court, if the
provision of “humanitarian assistance” is to escape condemnation as an intervention in the internal affairs
of Nicaragua, not only must it be limited to the purposes hallowed in the practice of the Red Cross, namely
“to prevent and alleviate human suffering”, and “to protect life and health and to ensure respect for the
human being”; it must also, and above all, be given without discrimination to all in need in Nicaragua, not
merely to the contrasand their dependants.
[...]
254. The Court now turns to the question of the application of humanitarian law to the activities of the United
States complained of in this case. Mention has already been made (paragraph 215 above) of the violations
of customary international law by reason of the failure to give notice of the mining of the Nicaraguan ports,
for which the Court has found the United States directly responsible. Except as regards the mines,
Nicaragua has not however attributed any breach of humanitarian law to either United States personnel or
the “UCLAs” [”Unilaterally Controlled Latino Assets” acronym used by the CIA for Latin American citizens,
paid by, and acting under the direct instructions of, United States military or intelligence personnel], as
distinct from the contras. The Applicant has claimed that acts perpetrated by the contras constitute
breaches of the “fundamental norms protecting human rights”; it has not raised the question of the law
applicable in the event of conflict such as that between the contras and the established Government. In
effect, Nicaragua is accusing the contras of violations both of the law of human rights and humanitarian
law, and is attributing responsibility for these acts to the United States. The Court has however found
(paragraphs 115, 216) that this submission of Nicaragua cannot be upheld; but it has also found the United
States responsible for the publication and dissemination of the manual on “Psychological Operations in
Guerrilla Warfare” referred to in paragraphs 118 to 122 above.
255. The Court has also found (paragraphs 219 and 220 above) that general principles of humanitarian law
include a particular prohibition, accepted by States, and extending to activities which occur in the context
of armed conflicts, whether international in character or not. By virtue of such general principles, the
United States is bound to refrain from encouragement of persons or groups engaged in the conflict in
Nicaragua to commit violations of Article 3 which is common to all four Geneva Conventions of August 12,
1949. The question here does not of course relate to the definition of the circumstances in which one State
may be regarded as responsible for acts carried out by another State, which probably do not include the
possibility of incitement. The Court takes note of the advice given in the manual on psychological
operations to “neutralize” certain “carefully selected and planned targets”, including judges, police officers,
State Security officials, etc., after the local population have been gathered in order to “take part in the act
and formulate accusations against the oppressor”. In view of the Court, this must be regarded as contrary
to the prohibition in Article 3 of the Geneva Conventions, with respect to non-combatants, of
“the passing of sentences and the carrying out of executions without previous judgement pronounced by a
regularly constituted court, affording all the judicial guarantees which are recognized as indispensable by
civilized peoples”
and probably also of the prohibition of “violence to life and person, in particular murder to all kinds, ... .”
256. It is also appropriate to recall the circumstances in which the manual of psychological operations was
issued. When considering whether the publication of such a manual, encouraging the commission of acts
contrary to general principles of humanitarian law, is unlawful, it is material to consider whether that
encouragement was offered to persons in circumstances where the commission of such acts was likely or
foreseeable. The Court has however found [...] that at the relevant time those responsible for the issue of
the manual were aware of, at the least, allegations that the behaviour of the contras in the field was not
consistent with humanitarian law; it was in fact even claimed by the CIA that the purpose of the manual
was to “moderate” such behaviour. The publication and dissemination of a manual in fact containing the
advice quoted above must therefore be regarded as an encouragement, which was likely to be effective, to
commit acts contrary to general principles of international humanitarian law reflected in treaties. [...]
Decision
THE COURT
[...]
(8) By fourteen votes to one,
Decides that the United States of America, by failing to make known the existence and location of the mines laid
by it, referred to in subparagraph (6) hereof, has acted in breach of its obligations under customary international
law in this respect; [...]
(9) By fourteen votes to one,
Finds that the United States of America, by producing in 1983 a manual entitled Operaciones sicológicas en
guerra de guerillas, and disseminating it to contra forces, has encouraged the commission by them of acts
contrary to general principles of humanitarian law: but does not find a basis for concluding that any such acts
which may have been committed are imputable to the United States of America as acts of the United States of
America; [...]
Discussion
1. (Paras 174-178, 181) Does a rule of customary international law continue to be in force between States
party to a multilateral treaty codifying that rule? Even if the two rules are identical? Why? May the
contents of the customary rule be influenced by the treaty rule? By the practice of States bound by the
treaty?
2. (Paras 185, 186, 207) Does a treaty commitment “count” as practice for customary international law? Can
a rule belong to customary international law even if the behaviour of States frequently fails to conform with
the rule in question? What is the importance of the Court’s ruling on these points for IHL?
3. (Para. 219) How does the Court qualify the conflict in Nicaragua?
4. (Paras 80, 215, 254) Was the laying of mines in or near the ports of Nicaragua a violation of international enclave and the other to the extent necessary for the exercise of its sovereignty and
law? Of IHL? What did violate IHL? Was IHL at all applicable? (Hague Convention VIII, Arts 3-4) subject to the regulation and control of India ; it also claimed that, in July 1954,
contrary to the practice previously followed, India had prevented it from exercising
5. (Paras 218, 219) Does Art. 3 common to the Conventions apply to international armed conflicts? As that right and that that situation should be redressed. A first Judgment, delivered on
customary law? Does the Martens Clause prove that Art. 3 common to the Conventions is customary law? 26 November 1957, related to the jurisdiction of the Court, which had been challenged
That the whole of IHL is customary law? by India. The Court rejected four of the preliminary objections raised by India and
joined the other two to the merits. In a second Judgment, delivered on 12 April 1960,
6. (Para. 220) Is Art. 1 common to the Conventions applicable in non-international armed conflicts? As a after rejecting the two remaining preliminary objections, the Court gave its decision
treaty rule? As a customary rule? Or both? on the claims of Portugal, which India maintained were unfounded. The Court found
that Portugal had in 1954 the right of passage claimed by it but that such right did not
7. (Paras 115-122, 254-256, 292(9)) extend to armed forces, armed police, arms and ammunition, and that India had not
acted contrary to the obligations imposed on it by the existence of that right.
a. Is the US responsible for all acts of the contras? For their violations of IHL? For some of the IHL
violations? Why? Under which conditions would the US be responsible for all acts of the contras?
Would that modify the Court’s qualification of the conflict?

b. Is the US violating IHL by providing the Manual “Operaciones sicológicas en guerra de

INTERNATIONAL COURT OF JUSTICE
guerrillas”? Regardless of whether the contras actually committed the recommended acts?
Which rules of IHL are violated?

8. (Paras 242, 243)

RIGHT OF PASSAGE OVER INDIAN TERRITORY
a. Can providing humanitarian assistance violate international law? Are the rules violated those of
IHL or those of jus ad bellum?

b. Are the conditions for lawful humanitarian assistance prescribed by IHL? (GC IV, PORTUGAL
Arts 23 and 59; P I, Art. 70; P II, Art. 18; CIHL, Rules 55-56) Are the fundamental principles of
the Red Cross part of IHL? To whom are they addressed? Must States comply with the
fundamental principles of the Red Cross?
v.

c. Which aspect of the US humanitarian assistance to the contras violated international law? (P
I, Art. 70; P II, Art. 18)
INDIA

d. Does a State providing strictly humanitarian assistance to only one side in an international
armed conflict violate international law? Does the other side have an obligation to let such
assistance through? (P I, Art. 70; GC IV, Arts 23 and 59)

JUDGMENT

9. Right of Passage over Indian Territory (Portugal v. India) Return Home

BEFORE: President: Hackworth;

10. OVERVIEW OF THE CASE Vice-President: Badavi;
Judges: Guerrero, Basdewant, Winiarski, Zoricic, Klaestad, Read, Armand-
Ugon, Kojevnikov, Sir Muhammad Zafrulla Khan, sir Hersch Lauterpacht,
Moreno Quintana, Cordova, Wellington Koo;
The Portuguese possessions in India included the two enclaves of Dadra and Nagar- Judges ad hoc: Chagla, Fernandes
Aveli which, in mid-1954, had passed under an autonomous local administration.
Portugal claimed that it had a right of passage to those enclaves and between one PermaLink: http://www.worldcourts.com/icj/eng/decisions/1957.11.26_right_of_passage.htm
 Right of Passage over Indian Territory, Portugal v. India, Judgment, 1957 I.C.J.
Citation: was filed. It was also notified under Article 40, paragraph 3, of the Statute to the other Members of
125 (Nov. 26)
the United Nations and to other non-member States entitled to appear before the Court.
Represented By: Portugal: Dr. Joao de Barros Ferreira da Fonseca, Ambassador of Portugal to the
By an Order of March 13th, 1956, the Court fixed June 15th, 1956, as the time-limit for the filing of
Netherlands, as Agent;
the Memorial of the Government of the Republic of Portugal, and December 15th, 1956, as the time-
Professor Inocêncio Galvao Telles, Director of the Faculty of Law of Lisbon,
limit for the filing of the Counter-Memorial of the Government of the Republic of India. In the same
Member of the Upper House, as Agent, Advocate and Counsel;
Order the Court reserved the rest of the procedure for further decision. The Memorial was filed within
assisted by
the prescribed time-limit. At the request of the Government of India, which had announced its
M. Maurice Bourquin, Professor in the Faculty of Law of the University of
intention to submit a Preliminary Objection to the jurisdiction of the Court, the time-limit for the
Geneva and in the Graduate Institute of International Studies, as Advocate and
filing of the Counter-Memorial, or of the Preliminary Objection, was extended, by an Order of
Counsel;
November 27th, 1956, to April 15th, 1957. Within the new time-limit thus fixed, the Government of
M. Pierre Lalive d'Épinay, Professor in the Faculty of Law of the University of
India filed a « Preliminary Objection» designed, on [p128] various grounds stated therein, to obtain a
Geneva;
finding from the Court that it is without jurisdiction to entertain the Portuguese Application.
Dr. Henrique Martins de Carvalho, Counsellor for Overseas Affairs at the
Ministry of Foreign Affairs;
On April 16th, 1957, an Order, recording that the proceedings on the merits were suspended under
Dr. Alexandre Lobato, Secretarv of the Centre for Overseas Historical Studies,
Article 62, paragraph 3, of the Rules of Court, fixed a time-limit expiring on June 15th, 1957, for
as Expert Advisers;
submission by the Government of Portugal of a written statement containing its Observations and
Dr. Carlos Macieira ,Ary dos Santos, Secretary of the Embassy of Portugal at
Submissions on the Preliminary Objections. Subsequently, at the request of the Government of
The Hague, as Secretary;
Portugal, the Court, by an Order of May 18th, 1957, extended that time-limit to August 15th, 1957.
On that date, the written statement was filed and the case, in so far as the Preliminary Objections
India: Shri B. K. Kapur, Ambassador of India to the Netherlands, as Agent; were concerned, was ready for hearing.
assisted by
Shri M. C. Setalvad, Attorney-General of India; The Honorable Mahomed Ali Currim Chagla, Chief Justice of Bombay, and M. Manuel Fernandes,
The Right Hon. Sir Frank Soskice, Q.C., M.P.; Director-General at the Ministry of Justice of Portugal and Member of the International Relations
Professor C. H. M. Waldock, C.M.G., O.B.E., Q.C., Chichele Professor of Public Section of the Upper House, were respectively chosen, in accordance with Article 31, paragraph 3, of
International Law in the University of Oxford; the Statute, to sit as Judges ad hoc in the present case by the Government of India and the
M. Paul Guggenheim, Professor of International Law in the Faculty of Law of Government of Portugal.
the University of Geneva and of the Graduate Institute of International Studies;
Mr. J. G. Le Quesne, Member of the English Bar, as Counsel; Sittings were held on September 23rd, 24th, 25th, 26th, 27th and 30th and on October 1st, 2nd, 3rd,
Shri J. M. Mukhi, Legal Adviser in the Ministry of External Affairs, 5th, 7th, 8th, 10th and 11th, 1957 in the course of which the Court heard oral arguments and replies
as Assistant Agent and Secretary. from Shri B. K. Kapur, Shri M. C. Setalvad, Professors Waldock and Guggenheim, and Sir Frank
Soskice, on behalf of the Government of India, and from M. de Barros Ferreira da Fonseca, and
Professors Galvao Telles and Maurice Bourquin, on behalf of the Government of Portugal.

In the course of the written and oral proceedings, the following Submissions were made by the
Parties:

On behalf of the Government of Portugal, in the Application:

[p.125]
"May it please the Court,
The Court,
(a) To recognize and declare that Portugal is the holder or beneficiary of a right of passage between
composed as above,
its territory of Dam20 (littoral Damao) and its enclaved territories of Dadra and Nagar-Aveli, and
between each of the latter, and that this right comprises the faculty of transit for persons and goods,
delivers the following Judgment:
including armed forces or other upholders of law and order, without restrictions or difficulties and in
the manner and to the extent required by the effective exercise of Portuguese sovereignty in the said
On December 22nd, 1955, the Minister of Portugal to the Netherlands, acting on the instructions of
territories.
his Government, filed on that date with the Registrar an Application signed by himself as the
appointed Agent of the Portuguese Government and submitting to the Court a dispute between the
(b) To recognize and declare that India has prevented and continues to prevent the exercise of the
Republic of Portugal and the Republic of India concerning the right of passage over Indian territory
right in question, thus committing an offence to the detriment of Portuguese sovereignty over the
between the territory of Daman (littoral Daman) and the enclaved territories of Dadra and Nagar-
enclaves of Dadra and Nagar-Aveli and violating its international obligations deriving from the
Aveli as well as between each of the two last-mentioned territories.
above-mentioned sources and from any others, particularly treaties, which may be applicable.
In the Application, the Government of Portugal stated that the Court had jurisdiction in the dispute for
(c) To adjudge that India should put an immediate end to this de facto situation by allowing Portugal
the reason that both Portugal and India had accepted the Optional Clause which forms the subject of
to exercise the above-[p129]mentioned right of passage iii the conditions herein set out."
Article 36, paragraph 2, of the Statute of the Court. The Application was communicated to the
Government of India in conformity with Article 40, paragraph 2, of the Statute, on the day on which it
On behalf of the same Government, in the Memorial:

"May it please the Court,
1. To adjudge and declare
(a) that Portugal has a right of passage through the territory of India in order to ensure
communications between its territory of Daman (coastal Daman) and its enclaved territories of Dadra
and Nagar-Aveli;
(b) that this right comprises the transit of persons and goods, as well as the passage of representatives
of the authorities and of armed forces necessary to ensure the full exercise of Portuguese sovereignty
in the territories in question.
2. To adjudge and declare:
(a) that the Government of India must respect that right; (6) that it must therefore abstain from any act
capable of hampering or impeding its exercise;
(c) that neither may it allow such acts to be carried out on its territory;
3. To adjudge and declare that the Government of India has acted and continues to act contrary to the
obligations recalled above;
4. To call upon the Government of India to put an end to this unlawful state of affairs."
On behalf of the Government of India, in the Preliminary Objections :
"The Government of India, accordingly, asks the Court to adjudge and declare that it is without
jurisdiction to entertain the Portuguese Application, dated 22nd December, 1955, on one or more of
the following grounds:
A. (1) The third condition of the Portuguese Declaration of 19th December, 1955, is incompatible
with the provisions of the Optional Clause of the Statute of the Court so that the said Declaration is
totally invalid as a recognition of the compulsory jurisdiction of the Court under that Clause; and, in
consequence,
(2) The Portuguese Application of 22nd December, 1955, which is expressed to found the jurisdiction
of the Court in the present case upon the said Declaration, was ineffective to establish the compulsory
jurisdiction of the Court under the Optional Clause (paragraphs 25-34).
B. (1) The filing of the Application in the present case by the Portuguese Government on 22nd
December, 1955, both violated the principle of equality of States before the Court, and disregarded
the express condition of reciprocity contained in the Declaration of the Government of India, dated
28th February, 1940; and, in consequence, [p130]
(2) The Portuguese Application of 22nd December, 1955, was ineffective to establish the compulsory
jurisdiction of the Court under the Optional Clause (paragraphs 35-44).
C. (1) Portugal, before filing her Application in the present case, did not comply with the rule of
customary international law requiring her to undertake diplomatic negotiations and continue them to
the point where it was no longer profitable to pursue them, because
(A) She filed her Application on 22nd December, 1955, without ever previously having given to India
the slightest indication that she made any such claims to legal rights of passage as she has since
formulated in the Memorial; and
(B) She filed her Application on und December, 1955, immediately after making her Declaration
accepting the Optional Clause, and only shortly after becoming a Member of the United Nations
without attempting to pursue her diplomatic negotiations with India in the new situation created by
the change in the legal relations of the Parties brought about by these events; and, in consequence,
(2) When Portugal filed her Application in the present case on 22nd December, 1955, there was not
any legal dispute between the Parties and, in addition, Portugal had not fulfilled an essential condition
for the invoking of the Court's compulsory jurisdiction under the Optional Clause (paragraphs 45-50).
D. (1) The fling of the Application in the present case by the Portuguese Government on 22nd
December, 1955, was a violation of the reciprocal right conferred upon India, both by the terms of the
Optional Clause, and by the terms of India's Declaration, to exercise the power to make reservations
contained in the third condition of the Portuguese Declaration, dated 19th December, 1955;
(2) The filing of the Application on 22nd December, 1955, having regard to the terms of the
Portuguese third condition, \vas also an abuse of the Optional Clause and of the procedure of the
Court; and, in consequence,
(3) For each and both of the above reasons the Portuguese Application of 22nd December, 1955, was
ineffective to establish the compulsory jurisdiction of the Court under the Optional Clause
(paragraphs 51-58).
E. (1) The dispute relates to a question which under international law is, in principle, a question
falling exclusively within the jurisdiction of India (paragraphs 161-168).
(2) A summary view of the facts shows that each of the interested States has for a long time past
treated the matters now in dispute as falling exclusively within the jurisdiction of the territorial
sovereign and, in view of the principle in E (1) above, this suffices to establish conclusively that the
present dispute is one relating to a question which, by international law, falls exclusively within the
jurisdiction of India (paragraphs 156-159). [p131]
(3) A summary view of the facts shows that in the past Portugal has unequivocally recognized that the
matters now in dispute relate to a question falling exclusively within the jurisdiction of the territorial
sovereign and the recognition of this by Portugal suffices to establish conclusively that the present
dispute is one relating to a question which by international law falls exclusively within the
jurisdiction of India (paragraphs 158-159).
(4) Independently of the attitude of the Parties, a summary view of the relevant facts and applicable
law shows that none of the legal grounds of claim based on treaties, custom or general principles of
law, which are invoked by the Government of Portugal in the Memorial, justify the provisional
conclusion that they are of real importance judicially for determining the legal position of the Parties
with respect to the passage of Portuguese persons and goods between Daman and the enclaves, with
the result that these legal grounds of claim do not afford any basis for holding that the present dispute
is not one relating to a question which by international law falls exclusively within the jurisdiction of
India (paragraphs 160-197).
(5) Having regard to the principle in E (1) above, the present dispute, for each of the several reasons
given in E (z), E (3) and E (4) above, is a dispute relating to a question which by international law
falls exclusively within the jurisdiction of India and, as such, is excepted from India's acceptance of
compulsory jurisdiction under the Optional Clause by the express terms of her Declaration dated 28th
February, 1940 (paragraphs I59-197).
F. (1) If, contrary to the contentions of the Government of India, Portugal establishes that she was
asserting some claim to rights of passage between Daman and the enclaves during the period from
1891 to the filing of the Application in the present case, the facts show that this claim was disputed by
the British/ Indian Government; and, in consequence,
(2) The dispute submitted to the Court in the Portuguese Application of 22nd December, 1955, is in
that event a dispute with regard to a situation antecedent to 5th February, 1930, and, as such, is
excluded ratione temporis from India's acceptance of compulsory jurisdiction by the express terms of
her Declaration dated 28th February, 1940 (paragraphs 198-201)."
On behalf of the Government of Portugal, in its Observations and Submissions in regard to the
Preliminary Objections of the Government of India, the following Submissions were stated:
"The Portuguese Government considers that it has shown that not one of the six Preliminary
Objections advanced by the Government of India is justified.
Accordingly, it respectfully begs the Court to reject them and to invite the Government of India
to present its Submissions on the merits of the dispute."[p132]
On behalf of the Government of India at the sitting of September 27th, 1957:
"First Objection
The Portuguese Declaration of 19 December, 1955, by reason of the incompatibility of its third
condition with the object and purpose of the Optional Clause of the Statute of the Court, is wholly
invalid as a recognition of the compulsory jurisdiction of the Court under that Clause; and, as the
Portuguese Application of 22 December, 1955, purports to found the jurisdiction of the Court only
upon the said invalid Declaration, the Court is without jurisdiction to entertain that Application.
Second Objection
Since the Portuguese Application of 22 December, 1955, was filed before the lapse of such brief
period as in the normal course of events would enable the Secretary-General of the United Nations, in
compliance with Article 36, paragraph 4, of the Statute of the Court, to transmit copies of the
Portuguese Declaration of 19 December, 1955, to other parties to the Statute, the filing of the said
Application violated the equality, mutuality and reciprocity to which India was entitled under the
Optional Clause and under the express condition of reciprocity contained in her Declaration of 28
February, 1940, and thus the conditions necessary to entitle the Government of Portugal to invoke the
Optional Clause against India did not exist when the said Application was filed; and in consequence
the Court is without jurisdiction to entertain the said Application.
Fourth Objection
Since the Portuguese Application of 22 December, 1955, was filed before the lapse of such brief
period as in the normal course of events would enable the Secretary-General of the United Nations, in
compliance with Article 36, paragraph 4, of the Statute of the Court, to transmit copies of the
Portuguese Declaration of 19 December, 1955, to other parties to the Statute, the filing of the said
Application violated the reciprocal right conferred upon India by the Optional Clause and by India's
Declaration of 28 February, 1940, to invoke the third condition contained in the Portuguese
Declaration of 19 December, 1955, equally and under the same conditions as Portugal; and thus the
conditions necessary to entitle the Government of Portugal to invoke the Optional Clause against
India did not exist when the said Application was filed and the filing of the said Application
constituted an abuse both of the Optional Clause and of the process of the Court; and in consequence.
the Court is without jurisdiction to entertain the said Application.
Third Objection
Since the Portuguese Application of 22 December, 1955, "as filed before the Portuguese claim of a
right of passage for persons and goods across Indian territory had been made the subject of
diplomatic negotiations, the subject-matter of the claim had[p133] not yet been determined and there
was not yet any legal and justiciable dispute between the Parties which could be referred to the Court
under the Optional Clause; and thus the conditions necessary to entitle the Government of Portugal to
invoke the Optional Clause against India did not exist when the said Application was filed; and in
consequence the Court is without jurisdiction to entertain the said Application.
Fifth Objection
Since the acceptance of compulsory jurisdiction of the Court for the categories of disputes listed in
the Optional Clause does not include disputes with regard to questions which by international law fall
exclusively within the jurisdiction of India and since also India's Declaration of 28 February, 1940,
expressly excluded such disputes from the scope of her acceptance of compulsory jurisdiction under
the Optional Clause; and since in principle the subject-matter of the present dispute, namely, the
transit of persons and goods over Indian territory between Daman and the enclaves, relates to a
question which by international law falls exclusively within the jurisdiction of India, it is for Portugal
to show legal grounds of claim which would place a limitation on India's exercise of her exclusive
jurisdiction with respect to the subject-matter of the dispute and which are reasonably arguable under
international law;
and whereas:
(a) the authorities cited in paragraphs 163 to 10s of India's Preliminary Objection establish that the
Portuguese claim to a right of transit, whether it is considered to be with or without immunity, cannot
be regarded as a reasonably arguable cause of action under international law unless it is based on the
express grant or specific consent of the territorial sovereign; and since the facts presented to the Court
in the pleadings of the Parties show no such express grant or specific consent of the territorial
sovereign as could place a limitation on the exercise of India's jurisdiction with respect to the subject-
matter of the dispute, the Fifth Objection should forthwith be sustained;
and whereas, in the alternative:
(b) none of the grounds of claim put forward by the Portuguese Government in its Application and
Memorial, namely, treaty, custom and general principles of law, can be regarded on the facts and the
law which have been presented to the Court as reasonably arguable under international law, the Fifth
Objection must for this reason also be sustained ;
and whereas, furthermore:
(c) regardless of the correctness or otherwise of the conclusions set out in paragraphs 4 (a) and 4 (b),
the uncontradicted facts presented in the pleadings of the Parties establish that the[p134]
question of transit between Daman and the enclaves has always been dealt with both by Portugal and
the territorial sovereign on the basis that it is a question within the exclusive competence of the
territorial sovereign;
and whereas:
(d) both Portugal and India have accepted the compulsory jurisdiction of the Court only for legal
disputes which may be decided by the Court under the provisions of Article 38, paragraph 1, of the
Statute; and the dispute submitted to the Court by Portugal is not such a dispute and there has been no
agreement between the Parties to submit the dispute to the Court under the provisions of Article 38,
paragraph 2, of the Statute; in consequence, for this reason also, the Fifth Objection should be
sustained.
Sixth Objection
Since India's Declaration of 28 February, 1940, limited her acceptance of the compulsory jurisdiction
of the Court to disputes arising after 5 February, 1930, with regard to situations or facts subsequent to
that date; and since the claim of Portugal to a right of transit between Daman and the enclaves is
formulated in her Application and Memorial as a claim of right dated from a period much before j
February, 1930; and since that claim, if it was ever made, has been persistently opposed by the
territorial sovereign, the present dispute as submitted to the Court by Portugal is a dispute excluded
from India's acceptance of compulsory jurisdiction under the Optional Clause by the express terms of
the said limitation in India's Declaration of 28 February, 1940 ; and in consequence the Court is
without jurisdiction to entertain the Portuguese Application of 22 December, 1955.''
On behalf of the Government of Portugal, at the sitting of October 3rd, 1957:
"1. On the First Preliminary Objections
Whereas the reservation in the Portuguese Declaration of December 19th, 1955, on which the
Government of India relies in support of its contention that the said Declaration is wholly invalid as a
recognition of the compulsory jurisdiction of the Court, in no way contravenes the requirements of
the Statute of the Court and cannot therefore be regarded as invalid;
Whereas the invalidity of that reservation would not, in any event, involve the invalidity of the
declaration itself;
Whereas the Application by which the Portuguese Government has referred the present dispute to the
Court has therefore, in this respect. a valid foundation;
For these reasons,
May it please the Court
to dismiss the First Preliminary Objection of the Government of India.[p135]
II. On the Second Preliminary Objection
Whereas Declarations made in accordance with Article 36, paragraph 2, of the Statute enter into force
at once and have the effect of making the jurisdiction of the Court compulsory as between States
accepting the same obligation;
Whereas no special condition has to be satisfied for this purpose;
Whereas, in particular, it is not made a condition for the exercise of its rights by the declarant State,
by the submission to the Court of a dispute by means of an Application, that its Declaration should
have been brought to the knowledge of the State which is the other Party to the dispute;
And whereas it is likewise not made a condition that a certain period of time should have elapsed
after the making of the Declaration;
For these reasons,
May it please the Court
to dismiss the Second Preliminary Objection of the Government of India.
III. On the Third Preliminary Objection
Whereas international law does not make the institution of proceedings by means of a unilateral
Application dependent on the prior exhaustion of diplomatic negotiations, in the absence of a treaty-
provision stipulating such a condition;
Whereas no provision of this kind' exists in the present case, and whereas the Portuguese Government
was therefore under no obligation to pursue diplomatic negotiations with the Government of India up
to the point at which they became futile;
Whereas it is, in any event, for the Government of India to prove the insufficiency of these
negotiations, and whereas it not only has failed to adduce such proof but proof to the contrary is
contained in the documents;
Whereas these negotiations made clear beyond question the existence of a dispute between the
Parties;
Whereas it is incorrect to assert that these negotiations were not carried on upon the legal plane, since
the Portuguese Government constantly protested against the violation by the Government of India of
the rights which it is claiming in the present proceedings, and since it drew attention to the
responsibility which the Government of India thereby incurred;
For these reasons,
May it please the Court
to dismiss the Third Preliminary Objection of the Government of India.
IV. On the Fourth Preliminary Objection
Whereas the principle of reciprocity, laid down by Article 36 of the Statute of the Court, relates to the
extent of the obligations binding upon the States involved in a dispute, at the time when that dispute
is referred to the Court;
Whereas it does not apply to the measures which the said States would have been entitled to take
before the case \vas brought before the Court, either for the purpose of putting an end to the binding
force of their Declarations or for the purpose of restricting their scope;
Whereas the right, of which the Government of India claims to have been wrongfully deprived as a
result of the speedy filing of the Portuguese Application, is not therefore covered by the principle of
reciprocity as the scope of that principle is laid down by Article 36;
Whereas, even if this were not so, it would have been quite unnecessary for the Government of India
to invoke this principle in order to limit the scope of its obligations relating to the compulsory
jurisdiction of the Court, before the filing of the Application instituting proceedings, and whereas it
was, therefore, in order to obtain this result, quite unnecessary for it to have cognizance of the
Portuguese Declaration;
Whereas, furthermore, there is a flagrant contradiction between the First and Fourth Objections, for if
the Portuguese reservation were without any legal validity, as contended by the Government of India
in its First Objection, it is difficult to see how that Government could have relied on the said
reservation for the purpose of drawing the consequences which it envisages in its Fourth Objection;
For these reasons,
May it please the Court
to dismiss the Fourth Preliminary objection of the Government of India.
V. On the Fifth Preliminary Objection
Whereas the Government of India requests the Court to derogate . from the provisions of Article 43 of
the Statute and of the corresponding articles O; the Rules of Court relating to the normal course of the
proceedings in contentious cases, claiming that, by international law, the questions which are the
subject-matter of the present dispute fall exclusively within the jurisdiction of India;
Whereas, in order to adjudicate upon this claim in the light of all the necessary information, argument
upon the merits would be necessary, while the Government of India in fact requests the Court
definitively to dispense with such further argument by holding itself hic et nunc, without jurisdiction
to adjudicate upon the Portuguese claim;
Whereas such a contention could in any event only be accepted if the Government of India showed
that a summary consideration of the grounds relied upon by Portugal sufficed to make it clear that
those grounds are manifestly lacking in substance and that it would consequently be superfluous to
prolong the proceedings by complying with the relevant provisions of the Statute and of the Rules of
Court;
Whereas the Government of India has failed to prove this, and whereas the arguments adduced, on
either side, on the contrary [p137] show the need for full discussion in order to enable the Court to
pass upon the substance of the grounds in question;
Whereas, furthermore, it is incorrect to assert that the subject-matter of the present dispute has in the
past been regarded as concerning a matter within the exclusive jurisdiction of India, and that Portugal
has indeed recognized that it possesses this character ;
Whereas the assertions put forward in this connection by the Government of India in paragraph 159
of its Preliminary Objections are based upon a mistaken interpretation of the claim submitted to the
Court;
For these reasons,
May it please the Court
to dismiss the Fifth Preliminary Objection of the Government of India;
Or, in the alternative: to join it to the merits.
VI. On the Sixth Preliminary Objection
Whereas the Government of India, by its Declaration of February 28th, 1940, accepted the
jurisdiction of the Court over all disputes arising after February 5th, 1930, 'with regard to situations or
facts subsequent to the same date';
Whereas the situations and facts which are to be taken into consideration in applying this clause are
solely those which constitute the source of the dispute;
Whereas the situations and facts which are the source of the dispute are all subsequent to February 5
th, 1930;
Whereas the Sixth Objection is therefore devoid of substance;
Whereas, in order to avoid this conclusion, the Indian Government has merely put forward a
hypothesis and made an assertion, which is formally disputed, to the effect that Portugal neither
claimed nor exercised a right of passage before February 5th, 1930, at least since the abrogation of
the British-Portuguese Treaty of 1878;
Whereas full discussion of these points is essential, particularly with regard to the true scope of the
said Treaty and of the effects of its abrogation;
Whereas such a discussion would raise questions of fact and of law with regard to which the Parties
are, in several respects, in disagreement and which are too closely linked with the merits for the Court
to be able to pass upon them, in the light of all the necessary information, within the compass of its
consideration of a preliminary objection;
For these reasons,
May it please the Court
to dismiss the Sixth Preliminary Objection of the Government of India;
Or, in the alternative:
to join it to the merits. [p138]
VII. Whereas, in its Conclusions relating to the Fifth Preliminary Objection, the Government of India
maintains:
' (d) both Portugal and India have accepted the compulsory jurisdiction of the Court only for legal
disputes which may be decided by the Court under the provisions of Article 38, paragraph 1, of the
Statute; and the dispute submitted to the Court by Portugal is not such a dispute and there has been no
agreement between the Parties to submit the dispute to the Court under the provisions of Article 38,
paragraph 2, of the Statute; in consequence for this reason also the Fifth Objection should be
sustained';
Whereas this constitutes a new Objection [i.e. an Objection not advanced in the written pleadings];
Whereas it is manifestly lacking in substance as is shown by the legal grounds relied upon by the
Portuguese Government in support of its Application;
Whereas, furthermore, in accordance with Article 62 of the Rules of Court, preliminary objections
must be filed by a party at the latest before the expiry of the time-limit fixed for the delivery of its
first pleading;
Whereas, in these circumstances, the said Objection would in any event be inadmissible;
For these reasons,
May it please the Court
to dismiss the new Objection raised by the Government of India in the guise of an argument in
support of its Fifth Preliminary Objection.
VIII. Whereas the Application instituting proceedings was filed in the Registry of the Court on
December 22nd, 1955;
Whereas the risk exists that the dispute may become aggravated so long as no decision on the merits
is given and whereas that aggravation might compromise the execution of the said decision;
For these reasons,
May it please the Court
to recall to the Parties the universally admitted principle that they should facilitate the
accomplishment of the task of the Court by abstaining from any measure capable of exercising a
prejudicial effect in regard to the execution of its decision or which might bring about either an
aggravation or an extension of the dispute."
On behalf of the Government of India, the following amended and supplementary Submissions were
filed at the sitting of October 8th, 1957:
"1. Sixth Objection
Since India's Declaration of February 28, 1940, limited her acceptance of the compulsory jurisdiction
of the Court to disputes arising after 5th February, 1930, with regard to situations or facts subsequent
to that date; and since the present dispute as [p139] submitted to the Court by Portugal is a dispute
which did not arise after 5th February, 1930, and was in any case a dispute with regard to situations or
facts which were not subsequent to that date, the dispute is excluded from India's acceptance of
compulsory jurisdiction under the Optional Clause by the express terms of the said limitation in
India's Declaration of February 28, 1940, and in consequence the Court is without jurisdiction to
entertain the Portuguese Application of 22nd December, 1955.
2. With regard to the Seventh Conclusion of the Government of Portugal
Since the submission of the Government of India in support of its Fifth Preliminary Objection quoted
in the Seventh Conclusion of the Government of Portugal in no sense constitutes a new objection, but
is simply one aspect of the contention of the Government of India that the matters in dispute fall
exclusively within the domestic jurisdiction of India; and since the said submission of the
Government of India is well-founded; in consequence the Seventh Conclusion of the Government of
Portugal should be rejected.
3. With regard to the Eighth Conclusion of the Government of Portugal
Since the Government of Portugal has not invoked the power of the Court to indicate provisional
measures under Article 41 of the Statute of the Court; and since that Government asks the Court to
address an admonition to the Parties analogous to an indication of provisional measures in
circumstances which would not justify the Court in making an Order under Article 41; and since that
Government has not disclosed any valid grounds for asking the Court to address such an exceptional
admonition to the Parties, and since it would in the circumstances of the present case be wholly
inappropriate to accede to the request of the Government of Portugal; in consequence, the Eighth
Conclusion of the Government of Portugal should be rejected."
On behalf of the Government of Portugal, the following Submissions were filed at the sitting of
October 11th, 1957:
"Whereas the Government of India, by its Declaration of February z8th, 1940, has accepted the
jurisdiction of the Court over all disputes arising after February 5th, 1930, with regard to situations or
facts subsequent to the same date;
Whereas, by the terms of the Application instituting proceedings, the purpose of the reference of the
dispute to the Court is to secure:
(a) recognition of the right of passage existing in favour of Portugal between its enclaved territories
of Dadra and Nagar-Aveli and between these territories and its territory of Daman (littoral Daman);
(b) a finding that India has prevented and continues to prevent the exercise of that right; and [p140]
(c) that India should put an immediate end to this situation;
Whereas the earlier date of the grounds on which the claim is based is not relevant for the purpose of
applying the reservation in the Indian Declaration of February 28th, 1940, on which the Sixth
Preliminary Objection is founded;
Whereas, on the other hand, the situations and facts which are relevant in applying such a reservation
are solely those which constitute the source of the dispute;
Whereas the dispute referred to the Court by the Portuguese Application of December 22nd, 1955, the
purpose of which is recalled above, is undeniably subsequent to February 5th, 1930;
Whereas the same is true of the situations and facts which constitute the source of that dispute;
For these reasons,
May it please the Court
to dismiss the Sixth Preliminary Objection of the Government of India."
***
The Declarations by which the Parties accepted the compulsory jurisdiction of the Court are as
follows:
Declaration of India of February 28th, 1940:
"On behalf of the Government of India, I now declare that they accept as compulsory ipso facto and
without special convention, on condition of reciprocity, the jurisdiction of the Court, in conformity
with paragraph 2 of Article 36 of the Statute of the Court for a period of 5 years from to-day's date,
and thereafter until such time as notice may be given to terminate the acceptance, over all disputes
arising after February 5th, 1930, with regard to situations or facts subsequent to the same date, other
than:
disputes in regard to which the Parties to the dispute have agreed or shall agree to have recourse to
some other method of peaceful settlement;
disputes with the government of any other Member of the League which is a Member of the British
Commonwealth of Nations, all of which disputes shall be settled in such manner as the Parties have
agreed or shall agree;
disputes with regard to questions which by international law fall exclusively within the jurisdiction of
India; and
disputes arising out of events occurring at a time when the Government of India were involved in
hostilities;
and subject to the condition that the Government of India reserve the right to require that proceedings
in the Court shall be suspended in respect of any dispute which has been submitted to and is under
consideration by the Council of the League of Nations, provided that notice to suspend is given after
the dispute has been submitted to the Council and is given within 10 days of the notification of the
initiation of the proceedings in the Court, and provided also that [p141] such suspension shall be
limited to a period of 12 months or such longer period as may be agreed by the Parties to the dispute
or determined by a decision of all the Members of the Council other than the Parties to the dispute."
Declaration of Portugal of December 19th, 1955:
"Under Article 36, paragraph 2, of the Statute of the International Court of Justice, I declare on behalf
of the Portuguese Government that Portugal recognizes the jurisdiction of this Court as compulsory
ipso facto and without special agreement, as provided for in the said paragraph 2 of Article 36 and
under the following conditions:
(1) The present declaration covers disputes arising out of events both prior and subsequent to the
declarations of acceptance of the "optional clause" which Portugal made on December 16, 1920, as a
party to the Statute of the Permanent Court of International Justice.
(2) The present declaration enters into force at the moment it is deposited with the Secretary-General
of the United Nations; it shall be valid for a period of one year, and thereafter until notice of its
denunciation is given to the said Secretary-General.
(3) The Portuguese Government reserves the right to exclude from the scope of the present
declaration, at any time during its validity, any given category or categories of disputes, by notifying
the Secretary-General of the United Nations and with effect from the moment of such notification."
India has filed six Preliminary Objections to the exercise of jurisdiction by the Court in the present
case. The Court will now proceed to examine these Objections.
First Preliminary Objection
The First Preliminary Objection of the Government of India is to the effect that the Court is without
jurisdiction to entertain the Application of Portugal on the ground that the Portuguese Declaration of
Acceptance of the jurisdiction of the Court of December 19th, 1955, is invalid for the reason that the
Third Condition of the Declaration is incompatible with the object and purpose of the Optional
Clause. There are, in the view of the Government of India, three main reasons for such
incompatibility.
The Third Condition of the Declaration of Portugal provides as follows:
"3) The Portuguese Government reserves the right to exclude from the scope of the present
declaration, at any time during its validity, any given category or categories of disputes, by notifying
the Secretary-General of the United Nations and with effect from the moment of such notification."
[p142]
In the first instance., the Government of India maintains that that Condition gives Portugal the right,
by making at any time a notification to that effect, to withdraw from the jurisdiction of the Court a
dispute which has been submitted to it prior to such a notification. This is what in the course of the
proceedings was described as the retroactive effect attaching- to that notification. India asserts that
such retroactive effect is incompatible with the principle and notion of the compulsory jurisdiction of
the Court as established in Article 36 of the Statute and that the Third Condition is invalid inasmuch
as it contemplates an effect which is contrary to the Statute.
The Government of Portugal has contested that interpretation and has affirmed that the Third
Condition does not have such retroactive, effect and that, in consequence, it is not incompatible with
Article 36 of the Statute.
In order to decide whether, as maintained by the Government of India, the Third Condition appended
by Portugal is invalid, and whether such invalidity entails the invalidity of the Declaration in which it
is contained. the Court must determine the meaning and the effect of the Third Condition by reference
to its actual wording and applicable principles of law.
The words "with effect from the moment of such notification" cannot be construed as meaning that
such a notification would have retroactive effect so as to cover cases already pending before the
Court. Construed in their ordinary sense, these words mean simply that a notification under the Third
Condition applies only to disputes brought before the Court after the date of the notification. Such an
interpretation leads to the conclusion that no retroactive effect can properly be imputed to
notifications made under the Third Condition. It is a rule of law generally accepted. as well as one
acted upon in the past by the Court that, once the Court has been validly seised of a dispute, unilateral
action by the respondent State in terminating its Declaration. in whole or in part. cannot divest the
Court of jurisdiction. In the Nottebohm case the Court gave expression to that principle in the
following words:
"An extrinsic fact such as the subsequent lapse of the Declaration, by reason of the expiry of the
period or by denunciation, cannot deprive the Court of the jurisdiction already established." (I.C.J.
Reports 1953, p. 123.)
That statement by the Court must be deemed to apply both to total denunciation, and to partial
denunciation as contemplated in the Third Portuguese Condition. It is a rule of interpretation that a
text emanating from a Government must, in principle, be interpreted as producing and as intended to
produce effects m accordance with existing law and not in violation of it. [p143]
The second reason, contended for by the Government of India, for the incompatibility of the Third
Portuguese Condition with the object and purpose of the Optional Clause, is that it has introduced
into the Declaration a degree of uncertainty as to reciprocal rights and obligations which deprives the
acceptance of the compulsory jurisdiction of the Court of all practical value. In particular, it was
contended that in consequence of the Third Condition, the other Signatories are in a continuous state
of uncertainty as to their reciprocal rights and obligations which may change from day to day.
While it must be admitted that clauses such as the Third Condition bring about a degree of
uncertainty as to the future action of the accepting government, that uncertainty does not attach to the
position actually established by the Declaration of Acceptance or as it might be established in
consequence of recourse to the Third Condition.
As Declarations, and their alterations, made under Article 36 must be deposited with the Secretary-
General. it follows that, when a case is submitted to the Court, it is always possible to ascertain what
are, at that moment. the reciprocal obligations of the Parties in accordance with their respective
Declarations. Under the existing system, Governments can rely upon being informed of any changes
in the Declarations in the same manner as they are informed of total denunciations of the Declarations
it is true that during the interval between the date of a notification to the Secretary-General and its
receipt by the Parties to the Statute, there may exist some element of uncertainty. However, such
uncertainty is inherent in the operation of the system of the Optional Clause and does not affect the
validity of the Third Condition contained in the Portuguese Declaration.
It must also be noted that, with regard to any degree of uncertainty resulting from the right of
Portugal to avail itself at any time of its Third Condition of Acceptance, the position is substantially
the same as that created by the right claimed by many Signatories of the Optional Clause, including
India, to terminate their Declarations of Acceptance by simple notification without any obligatory
period of notice. India did so on January 7th, 1956, when it notified the Secretary-General of the
denunciation of its previous Declaration of Acceptance, for which it simultaneously substituted a new
Declaration incorporating reservations which were absent from its previous Declaration. Hg-
substituting, on January 7th, 1956, a new Declaration for its earlier Declaration, India achieved, in
substance, the object of Portugal's Third Condition.
It has been argued that there is a substantial difference, in the matter of the certainty of the legal
situation, between the Third Portuguese Condition and the right of denunciation without notice.[p144]
In the view of the Court there is no essential difference, with regard to the degree of certainty,
between a situation resulting from the right of total denunciation and that resulting from the Third
Portuguese Condition which leaves open the possibility of a partial denunciation of the otherwise
subsisting original Declaration.
Neither can it be admitted, as a relevant differentiating factor, that while in the case of total
denunciation the denouncing State can no longer invoke any rights accruing under its Declaration, in
the case of a partial denunciation under the terms of the Third Condition Portugal can otherwise
continue to claim the benefits of its Acceptance. For, as the result of the operation of reciprocity, any
jurisdictional rights which it may thus continue to claim for itself can be invoked against it by the
other Signatories, including India.
Finally, as the third reason for the invalidity of the Third Condition, it has been contended that that
Condition offends against the basic principle of reciprocity underlying the Optional Clause inasmuch
as it claims for Portugal a right which in effect is denied to other Signatories who have made a
Declaration without appending any such condition. The Court is unable to accept that contention . It
is clear that any reservation notified by Portugal in pursuance of its Third Condition becomes
automatically operative against it in relation to other Signatories of the Optional Clause. If the
position of the Parties as regards the exercise of their rights is in any way affected by the unavoidable
interval between the receipt by the Secretary-General of the appropriate notification and its receipt by
the other Signatories, that delay operates equally in favour of or against all Signatories and is a
consequence of the system established by the Optional Clause.
Neither can the Court accept the view that the Third Condition is inconsistent with the principle of
reciprocity inasmuch as it renders inoperative that part of paragraph 2 of Article 36, which refers to
Declarations of Acceptance of the Optional Clause in relation to States accepting the "same
obligation". It is not necessary that the "same obligation" should be irrevocably, defined at the time of
the deposit of the Declaration of Acceptance for the entire period of its duration. That expression
means no more than that, as between States adhering to the Optional Clause, each and all of them are
bound by such identical obligations as may exist at an- time during which the Acceptance is mutually
binding.
As the Court finds that the Third Portuguese Condition is not inconsistent with the Statute, it is not
necessary for it to consider the question whether, if it were invalid, its invalidity would affect the
Declaration as a whole.
For these reasons, the First Preliminary Objection of the Government of India must be dismissed.
[p145]
***
Second Preliminary Objection
The Second Preliminary Objection of the Government of India is based on the allegation that—as the
Portuguese Application of December 22nd, 1955, was filed before the lapse of such brief period as in
the normal course of events would have enabled the Secretary-General of the United Nations, in
compliance with Article 36, paragraph 4, of the Statute of the Court, to transmit copies of the
Portuguese Declaration of Acceptance of December 19th, 1955, to the other Parties to the Statute—
the filing of the Application violated the equality, mutuality and reciprocity to which India was
entitled under the Optional Clause and under the express condition of reciprocity contained in its
Declaration of February 28th, 1940; that, in consequence, the conditions necessary to entitle the
Government of Portugal to involve the Optional Clause against India did not exist when that
Application was filed; and that, as a result, the Court is without jurisdiction to entertain the
Application.
The principle of reciprocity forms part of the system of the Optional Clause by virtue of the express
terms both of Article 36 of the Statute and of most Declarations of Acceptance, including that of
India. The Court has repeatedly affirmed and applied that principle in relation to its own jurisdiction.
It did so, in particular, in the case of Certain Norwegian Loans (I.C.J. Reports 1957, pp. 22-23) where
it recalled its previous practice on the subject. However, it is clear that the notions of reciprocity and
equality are not abstract conceptions. They must be related to some provision of the Statute or of the
Declarations.
The two questions which the Court must now consider are as follows: in filing its Application on the
date that it did, namely, December 22ntl, 1955, did Portugal act in a manner contrary to any provision
of the Statute ? If not, did it thereby violate any right of India under the Statute or under its
Declaration ?
In the course of the oral argument the Government of India disclaimed any intention of contending
that Portugal was not entitled to file its Application until the notification of the Secretary-General had
reached the Government of India. The latter merely maintained that before filing its Application
Portugal ought to have allowed such period to elapse as would reasonably have permitted the
notification of the Secretary-General to take its "appropriate effects".
The material dates. as stated by the Government of India, are as follows: On December 19th, 1955,
the Representative of Portugal to the United Nations made the Declaration, on behalf of the
Government of Portugal, accepting the compulsory jurisdiction of [p146] the Court under the
Optional Clause. On December 22nd, the Government of Portugal filed in the Court the Application
instituting the present proceedings against the Government of India. On the same day, a telegram was
sent by the Court notifying the Government of India of the filing of the Portuguese Application. On
December 3oth, 1955, the Government of India received a copy of the Portuguese Declaration of
Acceptance which had been obtained from the Court by its Embassy at The Hague. On January 19th,
1956, a copy of the Portuguese Declaration was officially transmitted to the Government of India by
the Secretary-General of the United Nations in compliance with Article 36, paragraph 4, of the
Statute.
The Government of India has contended that, in filing its Application on December 22nd. I955, the
Government of Portugal did not act in conformity with the provisions of the Statute. The Court is
unable to accept that contention. The Court considers that, by the deposit of its Declaration of
Acceptance with the Secretary-General, the accepting State becomes a Party to the system of the
Optional Clause in relation to the other declarant States, with all the rights and obligations deriving
from Article 36. The contractual relation between the Parties and the compulsory jurisdiction of the
Court resulting therefrom are established, "ipso facto and without special agreement", by the fact of
the making of the Declaration. Accordingly, every State which makes a Declaration of Acceptance
must be deemed to take into account the possibility that, under the Statute, it may at any time find
itself subjected to the obligations of the Optional Clause in relation to a new Signatory as the result of
the deposit by that Signatory of a Declaration of acceptance. A State accepting the jurisdiction of the
Court must expect that an Application may be filed against it before the Court by a new declarant
State on the same day on which that State deposits with the Secretary-General its Declaration of
Acceptance. For it is on that very day that the consensual bond, which is the basis of the Optional
Clause, comes into being between the States concerned. When India made its Declaration of
acceptance of February 28th, 1940, it stated that it accepted the jurisdiction of the Court for a
specified period "from to-day's date".
It has been contended by the Government of India that as Article 36 requires not only the deposit of
the Declaration of Acceptance with the Secretary-General but also the transmission by the Secretary-
General of a copy of the Declaration to the Parties to the Statute, the Declaration of Acceptance does
not become effective until the latter obligation has been discharged. However, it is only the first of
these requirements that concerns the State making the Declaration. The latter is not concerned with
the duty of the Secretary-General or the manner of its fulfilment. The legal effect of a Declaration
does not depend upon subsequent action or inaction of the Secretary-General. Moreover, unlike some
other [p147] instruments, Article 36 provides for no additional requirement, for instance, that the
information transmitted by the Secretary-General must reach the Parties to the Statute, or that some
period must elapse subsequent to the deposit of the Declaration before it can become effective. Any
such requirement would introduce an element of uncertainty into the operation of the Optional Clause
system. 'The Court cannot read into the Optional Clause any requirement of that nature.
India has further contended that, even though the filing of the Application by Portugal be held to be
otherwise in accordance with Article 36, it was effected in a manner which violated rights of India
under the Statute and under its Declaration of Acceptance.
Apart from complaining generally of an impairment of its rights of equality, mutuality and reciprocity
under the Statute, India has not specified what actual right has been adversely affected by the manner
of the filing of the Portuguese Application. 'The Court has been unable to discover what right has, in
fact, thus been violated.
As the Court has arrived at the conclusion that the manner of filing the Portuguese Application was
neither contrary to Article 36 of the Statute nor in violation of any right of India under the Statute, or
under its Declaration of Acceptance, the Court must dismiss the Second Preliminary Objection of the
Government of India.
***
Fourth Preliminary Objection
As the Second and Fourth Preliminary Objections are concerned with cognate aspects of the filing of
the Portuguese Application, it is convenient to consider the Fourth Preliminary Objection before
examining the Third.
In the Fourth Preliminary Objection, India contended that, since it had no knowledge of the
Portuguese Declaration before Portugal filed its Application, it was unable to avail itself, on the basis
of reciprocity, of the Third Portuguese Condition and to exclude from the jurisdiction of the Court the
dispute which is the subject-matter of the Portuguese Application. This Objection is based on
considerations substantially identical with those adduced in support of the Second Preliminary
Objection. Accordingly, the Court will confine itself to recalling what it has already said in dealing
with the Second Preliminary Objection, in particular that the Statute does not prescribe any interval
between the deposit by a State of its Declaration of Acceptance and the filing of an Application by
that State, and that the principle of reciprocity is not affected by any delay in the receipt of copies of
the Declaration by the Parties to the Statute.
As the manner of the filing of the Portuguese Application did not in respect of the Third Portuguese
Condition deprive India [p148] of any right of reciprocity under Article 36 of the Statute, so as to
constitute an abuse of the Optional Clause, the Court cannot regard the Fourth Preliminary Objection
of the Government of India as well founded.
***
Third Preliminary Objection
In its Third Preliminary Objection, as defined in the Submissions, the Government of India contended
that, as the Portuguese Application of December 22nd, 1955, was filed before the Portuguese claim
was effectively made the subject of diplomatic negotiations, the subject-matter of the claim had not
yet been determined and that there was therefore, as yet, no legal and justiciable dispute between the
Parties which could be referred to the Court under the Optional Clause. It was therefore submitted
that, as the conditions necessary to entitle the Government of Portugal to invoke the Optional Clause
did not exist at the time of the Application, the Court is without jurisdiction to entertain the
Application.
In particular, the Third Objection is based on the allegation that, although neither Article 36 (2) of the
Statute nor the Portuguese or Indian Declarations of Acceptance refer directly to the requirement of
previous negotiations, the fact that the Application was filed prior to the exhaustion of diplomatic
negotiations was contrary to Article 36 (2) of the Statute, which refers to legal disputes. It was
contended by India that, unless negotiations had taken place which had resulted in a definition of the
dispute between the Parties as a legal dispute, there was no dispute, in the sense of Article 36 (2) of
the Statute, the existence of which had been established in the Application and with respect to which
the Court could exercise jurisdiction.
In examining this Objection, the Court must consider the question of the extent to which, prior to the
filing of the Application by Portugal, negotiations had taken place between the Parties in the matter of
the right of passage. An examination of these negotiations shows that, although they cover various
aspects of the situation arising out of the political claims of India in respect of the enclaves, a
substantial part of these exchanges of views was devoted, directly or indirectly, to the question of
access to the enclaves. A survey of the correspondence and Notes laid before the Court reveals that
the alleged denial of the facilities of transit to the enclaves provided the subject-matter of repeated
complaints on the part of Portugal; that these complaints constituted one of the principal objects of
such exchanges of views as took place; that, although the exchanges between the Parties had not
assumed the character of a controversy as to the nature [p149] and extent of the legal right of passage,
Portugal described the denial of passage requested by it as being inconsistent not only with
requirement; of good neighbourly relations but also with established custom and international law in
general; and that these complaints w-ere unsuccessful.
While the diplomatic exchanges which took place between the two Governments disclose the
existence of a dispute between them on the principal legal issue which is now before the Court,
namely, the question of the right of passage, an examination of the correspondence shows that the
negotiations had reached a deadlock.
It would therefore appear that assuming that there is substance in the contention that Article 36 (2) of
the Statute, by referring to legal disputes, establishes as a condition of the jurisdiction of the Court a
requisite definition of the dispute through negotiations, the condition was complied with to the extent
permitted by the circumstances of the case.
The Court finds that the legal issue was sufficiently disclosed in the diplomatic exchanges, and
considers that the Government of Portugal has complied with the .conditions of the Court's
jurisdiction as laid down in Article 36 (2) of the Statute. Accordingly, the Court must dismiss the
Third Preliminary Objection.
***
Fifth Preliminary Objection
In its Fifth Preliminary Objection the Government of India has relied on the reservation which forms
part of its Declaration of Acceptance of February 28th, 1940, and which excludes from the
jurisdiction of the Court disputes with regard to questions which by international law fall exclusively
within the jurisdiction of the Government of India. In particular, it was asserted by the Government of
India that the facts and the legal considerations adduced before the Court did not permit the
conclusion that there was a reasonably arguable case for the contention that the subject-matter of the
dispute is outside the exclusive domestic jurisdiction of India. It \vas therefore submitted that the
dispute is outside the jurisdiction of the Court.
The relevant Submissions of the Government of India filed on September 27th, 1957, are based
largely on the following assertions: in paragraph (a) of its Submissions on the Fifth Objection it is
asserted that "the Portuguese claim to a right of transit ... cannot be regarded as a reasonably arguable
cause of action under international law unless it is base6 on the express grant or specific consent of
the territorial sovereign", and that "the facts presented to the Court in the Pleadings of the Parties
show no such express grant or specific consent of the territorial sovereign as could place [p150] a
limitation on the exercise of India's jurisdiction...". In paragraph (6) it is asserted that none of the
grounds put forward by the Government of Portugal, namely, treaty, custom and general principles of
law, can be regarded on the facts and the law which have been presented to the Court as reasonably
arguable under international law. Paragraph (c) deals exclusively with factual aspects of the matter
before the Court. India urges that the Fifth Preliminary Objection must be sustained for the reason
that "regardless of the correctness or otherwise of the conclusions set out in paragraphs 4 (a) and 4
(b), the uncontradicted facts presented in the Pleadings of the Parties establish that the question of
transit between Daman and the enclaves has always been dealt with both by Portugal and the
territorial sovereign on the basis that it is a question within the exclusive competence of the territorial
sovereign". Finally, in paragraph (II) it is urged that the dispute submitted to the Court by Portugal is
not a legal dispute which may be decided by the Court under Article 38, paragraph I of the Statute.
The facts on which those Submissions of the Government of India are based are not admitted by
Portugal. The elucidation of those facts, and their legal consequences, involves an examination of the
actual practice of the British, Indian and Portuguese authorities in the matter of the right of passage -
in particular as to the extent to which that practice can be interpreted, and was interpreted by the
Parties, as signifying that the right of passage is a question which according to international law is
exclusively within the domestic jurisdiction of the territorial sovereign. There is the further question
as to the legal significance of the practice followed by the British and Portuguese authorities, namely,
whether that practice was expressive of the common agreement of the Parties as to the exclusiveness
of the rights of domestic jurisdiction or whether it provided a basis for a resulting legal right in favour
of Portugal. There is, again, the question of the legal effect and of the circumstances surrounding the
application of Article 17 of the Treaty of 1779 and of the Mahratha Decrees issued in pursuance
thereof.
Having regard to all these and similar questions, it is not possible to pronounce upon the Fifth
Preliminary Objection at this stage without prejudging the merits. Accordingly, the court decides to
join that Objection to the merits.
In these circumstances, it is not necessary for the Court to examine the other questions relating to the
Fifth Objection which have been raised by the Parties in their Submissions.[p151]
***
For these reasons.
Sixth Preliminary Objections
The Court,
In its Sixth Objection the Government of India contended that the Court is without jurisdiction on the
ground that India's Declaration of February 28th, I940, accepting the compulsory jurisdiction of the by fourteen votes to three,
Court is limited to "disputes arising after February 5th, 1930, with regard to situations or facts rejects the First Preliminary Objection;
subsequent to the same date". In particular, the Government of India maintained: (a) that the dispute
submitted to the Court by Portugal is a dispute which did not arise after February 5th, 1930, and (b) by fourteen votes to three,
that in any case it is a dispute with regard to situations 'and facts prior to that date. rejects the Second Preliminary Objection;

