SECTION

16 Pimentel, Jr. vs Ermita, 472 SCRA 587 Facts: President Arroyo issued appointments to respondents as acting secretaries of their respective departments without the consent of the Commission on Appointments, while Congress is in their regular session. Subsequently after the Congress had adjourned, President Arroyo issued ad interim appointments to respondents as secretaries of the departments to which they were previously appointed in an acting capacity. Petitioners senators assailing the constitutionality of the appointments, assert that while Congress is in session, there can be no appointments, whether regular or acting, to a vacant position of an office needing confirmation by the Commission on Appointments, without first having obtained its consent. Respondent secretaries maintain that the President can issue appointments in an acting capacity to department secretaries without the consent of the Commission on Appointments even while Congress is in session. EO 292, which devotes a chapter to the Presidents power of appointment. Sections 16 and 17, Chapter 5, Title I, Book III of EO 292 read: SEC. 16. Power of Appointment. The President shall exercise the power to appoint such officials as provided for in the Constitution and laws. SEC. 17. Power to Issue Temporary Designation. (1) The President may temporarily designate an officer already in the government service or any other competent person to perform the functions of an office in the executive branch, appointment to which is vested in him by law, when: (a) the officer regularly appointed to the office is unable to perform his duties by reason of illness, absence or any other cause; or (b) there exists a vacancy[.] Issue: WON the President can issue appointments in an acting capacity to department secretaries while Congress is in session. Held: Yes. The essence of an appointment in an acting capacity is its temporary nature. It is a stop-gap measure intended to fill an office for a

limited time until the appointment of a permanent occupant to the office. In case of vacancy in an office occupied by an alter ego of the President, such as the office of a department secretary, the President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume office. The office of a department secretary may become vacant while Congress is in session. Since a department secretary is the alter ego of the President, the acting appointee to the office must necessarily have the Presidents confidence. Thus, by the very nature of the office of a department secretary, the President must appoint in an acting capacity a person of her choice even while Congress is in session. Ad interim appointments and acting appointments are both effective upon acceptance. But ad- interim appointments are extended only during a recess of Congress, whereas acting appointments may be extended any time there is a vacancy. Moreover ad-interim appointments are submitted to the Commission on Appointments for confirmation or rejection; acting appointments are not submitted to the Commission on Appointments. Acting appointments are a way of temporarily filling important offices but, if abused, they can also be a way of circumventing the need for confirmation by the Commission on Appointments. The absence of abuse is readily apparent from President Arroyos issuance of ad interim appointments to respondents immediately upon the recess of Congress, way before the lapse of one year. Note: Can Congress impose the automatic appointment of the undersecretary? Congress, through a law, cannot impose on the President the obligation to appoint automatically the undersecretary as her temporary alter ego. The power to appoint is essentially executive in nature, and the legislature may not interfere with the exercise of this executive power except in those instances when the Constitution expressly allows it to interfere. Limitations on the executive power to appoint are construed strictly against the legislature. The scope of the legislatures

interference in the executives power to appoint is limited to the power to prescribe the qualifications to an appointive office. Congress cannot appoint a person to an office in the guise of prescribing qualifications to that office. Neither may Congress impose on the President the duty to appoint any particular person to an office. GUDANI VS.SENGA FACTS: On Sept. 22, 2005, Sen. Biazon invited several senior officers of the AFP, including Gen. Gudani, to appear at a public hearing before the Senate Committee on National Defense and Security concerning the conduct of the 2004 elections wherein allegations of massive cheating and the Hello Garci tapes emerged. AFP Chief of Staff Gen. Senga issued a Memorandum, prohibiting Gen. Gudani, Col. Balutan and company from appearing before the Senate Committee without Presidential approval. Nevertheless, Gen. Gudani and Col. Balutan testified before said Committee, prompting Gen. Senga to order them subjected to General Court Martial proceedings for willfully violating an order of a superior officer. In the meantime, President Arroyo issued EO 464, which was subsequently declared unconstitutional. ISSUES: Whether or not E.O. 464 which provides among others that no AFP personnel shall appear before any congressional or senate hearing without her approval is constitutional? YES W/N the case can be subject to judicial review? HELD: Insofar as E.O. 464 compelled officials of the executive branch to seek prior presidential approval before appearing before Congress, the notion of executive control also comes into consideration. The impression is wrong. The ability of the President to require a military official to secure prior consent before appearing in Congress pertains to wholly different and independent specie of presidential authoritythe commander-in-chief powers of the President. By tradition and jurisprudence, the commander-in- chief powers of the President are not encumbered

