G.R. No.

185572 February
7, 2012
CHINA NATIONAL MACHINERY
& E!I"MENT COR". #GRO!"$,
Petitioner, vs.
HON. CE%AR &. %ANTAMARIA,
'( )'* o++','a- ,a.a,'/y a* "re*'0'(1
2u01e o+ 3ra(,) 145, Re1'o(a- Tr'a-
Cour/ o+ Ma5a/' C'/y, HERMINIO
HARRY L. RO!E, 2R., 2OEL R.
3!T!YAN, ROGER R. RAYEL,
ROMEL R. 3AGARE%,
CHRI%TO"HER FRANCI%CO C.
3OLA%TIG, LEAG!E OF !R3AN
"OOR FOR ACTION #L!"A$,
6IL!%AN NG MARALITA %A
MEYCA!AYAN #6MM7L!"A
CHA"TER$, &ANILO M.
CAL&ERON, 8ICENTE C.
AL3AN, MERLYN M. 8AAL,
LOLITA %. !INONE%,
RICAR&O &. LANO9O, 2R.,
CONCHITA G. GO9O, MA.
TERE%A &. 9E"E&A, 2O%EFINA
A. LANO9O, a(0 %ERGIO C.
LEGA%"I, 2R., 6ALI"!NAN NG
&AMAYANG MAHIHIRA"
#6A&AMAY$, E&Y CLERIGO,
RAMMIL &INGAL, NEL%ON 3.
TERRA&O, CARMEN &E!NI&A,
a(0 E&!AR&O
LEG%ON, Respondents.
D E C I S I O N
%ERENO, J.:
This is a Petition for Review on
Certiorari with Prayer for the Issuance
of a Temporary Restrainin Order
!TRO" and#or Pre$iminary In%unction
assai$in the &' Septem(er )''*
Decision and + Decem(er )''*
Reso$ution of the Court of ,ppea$s
!C," in C,-..R. SP No. /'&&+/.
/
On /0 Septem(er )''), petitioner
China Nationa$ 1achinery 2
E3uipment Corp. !.roup" !CN1E.",
represented (y its chairperson, Ren
4on(in, entered into a 1emorandum
of 5nderstandin with the North
6u7on Rai$ways Corporation
!Northrai$", represented (y its
president, 8ose 6. Cortes, 8r. for the
conduct of a feasi(i$ity study on a
possi($e rai$way $ine from 1ani$a to
San 9ernando, 6a 5nion !the Northrai$
Pro%ect".
)
On &' ,uust )''&, the E:port Import
;an< of China !E=I1 ;an<" and the
Department of 9inance of the
Phi$ippines !DO9" entered into a
1emorandum of 5nderstandin !,u
&' 1O5", wherein China areed to
e:tend Preferentia$ ;uyer>s Credit to
the Phi$ippine overnment to finance
the Northrai$ Pro%ect.
&
The Chinese
overnment desinated E=I1 ;an< as
the $ender, whi$e the Phi$ippine
overnment named the DO9 as the
(orrower.
0
5nder the ,u &' 1O5,
E=I1 ;an< areed to e:tend an
amount not e:ceedin 5SD
0'',''',''' in favor of the DO9,
paya($e in )' years, with a +?year
race period, and at the rate of &@ per
annum.
+
On / Octo(er )''&, the Chinese
,m(assador to the Phi$ippines, Aan
Chunui !,m(. Aan", wrote a $etter
to DO9 Secretary 8ose Isidro
Camacho !Sec. Camacho" informin
him of CN1E.>s desination as the
Prime Contractor for the Northrai$
Pro%ect.
B
On &' Decem(er )''&, Northrai$ and
CN1E. e:ecuted a Contract
,reement for the construction of
Section I, Phase I of the North 6u7on
Rai$way System from Ca$oocan to
1a$o$os on a turn<ey (asis !the
Contract ,reement".
C
The contract
price for the Northrai$ Pro%ect was
peed at 5SD 0)/,'+','''.
*
On )B 9e(ruary )''0, the Phi$ippine
overnment and E=I1 ;an< entered
into a counterpart financia$ areement
- ;uyer Credit 6oan ,reement No.
;6, '0'++ !the 6oan ,reement".
D
In
the 6oan ,reement, E=I1 ;an<
areed to e:tend Preferentia$ ;uyer>s
Credit in the amount of 5SD
0'',''',''' in favor of the Phi$ippine
overnment in order to finance the
construction of Phase I of the
Northrai$ Pro%ect.
/'
On /& 9e(ruary )''B, respondents
fi$ed a Comp$aint for ,nnu$ment of
Contract and In%unction with 5rent
1otion for Summary 4earin to
Determine the E:istence of 9acts and
Circumstances 8ustifyin the Issuance
of Arits of Pre$iminary Prohi(itory
and 1andatory In%unction and#or TRO
aainst CN1E., the Office of the
E:ecutive Secretary, the DO9, the
Department of ;udet and
1anaement, the Nationa$ Economic
Deve$opment ,uthority and
Northrai$.
//
The case was doc<eted as
Civi$ Case No. 'B?)'& (efore the
Reiona$ Tria$ Court, Nationa$ Capita$
8udicia$ Reion, 1a<ati City, ;ranch
/0+ !RTC ;r. /0+". In the Comp$aint,
respondents a$$eed that the Contract
,reement and the 6oan ,reement
were void for (ein contrary to !a" the
ConstitutionE !(" Repu($ic ,ct No.
D/*0 ! R.,. No. D/*0", otherwise
<nown as the .overnment
Procurement Reform ,ctE !c"
Presidentia$ Decree No. /00+,
otherwise <nown as the .overnment
,uditin CodeE and !d" E:ecutive
Order No. )D), otherwise <nown as
the ,dministrative Code.
/)
RTC ;r. /0+ issued an Order dated /C
1arch )''B settin the case for
hearin on the issuance of in%unctive
re$iefs.
/&
On )D 1arch )''B, CN1E.
fi$ed an 5rent 1otion for
Reconsideration of this Order.