The Court must examine the relevant Indian reservation, in the first instance, in so far as it refers to by sixteen votes to one,
the date on which the dispute may be said to have arisen. The first contention advanced in this rejects the Third Preliminary Objection;
connection by the Government of India is that the dispute submitted to the Court did not arise after
February 5th, 1930, but—partly or wholly - before that date. However, the Government of Portugal by fifteen votes to two,
contends that the dispute submitted to the Court arose after 1953, when the Government of India rejects the Fourth Preliminary Objection;
adopted certain measures relating to passage and transit between the littoral territory of Daman and
the enclaves of Dadra and Nagar-Aveli. by thirteen votes to four,
joins the Fifth Preliminary Objection to the merits;
That divergence of views cannot be separated from the question whether or not the dispute submitted
to the Court is only a continuation of a dispute which divided Portugal and the territorial sovereign by fifteen votes to two,
prior to 1930 concerning the right of passage. The Court, having heard conflicting arguments joins the Sixth Preliminary Objection to the merits; [p153]
regarding the nature of the passage formerly exercised, is not in a position to determine at this stage
the date on which the dispute arose or whether or not the dispute constitutes an extension of a prior resumes the proceedings on the merits;
dispute. and fixes the following time-limits for the rest of the procedure:

Similar considerations apply to the second element of the reservation ratione temporis which forms for the filing of the Counter-Memorial of the Government of India, February 2jth, 1958;
part of the Indian Declaration of Acceptance, namely, in so far as it refers to "situations or facts"
subsequent to 5th February, 1930. for the filing of the Reply of the Government of Portugal, May 25th, 1958:

It was contended that the question of the existence or non-existence of a legal right of passage was
not, prior to 1930, in controversy between the Parties concerned and that they managed throughout to
settle, without raising or resolving the question of legal right, the practical problems arising in this
connection. On the other hand it was also contended that the dispute nom7 before the Court is a
continuation of a conflict of views going as far as 1818, and that it is a dispute "beyond any question
with reference to situations or facts stretching far back before 1930". [p152]
for the filing of the Rejoinder of the Government of India. July 25th 1958.
Done in English and French, the English text being authoritative, at the Peace Palace, The Hague, this
twenty-sixth day of November, one thousand nine hundred and fifty-seven, in three copies, one of
which will be placed in the archives of the Court and the others transmitted to the Government of the
Portuguese Republic and to the Government of the Republic of India, respectively.

The Court is not at present in possession of sufficient evidence to enable it to pronounce on these
questions. To do that would necessitate an examination and clarification of, often complicated,
questions of fact bearing on the practice pursued by the authorities concerned for a period of very
considerable duration and stretching back to 1818, or even 1779. There are other factors which give
rise to similar considerations. These factors include the disputed interpretation of the Treaty of 1779
between the Mahrathas and the Portuguese. Any evaluation of these factors, although limited to the
purposes of the Sixth Preliminary Objection, would entail the risk of prejudging some of the issues
closely connected with the merits. Accordingly, the Court must join the Sixth Preliminary Objection
to the merits.
***
The Government of Portugal added to its Submissions a statement requesting the Court to recall to
the Parties the universally admitted principle that they should facilitate the accomplishment of the
task of the Court by abstaining from any measure capable of exercising a prejudicial effect in regard
to the execution of its decisions or which might bring about either an aggravation or an extension of
the dispute. The Government of Portugal has expressly disclaimed any intention of invoking the
provisions of Article 41 of the Statute concerning the indication of interim measures. The Court does
not consider that, in the circumstances of the present case, it should comply with the request of the
Government of Portugal.
(Signed) Green H. Hackworth.
President.
(Signed) J. Lopez Olivan,
Registrar.
Judge Kojevnikov states that he cannot concur either in the operative clause or in the reasoning of the
Judgment because, in his opinion, the Court should at the present stage of the proceedings hold that it
is without jurisdiction on one or indeed more of the Preliminary Objections raised by the Government
of India.
Vice-President Badawi, availing himself of the right conferred upon him by Article 57 of the Statute,
appends to the Judgment of the Court a statement of his dissenting opinion.
Judge Klaestad, availing himself of the right conferred upon him by Article 57 of the Statute, appends
to the Judgment of the Court a statement of his dissenting opinion, in which M. Fernandes, Judge ad
hoc, concurs.
Mr. Chagla, Judge ad hoc, availing himself of the right conferred upon him by Article 57 of the
Statute, appends to the Judgment of the Court a statement of his dissenting opinion.

(Initialled) G. H. H.
(Initialled) J. L. O.
[p154]
DISSENTING OPINION OF VICE-PRESIDENT BADAWI
[Translation]
I am in agreement with the decisions of the Court on Objections 1, 3, 4 and 5, without, however,
subscribing to certain aspects of the reasoning for those decisions.
I regret, however, that I cannot concur in the decisions relating to Objections 2 and 6, which I
consider well-founded. Each of these Objections would be sufficient in itself to exclude the
jurisdiction of the Court to deal with the dispute relating to right of passage.
***
The Second Objection relates to the premature filing of the Portuguese Application of December
22nd, 1955.
The Portuguese Declaration was deposited with the Secretary-General on December 19th, but the Full
Powers of the representative of that State were signed at Lisbon only on the 20th and were
transmitted to the Secretary-General only on the 21st.
Therefore, although the declaration was submitted on December 19th, it was properly deposited only
on the 21st.
But the Application to the Court was filed on December 22nd. The Government of India, as a result of
its own investigations, u7as able to discover the existence of the Declaration towards the end of
December, but the Secretary-General did not transmit it to the States until January 1956 (the 19th).
India bases its Objection on the lack of equality, mutuality and reciprocity, but these bases are for
India but the consequences of the consensual character of the Declarations. In my opinion, these
consequences do not furnish any additional force to the argument based on that consensual character.
I shall, therefore, confine myself to this consensual character, the basis of this Objection.
It is generally recognized that a State can be brought before an international tribunal only with its
consent. The system of Declarations, however ingenious it may be as a means of overcoming certain
hesitations and of finding a practical and variable formula for the acceptance of the jurisdiction of the
Court without a rule which is directly and uniformly binding, is none the less based on the idea of
consent.
When Article 36 of the Statute uses the words "ipso facto and without special agreement", it stresses
the conventional character of Declarations and it confirms that character by the expression "in
relation to any other State accepting the same obligation". These words make it quite impossible to
attribute to a Declaration by itself a unilateral character and a binding effect on this ground. [p155]
It has been said that the Court has, in certain passages in its decisions, described Declarations as
unilateral acts, but an examination of these passages shows that this description in no way signifies
that a Declaration by itself and of its own force binds other States. The Court was simply indicating
that for the purpose of interpreting such Declarations their unilateral origin should be taken into
consideration.
Portugal, moreover, does not contest the consensual character of the legal relationship which is
formed between States which have subscribed to Declarations accepting the compulsory jurisdiction
of the Court. But it has argued that what creates the consensual bond between these States is the
coinciding of their Declarations, or, more accurately, the provision of Article 36, paragraph 2, which
establishes a reciprocity of rights and obligations as between the States accepting the same obligation.
But that reciprocity cannot create the agreement. It may define its extent. But what creates the
agreement here, as in every other meeting of wills, is always the basic idea of offer and acceptance.
Indeed, any Declaration can be analysed only into an acceptance, by the State depositing it, of the
Declarations of those States which have preceded it and into an offer by it to them. This analysis is
particularly evident when the new Declaration contains new reservations.
But whichever, in this analysis, is the State which offers and that which accepts, it is essential in each
case that the offer should be accepted by the State to which it is addressed. This acceptance, even
though it be regarded as delimited by reciprocity, is none the less indispensable. It must exist, for it is
the basis of the resulting obligation upon these States to submit to the jurisdiction of the Court. It
matters little whether the acceptance be actual or constructive, on the basis of a legal interpretation
that communication is equivalent to acceptance, it must always be recognized as the only foundation
for the jurisdiction of the Court.
***
It goes without saying that the Secretary-General is not the ultimate recipient of the Declaration,
which is deemed to be addressed or notified by the State making it to the other States which have
already accepted the compulsory jurisdiction, so that a binding contract may be formed between
them.
The notification of Declarations to the Secretary-General, or their deposit with him and his obligation
to communicate them to other States, are merely intended to take the place of direct communications.
The Secretary-General is thus a mere depository entrusted with the duty of bringing the Declarations
to the knowledge of the other States. By channelling these communications through the office of the
Secretary-General, the Statute [p156] was simply seeking to ensure communication in an efficient and
regular way. This communication constitutes a special obligation of the Secretary-General which is
provided for by Article 36 of the Statute.
Translated into legal terminology, the system of Declarations constitutes a contract by correspondence
between the declarant State and the other States through the agency of the Secretary-General as an
intermediary who, in these cases, constitutes a stage in the transmission. Counsel for Portugal indeed
recognized the correctness of this legal construction, but he contended that the contract was formed
by the mere deposit with the Secretary-General.
It is necessary in this connection to recd that every Declaration is itself an acceptance and an offer.
The offer by Portugal, contained in its Declaration and addressed to the other States, had not been
accepted by India or, indeed, communicated to India.
***
With regard to the formation of contracts by correspondence, municipal legal systems adopt different
positions. Some adopt the declaration theory; others the dispatch theory. Still others take the view that
the contract is concluded at the time and place where the author of the offer becomes aware of its
acceptance. and there is the further view, which is that of the French Cour de Cassation, that it is a
question of fact which has to be decided in the light of the circumstances of each case.
Portugal contends that Article 36 of the Statute is silent on this point but, being obliged to recognize
the consensual character of Declarations as a tacit implication of the system, it seeks to explain the
expression of consent as between States by the mere coinciding of their Declarations. But, in fact, this
coincidence is often lacking and, in any event, it constitutes only the measure and the extent of the
respective obligations of the States.
It is true that the point is a new one and one for which there is no precedent. Generally speaking, the
point has not been dealt with either in the writings of publicists or in judicial decisions. The present
case reveals the desire that was felt to spring a surprise and thus to avoid the possibility of abrogation
of or exclusion from a Declaration. But it fails wholly to satisfy the minimum conditions required for
the formation of a contract.
Since the Declaration was deposited with the Secretary-General on the eve of the Application, it
would have been impossible to suppose that it would be transmitted to the other States within 24
hours. The position therefore is the same as if the Declaration had not been made.
It is unnecessary and would indeed be useless to discuss the question of the moment at which consent
may be said to exist, at which a contract may be regarded as having been formed between [p157] the
declarant State and the other States. Whatever that moment may be, the position in the present case is
that, in any event, and whatever criterion or moment may be adopted with regard to the formation of a
contract by correspondence, it was prior to that moment. The present case is similar to one in which
there is an offer which has not yet been dispatched.
***
In relying upon Article 36, paragraph 2, of the Statute to say that a Declaration produces its effects
immediately and makes it permissible to seise the Court the day after it is deposited, the Court puts
the emphasis on the expression "ipso facto", "de plein droit", but by isolating that expression from the
following expression "and without special agreement", which completes it, the complete idea
contained in the Statute has been dismembered and disregarded. What the Statute sought to provide
was that there should be no need for the acceptance of the jurisdiction of the Court, of a special
agreement (I stress the word "special") between each State and the other States. However, since
submission to an international tribunal is essentially and pre-eminently conventional in character,
such submission, in accordance with the Statute, is to result ipso facto from the convention which
comes into being between the declarant State and the other States by the exchange of Declarations
between them—an exchange the operation of which is ensured by the Statute through a dual
obligation: that of the declaring State to deposit it with the Secretary-General and that of the latter to
communicate it to the other States. The notion of a convention has thus been strictly observed both in
substance and in form in the Optional Clause system.
But would it have been possible to preserve this idea without the operation of the classical notion of
offer and acceptance? It is obvious that the authors of the Statute could not have brought about
innovations in legal concepts. But apart from this classical mechanism, there remains only the theory
of the declaration of the will and that of the contract by accession in which the dual elements of offer
and acceptance become merged. Very few legal systems, however, recognize the first theory, whereas
the second has no points of analogy with the Optional Clause.
Indeed, whereas the essential feature of the "adherence" or "accession" contract is uniformity, that of
Declarations is variety and diversity. Each Declaration expresses the conditions, the purposes and the
policy of the State which makes it. Furthermore, in "adherence contracts" one of the parties in fact is
in a position in which it is impossible to discuss the terms of the contract. It is obliged to contract and
gives its adherence to the all powerful will of the other. In this category are included, inter alia,
contracts of [p158] service, contracts for transport and for insurance. What analogy can there be
between such contracts and Declarations accepting jurisdiction ?
***
Reference has also been made to the case of collective or multilateral conventions in which a State,
by acceding thereto, assumes by its mere act of accession the capacity of a party to the convention,
benefiting from the rights conferred by the convention and subject to the obligations which it
prescribes independently of acceptance by other States. But the position in this case is no different
from that referred to in "adherence contracts" under municipal legal systems, since the convention is
accepted as a whole—as it stands —and since indeed it remains open to accessions by the will of its
signatories.
Reliance has, however, been placed upon the Opinion of the Court of May 28th, 1951, on
Reservations to the Convention on the Prevention and Punishment of the Crime of Genocide. Rut, in
the first place, this Opinion does not deal with the rule relating to adherence to collective
conventions; furthermore, the Opinion recognizes that a given reservation is valid only if it is
accepted by every one of the contracting parties and that this conception, directly inspired by the idea
of contract, constitutes an undeniable principle. Moreover, the Opinion given by the Court was
expressly limited to the Genocide Convention itself.
Furthermore, the Optional Clause system established by Article 36 of the Statute has nothing in
common with a collective convention. It is concerned with individual Declarations, varying
considerably in character, which, combined together by means of their mutual exchange, constitute
conventions which are equally variable and limited by reciprocity.
***
Reference has been made to the practice of States which denounce and renew their Declarations in the
belief that both their denunciation and their renewal take immediate effect, and, in particular, the
contrast has been pointed out between the attitude and the contentions of India with regard to the
premature character of the Application and the formula adopted by that State with reference to its
denunciation of January 7th, 1957, of its own Declaration, a denunciation which was to take
immediate effect; and it has been argued that what applies to the denunciation of the Indian
Declaration should likewise apply to the Portuguese Declaration.
But it is more than doubtful, in my opinion, whether the word "immediate" can have the effect of
eliminating the consensual [p159] notion in respect of the denunciation of the contract by which the
jurisdiction of the Court is accepted.
In the case both of the formation of this contract and of its denunciation, the same rules relating to the
necessity for acceptance should be applied.
I therefore consider that the juridical construction which both takes into account the factual elements
of the dispute submitted to the Court and is in conformity with the Statute, does not make it possible
to Say that any agreement existed between Portugal and India with regard to acceptance of the
jurisdiction of the Court. It would follow that the Court is without jurisdiction to deal with the
Application of December 22nd, 1955, on the basis of the Second Objection.
***
The Sixth Objection is based upon the provision relating to disputes arising after February 5th, 1930,
6th regard to situations or facts subsequent to that date; it is an objection ratione temporis.
I shall disregard the first phase in which this Objection bore a certain relationship of dependence with
the Fifth Objection and in which the scope of the Objection was vague, imprecise and hypothetical,
and I shall confine myself to the final form of the Objection, the form in which it was put forward in
the oral reply. In this phase, as in the earlier ones, both Parties relied upon the Judgments in the
Phosphates case and in the Electricity Company of Sofia case, and each relied upon the words used
by the Permanent Court in the two decisions regarding the situation which it described as the source
of the dispute.
In both the Phosphates case and the Electricity Company of Sofia case, there was a clear distinction
between the dispute and the situation. In the Phosphates case, both the dispute and the situation which
gave rise to it were, in the view of Italy, unlawful acts. But the Court traced back the situation, which
gave rise to the conflict, to 1920, the date of the dahir establishing the phosphate monopoly, and it
held itself without jurisdiction because that date was prior to the date of the ratification of the
Declaration.
In the Electricity Company of Sofia case, the Bulgarian Government sought to trace back the dispute
to an earlier date, namely, that of the arbitral awards made prior to the Declaration, in which case the
Court would have been without jurisdiction; but the Court found that the awards had been recognized
by both parties as being binding and that the question of their application after the date of the
Declaration was the source of the disputes. [p160]
In the present case, in spite of the fact that India claims that the dispute was prior to rg30, its real date
is 1954. This is the date contended for by Portugal and it was at the end of July of that year that it
became crystallized.
But what is the fact or the situation which can be regarded as the source of the dispute ? Portugal, in
the last phase of the oral arguments, expressed the view that "They are those which were constituted
by the interruption of communications with the enclaves, brought about by the act of the Indian
Union in 1954, and by the continuance of that state of affairs. At a given moment India decided to
prevent access by Portugal to its enclaves and put that decision into effect" (p. 236 of the Oral
Proceedings volume).
In an earlier phase, Portugal stated: "It is well known how this dispute came into existence. In its
Notes of February 27th, 1950, and of January 14th and May 1st, 1953, the Indian Union manifested
its claim to put an end to the sovereignty of Portugal over its territories in the Hindustan Peninsula by
absorbing these territories. These Notes—as stated in paragraph 30 of the Memorial —constitute the
'prelude to the events which are the basis of the present action'." (Same volume, p. 117.)
According to this argument, the situation began in 1950 and gave rise to the dispute of 1954.
In the view of India, the situation must be traced back to 1818 and is consequently prior to 1930.
Before examining the Indian argument, it should be said that one cannot avoid the conclusion that
Portugal is confusing the dispute and the situation. The fact that there is a culminating point in the
dispute, namely, 1954, does not mean that it does not consist of more than one phase, and it was
Portugal, in its first oral argument, which described the 1950 and 1953 Notes as "the prelude to the
events which are the basis of the present action". To include within the words "facts and situations"
the developments of the dispute would be to distort the meaning of those words. The dispute had
already begun in 1950 and since it is both a political and legal dispute, it took various forms and
passed through several stages.
In so far as India is concerned, since what is involved is merely passage on sufferance, the difficulties
and obstacles which that country inflicted on Portugal, which began in 1950 and culminated in 1954,
are but progressive manifestations of the dispute which constitute the dispute from its beginning until
its end, and not the situation which gave rise to the dispute.
In the view of India, the facts and situations which gave rise to the dispute are those preceding the
period 1950-1954, which go back into the past, to 1818, that is to say, the whole period during which
passage was exercised.
It is out of this situation, with its ambiguous and equivocal character, that the dispute provoked by the
measures taken in [p161] 1954 arose. What is here involved is a factual situation: the authorization of
passage which was differently understood by each of the Parties: by India, as on sufferance or as an
act of grace, and by Portugal, as a right. In reality, the situation is one susceptible of two
interpretations. The exercise of passage would not be incompatible with either of those
interpretations. In the actual conditions in which it was exercised, that is, by means of separate
authorizations, it would appear rather to have been permitted on sufferance. Considered as a right,
various elements of a right would appear to be lacking.
Indeed, the fragmentary and individual character of the requests for authorization in respect of each
transport, subject to the discretion of the authority to which the requests were addressed, would prima
facie exclude the conclusion that any general right did exist, and would likewise exclude the
possibility that by the repetition of these authorizations a right of passage came into being. The right
to refuse passage on any or every occasion is to be assumed from the necessity for a request.
However that may be, the situation which existed before 1930 was identical with that which existed
afterwards, an equivocal situation which gave rise to the dispute of 1954, when India took the view
that certain political circumstances justified it in finally refusing further to extend this sufferance. The
lengthy duration of this sufferance has no bearing upon the character of this passage since, in the
absence of any express recognition of right during this long period, there was no change in the
equivocal position.
It matters little whether a dispute has or has not arisen expressly with regard to that situation, the
priority of date is referable only to the situation and not to the dispute. The Declaration does not Say
"concerning prior disputes" but "prior situations or facts". It is therefore applicable even if those facts
or situations have never given rise to differences between the Parties.
***
The fact remains that this situation was prior to 1930, and whatever may be the validity and weight of
the arguments adduced by Portugal in support of its conception of this passage as a right, the mere
probability of India's conception of passage as on sufferance would be sufficient to justify the
objection ratione temporis.
Even if it should appear on examination that the view which Portugal has formed or the legal
construction which it puts upon this situation is correct, that would in no way alter the fact that the
situation existed prior to 1930 and that fact, by itself, and irrespective of the merits of the question, is
sufficient to exclude the dispute from the jurisdiction of the Court.
In the Phosphates in Morocco case, the Court considered it sufficient as a reason for holding itself
without jurisdiction that the [p162] act, which was the subject of the dispute between France and
Italy, was merely the application of a dahir of 1920, that is, a date earlier than the ratification of the
French Declaration, and held that it was unnecessary to consider whether the dahir was or was not
contrary to the international obligations assumed by France.
It follows that even if Portugal could succeed in showing that it did in reality enjoy a right, that
possibility is wholly unconnected with the Sixth Objection. If the Court had rejected that Objection, it
would have given retroactive effect to the Indian Declaration and would thus have adjudicated upon a
situation some two centuries old.
***
It is of interest in this connection to recall what the Permanent Court said in the Phosphates case as an
explanation of the raison d'être of this objection "ratione temporis":
"Not only are the terms expressing the limitation ratione temporis clear, but the intention which
inspired it seems equally clear: it was inserted with the object of depriving the acceptance of the
compulsory jurisdiction of any retroactive effects, in order both to avoid, in general, a revival of old
disputes, and to preclude the possibility of the submission to the Court by means of an application of
situations or facts dating from a period when the State whose action was impugned was not in a
position to foresee the legal proceedings to which these facts and situations might give rise" (p. 24).
***
The facts and situations referred to in the Sixth Objection are not the same as the grounds on which
the applicant relies, and the argument that the general principles of law and general custom are above
and beyond dates is of no relevance in the present case.
These principles and custom do not constitute a situation. They might be a justification for a situation.
But what is relevant to this Objection is priority of date, not legality. The fact or situation which is the
source of a dispute has a causal connection with that dispute. Legal grounds have not, and cannot
have, any such connection.

