Case Summary (G.R. No. 154705)
Dispute over Renewal and Termination
Prior to August 1999, petitioners indicated that renewal would await the incoming Chief of Administration, Azhari Kasim (arrived March 2000). Finding respondent’s performance unsatisfactory, Kasim authorized termination, effected by letter dated August 31, 2000. Petitioners also alleged a prior verbal notice of termination.
Respondent’s Civil Action and Petitioners’ Motion to Dismiss
Respondent filed suit on December 15, 2000, claiming wrongful and arbitrary termination. Petitioners moved to dismiss, invoking:
- Sovereign immunity of the Republic of Indonesia;
- Diplomatic immunity of Ambassador Soeratmin and Minister Counsellor Kasim under the Vienna Convention.
Opposition Asserting Waiver of Immunity
Respondent resisted dismissal, citing the Maintenance Agreement’s choice-of-law and venue clause: “Any legal action arising out of this Maintenance Agreement shall be settled according to the laws of the Philippines and by the proper court of Makati City.” He argued this provision constituted an express waiver of sovereign and diplomatic immunity. He also contended that the diplomatic agents could be sued in their private capacities for torts committed in bad faith.
Trial Court and Court of Appeals Rulings
The RTC denied the motion to dismiss and refused reconsideration. Petitioners elevated the issue to the Court of Appeals via certiorari and prohibition, which likewise found no grave abuse of discretion and upheld the trial court’s ruling.
Principles of Sovereign Immunity under International Law
Under the 1987 Constitution (Art. II, Sec. 2), international law principles—reciprocity, comity, independence, equality of States—are part of domestic law. Sovereign immunity derives from the maxim par in parem non habet imperium and prevents one State’s courts from exercising jurisdiction over another without consent.
Restrictive Theory: Acts jure imperii vs. jure gestionis
Modern doctrine distinguishes:
- Acts jure imperii (public/sovereign functions) remain immune.
- Acts jure gestionis (private/commercial functions) may be subject to suit.
Contracting alone does not determine the nature of the act; the transaction’s substance and context govern classification.
No Clear and Unequivocal Waiver in the Agreement
A choice-of-law clause does not ipso facto waive sovereign immunity. Such waiver must be explicit or necessarily implied. The clause could simply stipulate venue and governing law if the State elects to litigate; it does not compel submission in all circumstances. Here, there is no language clearly relinquishing immunity.
Maintenance as a Sovereign Function
Establishing and operating a diplomatic mission—including its maintenance and upkeep—constitutes a sovereign act jure imperii. Contracts for the preservation of embassy premises and official residences are integral to sovereign functions and thus immune from suit absent clear waiver.
Diplomatic Agents’ Immunity from Civil Jurisdiction
Under Article 31 of the Vienna Convention, diplomatic agents enjoy immunity from civil and admini
Case Syllabus (G.R. No. 154705)
Facts
- In August 1995, the Republic of Indonesia, through its Counsellor Siti Partinah, entered into a four-year Maintenance Agreement with James Vinzon, sole proprietor of Vinzon Trade and Services.
- The Agreement covered maintenance of air conditioning units, generator sets, electrical facilities, water heaters, and water motor pumps at the Embassy Main Building, Embassy Annex, and the Wisma Duta (official residence).
- The Agreement automatically renewed for similar four-year terms unless either party gave thirty days’ prior written notice of cancellation.
Pre-Termination Events
- Prior to August 1999, petitioners informed respondent that renewal would depend on incoming Chief of Administration Minister Counsellor Azhari Kasim, expected February 2000.
- Upon assuming office in March 2000, Minister Counsellor Kasim allegedly found the maintenance services unsatisfactory and non-compliant with contractual standards.
- The Embassy sent a termination letter on August 31, 2000, and respondents claim they were verbally informed earlier.
Respondent’s Counter-Arguments
- Respondent characterized the termination as arbitrary and unlawful, pointing to:
• A July 2000 request by Kasim for an additional full-time worker.
• An August 2000 request for a donated prize for an Independence Day golf tournament, which respondent complied with.
• An August 22, 2000 letter from Ambassador Soeratmin thanking respondent for sponsoring a prize and expressing hopes to maintain cordial relations.
Procedural History
- On December 15, 2000, respondent filed Civil Case No. 18203 in RTC Makati, Branch 145.
- Petitioners moved to dismiss (Feb. 20, 2001), invoking sovereign immunity of the Republic of Indonesia and diplomatic immunity of Ambassador Soeratmin and Minister Counsellor Kasim under the Vienna Convention.
- Respondent opposed (Mar. 20, 2001), arguing the Agreement’s forum-selection clause waive