C.

STATE IMMUNITY FROM SUIT

Basis: Constitutional and Jurisprudence

Republic v. Villasor

Facts: The case was filed by the Republic of the Philippines requesting to nullify the ruling of The Court
of First Instance in Cebu in garnishing the public funds allocated for the Arm Forces of the Philippines.
A decision was rendered in Special Proceedings in favor of respondents P. J. Kiener Co., Ltd., Gavino
Unchuan, and International Construction Corporation, and against the petitioner herein, confirming the
arbitration award in the amount of P1,712,396.40, subject of Special Proceedings. The respondent
Honorable Guillermo P. Villasor, issued an Order declaring the said decision final and executory,
directing the Sheriffs of Rizal Province, Quezon City and Manila to execute the said decision. The
corresponding Alia Writ of Execution was issued. On the strength of the aforementioned Alias Writ of
Execution, the Provincial Sheriff of Rizal served Notices of Garnishment with several Banks. The funds of
the Armed Forces of the Philippines on deposit with Philippine Veterans Bank and PNB are public funds
duly appropriated and allocated for the payment of pensions of retirees, pay and allowances of military
and civilian personnel and for maintenance and operations of the AFP.
Petitioner, filed prohibition proceedings against respondent Judge Villasor for acting in excess of
jurisdiction with grave abuse of discretion amounting to lack of jurisdiction in granting the issuance of a
Writ of Execution against the properties of the AFP, hence the notices and garnishment are null and
void.

Issues:
Whether or not the state can be sued without its consent.
Whether or not the notice of garnishment issued by Judge Villasor is valid.

Discussions:
The provision of Sec 3 Article XVI declares that “the State may not be sued without its consent”. This
provision is merely a recognition of the sovereign character of the State and express an affirmation of
the unwritten rule insulating it from the jurisdiction of the courts of justice. Another justification is the
practical consideration that the demands and inconveniences of litigation will divert time and resources
of the State from the more pressing matters demanding its attention, to the prejudice of the public
welfare. As a general rule, whether the money is deposited by way of general or special deposit, they
remain government funds and are not subject to garnishment. An exception of the rule is a law or
ordinance that has been enacted appropriating a specific amount to pay a valid government obligation.

Rulings: It is a fundamental postulate of constitutionalism flowing from the juristic concept of

sovereignty that the state as well as its government is immune from suit unless it gives its consent. A
sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the
logical and practical ground that there can be no legal right as against the authority that makes the law
on which the right depends. A continued adherence to the doctrine of non-suability is not to be
deplored for as against the inconvenience that may cause private parties, the loss of government
efficiency and the obstacle to the performance of its multifarious functions are far greater is such a
fundamental principle were abandoned and the availability of judicial remedy were not thus restricted.
What was done by respondent Judge is not in conformity with the dictates of the Constitution. From a
logical and sound sense from the basic concept of the non-suability of the State, public funds cannot be
the object of a garnishment proceeding even if the consent to be sued had been previously granted and
the state liability adjudged. Disbursements of public funds must be covered by the corresponding
appropriation as required by law. The functions and public services rendered by the State cannot be
allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific
objects, as appropriated by law.

Lasco v. UNRENRE

Facts: Petitioners were dismissed from their employment with private respondent, the United Nations
Revolving Fund for Natural Resources Exploration (UNRFNRE), which is a special fund and subsidiary
organ of the United Nations. The UNRFNRE is involved in a joint project of the Philippine Government
and the United Nations for exploration work in Dinagat Island. Petitioners are the complainants for
illegal dismissal and damages. Private respondent alleged that respondent Labor Arbiter had no
jurisdiction over its personality since it enjoyed diplomatic immunity.

Issue: WON specialized agencies enjoy diplomatic immunity

Held: Petition is dismissed. This is not to say that petitioner have no recourse. Section 31 of the
Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations states
that ³each specialized agency shall make a provision for appropriate modes of settlement of (a) disputes
arising out of contracts or other disputes of private character to which the specialized agency is a party.´
Private respondent is not engaged in a commercial venture in the Philippines. Its presence is by virtue of
a joint project entered into by the Philippine Government and the United Nations for mineral
exploration in Dinagat Island

SEAFDEC v. NLRC

FACTS: SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries

Development Center, organized through an agreement in 1967 by the governments of Malaysia,
Singapore, Thailand, Vietnam, Indonesia and the Philippines with Japan as the sponsoring country.