***
The Court has decided to join this Objection to the merits. This joinder is said to be justified, on the
one hand, by the connection between the facts relevant thereto and those relevant to the Fifth
Objection, and, on the other hand, by the need to have further clarification of the origins of the
dispute. [p163]
But, in the first place, this Objection is distinct from and independent of the Fifth Objection, and the
facts which make up its elements have nothing in common with those pertaining to the Fifth
Objection.
In the second place, in order to uphold this Objection, it is necessary only to perceive the relationship
between the present dispute and a prior situation said to have given rise to it. But the elements of this
relationship are to be found in the documents now before the Court and they have been sufficiently
discussed by the Parties. There is no need, in order to reach a conclusion with regard to this
relationship, to accumulate facts or to discover any new facts.
In view of all these considerations, I am of opinion that the source of the dispute is the ambiguous
and equivocal situation, resulting from a system of individual authorizations depending upon the
discretion of the authority granting them, which was understood in different ways by the two Parties.
This situation was determined or influenced by political considerations. The dispute arose when, as a
result of changed political circumstances, India decided to refuse to continue these authorizations.
This situation having existed since the beginning of the last century, I consider the Objection to be
justified and the Court to be without jurisdiction to deal with the dispute.
(Signed) A. Badawi.
[p164]
DISSENTING OPINION OF JUDGE KLAESTAD
In its Fifth Preliminary Objection the Government of India invokes a reservation contained in its
Declaration of 1940 accepting the compulsory jurisdiction of the Court, which excludes from this
jurisdiction "disputes with regard to questions which by international law fall exclusively within the
jurisdiction of India". It contends that the Court lacks jurisdiction because the present dispute
concerning Portugal's alleged right of passage over Indian territory between Daman and the enclaves
and between the enclaves themselves relates to questions which fall exclusively within the national
jurisdiction of India.
The legal principle applicable to a question of this kind was formulated by the Permanent Court of
International Justice in its Advisory Opinion concerning Nationality Decrees issued in Tunis and
Morocco. Applying that principle to the circumstances of the preliminary phase of the present
dispute, I shall have to examine in a summary and provisional manner whether the legal grounds
invoked by the Government of Portugal may justify the provisional conclusion that they are of
juridical importance for the dispute and, if so, whether these grounds relate to questions of
international law.
The Government of Portugal invokes a Treaty of 1779 concluded between Portugal and the Mahratha
ruler and various Mahratha Decrees purporting to carry out the provisions of Article 17 of that Treaty.
It contends that sovereignty over the enclaves was thereby ceded to Portugal by the Mahratha ruler,
while the Government of India alleges that Portugal acquired only certain revocable fiscal rights with
regard to the enclaves, and that the sovereignty over them was retained by the Mahratha State. It is
possible that this divergence of opinion may have a bearing on the question of right of passage
between Daman and the enclaves. As it involves the interpretation of a treaty, it relates to a question
of international law.
The Government of Portugal further invokes a Convention of 1785 concluded with the Mahratha
ruler. By this Convention it was provided that Portugal was obliged to quell any rebellion which
might break out in the enclaves. It is argued that this provision presupposed Portugal's access to the
enclaves, thereby affirming her right of passage over Mahratha territory. Whether this view is
justified or not may depend on an interpretation of this Convention and would consequently relate to
a question of international law.
The Government of Portugal also relies on an alleged local custom which during a period of nearly
two centuries is said to [p165] have developed between Portugal and the Mahratha State and its
successors. The question whether a possible usage with regard to passage between Daman and the
enclaves was exercised in such a manner as to satisfy the requirements of Article 38, paragraph I (b),
of the Statute of the Court is a question of international law (compare Judgment in the Asylum case,
I.C.J. Reports 1950, pp. 276-277).
The Government of Portugal finally invokes an alleged international general custom as well as
general principles of law recognized by civilized nations (Statute, Article 38, paragraphs I (b) and
(c)), while the Government of India, refuting the Portuguese allegations in this respect, places itself
upon the same ground of international law.
It is unnecessary to pursue this summary and provisional examination of the legal grounds invoked by
the Government of Portugal in order to form an opinion upon the nature of the dispute. This
examination is sufficient to show that in any case some of these grounds may be of juridical
importance for the present dispute and that they relate to questions of international Law. It is in my
view evident that the subject-matter of the dispute can only be decided on the ground of international
law, and that it cannot be considered as relating to "questions which by international law fall
exclusively within the jurisdiction of India". I am therefore unable to accept the Fifth Preliminary
Objection.
With regard to the question whether this Objection should be rejected or joined to the merits, opinions
have differed. In my view it should be rejected, since a summary and provisional examination of the
legal grounds invoked by Portugal has in a sufficient measure disclosed elements of international law
which may be of relevance for the decision of the dispute.
This provisional finding as to the nature of the dispute does not in any way prejudge the consideration
of the merits. With regard to the question whether the Portuguese contentions as to the alleged right
of passage over Indian territory are justified or not, I have formed no opinion whatsoever. Such an
opinion could be arrived at only when the dispute at the next phase of the proceedings has been
argued and considered on the merits. The preliminary question whether the Court has jurisdiction to
decide these merits should be distinguished from the actual exercise of that jurisdiction.
With regard to the other questions in dispute, I am in general agreement with the Court.
(Signed) Helge Klaestad.

[p166]DISSENTIKG OPINION OF JUDGE CHAGLA
I regret that I am unable to agree with the conclusion arrived at by the majority of my colleagues. As
the matter is of considerable importance, I think it necessary to give the reasons for my dissent.
There are two unique features in this case—one is the third condition in the Portuguese Declaration,
and the other is that the Portuguese Application which started this case was filed within three days of
the making of the Declaration and before the provision contained in the second part of Article 36 (4)
of the Statute of the Court could be complied with. Neither of these aspects has ever been considered
by this Court, and they both raise very important questions with regard to the jurisdiction of the
Court.
Turning to the First Objection of India, it may be readily granted that the Optional Clause gives the
widest freedom to a State which submits to the compulsory jurisdiction of the Court. This freedom is
in two respects. A State has the right to define the categories of disputes which it is prepared to
submit to the compulsory jurisdiction of the Court. It may make any reservation it likes and it may
limit the categories to any extent that it desires. The other respect is that it can limit the time of the
pendency of the Declaration. The Declaration may last two years, one year, six months, or even it
could be terminable on mere notice. But the third condition of Portugal is an entirely different kind of
reservation. It reserves the right to Portugal to alter and modify the scope of its Declaration during the
pendency of that Declaration.
It was urged by India that this reservation was retroactive and it was open to Portugal to withdraw a
pending litigation by having resort to this reservation. It is pointed out that the expression "from the
date of the notification" used in the third condition only indicates the point of time from which the
reservation becomes effective; it does not refer to its scope or ambit. There is no limitation placed b3-
Portugal upon the extent of the reservation and, therefore, it is suggested that Portugal, under this
third condition, reserves to itself the right of withdrawing a pending litigation before the Court. India
is not without support in this interpretation. The reaction of Sweden to this condition was the same as
India. (See Sweden's Note to the Secretary-General of the United Nations dated 23rd February, 1956.)
Portugal replied to this Note by its Note of 5th July, 1956, in which it stated that this condition did not
warrant the conclusion that the Portuguese [p167]Government would be in a position to withdraw
from the jurisdiction of the Court any dispute, or category of disputes, already referred to it. If the
reservation is retroactive, then there can be no dispute that the reservation is bad. On the other hand, it
must be borne in mind that a court must always lean against giving retroactive or retrospective effect
to an instrument, the more so when such an interpretation is likely to invalidate the instrument and to
deprive a tribunal of its jurisdiction. Even if the language of the reservation is susceptible of this
interpretation, if the other interpretation is possible, the Court would rather give the interpretation to
the instrument which would render it valid and which would not deprive this Court of its jurisdiction.
But whatever interpretation the Court places upon this condition, it must be an interpretation based
upon the language used in the instrument itself. Xo assistance can be sought from the ex post facto
and ex parte statement made by Portugal to which reference has been made by which it attempted to
clarify and elucidate its own Declaration. So canon of construction is more firmly established than the
one which lays down that the intention of a party to an instrument must be gathered from the
instrument itself and not from what the party says its intention was.
But even if no retroactive effect can be given to Portugal's Declaration, it suffers from a defect,
which, in my opinion, is fatal. Once a reservation is made with regard to categories of disputes which
are submitted to the compulsory jurisdiction of the Court, categories over which the Court has
jurisdiction must be specified and defined. The jurisdiction of the Court with regard to these
categories of disputes must be finally accepted when the Declaration is made.
It is futile to try and draw a distinction between the Portuguese reservation and the right to terminate
a Declaration at any time. It was suggested in the course of the arguments that, in the latter case, a
State can put an end to its obligation to submit to the compulsory jurisdiction of the Court with regard
to all categories of disputes, while, in the former case, a more limited right was reserved by Portugal
in that it could only limit the scope of its obligation. This argument is specious. In the latter case, by
terminating the Declaration, the juridical bond between a declarant State and the other State comes to
an end. The State no longer adheres to the Optional Clause and is not liable to the compulsory
jurisdiction of the Court with regard to any matter. In the former case, the juridical bond continues. In
the latter case, both the right to bring a dispute before the Court and the obligation to submit to the
jurisdiction of the Court come to an end. In the former case, the right remains and the State can put an
end to the obligation with regard to any dispute at its own discretion.
Distinguished authors have regretted the continuous decline of the Optional Clause, and it is the duty
of the Court to prevent any [p168] further decline of this Clause. Judge Lauterpacht in the Norwegian
Loans case (I.C.J. Reports of Judgments, Advisory Opinions and Orders, 1957), when considering the
French reservation in that case, said (p. 64) that it "tended to impair the legal—and moral— authority
and reality of the Optional Clause", and also (p. 65) that it "threatens to disintegrate that minimum of
compromise which is embodied in the Optional Clause". These observations also apply to the novel
reservation embodied by Portugal in her Declaration. Acceptance by Portugal of the compulsory
jurisdiction of the Court is entirely illusory. The minimum of compromise which is embodied in the
Optional Clause is the right given to the State to limit the categories of disputes which it is prepared
to submit to the compulsory jurisdiction of the Court; but any further derogation from that minimum
of compromise should not be permissible. Once a State, by its Declaration, has expressed its clear
will to submit to the compulsory jurisdiction of the Court a particular dispute, the jurisdiction of the
Court with regard to that dispute must continue so long as the Declaration lasts. As the intention of
the Optional Clause is to make a State accept the compulsory jurisdiction of the Court, any
reservation which frustrates that intention must be held to be opposed to the general purpose of the
Optional Clause and therefore invalid.
It was suggested that even if this reservation was invalid, as it did not affect the present case, it could
be severed from the rest of the Declaration and the rest of the Declaration could be held valid. The
doctrine of severance is well settled in municipal law and it also applies to international law. If a
provision in an instrument is an essential condition, and if the court is satisfied that in the absence of
that essential condition the instrument would not have been executed, then if the condition is bad, the
court is powerless and the whole instrument must be declared to be invalid. Otherwise, the court
would be writing a new instrument without the essential condition. In this case there cannot be the
slightest doubt that the reservation we are considering is an essential condition of Portugal's
adherence to the Optional Clause. It is on this condition that Portugal has agreed to confer jurisdiction
upon the Court. The condition is of the very essence of the submission of Portugal to the compulsory
jurisdiction of the Court, and if this condition is invalid, the whole Declaration must be declared to be
invalid.
***
As I am of the opinion that India's First Objection should prevail, it would be unnecessary to consider
her Second and Fourth Objections, but as they have been argued at considerable length [p169] and as
they raise questions of considerable importance, I would like to express my opinion on them.
Both the Objections are based on the fact that Portugal's Declaration was deposited with the
Secretary-General of the United Nations on the 19th December, 1955, and the present Application
was filed on the 22nd December, 1955. I do not think there is any instance in the history of this Court
where a State has filed an Application with such lightning speed. It is urged on behalf of Portugal that
adherence to the Optional Clause is a unilateral act by a State and the Declaration comes into force
immediately it is deposited with the Secretary-General of the United Nations. It is further pointed out
that there is nothing in the Statute or the Rules of the Court which requires that any time should
elapse between the making of the Declaration and the filing of the Application. It is therefore said that
although copies of the Declaration were not transmitted by the Secretary-General to the Parties to the
Statute nor to the Registrar of this Court, and although India had no knowledge that any such
Declaration had been made by Portugal, the Declaration became immediately effective, and to the
extent that the same obligations were undertaken by the Declaration of Portugal and the Declaration
of India, India became liable to be called before the Court in answer to any claim made by Portugal
which fell within the scope of the two Declarations.
The narrow question that we have to consider is whether the Statute of the Court contemplates that
the Declaration should be immediately effective without knowledge, presumptive or actual, on the
part of the other States who have already adhered to the Optional Clause—in other words, whether a
juridical bond can be created by a new declarant with the other States who are already Parties to the
Optional Clause by the mere deposit of the Declaration with the Secretary-General so as to entitle the
new declarant immediately to file an Application and bring another State before the Court. India has
contended that by this precipitous Application, Portugal has violated the principle of equality of
States before the court, a principle which is the very basis of the Optional Clause. Portugal, on the
other hand, has relied on the letter of the law and has urged that apart from the reciprocity of
obligations at the date of the Declaration, there is no other reciprocity or equality which is
contemplated by Article 36 (2) of the Statute. Whether the Statute permits a State to file an
Application before the ink on its Declaration is dry or not, it will be agreed that this is a practice
which should not be countenanced by the Court; and if there is any provision in the Statute which can
permit the Court to refuse to entertain Portugal's Application, it should do so under the circumstances
of the case.
Article 36 (3) of the Statute consists of two parts: one, making it incumbent upon a State making a
Declaration to deposit it with the Secretary-General of the United Nations, and the second [p170]
making it incumbent upon the Secretary-General to transmit copies thereof to the Parties to the
Statute and to the Registrar of the Court. It is common ground that unless the Declaration is deposited
as required by Article 36 (4), the Declaration cannot become effective. It is difficult to understand
why, if the first part of Article 36 (4) is mandatory, the second part is not equally mandatory. It is said
that the second part is purely administrative or procedural and it merely gives a direction to the
Secretary-General to carry out his duties. It is difficult to accept the argument that a provision so
unimportant should have found a place in so solemn a document as the Statute of the Court. In my
opinion, the same importance should be attached to both the parts of Article 36 (4). There must have
been some reason why the framers of the Statute inserted this provision in Article 36 (4) and the
obvious reason is that some time should elapse between the making of the Declaration and the filing
of an Application.
It is unnecessary in this case to speculate as to what is the proper time that should elapse between the
making of the Declaration and the filing of the Application. Sufficient unto the day is the law thereof:
and it will be sufficient to deal only with the facts of this case. It is clear that in this case an
Application has been filed by Portugal before the second part of Article 36 (4) was complied with,
and it is open to the Court to Say that the Application is premature and that Portugal should have
waited until effect had been given to the provision of the second part of Article 36 (4).
Emphasis has been placed upon the expression "ipso facto" used in Article 36 (2) of the Statute. It is
suggested that this expression makes it clear that the mere deposit of the Declaration, and nothing
more, brings about the consensual bond between the declarant State and the State which has accepted
the same obligation. The expression "ipso facto" must be read with the words that follow "and
without special agreement". What the Statute emphasizes is that apart from the Declaration no special
agreement is necessary to attract the Application of the Optional Clause. Article 36 (z), in my opinion,
does not deal with the question as to when the Declaration becomes effective. For this purpose we
have to turn to Article 36 (4).
There is also force in India's contention that by the timing of Portugal's Application, India was
deprived of the right to invoke in her favour the third condition in Portugal's Declaration. It is now
well-settled law that a State which is a Party to the Optional Clause is entitled to incorporate into its
own Declaration any condition contained in the Declaration of any other State which has adhered to
the Optional Clause. (See the Norwegian Loans case, I.C.J. Reports of Judgments, Advisory Opinions
and Orders, 1957.) Therefore, it cannot be disputed that India had the right to make use of the third
condition as against Portugal as much as Portugal [p171] had the right as against India. But if this
right is to have any meaning or significance, it must be a right which can be exercised. Portugal, by
filing the Application when she did, made it impossible for India to exercise that right. Portugal could
have invoked this condition any time before filing the Application. India could have only invoked it if
she had knowledge of the Declaration before the Application was filed. Once the Application was
filed, inasmuch as the condition, as I have pointed out, is not retroactive, India was deprived of that
right and was compelled to accept the jurisdiction of the Court whether she liked it or not. In the
Norwegian Loans case, it was stated that Norway, equally with France, was entitled to except from
the compulsory jurisdiction of the Court disputes falling within the ambit of France's reservation. In
the Phosphates in Morocco case, although a particular limitation in the Declaration of one State did
not appear in the Declaration of the other, it was held that the limitation must hold good as between
the Parties; and in the Electricity Company of Sofia and Bulgaria case, the Court said that in
consequence of the condition of reciprocity laid down in paragraph 2 of Article 36, the limitation
contained in the Declaration of one State must be applicable as between the Parties.
Now what is the reciprocity that Article 36 (2) contemplates ? Is it the narrow reciprocity suggested
by Portugal, namely, the reciprocity that should subsist at the date of the Application, or a wider
reciprocity which would entitle a State to avail itself of every limitation contained in the other Party's
Declaration to the same extent and in the same manner as the other Party?
It should be remembered that in the Norwegian Loans case, at the date of France's Application,
Norway had not availed itself of the reservation contained in France's Declaration with regard to
domestic jurisdiction. Therefore, if reciprocity had been narrowly construed in that case, Norway
could not have availed herself of that limitation. But the Court held that Norway was as much entitled
as France to plead that the particular dispute fell within her domestic jurisdiction. Therefore, strictly,
the principle of reciprocity had been given effect to after France's Declaration had been filed and the
Court did not confine itself to considering the situation as it existed at the date of France's
Application. The question that now arises is whether the Court should not look at the situation as it
existed before Portugal filed her Application. And if the Court comes to the conclusion that India
could only have exercised the third limitation contained in Portugal's Declaration before Portugal
filed her Application, and if India has been deprived of that right, then the principle of reciprocity
under Article 36 (2) has been violated. In any view of the case, in my opinion, the [p172] Court
should come to the conclusion that the haste with which Portugal filed this Application has resulted in
an abuse of the Optional Clause and also an abuse of the processes of the Court, and therefore the
Court should refuse to entertain Portugal's Application.
***
India's Third Objection is that the present dispute was brought before this Court without preliminary
diplomatic negotiations and without the negotiations reaching a deadlock. It is urged by India that the
jurisdiction of the Court is confined to deciding legal disputes, and before there can be a dispute, it
must be clear that the controversy cannot be settled by negotiations. It is pointed out that before a
State is brought before the bar of the International Court, every attempt should first be made to see
whether the controversy in question could not be amicably settled. Our attention has been drawn to
the various Notes that were exchanged between India and Portugal, and it does appear that Portugal
never raised in these Notes the general question of a right of passage as such. What was discussed in
these Notes was certain concrete questions relating to special situations arising out of disturbances
which had occurred within the Portuguese enclaves; and what Portugal insisted on was that India had
incurred an international responsibility by its behaviour at a given time and in a specific situation.
Our attention is drawn to the fact that if the general question of a right of passage had been raised in
this diplomatic exchange of Notes, this Court would have had a better conception of the right claimed
by Portugal. As it is, the Court is not in a position to know or judge what is the actual nature of the
right claimed by Portugal. Nor had India been given an opportunity to formulate or express her views
with regard to the right claimed by Portugal before the matter was brought before the Court. Reliance
is placed on the observations of the Court in the Electricity Company of Sofia and Bulgaria case
(P.C.I.J., Series A/B, No. 77, p. 132): "What is essential is that, prior to the filing of an Application by
one Party bringing a dispute before the Court, the other Party must have been given the opportunity to
formulate and to express its views on the subject of the dispute. Only diplomatic negotiations will
have afforded such an opportunity."
It is also urged by India that this de with regard to preliminary diplomatic negotiations does not
operate only in those cases where there is a provision to this effect in a treaty between the Parties. The
rule is of general application and is based on two considerations: (1) the need of the Court to know
what is the subject-matter of the dispute, and (2) efforts made by the Parties to reach an agreement
have been fruitless. [p173]
There can be no doubt as to the desirability of States negotiating with regard to a dispute and trying to
arrive at a fair solution before they avail themselves of the compulsory jurisdiction of the Court. But
what we have to consider is whether failure to pursue this desirable course deprives the Court of its
jurisdiction. It is clear on the authorities that what the Court has insisted upon is the mere existence of
a dispute, and a dispute has been defined as a divergence of opinions or views between two States: It
has also been held that this divergence is established after one Government finds that the attitude of
the other is contrary to its own. In the Ch.6rzozo Factory case (Series A, No. 13, p. IO), the Court
pointed out that "it would no doubt be desirable that a State should not proceed to take as serious a
step as summoning another State to appear before the Court without having previously, within
reasonable limits, endeavoured to make it quite clear that a difference of views is in question which
has not been capable of being otherwise overcome. But, in view of the wording of the article, the
Court considers that it cannot require that the dispute should have manifested itself in a formal way;
according to the Court's view, it should be sufficient if the two Governments have in fact shown
themselves as having opposite views." Therefore, it is clear that the dispute should not be manifested
in any formal way and all that is necessary is that two Governments should show themselves as
holding opposite views. It has also been observed in the case of Certain German Interests in Upper
Silesia (Series A, No. 6, p. 14): ".., a difference of opinion does exist as soon as one of the
Governments concerned points out that the attitude adopted by the other conflicts with its own
views". It is difficult to take the view that the attitude of India on the question of Portugal's claim with
regard to a right of passage does not conflict with the view held by Portugal. I would therefore
overrule this Objection.
***
Turning to the Fifth Objection, we heard very learned arguments as to the burden of proof. In my
opinion, now that all the arguments are before the Court, the question of burden of proof loses much
of its importance. But even so, I should like to Say a few words about it. It is always for a party which
comes before a court or a tribunal to make out a prima facie case that the tribunal or court has
jurisdiction. If that prima facie burden is discharged, it may be that the burden would shift on to the
other party. When India objects to the jurisdiction of the Court on the ground that the subject-matter
of the dispute falls exclusively within her domestic jurisdiction, it would not be correct to describe
her attitude as it has been described by Counsel for Portugal as attempting to obstruct the normal
course of statutory procedure. Undoubtedly the party coming to the Court has the right to have the
benefit of the procedure [p174] provided by the Statute and the Rules for contentious matters. But
that is so only on the assumption that the Court has jurisdiction. All that India has done is to draw the
attention of the Court to the fact that, looking to her Declaration, the Court has no jurisdiction over
this particular dispute. It is ultimately for the Court to decide the question of jurisdiction and it is only
if the Court takes the view that the dispute falls within the ambit of India's Declaration that the matter
can go on and the rules of statutory procedure can be given effect. It is equally incorrect to Say that
inasmuch as India is relying on an exception contained in her Declaration which confers jurisdiction
upon the Court the burden is upon her to make good that exception. India has accepted the
compulsory jurisdiction with regard to certain categories of disputes, and the particular category with
regard to matters falling exclusively within her domestic jurisdiction has been excluded. Therefore, it
is for Portugal to establish that the dispute which she has brought before the Court falls within the
scope of India's Declaration, and she can only establish that provided she satisfies the Court that the
dispute is not exclusively within the domestic jurisdiction of India. The reservation made by India
with regard to matters falling exclusively within her domestic jurisdiction is not an exception: it is an
essential—an integral—part of her acceptance of the jurisdiction of the Court.
Coming to the substance of the matter, there are certain points which are beyond controversy. The
first is that India has exclusive territorial sovereignty over the territory through which Portugal claims
a right of passage or a right of transit. I think it is equally indisputable that prima facie a State
enjoying territorial sovereignty has the right to allow or to prohibit a right of passage or transit
through her territories to any other State or to permit a right of passage or transit under such terms
and conditions as she thinks proper. It is true that even though a subject-matter may fall within the
domestic jurisdiction of a State, the State may not have complete discretion with regard to it but its
discretion may be controlled by any international obligation undertaken by it. If India has undertaken
any international obligation, then the matter is no longer exclusively within her domestic jurisdiction.
In other words, the matter would not be within the reserved domain but would be within the
international domain into which the Court can enquire and determine what are her obligations
according to international law.
It is true that in a large majority of cases, when an Objection is taken on the ground of domestic
jurisdiction, the Court is inclined to join the Objection to the merits because the Court feels that it is
impossible to arrive at a decision on this issue without investigating into the merits of the subject. But
this is not always [p175] so. Otherwise it would never be open to a State to take a Preliminary
Objection on this ground. The test has been clearly laid down by this Court as to what has to be
established in order that the Court will not uphold the Objection at a preliminary stage but would
stand it over to the hearing. Portugal must establish that the legal grounds relied upon by her justify a
provisional conclusion that they are of juridical importance for a decision of the dispute according to
international law. (See the classical statement of the law in the Nationality Decrees of Tunisia and
Morocco, Series B, No. 4, p. 25.) To use simpler language, Portugal must show that her claim
discloses an arguable cause of action under international law. Again, to use a different language,
Portugal must show that the general rule that the subject-matter being within the domestic jurisdiction
of India is within her discretion has been displaced by some rule of international law.
Now what is the subject-matter of the dispute between Portugal and India? I will not consider the
various metamorphoses which Portugal's claim has undergone. But as finally indicated to this Court it
is a right of transit between Daman and the Portuguese enclaves of Dadra and Nagar-Aveli in order to
maintain communications between Daman and these two enclaves. The first striking thing about this
alleged right is that it is completely indefinite and vague and, as was described by Counsel for India,
"something undefined and disembodied, hard both to exercise and to enforce". When a State comes to
this Court claiming a right against another State, it must be a right which should be enforceable. It
must be a right which, if conceded by the Court, could be given effect to by the defendant State. No
Court would give judgment which could not be carried out by the losing party. And the most
surprising feature of Portugal's claim in this case is that if she were to succeed in her contentions, the
judgment she would obtain from this Court could never be given effect to by India. If the Court were
to declare that Portugal has a right of transit over Indian territory from Daman to the enclaves, it
would be impossible for India to know what the nature, extent or content of that right would be.
Would Portugal be entitled under this right to transport a whole army from Daman to the enclaves in
order to suppress the revolt which has taken place there? Would she be able to transport tanks and
artillery and all the paraphernalia of modern arms and armaments? Would she be able to fly
aeroplanes over Indian territory, in order to bomb the enclaves in order to reduce them to subjection?
Or would the right be confined to transit facilities to be given to diplomatic envoys or a small unit in
order to maintain law and order in the enclaves ? These queries conclusively establish that Portugal
has failed to formulate any legal right which she can assert against India. It is only by negotiations
which may result in a treaty that the modalities of a right of transit can be settled between India and
Portugal. But the Court cannot be called upon to draft a treaty between these [p176] two States. The
Court can only pronounce upon an existing right, and if the right claimed is so insubstantial as to be
incapable of being translated into something which is enforceable, the Court must come to the
conclusion that the right claimed is not a legal right, much less a right recognized by international law
or a right with regard to which India's discretion is controlled by any international obligation. It seems
to me that on this ground alone India's Preliminary Objection must be sustained. It would be a sheer
waste of time of this Court to join this issue to the merits when at the end of it the Court would have
to come to the conclusion that no effective declaration can be made in favour of Portugal.
I have already pointed out that it is an elementary principle of international law that a State has
exclusive competence within its own territory. This principle was emphatically pronounced by Chief
Justice 3larshall in the Schooner Exchange case (1812, 7 Cranch 116): "The jurisdiction of the nation
within its own territory is necessarily exclusive and absolute. It is susceptible of no limitation not
imposed by itself. Any restriction upon it, deriving validity from an external source, would imply a
diminution of its sovereignty to the extent of the restriction, and an investment of that sovereignty to
the same extent in that power which could impose such restriction. All exceptions, therefore, to the
full and complete power of a nation within its own territories, must be traced up to the consent of the
nation itself. They can flow from no other legitimate source." It is not suggested by Portugal that
India has ever given her consent to any limitation upon her territorial sovereignty over the territory in
question. Although in her Memorial Portugal relied upon treaties between the Maratha rulers and
herself, this contention was given up or at least not pressed at the hearing. As a matter of fact, the
only treaty which deals with this subject at all is the Portuguese-Maratha Treaty of 1741, which,
surprising as it may seem, provides expressly that soldiers of either power are not to enter the
territory of the other without permission. If, therefore, India has not given her consent to any
limitation upon her sovereignty, is there any other international obligation undertaken by India
independently of any treaty or her consent ? I may observe in passing that Portugal concedes that the
right of transit claimed by her, even though it may be without any immunity, does constitute a
limitation upon India's sovereignty.
An international obligation may arise through local custom. If for a considerable period of time
Portugal has been exercising this right, then the right may be upheld by international law. But in order
that local custom should be established, it is not sufficient for Portugal merely to state that for a long
period she maintained [p177] communications between Daman and the enclaves. She must go further
and establish that the transit facilities that she had were enjoyed by her as a matter of right and not as
a matter of grace or concession on the part of the Indian Government. And if one thing is clear
beyond anything else from the record that we have before us, it is that throughout the period in
question—from 1818 when the British appeared on the scene onwards—the facilities enjoyed by
Portugal with regard to communicating with her enclaves were entirely at the discretion of the Indian
Government and they were granted to Portugal as a matter of grace and indulgence. The Indian
Government always reserved to itself the right to control the passage or transit facilities and even, if
occasion arose, to prohibit it altogether. We have instances where a complete embargo was placed by
the Indian Government on the carriage of certain goods. We have instances where no less a person
than the Consul-General of Portugal reminded the Governor of Diu that authorization by the British
authorities was indispensable before any Portuguese troops could cross British territory. Therefore,
India is right when she says that a right of passage subject to be revoked in whole or in part by
somebody else is not a right at all. I think that Portugal realizes the weakness of her case under this
head and therefore what has been really urged before us by Portugal is that this right which she claims
is warranted by general principles of international law. General principles of international law would
be applicable if Portugal establishes a general custom in contradistinction to a local custom by which
a State has the right to have access to enclaves by transit facilities being given to her in order to
maintain communications between herself and her enclaves. Now the only general custom which is
comparable to the question we have to consider which international law recognizes is the right of
innocent passage in territorial seas and in maritime parts of international rivers, and also immunity
given to diplomatic representatives when they are in transit between one State and another. No
general custom has ever been established permitting a State to have access to her enclaves as of right.
Portugal has relied on a learned study made by Professor Bauer of other enclaves, but this study only
shows that the right of passage either arises out of treaty or out of local custom which is not
applicable to the present case.
A principle of international law may also be imported from municipal law where the principle in
municipal law is universally recognized and when that principle is not in conflict with any rule of
international law itself; and the strongest reliance is placed by Portugal on the principle of municipal
law which may be described as an easement of necessity. It is said that when you have an owner
[p178] of land and his land is surrounded by the lands of other owners, the former has a right of
access to a public road. This right of access arises out of necessity because but for this access the
owner would be landlocked and would not be able to get out of his land, and therefore, in these
circumstances, municipal law presupposes a right of way in the first owner over the lands of other
owners. In my opinion, it would be extremely unsafe to draw an analogy between the rights of an
owner and the obligations of other owners under municipal law and the rights and obligations of
States under international law. There can be no comparison between private property and territorial
sovereignty nor can there be any comparison between a citizen and a sovereign State. A sovereign
State can pass any legislation affecting private property. It can compel the owner of land to cede any
right to neighbouring owners. But that surely cannot be true of territorial sovereigns. Portugal cannot
compel India to cede any right to her nor can India be placed under any obligation because Portugal is
under a necessity to have access to her enclaves. Further, such a rule would obviously be in
contradiction with the one undisputed well-established principle of international law, namely,
territorial sovereignty, and therefore there is no scope for importing this principle of municipal law
into the domain of international law.
Even in municipal law parties may agree as to the nature and extent of an easement, and if parties
agree, then municipal law will not presume an easement of necessity. In this case, the relations
between Portugal and the territorial sovereign of India clearly demonstrate that the conditions of
Portugal's passage or transit over Indian territory were clearly settled and those conditions were that
Portugal had no right to a passage or transit but she could only be afforded such facilities as the
Indian Government, in its absolute discretion, thought fit to concede. Therefore, Portugal has failed to
make out any case, let alone an arguable case, that India's discretion with regard to this particular
subject-matter, which clearly falls within her own domestic jurisdiction, is controlled by any
international obligation or that there is any rule of international law which takes this matter out of the
reserved domain. Under the circumstances, I think that the Court should uphold this Objection raised
by India and should decide that there is no necessity for further investigation of the facts and no
useful purpose would be served by joining this Objection to the hearing.
***
I now come to the last and final Objection of India, which is Objection Six. It is with regard to ratione
temporis, and India's contention is that the dispute brought before the Court arose [p179] prior to 5th
February, 1930, with regard to situations or facts prior to that date and that therefore the dispute is
clearly excluded from the competence of the Court by reason of her reservation in her Declaration of
28th February, 1940. It is clear from the jurisprudence of the Court that the only facts or situations
which can be considered for the purpose of this Objection are those facts or situations which are the
source or cause of the dispute. It is clear to my mind that the source of the dispute is the divergence of
 opinion between India and Portugal as to the legal implications of what transpired from 1812 The Factory At Chorzow (Claim for Indemnity) (The Merits)
onwards. The divergence is not only as to what happened in 1954. The divergence is as to the whole
concatenation of facts and situations relied on by Portugal for asserting her right. Portugal says that
India has acted contrary to her obligation to allow right of passage to Portugal and the breach of her
obligation only took place in 1954, and therefore it is irrelevant to consider for the purpose of this
Objection any facts or situations prior to 1954. This is clearly a fallacy. The obligation of India itself Germany v. Poland
is in dispute and according to Portugal herself the obligation of India arises from facts and situations
prior to 1930. The question that the Court has to consider is not whether there was any breach of
Portugal's legal right by India in 1954. The question is whether Portugal had any legal right at all and
Portugal can only establish the legal right by a body of evidence from 1818 to 1954 which forms a Judgment
single and continuous whole. This is not a new dispute which Portugal seeks to bring before the
Court. The conflict of views between the two Governments stretches back to 1818. It is a dispute as to
the true result in law of facts and situations from 1818 onwards. In the Phosphates in Morocco case
(P.C.I.J., Series A/B, No. 74, p. 24), the Court observed that the expression "facts and situations" was BEFORE: President: Anzilotti
wide enough to embrace all the different facts capable of giving rise to a dispute, and a situation Former
Huber
would include within its connotation not merely facts but also legal consequences resulting from a President:
given set of facts. Again, in the Phosphates in Morocco case, dealing with the general object of the Judges: Lord Finlay, Nyholm, de Bustamante, Altamira,Oda, Pessoa
limitation ratione temporis, it is stated (p. 24): "... it was inserted with the object of depriving the Deputy
Beichmann
acceptance of the compulsory jurisdiction of any retroactive effects, in order both to avoid, in general, Judge(s):
a revival of old disputes, and to preclude the possibility of the submission to the Court by means of an National
Rabel, Ehrlich
application of situations or facts dating from a period when the State whose action was impugned was Judge:
not in a position to foresee the legal proceedings to which these facts and situations might give rise".
This observation in all its force applies to the present case. The Government of India was not in a Represente
Germany: Dr. Erich Kaufmann, Professor at Berlin
position to foresee the legal proceedings to which the facts and situations from 1818 onwards might d By:
give rise. And the whole object of India's limitation contained in her Declaration is to prevent Thadeus Sobolewski, Agent for the Polish Government before
Poland:
adjudication by the Court with regard to such [p180] facts and situations. In my opinion, there is no the Polish-German Mixed Arbitral Tribunal
answer to India's Sixth Objection.
Perm. Link: http://www.worldcourts.com/pcij/eng/decisions/1928.09.13_chorzow1.htm
I should like to make one general observation with regard to the question of the jurisdiction of the
Court. It has been said that a good judge extends his jurisdiction. This dictum may be true of a judge Citation: Factory at Chorzow (Germ. v. Pol.), 1928 P.C.I.J. (ser. A) No. 17 (Sept.
in a municipal court; it is certainly not true of the International Court. The very basis of the 13)
jurisdiction of this Court is the will of the State, and that will must clearly demonstrate that it has Publication: Publications of the Permanent Court of International Justice Series A - No.
accepted the jurisdiction of the Court with regard to any dispute or category of disputes. Therefore, 17; Collection of Judgments A.W. Sijthoff’s Publishing Company, Leyden,
whereas a municipal court may liberally construe provisions of the law which confer jurisdiction 1928.
upon it, the International Court on the other hand must strictly construe the provisions of the Statute
and the Rules and the instruments executed by the States in order to determine whether the State
objecting to its jurisdiction has in fact accepted it.