/0

;efore RTC ;r. /0+ cou$d ru$e
thereon, CN1E. fi$ed a 1otion to
Dismiss dated /) ,pri$ )''B , aruin
that the tria$ court did not have
%urisdiction over !a" its person, as it
was an aent of the Chinese
overnment, ma<in it immune from
suit, and !(" the su(%ect matter, as the
Northrai$ Pro%ect was a product of an
e:ecutive areement.
/+
On /+ 1ay )''C, RTC ;r. /0+ issued
an Omni(us Order denyin CN1E.>s
1otion to Dismiss and settin the case
for summary hearin to determine
whether the in%unctive re$iefs prayed
for shou$d (e issued.
/B
CN1E. then
fi$ed a 1otion for Reconsideration,
/C

which was denied (y the tria$ court in
an Order dated /' 1arch )''*.
/*

Thus, CN1E. fi$ed (efore the C, a
Petition for Certiorari with Prayer for
the Issuance of TRO and#or Arit of
Pre$iminary In%unction dated 0 ,pri$
)''*.
/D
In the assai$ed Decision dated &'
Septem(er )''*, the appe$$ate court
dismissed the Petition for Certiorari.
)'
Su(se3uent$y, CN1E. fi$ed a 1otion
for Reconsideration,
)/
which was
denied (y the C, in a Reso$ution
dated + Decem(er )''*.
))
Thus,
CN1E. fi$ed the instant Petition for
Review on Certiorari dated )/ 8anuary
)''D, raisin the fo$$owin issuesF
)&
Ahether or not petitioner CN1E. is
an aent of the soverein Peop$e>s
Repu($ic of China.
Ahether or not the Northrai$ contracts
are products of an e:ecutive
areement (etween two soverein
states.
Ahether or not the certification from
the Department of 9orein ,ffairs is
necessary under the foreoin
circumstances.
Ahether or not the act (ein
underta<en (y petitioner CN1E. is
an act %ure imperii.
Ahether or not the Court of ,ppea$s
fai$ed to avoid a procedura$ $im(o in
the $ower court.
Ahether or not the Northrai$ Pro%ect is
su(%ect to competitive pu($ic (iddin.
Ahether or not the Court of ,ppea$s
inored the ru$in of this 4onora($e
Court in the Neri case.
CN1E. prays for the dismissa$ of
Civi$ Case No. 'B?)'& (efore RTC ;r.
/0+ for $ac< of %urisdiction. It $i<ewise
re3uests this Court for the issuance of
a TRO and, $ater on, a writ of
pre$iminary in%unction to restrain
pu($ic respondent from proceedin
with the disposition of Civi$ Case No.
'B?)'&.
The cru: of this case (oi$s down to
two main issues, name$yF
/. Ahether CN1E. is entit$ed to
immunity, prec$udin it from
(ein sued (efore a $oca$ court.
). Ahether the Contract
,reement is an e:ecutive
areement, such that it cannot (e
3uestioned (y or (efore a $oca$
court.
F'r*/ '**ue: ;)e/)er CNMEG '*
e(/'/-e0 /o '<<u('/y
This Court e:p$ained the doctrine of
soverein immunity in Holy See v.
Rosario,
)0
to witF
There are two conf$ictin concepts of
soverein immunity, each wide$y he$d
and firm$y esta($ished. ,ccordin to
the c$assica$ or a(so$ute theory, a
*o=ere'1( ,a((o/, >'/)ou/ '/*
,o(*e(/, be <a0e a re*.o(0e(/ '(
/)e ,our/* o+ a(o/)er *o=ere'1(.
,ccordin to the newer or restrictive
theory, /)e '<<u('/y o+ /)e
*o=ere'1( '* re,o1('?e0 o(-y >'/)
re1ar0 /o .ub-', a,/* or a,/* jure
imperii o+ a */a/e, bu/ (o/ >'/)
re1ar0 /o .r'=a/e a,/* or a,/* jure
gestionis. !Emphasis supp$iedE
citations omitted." : : : : :
: : : :
The restrictive theory came a(out
(ecause of the entry of soverein
states into pure$y commercia$
activities remote$y connected with the
dischare of overnmenta$ functions.
This is particu$ar$y true with respect to
the Communist states which too<
contro$ of nationa$i7ed (usiness
activities and internationa$ tradin.
In 85S1,. v. Nationa$ 6a(or
Re$ations Commission,
)+
this Court
affirmed the Phi$ippines> adherence to
the restrictive theory as fo$$owsF
The doctrine of state immunity from
suit has underone further
metamorphosis. The view evo$ved that
the e:istence of a contract does not,
per se, mean that soverein states
may, at a$$ times, (e sued in $oca$
courts. The comp$e:ity of
re$ationships (etween soverein states,
(rouht a(out (y their increasin
commercia$ activities, mothered a
more restrictive app$ication of the
doctrine. : : : : : : : : :
,s it stands now, the app$ication of the
doctrine of immunity from suit has
(een restricted to soverein or
overnmenta$ activities !jure imperii" .
The mant$e of state immunity cannot
(e e:tended to commercia$, private
and proprietary acts !jure gestionis".
)B
! Emphasis supp$ied. "
Since the Phi$ippines adheres to the
restrictive theory, it is crucia$ to
ascertain the $ea$ nature of the act
invo$ved - whether the entity c$aimin
immunity performs overnmenta$, as
opposed to proprietary, functions. ,s
he$d in 5nited States of ,merica v.
Rui7 -
)C
The restrictive app$ication of State
immunity is proper on$y when the
proceedins arise out of commercia$
transactions of the forein soverein,
its commercia$ activities or economic
affairs. Stated different$y, a State may
(e said to have descended to the $eve$
of an individua$ and can thus (e
deemed to have tacit$y iven its
consent to (e sued on$y when it enters
into (usiness contracts. It does not
app$y where the contract re$ates to the
e:ercise of its soverein functions.