by the same degree of restriction as that which may attach to executive privilege or executive control. SC holds that the President has constitutional authority to do so, by virtue of her power as commander-in-chief, and that as a consequence a military officer who defies such injunction is liable under military justice. At the same time, we also hold that any chamber of Congress which seeks to appear before it a military officer against the consent of the President has adequate remedies under law to compel such attendance. Any military official whom Congress summons to testify before it may be compelled to do so by the President. If the President is not so inclined, the President may be commanded by judicial order to compel the attendance of the military officer. Final judicial orders have the force of the law of the land which the President has the duty to faithfully execute. Again, let it be emphasized that the ability of the President to prevent military officers from testifying before Congress does not turn on executive privilege, but on the Chief Executives power as commander in-chief to control the actions and speech of members of the armed forces. The Presidents prerogatives as commander-in-chief are not hampered by the same limitations as in executive privilege. The commander-in-chief provision in the Constitution is denominated as Section 18, Article VII, which begins with the simple declaration that [t]he President shall be the Commander-in-Chief of all armed forces of the Philippines. Outside explicit constitutional limitations, such as those found in Section 5, Article XVI, the commander-in-chief clause vests on the President, as commander-in- chief, absolute authority over the persons and actions of the members of the armed forces. Such authority includes the ability of the President to restrict the travel, movement and speech of military officers, activities which may otherwise be sanctioned under civilian law. Judicial relief as remedy: The refusal of the President to allow members of the military to appear before Congress is not absolute. Inasmuch as it is ill-advised for Congress to interfere with the Presidents power as commander-inchief, it is similarly detrimental for the President to unduly interfere with Congresss

right to conduct legislative inquiries. The impasse did not come to pass in this petition, since petitioners testified anyway despite the presidential prohibition. The remedy lies with the courts. It may thus be subjected to judicial review pursuant to the Courts certiorari powers under Section 1, Article VIII of the Constitution. To avoid conflict, Congress must indicate in its invitations to the public officials concerned, or to any person for that matter, the possible needed statute which prompted the need for the inquiry. Section 21, Article VI likewise establishes critical safeguards that proscribe the legislative power of inquiry. The provision requires that the inquiry be done in accordance with the Senate or Houses duly published rules of procedure, necessarily implying the constitutional infirmity of an inquiry conducted without duly published rules of procedure. Section 21 also mandates that the rights of persons appearing in or affected by such inquiries be respected, an imposition that obligates Congress to adhere to the guarantees in the Bill of Rights. Courts are empowered, under the constitutional principle of judicial review, to arbitrate disputes between the legislative and executive branches of government on the proper constitutional parameters of power. By this and, if the courts so rule, the duty falls on the shoulders of the President, as commander-in-chief, to authorize the appearance of the military officers before Congress. Even if the President has earlier disagreed with the notion of officers appearing before the legislature to testify, the Chief Executive is nonetheless obliged to comply with the final orders of the courts. Philip Sigfrid Fortun v. Gloria Macapagal- Arroyo, et al., G.R. No. 190293, March 20, 2012 (and other consolidated cases) I. THE FACTS On November 23, 2009, heavily armed men believed led by the ruling Ampatuan family of Maguindanao gunned down and buried under shoveled dirt 57 innocent civilians. In response to this carnage, President Arroyo issued on November 24, 2009 PP 1946 declaring a state of

