Case Digest (G.R. No. 185572)
Facts:
China National Machinery & Equipment Corp. (Group) v. Hon. Cesar D. Santamaria, G.R. No. 185572, February 07, 2012, the Supreme Court En Banc, Sereno, J., writing for the Court.Petitioner China National Machinery & Equipment Corp. (Group) (CNMEG) was designated prime contractor for the Northrail Project; respondents were the presiding judge of RTC Branch 145, Makati City (Hon. Cesar D. Santamaria) and private citizens and urban poor organizations who filed suit challenging the contracts. CNMEG sought review of the Court of Appeals decision dismissing its petition for certiorari and denial of a TRO/preliminary injunction.
The procurement and financing chain began with a Memorandum of Understanding dated 14 September 2002 between CNMEG and North Luzon Railways Corporation (Northrail) for a feasibility study and potential turnkey construction of the Caloocan–Malolos rail segment. On 30 August 2003 the Export-Import Bank of China (EXIM Bank) and the Philippine Department of Finance (DOF) executed a Memorandum of Understanding to provide Preferential Buyers Credit (up to USD 400 million). Ambassador Wang Chungui wrote the DOF on 1 October 2003 informing that CNMEG was designated Prime Contractor. Northrail and CNMEG executed a Contract Agreement on 30 December 2003 (contract price USD 421,050,000). The Buyer Credit Loan Agreement between EXIM Bank and the Philippine government was signed 26 February 2004.
On 13 February 2006 respondents filed Civil Case No. 06-203 in RTC Branch 145: a Complaint for Annulment of Contract and Injunction alleging the Loan Agreement and Contract Agreement violated the Constitution, R.A. No. 9184, PD No. 1445, and EO No. 292. The trial court set the case for hearing on injunctive relief (17 March 2006). CNMEG moved to dismiss (12 April 2006), asserting foreign sovereign immunity (as agent of the People’s Republic of China) and that the contracts were executive agreements beyond judicial scrutiny. RTC Branch 145 denied the motion to dismiss in an Omnibus Order (15 May 2007) and denied reconsideration (10 March 2008). CNMEG sought certiorari relief in the Court of Appeals; the CA dismissed the petition in a Decision dated 30 September 2008 and denied reconsideration in a Resolution dated 5 December 2008.
CNMEG filed the present Petition for Review on Certiorari (Rule 45) with prayer for TRO/preliminary injunction before the Supreme Court (filed 21 January 2009). The petition...(Pro-only)
Issues:
- Is CNMEG entitled to foreign sovereign immunity that bars suit in Philippine courts?
- Is the Contract Agreement an executive agreement between States such that it is governed by international law and not subject to local judicial review?
- Was a Department of Foreign Affairs certification necessary or conclusive to establish CNMEG's claim of immunity?
- Did CNMEG's agreement to arbitrate disputes and related Loan Agreement provisions constitute a waiver of immunity?
- What is the legal effect of the Contract Agreement's choice...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
- (Pro-only)