)*
,. CN1E. is enaed in a
proprietary activity.
, thresho$d 3uestion that must (e
answered is whether CN1E.
performs overnmenta$ or proprietary
functions. , thorouh e:amination of
the (asic facts of the case wou$d show
that CN1E. is enaed in a
proprietary activity.
The parties e:ecuted the Contract
,reement for the purpose of
constructin the 6u7on Rai$ways,
vi7F
)D
A4ERE,S the Emp$oyer !Northrai$"
desired to construct the rai$ways form
Ca$oocan to 1a$o$os, section I, Phase
I of Phi$ippine North 6u7on Rai$ways
Pro%ect !hereinafter referred to as T4E
PRO8ECT"E
,ND A4ERE,S the Contractor has
offered to provide the Pro%ect on
Turn<ey (asis, inc$udin desin,
manufacturin, supp$y, construction,
commissionin, and trainin of the
Emp$oyer>s personne$E
,ND A4ERE,S the 6oan
,reement of the Preferentia$ ;uyer>s
Credit (etween E:port?Import ;an< of
China and Department of 9inance of
Repu($ic of the Phi$ippinesE
NOA, T4ERE9ORE, the parties
aree to sin this Contract for the
Imp$ementation of the Pro%ect.
The a(ove?cited portion of the
Contract ,reement, however, does
not on its own revea$ whether the
construction of the 6u7on rai$ways
was meant to (e a proprietary
endeavor. In order to fu$$y understand
the intention (ehind and the purpose
of the entire underta<in, the Contract
,reement must not (e read in
iso$ation. Instead, it must (e construed
in con%unction with three other
documents e:ecuted in re$ation to the
Northrai$ Pro%ect, name$yF !a" the
1emorandum of 5nderstandin dated
/0 Septem(er )'') (etween Northrai$
and CN1E.E
&'
! (" the $etter of ,m(.
Aan dated / Octo(er )''& addressed
to Sec. CamachoE
&/
and !c" the 6oan
,reement.
&)
/. 1emorandum of 5nderstandin
dated /0 Septem(er )'')
The 1emorandum of 5nderstandin
dated /0 Septem(er )'') shows that
CN1E. souht the construction of
the 6u7on Rai$ways as a proprietary
venture. The re$evant parts thereof
readF
A4ERE,S, CN1E. has the
financia$ capa(i$ity, professiona$
competence and technica$ e:pertise to
assess the state of the G1ain 6ine
North !16N"H and recommend
imp$ementation p$ans as we$$ as
underta<e its reha(i$itation and#or
moderni7ationE
A4ERE,S, CN1E. has e:pressed
interest in the reha(i$itation and#or
moderni7ation of the 16N from
1etro 1ani$a to San 9ernando, 6a
5nion passin throuh the provinces
of ;u$acan, Pampana, Tar$ac,
Panasinan and 6a 5nion !the
IPro%ect>"E
A4ERE,S, the NORT4R,I6 CORP.
we$comes CN1E.>s proposa$ to
underta<e a 9easi(i$ity Study ! the
JStudyJ" at no cost to NORT4R,I6
CORP.E
A4ERE,S, the NORT4R,I6 CORP.
a$so we$comes CN1E.>s interest in
underta<in the Pro%ect with
Supp$ier>s Credit and intends to
emp$oy CN1E. as the Contractor for
the Pro%ect su(%ect to comp$iance with
Phi$ippine and Chinese $aws, ru$es and
reu$ations for the se$ection of a
contractorE
A4ERE,S, the NORT4R,I6 CORP.
considers CN1E.>s proposa$
advantaeous to the .overnment of
the Repu($ic of the Phi$ippines and
has therefore areed to assist CN1E.
in the conduct of the aforesaid StudyE
: : : : : : : : :
II. ,PPROK,6 PROCESS
)./ ,s soon as possi($e after
comp$etion and presentation of the
Study in accordance with Pararaphs
/.& and /.0 a(ove and in comp$iance
with necessary overnmenta$ $aws,
ru$es, reu$ations and procedures
re3uired from (oth parties, the parties
sha$$ commence the preparation and
neotiation of the terms and
conditions of the Contract !the
JContractJ" to (e entered into (etween
them on the imp$ementation of the
Pro%ect. The parties sha$$ use their (est
endeavors to formu$ate and fina$i7e a
Contract with a view to sinin the
Contract within one hundred twenty
!/)'" days from CN1E.>s
presentation of the Study.
&&

! Emphasis supp$ied "
C$ear$y, it was CN1E. that initiated
the underta<in, and not the Chinese
overnment. The 9easi(i$ity Study
was conducted not (ecause of any
dip$omatic ratuity from or e:ercise of
soverein functions (y the Chinese
overnment, (ut was p$ain$y a
(usiness stratey emp$oyed (y
CN1E. with a view to securin this
commercia$ enterprise.
). 6etter dated / Octo(er )''&
That CN1E., and not the Chinese
overnment, initiated the Northrai$
Pro%ect was confirmed (y ,m(. Aan
in his $etter dated / Octo(er )''&,
thusF
/. CN1E. has the
proven competence and capa(i$ity
to underta<e the Pro%ect as
evidenced (y the ran<in of 0)
iven (y the ENR amon ))+
$o(a$ construction companies.
). CN1E. a$ready
sined an 1O5 with the North
6u7on Rai$ways Corporation $ast
Septem(er /0 , )''' durin the
visit of Chairman 6i Pen. Such
(ein the case, they have a$ready
esta($ished an initia$ wor<in
re$ationship with your North 6u7on
Rai$ways Corporation. This wou$d
cateori7e CN1E. as the state
corporation within the Peop$e>s
Repu($ic of China which initiated
our .overnment>s invo$vement in
the Pro%ect.
&. ,mon the various
state corporations of the Peop$e>s
Repu($ic of China, on$y CN1E.
has the advantae of (ein fu$$y
fami$iar with the current
re3uirements of the Northrai$
Pro%ect havin a$ready
accomp$ished a 9easi(i$ity Study
which was used as inputs (y the
North 6u7on Rai$ways Corporation
in the approva$s !sic" process
re3uired (y the Repu($ic of the
Phi$ippines.