I would, therefore, dismiss Portugal's claim on the ground that the Court has no jurisdiction to
entertain it.
[p5] THE COURT,
(Signed) M. C. Chagla. composed as above,
having heard the observations and conclusions of the Parties,
delivers the following judgment:

[1] 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 for the damage
PERMANENT COURT OF INTERNATIONAL JUSTICE suffered by the Oberschlesische Stickstoffwerke A.-G. (hereinafter designated as the
Oberschlesische) and the Bayerische Stickstoffwerke A.-G. (hereinafter designated as
the Bayerische) in consequence of the attitude adopted by that Government towards
those Companies in taking possession of the nitrate factory situated at Chorzów, which
Fourteenth (Ordinary) Session attitude has 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 13th, 1922,
between Germany and Poland (hereinafter described as the Geneva Convention).
[2] On receipt of the German Government's Case in the suit, on March 3rd, 1927, the
Polish Government, on April 14th, 1927, raised a preliminary objection denying the
Court's jurisdiction to hear the suit brought before it and submitting that the Court
should, "without entering into the merits, declare that it had no jurisdiction".
[3] The Court dealt with this plea in its Judgment No. 8 given on July 26th, 1927, by
which it overruled the preliminary objection raised by the Polish Government and
reserved for judgment on the merits the suit brought on February 8th, 1927, by the
German Government.
[4] Furthermore, under the terms of this judgment, the President was instructed to fix
the times for the filing of the Counter-Case, Reply and Rejoinder on the merits. These
times, which were in the first place fixed to expire on [p6] September 30th, November
15th and December 30th, 1927, were subsequently extended by successive decisions
until November 30th, 1927, February 20th and May 7th, 1928, respectively.
[5] The documents of the written proceedings were duly filed with the Registrar of the
Court within the times finally fixed and were communicated to those concerned as
provided in Article 43 of the Statute.
[6] In the course of hearings held on June 21st, 22nd, 25th, 27th and 29th, 1928, the
Court has heard the oral statements, reply and rejoinder submitted by the above-
mentioned Agents for the Parties.
***
[7] The submissions made in the German Government's Application of February 8th,
1927, were as follows:
It is submitted:
[Translation.]
(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 damage 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 damage caused to the Oberschlesische Stickstoffwerke
Company and 16,775,200 Reichsmarks for the damage caused 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 possession of the working capital (raw material, finished and half-
manufactured 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; [p7]
(c) that, from the date of 3judgment, 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.
[8] These submissions have, in the course of the written or oral proceedings, undergone
modifications which will be indicated below. As the Court has not in the present suit
availed itself of the right conferred upon it under Article 48 of the Statute to make
orders as to "the form and time in which each Party must conclude its arguments", it, in
this case, allows the Parties, in accordance with established precedent, to amend their
original submissions, not only in the Case and Counter-Case (Article 40 of the Rules),
but also both in the subsequent documents of the written proceedings and in
declarations made by them in the course of the hearings (Article 35 of the Rules),
subject only to the condition that the other Party must always have an opportunity of
commenting on the amended submissions.
[9] Submission No. I of the Application has not been subsequently amended.
[10] On the other hand, with regard to submission No. 2, important amendments have
been made. In the Case this submission is worded as follows:
It is submitted: ....
[Translation.]
(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 damage caused to the Oberschlesische Stickstoffwerke Company, and 20,179,000
Reichsmarks for the damage caused to the Bayerische Stickstoffwerke Company.
[11] In comparing submission (2) of the Case with submission (2) of the Application,
regard must be had to the following facts resulting from the Case: [p8]
(a) that the total of 59,400,000 mentioned in the Application as the figure representing
the damage suffered by the Oberschlesische is calculated as on July 3rd, 1922;
(b) that this sum includes the sum of 1 million for raw materials, finished and half-
manufactured products, stores, etc.
(c) that the. sum of 75,920,000 mentioned in the Case as the figure representing the
damage suffered by the Oberschlesische is made up of 58,400,000 for damages as on
July 3rd, 1922, and 17,520,000 for interest at 6% on 58,400,000 for the period July
3rd, 1927, to July 2nd, 1927;
(d) that this sum does not include an amount for "working capital", compensation for
the "present value" of this capital being in the Case sought in general terms;
(e) that the sum of 16,775,200 mentioned in the Application as the figure representing
the damage suffered by the Bayerische is calculated as on July 3rd, 1922;
(f) that the sum of 20,179,000 mentioned in the Case as representing the damage
suffered by the Bayerische is calculated as on July 2nd (or 3rd), 1927, at a rate of
interest of 6 % the amount for the Bayerische indicated in the Application is said to
contain an error of calculation.
[12] Lastly, submission (2) of the Application has been amended in the German Agent's
oral reply as concerns the compensation claimed for the damage suffered by the
Oberschlesische. This submission runs as follows in the submissions read by the Agent
at the conclusion of his oral Reply:
It is submitted:
[Translation.]
that the total of the compensation to be paid to the German Government is 58,400,000
Reichsmarks, plus 1,656,000 Reichsmarks, plus interest at 6% on this sum as from July
3rd, 1922, until the date of judgment (for the damage done to the Oberschlesische
Stickstoffwerke A.-G.);
that the total of the compensation to be paid to the German Government is 20,179,000
Reichsmarks for the damage done to the Bayerische Stickstoffwerke A.-G.
[13] It follows that, as regards the Oberschlesische, the German Government (a)
reverts to the sum of 58,400,000 as on [p9] July 3rd, 1922; (b) fixes as 1,656,000 the
value of the working capital on that date; (c) claims on these two sums interest at 6%
until the date of judgment, thus abandoning the claim for a lump sum made in the
Case.
[14] As regards submission (3) of the German Government's Application, amendments
both of form and of substance are to be noted in the course of the subsequent
procedure.
[15] As regards form, paragraph (e) of submission (3) of the Application constitutes by
itself a new third submission in the Case, whilst the substance of paragraphs (a)-(d) of
submission No. 3 of the Application has been embodied in a new submission No. 4 (a)-
(d) in the Case. In these circumstances, it is preferable to trace back the modifications
made to each of the paragraphs of the original third submission.
[16] Paragraph 3 (a) is worded as follows in the Case (where it is numbered 4 (a)):
[Translation.]
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
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.
[17] As compared with the Application, therefore, this paragraph has undergone a
purely superficial modification (deletion of an explanatory remark in parenthesis), and
it has not subsequently been amended.
[18] Paragraph 3 (b) is worded as follows in the Case (where it is numbered 4 (b)):
[Translation.]
that the Polish Government should pay the remaining sums by April 15th, 1928, at
latest;
in the alternative, that, in so far as 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. [p10]
[19] Thus to the main original submission has been added an alternative contemplating
the possibility of payment by instalments.
[20] The same paragraph is couched in the following terms in the oral reply:
[Translation.]
It is submitted that the Polish Government should pay the remaining sums at latest
within fifteen days after the beginning of the financial year following the judgment; in
the alternative that, in so far as payment may be effected by instalments, the Polish
Government should, within one month from the date of judgment, give bills of
exchange for the amounts of the instalments, including interest, payable on maturity to
the Oberschlesische Stickstoffwerke A.-G. and to the Bayerische Stickstoffwerke A.-G.
[21] The modification as compared with the previous version consists in the
substitution for the date April 15th, 1928, which had already passed, a time-limit fixed
in relation to the beginning of the Polish financial year.
[22] Paragraph 3 (c) of the submissions of the Application (4 (c) of the Case) has
undergone no subsequent modification.
[23] On the other hand, paragraph 3 (d) of the Application appears in the Case in the
following form (No. 4 (d) of the Case)
[Translation.]
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.
[24] The original submission is contained in the last part of this paragraph, the
principal clause of which now seeks a declaration excluding any possibility of extra-
judicial set-off.
[25] The wording of the Case is retained both in the written and in the oral reply,
except that a new alternative submission is added in regard to the question of the
prohibition of extra-judicial set-off. This addition runs as follows: [p11]
[Translation.]
In the alternative it is submitted that set-off is only permissible if the Polish
Government puts forward for this purpose a claim in respect of a debt recognized by
the German Government or established by a judgment given between the two
Governments.
[26] Turning lastly to paragraph 3 (e) of the submissions in the Application, it is to be
observed that this reappears unchanged in submission 3 of the Case. On the other hand,
in the written Reply, whilst the submission of the Application is repeated, the following
alternative is added:
[Translation.]
It is submitted that the Polish Government should be obliged to cease the exploitation
of the factory and of the chemical equipment for the transformation of nitrate of lime
into ammonium nitrate, etc.
[27] With this addition, this submission also appears in the oral reply in the following
form:
[Translation.]
in the alternative, should the Court not adopt the points of view set out in paragraphs
55 and 57 of the Reply, it is submitted that the Polish Government should be obliged to
cease the exploitation of the factory or of the chemical ,equipment for the production
of ammonium nitrate, etc.
***
[28] In connection with certain submissions made by the Polish Government in regard
to the compensation of the Oberschlesische, the German Government has not merely
asked the Court to reject these submissions but has also formulated two other
submissions, namely:
[Translation.]
(1) that the Polish Government is not entitled to refuse to pay compensation to the
German Government on the basis of arguments drawn from Article 256 and for
motives of respect for the rights of the Reparation Commission and other third parties;
(2) that the Polish Government's obligation to pay the indemnity awarded by the Court
is in no way set aside by a judgment given or to be given by a Polish municipal court in
a suit concerning the question of the ownership of the factory at Chorzów. [p12]
[29] These submissions, which were made in the written Reply and in the first oral
statement of the German Agent respectively, have been maintained unaltered in the oral
reply.
[30] Apart from the two additional claims just referred to, the final submissions of the
German Government are therefore as follows :
[Translation.]
(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) (a) that the amount of the compensation to be paid to the German Government is
58,400,000 Reichsmarks, plus 1,656,000 Reichsmarks, plus interest at 6 % on this sum
as from July 3rd, 1922, until the date of judgment (for the damage caused to the
Oberschlesische Stickstoffwerke A.-G.);
(b) that the amount of the compensation to be paid to the German Government is
20,179,000 Reichsmarks for the damage caused to the Bayerische Stickstoffwerke A.-
G. ;
(3) 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;
in the alternative, that the Polish Government should be obliged to cease from
exploiting the factory or the chemical equipment for the production of nitrate of
ammonia, etc.;
(4) (a) that the Polish Government should pay, within one month from the, date of
judgment, the compensation due to the Oberschlesische Stickstoffwerke A.-G. for the
taking possession of the working capital and the compensation due to the Bayerische
Stickstoffwerke A.-G. for the period of exploitation from July 3rd, 1922, to the date of
judgment;
(b) that the Polish Government should pay the remaining sums at latest within fifteen
days after the beginning of the financial year following the judgment; in the
alternative, that, in so far as payment may be effected by instalments, the Polish
Government should within one month from the date of judgment, give bills of
exchange for the amounts of the instalments, including interest, payable on maturity to
the Oberschlesische Stickstoffwerke A.-G. and to the Bayerische Stickstoffwerke A.-G.
;
(c) that from the date of judgment, interest at 6 % per annum should be paid by the
Polish Government; [p13]
(d) that the Polish Government is not entitled to set off against the above-mentioned
claim for indemnify 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
said claim for indemnity; and that the payments mentioned under (a) to (c) should be
made without any deduction to the account of the two Companies with the Deutsche
Bank at Berlin;
in the alternative, that set-off is only permissible if the Polish Government puts
forward for this purpose a claim in respect of a debt recognized by the German
Government or established by a judgment given between the two Governments.
[31] The Polish Government has made no formal objection to the amendments
successively made in the original submissions of the German Government.
***
[32] The submissions formulated by the Polish Government in reply to those set out in
the Application and Case of the German Government are worded as follows in the
Counter-Case:
It is submitted:
[Translation.]
A. In regard to the Oberschlesische:
(1) that the applicant Government's claim should be dismissed;
(2) in the alternative, that the claim for indemnity should be provisionally suspended;
(3) as a further alternative, in the event of the Court awarding some compensation, that
such compensation should only be payable: (a) after the previous withdrawal by the
said Company of the action brought by it and pending before the German-Polish Mixed
Arbitral Tribunal in regard to the Chorzów factory and after the formal abandonment
by it of any claim against the Polish Government in respect of the latter's taking
possession and exploitation of the Chorzów factory; (b) when the civil action brought
against the said Company by the Polish Government in respect of the validity of the
entry of its title to ownership in the land register has been finally decided in favour of
the Oberschlesische.
(4) In any case, it is submitted that the German Government should, in the first place,
hand over to the Polish Government the whole of the shares of the Oberschlesische
[p14] Stickstoffwerke Company, of the nominal value of 110,000,000 Marks, which
are in its hands under the contract of December 24th, 1919.
B. In regard to the Bayerische:
(1) (a) that the applicant Government’s claim for compensation in respect of the past,
in excess of 1,000,000 Reichsmarks, should be dismissed;
(b) that, pro futuro, an annual rent of 250,000 Reichsmarks, payable as from January
1st, 1928, until March 31st, 1941, should be awarded;
(c) that these indemnities should only be payable after previous withdrawal by the said
Company of the claim pending before the German-Polish Mixed Arbitral Tribunal in
respect of the Chorzów factory and after the formal abandonment by it of any claim
against the Polish Government in respect of the latter's taking possession and
exploitation of the Chorzów factory ;
(2) that the applicant Government's third submission to the effect that until June 30th,
1931, no exportation of nitrated lime or nitrate of ammonia should take place to
Germany, the United States of America, France or Italy, should be dismissed.
C. In regard to the Oberschlesische and Bayerische jointly:
that submission No. 4 – to the effect that it is not permissible for the Polish
Government to set off, against the abovementioned 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 abovementioned claim for indemnity, and that
the payments mentioned under 4 (a)-(c) should be made without any deduction to the
account of the two Companies with the Deutsche Bank at Berlin-should be rejected.
[33] These submissions have not subsequently been amended except that submission
A, 3 (b), was withdrawn by means of a declaration contained in the written Rejoinder.
[34] The German Government having disputed the right of the Polish Government to
withdraw this submission (the rejection of which had been demanded by the former) at
the stage of the proceedings reached when the withdrawal took place, the latter
Government maintained its withdrawal.
[35] For the reasons given above, the Court holds that there is nothing to prevent the
Polish Government for its part from [p15] amending its original submissions,
especially seeing that this amendment occurred while the written proceedings were still
in progress and took the form of the abandonment of a part of its submissions. In the
Court's opinion, the second of the "additional claims" of the German Government
mentioned above, was doubtless designed to meet the Polish submission which has
been thus abandoned.
* intended to meet;
[36] The Court therefore considers that the final submissions of the Polish Government
may be set down as under:
"It is submitted :
A. As regards the Oberschlesische:
(1) that the claim of the applicant Government should be dismissed;
(2) in the alternative, that the claim for indemnity should be provisionally suspended;
(3) as a further alternative, in the event of the Court awarding some compensation, that
such compensation should only be payable after the previous withdrawal by the said
Company of the action brought by it and pending before the German-Polish Mixed
Arbitral tribunal in regard to the Chorzów factory, and after the formal abandonment
by it of any claim against the Polish Government in respect of the latter's taking
possession and exploitation of the Chorzów factory.
(4) In any case, it is submitted that the German Government should, in the first place,
hand over to the Polish Government the whole of the shares of the Oberschlesische
Stickstoffwerke Company, of the nominal value of 110,000,000 Marks, which are in its
hands under the contract of December 24th, 1919.
B. As regards the Bayerische:
(1) (a) that the applicant Government's claim for compensation in respect of the past, in
excess of 1,000,000 Reichsmarks, should be dismissed;
(b) that, pro futuro, an annual rent of 250,000 Reichsmarks, payable as from January
1st, 1928, until March 31st, 1941, should be awarded;
(c) that. these indemnities should only be payable after previous withdrawal by the said
Company of the claim pending before the German-Polish Mixed Arbitral [p16]
Tribunal in respect of the Chorzów factory and after the formal abandonment by it of
any claim against the Polish Government in respect of the latter's taking possession and
exploitation of the Chorzów factory;
(2) that the applicant Government's third submission to the effect that until June 30th,
193,I, no exportation of nitrate of lime or nitrate of ammonia should take place to
Germany, the United States of America, France or Italy.
C. As regards the Oberschlesische and Bayerische jointly:
that submission No. 4-to the effect that it is not permissible for the Polish Government
to set off against the abovementioned 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 abovementioned claim for indemnity, and that the
payments mentioned under 4 (a)-(c) should be made without any deduction to the
account of the two Companies with the Deutsche Bank at Berlin-should be rejected.
***
[37] A comparison between the German and Polish final submissions as thus set out
leads to the following results :
I. (A) as regards the first German submission: that the Parties are at variance except in
regard to the reparation of the damage sustained by the Bayerische;
(B) as regards submission No. 2 a of the German Government that the Polish
Government asks that it should be dismissed ; and, in the alternative, that the claim for
indemnity should be provisionally suspended; it is doubtless the alternative claim thus
put forward by Poland in reply to submission No. 2 a of the German Government that
the first of the "additional claims" of the latter Government mentioned above is
(C) as regards submission No. 2 b of the German Government: that the Polish
Government asks that it should be dismissed except as regards the award, in respect of
[p17] the past, of a sum not exceeding 1,000,000 Reichsmarks for the future, of an
annual rent of 250,000 Reichsmarks payable as from January 1st, 1928, until March
31st, 1941;
(D) as regards the German submission No. 3: that the Polish Government asks that the
German Government's principal submission should be dismissed but does not
formulate a definite submission with regard to the alternative submission under this
number;
(E) as regards the German submissions Nos. 4 (a)-(c): that the Polish Government does
not say anything specific concerning these submissions except in so far as it formulates
its submission A 3, regarding the suspension of payment;
(F) as regards the German Government's submission No. 4 (d): that the Polish
Government submits that the principal submission under this number should be
rejected, but does not formulate any definite submission regarding the alternative
German submission.
II. As regards the Polish submissions: that submission A 4, which goes beyond the
scope of the German submissions, has given rise to a claim for its rejection on the part
of 'the German Government, formulated during the oral proceedings.
***
[38] It is therefore solely with the points of divergence as set out above that the Court
has to deal in the judgment which it is about to deliver. It is true that the Parties have,
both in the written and oral proceedings, formulated yet other claims. In so far,
however, as these claims do not constitute developments of the original submissions, or
alternatives to them, the Court cannot regard them otherwise than - to use the
expression of the Agent of the German Government-as "subsidiary arguments" or as
mere suggestions as to the procedure to be adopted; this is certainly the case as regards
the numerous requests with a view to the consultation of experts or the hearing of
witnesses. There is no occasion for the Court [p18] to pass upon all these requests; it
may therefore confine itself to taking them into account, in so far as may be necessary
during the discussion of the arguments advanced by the parties in support of their
submissions, for the purposes of stating the reasons of the judgment.
***
[39] The Parties have presented to the Court numerous documents either as annexes to
the documents of the written proceedings or in the course of the hearings, or, lastly, in
response to requests made or questions put by the Court. (Annex.)
THE FACTS.
[40] The facts underlying the present suit have already been succinctly stated or
referred to in judgments Nos. 6, 7, 8 and 11, given by the Court on August 25th, 1925,
May 25th, 1926, July 26th, 1927, and December 16th, 1927.
[41] The present judgment, however, must deal with the so-called case of the factory at
Chorzów from a point of view with which the Court has not hitherto had to concern
itself, namely, that of the nature - and, if necessary, the amount and method of payment
- of the reparation which may be due by Poland in consequence of her having, as
established by the Court in Judgment No. 7, adopted an attitude not in conformity with
the Geneva Convention of May 13th, 1922. Accordingly, it is necessary, before
approaching the point of law raised by the German Application of February 8th, 1927,
briefly to trace out the relevant facts from this particular standpoint.
[42] On March 5th, 1915, a contract was concluded between the Chancellor of the
German Empire, on behalf of the Reich, and the Bayerische, according to which that
Company undertook "to establish for the Reich and forthwith to begin the construction
of", amongst other things, a nitrate factory at Chorzów in Upper Silesia. The necessary
lands were to be acquired on [p19] 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 profits 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 months' notice.
The contract could be determined as early as March 31st, 1921, always on condition of
fifteen months' notice being given, if the Reich's share of the surplus did not reach a
fixed level.
[43] This contract was subsequently supplemented by a series of seven additional
contracts, of which, however, only the second and seventh, concluded on November
16th, 1916, and November 22nd, 1918, respectively, relate to the Chorzów factory. On
May 14th, 1919, the Bayerische brought an action against the Reich, claiming that the
latter was bound to compensate the Company for the damage said to have been
suffered by it, owing to certain alleged shortcomings with respect to the fulfilment of
the contract of March 5th, 1913, and the additional contracts. This matter was,
however, settled out of court by an arrangement concluded on October 24th, 1919,
between the Reich and the Bayerische, an arrangement which replaced the fifth
additional contract and did not relate to the Chorzów factory.
[44] 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., with a share capital of 250,000 marks, increased subsequently
to 110 millions of marks, and the sale by the Reich to this Company of the factory at
Chorzów, that is to say, the whole of the land, buildings and installations belonging
thereto, with all accessories, reserves, raw material, equipment and stocks. The [p20]
management and working of the factory were to remain in the hands of the Bayerische,
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 was duly entered, on January 29th, 1920, at the Amtsgericht of
Königshütte, in the Chorzów land register, as owner of the landed property constituting
the nitrate factory at Chorzów. The registered office of the Oberschlesische which,
under the memorandum of association, was established at Chorzów, was subsequently,
by an amendment executed on January 14th, 1920, transferred to Berlin.
[45] In the contract of December 24th, 1919, between the Reich and the newly created
Oberschlesische, a second limited liability company, founded the same day and known
as the Stickstoff Treuhand Gesellschaft m. b. H. (hereinafter called the "Treuhand")
was also concerned. This Company had a share capital of 300,000 marks, subsequently
increased to 1,000,000 marks. Under the contract, the whole of the factory for the
production of nitrated lime, with the accessory installations, situated at Chorzów, was
ceded by the Reich to the Oberschlesische at the price of approximately 110 million
marks, - which price was calculated according to certain data indicated in the contract
itself, - the Treuhand taking over, in the place of the Oberschlesische, as sole and
independent debtor, all the obligations imposed by the contract upon the latter in regard
to the Reich, and obtaining in consideration thereof, without payment, shares of the
Oberschlesische - to the nominal value of 109,750,000 marks. Later, the Treuhand also
acquired the rest of the shares of the Oberschlesische, thus becoming the sole
shareholder of that Company. As guarantee for the sums due to the Reich under the
contract, the Treuhand undertook to obtain for the Reich a lien on all the shares of the
Oberschlesische. The Treuhand was to liquidate the purchase price exclusively by
paying to the Reich the dividends on the shares of the Oberschlesische. Nevertheless,
the Treuhand was authorized to pay at any time the whole or a part of the purchase
price ; this would have the effect of removing the lien on shares of a nominal value
corresponding to the payment [p21] made. The Reich was authorized itself to exercise
all the rights resulting from the possession of the shares, and in particular the right to
vote at the general meeting of shareholders, but agreed that the management. of the
exploitation of the Oberschlesische should be left in the hands of the Bayerische. An
alienation of the shares so pledged would be authorized only with the approval of the
Reich, even after the lien had expired. As a guarantee for the fulfilment of this
obligation, the Reich would, even after expiration of the lien, retain possession of the
shares and the exercise of all rights resulting from such possession. The price realized
in the event of a sale of the shares was in the first place to be devoted to the liquidation
of the balance of the Reich's claim. Of any surplus, the Reich was to receive either
85% - If the sale were effected by the Treuhand - or 90% - if it were effected by the
Reich; in both cases, the balance only would fall to the Treuhand which, however, in
the second case, would obtain a right to acquire the shares at the price at which the
Reich wished that they should be disposed of.
[46] On May 15th, 1922, was signed at Geneva between Germany and Poland the
Convention concerning Upper Silesia.
[47] After the signature of this Convention but before the actual cession of Polish
Upper Silesia to Poland, the Treuhand, by a letter dated May 26th, 1922, offered to a
Swiss company, the Compagnie d'azote et de fertilisants S. A. at Geneva, an option
until the end of the year for the purchase, at a price of five million Swiss francs, to be
paid by January 2nd, 1923, at latest, of one half (55 million marks) of the shares of the
Oberschlesische, in consideration of which the Genevese Company would, amongst
other things, acquire the right to take part in the negotiations with the Polish
Government. This offer came to nothing.
[48] On July 1st, 1922, the Polish Court of Huta Krolewska, which had replaced the
Amtsgericht of Königshütte, gave a decision to the effect that the registration with this
Court of the Oberschlesische as owner of the factory, which was declared null and
void, was to be cancelled and the previously existing situation restored and that the
right of ownership in the landed property in question was to be registered in the name
of the [p22] Polish Treasury. This decision, which cited Article 256 of the Treaty of
Versailles and the Polish laws of July 14th, 1920, and June 16th, 1922, was carried into
effect on the same day.
[49] On July 3rd, 1922, M. Ignacy Moscicki, who was delegated with full powers to
take charge of the factory at Chorzów 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 contended, and the Polish
Government did not deny, 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.
[50] After having taken over the factory, the Polish Government entered it in the list of
property transferred to it under Article 256 of the Treaty of Versailles, which list was
duly communicated to the Reparation Commission. The Polish Government alleges
that after the pronouncement of Judgment No. 7 by the Court, the German Government
asked that the factory should be struck out of the list in question; the former
Government has not, however, been informed whether this has been done.
[51] In the meantime, the Oberschlesische, on November I5th, 1922, had brought an
action before the German-Polish Mixed Arbitral Tribunal at Paris, claiming, amongst
other things, that the Polish Government should be ordered to restore the ,factory. This
action, notice of which was served upon the respondent Government on January 17th,
1923, was withdrawn by the Oberschlesische in June 1928, before the Tribunal had
been able to give a decision.
[52] The Oberschlesische, on November 24th, 1922, instituted a parallel action in
regard to the movable property existing at Chorzów at the time of the taking over of
the factory, against the Polish Treasury before the Civil Court of Katowice, with a view
to obtaining either the restitution to the Oberschlesische or the Bayerische of such
property, or the payment of the equivalent value. This action however led to no
decision on the merits.
[53] As regards the Bayerische, that Company also, on March 25th, 1925, brought an
action before the German-Polish Mixed [p23] Arbitral Tribunal against the Polish
Treasury with a view to obtaining an annual indemnity until the restitution of the
factory to the Oberschlesische, and to causing the possession and management of the
factory to be restored to it. Notice of this action was served on the respondent
Government on December 16th, 1925 ; but the case was withdrawn in June 1928, at the
same time as the action brought by the Oberschlesische and in the same circumstances.
[54] The Court's Judgment No. 7 was given on May 75th, 1926. This judgment was the
source of developments tending in two different directions.
[55] On the one hand, at the initiative of the German Government, it formed the
starting point for direct negotiations between the two Governments concerned. In
regard to these negotiations, it is only necessary here to note that, on January 14th,
1927, the German Government had recognized that the factory could no longer be
restored in kind and that consequently the reparation due must, in principle, take the
form of the payment of compensation, a statement which is moreover formally
repeated in the Case. The negotiations were unsuccessful owing, amongst other things,
to the fact that, in the opinion of the Polish Government, certain claims which Poland
was said to have against Germany, must be set off against the indemnity to be awarded
to Germany. The failure of the negotiations resulted in the institution of the present
proceedings.
[56] On the other hand, the Court's Judgment No. 7 gave rise on the part of the Polish
Government to the bringing of an action before the Polish Court of Katowice against
the Oberschlesische in order to obtain a declaration that that Company had not become
owner of the landed property at Chorzów; that the entry in the land register made in its
favour on January 29th, 1922, was not valid, and that-independently of the laws of July
14th, 1920, and June 16th, 1922, - the ownership of the landed property in question fell
to the Polish Treasury. The judgment of the Court in this action¬ which was given by
default - was published on November 12th, 1927, and took effect on January 2nd, 1928
; it admitted all the submissions of the claimant. [p24]
[57] Meanwhile, on October 18th, 1927, the Court had received a fresh application
from the German Government which, relying on the terms of Article 60 of the Statute
and Article 66 of the Rules of Court, prayed the Court to give an interpretation of its
Judgments Nos. 7, of May 25th, 1926, and 8, of July 26th, 1927, alleging that a
divergence of opinion had arisen between the two Governments in regard to the
meaning and scope of these two judgments in connection with the point which had
given rise to the proceedings before the Court of Katowice.
[58] The Court, on December 16th, 1927, delivered its judgment in this suit (No. II).
According to this judgment the Court's intention in Judgment No. 7 had been to
recognize, with binding effect between the Parties concerned and in respect of that
particular case, amongst other things, the right of ownership of the Oberschlesische in
the Chorzów factory under municipal law.
[59] Whilst the proceedings in connection with the request for an interpretation were in
progress, the German Government, by means of a Request dated October 14th, 1927,
and filed with the Registry on November 15th, besought the Court to indicate to the
Polish Government that it should pay to the German Government, as a provisional
measure, the sum of 30 million Reichsmarks.
[60] The Court gave its decision upon this request, which was submitted under the
terms of Article 41 of the Statute, in the form of an Order made on November 21st,
1927. It held that effect could not be given to the request of the German Government,
since it was to be regarded as designed to obtain not the indication of measures of
protection, but judgment in favour of a part of the claim formulated in the Application
of February 8th, 1927. [p25]
***
THE LAW.
I.
[61] The Court, before proceeding to consider the Parties' submissions, must determine
the import of the application which has given rise to the present proceedings, in order
to ascertain its nature and scope. In the light of the results of this investigation, it will
then proceed to consider the submissions made in the course of the written and oral
proceedings.
[62] In the application the Court is asked:
(1) to declare that the Polish Government, by reason of its attitude in respect of the
Oberschlesische and Bayerische Companies, which attitude the Court had declared not
to be in conformity with the Geneva Convention, is under an obligation to make good
the consequent damage sustained by those Companies;
(2) to award compensation, the amount of which is indicated in the application, for the
damage caused to each of the respective Companies;
(3) to fix the method of payment, and amongst other things to order the payments to be
made by the Polish Government to be effected to the account of the two Companies
with the Deutsche Bank at Berlin.
[63] In the course of the oral proceedings, a difference of opinion between the two
Parties became apparent as to the nature and scope of the application. The Agent for
the German Government argued in his address to the Court that a government may
content itself with reparation in any form which it may consider proper, and that
reparation need not necessarily consist in the compensation. of the individuals
concerned. The following passage should especially be noted:
[Translation.]
"It is in fact a question of the German Government's own rights. The German
Government has not brought this suit as representative of the individuals who have
suffered injury, but it may estimate the damage for which it claims reparation on its
own behalf, according to the measure provided by the losses suffered by the companies
whose case it has [p26] taken up. The German Government may claim the payment of
this compensation at any locus solutionis which it may think fit in this case, whether it
be a public or a private office.
The present dispute is therefore a dispute between governments and nothing but a
dispute between governments. It is very clearly differentiated from an ordinary action
for damages, brought by private persons before a civil court, as the Polish Government
has said in its Rejoinder."
[64] The Agent for the Polish Government in his Rejoinder submitted that this method
of regarding the question involved a modification of the subject of the dispute and, in
some sort also, of the nature of the application, for, according to Poland's view, the
subject of the dispute had been defined by Germany as the obligation to compensate
the two Companies. But damage and compensation being interdependent conceptions,
the German claim assumed another aspect if it was no longer a question of
compensating the Companies, but of compensating the State for the injury suffered by
it. The Agent for the Polish Government disputed the German Government's right to
make this change at that stage of the proceedings and refused to accept it.
[65] Even should it be possible to construe the terms of the application and of the
subsequent submissions of the Applicant as contemplating compensation due directly
to the two Companies for damages suffered by them and not reparation due to
Germany for a breach of the Geneva Convention, it follows from the conditions in
which the Court has been seized of the present suit, and from the considerations which
led the Court to reserve it by Judgment No. 8 for decision on the merits, that the object
of the German application can only be to obtain reparation due for a wrong suffered by
Germany in her capacity as a contracting Party to the Geneva Convention.
[66] The present application is explicitly and exclusively based on Judgment No. 7
which declared that the attitude of the Polish Government in respect of the two
Companies, the Oberschlesische and Bayerische, was not in conformity with, Article 6
and the following articles of the said Convention. Already in Judgment No. 6,
establishing the Court's jurisdiction to deal with the alleged violation of the Geneva
Convention, the [p27] Court recognized that - as had been maintained by the Applicant
- the matter was exclusively a dispute between States as to the interpretation and
application of a convention in force between them. Article 23 of the Geneva
Convention only contemplates differences of opinion respecting the interpretation and
application of Articles 6 to 22 of the Geneva Convention arising between the two
Governments. The Court in fact declared itself competent to pass upon the claim for
reparation because it regarded reparation as the corollary of the violation of the
obligations resulting from an engagement between States. This view of the matter,
which is in conformity with the general character of an international tribunal which, in
principle, has cognizance only of interstate relations, is indicated with peculiar force in
this case for the specific reason that the Geneva Convention, with its very elaborate
system of legal remedies, has created or maintained for certain categories of private
claims arbitral tribunals .of a special international character, such as the Upper Silesian
Arbitral Tribunal and the German-Polish Mixed Arbitral Tribunal. It was on the basis,
amongst other things, of. the purely interstate character of the dispute decided by
Judgment No. 7 that the Court reserved the case for judgment, notwithstanding the fact
that actions brought by the two Companies were pending before one of the arbitral
tribunals above mentioned, actions which related to the same act of dispossession
which led to the filing with the Court of the German Government's Application now
before it.
[67] The Court, which by Judgment No. 8 reserved the present application for
judgment on the merits, could only do so on the grounds on which it had already based
its Judgment No. 7 which constitutes the starting point for the claim for compensation
now put forward by Germany. Accordingly the declarations of the Applicant in the
present proceedings must be construed in the light of this conception and this method
must also have been followed even if that Party had not stated its contention as
explicitly as it has done in the German Agent's address to the Court.
[68] It is a principle of international law that the reparation of a wrong may consist in
an indemnity corresponding to the damage which the nationals of the injured State
have suffered [p28] as a result of the act which is contrary to international law. This is
even the most usual form of reparation; it is the form selected by Germany in this case
and the admissibility of it has not been disputed. The reparation due by one State to
another does not however change its character by reason of the fact that it takes the
form of an indemnity for the calculation of which the damage suffered by a private
person is taken as the measure. The rules of law governing the reparation are the rules
of international law in force between the two States concerned, and not the law
governing relations between the State which has committed a wrongful act and the
individual who has suffered damage. Rights or interests of an individual the violation
of which rights causes damage are always in a different plane to rights belonging to a
State, which rights may also be infringed by the same act. The damage suffered by an
individual is never therefore identical in kind with that which will be suffered by a
State; it can only afford a convenient scale for the calculation of the reparation due to
the State.
[69] International law does not prevent one State from granting to another the right to
have recourse to international arbitral tribunals in order to obtain the direct award to
nationals of the latter State of compensation for damage suffered by them as a result of
infractions of international law by the first State. But there is nothing - either in the
terms of Article 23 or in the relation between this provision and certain others of a
jurisdictional character included in the Geneva Convention - which tends to show that
the jurisdiction established by Article 23 extends to reparation other than that due by
one of the contracting Parties to the other in consequence of an infraction of Articles 6
to 22, duly recognized as such by the Court.
[70] This view is moreover readily reconcilable with the submissions of the Applicant.
The first of its submissions, throughout all stages of the proceedings, aims at the
establishment of an obligation to make reparation. The indemnities to be paid to the
German Government, according to No. 2 of the final submissions, constitute, in the
terms of submission 4d, as set out in both the Case and the oral reply, a debt due to that
Government. The claim formulated in the same submission, to the effect that payment
should be made to the account of the [p29] two Companies with the Deutsche Bank at
Berlin, is interpreted by the Agent for the German Government as solely relating to the
locus solutionis.