Juvenal Lazaga was employed as a Research Associate on a probationary basis by SEAFDEC-AQD.

Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of termination to Lazaga informing
him that due to the financial constraints being experienced by the department, his services shall be
terminated. SEAFDEC-AQD's failure to pay Lazaga his separation pay forced him to file a case with the
NLRC. The Labor Arbiter and NLRC ruled in favor of Lazaga. Thus SEAFDEC-AQD appealed, claiming that
the NLRC has no jurisdiction over the case since it is immune from suit owing to its international
character and the complaint is in effect a suit against the State which cannot be maintained without its
consent.

ISSUES: 1. Does the NLRC have jurisdiction over SEAFDEC-AQD?

2. Is SEAFDEC-AQD estopped for its failure to raise the issue of jurisdiction at the first instance?

HELD: 1. SEAFDEC-AQD is an international agency beyond the jurisdiction of public respondent NLRC.
Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional
independence and freedom from control of the state in whose territory its office is located.
Permanent international commissions and administrative bodies have been created by the agreement of
a considerable number of States for a variety of international purposes, economic or social and mainly
non-political. In so far as they are autonomous and beyond the control of any one State, they have a
distinct juridical personality independent of the municipal law of the State where they are situated. As
such, according to one leading authority "they must be deemed to possess a species of international
personality of their own."
One of the basic immunities of an international organization is immunity from local jurisdiction, i.e., that
it is immune from the legal writs and processes issued by the tribunals of the country where it is found.
The obvious reason for this is that the subjection of such an organization to the authority of the local
courts would afford a convenient medium thru which the host government may interfere in there
operations or even influence or control its policies and decisions of the organization; besides, such
subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities
impartially on behalf of its member-states.

2. Respondent Lazaga's invocation of estoppel with respect to the issue of jurisdiction is unavailing
because estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of action.
Jurisdiction is conferred by law. Where there is none, no agreement of the parties can provide one.
Settled is the rule that the decision of a tribunal not vested with appropriate jurisdiction is null and
void. (SEAFDEC-AQD vs NLRC, G.R. No. 86773, February 14, 1992)
Callado v. IRRI

FACTS: Petitioner Ernesto Callado was employed as a driver at the International Rice Research Institute
(IRRI). On February 11, 1990, while driving an IRRI vehicle on an official trip to the Ninoy Aquino
International Airport and back to the IRRI, petitioner figured in an accident. After evaluating petitioner's
answer, explanations and other evidence by IRRI's Human Resource Development Department Manager,
the latter issued a Notice of Termination to petitioner on December 7, 1990.

Petitioner then filed a complaint before the Labor Arbiter for illegal dismissal, illegal suspension and
indemnity pay with moral and exemplary damages and attorney's fees. Private respondent likewise
informed the Labor Arbiter, through counsel, that the Institute enjoys immunity from legal process by
virtue of Article 3 of Presidential Decree No. 1620, and that it invokes such diplomatic immunity and
privileges as an international organization in the instant case filed by petitioner, not having waived the
same. However, the Labor Arbiter finds private respondent IRRI to have waived its immunity considered
the defense of immunity no longer a legal obstacle in resolving the case.

ISSUE: Whether or not IRRI waived its immunity from suit in this dispute which arose from an employer-
employee relationship.

HELD: The Court ruled in the negative and vote to dismiss the petition. There’s no merit in petitioner's
arguments, thus IRRI's immunity from suit is undisputed. Presidential Decree No. 1620, Article 3
provides: Immunity from Legal Process. The Institute shall enjoy immunity from any penal, civil and
administrative proceedings, except insofar as that immunity has been expressly waived by the Director-
General of the Institute or his authorized representatives.
The grant of immunity to IRRI is clear and unequivocal and an express waiver by its Director-General is
the only way by which it may relinquish or abandon this immunity.

On the matter of waiving its immunity from suit, IRRI had, early on, made its position clear. Through
counsel, the Institute wrote the Labor Arbiter categorically informing him that the Institute will not
waive its diplomatic immunity.