&0
! Emphasis
supp$ied. "
Thus, the desire of CN1E. to secure
the Northrai$ Pro%ect was in the
ordinary or reu$ar course of its
(usiness as a $o(a$ construction
company. The imp$ementation of the
Northrai$ Pro%ect was intended to
enerate profit for CN1E., with the
Contract ,reement p$acin a contract
price of 5SD 0)/,'+',''' for the
venture.
&+
The use of the term Jstate
corporationJ to refer to CN1E. was
on$y descriptive of its nature as a
overnment?owned and#or ?contro$$ed
corporation, and its assinment as the
Primary Contractor did not imp$y that
it was actin on (eha$f of China in the
performance of the $atter>s soverein
functions. To imp$y otherwise wou$d
resu$t in an a(surd situation, in which
a$$ Chinese corporations owned (y the
state wou$d (e automatica$$y
considered as performin
overnmenta$ activities, even if they
are c$ear$y enaed in commercia$ or
proprietary pursuits.
&. The 6oan ,reement
CN1E. c$aims immunity on the
round that the ,u &' 1O5 on the
financin of the Northrai$ Pro%ect was
sined (y the Phi$ippine and Chinese
overnments, and its assinment as
the Primary Contractor meant that it
was (ound to perform a overnmenta$
function on (eha$f of China. 4owever,
the 6oan ,reement, which oriinated
from the same ,u &' 1O5, (e$ies
this reasonin, vi7F
,rtic$e //. ::: !%" Commercia$
,ctivity The e:ecution and de$ivery of
this ,reement (y the ;orrower
constitute, and the ;orrower>s
performance of and comp$iance with
its o($iations under this ,reement
wi$$ constitute, .r'=a/e a(0
,o<<er,'a- a,/* 0o(e a(0
.er+or<e0 +or ,o<<er,'a- .ur.o*e*
u(0er /)e -a>* o+ /)e [Link]-', o+
/)e ")'-'..'(e* a(0 (e'/)er /)e
3orro>er (or a(y o+ '/* a**e/* '*
e(/'/-e0 /o a(y '<<u('/y or
.r'='-e1e #*o=ere'1( or o/)er>'*e$
+ro< *u'/, e@e,u/'o( or a(y o/)er
-e1a- .ro,e** >'/) re*.e,/ /o '/*
ob-'1a/'o(* u(0er /)'* A1ree<e(/, a*
/)e ,a*e <ay be, '( a(y Aur'*0',/'o(.
Notwithstandin the foreoin, the
;orrower does not waive any
immunity with respect of its assets
which are !i" used (y a dip$omatic or
consu$ar mission of the ;orrower and
!ii" assets of a mi$itary character and
under contro$ of a mi$itary authority or
defense aency and !iii" $ocated in the
Phi$ippines and dedicated to pu($ic or
overnmenta$ use !as distinuished
from patrimonia$ assets or assets
dedicated to commercia$ use".
!Emphasis supp$ied."
!<" Proceedins to Enforce ,reement
In any proceedin in the Repu($ic of
the Phi$ippines to enforce this
,reement, the choice of the $aws of
the Peop$e>s Repu($ic of China as the
overnin $aw hereof wi$$ (e
reconi7ed and such $aw wi$$ (e
app$ied. The waiver of immunity (y
the ;orrower, the irrevoca($e
su(missions of the ;orrower to the
non?e:c$usive %urisdiction of the
courts of the Peop$e>s Repu($ic of
China and the appointment of the
;orrower>s Chinese Process ,ent is
$ea$, va$id, (indin and enforcea($e
and any %udment o(tained in the
Peop$e>s Repu($ic of China wi$$ (e if
introduced, evidence for enforcement
in any proceedins aainst the
;orrower and its assets in the
Repu($ic of the Phi$ippines provided
that !a" the court renderin %udment
had %urisdiction over the su(%ect
matter of the action in accordance
with its %urisdictiona$ ru$es, !(" the
Repu($ic had notice of the
proceedins, !c" the %udment of the
court was not o(tained throuh
co$$usion or fraud, and !d" such
%udment was not (ased on a c$ear
mista<e of fact or $aw.
&B
9urther, the 6oan ,reement $i<ewise
contains this e:press waiver of
immunityF
/+.+ Aaiver of Immunity The
;orrower irrevoca($y and
unconditiona$$y waives, any immunity
to which it or its property may at any
time (e or (ecome entit$ed, whether
characteri7ed as soverein immunity
or otherwise, from any suit, %udment,
service of process upon it or any
aent, e:ecution on %udment, set?off,
attachment prior to %udment,
attachment in aid of e:ecution to
which it or its assets may (e entit$ed in
any $ea$ action or proceedins with
respect to this ,reement or any of the
transactions contemp$ated here(y or
hereunder. Notwithstandin the
foreoin, the ;orrower does not
waive any immunity in respect of its
assets which are !i" used (y a
dip$omatic or consu$ar mission of the
;orrower, !ii" assets of a mi$itary
character and under contro$ of a
mi$itary authority or defense aency
and !iii" $ocated in the Phi$ippines and
dedicated to a pu($ic or overnmenta$
use !as distinuished from patrimonia$
assets or assets dedicated to
commercia$ use".
&C
Thus, despite petitioner>s c$aim that
the E=I1 ;an< e:tended financia$
assistance to Northrai$ (ecause the
(an< was mandated (y the Chinese
overnment, and not (ecause of any
motivation to do (usiness in the
Phi$ippines,
&*
it is c$ear from the
foreoin provisions that the Northrai$
Pro%ect was a pure$y commercia$
transaction.