[71] The Court therefore is of opinion that the Applicant has not altered the subject of
the dispute in the course of the proceedings.
***
[72] It follows from the foregoing that the application is designed to obtain, in favour
of Germany, reparation the amount of which is determined by the damage suffered by
the Oberschlesische and Bayerische. Three fundamental questions arise:
(1) The existence of the obligation to make reparation.
(2) The existence of the damage which must serve as a basis for the calculation of the
amount of the indemnity.
(3) The extent of this damage.
[73] As regards the first point, the Court observes that it is a principle of international
law, and even a general conception of law, that any breach of an engagement involves
an obligation to make reparation. In Judgment No. 8, when deciding on the jurisdiction
derived by it from Article 23 of the Geneva Convention, the Court has already said that
reparation 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. The existence of the
principle establishing the obligation to make reparation, as an element of positive
international law, has moreover never been disputed in the course of the proceedings in
the various cases concerning the Chorzów factory.
[74] The obligation to make reparation being in principle recognized, it remains to be
ascertained whether a breach of an international engagement has in fact taken place in
the case under consideration. Now this point is res judicata. The nonconformity of
Poland's attitude in respect of the two Companies with Article 6 and the following
articles of the Geneva Convention is established by No. 2 of the operative provisions of
Judgment No. 7. The application of the principle to the present case is therefore
evident. [p30]
[75] As regards the second point, the question whether damage has resulted from the
wrongful act which is common ground, is in no wise settled by the Court's previous
decisions relating to the Chorzów case. The Applicant having calculated the amount of
the reparation claimed on the basis of the damage suffered by the two Companies as a
result of the Polish Government's attitude, it is necessary for the Court to ascertain
whether these Companies have in fact suffered damage as a consequence of that
attitude.
[76] As regards the Bayerische, Poland admits the existence of a damage affording
ground for reparation; the Parties only differ as to the extent of this damage and the
mode of reparation; on the other hand, Poland denies the existence of any damage
calling for reparation in the case of the Oberschlesische and consequently submits that
Germany's claim should be dismissed. The fact of the dispossession of the
Oberschlesische is in no way disputed. But notwithstanding this, in the contention of
the Polish Government, that Company has suffered no damage: it argues, first, that the
right of ownership claimed by the Oberschlesische was null and void or subject to
annulment, and, secondly, that the contract of December 24th, 1919, attributed to the
Reich rights and benefits so considerable that any possible damage would not
materially affect the Company. In the alternative, the Polish Government contends that
these same circumstances at all events have the effect of essentially diminishing the
extent of the damage to be taken into account in so far as the said Company is
concerned.
[77] Apart from these preliminary objections, the Parties are at issue as to the amount
and method of payment of any compensation which may be awarded.
[78] In these circumstances, the Court must first of all consider whether damage
affording ground for reparation has ensued as regards not only the Bayerische but also
the Oberschlesische. [p31]
II.
[79] On approaching this question, it should first be observed that, in estimating the
damage caused by an unlawful act, only the value of property, rights and interests
which have been affected and the owner of which is the person on whose behalf
compensation is claimed, or the damage done to whom is to serve as a means of
gauging the reparation claimed, must be taken into account. This principle, which is
accepted in the jurisprudence of arbitral tribunals, has the effect, on the one hand, of
excluding from the damage to be estimated, injury resulting for third parties from the
unlawful act and, on the other hand, of not excluding from the damage the amount of
debts and other obligations for which the injured party is responsible. The damage
suffered by the Oberschlesische in respect of the Chorzów undertaking is therefore
equivalent to the total value - but to that total only - of the property, rights and interests
of this Company in that undertaking, without deducting liabilities.
[80] The Polish Government argues in the first place that the Oberschlesische has
suffered no loss as a result of its dispossession, because it was not the lawful owner, its
right of ownership having never been valid and having in any case ceased to be so in
virtue of the judgment given on November 12th, 1927, by the Court of Katowice; so
that from that date at all events no damage for which reparation should be made could
ensue as regards that Company.
[81] In regard to this the Court observes as follows: the Court has already, in
connection with Judgment No. 7, had to consider as an incidental and preliminary
point, the question of the validity of the transactions in virtue of which the ownership
of the Chorzów factory passed from the Reich to the Oberschlesische. It then arrived at
the conclusion that the various transactions in question were genuine and bona fide;
that is why it was able to regard the Chorzów factory as belonging to a company
controlled by German nationals, namely, the Oberschlesische. Whatever the effect of
this incidental decision may be as regards the right of ownership under municipal law,
it is evident that the fact that the [p32] Chorzów factory belonged to the
Oberschlesische was the necessary condition precedent to the Court's decision that the
attitude of the Polish Government in respect of the Oberschlesische was not in
conformity with Article 6 and the following articles of the Geneva Convention. For if
the factory did not belong to the Oberschlesische Stickstoffwerke, not only would that
Company not have suffered damage as a result of dispossession, but furthermore it
could not have been subjected to a dispossession contrary to the Geneva Convention,
but the Court established by Judgment No. 7 that such was the case. It should be noted
that the Court in Judgment No. 7 has not confined itself to recording the
incompatibility with the Geneva Convention of the application of the law of July 14th,
1920, to properties entered in the land register in the name of companies controlled by
German nationals, but has, in replying to the objections put forward by the
Respondent, also had to deal with the question whether such entry was the outcome of
fictitious and fraudulent transactions or of genuine and bona-¬fide transactions. Poland
herself objected in connection with the second submission of the German Application
of May 15th, 1925, that the entry of the Oberschlesische in the land register was in any
case not valid as it was based on a fictitious and fraudulent transaction and thus caused
the Court to deal with this point.
[82] As the application now under consideration is based on the damage established by
Judgment No. 7, it is impossible that the Oberschlesische's right to the Chorzów
factory should be looked upon differently for the purposes of that judgment and in
relation to the claim for reparation based on the same judgment. The Court, having
been of opinion that the Oberschlesische's right to the Chorzów factory justified the
conclusion that the Polish Government's attitude in respect of that Company was not in
conformity with Article 6 and the following articles of the Geneva Convention, must
necessarily maintain that opinion when the same situation at law has to be considered
for the purpose of giving judgment in regard to the reparation claimed as a result of the
act which has been declared by the Court not to be in conformity with the Convention.
[83] The Polish Government now points out that, after Judgment No. 7 had been
rendered, the Civil Court of Katowice [p33] which, under International Law, doubtless
has jurisdiction in disputes at civil law concerning immovable property situated within
its district, has declared the entry of the Oberschlesische in the land register as owner
not to be valid under the municipal law applicable to the case, and this apart from the
Polish laws of July 14th, 1920, and June 16th, 1922; it further contends that the Court,
in now giving judgment on the question of damages, should bear in mind this new
fact.
[84] There is no need for the Court to consider what would have been the situation at
law as regards the Geneva Convention, if dispossession had been preceded by a
judgment given by a competent tribunal. It will suffice to recall that the Court in
Judgment No. 8 has said that the violation of the Geneva Convention consisting in the
dispossession of an owner protected by Article 6 and following of the Geneva
Convention could not be rendered non-existent by the judgment of a municipal court
which, after dispossession had taken place, nullified the grounds rendering the
Convention applicable, which grounds were relied upon by the Court in Judgment No.
7. The judgment of the Tribunal of Katowice given on November 12th, 1927, - which
judgment was given by default as regards the Oberschlesische, the Reich not being a
Party to the proceedings, - does not contain in the text known to the Court the reasons
for which the entry of the property in the name of the Oberschlesische was declared
null and void; but it appears from the application upon which this judgment was given
that the reasons advanced by the Polish Treaty are essentially the same as those already
discussed before the Court on the basis of the Polish Government's submissions in the
proceedings leading up to Judgment No. 7, which reasons, in the opinion of the Court,
did not suffice to show that the Oberschlesische did not fall within the scope of Article
6 and the following articles of the Geneva Convention. If the Court were to deny the
existence of a damage on the ground that the factory did not belong to the
Oberschlesische, it would be contradicting one of the reasons on which it based its
Judgment No. 7 and it would be attributing to a judgment of a municipal court power
indirectly to invalidate a judgment of an international court, which is impossible.
Whatever the [p34] effect of the judgment of the Tribunal of Katowice of November
12th, 1927, may be at municipal law, this judgment can neither render inexistent the
violation of the Geneva Convention recognized by the Court in Judgment No. 7 to have
taken place, nor destroy one of the grounds on which that judgment is based.
[85] It is to the objection dealt with above and to a submission connected therewith
which the Polish Government made in its Counter-Case but subsequently withdrew,
that the following submission of the German Government relates:
[Translation.]
that the obligation of the Polish Government to pay the indemnity awarded by the
Court is in no way set aside by a judgment given or to be given by a Polish municipal
court in a suit concerning the question of the ownership of the factory situated at
Chorzów.
[86] This submission has been maintained notwithstanding the withdrawal of the
Polish submission referred to.
[87] The Court, being of opinion that this latter submission is to be regarded as having
been validly withdrawn, but that, nevertheless, the objection to which it referred still
subsists, considers that there is no need expressly to deal with the submission in regard
thereto made by the German Government, save in order to dismiss the submission of
the Polish Government based on the judgment of the Tribunal of Katowice.
***
[88] The Polish Government not only disputes the existence of a damage for the reason
that the Oberschlesische is not or is no longer owner of the factory at Chorzów, but
also contends from various points of view that the rights possessed by the Reich in the
undertaking, having passed into the hands of Poland, cannot be included amongst the
assets to be taken into account in the calculation of the damage sustained on which
calculation will depend the amount of the reparation due by Poland to Germany.
[89] The Polish Government, admitting, for the sake of argument, that the contract of
December 24th, 1919, was not null and void, but must be regarded as a genuine and
valid legal instrument, holds that, according to that contract, the German [p35]
Government is the owner of the whole of the shares of the Oberschlesische
representing the sole property of that Company, namely the factory. It deduces from
this that the transaction consists in the transformation of an ordinary State enterprise
into a State enterprise with a share capital, and as it holds that the property of a
German company, the whole of the shares of which belong to the Reich, falls within
the category of "property and possessions belonging to the Empire" acquired by Poland
under Article 256 of the Treaty of Versailles, it considers that it is "difficult to see what
the rights of the Oberschlesische were which had been infringed by the Polish
Government".
[90] In developing this argument, it has laid special stress on the allegation that the
Oberschlesische is in reality a company controlled by the German Government and not
a company controlled by German nationals, or even a private enterprise in which the
Reich merely possesses preponderating interests.
[91] Even if this should not be the case and if the instrument of December 24th, 1919,
were, for argument's sake, to be regarded as an effective and genuine contract for the
sale of the factory by the Reich to the Oberschlesische, the Polish Government
contends that it is impossible not to take into .account the circumstance that the
German State retained a whole complex of rights and interests in the undertaking. As
the indemnity claimed by the German Government is calculated, amongst other things,
on the extent of the damage presumed to have been sustained by the Oberschlesische, it
would not be "logically correct to award to that Company compensation for rights and
interests in the Chorzów undertaking which belonged to the Reich". These rights
should therefore be eliminated from the rights of the Oberschlesische, which, if this
were done, would amount simply to a nudum jus domini.
[92] The Polish Government also alleges that, under Article 256 of the Treaty of
Versailles, the rights and interests of the German Government in the Chorzów
undertaking are transferred to the Polish State, at latest as from the date of the transfer
to Poland of sovereignty over the part of Upper Silesia allotted to her, and that, on the
supposition that the .contract of December 24th, 1919, gave the German State [p36] the
whole of the shares of the Oberschlesische, as guarantee for its rights, and to enable it
to exercise those rights, these shares, on the possession of which depend the rights of
the Reich, should be transferred to Poland. If the contract of December 24th, 1919, is
to be regarded as genuine and effective, the Polish Government holds that, in order to
determine the indemnity which may be due to the Oberschlesische, the rights of the
Reich must first be eliminated; and as it is of opinion that this can only be done in one
way, namely, by the handing over by Germany to Poland of the shares of the
Oberschlesische to the nominal value of 110 million marks, the Polish Government has
in regard to this point made the following submission (No. A 4) in its Counter-Case:
[Translation.]
"In any case, it is submitted that the German Government should, in the first place,
hand over to the Polish Government the whole of the shares of the Oberschlesische
Company of the nominal value of 110,000,000 marks, which are in its hands under the
contract of December 24th, 1919."
[93] The German Government in its Reply made the following observations in regard
to this submission:
[Translation.]
"In the first place, the Polish Government cites no provision on which it is possible to
base the Court's jurisdiction to take cognizance of this question, which arises from the
interpretation of Article 256. In the previous proceedings, the Polish Government
strongly maintained that the interpretation of this article would not be admissible even
as a question incidental and preliminary to the interpretation of Articles 6 to 22 Of the
Geneva Convention.
The German Government does not know whether the Polish Government has on mind
the general treaty of arbitration signed at Locarno - according to which any dispute of a
legal nature must be submitted to arbitration, and, unless some special arbitral tribunal
is agreed upon, to the Permanent Court of International Justice. But, however that may
be, the German Government, being animated by a wish to ensure that full scope shall
be given to the Treaty of Locarno, without pausing to debate questions as to the
procedure therein provided for, and also to see the Chorzów case settled once and for
all, abstains from undertaking a detailed examination of the questions of lack of
jurisdiction or prematurity, even though these questions might enter into account in
connection with the counter-claim which, in the German Government's [p37]
contention, is formulated in submission A 4 of the Counter-Case. It will simply refer to
Article 40, paragraph 2, No. 4, of the Rules of Court, according to which the Court
may give judgment on counter-claims in so far as the latter come within its jurisdiction.
As between Germany and Poland this applies in respect of any question of law in
dispute between them. The only point which might be disputed is the question whether,
for the application of this article of the Rules, the conditions respecting forms and
times must also be fulfilled, or whether it is enough that the material conditions should
be fulfilled. This point, however, may be left open, since the German Government
accepts the jurisdiction of the Court in regard to the question raised in the Counter-
Case. In the course of the negotiations in regard to the Chorzów case, the German
plenipotentiary had already proposed to the Polish plenipotentiary that this question
should be referred to the Court."
[94] In the subsequent proceedings, the Polish Government has not made any statement
in regard to the question of the Court's jurisdiction. It is impossible, therefore, to say
whether it accepts the view of the German Government according to which it may be
inferred that such jurisdiction exists under the Convention between Germany and
Poland initialled at Locarno on October 16th, 1925, or whether it contends that the
Court has jurisdiction on sortie other basis. In any case, it is certain that it has not
withdrawn its claim and that, consequently, it wishes the Court to give judgment on the
submission in question. For its part the German Government, though basing the Court's
jurisdiction on the Locarno Convention, seems above all anxious that the Court should
give judgment on the submission in the course of the present proceedings.
[95] The Parties therefore are agreed in submitting to the Court for decision the
question raised by this submission. As the Court has said in Judgment No. 12,
concerning certain rights of minorities in Upper Silesia, Article 36 of the Statute
establishes the principle that the Court's jurisdiction depends on the will of the Parties ;
the Court therefore is always competent once the latter have accepted its jurisdiction,
since there is no dispute which States entitled to appear before the Court cannot refer to
it, save in exceptional cases where a dispute may be within the exclusive jurisdiction of
some other body. [p38]
[96] But this is not the case as regards the submission in question.
[97] The Court also observes that the counter-claim is based on Article 256 of the
Versailles Treaty, which article is the basis of the objection raised by the Respondent,
and that, consequently, it is juridically connected with the principal claim.
[98] Again, Article 40 of the Rules of Court, which has been cited by the German
Government, lays down amongst other things that counter-cases shall contain:
“4º conclusions based on the facts stated ; these conclusions may include counter-
claims, in so far as the latter come within the jurisdiction of the Court."
[99] The claim having been formulated in the Counter-Case, the formal conditions
required by the Rules as regards counter-claims are fulfilled in this case, as well as the
material conditions.
[100] As regards the relationship existing between the German claims and the Polish
submission in question, the Court thinks it well to add the following: Although in form
a counterclaim, since its object is to obtain judgment against the Applicant for the
delivery of certain things to the Respondent - in reality, having regard to the arguments
on which it is based, the submission constitutes an objection to the German claim
designed to obtain from Poland an indemnity the amount of which is to be calculated,
amongst other things, on the basis of the damage suffered by the Oberschlesische. It is
in fact a question of eliminating from the amount of this indemnity a sum
corresponding to the value of the rights and interests which the Reich possessed in the
enterprise under the contract of December 24th, 1919, which value, according to the
Polish Government, does not constitute a loss to the Oberschlesische because these
rights and interests are said to belong to the Polish Government itself under Article 256
of the Treaty of Versailles. The Court, having by Judgment No. 8 accepted jurisdiction,
under Article 23 of the Geneva Convention, to decide as to the reparation due for the
damage caused to the two Companies by the attitude of the Polish Government towards
them, cannot dispense with an examination of the objections the [p39] aim of which is
to show either that no such damage exists or that it is not so great as it is alleged to be
by the Applicant. This being so, it seems natural on the same grounds also to accept
jurisdiction to pass judgment on the submissions which Poland has made with a view
to obtaining the reduction of the indemnity to an amount corresponding to the damage
actually sustained.
*
[101] Proceeding now to consider the above-mentioned objections of the Polish
Government, the Court thinks it well first of all to define what is, in its opinion, the
nature of the rights which the German Government possesses in respect of the
Chorzów under-taking under the contract of December 24th, 1919, the main features of
which have been described above. Referring to this description, the Court points out
that the Treuhand, a not the Reich, is legally the owner of the shares of the
Oberschlesische. The Reich is the creditor of the Treuhand and in this capacity has a
lien on the shares. It also has, besides this lien, all rights resulting from possession of
the shares, including the right to the greater portion of the price in the event of the sale
of these shares. This right, which may be regarded as preponderating, is, from an
economic standpoint, very closely akin to ownership, but it is not ownership; and even
from an economic point of view it is impossible to disregard the rights of the Treuhand.
[102] Such being the situation at law, to endeavour now to identify the Oberschlesische
with the Reich-the effect of which would be that the ownership of the factory would
have passed to Poland under Article 256 of the Treaty of Versailles-would be in
conflict with the view taken by the Court in Judgment No. 7 and reaffirmed above, on
which view is based the decision to the effect that Poland's attitude as regards both the
Oberschlesische and Bayerische was not in conformity with the provisions of the
Geneva Convention.
[103] The same applies in regard to the contention that the Oberschlesische is a
company controlled not by German nationals but by the Reich. It is true, as the Polish
Government has recalled, that the Court in Judgment No. 7 has declared [p40] that
there was no need for it to consider the question whether the Oberschlesische, having
regard to the rights conferred by the contract of December 24th, 1919, on the Reich,
should be considered as controlled by the Reich, and, should this be the case, what
consequences would ensue as regards the application of the Geneva Convention. But
the reason for this was that the Court held that the Polish, Government had not raised
this question, and that, apart from its contention as to the fictitious character of the
instruments of December 24th, 1919, that Government did not seem to have disputed
that the Company was controlled by German nationals.
[104] At all events, it is clear that only by regarding the said Company as a company
controlled by German nationals within the meaning of Article 6 of the Geneva
Convention, was the Court able to declare that the attitude of the Polish Government
towards that Company was not in conformity with the terms of Article 6 and the
following articles of the said Convention.
[105] Even if the question were still open and the Court were now free once more to
consider it, it would be bound to conclude that the Oberschlesische was controlled by
the Bayerische. For seeing that, under the contract of December 24th, 1919, the Reich
had declared that it agreed to leave the management of the Chorzów undertaking in the
hands of the Bayerische, under the conditions previously settled with the Reich, and
that, under the subsequent contract concluded on November 25th, 1920, between the
Bayerische and the Treuhand, it had been stipulated that for this purpose the
Bayerische was to appoint at least two members of its own board as members of the
board of the Oberschlesische, the Court considers that the Bayerische, rather than the
Reich, controls the Oberschlesische.
[106] The Court, therefore, arrives at the conclusion that the Polish contention to the
effect that the Oberschlesische has not suffered damage, because that Company is to be
regarded as identifiable with the Reich, and that the property of which the said
Company was deprived by the action of the Polish Government has passed to Poland
under Article 256 of the Treaty of Versailles, is not well founded. [p41]
*
[107] Alternatively, the Polish Government has contended that, even if the rights
possessed by the Reich under the contract of December 24th, 1919, in the Chorzów
undertaking are not to be considered as involving ownership of the shares of the
Oberschlesische, the value of these rights, which fall within the scope of Article 256 of
the Treaty of Versailles, should nevertheless be deducted from the indemnity claimed
as regards the Oberschlesische. The Court is likewise unable to admit this contention.
[108] In this respect, it should be noted that Article 256 contains two conditions,
namely, that the "property and possessions" with which it deals must belong to the
Empire or to the German States, and that such "property and possessions" must be
"situated" in German territory ceded under the Treaty.
[109] It must therefore be ascertained, amongst other things, whether the rights of the
Reich under the contract of December 24th, 1919, are "situated" in the part of Upper
Silesia ceded to Poland. In so far as these rights consist in a claim against the
Treuhand, it is clear that this claim cannot be regarded as situated in Polish Upper
Silesia, since the Treuhand is a company whose registered office is in Germany and
whose shares belong to companies which also have their registered office in Germany
and which are undeniably controlled by German nationals. The fact that this claim is
guaranteed by a lien on the shares on which the profit, as well as the price obtained in
the event of sale, is to be devoted to the payment of this claim, does not, in the Court's
opinion, justify the view that. the rights of the Reich are situated in Polish Upper
Silesia where the factory is. These are only rights in respect of the shares; and these
rights, if not regarded as situated where the shares are, must be considered as localized
at the registered office of the Company which in this case in at Berlin and not in Polish
Upper Silesia. The transfer of the registered office of the Oberschlesische from
Chorzów to Berlin after the coming into force of the Treaty of Versailles cannot be
regarded as illegal and null: [p42] the reasons for which the Court, in Judgment No. 7,
held that alienations of public property situated in the plebiscite zone were not
prohibited by that Treaty, apply a fortiori in respect of the transfer by a company of its
registered office from this zone to Germany.
[110] It is also in vain that the Polish Government cites paragraph 10 of the Annex to
Articles 297 and 298 of the Treaty of Versailles, which paragraph lays down that
Germany shall deliver "to each Allied or Associated Power all securities, certificates,
deeds, or other documents of title held by its nationals and relating to property, rights
or interests situated in the territory of that Allied or Associated Power, including any
shares, stock, debentures, debenture stock, or other obligations of any company
incorporated in accordance with the laws of that Power". Even disregarding the
circumstances that the Oberschlesische was constituted under German law and has not
been "incorporated" in accordance with the laws of Poland, the clause quoted has
nothing to do with Article 256 and relates only to the articles to which it is annexed.
*
[111] Since, as has been shown above, Article 256 of the Treaty of Versailles is not, in
the Court's opinion, applicable to the rights possessed by the Reich under the contract
of December 24th, 1919, it follows that the Polish Government's contention-based on
the applicability of that article - to the effect that the value of these rights should be
eliminated from the amount of the indemnity to be awarded, must be rejected. The
same is true as regards the Polish Government's submission that the whole of the
shares of the Oberschlesische should be handed over to Poland, a submission the aim
of which is precisely to bring about the elimination referred to. For this submission is
likewise based solely on the alleged applicability of the same article of the Treaty of
Versailles. [p43]
***
[112] Alternatively, and also in regard to the claim for an indemnity based on the
damage sustained by the Oberschlesische, the Polish Government has asked the Court
"provisionally to suspend" its decision on the claim for indemnity.
[113] The reasons for which it seeks this suspension appear to be as follows:
[114] The Polish Government has notified the Reparation Commission of the taking
over of the Chorzów factory, under Article 236 of the Treaty of Versailles, by entering
it on the list of German State property acquired under that article. It is for the
Reparation Commission to fix the value of such -property, which value is to be paid to
the Commission by the succession State and credited to Germany on account of the
sums due for reparations. Now after the Court had delivered Judgment No. 7, the
German Government asked the Reparation Commission to strike out the Chorzów
factory ,from the list of property transferred to Poland, but the Commission has not yet
taken any decision in regard to this. The question whether Poland is to be debited with
the value of the factory therefore remains undecided, and the Polish Government
considers that, until this question has been decided .and the Reparation Commission
has struck the Chorzów factory off the list, it - the Polish Government - cannot be
compelled to make a payment in favour of the Oberschlesische.
[115] In addition to these considerations, the Polish Government also cites the
Armistice Convention and Article 248 of the Treaty of Versailles. The latter lays down
that, "subject to such exceptions as the Reparation Commission may approve, a first
charge upon all the assets and revenues of the German Empire and its constituent
States shall be the cost of reparation and all other costs arising under the present Treaty
or any treaties or agreements supplementary thereto or under arrangements concluded
between Germany and the Allied and Associated Powers during the armistice or its
extensions". The Polish Government says that in Judgment No. 7 the Court has decided
first that Poland, not having been a party [p44] to the Armistice Convention, is not
entitled to avail itself of the terms of that instrument in order to establish that the
alienation of the factory is null and void, and secondly, that that country cannot, on her
own account, cite Article 248 of the Treaty of Versailles for the same purpose. It would
seem, however, that the said Government contends that, in view of the right which the
States signatory to the Armistice Convention may have to oppose the sale of the
factory and in view of the right of the Reparation Commission to ensure the discharge
of reparation debts in general and especially in view of the right reserved to it under
Article 248, Poland's obligation to pay to Germany an indemnity in favour of the
Oberschlesische is dependent on the previous approval of the said States and of the
Reparation Commission.
[116] The German Government, for its part, whilst disputing the justice of these
objections of the Polish Government, has accepted the jurisdiction of the Court to
decide upon them has preliminary points in regard to the questions of form, amount
and methods of payment of the indemnities claimed by it, questions with which the
Court has already declared itself competent to deal". It has asked the Court to dismiss
the Polish alternative submission and to decide:
"that the Polish Government is not justified in refusing to pay compensation to the
German Government on the basis of arguments drawn from Article 256 or for motives
of respect for the rights of the Reparation Commission or other third parties".
[117] The Court considers that there is no doubt as to its jurisdiction to pass judgment
upon the Polish submission in question, but that this submission must be rejected as
not well-founded.
[118] In this respect, it should be observed in the first place that the facts cited by
Poland cannot prevent the Court, which now has before it a claim for indemnity based
on its Judgment No. 7, from passing judgment upon this claim in so far as concerns the
fixing of an indemnity corresponding, amongst other things, to the amount of the
damage sustained by the Oberschlesische, of which damage the most important
element is represented by the loss of the factory. For the Court, when it declared in
Judgment No. 7 that the attitude [p45] of the Polish Government in regard to the
Oberschlesische was not in conformity with the provisions of Article 6 and the
following articles of the Geneva Convention - which attitude consisted in considering
and treating the Chorzów factory as acquired by Poland under Article 256 of the Treaty
of Versailles-established that, as between the Parties, that article was not applicable to
the Chorzów factory. Again it appears from the documents submitted to the Court by
the Parties that the Reparation Commission does not claim to be competent to decide
whether any particular property is or is not acquired by a succession State under the
said article. The Commission accepts in this respect the solution arrived at in regard to
this question either by the means at the disposal of those concerned - diplomatic
negotiations, arbitration, etc. - or as the result of a unilateral act on the part of the
succession State itself. The fact that the Parties are now agreed that Poland must retain
the factory has nothing to do with Article 256 of the Treaty of Versailles, but is owing
to the impracticability of returning it. In these circumstances there seems to be no
doubt that Poland incurs no risk of having again to pay the value of the factory to the
Reparation Commission, if, in accordance with Germany's claim, she pays this value to
that State.
[119] With regard to the Armistice Convention and Article 248 of the Treaty of
Versailles, the question assumes a different aspect. The Armistice Convention appears
to have been cited in order to reserve the possibility of getting the sale of the factory to
the Oberschlesische declared invalid by means of an action to be brought to that end by
the States signatory to that Convention. As, however, the Court, in Judgment No. 7, has
held that Poland cannot avail itself of the provisions of the said Convention to which
she is not a party, the Court cannot without inconsistency admit that country's right to
invoke the Convention in order to delay making reparation for the damage resulting
from her adoption of an attitude not in conformity with her obligations under the
Geneva Convention.
[120] As has already been said, the Court in Judgment No. 7 has declared that Poland
cannot on her own account rely on Article 248 of the Treaty of Versailles in order to
obtain the [p46] annulment of the sale of the factory. Furthermore, the Court has stated
that this article does not involve a prohibition of alienation, and that the rights reserved
to the Allied and Associated Powers in the article are exercised through the Reparation
Commission. But it would be difficult to understand how these rights could be affected
by the payment to the Reich, as an indemnity, of the value of the factory, seeing that,
without such a payment, the rights of the Reich in the enterprise would probably lose
all value. The objection based on this article must therefore also be overruled.
[121] The Court considers that it should confine itself to rejecting the submission
whereby the Polish Government asks for a suspension, since by so doing and by
overruling the objections raised by the Polish Government on the basis of Article 256
of the Treaty of Versailles, it is deciding in conformity with the German submission to
the extent that that submission is well-founded; the Court cannot, in fact, consider the
submission in question in so far as it relates to third parties who are not specified.
III.
[122] The existence of a damage to be made good being recognized by the respondent
Party as regards the Bayerische, and the objections raised by the same Party against the
existence of any damage that would justify compensation to the Oberschlesische being
set aside, the Court must now lay down the guiding principles according to which the
amount of compensation due may be determined.
[123] The action of Poland which the Court has judged to be contrary to the Geneva
Convention is not an expropriation - to render which lawful only the payment of fair
compensation would have been wanting; it is a seizure of property, rights and interests
which could not. be expropriated even against compensation, save under the
exceptional conditions fixed by Article 7 of the said Convention. As the Court has
expressly declared in Judgment No. 8, reparation is in this case the consequence not of
the application of Articles 6 to 22 of the Geneva Convention, but of acts contrary to
those articles. [p47]
[124] It follows that the compensation due to the German Government is not
necessarily limited to the value of the undertaking at the moment of dispossession, plus
interest to the day of payment. This limitation would only be admissible if the Polish
Government had had the right to expropriate, and if its wrongful act consisted merely
in not having paid to the two Companies the just price of what was expropriated; in the
present case, such a limitation might result in placing Germany and the interests
protected by the Geneva Convention, on behalf of which interests the German
Government is acting, in a situation more unfavourable than that in which Germany
and these interests would have been if Poland had respected the said Convention. Such
a consequence would not only be unjust, but also and above all incompatible with the
aim of Article 6 and following articles of the Convention - that is to say, the
prohibition, in principle, of the liquidation of the property, rights and interests of
German nationals and of companies controlled by German nationals in Upper Silesia -
since it would be tantamount to rendering lawful liquidation and unlawful
dispossession indistinguishable in so far as their financial results are concerned.
[125] The essential principle contained in the actual notion of an illegal act - a
principle which seems to be established by international practice and in particular by
the decisions of arbitral tribunals - is that reparation must, as far as possible, wipe-¬out
all the consequences of the illegal act and re-establish the situation which would, in. all
probability, have existed if that act had not been committed. Restitution in kind, or, if
this is not possible, payment of a sum corresponding to the value which a restitution in
kind would bear; the award, if need be, of damages for loss sustained which would not
be covered by restitution in kind or payment in place of it-such are the principles which
should serve to determine the amount of compensation due for an act contrary to
international law.
[126] This conclusion particularly applies as regards the Geneva Convention, the
object of which is to provide for the maintenance of economic life in Upper Silesia on
the basis of respect for the status quo. The dispossession of an industrial undertaking -
the expropriation of which is prohibited by the [p48] Geneva Convention - then
involves the obligation to restore the undertaking and, if this be not possible, to pay its
value at the time of the indemnification, which value is designed to take the place of
restitution which has become impossible. To this obligation, in virtue of the general
principles of international law, must be added that of compensating loss sustained as
the result of the seizure. The impossibility, on which the Parties are agreed, of restoring
the Chorzów factory could therefore have no other effect but that of substituting
payment of the value [p49] of the undertaking for restitution ; it would not be in
conformity either with the principles of law or with the wish of the Parties to infer
from that agreement that ,the question of compensation must henceforth be dealt with
as though an expropriation properly so called was involved.
***
[127] Such being the principles to be followed in fixing the compensation due, the
Court may now consider whether the damage to be made good is to be estimated
separately for each of the two Companies, as the Applicant has claimed, or whether it
is preferable to fix a lump sum.
[128] If the Court were dealing with damage which, though caused by a single act, had
affected persons independent the one of the other, the natural method to be applied
would be a separate assessment of the damage sustained by each of them; the total
amount of compensation thus assessed would then constitute the amount of reparation
due to the State.
[129] In the present case, the situation is different. The economic unity of the Chorzów
undertaking, pointed out by the Court in its Judgment No. 6, is shown above all in the
fact that the interests possessed by the two Companies in the said undertaking are
interdependent and complementary; it follows that they cannot simply be added
together without running the risk of the same damage being compensated twice over;
for all that the Bayerische would have obtained from its participation in the
undertaking (sums due and shares in the profits) would have been payable by the
Oberschlesische. The value of the Bayerische's option on the factory depended also on
the value of the undertaking. The whole damage suffered by the one or the other
Company as the result of dispossession, in so far as concerns the cessation of the
working and the loss of profit which would have accrued, is determined by the value of
the undertaking as such; and, therefore, compensation under this head must remain
within these limits.
[130] On the other hand, it is clear that the legal relationship between the two
Companies in no way concerns the international proceedings and cannot hinder the
Court from adopting the system of a lump sum corresponding to the value of the
undertaking, if, as is the Court's opinion, such a calculation is simpler and gives greater
guarantees that it will arrive at a just appreciation of the amount, and avoid awarding
double damages.
[131] One reservation must, however, be made. The calculation of a lump sum referred
to above concerns only the Chorzów undertaking, and does not exclude the possibility
of taking into account other damage which the Companies may have sustained owing
to dispossession but which is outside the undertaking itself. No damage of such a
nature has been alleged as regards the Oberschlesische, and it seems hardly
conceivable that such damage should exist, for the whole activity of the
Oberschlesische was concentrated in the undertaking. On the other hand, it is possible
that damage of such a nature may be shown to exist as regards the Bayerische, which
possesses or works other factories of the same nature as Chorzów; the Court will
consider later whether such damage must be taken into account in fixing the amount of
compensation.
[132] Faced with the task of determining what the sum must be awarded to the German
Government in order to enable it to place the dispossessed Companies as far as
possible in the economic situation in which they would probably have been if the
seizure had not taken place, the Court considers that it cannot be satisfied with the data
for assessment supplied by the Parties. [p50]
[133] The cost of construction of the Chorzów factory, which the Applicant has taken
as a basis for his calculation as regards compensation to the Oberschlesische, gave rise
to objections and criticisms by the Respondent which are perhaps not without some
foundation. Without entering into this discussion and without denying the importance
which the question of cost of construction may have in determining the value of the
undertaking, the Court merely observes that it is by no means impossible that the cost
of construction of a factory may not correspond to the value which that factory will
have when built. This possibility must more particularly be considered when, as in the
present case, the factory was built by the State in order to meet the imperious demands
of public necessity and under exceptional circumstances such as those created by the
war.
[134] Nor yet can the Court, on the other hand, be satisfied with the price stipulated in
the contract of December 24th, 1919, between the Reich, the Oberschlesische and the
Treuhand, or with the offer of sale of the shares of the Oberschlesische to the Geneva
Compagnie d'azote et de fertilisants made on May 26th, 1922. It has already been
pointed out above that the value of the undertaking at the moment of dispossession
does not necessarily indicate the criterion for the fixing of compensation. Now it is
certain that the moment of the contract of sale and that of the negotiations with the
Genevese Company belong to a period of serious economic and monetary crisis; the
difference between the value which the undertaking then had and that which it would
have had at present may therefore be very considerable. And further, it must be
considered that the price stipulated in the contract of 1919 was determined by
circumstances and accompanied by clauses which in reality seem hardly to admit of its
being considered as a true indication of the value which the Parties placed on the
factory; and that the offer to the Genevese Company is probably to be explained by the
fear of measures such as those which the Polish Government in fact adopted afterwards
against the Chorzów undertaking, and which the Court has judged not to be in
conformity with the Geneva Convention. [p51]
[135] And finally as regards the sum agreed on at one moment by the two
Governments during the negotiations which followed Judgment No. 7 - which sum,
moreover, neither Party thought fit to rely on during the present proceedings it may
again be pointed out that the Court cannot take into account declarations, admissions or
proposals which the Parties may have made during direct negotiations between
themselves, when such negotiations have not led to a complete agreement.
* the Mitteldeutsche leased to the Bayerische the landed properties at Piesteritz
[136] This being the case, and in order to obtain further enlightenment in the matter,
the Court, before giving any decision as to the compensation to be paid by the Polish
Government to the German Government, will arrange for the holding of an expert
enquiry, in conformity with Article 50 of its Statute and actually with the suggestions
of the Applicant. This expert enquiry, directions for which are given in an Order of
Court of to-day's date, will refer to the following questions:
I. A. What was the value, on July 3rd, 1922, expressed in Reichsmarks current at the
present time, of the undertaking for the manufacture of nitrate products of which the
factory was situated at Chorzów in Polish Upper Silesia, in the state in which that
undertaking (including the lands, buildings, equipment, stocks and processes at its
disposal, supply and delivery contracts, goodwill and future prospects) was, on the date
indicated, in the hands of the Bayerische and Oberschlesische Stickstoffwerke?
B. What would have been the financial results, expressed in Reichsmarks current at the
present time (profits or losses), which would probably have been given by the
undertaking thus constituted from July 3rd, 1922., to the date of the present judgment,
if it had been in the hands of the said Companies?
II. What would be the value at the date of the present judgment, expressed in
Reichsmarks current at the present time, of the same undertaking (Chorzów) if that
undertaking (Including lands, buildings, equipment, stocks, available processes, supply
and delivery contracts, goodwill and future prospects) had remained in the hands of the
Bayerische and Oberschlesische Stickstoffwerke, and had either remained substantially
as it was in 1922 or had been developed proportionately on [p52] lines similar to those
applied in the case of other undertakings of the same kind, controlled by the
Bayerische, for instance, the undertaking of which the factory is situated at Piesteritz?
[137] The purpose of question 1 is to determine the monetary value, both of the object
which should have been restored in kind and of the additional damage, on the basis of
the estimated value of the undertaking including stocks at the moment of taking
possession by the Polish Government, together with any probable profit that would
have accrued to the undertaking between the date of taking possession and that of the
expert opinion.
[138] On the other hand, question II is directed to the ascertainment of the present
value on the basis of the situation at the moment of the expert enquiry and leaving
aside the situation presumed to exist in 1922.
[139] This question contemplates the present value of the undertaking from two points
of view: firstly, it is supposed that the factory had remained essentially in the state in
which it was on July 3rd, 1922, and secondly, the factory is to be considered in the
state in which it would (hypothetically but probably) have been in-the hands of the
Oberschlesische and Bayerische, if, instead of being taken in 1922 by Poland, it had
been able to continue its supposedly normal development from that time onwards. The
hypothetical nature of this question is considerably diminished by the possibility of
comparison with other undertakings of the same nature directed by the Bayerische,
and, in particular, with the Piesteritz factory, the analogy of which with Chorzów, as
well as certain differences between the two, have been many times pointed out during
the present proceedings.
[140] In regard to this, it should be observed that the Agent for the German
Government, at the public sitting of June 21st, 1928, handed in two certificates by
notaries containing a summary of contracts concluded on April 16th, 1925, and August
27th, 1927, between the Mitteldeutsche Stickstoffwerke A.-G. and the Bayerische, and
adhered to by the Vereinigte Industrie-Unternehmungen A.-G., under which contracts
belonging to it, together with all installations, etc., connected therewith. The Agent for
the Polish Government [p53], however, in his speech on June 25th, said that, not being
acquainted with the contracts and being entirely unable to form an opinion as to
whether the summaries in question contained all the data necessary for accurate
calculations, he formally objected to the said summaries being taken as a basis in the
present proceedings.
[141] As regards the lucrum cessans, in relation to question II, it may be remarked that
the cost of upkeep of the corporeal objects forming part of the undertaking and even
the cost of improvement and normal development of the installation and of the
industrial property incorporated therein, are bound to absorb in a large measure the
profits, real or supposed, of the undertaking. Up to a certain point, therefore, any profit
may be left out of account, for it will be included in the real or supposed value of the
undertaking at the present moment. If, however, the reply given by the experts to
question I B should show that after making good the deficits for the years during which
the factory was working at a loss, and after due provision for the cost of upkeep and
normal improvement during the following years, there remains a margin of profit, the
amount of such profit should be added to the compensation to be awarded.
[142] On the other hand, if the normal development presupposed by question II
represented an enlargement of the undertaking and an investment of fresh capital, the
amount of such sums must be deducted from the value sought for.
[143] The Court does not fail to appreciate the difficulties presented by these two
questions, difficulties which are however inherent in the special case under
consideration, and closely connected with the time that elapsed between the
dispossession and the demand for compensation, and with the transformations of the
factory and the progress made in the industry with which the factory is concerned. In
view of these difficulties, the Court considers it preferable to endeavour to ascertain
the value to be estimated by several methods, in order to permit of a comparison and if
necessary of completing the results of the one by those of the others. The Court,
therefore, reserves every right to review the valuations referred to in the different
formulæ; basing itself on the results of the said valuations and of facts and documents
submitted to it, it will then [p54] proceed to determine the sum to be awarded to the
German Government, in conformity with the legal principles set out above.
*

