CONSTANTINO v CUISIA

G.R. No. 106064

FACTS
1. During the Corazon Aquino regime, her administration came up with a scheme to reduce
the country’s external debt. The solution resorted to was to incur foreign debts.
2. Three restructuring programs were sought to initiate the program for foreign debts, they
are basically buyback programs and bond-conversion programs.
3. The spouses Renato Constantino, Jr. and Lourdes Constantino, as a taxpayers, and in behalf
of their minor children who are Filipino citizens, together with FFDC (Freedom From Debt
Coalition) averred that the buyback and bond-conversion schemes were onerous and they do
not constitute the loan “contract” or “guarantee” contemplated in Sec. 20, Art. VII of the
Constitution.
- Assuming that the President has such power, unlike other powers which may be
validly delegated by the President, the power to incur foreign debts is expressly
reserved by the Constitution in the person of the President, hence, the respondents
herein
- Central Bank Governor Jose Cuisia, cannot incur debts for the Philippines nor such
power can be delegated to them.
- The gravity by which the exercise of the power will affect the Filipino nation requires
that the President alone must exercise this power. They argue that the requirement of
prior concurrence of an entity specifically named by the Constitution, the Monetary
Board, reinforces the submission that not respondents but the President “alone and
personally” can validly bind the country.

ISSUE
Whether or not he President of the Philippines can validly delegate her debt power to Cuisia

RULING
Yes.

There is no question that the president has borrowing powers and that the President may
contract or guarantee foreign loans in behalf of this country with prior concurrence of the
Monetary Board. It makes no distinction whatsoever, and the fact that a debt or a loan may be
onerous is irrelevant.
On the other hand, the President can delegate this power to her direct subordinates. The
evident exigency of having the Secretary of Finance implement the decision of the President
to execute the debt-relief contracts is made manifest by the fact that the process of establishing
and executing a strategy for managing the government’s debt is deep within the realm of the
expertise of the Department of Finance, primed as it is to raise the required amount of funding,
achieve its risk and cost objectives, and meet any other sovereign debt management goals. If
the President were to personally exercise every aspect of the foreign borrowing power, he/she
would have to pause from running the country long enough to focus on a welter of time-
consuming detailed activities, the propriety of incurring/guaranteeing loans, studying and
choosing among the many methods that may be taken toward this end, meeting countless
times with creditor representatives to negotiate, obtaining the concurrence of the Monetary
Board, explaining and defending the negotiated deal to the public, and more often than not,
flying to the agreed place of execution to sign the documents.
This sort of constitutional interpretation would negate the very existence of cabinet positions
and the respective expertise which the holders thereof are accorded and would unduly
hamper the President’s effectivity in running the government. The act of the Cuisia et al are
not unconstitutional.
There are certain acts which, by their very nature, cannot be validated by subsequent approval
or ratification by the President. There are certain constitutional powers and prerogatives of
the Chief Executive of the Nation which must be exercised by him in person and no amount
of approval or ratification will validate the exercise of any of those powers by any other
person. Such, for instance, in his power to suspend the writ of habeas corpus and proclaim
martial law and the exercise by him of the benign prerogative of pardon (mercy).
DANUBE DAM CASE
Hungary v. Slovakia

FACTS
1. The present case arose out of the signature on 16 September 1977 by the Hungarian People’s
Republic and the Czechoslovak People’s Republic on a Treaty concerning the construction and
operation of the Gabcikovo-Nagymaros System of Locks.
2. The 1977 Treaty entered into force on 30 June 1978.
- It provides for the construction and operation of a System of Locks by the parties as
a “Joint Investment.”
- It seeks to divert the course of the Danube through a series of dams and reservoirs.
- It is aimed at the production of hydroelectricity, the improvement of navigation on
the relevant section of the Danube, and the protection of the areas along the banks against
flooding.
- The principal works to be constructed is 2 series of locks, one at Gabcikovo and one
in Nagymaros to constitute “a single and indivisible operational system of works”.
3. The Czechoslovak government began construction at Gabcikovo in 1978. The Hungarian
government, however, due to a variety of economic pressures and environmental concerns
failed to start their construction as agreed.
- There had been intense criticism on the project which led the Hungarian government
to suspend its works pending the completion of various studies which the competent
authorities were to finish before 31 July 1989.
- Hungary decided to abandon the works at Nagymaros on 27 October 1989.
4. Negotiations took place between the parties and Czechoslovakia started to investigate
alternative solutions, but to no avail. On 19 May 1992, the Hungarian Government transmitted
to the Czechoslovak government a Note Verbale terminating the 1977 Treaty.
5. On 7 April 1993, Hungary and the newly-independent Slovak Republic entered into an
agreement to submit the dispute to the ICJ as final and binding.

