G.R. No. 199439 - City of General Santos vs. Commission on Audit

On 14 September 2002, petitioner China National Machinery & Equipment Corp. (Group) (CNMEG), represented by its chairperson Ren Hongbin, entered into a Memorandum of Understanding (MOU) with the North Luzon Railways Corporation (Northrail), represented by president Jose L. Cortes, Jr., for a feasibility study of a possible railway line from Manila to San Fernando, La Union (the Northrail Project).
On 30 August 2003, the Export Import Bank of China (EXIM Bank) and the Philippine Department of Finance (DOF) entered into another MOU (Aug 30 MOU), designating EXIM Bank as lender and DOF as borrower for Preferential Buyer\'s Credit financing the Northrail Project, agreeing on a loan not exceeding USD 400 million over 20 years, with 5-year grace period and 3% annual interest.

On 1 October 2003, Chinese Ambassador Wang Chungui wrote to DOF Secretary Jose Isidro Camacho informing CNMEG was designated the Prime Contractor for the Northrail Project.
On 30 December 2003, CNMEG and Northrail executed a Contract Agreement for construction of Section I, Phase I of the railway from Caloocan to Malolos on a turnkey basis, valued at approximately USD 421 million.
On 26 February 2004, the Philippine government and EXIM Bank formalized the counterpart financial deal via Buyer Credit Loan Agreement No. BLA 04055 (Loan Agreement).

On 13 February 2006, respondents filed a Complaint for Annulment of Contract and Injunction against CNMEG and government agencies, asserting that the Contract and Loan Agreements violated the Constitution and various laws (Government Procurement Reform Act, Government Auditing Code, Administrative Code).
The Regional Trial Court of Makati Branch 145 (RTC Br. 145) heard motions from CNMEG seeking dismissal based on lack of jurisdiction, claiming sovereign immunity and executive agreement status.
The RTC denied motions to dismiss and set the case for summary hearing on injunctive reliefs.
CNMEG filed a Petition for Certiorari with the Court of Appeals (CA), which was dismissed on 30 September 2008; its motion for reconsideration was denied on 5 December 2008.
CNMEG filed the instant Petition for Review on Certiorari before the Supreme Court, questioning its immunity from suit and the nature of the contract.

Whether CNMEG is an agent of the Chinese government entitled to immunity.
Whether the contracts are executive agreements immune from local court jurisdiction.
Whether certification from the Department of Foreign Affairs (DFA) is necessary for immunity claims.
Whether CNMEG\'s acts are jure imperii (governmental) or proprietary.
Whether the Northrail Project is subject to public bidding.

Is CNMEG entitled to sovereign immunity from suit before Philippine courts?
Does the Contract Agreement constitute an executive agreement between the sovereign states of China and the Philippines, thus immune from judicial scrutiny?
Is a DFA certification necessary and conclusive regarding claims of immunity?
Does the contract embody a proprietary/commercial or sovereign/governmental function?
Are the procedural rulings by the CA and RTC consistent with prior jurisprudence, including the ruling in the Neri case?