emergency in Maguindanao, Sultan Kudarat, and Cotabato City. On December 4, 2009, President Arroyo issued PP 1959 declaring martial law and suspending the privilege of the writ of habeas corpus in Maguindanao except for identified areas of the Moro Islamic Liberation Front. On December 6, 2009, President Arroyo submitted her report to Congress. On December 9, 2009, Congress convened in joint session to review the validity of the Presidents action. But two days later, or on December 12, 2009, before Congress could act, the President issued PP 1963, lifting martial law and restoring the privilege of the writ of habeas corpus. II. THE ISSUES Did the issuance of PP 1963, lifting martial law and restoring the [privilege of the] writ in Maguindanao, render the issues moot and academic? III. THE RULING [The Court DISMISSED the consolidated petitions on the ground that they have become MOOT and ACADEMIC.] YES, the issuance of PP 1963, lifting martial law and restoring the [privilege of the] writ in Maguindanao, rendered the issues moot and academic Prudence and respect for the co-equal departments of the government dictate that the Court should be cautious in entertaining actions that assail the constitutionality of the acts of the Executive or the Legislative department. The issue of constitutionality, said the Court in Biraogo v. Philippine Truth Commission of 2010, must be the very issue of the case, that the resolution of such issue is unavoidable. The issue of the constitutionality of Proclamation 1959 is not unavoidable for two reasons: One. President Arroyo withdrew her proclamation of martial law and suspension of the privilege of the writ of habeas corpus before the joint houses of Congress could fulfill their automatic duty to review and validate or invalidate the same. xxx.

 xxx xxx xxx [U]nder the 1987 Constitution the President and the Congress act in tandem in exercising the power to proclaim martial law or suspend the privilege of the writ of habeas corpus. They exercise the power, not only sequentially, but in a sense jointly since, after the President has initiated the proclamation or the suspension, only the Congress can maintain the same based on its own evaluation of the situation on the ground, a power that the President does not have. Consequently, although the Constitution reserves to the Supreme Court the power to review the sufficiency of the factual basis of the proclamation or suspension in a proper suit, it is implicit that the Court must allow Congress to exercise its own review powers, which is automatic rather than initiated. Only when Congress defaults in its express duty to defend the Constitution through such review should the Supreme Court step in as its final rampart. The constitutional validity of the Presidents proclamation of martial law or suspension of the writ of habeas corpus is first a political question in the hands of Congress before it becomes a justiciable one in the hands of the Court. xxx xxx xxx Here, President Arroyo withdrew Proclamation 1959 before the joint houses of Congress, which had in fact convened, could act on the same. Consequently, the petitions in these cases have become moot and the Court has nothing to review. The lifting of martial law and restoration of the privilege of the writ of habeas corpus in Maguindanao was a supervening event that obliterated any justiciable controversy. Two. Since President Arroyo withdrew her proclamation of martial law and suspension of the privilege of the writ of habeas corpus in just eight days, they have not been meaningfully implemented. The military did not take over the operation and control of local government units in Maguindanao. The President did not issue any law or decree affecting Maguindanao that should ordinarily be enacted by Congress. No indiscriminate mass arrest had been reported. Those who were arrested during the period were either released or promptly charged

in court. Indeed, no petition for habeas corpus had been filed with the Court respecting arrests made in those eight days. The point is that the President intended by her action to address an uprising in a relatively small and sparsely populated province. In her judgment, the rebellion was localized and swiftly disintegrated in the face of a determined and amply armed government presence. xxx xxx xxx xxx. In a real sense, the proclamation and the suspension never took off. The Congress itself adjourned without touching the matter, it having become moot and academic. SECTION 20 Constantino v Cuisia During the Aquino regime, her administration came up w/ a scheme to reduce the countrys external debt. The solution resorted to was to incur foreign debts. Three restructuring programs were sought to initiate the program for foreign debts they are basically buyback programs & bond-conversion programs). Constantino as a taxpayer and in behalf of his minor children who are Filipino citizens, together w/ FFDC averred that the buyback and bond-conversion schemes are onerous and they do not constitute the loan contract or guarantee contemplated in Sec. 20, Art. 7 of the Constitution. And 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. They argue that 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 Constitutionthe Monetary Boardreinforces the submission that not respondents but the President alone and personally can validly bind the country. Hence, they would like Cuisia et al to stop acting pursuant to the scheme. ISSUE: Whether or not the president can validly delegate her debt power to the respondents.