,dmitted$y, the 6oan ,reement was
entered into (etween E=I1 ;an< and
the Phi$ippine overnment, whi$e the
Contract ,reement was (etween
Northrai$ and CN1E.. ,$thouh the
Contract ,reement is si$ent on the
c$assification of the $ea$ nature of the
transaction, the foreoin provisions
of the 6oan ,reement, which is an
ine:trica($e part of the entire
underta<in, nonethe$ess revea$ the
intention of the parties to the Northrai$
Pro%ect to c$assify the who$e venture
as commercia$ or proprietary in
character.
Thus, piecin toether the content and
tenor of the Contract ,reement, the
1emorandum of 5nderstandin dated
/0 Septem(er )''), ,m(. Aan>s
$etter dated / Octo(er )''&, and the
6oan ,reement wou$d revea$ the
desire of CN1E. to construct the
6u7on Rai$ways in pursuit of a pure$y
commercia$ activity performed in the
ordinary course of its (usiness.
;. CN1E. fai$ed to adduce evidence
that it is immune from suit under
Chinese $aw.
Even assumin arguendo that
CN1E. performs overnmenta$
functions, such c$aim does not
automatica$$y vest it with immunity.
This view finds support in 1a$on v.
Phi$ippine Nationa$ Rai$ways, in
which this Court he$d that
J!i"mmunity from suit is determined
(y the character of the o(%ects for
which the entity was orani7ed.J
&D
In this reard, this Court>s ru$in in
Deutsche .ese$$schaft 9Lr Technische
Musammenar(eit !.TM" v.
C,
0'
must (e e:amined. In Deutsche
.ese$$schaft, .ermany and the
Phi$ippines entered into a
Technica$ Cooperation ,reement,
pursuant to which (oth sined an
arranement promotin the Socia$
4ea$th Insurance-Networ<in and
Empowerment !S4INE" pro%ect. The
two overnments named their
respective imp$ementin
orani7ationsF the Department of
4ea$th !DO4" and the Phi$ippine
4ea$th Insurance Corporation !P4IC"
for the Phi$ippines, and .TM for the
imp$ementation of .ermany>s
contri(utions. In ru$in that .TM was
not immune from suit, this Court he$dF
The aruments raised (y .TM and the
GOffice of the So$icitor .enera$
!OS."H are rooted in severa$
indisputa($e facts. The S4INE pro%ect
was imp$emented pursuant to the
(i$atera$ areements (etween the
Phi$ippine and .erman overnments.
.TM was tas<ed, under the /DD/
areement, with the imp$ementation of
the contri(utions of the .erman
overnment. The activities performed
(y .TM pertainin to the S4INE
pro%ect are overnmenta$ in nature,
re$ated as they are to the promotion of
hea$th insurance in the Phi$ippines.
The fact that .TM entered into
emp$oyment contracts with the private
respondents did not dis3ua$ify it from
invo<in immunity from suit, as he$d
in cases such as 4o$y See v. Rosario,
8r., which set forth what remains va$id
doctrineF
Certain$y, the mere enterin into a
contract (y a forein state with a
private party cannot (e the u$timate
test. Such an act can on$y (e the start
of the in3uiry. The $oica$ 3uestion is
whether the forein state is enaed in
the activity in the reu$ar course of
(usiness. If the forein state is not
enaed reu$ar$y in a (usiness or
trade, the particu$ar act or transaction
must then (e tested (y its nature. If the
act is in pursuit of a soverein activity,
or an incident thereof, then it is an act
%ure imperii, especia$$y when it is not
underta<en for ain or profit.
;eyond dispute is the tena(i$ity of the
comment points !sic" raised (y .TM
and the OS. that .TM was not
performin proprietary functions
notwithstandin its entry into the
particu$ar emp$oyment contracts. Net
there is an e3ua$$y fundamenta$
premise which .TM and the OS. fai$
to address, name$yF Is .TM, (y
conception, a($e to en%oy the 9edera$
Repu($ic>s immunity from suitO
The princip$e of state immunity from
suit, whether a $oca$ state or a forein
state, is ref$ected in Section D , ,rtic$e
=KI of the Constitution, which states
that Jthe State may not (e sued
without its consent.J Aho or what
consists of Jthe StateJO 9or one, the
doctrine is avai$a($e to forein States
insofar as they are souht to (e sued in
the courts of the $oca$ State, necessary
as it is to avoid Jundu$y ve:in the
peace of nations.J
If the instant suit had (een (rouht
direct$y aainst the 9edera$ Repu($ic
of .ermany, there wou$d (e no dou(t
that it is a suit (rouht aainst a State,
and the on$y necessary in3uiry is
whether said State had consented to (e
sued. 4owever, the present suit was
(rouht aainst .TM. It is necessary
for us to understand what precise$y are
the parameters of the $ea$ persona$ity
of .TM.
Cou(*e- +or GT9 ,)ara,/er'?e*
GT9 a* B/)e '<.-e<e(/'(1 a1e(,y
o+ /)e Go=er(<e(/ o+ /)e Fe0era-
[Link]-', o+ Ger<a(y,B a depiction
simi$ar$y adopted (y the OS..
,ssumin that the characteri7ation is
correct, '/ 0oe* (o/ au/o<a/',a--y
'(=e*/ GT9 >'/) /)e ab'-'/y /o
'(=o5e %/a/e '<<u('/y +ro< *u'/.
The distinction $ies in whether the
aency is incorporated or
unincorporated. : : : : : :
: : :
State immunity from suit may (e
waived (y enera$ or specia$ $aw. The
specia$ $aw can ta<e the form of the
oriina$ charter of the incorporated
overnment aency. 8urisprudence is
rep$ete with e:amp$es of incorporated
overnment aencies which were
ru$ed not entit$ed to invo<e immunity
from suit, owin to provisions in their
charters manifestin their consent to
(e sued. : : : : : : : : :
It is usefu$ to note that on the part of
the Phi$ippine overnment, it had
desinated two entities, the
Department of 4ea$th and the
Phi$ippine 4ea$th Insurance
Corporation !P4IC", as the
imp$ementin aencies in (eha$f of the
Phi$ippines. The P4IC was esta($ished
under Repu($ic ,ct No. C*C+, Section
/B !" of which rants the corporation
the power Jto sue and (e sued in
court.J ,pp$yin the previous$y cited
%urisprudence, P4IC wou$d not en%oy
immunity from suit even in the
performance of its functions
connected with S4INE, however, !sic"
overnmenta$ in nature as !sic" they
may (e.