ISSUE
Whether or not the Republic of Hungary was entitled to suspend and subsequently abandon
the works on the Nagymaros.

RULING
No.

The Court did not accept Hungary’s argument that in suspending and subsequently
abandoning the works, it did not suspend the application of the 1977 Treaty or then reject the
same.
- The conduct of Hungary at that tome can only be interpreted as an expression of its
unwillingness to comply with at least some of the provisions of the treaty.
- Hungary’s conduct rendered impossible the accomplishment of the system of works
that the Treaty expressly described as “single and indivisible”.
The Court took into cognizance Hungary’s argument that there existed a state of necessity
which would have permitted it, without incurring international responsibility, to suspend and
abandon works which it undertook to perform in accordance with the 1977 Treaty.
- The “State of Emergency” is a ground recognized by customary international law for
precluding the wrongfulness of an act not in conformity with an international obligation. This
ground, however, can only be accepted on an exceptional basis.
- Article 33 of the Draft Article on the International Responsibility of States by the
International Law Commission are relevant in the present case:
1) IT MUST HAVE BEEN OCCASIONED BY AN ‘ESSENTIAL INTEREST’ OF THE
STATE WHICH IS THE AUTHOR OF THE ACT CONFLICTING WITH ONE OF ITS
INTERNATIONAL OBLIGATIONS;
2) THAT INTERESTS MUST HAVE BEEN THREATENED BY A ‘GRAVE AND
IMMINENT PERIL’;
3) THE ACT BEING CHALLENGED MUST HAVE BEEN THE ‘ONLY MEANS’ OF
SAFEGUARDING THAT INTEREST;
4) THAT ACT MUST ‘NOT HAVE SERIOUSLY IMPAIRED AN ESSENTIAL
INTEREST’ OF THE STATE TOWARDS WHICH THE OBLIGATION EXISTED;
5) AND THE STATE WHICH IS THE AUTHOR OF THAT ACT MUST NOT HAVE
CONTRIBUTED TO THE OCCURRENCE OF THE STATE OF NECESSITY.”
While the concerns expressed by Hungary regarding its natural environment is an “essential
interest” of the state, the perils invoked, however, were not sufficiently established, nor were they
imminent, and Hungary had to it other available means.
REPUBLIC v. SANDIGANBYAN
G.R. No. 104768, 21 July 2003

FACTS
1. 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.
2. 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.
3. 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.
4. 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.

ISSUE
Whether or not the search of Dimaano’s home was legal

RULING
No.

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.

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.

REPUBLIC OF INDONESIA v. VINZON

G.R. No. 154705, 26 June 2003

FACTS
1. Republic of Indonesia as represented by Siti Partinah, Petitioner, entered into a Maintenance
Agreement with Vinzon, sole proprietor of Vinzon Trade and Services. The equipment
covered by the Maintenance Agreement are air conditioning units and was to take effect in a
period of four years.
2. When Indonesian Minister Counsellor Kasim assumed the position of Chief of
Administration, he allegedly found respondent’s work and services unsatisfactory and not in
compliance with the standards set in the agreement. Hence, they terminated the agreement.
3. Vinzon claims that the aforesaid termination was arbitrary and unlawful. He then filed a
complaint against Petitioner which was opposed by invoking imminity from suit.

ISSUE
Whether or not the Republic of Indonesia can invoke the doctrine of sovereign immunity from
suit in the instant case.

RULING
Yes.

The Rule that a State may not be used without its consent is a necessary consequence of the
principles of independence and equality of States. The practical justification for the doctrine
of sovereign immunity is that there can be no legal right against the authority that makes the
law on which the right depends. In the case of foreign States the rule is derived from the
principle of the sovereign equality of States as expressed in the maxim par in parem non habet
imperium. All states are sovereign equals and cannot assert jurisdiction over one another.