HELD: 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 w/ 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 governments 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 activitiesthe 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 Presidents effectivity in running the government. The act of the respondents are not unconstitutional. Exception 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).

There are certain presidential powers which arise out of exceptional circumstances, and if exercised, would involve the suspension of fundamental freedoms, or at least call for the supersedence of executive prerogatives over those exercised by co- equal branches of government. The declaration of martial law, the suspension of the writ of habeas corpus, and the exercise of the pardoning power notwithstanding the judicial determination of guilt of the accused, all fall within this special class that demands the exclusive exercise by the President of the constitutionally vested power. The list is by no means exclusive, but there must be a showing that the executive power in question is of similar gravitas and exceptional import. SECTION 21 RAMON A. GONZALES, petitioner, vs. RUFINO G. HECHANOVA, as Executive Secretary, MACARIO PERALTA, JR., as Secretary of Defense, PEDROGIMENEZ, as Auditor General, CORNELIO BALMACEDA, as Secretary of Commerce and Industry, and SALVADORMARINO, Secretary of Justice, respondent Facts: It is not disputed that on September 22, 1963, respondent Executive Secretary authorized the importation of 67,000 tons of foreign rice to be purchased from private sources, and created a rice procurement committee composed of the other respondents for the implementation of said proposed importation. On September 25, 1963, petitioner Ramon A. Gonzales a rice planter, and president of the Iloilo Palay and Corn Planters Association, whose members are, likewise, engaged in the production of rice and corn filed the petition herein, averring that, in making or attempting to make said importation of foreign rice, the aforementioned respondents "are acting without jurisdiction or in excess of jurisdiction", because Republic Act No. 3452 which allegedly repeals or amends Republic Act No. 220 explicitly prohibits the importation of rice and corn "the Rice and Corn Administration or any other government agency;" that petitioner has no other plain, speedy and adequate remedy in the ordinary course of law; and that a preliminary injunction is necessary for the preservation of the rights of the parties during the pendency this case and to prevent the judgment therein from coming

ineffectual. Petitioner prayed, therefore, that said petition be given due course; that a writ of preliminary injunction be forthwith issued restraining respondent their agents or representatives from implementing the decision of the Executive Secretary to import the aforementioned foreign rice; and that, after due hearing, judgment be rendered making said injunction permanent. The contracts with Vietnam and Burma It is lastly contended that the Government of the Philippines has already entered into two (2) contracts for the Purchase of rice, one with the Republic of Vietnam, and another with the Government of Burma; that these contracts constitute valid executive agreements under international law; that such agreements became binding effective upon the signing thereof by representatives the parties thereto; that in case of conflict between Republic Acts Nos. 2207 and 3452 on the one hand, and aforementioned contracts, on the other, the latter should prevail, because, if a treaty and a statute are inconsistent with each other, the conflict must be resolved under the American jurisprudence in favor of the one which is latest in point of time; that petitioner herein assails the validity of acts of the Executive relative to foreign relations in the conduct of which the Supreme Court cannot interfere; and the aforementioned contracts have already been consummated, the Government of the Philippines having already paid the price of the rice involved therein through irrevocable letters of credit in favor of the sell of the said commodity. We find no merit in this pretense. Issue: W/N the sufficiency of petitioner's cause of action upon the theory that the proposed importation in question is not governed by Republic Acts Nos. 2207 and 3452, but was authorized by the President as Commander-in-Chief "for military stock pile purposes" in the exercise of his alleged authority under Section 2 of Commonwealth Act No. Held: This theory is devoid of merit. The Department of National Defense and the Armed Forces of the Philippines, as well as respondents herein,