[144] It must be stated that the Chorzów factory to be valued by the experts includes
also the chemical factory.
[145] Besides the arguments which, in the Polish Government's opinion, tend to show
that the working of the said factory was not established on a profitable basis-arguments
which it will be for the experts to consider-that Government has claimed that the
working depended on a special authorization, which the Polish authorities were entitled
to refuse. But the Court is of opinion that this argument is not well-founded.
[146] The authorization referred to seems to be that envisaged by paragraph 18 of the
Prussian law of 1861, under which, failing international treaty provisions to the
contrary, moral persons of foreign nationality cannot engage in industry without the
authorization of the Government. In the present case, it is certain that the Geneva
Convention does actually constitute the international treaty which, guaranteeing to
industrial undertakings the continuation of their activities, does away with any
necessity for the special authorization required by the law of 1861.
[147] The fact that the chemical factory was not only not working, but not even
completed, at the time of transfer of the territory to Poland, can be of no importance;
for chemical industry of all kinds was expressly mentioned in the articles of the
Oberschlesische Company as one of the objects of that Company's activities, and the
sections and plant of the chemical factory, which were, moreover, closely connected
with the sections and plant producing nitrate of lime, had already been provided for
and mentioned in the contract for construction and exploitation of March 5th, 1915 ;
thus, the entry into working of the factory was only the normal and duly foreseen
development of the industrial activity which the Oberschlesische had the right to
exercise in Polish Upper Silesia. [p55]
***
[148] In the Court's Opinion, the value to which the above questions relate will be
sufficient to permit it with a full knowledge of the facts to fix the amount of
compensation to which the German Government is entitled, on the basis of the damage
suffered by the two Companies in connection with the Chorzów undertaking.
[149] It is true that the German Government has pointed out several times during the
written and oral proceedings that fair compensation for damage suffered by the
Bayerische could not be limited to the value of what has been called the "contractual
rights", namely, the remuneration provided for in the contracts between the Reich or
the Oberschlesische and the said Company for having made available its patents,
licences and experience gained, for the management and for the organization of the
sale of the finished products. The reason given is that this remuneration, which was
accepted in view of the special relationship -between the Parties, would hardly
correspond to the fair remuneration which the Bayerische might have claimed from
any third party, like the Polish Government, for the same consideration. It was on these
grounds that the German Government proposed to take as a basis for the calculation of
damage suffered by the Bayerische a licence supposed to be granted by the said
Company to a third party under fair and normal conditions.
[150] The method adopted by the Court in putting the questions set out above to the
experts meets the German Government's contention, in so far as that contention is
justified. For if the Bayerische had demanded a larger sum or additional payments in
its favour, or if it had stipulated for other conditions to its advantage, the value to the
Oberschlesische of its participation would to the. same extent be diminished; this
shows that the relation between value given and value received does not enter into
consideration in calculating the worth of the enterprise as a, whole. If the Bayerische
had not merely managed but also owned the undertaking, this amount would still be the
same ; in fact, all the elements constituting the [p56] undertaking-the factory and its
accessories on the one hand, the non-corporeal and other values supplied by the
Bayerische on the other-are independent of the advantages which, under its contracts,
each of the two Companies may derive from the undertaking.
[151] For this reason, any difference which might exist between the conditions fixed in
the contracts of 1913, 1919 and 1920 and those laid down in a contract supposed to be
concluded with a third party, is of no importance in estimating the damage.
***
[152] It therefore only remains to be considered whether, in conformity with the
reservation. made above, the Bayerische has, owing to the dispossession, suffered
damage, other than that sustained by the undertaking, such as might be considered in
calculating the compensation demanded by the German Government.
[153] Although the position taken up on this subject by the German Government does
not seem clear to it, the Court is, in a position to state that this Government has not
failed to draw attention to certain circumstances which are said to prove the existence
of damage of such a nature. The possibility of competition injurious to the Bayerische's
factories by a third party, alleged to have unlawfully become acquainted with and have
obtained means of making use of that Company's processes, is certainly the
circumstance which is most important and easiest to appreciate in this connection.
[154] The Court must however observe that it has not before it the data necessary to
enable it to decide as to the existence and extent of damage resulting from alleged
competition of the Chorzów factory with the Bayerische factories ; the Court is not
even in a position to say for certain whether the methods of the Bayerische have been
or are still being employed at Chorzów, nor whether the products of that factory are to
be found in the markets in which the Bayerische sells or might sell products from its
own factories. In these circumstances, the Court can only observe that the damage
alleged to have resulted from competition is insufficiently proved. [p57]
[155] Moreover, it would come under the heading of possible but contingent and
indeterminate damage which, in accordance with the jurisprudence of arbitral tribunals,
cannot be taken into account.
[156] This is more especially the case as regards damage which might arise from the
fact that the field in which the Bayerische can carry out its experiments, perfect its
processes and make fresh discoveries has been limited, and from the fact that the
Company can no longer influence the market in the manner that it have done if it had
continued to work the Chorzów factory.
[157] As the Court has discarded for want of evidence, indemnity for damage alleged
to have been sustained by the Bayerische outside the undertaking, it is not necessary to
consider whether the interests in question would be protected by Articles 6 to 22 of the
Geneva Convention.
***
[158] In addition to pecuniary damages for the benefit of the Bayerische, the German
Government asks the Court to give judgment :
"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;
in the alternative, that the Polish Government should be obliged to cease working the
factory or the chemical equipment for the production of nitrate of ammonia, etc."
[159] In regard to these submissions, it should be observed in the first place that they
cannot contemplate damage already sustained, but solely damage which the Bayerische
might suffer in the future.
[160] If the prohibition of export is designed to prevent damage arising from the
competition. which the Chorzów factory might offer to the Bayerische factories, this
claim must be at once dismissed, in view of the result arrived at above by the Court. To
the reasons on which this result was based, it is to be added, in so far as the prohibition
of export is concerned, that the Applicant has furnished no information [p58] enabling
the Court to satisfy itself as to the justification for the German submission naming
certain countries to which export should not be. allowed and stating a definite period
for which this prohibition should be in force.
[161] It must further be observed that if the object of the prohibition were to protect the
industrial property rights of the Bayerische and to prevent damage which the latter
might suffer as a result of the use of these rights by Poland, in conflict with licences
granted by the Bayerische to other persons or companies, the German Government
should have furnished definite data as regards the existence and duration of the patents
or licences in question. But notwithstanding the express requests made in this respect
by the Polish Government, the German Government has produced no such data. The
explanation no doubt is that the German Government does not appear to wish to base
its claim respecting a prohibition of export upon the existence of these patents and
licences.
[162] On the contrary, the German Government's claim seems to present the [p59]
prohibition of export as a clause which should have been included in a fair and
equitable licensing contract concluded between the Bayerische and any third party; in
this connection the following remarks should be made:
[163] The mere fact that the produce of any particular undertaking is excluded from
any particular market cannot evidently in itself be in the interests of such undertaking,
nor of the persons who, as such, are interested therein. If the Bayerische -which, whilst
participating with the Oberschlesische in the Chorzów undertaking, constitutes an
entirely separate undertaking from that of Chorzów and one that may even to a certain
extent have interests conflicting with those of Chorzów -were to Emit in its own
favour, by contract, the number of the markets of that factory, it would follow that the
profit which it would draw from its share in the Chorzów undertaking might be
correspondingly diminished. The Court having, as is said above, adopted, in
calculating the compensation to be awarded to the German Government, a method by
which such compensation shall include the total value of the undertaking, it follows
that the profits of the Bayerische will be estimated without deducting the advantages
which that Company might draw from a clause limiting export. The prohibition of
export asked for by the German Government cannot therefore be granted, or the same
compensation would .be awarded twice over.
[164] This being so, the Court need not deal with the question whether such a
prohibition, although customary in contracts between individuals, might form the
subject of an injunction issued by the Court to a government, even if that government
were working, as a State enterprise, the factory of which export was to be limited, nor
if the prohibition asked for would be fair and appropriate in the circumstances.
[165] As regards the German Government's alternative claim for a prohibition of
exploitation, it may be added that this seems hardly compatible with the award of
compensation representing the present value of the undertaking; for when that
compensation, which is to cover future prospects and will consist in a sum of money
bearing interest, has been paid, the Polish Government will have acquired the right to
continue working the undertaking as valued, more especially as the Parties agree that
the factory shall remain in the hands of the Polish Government. This agreement cannot,
in fact, be construed as meaning that the factory should remain inoperative or be
adapted to some other purpose, if the reparation contemplated did not include, in
addition to a pecuniary indemnity, the prohibition of export sought for. It is moreover
very doubtful whether, apart from any other consideration, prohibition of exploitation
is admissible under the Geneva Convention, the object of which is to provide for the
maintenance of industrial undertakings, and which, for this purpose, even permits
them, in exceptional cases, to be expropriated (Article 7)
IV.
[166] The Court thinks it preferable not to proceed at this stage to consider the Parties'
submissions concerning certain conditions and methods in regard to the payment of the
indemnity to be awarded, which conditions and methods are closely connected either
with the amount of the sum to be paid or with circumstances which may exist when the
time comes for payment. This applies more especially as regards the [p60] German
submission No. 4 (a)-(b)-(c), and the Polish submissions A 3 and B 1 (c), which the
Court therefore reserves for the judgment fixing the indemnity.
[167] On the other hand, it is possible and convenient at once to decide the so-called
question of set-off to which submission No. 4 (d) of the Applicant and submission C of
the Respondent respectively relate.
[168] The claim of the German Government in regard to this matter has, in the last
instance, been couched in the following terms:
[Translation.]
"It is submitted 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; in the alternative, that set-off is only
permissible if the Polish Government puts forward for this purpose a claim in respect
of a debt recognized by the German Government or established by a judgment given
between the two Governments.”
[169] The Polish Government, for its part, has simply asked for the rejection of this
submission.
[170] If the German submission is read literally, it is possible to regard it as mainly
designed to prevent a specific case of setoff, that is to say, the setting-off in this case of
the claim which the Polish Government contends that it possesses in respect of social
insurances in Upper Silesia, and which was the cause of the failure of the negotiations
between the two Governments following Judgment No. 7. But, if we consider the
submission in the light of the observations contained in the Case and more especially
in the Reply, it is easy to see that the claim in respect of social insurances in Upper
Silesia is only taken as an example. In reality, the German Government asks the Court
for a decision of principle the effect of which would be either to prevent the set-off of
any counterclaim against the indemnity fixed in the judgment to be given by the Court,
or, alternatively, only to allow such set-off in certain defined circumstances.
[171] Though, as has been seen, the Polish Government for its part confines itself in its
submission to asking the Court to reject the German submission, the arguments
advanced in [p61] support of its claim clearly show that it considers the said German
submission to be both premature and inadmissible, and that the Court has therefore no
power to deal with it.