I* GT9 a( '(,[Link]/e0 a1e(,y o+
/)e Ger<a( 1o=er(<e(/C T)ere '*
*o<e <y*/ery *urrou(0'(1 /)a/
Due*/'o(. Ne'/)er GT9 (or /)e O%G
1o beyo(0 /)e ,-a'< /)a/ .e/'/'o(er
'* B/)e '<.-e<e(/'(1 a1e(,y o+ /)e
Go=er(<e(/ o+ /)e Fe0era-
[Link]-', o+ Ger<a(y.B On the other
hand, private respondents asserted
(efore the 6a(or ,r(iter that .TM was
Ja private corporation enaed in the
imp$ementation of deve$opment
pro%ects.J The 6a(or ,r(iter accepted
that c$aim in his Order denyin the
1otion to Dismiss, thouh he was
si$ent on that point in his Decision.
Neverthe$ess, private respondents
arue in their Comment that the
findin that .TM was a private
corporation Jwas never controverted,
and is therefore deemed admitted.J In
its Rep$y, .TM controverts that
findin, sayin that it is a matter of
pu($ic <now$ede that the status of
petitioner .TM is that of the
Jimp$ementin aency,J and not that
of a private corporation.
In truth, private respondents were
una($e to adduce any evidence to
su(stantiate their c$aim that .TM was
a Jprivate corporation,J and the 6a(or
,r(iter acted rash$y in acceptin such
c$aim without e:p$anation. ;ut
(e'/)er )a* GT9 *u..-'e0 a(y
e='0e(,e 0e+'('(1 '/* -e1a- (a/ure
beyo(0 /)a/ o+ /)e bare 0e*,r'./'=e
B'<.-e<e(/'(1 a1e(,y.B T)ere '* (o
0oub/ /)a/ /)e 1EE1 A1ree<e(/
0e*'1(a/e0 GT9 a* /)e
B'<.-e<e(/'(1 a1e(,yB '( be)a-+ o+
/)e Ger<a( 1o=er(<e(/. Ye/ /)e
,a/,) '* /)a/ *u,) /er< )a* (o
.re,'*e 0e+'('/'o( /)a/ '* re*.o(*'=e
/o our ,o(,er(*. I()ere(/-y, a(
a1e(/ a,/* '( be)a-+ o+ a .r'(,'.a-,
a(0 /)e GT9 ,a( be *a'0 /o a,/ '(
be)a-+ o+ /)e Ger<a( */a/e. 3u/ /)a/
'* a* +ar a* B'<.-e<e(/'(1 a1e(,yB
,ou-0 /a5e u*. T)e /er< by '/*e-+
0oe* (o/ *u..-y >)e/)er GT9 '*
'(,[Link]/e0 or u('(,[Link]/e0,
>)e/)er '/ '* o>(e0 by /)e Ger<a(
*/a/e or by .r'=a/e '(/ere*/*,
>)e/)er '/ )a* Aur'0',a- .er*o(a-'/y
'(0e.e(0e(/ o+ /)e Ger<a(
1o=er(<e(/ or (o(e a/ a--. : :
: : : : : : :
A1a'(, >e are u(,er/a'( o+ /)e
,orre*.o(0'(1 -e1a- '<.-',a/'o(*
u(0er Ger<a( -a> *urrou(0'(1 Ba
.r'=a/e ,o<.a(y o>(e0 by /)e
Fe0era- [Link]-', o+ Ger<a(y.B Ye/
/a5'(1 /)e 0e*,r'./'o( o( +a,e =a-ue,
/)e a..are(/ eDu'=a-e(/ u(0er
")'-'..'(e -a> '* /)a/ o+ a
,[Link]/'o( or1a('?e0 u(0er /)e
[Link]/'o( Co0e bu/ o>(e0 by /)e
")'-'..'(e 1o=er(<e(/, or a
1o=er(<e(/7o>(e0 or ,o(/ro--e0
,[Link]/'o( >'/)ou/ or'1'(a-
,)ar/er. A(0 '/ bear* (o/',e /)a/
%e,/'o( FG o+ /)e [Link]/e Co0e
*/a/e* /)a/ BHeI=ery ,[Link]/'o(
'(,[Link]/e0 u(0er /)'* Co0e )a*
/)e .o>er a(0 ,a.a,'/y @ @ @ /o *ue
a(0 be *ue0 '( '/* ,[Link]/e (a<e.B
It is entire$y possi($e that under
.erman $aw, an entity such as .TM or
particu$ar$y .TM itse$f has not (een
vested or has (een specifica$$y
deprived the power and capacity to
sue and#or (e sued. Net in the
proceedins (e$ow and (efore this
Court, GT9 )a* +a'-e0 /o e*/ab-'*)
/)a/ u(0er Ger<a( -a>, '/ )a* (o/
,o(*e(/e0 /o be *ue0 0e*.'/e '/ be'(1
o>(e0 by /)e Fe0era- [Link]-', o+
Ger<a(y. ;e a0)ere /o /)e ru-e
/)a/ '( /)e ab*e(,e o+ e='0e(,e /o
/)e ,o(/rary, +ore'1( -a>* o( a
.ar/',u-ar *ubAe,/ are .re*u<e0 /o
be /)e *a<e a* /)o*e o+ /)e
")'-'..'(e*, a(0 +o--o>'(1 /)e <o*/
'(/e--'1e(/ a**u<./'o( >e ,a(
1a/)er, GT9 '* a5'( /o a
1o=er(<e(/a- o>(e0 or ,o(/ro--e0
,[Link]/'o( >'/)ou/ or'1'(a- ,)ar/er
>)',), by ='r/ue o+ /)e [Link]/'o(
Co0e, )a* [email protected]**-y ,o(*e(/e0 /o be
*ue0. ,t the very $east, $i<e the 6a(or
,r(iter and the Court of ,ppea$s, this
Court has no (asis in fact to conc$ude
or presume that .TM en%oys immunity
from suit.