The rule, however, is not unbending or immune to change. The increasing need of sovereign
States to enter into purely commercial activities remotely connected with the discharge of their
governmental functions brought about a new concept of sovereign immunity. This concept,
the restrictive theory, holds that the immunity of the sovereign is recognized only with regard
to public acts or acts jure imperii but not with regard to private acts or acts jure getionis.

The mere entering into a contract by a foreign state with a private party cannot be construed
as the ultimate test of whether or not an act is an act jure imperii or jure gestionis. Such act is
only the start of the inquiry. There is no dispute that the establishment of a diplomatic mission
is an act jure imperii. The state may enter into contracts with private entities to maintain the
premises, furnishings and equipment of the embassy. The Republic of Indonesia is acting in
pursuit of a sovereign activity when it enetered into a contract with the respondent. The
maintenance agreement was entered into by the Republic of Indonesia in the discharge of its
governmental functions. Thus, it cannot be deemed to have waived its immunity from suit.

Article 31 of the Vienna Convention on Diplomatic Relations provides that a diplomatic agent
shall enjoy immunity from the criminal jurisdiction of the receiving state. He shall also enjoy
immunity from its civil and administrative jurisdiction except in the case of:
(a) A real action relating to private immovable property situated in the territory of the
receiving State, unless he holds it on behalf of the sending state for the purposes of the mission;
(b) An action relating to succession in which the diplomatic agent is involved as
executor, administrator, heir of legatee as a private person and not on behalf of the sending
state;
(c) an action relating to any professional or commercial activity exercised by the
diplomatic agent in the receiving state outside his official functions.
The Solicitor General believes that said act of Petitioner may fall under subparagraph (c), but
said provision clearly applies only to a situation where the diplomtic agent engages in any
professional or commercial activity outside his official functions which is not the case herein.

BARCELONA TRACTION, LIGHT AND POWER COMPANY CASE, ICJ REPORTS

FACTS
1. The Barcelona Traction, light and Power Co. Ltd. (BTLPC), is a Canadian company. The
greater part of its share capital belonged to Belgian nationals.
2. Barcelona Traction also owned the shares of several other companies, come of which were
operating in Spain under Spanish law.
3. BLTPC manufactured and supplied electricity in Spain. Although doing business in Spain,
it was incorporated in Canada and maintained its headquarters in Toronto. During the
Spanish Civil War, the government of Spain refused to allow BTLPC to transfer currency from
Spain to pay interest to the bondholders.
- The interest payments were never resumed.
4. In 1948, several Spaniards purchased some of the bonds and then brought suit in a Spanish
court asking it to declare BLTPC bankrupt because it failed to pay the interest bonds.
- The court did so and, following several motions and appeals and appeals, all of the
assets in Spain belonging to the company were finally sold by public auction in 1952.
- The proceeds from the sale were distributed to creditors and only a very small sum
was to be paid to shareholders.
5. The shareholders then sought the assistance of their home states, complained to Spain of
denials of justice and of the violation of certain treaties it alleged were applicable.
- Canada, among other states, complained to Spain of denials of justice and of the
violation of certain treaties it alleged were applicabl.
- Canada, however, eventually agreed that Spain had acted properly in denying
BLTPC the right to transfer currency abroad and later in declaring the company
bankrupt.
6. Belgium took an interest in the matter because Belgians owned 88 percent of the shares in
BLTPC.
- Belgium disagreed that Spain had acted properly and after Spain became a member
of the UN in 1955, Belgium filed a complaint before the International Court of Justice
in 1958
- The proceedings were suspended and then discontinued while representatives of the
private interest concerned carried on negotiations.
- When the negotiations failed, Belgium submitted a new application in the Court in
1962.
7. Spain objected that Belgium could not sponsor BLTPC or its shareholders because BLTPC
is a Canadian company.

ISSUE
Whether Belgium has locus standi

RULING
The Belgian government in the opinion of the Court, lacked the standing to exercise diplomatic
protection of Belgian shareholders in a Canadian company with respect to measures taken
against that company in Spain.

The Court ruled on the side of Spain, holding that only the nationality of the corporation can
sue.