[172] The question of the Court's jurisdiction is thus clearly raised. Since there is no
agreement between the Parties to submit to the Court the so-called question of set-off,
it remains first of all to be considered whether the Court has jurisdiction to pass
judgment on the German submission No. 4 (d) in virtue of any other provision, which,
in the present case, could only be Article 23 of the Geneva Convention.
[173] It is clear that the question whether international law allows claims to be set-off
against each other, and if so, under what conditions such set-off is permitted, is, in
itself, outside the jurisdiction derived by the Court from the said article. But the
German Government contends that the question raised by it only relates to one aspect
of the payment which the Polish Government must make and that, this being so, it
constitutes a difference of opinion covered by the arbitration clause contained in the
article.
[174] The Court considers that this argument must be interpreted in the sense that the
prohibition of set-off is asked for in order to ensure that in the present case reparation
shall be really effective.
[175] It may be admitted, as the Court has said in Judgment No. 8, that jurisdiction as
to the reparation due for the violation of an international convention involves
jurisdiction as to the forms and methods of reparation. If the reparation consists in the
payment of a sum of money, the Court may therefore determine the method of such
payment. For this reason it may well determine to whom the payment shall be made, in
what place and at what moment; in a lump sum or maybe by instalments; where
payment shall be made; who shall bear the costs, etc. It is then a question of applying
to a particular case the general rules regarding payment, and the Court's jurisdiction
arises quite naturally out of its jurisdiction to award monetary compensation.
[176] But this principle would be quite unjustifiably extended if it were taken as
meaning that the Court might have cognizance of any question whatever of
international law [p62] even quite foreign to the convention under consideration, for
the sole reason that the manner in which such question is decided may have an
influence on the effectiveness of the reparation asked for. Such an argument seems
hardly reconcilable with the fundamental principles of the Court's jurisdiction, which is
limited to cases specially provided for in treaties and conventions in force.
[177] The German Government's standpoint however is that the power of the Court to
decide on the exclusion of set-off is derived from the power which it has to provide
that reparation shall be effective. Now, it seems clear that this argument can only refer
to a plea of set-off raised against the beneficiary by the debtor, of such a nature as to
deprive reparation of its effectiveness. Such for instance would be the case if the claim
put forward against the claim on the score of reparation was in dispute and was to lead
to proceedings which would in any case have resulted in delaying the entry into
possession by the person concerned of the compensation awarded to him. On the
contrary, if a liquid and undisputed claim is put forward against the reparation claim, it
is not easy to see why a plea of set-off based on this demand should necessarily
prejudice the effectiveness of the reparation. It follows that the Court's Jurisdiction
under Article 23 of the Geneva Convention could in any case only be relied on in
regard to a plea raised by the respondent Party.
[178] Now it is admitted that Poland has raised no plea of set-off in regard to any
particular claim asserted by her against the German Government.
[179] It is true that in the negotiations which followed Judgment No. 7 Poland had put
forward a claim to set off a part of the indemnity which she would have undertaken to
pay the German Government, against the claim which she put forward in regard to
social insurances in Upper Silesia. But the Court has already had occasion to state that
it can take no account of declarations, admissions or proposals which the Parties may
have made during direct negotiations between them. Moreover, there is nothing to
justify the Court- in thinking that the Polish Government would wish to put forward,
against a judgment of the Court, claims which it may have thought [p63] fit to raise
during friendly negotiations which the Parties intended should lead to a compromise.
The Court must also draw attention in this connection to what it has already said in
Judgment No. 1 to the effect that it neither can nor should contemplate 'the contingency
of the judgment not being complied with at the expiration of the time fixed for
compliance.
[180] In these circumstances the Court must abstain from passing upon the
submissions in question.
***
[181] For these reasons,
The Court,
having heard both Parties,
by nine votes to three,
(1) gives judgment to the effect that, by reason of the attitude adopted by the Polish
Government 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 pay, as reparation
to the German Government, a compensation corresponding to the damage sustained by
the said Companies as a result of the aforesaid attitude;
(2) dismisses the pleas of the Polish Government with a view to the exclusion from the
compensation to be paid of an amount corresponding to all or a part of the damage
sustained by the Oberschlesische Stickstoffwerke, which pleas are based either on the
judgment given by the Tribunal of Katowice on November 12th, 1927, or on Article
256 of the Treaty of Versailles;
(3) dismisses the submission formulated by the Polish Government to the effect that
the German Government should in the first place hand over to the Polish Government
the whole of the shares of the Oberschlesische Stickstoffwerke Company, of the
nominal value of 110,000,000 [p64] marks, which are in the hands of the German
Government under the contract of December 24th, 1919;
(4) dismisses the alternative submission formulated by the Polish Government to the
effect that the claim for indemnity, in so far as the Oberschlesische Stickstoffwerke
Company is concerned, should be provisionally suspended;
(5) dismisses the submission of the German Government asking for judgment to the
effect 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, or, in the
alternative, that the Polish Government should be obliged to cease working the factory
or the chemical equipment for the production of nitrate of ammonia, etc.
(6) gives judgment to the effect that no decision is called for on the submissions of the
German Government asking for judgment to the effect 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 said claim for indemnity, and, in the
alternative, that set-off is only permissible if the Polish Government puts forward for
this purpose a claim in respect of a debt recognized by the German Government or
established by a judgment given between the two Governments;
(7) gives judgment to the effect that the compensation to be paid by the Polish
Government to the German Government shall be fixed as a lump sum;
(8) reserves the fixing of the amount of this compensation for a future judgment, to be
given after receiving the report of experts to be appointed by the Court for the purpose
of enlightening it on the questions set out in the present judgment and after hearing the
Parties on the subject of this report;
(9) also reserves for this future judgment the conditions and methods for the payment
of the compensation in so far as concerns points not decided by the present judgment.
[p65]
[182] Done in French and English, the French text being authoritative, at the Peace
Palace, The Hague, this thirteenth day of September nineteen hundred and twenty-
eight, 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) D. Anzilotti
President.
(Signed) Paul Ruegger
Deputy-Registrar.
[183] M. de Bustamante, Judge, declares that he is unable to concur in the judgment of
the Court as regards No. 8 of the operative portion; he considers that the questions
numbered I B and II in the judgment should not be put to the experts.
[184] M. Altamira, Judge, declares that he is unable to concur in the judgment of the
Court as regards No. 6 of the operative portion.
[185] M. Rabel, National Judge, desires to add to the judgment the remarks which
follow hereafter.
[186] Lord Finlay, Judge, and M. Ehrlich, National judge, declaring that they cannot
concur in the judgment of the Court and availing themselves of the right conferred on
them by Article 57 of the Statute, have delivered the separate opinions which follow
hereafter.
[187] M. Nyholm, Judge, being unable to concur in the result arrived at by the
judgment, desires to add the remarks which follow hereafter.
(Initialled) D. A.
(Initialled) P. R.
[p66] Observations by M. Rabel.
[188] Whilst in general agreement with the judgment delivered by the Court, I find
myself, to my regret, compelled to disagree with it in regard to some points, one of
which I feel it my duty to deal with below (No. II). Before doing so, I wish briefly to
explain my point of view in accepting the solution adopted by the Court in regard to
the main question concerning the fixing of the indemnity due by the Respondent (No.
I).
[189] I. In Chapter III, the judgment begins by saying that if the expropriation effected
by the Polish Government had been lawful, the compensation due by it therefore
should correspond to the value of the undertaking at the time of dispossession, plus
interest on this sum to the, date of payment. The judgment goes on to say that this
limitation of the compensation is not admissible in the present case because the Polish
Government had no right of expropriation and that, consequently, the German
Government is entitled to be compensated for all the losses suffered by its nationals as
a result of the seizure of the undertaking.
[190] Being convinced of the justice of these arguments, I have accepted them,
believing that the principles resulting from the unlawful nature of the expropriation,
which principles are subsequently set out in the judgment, are applicable in practice
whenever the damage caused appears greater than the compensation which would be
due if expropriation had been lawful, as may be the case in the present suit.
[191] It is in fact obvious that the expropriator's responsibility must be increased by the
fact that his action is unlawful. Nevertheless, it is in my opinion also obvious that the
unlawful character of his action can never place the expropriator in a more favourable
position, nor the expropriated Party in a more unfavourable position, either by reducing
the indemnity due or by increasing the burden of proof resting upon the Applicant. This
point of view, with which the Court in its judgment has not thought fit expressly to
deal, appears to me to be in accordance with the general principles of law. [p67]
[192] It corresponds to the notion which has been very clearly, established, for instance
in the application of German civil law, namely that the fact that an act is of an unlawful
character - in the same way as if it were of a deceptive or defective character - though
in principle aggravating the consequences of the act, nevertheless leaves intact, in
favour of the injured Party, and to be asserted by him should he choose to do so, the
rights to which the act would have given rise if it had been lawful or less culpable.
[193] It appears to me therefore that the obligation resulting from an unlawful seizure
may be simply expressed as follows: A government which has expropriated an object -
with no right to do so - is obliged to pay the value of the object at the moment of
dispossession plus interest on this value, and it is also responsible for damage caused
in so far as such damage exceeds the amount mentioned above.
[194] The questions put by the Court to the experts meet this view, though, in my
opinion, they are not in all points necessary or expedient.
[195] II. I cannot concur in the Court's decision in regard to the so-called question of
set-off.
[196] 1. This question first arose in a note of the Polish Government of February 1st,
1927, to the effect that that Government had claims against Germany in respect of
various amounts, one of which, arising out of social insurances in Upper Silesia, had
been fixed by an award of the League of Nations at 25 million Reichsmarks. In these
circumstances, it contended that the respective claims should be set off against each
other. It is to be observed that this statement related to the note and aide-memoire of
the German Government, dated January 19th, 1927, which "in regard to the question of
the method, of payment, which tended more and more to become the main question",
demanded "in principle a full and immediate payment" and proposed, as regards some
portions of the payment, the delivery of bills of exchange.
[197] As will be seen, the Polish Government, in asserting its right to set-off, did not
specify the claims in question, except the claim arising out of social insurance in Upper
Silesia. Now the Arbitral Tribunal of Interpretation, established between [p68] the
Reparation Commission and Germany to hear disputes concerning the so-called Dawes
Plan, gave, on March 24th, 1926, a decision having the force of res judicata as between
Germany and Poland, to the effect that the payment of the 25 millions referred to is
included in the annuities which, under the Dawes Plan, Germany has to pay to the
Agent-General for Reparation Payments. As these annuities consist of fixed sums, the
Polish Government's contention was therefore designed to make the German
Government - contrarily to the award of the Arbitral Tribunal of Interpretation - bear
the burden of this claim, by causing it to lose the indemnity due for the dispossession
of the Oberschlesische, which had been established by another international judgment,
namely the Court's Judgment No. 7.
[198] 2. In the course of the proceedings leading up to Judgment No. 8, as well as
those leading up to the present judgment, in spite of the invitations of the Applicant on
the subject and notwithstanding the exhaustive statements made by both Parties on the
question of set-off, the Polish Government has neither put forward specific claims to
which it is entitled, nor said that it would not maintain its submission that judicial or
extra-¬judicial set-off against the future judgment should be allowed.
[199] The German Government in the course of the proceedings has several times
pressed that the Court should decide this question which, being the real cause of the
breakdown of the diplomatic negotiations, is, in its opinion, a question of vital
importance in this suit, and that, unless it were decided, the dispute concerning the
Chorzów factory would not really be completely adjusted.
[200] 3. The Court considers that it has not jurisdiction to pass upon this difference of
opinion under Article 23 of the Geneva Convention.
[201] It should be observed that the terms of the judgment which dismisses the German
claim in regard to the question of set-off in so far as they are based on the said opinion,
do not seem to me to have any bearing on claims directly seeking judgment for an
actual payment in money. For the Court, having decided in its judgment that the said
Article 23 of the Geneva Convention gives it jurisdiction to determine the form and
[p69] method of the reparation due, seems undoubtedly to cover, in this definition of its
jurisdiction the question whether, in this case, a money indemnity should be actually
paid in money or in other values.
[202] 4. The judgment deals rather with the abstract question raised by the Applicant as
to whether and under what conditions a respondent condemned by a judgment of the
Court to pay a certain slim, may put forward a counter-claim to be set off against this
obligation. This question also seems to me to enter into the present proceedings and not
to relate to a point necessarily distinct from them, such as should only be taken at a
subsequent stage.
[203] A judgment imposing a penalty creates an obligation and lays down in what that
obligation consists. In a system of municipal law, the judge may and should confine
himself to certain observations and technical points, which observations may be read in
the light of relevant municipal legislation. Thus municipal law will define what is
meant by a payment which the defendant is ordered to make and in particular whether
and under what conditions the setting-off of a counterclaim is equivalent to payment in
money of the judgment debt. If, on the other hand, in an international case, the Parties
are at issue as to the action to be taken by the defendant in complying with the
judgment, it appears to me that the nature of this action must be defined in the
judgment in order to avoid any possible uncertainty.
[204] As regards the other conditions necessary for the granting of the claim in
question, I will merely point out that in my opinion they also are fulfilled in the present
case.
(Signed) E. Rabel.
[p70] Dissenting Opinion by Lord Finlay
[205] I regret that I am unable to concur in the judgment that has just been delivered. I
think that question II ought not to have been put to the experts and am further unable to
agree with what is said in the judgment as to the principles governing the assessment of
the indemnity.
I.
[206] In its Memoire, Chapter II, § 2 at page 13, the German Government renounced
its claim to restitution of the undertaking in the following terms:
"Le Gouvernement allemand, qui, au commencement, avait demande la restitution en
nature de l'entreprise expropriée, s'est convaincu, au cours des négociations, que la
restitution n'entre pas en cause, étant donne que l'usine, qui a été exploitée par I'Etat
polonais pendant presque cinq années et qui a été soustraite aux soins et au
développement de l'entrepreneur primitif pour être adaptée aux besoins de son
exploiteur actuel, n'est plus, dans son 6tat actuel, au point de vue juridique et
économique, le même objet qu'elle était à la date de la reprise, et que, par conséquent,
elle n'est pas propre à être restituée."
[207] The Party who has been dispossessed has a choice of remedies. He may claim
restitution of the property taken. This is what is meant by restitutio in integrum. He
may on the other hand abandon any claim to restitution of the actual property and
claim damages instead. The German Government abandoned its claim to restitution,
possibly under the impression - which may have been correct - that the alterations were
not of a nature which would harmonize with the use to which the German Government
intended that the property should be put. If the German Government had obtained
restitutio in integrum, it would have got the property itself and any enhanced value
which it, had reached would necessarily go to the German Government with the
property. But since the claim to restitution is abandoned, the only claim is for damages
for the wrongful act. A Party who has given up [p71] his right to restitutio in integrum
is not entitled to claim damages on the footing that it is right that he should have the
enhanced value, if any: that he would have got if he had pressed his claim for
restitution. The German Government having renounced restitution cannot make good a
claim to recover an amount representing the value of the property which would have to
be restored. It has given up restitution and elected to take damages and these damages
must be assessed according to the general rule as at the time of the wrong.
[208] There is no trace of anything from which it could be implied that on giving up
the right to restitutio in integrum, Germany should be entitled in lieu thereof to get
damages on a higher scale than that on which the damages for a wrongful taking would
by law be assessed. If the Parties had intended this they would have said so. Germany
and Poland merely agreed that the claim for restitution had been abandoned, and that
left matters exactly as if that claim had never been put forward. To construe this
transaction as involving an agreement that the damages should be assessed in any but
the usual way is to make a new agreement for the Parties. What the Parties did was
merely to abandon restitution with the consequence that Germany took the right to
damages to be assessed in the usual way.
[209] In my opinion, according to the general principle of international law, these
damages should be assessed upon the basis of the value of the undertaking at the time
of the seizure, that is the 3rd July, 1922, together with a fair rate of interest on that
value from that date until the date of payment; and in addition any other damage
directly consequent upon the seizure.
[210] It may be that damages so assessed will amount to no more than the amount
which the Polish Government would have had to pay if it had been able to expropriate
the undertaking in conformity with the terms of the Geneva Convention; but this is
immaterial. Germany has selected as the form of reparation for the wrong done to her
at international [p72] law a pecuniary indemnity corresponding to the loss sustained by
her nationals. It is immaterial whether the result of this selection is to put Germany and
the German Companies in a better or worse position than that in which they would
otherwise have been.
[211] It is said that the general rule as to assessment of damages cannot here be applied
and that some distinction must be made between the consequences of a wrongful
expropriation and those of a lawful expropriation in accordance with the provisions of
the Geneva Convention. The fact that Poland, had she expropriated in accordance with
the Geneva Convention, would have been bound to pay an indemnity equal to the
amount of the damages, if the damages are assessed according to the general rule of
international law, does not affect the matter. The question is what was the loss inflicted
on the two Companies by the seizure.
[212] It is argued that it would not be equitable that the liability of a mere wrongdoer
should be no greater than that of one who had expropriated the property in accordance
with the terms of the Geneva Convention.
[213] Expropriation in accordance with those terms was at the time impossible, in the
absence of recognition by the Mixed Commission that this measure was indispensable
for the maintenance of the working of the undertaking (Article 7). No special provision
is made in the Convention as to what is to happen if the Government takes property in
contravention of these provisions: that is left to the general law. It is now however
argued that it is not equitable that the general law should apply in such a case, and an
effort is made to modify it so as to prevent the Government which has so acted being
financially in no worse position than one which has acted under the provisions of the
Geneva Convention.
[214] It seems to me that it is entirely beyond the province of the Court in effect to
introduce provisions of this nature, in the absence of agreement in treaty or convention
to that effect. [p73]
II.
[215] If the relevant time for determining the value of the undertaking is the time of the
seizure, it follows that the value of the undertaking at the present time, had it remained
in the hands of the Oberschlesische and the Bayerische, is irrelevant except in so far as
it may give some assistance in determining the value at the time of the seizure. It is not
necessary to refer to the experts any question directed to the value at the present time. I
think therefore that question II is unnecessary.
[216] That question is in the following terms:
«Quelle serait la valeur exprimée en Reichsmarks actuels, à la date du présent arrêt, de
ladite entreprise de Chorzów, si cette entreprise (y compris les terrains, bâti¬ments,
outillage, stocks, procèdes disponibles, contrats de fourniture et de livraison, clientèle
et chances d'avenir), étant restée entre les mains des Bayerische et Oberschle¬sische
St. W., soit était demeurée essentiellement en l'état de 1922, soit avait reçus, toutes
proportions gardées, un développement analogue à celui d'autres entreprises du même
genre, dirigées par la Bayerische, par exemple, l'entreprise dont l'usine est sise à
Piesteritz?»
[Translation.]
"What would be the value at the date of the present judgment, expressed in
Reichsmarks current at the present time, of the same undertaking (Chorzów) if that
undertaking (including lands, buildings, equipment, stocks, available processes, supply
and delivery contracts, goodwill and future prospects) had remained in the hands of the
Bayerische and Oberschlesische Stickstoffwerke, and had either remained substantially
as it was in 1922, or been developed proportionately on lines similar to those applied in
the case of other undertakings of the same kind, controlled by the Bayerische, for
instance, the undertaking of which the factory is situated at Piesteritz?”
[217] Further, I consider this question unsatisfactory in itself. It is directed to two
values under hypothetical conditions. The first of those values is dependent upon the
hypothesis that the undertaking remained substantially in the condition in which it was
in 1922. It would be difficult to say what the present day value of the undertaking in
such an obsolete [p74] condition would be. The second of those values is dependent
upon a hypothetical development of the undertaking. The development which the
question assumes is one "proportionately on lines similar to" the development which
has taken place in what are alleged to be parallel undertakings. It would be difficult to
determine the proportions of development applicable. The question of what
undertakings may be taken into consideration for this purpose seems to be one for the
experts themselves, and I think that question II would present great difficulty in the
working.
[218] It is on these two points only that I am unable to concur in the judgment of the
Court in this case; but they are of vital importance.
(Signed) Finlay.
[p75] Dissenting Opinion by M. Ehrlich.
[219] I regret that I disagree on some of the questions decided by the judgment which
has just been given.
I.
[220] In my opinion, the Court should have taken into consideration the judgment
given by the Civil Court of Katowice.
*
[221] The Parties are agreed, and moreover it follows from the principles generally
applied by arbitral tribunals, that in cases like the present the basis of the award must
be found, not in the enrichment of the Respondent, but in the loss suffered by the
individuals concerned. In this case these are the Bayerische and Oberschlesische, and
the Respondent has contended, among other things, that the Oberschlesische was not
the owner of the lands and buildings which were entered in its name in the land
register, from January, 1920, until this ,entry was vacated, in 1922, in accordance with
the Polish law of 1920.
[222] In my opinion this contention of the Respondent cannot be rejected on the basis
of what the Court has said either in Judgment No. 7 or in Judgment No. 8.
*
[223] The judgment which has just been given does not, it is true, rely on res judicata;
this is correct, for it is quite certain, to mention only the case of the Pious Fund of the
Californias, that in international law, one of the conditions on which the existence of
res judicata is dependent is that there must be "identity of subject matter" and that the
point which was decided must relate to the "merits of the case". It is evident that in the
proceedings concluded by Judgment [p76] No. 7, the question of the ownership of the
Oberschlesische was not a part of the main dispute, but that it was a question to be
decided as a preliminary and incidental point. This is precisely what the Court said in
Judgment No. 7:
"In the next place, it must be observed that the Court, in the exercise of the jurisdiction
granted by Article 23 of the Geneva Convention, will not examine, save as an
incidental or preliminary point, the possible existence of rights under German
municipal law."
[224] German legislation was referred to because, in Polish Upper Silesia, it is German
civil law which determines such questions of real property.
[225] The Court maintained the same standpoint in Judgment No.11, when it recalled
that, in Judgment No. 7, it had recognized the necessity of examining, though "as an
incidental or preliminary point", the contention of the Polish Government that the
contract of 1919 and the transfer of the factory to the Oberschlesische were of a
fictitious and fraudulent character.
[226] It is generally admitted that the principles of litispendency and res judicata do
not apply to questions decided as incidental and preliminary points.
[227] Without however laying down that there is res judicata, the judgment which has
just been delivered declares that it would be impossible for the Oberschlesische's right
to the Chorzów factory to be defined differently for the purposes of Judgment No. 7
and in relation to the claim for reparation which is the subject matter of the present
judgment.
[228] On this point I disagree. It is true that facts adduced by one Party and accepted
by the Court as the direct or indirect basis of its decision cannot be disputed by the
same Party in a subsequent suit; similarly, a rule of law applied as decisive by the
Court in one case, should, according to the principle stare decisis, be applied by the
Court as far as possible in its subsequent decisions. But it may be necessary to view
differently the same situation of fact in a different suit, of which the subject matter is
different, and in which, consequently, different principles should be applied. [p77]
*
[229] In the proceedings concluded by Judgment No. 7, the Applicant said that the
Chorzów undertaking was not and had never been from the outset (contract of 1915) an
enterprise of the Reich, that the Bayerische was the business concern which worked it
(Publications of the Court, Series C., No. 11 - I, pages 351, 159), and the Applicant
maintained, as to what had been the property of the Reich until 1919-1920, that even
admitting the nullity of the contract of 1919,
"the Oberschlesische Stickstoffwerke were entered in the land registers as owners and,
in accordance with paragraph 891 of the German Civil Code, if a right is entered in
those registers in favour of a certain person, the presumption is that that person is the
possessor of the right. And should the contents of the registers not be in accordance
with the real situation at law, the interested Party may, under paragraph 894, call upon
the person entered to have the entry rectified.....
If therefore the Polish Government considered that the contract of 1919 was fictitious,
why did it not resort to the legal remedy afforded by the Civil law in force?"
[230] Then, dealing with the question whether the contract of 1919 was, fictitious, or
concluded in fraudemn creditorum, the Applicant insisted that :
"The most favourable result for the Polish Government would therefore be that it could
bring an action against the Oberschlesische for the transfer to it of the ownership in the
immovable property obtained by the Oberschlesische under a fraudulent contract."
[231] It is in accordance with these contentions of the Applicant that the Court, in
Judgment No. 7, has said :
"In the present case, in fact, the Court holds that the Oberschlesische's right of
ownership of the Chorzów factory must be regarded as established, its name having
been duly entered as owner in the land register. If Poland wishes to dispute the validity
of this entry, it can, in any case, only be annulled in pursuance of a decision given by
the competent tribunal ; this follows from the principle of respect for vested rights
…..” [p78]
[232] Judgment No. 7, in so far as it relates to the Chorzów case, says, as had already
been said in Judgment No. 7, that the Chorzów undertaking was an entity of which the
factory, which belonged at first to the Reich and afterwards to the Oberschlesische, was
only one constituent part; consequently, the undertaking as such did not fall within the
scope of Article 256 of the Treaty of Versailles. Judgment No. 7 also says in regard to
the Oberschlesische, first, that the sale to the latter by the Reich was permissible from
the point of view of international law, and, secondly, as has been said above, that the
name of the Oberschlesische had been entered in the land register and that as a result of
this, in the absence of a decision to the contrary by the competent municipal court, the
presumption was that the right of the Oberschlesische was established. The reason
expressed in the words "its name having been duly entered as owner in the land
register" suffices to establish that, while the Geneva, Convention may have been
violated by the failure to observe the rules of municipal law regarding this entry, it is in
this failure alone that the violation of the Geneva Convention consists in this respect.
*
[233] The violation of the Geneva Convention cannot be effaced, ex post facto by a
decision which should have preceded the vacation of the rights of the Oberschlesische
on the land register. That is all that is to be deduced from Judgment No. 7 as regards
subsequent decisions of competent municipal courts. As is also said in Judgment No. 8,
an examination of the right of ownership:
"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."
[234] But, in the present proceedings, there is no question of deciding whether the
breach was justified, or whether it has been effaced. These two points are res judicata:
both Parties agree that Judgment No. 7, in so far as it decides that there [p79] has been
a breach of the Geneva Convention, cannot be called in question, and the Respondent
has not referred to any possibility of making good this breach.
[235] The question to be decided now is entirely different. It is this: what was the loss
actually sustained by the Oberschlesische? There is nothing in Judgment No. 7 to
prevent a subsequent decision by the competent tribunals, as to the existence and
extent of property rights at municipal law, nor is there anything to prevent such a
decision being taken into account by the Court. There is neither in the operative part
nor anywhere else in Judgment No. 7 anything which might come either to appear
erroneous or to be invalidated, if the Court, in the present case, were to take into
account the decision of the Tribunal of Katowice of November 12th, 1927.
Incidentally, that decision was given in accordance with the terms of the German Code
of Civil Procedure which is in force in Polish Upper Silesia, and therefore, having been
rendered by default, does not contain a statement of the grounds on which it is based.
The fact that the passages in question in Judgment No. 7 were not made solely with
regard to the case then before the Court, clearly appears also from the interpretative
Judgment No. 11 which says in regard to the passage beginning "If Poland wishes. . .":
"Though from the use of the present tense it may be concluded that the Court had in
view the possibility of the institution by Poland, even after the judgment, of
proceedings with a view to obtaining the annulment of the entry by means of a decision
of the competent municipal tribunals, it would be contrary to the whole of the
reasoning to construe it as a reservation implying that the binding effect of the
judgment given - and more especially of paragraph 2 (a) of the operative part thereof
("that the attitude of the Polish Government in regard to the Oberschlesische
Stickstoffwerke and Bayerische Stickstoffwerke Companies was not in conformity
with Article 6 and the following articles of the Geneva Convention")-were to depend
on the result of such proceedings instituted subsequently."
[236] The same conclusion is indicated by the fact that the operative part of Judgment
No. 11 definitely affirms that a declaration of the ownership of the Oberschlesische had
been made (in Judgment No. 7) with binding effect "in respect of that particular case".
[p80]
II.
[237] In my opinion, the objections of the Respondent based on the view that the rights
of the Reich both in the Chorzów enterprise and in the shares (of the Oberschlesische)
have passed to Poland under Article 256 of the Treaty of Versailles, should have been
upheld.
* and interest and, if a part of the purchase price were refunded, shares of a nominal
[238] I hold that the Reich is owner of the shares of the Oberschlesische.
[239] I cannot accept the view that the question of the ownership of the shares is -
though not res judicata in virtue of Judgment No. 7 - no longer an open question since
that judgment. All that is said in Judgment No. 7 on the question of the Treuhand as
owner, is to be found in an incidental observation in the following context :
"Moreover, it was the Bayerische which, in conjunction with another Company, the
Deutsche Petroleum A.-G., had founded the Treuhand which owned all the shares of
the Oberschlesische; and the purchase of the factory by the latter may therefore be
regarded, in a sense, as the exercise, modified in accordance with circumstances, of the
right of purchase possessed under the contract of March 5th, 1915, by the Bayerische
which, by itself, had not the necessary funds at its disposal."
* obligation, the Reich will retain possession of the shares even after the expiration of
[240] On December 24th, 1919, were concluded simultaneously:
(1) the memorandum of association of a new limited liability company (hereinafter
called the Treuhand) with a share capital of 300,000 marks, increased the same day to
1,000,000 marks;
(2) the memorandum of association of a new joint stock company (hereafter called the
Oberschlesische) with a share capital of 250,000 marks, increased the same day to
110,000,000 marks; [p81]
(3) a contract between the Reich, the Oberschlesische and the Treuhand, by which the
Reich left over to the Oberschlesische the Chorzów factory; the contract laid down the
principles on which the purchase price (Uberlassungspreis) was to be calculated, and
added that this price represented, according to the documentary evidence then existing,
about 110,000,000 marks, and that on this sum would be reckoned interest at 5 % from
December 31st, 1919. The contract continued as follows:
Ҥ 3. The purchase price (Kaufpreis) and the interest will be liquidated by paying to the
Reich the whole of the net profit shown by the balance sheet (of the Oberschlesische).”
[241] After adding that larger payments in liquidation of the debt would be permissible
at any time, the contract proceeded.
Ҥ 4. The Treuhand will assume in place of the Oberschlesische, as sole debtor, in
accordance with the provisions laid down above, all the obligations imposed by their
contract upon the Oberschlesische in respect of the Reich.
§ 5. The interest and capital of the purchase price shall be liquidated exclusively by the
payment to the Reich of the profits on the shares (of the Oberschlesische) . . . ."
[242] The contract also stipulated that the Oberschlesische should increase its capital to
a sum equal to the purchase price of the factory and that as guarantee for the claims of
the Reich under this contract, the Treuhand should
"undertake to obtain for the Reich a lien on all existing shares of the Oberschlesische
after this increase, with the effect that the Reich will be authorized itself to exercise all
rights derived from the possession of the shares and especially the right to vote at
general meetings of shareholders".
[243] The, Reich agreed, in its capacity as holder (Inhaber) of the shares, to maintain
the rights of the Bayerische resulting from previous contracts between the Reich and
the Bayerische. The Treuhand might at any time pay the whole or a part of the capital
value corresponding to the payment would be released from the lien, whereas the
reduction of the capital sum by the payment of the profits of the Oberschlesische
would liberate no shares from the lien. But – [p82] the contract proceeded - the
Stickstoffwerke (a designation used in the contract to denote the Oberschlesische)
"can only claim the handing over of the shares if and in so far as they may sell shares
to a third party with the consent of the Reich. Until such time the shares will remain in
possession of the Reich, which will continue to exercise all rights derived from
possession of the shares, including the right to vote at general meetings of
shareholders."
[244] The contract lays down that any alienation (sale, transfer, pledging, pooling,
leasing, or grant of a right to receive dividends, in short, any kind of disposal) of the
shares or of a part thereof will only be permitted, even after the expiration of the lien,
with the consent of the Reich, and that, as a guarantee of compliance with this
the lien.
[245] Finally, there were provisions concerning the sale of the shares by the Reich, in
which case the Treuhand might declare its readiness to acquire (erwerben) the shares at
the price which the Reich was prepared to accept, and if the Treuhand made no such
declaration, it was to receive 10 % of the surplus remaining after deduction of the
capital sum and of the arrears of interest of the price of the factory; if, on the other
hand, the Treuhand wished to dispose of the shares or a part thereof, which it could
never do without the consent of the Reich, the Reich was to obtain out of the purchase
price the total sum due to it and the arrears of interest plus 85 % of the surplus, the
remainder of the surplus going to the Treuhand.
[246] The shares of the Oberschlesische were shares to bearer (Inhaberaktien); the
Treuhand was never mentioned in the contract as owner of the shares; it could only
obtain them, even after having paid the whole of the debt with all interest, by acquiring
(erwerben) them if the Reich were willing to sell them and if it (the Treuhand) availed
itself of the right of preemption; it could decide nothing as to the sale of the shares
without the Reich's consent; if on the other hand the Reich wished to dispose of them,
the Treuhand had only a right of preemption; it could not exercise the rights of a
shareholder, until it had "acquired" the shares under the conditions indicated or by
permission (by sufferance) of the [p83] Reich. On the other hand, the Reich was
always, in all circumstances, to remain holder of the shares (Inhaber of the
Inhaberaktien) until the moment when it decided to alienate them.
[247] A limited liability company which had just been formed could hardly guarantee
to the Reich a debt amounting to 110 times its capital. At all events, the Treuhand's
only responsibility towards the Reich was to obtain for it the shares of the
Oberschlesische, a thing which it was able in principle to do there and then at no
expense. Over and above the right of preemption which I have mentioned, the
Treuhand had only a hypothetical right to a commission. Indeed, it is in the Case of the
applicant Government in the proceedings concluded by Judgment No. 7 that the
difference of 5 % has been described as a "commission" (Publications of the Court,
Series C., No. 11 - I, page 356). It is obvious that an owner does not receive
commission on the sale of his own property.
* value of such acquisition shall be fixed by the Reparation Commission, and paid by the
[248] Even if it be sought to deny that the Reich was owner of the shares of the
Oberschlesische, it is impossible to deny that it had a complete and perpetual right of
antichresis in virtue of which it was the owner in so far as all third parties were
concerned. The only restriction upon it, namely the obligation to maintain the
management in certain hands for a limited time, cannot be looked upon as a real
obligation, but as a purely personal obligation, which cannot affect the position of the
Reich as the actual shareholder.
* “It is true that the application of the Geneva Convention is hardly possible without
[249] The question of the alleged control of the Reich over the Oberschlesische has
been left open by Judgment No. 7.
[250] All that is to be found on the subject in Judgment No. 7 is confined to the two
following paragraphs:
"In a similar connection, the further question might be examined whether the
Oberschlesische, having regard to the rights conferred by the contract of December
24th, 1919, on the Reich in respect of that Company, should be regarded as [p84]
controlled by the Reich and, should this be the case, what consequences would ensue
as regards the application of the Geneva Convention.
It is, however, not necessary for the Court to go into this question. The Respondent,
who adopts the standpoint that no measure of liquidation has been taken by the Polish
Government in respect of the Chorzów factory, has not raised it, even as a subsidiary
point, and it would seem that he does not dispute-apart from.-the argument regarding
the fictitious character of the agreements of December 24th, 1919 - the fact that the
Oberschlesische is a company controlled by German nationals."
[251] It appears from these paragraphs that the Court had not considered the question
of control in Judgment No. 7. It also appears that it "seemed" that Poland did not
dispute the contention that the Oberschlesische was controlled by German nationals
and not by the Reich. Even if the Court had dealt with this question, it would only have
dealt with it as with an incidental and preliminary point; consequently, even if the
Court had decided the point, its decision would not have the force of res judicata; a
fortiori, it is impossible to argue that because the Respondent did not raise this
incidental and preliminary point, it was thereby debarred from ever raising it.
[252] Even admitting for the sake of argument that the Reich was not the owner of the
Oberschlesische's shares, it would still be true that that Company was exclusively
controlled by the Reich. It would be difficult to conceive a clearer case of control by
the Reich than that of a company of which all the shares, and bearer shares at that,
remained in the hands of the Reich which had all the rights of a shareholder in
perpetuity, subject only to the possibility of sale if it saw fit, in which case it would
receive practically the whole' sale price, these rights of the Reich being limited only by
a contractual obligation to maintain in certain hands, and for a certain time, the
management of the works owned by the Company.
*
[253] The right s of the Reich fall within the scope of Article 256 of the Treaty of
Versailles of which paragraph I is as follows: [p85]
"Powers to which German territory is ceded shall acquire all property and possessions
situated therein belonging to the German Empire or to the German States, and the
State acquiring the territory to the Reparation Commission for the credit of the German
Government on account of the sums due for reparation."
[254] The interpretation of this article as found in Judgment No. 7 has not the force of
res judicata.
[255] In declaring that it had jurisdiction to deal with the case decided by Judgment
No. 7, the Court in Judgment No. 6 said :
giving an interpretation of Article 256 of the Treaty of Versailles and the other
international stipulations cited by Poland. But these matters then constitute merely
questions preliminary or incidental to the application of the Geneva Convention."
[256] This point of view was in accordance with that of the Applicant, on whose behalf
the following observation was made during the hearing in regard to the question of
jurisdiction :
"And if it [Article 256] is to be taken into consideration solely on this ground
(erroneous citation thereof by the Polish Government), it is only as a preliminary
question to be decided incidentally."
*
[257] If the Reich either was the sole owner of the shares of the Oberschlesische, or
controlled the Oberschlesische, the whole of the property of that Company in Polish
Upper Silesia falls under the provisions of Article 256. Such is actually the case.
[258] But, even if this were not so, the rights of the Reich should in any case be
regarded as situated in Polish Upper Silesia.
[259] It appears to me impossible to hold that these rights consisted entirely or for the
most part, in the so-called claim against the Treuhand, a claim which was only
guaranteed by a lien on the shares. The Treuhand was a limited liability [p86] company
with a capital amounting to less than 1% of the sale price of the factory; the balance
sheet of the Treuhand drawn in 1924, mentioned a capital of 1,000 RM. so that this
Company cannot reasonably be held to be indebted for value which the applicant
Government has estimated in the present proceedings at a figure in any case exceeding
50,000,000 RM. Furthermore, it does not appear from the contract of 1919 that the
Treuhand had any obligation towards the Reich; by handing over to it all the shares of
the Oberschlesische, it freed itself from any possible obligation. In the proceedings
leading up to Judgment No. 7, the Applicant stated that the Treuhand was "merely a
legal device for the exercise of shareholders' rights ; it was not essential. It was created
in order to provide a special mechanism for the sale of the shares and also so as not to
burden the balance sheets of the other companies with the debt arising from the
contract of purchase and sale" (Publications of the Court, Series C., No. 11 - I, page
241). It must be remembered that the Treuhand was a limited liability company whose
obligations would not therefore involve obligations on the part of the companies which
formed it.
[260] The fact that the Treuhand does not regard itself as the Reich's debtor also
appears from the fact that in its gold-balance sheet drawn up for the first time in 1924,
there appear neither the shares of the Oberschlesische, the value of which was
considered fictitious, nor the debt to the Treasury. This is explained in a letter from the
Treuhand to the Deutsche Bank, submitted to the Court by the Applicant, in the
following terms
"It follows naturally that the balance sheet also cannot include amongst the liabilities, a
debt to the Treasury of the Reich. The value of the shares in the balance sheet must be
set off against the debt. But since it is impossible to assess the value of the shares in the
balance sheet, owing to the seizure of the factory, our obligation towards the Reich
Treasury also disappears (fallt…fort).
* [264] I cannot agree that it is the Bayerische which had control over the [p89]
[261] Even admitting for the sake of argument that the Reich had a genuine claim upon
the Treuhand, it cannot be denied [p87] that that claim would be localized in Polish
Upper Silesia, since the Chorzów factory constituted the only property of the
Oberschlesische and since all the net profits of the Oberschlesische and consequently
all the net profits of the undertaking, except perhaps certain very small deductions,
were to be paid to the Reich, which moreover, in virtue of its position as sole
shareholder, had the whole of the property of the Oberschlesische at its disposal. It
appears to me impossible to deny that the terms of Article 256 of the Treaty of
Versailles would apply to a factory situated in ceded territory, a factory of which all or
nearly all the net profits went to the Reich and over which the Reich had in fact all
possible rights of ownership, except that, for a certain time, it was obliged by a
contract not to change the management.
[262] I find it impossible to hold that the rights of the Reich are not situated in Upper
Silesia, on the ground that these rights are rights as against the Treuhand, the registered
office of which is in Germany. For it would follow that, contrary to what the Court has
laid down in Judgment No. 7, Poland has not expropriated the contractual rights of the
Bayerische, since these rights were derived from contracts between the Bayerische and
the Reich and later, between the Bayerische and the Oberschlesische, that is to say,
between Parties which, according to the judgment just given, were all domiciled in
Germany. Yet the Court did decide in Judgment No.7 t at these contractual rights of the
Bayerische related to the factory and were so to speak concentrated in that factory.
From this the Court drew the conclusion that they should not have been expropriated,
having regard to the last sentence of Article 6 of the Geneva Convention, which lays
down that, with certain exceptions, "property, rights and interests of German nationals
or of companies controlled by German nationals, cannot be liquidated in Polish Upper
Silesia".
*
[263] Article 256 must be construed in good faith and consequently in accordance with
the principle that the real state of things must be ascertained and that no decisive value
must be attached to mere legal forms. Again, the interpretation of this article [p88]
must take into account the economic conditions of which legal forms are merely an
outward expression. Legal forms such as a joint stock company must serve the objects
of economic life, but they must not obscure economic facts. There is no doubt that a
joint stock company is very closely bound up with its property ; that is why, for
instance, according to the German Commercial Code, which is in force both in
Germany and in Polish Upper Silesia, a total alienation of the property of a company
involves in principle the liquidation of that company. It must be remembered that the
rights of the Oberschlesische in the Chorzów undertaking constituted its sole property.
During and since the world war, it has been found more and more necessary to define
the nationality of joint stock companies in accordance with economic facts (for
instance the question of control) instead of by means of formal criteria such as the
registered office of the place of registration. Quite recently the House of Lords refused
to admit that a company which was registered in London and had a secretary there, but
of which the whole commercial activity was carried on in Egypt, was "resident" in
England. Lord Sumner, who delivered the leading judgment, declared the argument to
be "too transcendental for acceptance" (Egyptian Delta Land and Investment Co., Ltd.,
v. Todd). It seems to me impossible to deny that for the purposes of Article 256 the
commercial domicile of the Oberschlesische was not at Chorzów, assuming that one
regards that Company as the owner of the factory.
*
Oberschlesische. Control is the power of final decision belonging to the shareholder,
but not the power to appoint under an obligation accepted by the shareholder, the board
of management or some of its members. Again, since the Oberschlesische has, at the
utmost, succeeded to the rights of the Reich and since the Bayerische has only retained
the powers held by it under the contract with the Reich, it cannot be argued that the
Bayerische had control over the owner of the factory; for the owner, before the
Oberschlesische, had been the Reich itself.
III.
[265] Assuming that the Oberschlesische was legally owner of the factory at Chorzów
and that it was neither identical with the Reich as treasury nor controlled by it, it must
also be held that the Oberschlesische has suffered no material damage.
[266] It is not disputed that if it had suffered such damage, this should have been taken
into account in fixing the amount of the indemnity to be paid to Germany.
[267] But the indemnity can only include the amount corresponding to the damage
actually sustained by the persons whose losses should, according to the claim of the
German Government, serve as a basis for the assessment of compensation in the
present case. For this reason, damage sustained by any third person, and amongst
others by the Reich Treasury, must be left out of account ; for the German Government
has not asked the Court to take into account damage suffered by itself (its Treasury).
The Court has only to estimate the loss suffered by the Oberschlesische and
Bayerische, in accordance with the principle non ultra petita.
[268] The loss caused to any given person can only be quantum ejus interest. If two
persons have different rights over a piece of land, one being the owner, and the other
being owner of land in favour of which a servitude over the land has been established,
the reparation due to each of these persons will be represented by the value of his right,
excluding the value of the rights of the other person. It is true that the amount of debts
and other obligations, for which the injured person is responsible, must not be
excluded; but by this is meant only personal debts and other personal obligations. On
the other hand, the reparation of the loss caused, for instance, by the destruction of a
house-whether the person concerned be owner, tenant, or owner of a property in favour
of which a servitude exists-, would only cover the value of the rights of the particular
person, excluding the rights of every other person. [p90]
[269] Now, if the interests of the Reich be excluded, no material injury could have
been suffered by the Oberschlesische ; for the Reich had, to the exclusion of anyone
else, all rights of ownership in the factory; thus, in the exercise of its rights as
shareholder, it could alienate the factory; it could also draw from it all the net profits. If
the shareholder were not identical with the Reich, he had never obtained and could
never obtain from the factory any profit except that which the Reich, in the exercise of
its rights at the general meeting of shareholders, chose to grant him.
IV.
[270] Any assessment of the damage resulting from the taking over of the enterprise
must be based on the extent of the damage suffered at the time of dispossession. If
there were delay in payment, the damage may be increased by the amount of the loss
resulting from such delay ; this loss may either be expressed in terms of interim
interest, or may be estimated by taking into account, according to the circumstances,
the balance of the profit and loss which, in all probability, would have accrued between
the date of dispossession and the date of judgment. It is impossible to take as the date
of assessment a date subsequent to dispossession, unless it were the fault of the
Respondent that the claim could not be brought earlier before the international tribunal.
[271] Moreover the German Government itself has asked for a sum consisting of the
capital amount and of interest calculated as from 1922.
[272] It should be added that in the present case no subjective consideration enters into
account, such as a wrongful act entailing damages which should be calculated on some
special basis; indeed the Court cannot presume that there has been anything but an
error on the part of Poland in construing and applying the Geneva Convention.
V.
[273] It is not permissible to infer from the articles of the Oberschlesische, the
existence of a vested right on its part to [p91] work the so-called chemical factory. The
articles of a joint stock company are, from a legal point of view, only a contract .of
private law, which, according to the commercial code, must be entered in the
commercial register. Such an entry merely establishes that the rules of the commercial
code have not been infringed in the formation of the Company. It does not involve any
right to carry on the activities contemplated in the contract.
(Signed) Ludwik Ehrlich
[p92] Observations by M. Nyholm.
[274] The wish to have recourse to expert opinion for the purpose of estimating the
compensation due in respect of the Chorzów factory is certainly legitimate, but is it
also possible to obtain a result by this means? If it were a question of an expert report
on a purely mathematical basis, such as the drawing up of a balance sheet prepared
from accounts, experts appointed by the Court and by the Parties - working entirely
independently and with no liaison with the Court, on a footing of equality amongst
themselves and authorized to obtain any information - would doubtless be of decisive
assistance in arriving at a just settlement of the matter. But in this case the hypothetical
nature of the questions involves an equally hypothetical answer. As it is a question of
estimating what financial results the factory would have produced between 1922 and
1928, if it had remained in German hands, the experts will find themselves in a sphere
in which they will have difficulty in replying otherwise than by hypothetical answers.
[275] A considerable number of circumstances enter into account. Amongst others the
capacity of the various persons concerned in the management to undertake technical
control and to take advantage of the situation of the general market and of the
formation of the various groups of factories into consortiums which is a characteristic
of the years 1922-1928; the capital which might have been at the disposal of the
factory, the favourable or unfavourable effect of Polish legislation, etc.
[276] The answer can hardly take the form of the indication of a precise sum which
would enable the affair to be immediately settled.
[277] Even supposing that, thanks to the declarations of the experts, it might be
possible to arrive more nearly at the true situation, the greater or less degree of
progress thus made would not be of much importance in a case when the Court's
estimate must always be based on a number of detailed decisions, all arrived at
separately, in order to reach [p93] the total sum. It matters but little whether in regard
to some points the figure estimated is for instance 110 instead of 100, if the net result
of all the decisions is still in the nature of an approximation.
[278] It may be wondered therefore whether it is worth while to delay the settlement of
the case and to incur the difficulties connected with an expert report, including
amongst others the choice of the experts who must, if they are to perform their task
properly, possess qualifications but seldom found in one and the same person.
[279] In the end the Court may be confronted with precisely the same situation as
before the expert report and may find that the discussion upon the report between the
Parties involves a rediscussion of the case on the same bases as those already
considered.
[280] Again, the numerous data afforded by the documents in the case would appear to
make an immediate decision possible. A study of the information and statistics
furnished by the documents in regard for instance to the condition of the factory and
general development in the industry in question would appear to afford a sufficient
basis for the general assessment which the Court must in any case undertake. The
application, mutatis mutandis, of this information to the sister factory of Piesteritz
would seem particularly likely to produce useful results. There would seem to be a
possibility of obtaining corroborative evidence, for instance, by examining the offer of
sale made to the Swiss Company, taking into account the situation existing at that time.
***
[281] Certain points in this case, which as a whole is of a specific nature, may attract
attention from the point of view of law.
*
[282] As regards the assessment of the damage, the Respondent again seeks in the
present proceedings to revert to points already dealt with, maintaining that it should not
pay the [p94] indemnity because it is not the two Companies which are entitled to
receive it, but the Reich. These questions have been decided by Judgment No. 7, which
definitely lays down that any damages are due to the two Companies and not to the
Reich, which is not the owner, since it sold the factory under the contracts of 1919. The
judgment therefore unnecessarily again deals with the Polish objections on this point.
[283] The Polish contention based on Article 256 of the treaty of Versailles, again
seeks to show that the Reich should be regarded as owner. But this question is already
dealt with by the decisions of Judgment No. 7. This is also the case as regards the
position of the Reich as pledgee.
The Court therefore need not again concern itself with this. If Poland is to succeed in
her claim based on Article 256, it must be before some other tribunal and not this
Court. If she succeeded in establishing her claim before such other tribunal, the result
would simply be that Poland would in the future regain what she has to pay now. This
claim, therefore, cannot be opposed to the decision contained in Judgment No. 7,
which is being applied by the present judgment. There is therefore no reason for again
undertaking an examination of Article 256, as is done in the judgment; nor need the
Court again consider the question whether the Reich has become owner in
consequence of its position as pledgee. This matter, as also the question regarding
Article 256, relates to a stage reached long before the present judgment, and it cannot
be reopened on the pretext that, when the preceding judgments were given, the
question was to establish the principle of damages, but that now the problem is to
estimate these damages. Both are points which have already been decided.
***
[284] A question of more general legal interest arises as regards the situation of
Germany in the proceedings; that Germany alone, to the exclusion of the two
Companies, can sue, is undeniable, since this is a suit within the jurisdiction of the
Permanent Court, which is open only to States. But what is [p95] the situation of
Germany as regards the claim for indemnity? It cannot be denied that judgment must in
form be given in favour of the German State; but since the damage has been sustained
by others, it is not in the capacity of owner that Germany can claim an indemnity. The
claim put forward in the Reich's conclusions seems rather to relate to the award of a
sum as reparation for wrong inflicted upon its subjects. In the judgment the expressions
vary: "The amount of compensation to which the German Government is entitled, on
the basis of the damage suffered by the two Companies" (page 55). Another passage
runs as follows: "What sum must be awarded to the German Government in order to
enable it to place the dispossessed Companies.... in the economic situation... ? " (page
49). A precise indication of the Applicant's position is not to be found in the judgment.
It seems that the problem may be solved in accordance with the following
considerations.
[285] The asset claimed by the two Companies is in itself an asset in the hands of the
Polish State, which may be claimed by civil action against the Polish Government and
under Polish law; but as the result of the Geneva Convention, the asset has acquired
also an international character. In seizing the factory the Polish Government has also
infringed the obligations accepted by it as regards the German State. In basing its
action on this infringement, Germany is relying on the wrong done to the Companies;
but she cannot lay claim to the indemnity as her own property. Germany may suffer, as
the result of Poland's action, moral damage represented by the demand for an
imaginary sum, and also, maybe, material damage; but the latter is always based on a
fact affecting the State itself. To measure such damage by the actual amount of damage
caused to its subjects is to make a claim that, finds no support save as regards the
special cases where the wrong done to subjects directly affects the State as being
privately interested in the enterprise. In the present affair such a case might have
arisen, owing to the situation of Germany as pledgee; no such claim has however been
put forward in the proceedings. The State must therefore, as far [p96] as itself is
concerned, limit its claim to the moral or material damage directly caused to it. But at
the same time international precedent has laid down that the State may put forward
before an international court the claims of its subjects, may "take up" their case, with
the result that such claims must then be decided according to international law (see
judgments of the Permanent Court of International Justice - Wimbledon and
Mavrommatis affairs).
[286] In this situation the new question arises, since the creation of the International
Court, whether the State has the right to take upon itself or at any rate to bring before
the Court on its own initiative the claims of individuals.
[287] As regards this point, it appears that there is no reason for assuming that in
international law any change has taken place in the general principles which grant to
individuals the protection of their property rights. These rights remain always
protected, and the putting forward of a particular claim in international proceedings can
only be the result of the existence of a tacit or expressed mandate, arising either from a
demand or from the consent of the Parties. That such a mandate exists in the present
case cannot be doubted. The documents in the case show that the German State is
working in full collaboration with the Companies, who have evidently supplied all
information in order that the proceedings may have a favourable issue. From what
precedes it results that the claims must indeed be granted to the German Government
in name, but only as mandatory for the Companies. The Court cannot therefore award
the money to Germany without further comment and without considering the question
whether the German State can in law make free disposition of the amount of the
indemnity as owner, and without the legal obligation to pay it to the parties
dispossesses. The position of the Applicant must be regarded as one of mandatory.
***
[288] The argument set out above has an effect upon the question of the award of a
lump sum in compensation in favour of the two Companies, the system adopted by the
judgment. In the [p97] documents there is indeed no trace of the existence of a
mandate conferring on the German State the right to lump together the two claims. On
the contrary, the whole of the pleadings were conducted on the basis of a complete
separation.
[289] The amalgamation of the claims of the Oberschlesische and Bayerische,
officially declared by the judgment, seems therefore to have no support in law. And
further, in fact, it meets with great difficulties. The claim of the Bayerische is
composed of one part representing a percentage on the profits of the Oberschlesische;
but there are other special claims, rights resulting from the management of the factory
in relation to other factories united in a consortium under the direction of the
Bayerische. As regards the relations between the two Companies, the figures cannot be
compared -for from a financial point of view we have on the one hand a balance sheet
for the Oberschlesische for 1928, or a question of capital, and on the other hand, for the
Bayerische, a remuneration for the exploitation running as far as 1941. There seems
therefore to be no reason for departing from the express wishes of the Parties set out in
the pleadings.
[290] As regards the question of set-off, the judgment has concluded that there was no
ground for deciding it, especially because, in any case, the matter had not been raised
by the Respondent. It appears therefore that the Court decides that it has jurisdiction.
[291] On the other hand, the judgment states (page 61) that: "It is clear that the
question whether international law allows claims to be set off against each other and if
so under what conditions such set-off is permitted is in itself outside the jurisdiction
derived by the Court from Article 23 of the Geneva Convention."
[292] This paragraph appears to have for consequence a declaration of want of
jurisdiction to deal with the dispute itself.
[293] It appears however that the Court, which has jurisdiction .as regards the sums in
dispute, will also have the right to [p98] hear and determine the objections. To those
which relate to the extinction of the credit claimed may be added the declaration of a
set-off which cancels out the credit. In international law no principle can be raised
which would establish on this subject a difference between national and international
law.
(Signed) D. G. Nyholm.
[p104] Annex.
I. Documents submitted by the agent to the German government:
Contract between the Chancellor Of the Reich and the Bayerische, May 2nd, 19i6 (in
German).
Second additional contract between the same Parties, October 21st, 1916 (in German).
Fourth additional contract between the same Parties, December 22nd, 1916 (in
German).
Fifth additional contract between the same Parties, March 20th, 1917 (in German).
Seventh additional contract between the same Parties, November 13th, 1918 (in
German).
Application filed by the Bayerische against the German Treasury, May 14th, 1919 (in
German).
Letter from Messrs. Lybrand, Ross Bros. & Montgomery to the management of the
Bayerische (with expert opinion).
Notary's certificate by Dr. Hermann Münch, June 19th, 1928.
Notary's certificate by Dr. Robert Henoch, June 19th, 1928.
Glossen zur Stickstoff-Industrie, lecture by Dr. -X. Caro, Januarv 24th, 1927 (in
German).
General Plan of the Piesteritz factory.
Plan of the Reichsstickstoffwerke, Piesteritz.
Panoramic view of the Bayerische Stickstoffwerke, Piesteritz.
General Plan of the Oberschlesische Stickstoffwerke at Chorzów.
Plan of the Reichsstickstoffwerke, Chorzów.
Panoramic view of the factories at Chorzów.
Glossen zur Stickstoff-Industrie, extract from the Chemische Industrie, No. 14, April
9th, 1927 (in German).
Letter from the Oberschlesische to Dr. Ernst Wolff, Berlin, June 19th, 1928 (in
German).
Letter from the Bayerische to Dr. Ernst Wolff, Berlin, June 19th, 1928 (in German).
Annual balance sheets of the Stickstoff Treuhand Gesellschaft, March 31st, 1921, to
March 31st, 1928 (in German).
II. Documents submitted by the agent to the Polish government:
Application made to the Tribunal at Katowice, in the name of the Polish Treasury
against the Oberschlesische.
Letter from the Bayerische to the State Factories Section of the Management of the
Chorzów factories, Berlin, July 24th, 1917.
Speech by Deputy Mayer in the Reichstag, November 2nd, 19i6.
Letter from the General commanding Sixth Army Corps to the Reichsstickstoffwerke,
Chorzów, October 20th, 1916.
Letter to the Management of the Railways, Katowice, June 22nd, 1917.
Letter from the War Ministry to the Kriegsamtstelle, Breslau. May 25th 1918. [p105]
Letter from the Oberschlesische to the Bayerische Stickstoffwerke A.-G., Trostberg,
October 14th, 1920.
Description bf the factory plant at Chorzów.
Extract from the Gewerbeordnung für das Deutsche Reich, Berlin, 1912.
Table showing the actual cost of production of 1 Kg. of nitrate in the Chorzów factory.
Statement of stores, etc., taken over at the Chorzów factory, July 3rd, 1922.
Application made to the German-Polish Mixed-Arbitral Tribunal by the Bayerische
against the Polish State, March 25th, 1925.
Note verbale from the German Government to the Polish Legation, Berlin, May 11th,
1927.
Judgment of the Tribunal of Katowice in the affair Polish Treasury v. Oberschlesische,
November 12th, 1927.
Letter from Dr. Ernst Wolff, advocate, to the German-Polish Mixed Arbitral Tribunal,
January 6th, 1928.
Letter from the German Minister in Warsaw to M. Jackowski, October 24th, 1927.
Letter from the German Minister in Warsaw to M. Jackowski, October 20th, 1927.
The Chorzow Factory Case (1928, Germany v Poland)Principle:
It is a general principle of law as well as International law, that any breach ofagreement creates an obligation to
make reparation.
Fact:
There was an agreement between Germany and Poland and that bilateral treatywas known as the Geneva Upper
Silesia convention 1922. It had been provided in thattreaty that on transfer of sovereignty of certain territories from
Germany to Poland afterthe 1st world war, existing proprietary right were to be maintained except that the
PolishGovernment was granted a right of expropriation under certain condition with respects ofall property belonging
to German nationals in Upper Silesia. The present dispute arosewhen Poland seized to companies there in breach of
its international obligation under theUpper Silesia convention of 1922. The Germany demanded compensation from
thePoland.
Issues:
Whether a state can be held responsible for expropriation of alien property.Whether a state can be made responsible
at International Law, for acts of Governmentorgans or officersWhether it is a basic rule of international law that
reparation is to be made for violationsof international law
Decision:
The reparation of wrong may consist in an indemnity corresponding to thedamage which is contrary of International
Law. Right or interests of an individual theviolation of which rights cause damages are always in a different plain to
rights belongingto a state, which rights may also be infringed by the same act.
Reasoning:
The action of Poland was not expropriation in its real sense, it was rather aseizure of property, right and interest
which could not be expropriated even againstcompensation, save under the special conditions fixed by Art. 7 of the
Upper Silesiaconvention of 1922. in doing so, therefore, Poland acted contrary to its obligations. It isgeneral principle
of international law and even a general concept of law that a breach ofan agreement involves a duty to make
reparation. Reparation is the expendablecomplement of a failure to apply a convention and there is no necessity for
this to bestated in the convention itself. This case is one of an unlawful expropriation and in suchcases expropriating
sates must in addition to paying the compensation due in respect oflawful expropriation, pay also damages for any
loss continued by the injured party.
NORTH SEA CONTINENTAL SHELF CASES (SUMMARY)
International Court of Justice Contentious Case: The North Sea Continental Shelf Cases (Germany/Denmark;
Germany/Netherlands).
Year of Decision: 1969.