0/
! Emphasis supp$ied. "
,pp$yin the foreoin ru$in to the
case at (ar, it is readi$y apparent that
CN1E. cannot c$aim immunity from
suit, even if it contends that it
performs overnmenta$ functions. Its
desination as the Primary Contractor
does not automatica$$y rant it
immunity, %ust as the term
Jimp$ementin aencyJ has no precise
definition for purposes of ascertainin
whether .TM was immune from suit.
,$thouh CN1E. c$aims to (e a
overnment?owned corporation, it
fai$ed to adduce evidence that it has
not consented to (e sued under
Chinese $aw. Thus, fo$$owin this
Court>s ru$in in Deutsche
.ese$$schaft, in the a(sence of
evidence to the contrary, CN1E. is
to (e presumed to (e a overnment?
owned and ? contro$$ed corporation
without an oriina$ charter. ,s a resu$t,
it has the capacity to sue and (e sued
under Section &B of the Corporation
Code.
C. CN1E. fai$ed to present a
certification from the Department of
9orein ,ffairs.
In 4o$y See,
0)
this Court reiterated the
oft?cited doctrine that the
determination (y the E:ecutive that an
entity is entit$ed to soverein or
dip$omatic immunity is a po$itica$
3uestion conc$usive upon the courts,
to witF
In Pu($ic Internationa$ 6aw, when a
state or internationa$ aency wishes to
p$ead soverein or dip$omatic
immunity in a forein court, it
re3uests the 9orein Office of the state
where it is sued to convey to the court
that said defendant is entit$ed to
immunity. : : : : : : : : :
In the Phi$ippines, the practice is for
the forein overnment or the
internationa$ orani7ation to first
secure an e:ecutive endorsement of its
c$aim of soverein or dip$omatic
immunity. ;ut how the Phi$ippine
9orein Office conveys its
endorsement to the courts varies. In
International Catholic Migration
Commission v. Calleja, /D' SCR, /&'
!/DD'", the Secretary of 9orein
,ffairs %ust sent a $etter direct$y to the
Secretary of 6a(or and Emp$oyment,
informin the $atter that the
respondentemp$oyer cou$d not (e sued
(ecause it en%oyed dip$omatic
immunity. In World Health
Organization v. !uino, 0* SCR, )0)
!/DC)", the Secretary of 9orein
,ffairs sent the tria$ court a te$eram
to that effect. In "aer v. #izon, +C
SCR, / !/DC0", the 5.S. Em(assy
as<ed the Secretary of 9orein ,ffairs
to re3uest the So$icitor .enera$ to
ma<e, in (eha$f of the Commander of
the 5nited States Nava$ ;ase at
O$onapo City, Mam(a$es, a
JsuestionJ to respondent 8ude. The
So$icitor .enera$ em(odied the
JsuestionJ in a 1anifestation and
1emorandum as amicus curiae.
In the case at (ench, the Department
of 9orein ,ffairs, throuh the Office
of 6ea$ ,ffairs moved with this
Court to (e a$$owed to intervene on
the side of petitioner. The Court
a$$owed the said Department to fi$e its
memorandum in support of
petitioner>s c$aim of soverein
immunity.
In some cases, the defense of
soverein immunity was su(mitted
direct$y to the $oca$ courts (y the
respondents throuh their private
counse$s !Ra3ui7a v. ;radford, C+
Phi$. +' G/D0+HE 1i3uia(as v.
Phi$ippine?Ryu<yus Command, *'
Phi$. )B) G/D0*HE 5nited States of
,merica v. .uinto, /*) SCR, B00
G/DD'H and companion cases". In
cases where the forein states (ypass
the 9orein Office, the courts can
in3uire into the facts and ma<e their
own determination as to the nature of
the acts and transactions invo$ved.
0&

! Emphasis supp$ied. "
The 3uestion now is whether any
aency of the E:ecutive ;ranch can
ma<e a determination of immunity
from suit, which may (e considered as
conc$usive upon the courts. This
Court, in Department of 9orein
,ffairs !D9," v. Nationa$ 6a(or
Re$ations Commission !N6RC",
00

emphasi7ed the D9,>s competence
and authority to provide such
necessary determination, to witF
The D9,>s function inc$udes, amon
its other mandates, the determination
of persons and institutions covered (y
dip$omatic immunities, a
determination which, when cha$$ene,
!sic" entit$es it to see< re$ief from the
court so as not to serious$y impair the
conduct of the countryPs forein
re$ations. The D9, must (e a$$owed to
p$ead its case whenever necessary or
advisa($e to ena($e it to he$p <eep the
credi(i$ity of the Phi$ippine
overnment (efore the internationa$
community. Ahen internationa$
areements are conc$uded, the parties
thereto are deemed to have $i<ewise
accepted the responsi(i$ity of seein to
it that their areements are du$y
rearded. In our country, this tas< fa$$s
principa$$y of !sic" the D9, as (ein
the hihest e:ecutive department with
the competence and authority to so act
in this aspect of the internationa$
arena.
0+
! Emphasis supp$ied. "
9urther, the fact that this authority is
e:c$usive to the D9, was a$so
emphasi7ed in this Court>s ru$in in
Deutsche .ese$$schaftF
It is to (e reca$$ed that the 6a(or
,r(iter, in (oth of his ru$ins, noted
that it was imperative for petitioners to
secure from the Department of
9orein ,ffairs Ja certification of
respondents> dip$omatic status and
entit$ement to dip$omatic privi$ees
inc$udin immunity from suits.J The
re3uirement miht not necessari$y (e
imperative. 4owever, had .TM
o(tained such certification from the
D9,, it wou$d have provided factua$
(asis for its c$aim of immunity that
wou$d, at the very $east, esta($ish a
disputa($e evidentiary presumption
that the forein party is indeed
immune which the opposin party wi$$
have to overcome with its own factua$
evidence. Ae do not see why .TM
cou$d not have secured such
certification or endorsement from the
D9, for purposes of this case.