and each and every officer and employee of our Government, our government agencies and/or agents. In the contracts with Vietnam and Burma, the Court is not satisfied that the status of said tracts as alleged executive agreements has been sufficiently established. The parties to said contracts do not pear to have regarded the same as executive agreements. But, even assuming that said contracts may properly considered as executive agreements, the same are unlawful, as well as null and void, from a constitutional viewpoint, said agreements being inconsistent with the provisions of Republic Acts Nos. 2207 and 3452. Although the President may, under the American constitutional system enter into executive agreements without previous legislative authority, he may not, by executive agreement, enter into a transaction which is prohibited by statutes enacted prior thereto. Under the Constitution, the main function of the Executive is to enforce laws enacted by Congress. The former may not interfere in the performance of the legislative powers of the latter, except in the exercise of his veto power. He may not defeat legislative enactments that have acquired the status of law, by indirectly repealing the same through an executive agreement providing for the performance of the very act prohibited by said laws. The writ of preliminary injunction The members of the Court have divergent opinions on the question whether or not respondents herein should been joined from implementing the aforementioned proposed importation. However, the majority favors the negative view, for which reason the injunction prayed for cannot be granted. WHEREFORE, judgment is hereby rendered declaring that respondent Executive Secretary had and has no power to authorize the importation in question; that he exceeded his jurisdiction in granting said authority; said importation is not sanctioned by law and is contrary to its provisions; and that, for lack of the requisite majority, the injunction prayed for must be and is, accordingly denied. It is so ordered. CNMEC v Sta Maria PETITION: This is a Petition for Review on Certiorari with Prayer for the Issuance of a Temporary Restraining Order (TRO) and/or

Preliminary Injunction Resolution of the Court of Appeals (CA) FACTS:

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Petitioner China National Machinery & Equipment Corp. (Group) (CNMEG), represented by its chairperson, Ren Hongbin, entered into a Memorandum of Understanding with the North Luzon Railways Corporation (Northrail), represented by its president, Jose L. Cortes, Jr. for the conduct of a feasibility study on a possible railway line from Manila to San Fernando, La Union (the Northrail Project). The Export Import Bank of China (EXIM Bank) and the Department of Finance of the Philippines (DOF) entered into a Memorandum of Understanding (Aug 30 MOU), wherein China agreed to extend Preferential Buyers Credit to the Philippine government to finance the Northrail Project. The Chinese government designated EXIM Bank as the lender, while the Philippine government named the DOF as the borrower. Northrail and CNMEG executed a Contract Agreement for the construction of Section I, Phase I of the North Luzon Railway System from Caloocan to Malolos on a turnkey basis (the Contract Agreement). The Philippine government and EXIM Bank entered into a counterpart financial agreement Buyer Credit Loan Agreement No. BLA 04055 (the Loan Agreement). In the Loan Agreement, EXIM Bank agreed to extend Preferential Buyers Credit in the amount of USD 400,000,000 in favor of the Philippine government in order to finance the construction of Phase I of the Northrail Project. Respondents filed a Complaint for Annulment of Contract and Injunction with Urgent Motion for Summary Hearing to Determine the Existence of Facts and Circumstances Justifying the Issuance of

Writs of Preliminary Prohibitory and Mandatory Injunction and/or TRO against CNMEG, the Office of the Executive Secretary, the DOF, the Department of Budget and Management, the National Economic Development Authority and Northrail. - In the Complaint, respondents alleged that the Contract Agreement and the Loan Agreement were void for being contrary to (a) the Constitution; (b) Republic Act No. 9184 (R.A. No. 9184), otherwise known as the Government Procurement Reform Act; (c) Presidential Decree No. 1445, otherwise known as the Government Auditing Code; and (d) Executive Order No. 292, otherwise known as the Administrative Code. On 29 March 2006, CNMEG filed an Urgent Motion for Reconsideration of this Order and CNMEG filed a Motion to , arguing that the trial court did not have jurisdiction over (a) its person, as it was an agent of the Chinese government, making it immune from suit, and (b) the subject matter, as the Northrail Project was a product of an executive agreement. RTC Br. 145 issued an Omnibus Order denying CNMEGs Motion to Dismiss and setting the case for summary hearing to determine whether the injunctive reliefs prayed for should be issued. MR DENIED. Thus, CNMEG filed before the CA a Petition for Certiorari with Prayer for the Issuance of TRO and/or Writ of Preliminary Injunction dated 4 April 2008. BUT the appellate court dismissed the Petition for Certiorari. THUS, CNMEG filed the instant Petition for Review on Certiorari dated 21 January 2009, raising the following issues:

ISSUES: 1. Whether CNMEG is entitled to immunity, precluding it from being sued before a local court.

2. Whether the Contract Agreement is an executive agreement, such that it cannot be questioned by or before a local court. First issue: Whether CNMEG is entitled to immunity - This Court explained the doctrine of sovereign immunity in Holy See v. Rosario, to wit: According to the classical or absolute theory, a sovereign cannot, 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 recognized only with regard to public acts or acts jure imperii of a state, but not with regard to private acts or acts jure gestionis. The restrictive theory came about because of the entry of sovereign states into purely commercial activities remotely connected with the discharge of governmental functions. This is particularly true with respect to the Communist states which took control of nationalized business activities and international trading. As it stands now, the application of the doctrine of immunity from suit has been restricted to sovereign or governmental activities (jure imperii). The mantle of state immunity cannot be extended to commercial, private and proprietary acts (jure gestionis).26 (Emphasis supplied.) Since the Philippines adheres to the restrictive theory, it is crucial to ascertain the legal nature of the act involved whether the entity claiming immunity performs governmental, as opposed to proprietary, functions. A. CNMEG is engaged in a proprietary activity. A threshold question that must be answered is whether CNMEG performs governmental or proprietary functions. A thorough examination of the basic facts of

the case would show that CNMEG is engaged in a proprietary activity. - Clearly, it was CNMEG that initiated the undertaking, and not the Chinese government. The Feasibility Study was conducted not because of any diplomatic gratuity from or exercise of sovereign functions by the Chinese government, but was plainly a business strategy employed by CNMEG with a view to securing this commercial enterprise. 3. The Loan Agreement CNMEG claims immunity on the ground that the Aug 30 MOU on the financing of the Northrail Project was signed by the Philippine and Chinese governments, and its assignment as the Primary Contractor meant that it was bound to perform a governmental function on behalf of China. However, the Loan Agreement, which originated from the same Aug 30 MOU, belies this reasoning, viz: Article 11. xxx (j) Commercial Activity The execution and delivery of this Agreement by the Borrower constitute, and the Borrowers performance of and compliance with its obligations under this Agreement will constitute, private and commercial acts done and performed for commercial purposes under the laws of the Republic of the Philippines and neither the Borrower nor any of its assets is entitled to any immunity or privilege (sovereign or otherwise) from suit, execution or any other legal process with respect to its obligations under this Agreement, as the case may be, in any jurisdiction. Further, the Loan Agreement likewise contains this express waiver of immunity: it is clear from the foregoing provisions that the Northrail Project was a purely commercial transaction. B. CNMEG failed to adduce evidence that it is immune from suit under Chinese law.

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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 inquiry. The logical 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 or trade, the particular act or transaction must 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 imperii, especially when it is not undertaken for gain or profit. it is readily apparent that CNMEG cannot claim immunity from suit, even if it contends that it performs governmental functions. Its designation as the Primary Contractor does not automatically grant it immunity, just as the term "implementing agency" has no precise definition for purposes of ascertaining whether GTZ was immune from suit. Although CNMEG claims to be a government-owned corporation, it failed to adduce evidence that it has not consented to be sued under Chinese law. Thus, following this Courts ruling in Deutsche Gesellschaft, in the absence of evidence to the contrary, CNMEG is to be presumed to be a government-owned and -controlled corporation without an original charter. As a result, it has the capacity to sue and be sued under Section 36 of the Corporation Code.