Note: This post discusses only aspects of the case related to treaty and customary international law.

Overview: The jurisprudence of the North Sea Continental Shelf Cases sets out the dual requirement for the formation
of customary international law: (1) State practice (the objective element) and (2) opinio juris (the subjective element). In these
cases, the Court explained the criteria necessary to establish State practice – widespread and representative participation.
It highlighted that the practices of those States whose interests were specially affected by the custom were especially relevant in
the formation of customary law. It also held that uniform and consistent practice was necessary to demonstrate opinio juris –
opinio juris is the belief that State practice amounts to a legal obligation. The North Sea Continental Self Cases also dispelled
the myth that duration of the practice (i.e. the number of years) was an essential factor in forming customary international law.

The case involved the delimitation of the continental shelf areas in the North Sea between Germany and Denmark and Germany
and Netherlands beyond the partial boundaries previously agreed upon by these States. The parties requested the Court to
decide the principles and rules of international law that are applicable to the above delimitation because the parties disagreed
on the applicable principles or rules of delimitation. Netherlands and Denmark relied on the principle of equidistance (the
method of determining the boundaries in such a way that every point in the boundary is equidistant from the nearest points of the
baselines from which the breath of the territorial sea of each State is measured). Germany sought to get a decision in favour of
the notion that the delimitation of the relevant continental shelf was governed by the principle that each coastal state is entitled
to a just and equitable share (hereinafter called just and equitable principle/method). Contrary to Denmark and Netherlands,
Germany argued that the principle of equidistance was neither a mandatory rule in delimitation of the continental shelf nor a
rule of customary international law that was binding on Germany. The Court was not asked to delimit because the parties had
already agreed to delimit the continental shelf as between their countries, by agreement, after the determination of the Court on
the applicable principles.

Facts of the Case:

Netherlands and Denmark had drawn partial boundary lines based on the equidistance principle (A-B and C-D). An agreement
on further prolongation of the boundary proved difficult because Denmark and Netherlands wanted this prolongation to take
place based on the equidistance principle (B-E and D-E) where as Germany was of the view that, together, these two boundaries
would produce an inequitable result for her. Germany stated that due to its concave coastline, such a line would result in her
loosing out on her share of the continental shelf based on proportionality to the length of its North Sea coastline. The Court had
to decide the principles and rules of international law applicable to this delimitation. In doing so, the Court had to decide if the
principles espoused by the parties were binding on the parties either through treaty law or customary international law.

North Sea Continental Shelf Cases (commons.wikimedia.org)

Questions before the Court (as relevant to this post):

Is Germany under a legal obligation to accept the equidistance-special circumstances principle, contained in Article 6 of the
Geneva Convention on the Continental Shelf of 1958, either as a customary international law rule or on the basis of the Geneva
Convention?

The Court’s Decision:

The use of the equidistance method had not crystallised into customary law and the method was not obligatory for the
delimitation of the areas in the North Sea related to the present proceedings.
Relevant Findings of the Court:
1. Nature of the treaty obligation: Is the 1958 Geneva Convention, and in particular Article 6, binding on Germany?
1. Article 6 of the Geneva Convention stated that unless the parties had already agreed on a method for delimitation or unless
special circumstances exist, the equidistance method would apply. Germany had signed, but not ratified, the Geneva Convention,
while Netherlands and Denmark were parties to the Convention. The latter two States argued that while Germany is not a party
to the Convention (not having ratified it), she was still bound by Article 6 of the Convention because:
“…(1) by conduct, by public statements and proclamations, and in other ways, the Republic has unilaterally assumed the
obligations of the Convention; or has manifested its acceptance of the conventional regime; or has recognized it as being
generally applicable to the delimitation of continental shelf areas…
(2) the Federal Republic had held itself out as so assuming, accepting or recognizing, in such a manner as to cause other States,
and in particular Denmark and the Netherlands, to rely on the attitude thus taken up” (the latter is called the principle of
estoppel).
2. The Court rejected the first argument. It said that only a ‘very definite very consistent course of conduct on the part of a State
would allow the Court to presume that the State had somehow become bound by a treaty (by a means other than in the formal
manner: i.e. ratification) when the State was ‘at all times fully able and entitled to…’ accept the treaty commitments in a formal
manner. The Court held that Germany had not unilaterally assumed obligations under the Convention. The court also took notice
of the fact that even if Germany ratified the treaty, she had the option of entering into a reservation on Article 6, following which
that particular article would no longer be applicable to Germany (in other words, even if one were to assume that Germany had
intended to become a party to the Convention, it does not presuppose that it would have also undertaken those obligations
contained in Article 6).
3. Note: The Vienna Convention on the Law of Treaties of 1969 (VCLT), which came into force in 1980, discusses in more
detail treaty obligations of third States (those States who are not parties to the treaty). It clearly stipulates that obligations arise
for third States from a provision of a treaty only if (1) the actual parties to the treaty intended the provision to create obligations
for third States; and (2) third State expressly accept those obligations in writing (Article 35 of the VCLT). The VCLT was not in
force when the Court deliberated on this case. However, as seen above, the Court’s position is consistent the VCLT. (See the
relevant provisions of the Vienna Convention on the Law of Treaties).
4. The Court held that the existence of a situation of estoppel would have allowed Article 6 to become binding on Germany – but
held that Germany’s action did not support an argument for estoppel. The Court also held that the mere fact that Germany may
not have specifically objected to the equidistance principle as contained in Article 6, is not sufficient to state that the principle is
now binding upon it.
5. In conclusion, the Court held that Germany had not acted in any manner so as to incur obligations contained in Article 6 of the
Geneva Convention. The equidistance–special circumstances rule was not binding on Germany by way of treaty law.
2. Nature of the customary international law obligation: Is Germany bound by the provisions of Article 6 of the Geneva
Convention in so far as they reflect customary international law?
6. Netherlands and Denmark argued that Article 6 also reflected ‘the accepted rule of general international law on the subject of
continental shelf delimitation’ and that it existed independently of the Convention. Therefore, they argued, Germany is bound by
the subject matter of Article 6 by way of customary international law.
7. To decide if the equidistance principle bound Germany by way of customary international law, the Court examined (1) the
status of the principle contained in Article 6 as it stood when the Convention was being drawn up; and (2) its status after the
Convention came into force.
(a) What was the customary law status of Article 6 at the time of drafting the Convention?
8. The Court held that the principle of equidistance, as contained in Article 6 did not form a part of existing or emerging
customary international law at the time of drafting the Convention. The Court supported this finding based on (1) the hesitation
expressed by the drafters of the Convention, the International Law Commission, on the inclusion of Article 6 into the Convention
and (2) the fact that reservations to Article 6 was permissible under the Convention. The Court held:
“… Article 6 is one of those in respect of which, under the reservations article of the Convention (Article 12) reservations may
be made by any State on signing, ratifying or acceding, – for speaking generally, it is a characteristic of purely conventional
rules and obligations that, in regard to them, some faculty of making unilateral reservations may, within certain limits, be
admitted; whereas this cannot be so in the case of general or customary law rules and obligations which, by their very nature,
must have equal force for all members of the international community, and cannot therefore be the subject of any right of
unilateral exclusion exercisable at will by any one of them in its own favor…. The normal inference would therefore be that any
articles that do not figure among those excluded from the faculty of reservation under Article 12, were not regarded as
declaratory of previously existing or emergent rules of law …” (see para 65 for a counter argument and the Court’s careful
differentiation)
(b) Did the provisions in Article 6 on the equidistance principle attain the customary law status after the Convention came into
force?
9. The Court then examined whether the rule contained in Article 6 had become customary international law after the Convention
entered into force – either due the Convention itself (i.e., if enough States had ratified the Convention in a manner so as to fulfil
the criteria specified below), or because of subsequent State practice (i.e. even if an adequate number of States had not ratified
the Convention, one could find sufficient State practice to meet the criteria below). The Court held that Article 6 of the
Convention had not attained a customary law status. (Compare the 1958 Geneva Convention with the four Geneva Conventions
on 1949 relating to international humanitarian law in terms of the latter’s authority as a pronouncement of customary
international law).
10. For a customary rule to emerge the Court held that it needed: (1) very widespread and representative participation in the
Convention, including States whose interests were specially affected (in this case, they were coastal States) (i.e. generality);
and (2) virtually uniform practice (i.e. consistent and uniform usage) undertaken in a manner that demonstrates (3) a general
recognition of the rule of law or legal obligation (i.e. opinio juries). In the North Sea Continental Shelf cases the court held
that the passage of a considerable period of time was unnecessary (i.e. duration) for the formation of a customary law.
Widespread and representative participation
11. The Court held that the first criteria was not met. The number of ratifications and accessions to the Convention (39 States)
were not adequately representative or widespread.
Duration
12. The Court held that the duration taken for a customary law rule to emerge is not as important as widespread and
representative participation, uniform usage, and the existence of an opinio juris. It held that:
“Although the passage of only a short period of time (in this case, 3 – 5 years) is not necessarily, or of itself, a bar to the
formation of a new rule of customary international law on the basis of what was originally a purely conventional rule, an
indispensable requirement would be that within the period in question, short though it might be, State practice, including that of
States whose interests are specially affected, should have been both extensive and virtually uniform in the sense of the provision
invoked and should moreover have occurred in such a way as to show a general recognition that a rule of law or legal
obligation is involved.”
Opinio juris
13. Opinio juris is reflected in acts of States (Nicaragua Case) or in omissions (Lotus case), in so far as those acts or omissions
were done following a belief that the said State is obligated by law to act or refrain from acting in a particular way. (For more
on opinio juris click here).

14. The Court examined 15 cases where States had delimited their boundaries using the equidistance method, after the
Convention came into force (paras. 75 -77). The Court concluded that even if there were some State practice in favour of the
equidistance principle, the Court could not deduct the necessary opinio juris from this State practice. The North Sea Continental
Shelf Cases confirmed that both State practice (the objective element) and opinio juris (the subjective element) are essential pre-
requisites for the formation of a customary law rule. This is consistent with Article 38 (1) (b) of the Statute of the ICJ. The Court
explained the concept of opinio jurisand the difference between customs (i.e. habits) and customary law:

“Not only must the acts concerned amount to a settled practice, but they must also be such, or be carried out in such a way, as
to be evidence of a belief that this practice is rendered obligatory by the existence of a rule of law requiring it. The need for such
a belief, i.e, the existence of a subjective element, is implicit in the very notion of the opinio juris sive necessitatis. The States
concerned must therefore feel that they are conforming to what amounts to a legal obligation. The frequency, or even habitual
character of the acts is not in itself enough. There are many international acts, e.g., in the field of ceremonial and protocol,
which are performed almost invariably, but which are motivated only by considerations of courtesy, convenience or tradition, Customary International Law as a Source of Law
and not by any sense of legal duty.” (Para 77).

15. The Court concluded that the equidistance principle was not binding on Germany by way of treaty or customary
international law. In the case of the latter, the principle had not attained a customary international law status at the time of the
entry into force of the Geneva Convention or thereafter. As such, the Court held that the use of the equidistance method is not
obligatory for the delimitation of the areas concerned in the present proceedings.

© Ruwanthika Gunaratne at https://ruwanthikagunaratne.wordpress.com, 2008 – 2017. Unauthorized use and/or duplication of

[G.R. No. 125865. March 26, 2001]
this material without express and written permission from this blog’s author and/or owner, or without attribution, is strictly
prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ruwanthika Gunaratne with
appropriate and specific direction to the original content.

 Twitter JEFFREY LIANG (HUEFENG), petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

 Print RES OLUTIO N

YNARES-SANTIAGO, J.:
 More

 This resolves petitioners Motion for Reconsideration of our Decision dated January 28, 2000, denying the petition for
review.
Related
The Motion is anchored on the following arguments:
Opinio Juris
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.
What is opinio juris? 1. Article 38 (1) (b) of the Statute of the International Court of Justice explains customary international law
as comprising of "(1) a general practice (2) accepted as law". The general practice or state practice was discussed in an earlier 2) THE IMMUNITY OF INTERNATIONAL ORGANIZATIONS IS ABSOLUTE.
post. The ICJ, in its jurisprudence, has relied…
In "Sources" 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 [1] 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 Metropolitan Trial Court dismissing the criminal cases. [2]
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.
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 defamation 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.
Davide, Jr., C.J., (Chairman), join the concurring opinion of Mr. Justice Puno.
Kapunan, and Pardo, JJ., concur.
Puno, J., Pls. See concurring opinion.
G.R. No. 101949 December 1, 1994
[1]
Criminal Cases Nos. 53170 & 53171 of the Metropolitan Trial Court of Mandaluyong City, Branch 60, presided by Hon. Ma. petitioner,
Luisa Quijano- Padilla.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the Regional Trial Court of Makati, Branch 61 and STARBRIGHT SALES ENTERPR
[2]
SCA Case No. 743 of the Regional Trial Court of Pasig City, Branch 160, presided by Hon. Mariano M. Umali.
Padilla Law Office for petitioner.
LIANG VS PEOPLE OF THE PHILIPPINES GR no. 125865 January 28, 2000
Petitioner: Jeffrey Liang
Respondent: People of the Philippines
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 petitioner’s 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 covered 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 petitioner’s case is covered with immunity from legal process with regard to
Section 45 of the Agreement between the ADB and the Philippine Gov’t.
(2) Whether or not the conduct of preliminary investigation was imperative.
HELD:
(1) NO. The petitioner’s 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.
 Montecillo & Ongsiako for private respondent. 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;
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 f
Msgr. Cirilos for being an improper party. An opposition to the motion was filed by private respondent.
n 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
Court, Branch 61, Makati, Metro Manila in Civil Case No. 90-183.
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
entering into the business contract in question" (Rollo, pp. 20-21).
d 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
nsideration of the June 20,1991 Order.
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 Es
Factual Allegation for claim of Immunity as a Jurisdictional Defense." So as to facilitate the determination of its defense of sovereign immunity, petitioner pr
Holy See who exercises sovereignty over the Vatican City in Rome, Italy, and is represented in the Philippines by the Papal Nuncio.
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 mo

ent, Starbright Sales Enterprises, Inc., is a domestic corporation engaged in the real estate business.
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 peti
, p.located
ose from a controversy over a parcel of land consisting of 6,000 square meters (Lot 5-A, Transfer Certificate of Title No. 390440) 22). in the Municipality
Metro Manila and registered in the name of petitioner.
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
representative,
contiguous to Lots 5-B and 5-D which are covered by Transfer Certificates of Title Nos. 271108 and 265388 respectively the Papal
and registered in Nuncio.
the name of the
y Corporation (PRC).
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 outcom
as regards
were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr., acting as agent to the sellers. Later, Licup assigned thetodiplomatic
his rights immunity
the sale to private of petitioner, and that it "adopts by reference, the allegations contained in the petition of the Holy See insofar as they re
arguments relative to its claim of sovereign immunity from suit" (Rollo, p. 87).

Private
fusal of the squatters to vacate the lots sold to private respondent, a dispute arose as to who of the parties has the respondent
responsibility of opposed the clearing
evicting and intervention of the Department of Foreign Affairs. In compliance with the resolution of this Court, both parties and the Dep
Foreign AffairsCorporation
atters. Complicating the relations of the parties was the sale by petitioner of Lot 5-A to Tropicana Properties and Development submitted their respective memoranda.
(Tropicana).

I II

A preliminary
1990, private respondent filed a complaint with the Regional Trial Court, Branch 61, Makati, Metro Manila for annulment of thematter
sale oftothe
be three
threshed out is
parcels of the procedural issue of whether the petition for certiorari under Rule 65 of the Revised Rules of Court can be ava
questionMsgr.
ic performance and damages against petitioner, represented by the Papal Nuncio, and three other defendants: namely, the order denying
Domingo petitioner's
A. Cirilos, motion to dismiss. The general rule is that an order denying a motion to dismiss is not reviewable by the appellate c
Jr., the
ana (Civil Case No. 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 t
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];
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 t
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
r square meters; (2) the agreement to sell was made on the condition that earnest money of P100,000.00 be paid Thebyother
Licupprocedural question
to the sellers, raised
and that theby private respondent is the personality or legal interest of the Department of Foreign Affairs to intervene in the case
said lots of squatters who were then occupying the same; (3) Licup paid the earnest money to Msgr. Cirilos; (4) in the same month, , pp. Licup
186-190).
assigned his
property to private respondent and informed the sellers of the said assignment; (5) thereafter, private respondent demanded from Msgr. Cirilos that the
r undertaking and clear the property of squatters; however, Msgr. Cirilos informed private respondent of the squatters' refusal to vacate the lots, proposing
In Public International Law, when a state or international agency wishes to plead sovereign or diplomatic immunity in a foreign court, it requests the Foreig
hat private respondent undertake the eviction or that the earnest money be returned to the latter; (6) private respondent counterproposed that if it would
state where it is sued to convey to the court that said defendant is entitled to immunity.
viction 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
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
t the earnest money back to the sellers, but later discovered that on March 30, 1989, petitioner and the PRC, without
In thenotice
UnitedtoStates,
privatethe
respondent,
proceduresold followed is the process of "suggestion," where the foreign state or the international organization sued in an American c
cana, 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 the
Secretary
sellers' of
transfer
State tocertificate
make a determination
of title as to whether it is entitled to immunity. If the Secretary of State finds that the defendant is immune from sui
re cancelled, transferred and registered in the name of Tropicana; (9) Tropicana induced petitioner and the PRCasks to sell
thethe
Attorney
lots to itGeneral
and thusto enriched
submit to the court a "suggestion" that the defendant is entitled to immunity. In England, a similar procedure is followed, only
ense of private respondent; (10) private respondent demanded the rescission of the sale to Tropicana and the reconveyance
Office issuesof a the
certification
lots, to no
to avail;
that effect
and instead of submitting a "suggestion" (O'Connell, I International Law 130 [1965]; Note: Immunity from Suit of Foreig
pondent is willing and able to comply with the terms of the contract to sell and has actually made plans to develop Instrumentalities
the lots into a townhouse
and Obligations,
project,50but Yale
in Law Journal 1088 [1941]).
 s, the practice is for the foreign government or the international organization to first secure an executive endorsement of its claim of sovereign or
unity. But how the Philippine Foreign Office conveys its endorsement to the courts varies. In International Catholic Inasmuch
MigrationasCommission
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 con
v. Calleja
0), the Secretary of Foreign Affairs just sent a letter directly to the Secretary of Labor and Employment, informingthe
thePope's ownthe
latter that view, it is the Holy See that is the international person.
respondent-employer
ed because it enjoyed diplomatic immunity. In World Health Organization v. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial
m 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
The Republic of the General to make,
Philippines in
has accorded the Holy See the status of a foreign sovereign. The Holy See, through its Ambassador, the Papal Nuncio, ha
mmander of the United States Naval Base at Olongapo City, Zambales, a "suggestion" to respondent Judge. The Solicitor General
diplomatic embodied
representations withthe
the Philippine government since 1957 (Rollo, p. 87). This appears to be the universal practice in international relations.
a Manifestation and Memorandum as amicus curiae.

Sovereign Immunity
ench, 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
he said Department to file its memorandum in support of petitioner's claim of 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 a
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
the defense of sovereign immunity was submitted directly to the local courts by the respondents through their private counsels
(United (Raquiza
States of Americav.v.Bradford, 75 SCRA 644 [1990]).
Guinto, 182
Miquiabas v. Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of America v. Guinto, 182 SCRA 644 [1990] and companion cases). In
e 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
olved. There are two conflicting concepts of sovereign immunity, each widely held and firmly established. According to the classical or absolute theory, a sovereig
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
only with regard to public acts or acts jure imperii of a state, but not with regard to private acts or acts jure gestionis
III (United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and Defensor-Santiago, Public International Law 194 [1984]).

he petition is that respondent trial court has no jurisdiction over petitioner, being a foreign state enjoying sovereign immunity.
Some statesOn the other
passed hand, to
legislation private
serve as guidelines for the executive or judicial determination when an act may be considered as jure gestionis. The Un
sts that the doctrine of non-suability is not anymore absolute and that petitioner has divested itself of such a cloak when,the
passed of its own free
Foreign will, it entered
Sovereign into Act of 1976, which defines a commercial activity as "either a regular course of commercial conduct or a particula
Immunities
ansaction for the sale of a parcel of land located in the Philippines. transaction or act." Furthermore, the law declared that the "commercial character of the activity shall be determined by reference to the nature of the cours
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 Ca
e 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 "co

mine the issue of petitioner's non-suability, a brief look into its status as a sovereign state is in order.
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
treatises and the decisions in countries which follow the restrictive theory have difficulty in characterizing whether a contract of a sovereign state with a priv
exation 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 or an actLaw. With the
jure imperii.
al 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
alonga and Yap, Public International Law 36-37 [1992]).
The restrictive theory came about because of the entry of sovereign states into purely commercial activities remotely connected with the discharge of gove
functions. This is particularly true with respect to the Communist states which took control of nationalized business activities and international trading.
nd the Holy See entered into the Lateran Treaty, where Italy recognized the exclusive dominion and sovereign jurisdiction of the Holy See over the Vatican
gnized 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
w (Garcia, Questions and Problems In International Law, Public and Private 81 [1948]). 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 ap
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 Na
(United States of America v. Ruiz, supra.); and (3) the change of employment status of base employees (Sanders v. Veridiano, 162 SCRA 88 [1988]).
eaty 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
vereignty also in the field of international relations" (O'Connell, I International Law 311 [1965]).
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
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
ordings of the Lateran Treaty, it is difficult to determine whether the statehood is vested in the Holy See or in the American
Vatican City. Some writers
servicemen even
and the general public (United States of America v. Rodrigo, 182 SCRA 644 [1990]); and (2) the bidding for the operation of barber s
the treaty created two international persons — the Holy See and Vatican City (Salonga and Yap, supra, 37). 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 gene
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 propr
y fits into none of the established categories of states, and the attribution to it of "sovereignty" must be made in athe United
sense Statesfrom
different government impliedly
that in which it is divested itself of its sovereign immunity from suit.
states (Fenwick, International Law 124-125 [1948]; Cruz, International Law 37 [1991]). In a community of national states, the Vatican City represents an
not for political but for ecclesiastical purposes and international objects. Despite its size and object, the Vatican In
City
thehas an independent
absence government
of legislation defining what of activities and transactions shall be considered "commercial" and as constituting acts jure gestionis, we have to
e Pope, who is also head of the Roman Catholic Church, as the Holy See or Head of State, in conformity with its our traditions, and the demands
own guidelines, tentative of its may
they missionbe.
eed, the world-wide interests and activities of the Vatican City are such as to make it in a sense an "international state" (Fenwick, supra
ernational Law 160 [1956]).
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 inquir
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
rote that the recognition of the Vatican City as a state has significant implication — that it is possible for any entity pursuingact
particular objects essentially
or transaction mustdifferent
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 impe
ued by states to be invested with international personality (Kunz, The Status of the Holy See in International Law, 46 The
when it isAmerican Journal
not undertaken forofgain or profit.
w 308 [1952]).
As held in United States of America v. Guinto, (supra): 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
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 espous
relations between the Philippine government and the Holy See (Young, Remedies of Private Claimants Against Foreign States, Selected Readings on Pro
There is no question that the United States of America, like any other state, will be deemed to have
of Private Foreign Investments 905, 919 [1964]). Once the Philippine government decides to espouse the claim, the latter ceases to be a private cause.
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. According to the Permanent Court of International Justice, the forerunner of the International Court of Justice:

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
By taking up the case of one of its subjects and by reporting to diplomatic action or international judicial proceedings on his
can be categorized as an act jure gestionis. However, petitioner has denied that the acquisition and subsequent disposal of Lot is in5-A
reality asserting its own rights — its right to ensure, in the person of its subjects, respect for the rules of international law
were made for profit but claimed that it acquired said property for the site of its mission or the Apostolic Nunciature in the Philippines.
Mavrommatis Palestine Concessions, 1 Hudson, World Court Reports 293, 302 [1924]).
Private respondent failed to dispute said claim.
WHEREFORE, the petition for certiorari is GRANTED and the complaint in Civil Case No. 90-183 against petitioner is DISMISSED.
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. Narvasa, C.J., Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan and Mendoza, JJ., concur.

In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the civil and administrative jurisdiction
Padilla, J., took no part. 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
Feliciano, J., is on leave.
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
The Lawphil Project - Arellano Law Foundation
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
G.R. No. 101949
exempt from local jurisdiction and entitled to all the rights, privileges and immunities of a diplomatic mission or embassy in this country
238 SCRA 524
(Rollo, pp. 156-157). The determination of the executive arm of government that a state or instrumentality is entitled to sovereign or
December 1, 1994
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 Petitioner: The Holy See
Health Organization v. Aquino, 48 SCRA 242 [1972]). As in International Catholic Migration Commission and in World Health Respondent: Hon. Elidberto Rosario, Jr., in his capacity as Presiding Judge of
Organization, we abide by the certification of the Department of Foreign Affairs. RTC Makati, Branch 61 and Starbright Sales Enterprises, Inc.

FACTS: Petition arose from a controversy over a parcel of land. Lot 5-A, registered under the name
Ordinarily, the procedure would be to remand the case and order the trial court to conduct a hearing to establish the factsHoly
alleged bywas contiguous to Lot 5-B and 5-D under the name of Philippine Realty Corporation (PRC).
See,
petitioner in its motion. In view of said certification, such procedure would however be pointless and unduly circuitous (Ortigas & Co.was donated by the Archdiocese of Manila to the Papal Nuncio, which represents the Holy
The land
Ltd. Partnership v. Judge Tirso Velasco, G.R. No. 109645, July 25, 1994). See, who exercises sovereignty over the Vatican City, Rome, Italy, for his residence.

IV Said lots were sold through an agent to Ramon Licup who assigned his rights to respondents
Starbright Sales Enterprises, Inc.

Private respondent is not left without any legal remedy for the redress of its grievances. Under both Public International Law
Whenandthe squatters refuse to vacate the lots, a dispute arose between the two parties because both
Transnational Law, a person who feels aggrieved by the acts of a foreign sovereign can ask his own government to espouse werehis cause whose responsibility was it to evict the squatters from said lots. Respondent Starbright
unsure
through diplomatic channels. Sales Enterprises Inc. insists that Holy See should clear the property while Holy See says that
respondent corporation should do it or the earnest money will be returned. With this, Msgr. Cirilios, the
agent, subsequently returned the P100,000 earnest money.

The same lots were then sold to Tropicana Properties and Development Corporation.

Starbright Sales Enterprises, Inc. filed a suit for annulment of the sale, specific performance and
damages against Msgr. Cirilios, PRC as well as Tropicana Properties and Development Corporation. The
Holy See and Msgr. Cirilos moved to dismiss the petition for lack of jurisdiction based on sovereign
immunity from suit. RTC denied the motion on ground that petitioner already "shed off" its sovereign
immunity by entering into a business contract. The subsequent Motion for Reconsideration was also
denied hence this special civil action for certiorari was forwarded to the Supreme Court.

ISSUE: Whether or not Holy See can invoke sovereign immunity.

HELD: The Court held that Holy See may properly invoke sovereign immunity for its non-suability. As
expressed in Sec. 2 Art II of the 1987 Constitution, generally accepted principles of International Law
are adopted by our Courts and thus shall form part of the laws of the land as a condition and
consequence of our admission in the society of nations.

It was noted in Article 31(A) of the 1961 Vienna Convention on Diplomatic Relations that diplomatic
envoy shall be granted immunity from civil and administrative jurisdiction of the receiving state over
any real action relating to private immovable property. The Department of Foreign Affairs (DFA)
certified that the Embassy of the Holy See is a duly accredited diplomatic missionary to the Republic
of the Philippines and is thus exempted from local jurisdiction and is entitled to the immunity rights of
a diplomatic mission or embassy in this Court.

Furthermore, it shall be understood that in the case at bar, the petitioner has bought and sold lands in
the ordinary course of 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 the
lot were made for profit but claimed that it acquired said property for the site of its mission or the
Apostolic Nunciature in the Philippines.

The Holy See is immune from suit because the act of selling the lot of concern is non-propriety in
nature. The lot was acquired through a donation from the Archdiocese of Manila, not for a commercial
purpose, but for the use of petitioner to construct the official place of residence of the Papal Nuncio
thereof. The transfer of the property and its subsequent disposal are likewise clothed with a
governmental (non-proprietal) character as petitioner sold the lot not for profit or gain rather because
it merely cannot evict the squatters living in said property.

In view of the foregoing, the petition is hereby GRANTED and the complaints were dismissed
accordingly.