the court that said defendant is entitled to immunity. - In the Philippines, the practice is for the foreign government or the international organization to first secure an executive endorsement of its claim of sovereign or diplomatic immunity. The question now is whether any agency of the Executive Branch can make a determination of immunity from suit, which may be considered as conclusive upon the courts. This Court, in Department of Foreign Affairs (DFA) v. National Labor Relations Commission (NLRC), emphasized the DFAs competence and authority to provide such necessary determination, to wit: The DFAs function includes, among its other mandates, the determination of persons and institutions covered by diplomatic immunities, a determination which, when challenge, (sic) entitles it to seek relief from the court so as not to seriously impair the conduct of the country's foreign relations. The DFA must be allowed to plead its case whenever necessary or advisable to enable it to help keep the credibility of the Philippine government before the international community. When international agreements are concluded, the parties thereto are deemed to have likewise accepted the responsibility of seeing to it that their agreements are duly regarded. In our country, this task falls principally of (sic) the DFA as being the highest executive department with the competence and authority to so act in this aspect of the international arena. In the case at bar, CNMEG offers the Certification executed by the Economic and Commercial Office of the Embassy of the Peoples Republic of China, stating that the Northrail Project is in pursuit of a sovereign activity Surely, this is not the kind of certification that can establish CNMEGs entitlement to

C. CNMEG failed to present a certification from the Department of Foreign Affairs. - In Public International Law, when a state or international agency wishes to plead sovereign or diplomatic immunity in a foreign court, it requests the Foreign Office of the state where it is sued to convey to -

immunity from suit, as Holy See unequivocally refers to the determination of the "Foreign Office of the state where it is sued." - Further, CNMEG also claims that its immunity from suit has the executive endorsement of both the OSG and the Office of the Government Corporate Counsel (OGCC), which must be respected by the courts. However, as expressly enunciated in Deutsche Gesellschaft, this determination by the OSG, or by the OGCC for that matter, does not inspire the same degree of confidence as a DFA certification. Even with a DFA certification, however, it must be remembered that this Court is not precluded from making an inquiry into the intrinsic correctness of such certification.

Article 2(1) of the Vienna Convention on the Law of Treaties (Vienna Convention) defines a treaty as follows: - [A]n international agreement concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation. The agreement, the following three requisites provided under the Vienna Convention must nevertheless concur: (a) the agreement must be between states; (b) it must be written; and (c) it must governed by international law. The first and the third requisites do not obtain in the case at bar.

A. CNMEG is neither a government nor a government agency. - The Contract Agreement was not concluded between the Philippines and China, but between Northrail and CNMEG. By the terms of the Contract Agreement, Northrail is a government-owned or - controlled corporation, while CNMEG is a corporation duly organized and created under the laws of the Peoples Republic of China. Thus, both Northrail and CNMEG entered into the Contract Agreement as entities with personalities distinct and separate from the Philippine and Chinese governments, respectively.

D. An agreement to submit any dispute to arbitration may be construed as an implicit waiver of immunity from suit. - All disputes or controversies arising from this Contract which cannot be settled between the Employer and the Contractor shall be submitted to arbitration in accordance with the UNCITRAL Arbitration Rules at present in force and as may be amended by the rest of this Clause. The appointing authority shall be Hong Kong International Arbitration Center. The place of arbitration shall be in Hong Kong at Hong Kong International Arbitration Center (HKIAC). From all the foregoing, it is clear that CNMEG has agreed that it will not be afforded immunity from suit. Thus, the courts have the competence and jurisdiction to ascertain the validity of the Contract Agreement.

B. The Contract Agreement is to be governed by Philippine law. - Since the Contract Agreement explicitly provides that Philippine law shall be applicable, the parties have effectively conceded that their rights and obligations thereunder are not governed by international law. It is therefore clear from the foregoing reasons that the Contract Agreement does

Second issue: Whether the Contract Agreement is an executive agreement -

not partake of the nature of an executive agreement. It is merely an ordinary commercial contract that can be questioned before the local courts. HELD: PETITION DENIED