Certain$y, it wou$d have (een hih$y
prudentia$ for .TM to o(tain the same
after the 6a(or ,r(iter had denied the
motion to dismiss. Sti$$, even at this
%uncture, we do not see any evidence
that the D9,, the office of the
e:ecutive (ranch in chare of our
dip$omatic re$ations, has indeed
endorsed .TM>s c$aim of immunity. It
may (e possi($e that .TM tried, (ut
fai$ed to secure such certification, due
to the same concerns that we have
discussed herein.
Aou$d the fact that the So$icitor
.enera$ has endorsed .TM>s c$aim of
State>s immunity from suit (efore this
Court sufficient$y su(stitute for the
D9, certificationO Note that the ru$e
in pu($ic internationa$ $aw 3uoted in
4o$y See referred to endorsement (y
the 9orein Office of the State where
the suit is fi$ed, such forein office in
the Phi$ippines (ein the Department
of 9orein ,ffairs. Nowhere in the
Comment of the OS. is it manifested
that the D9, has endorsed .TM>s
c$aim, or that the OS. had so$icited
the D9,>s views on the issue. The
aruments raised (y the OS. are
virtua$$y the same as the aruments
raised (y .TM without any indication
of any specia$ and distinct perspective
maintained (y the Phi$ippine
overnment on the issue. The
Comment fi$ed (y the OS. does not
inspire the same deree of confidence
as a certification from the D9, wou$d
have e$icited.
0B
! Emphasis supp$ied."
In the case at (ar, CN1E. offers the
Certification e:ecuted (y the
Economic and Commercia$ Office of
the Em(assy of the Peop$e>s Repu($ic
of China, statin that the Northrai$
Pro%ect is in pursuit of a soverein
activity.
0C
Sure$y, this is not the <ind
of certification that can esta($ish
CN1E.>s entit$ement to immunity
from suit, as 4o$y See une3uivoca$$y
refers to the determination of the
J9orein Office of the state where it is
sued.J
9urther, CN1E. a$so c$aims that its
immunity from suit has the e:ecutive
endorsement of (oth the OS. and the
Office of the .overnment Corporate
Counse$ ![Link]", which must (e
respected (y the courts. 4owever, as
e:press$y enunciated in Deutsche
.ese$$schaft, this determination (y the
OS., or (y the [Link] for that matter,
does not inspire the same deree of
confidence as a D9, certification.
Even with a D9, certification,
however, it must (e remem(ered that
this Court is not prec$uded from
ma<in an in3uiry into the intrinsic
correctness of such certification.
D. ,n areement to su(mit any
dispute to ar(itration may (e
construed as an imp$icit waiver of
immunity from suit.
In the 5nited States, the 9orein
Soverein Immunities ,ct of /DCB
provides for a waiver (y imp$ication
of state immunity. In the said $aw, the
areement to su(mit disputes to
ar(itration in a forein country is
construed as an imp$icit waiver of
immunity from suit. ,$thouh there is
no simi$ar $aw in the Phi$ippines, there
is reason to app$y the $ea$ reasonin
(ehind the waiver in this case.
The Conditions of Contract,
0*
which
is an intera$ part of the Contract
,reement,
0D
statesF
&&. SETT6E1ENT O9 DISP5TES
,ND ,R;ITR,TION
&&./. ,mica($e Sett$ement
;oth parties sha$$ attempt to amica($y
sett$e a$$ disputes or controversies
arisin from this Contract (efore the
commencement of ar(itration.
&&.). ,r(itration
,$$ disputes or controversies arisin
from this Contract which cannot (e
sett$ed (etween the Emp$oyer and the
Contractor sha$$ (e su(mitted to
ar(itration in accordance with the
5NCITR,6 ,r(itration Ru$es at
present in force and as may (e
amended (y the rest of this C$ause.
The appointin authority sha$$ (e
4on Qon Internationa$ ,r(itration
Center. The p$ace of ar(itration sha$$
(e in 4on Qon at 4on Qon
Internationa$ ,r(itration Center
!4QI,C".
5nder the a(ove provisions, if any
dispute arises (etween Northrai$ and
CN1E., (oth parties are (ound to
su(mit the matter to the 4QI,C for
ar(itration. In case the 4QI,C ma<es
an ar(itra$ award in favor of Northrai$,
its enforcement in the Phi$ippines
wou$d (e su(%ect to the Specia$ Ru$es
on ,$ternative Dispute Reso$ution
!Specia$ Ru$es". Ru$e /& thereof
provides for the Reconition and
Enforcement of a 9orein ,r(itra$
,ward. 5nder Ru$es /&.) and /&.& of
the Specia$ Ru$es, the party to
ar(itration wishin to have an ar(itra$
award reconi7ed and enforced in the
Phi$ippines must petition the proper
reiona$ tria$ court !a" where the assets
to (e attached or $evied upon is
$ocatedE !(" where the acts to (e
en%oined are (ein performedE !c" in
the principa$ p$ace of (usiness in the
Phi$ippines of any of the partiesE !d" if
any of the parties is an individua$,
where any of those individua$s residesE
or ! e" in the Nationa$ Capita$ 8udicia$
Reion.
9rom a$$ the foreoin, it is c$ear that
CN1E. has areed that it wi$$ not (e
afforded immunity from suit. Thus,
the courts have the competence and
%urisdiction to ascertain the va$idity of
the Contract ,reement.
%e,o(0 '**ue: ;)e/)er /)e Co(/ra,/
A1ree<e(/ '* a( e@e,u/'=e
a1ree<e(/
,rtic$e )!/" of the Kienna Convention
on the 6aw of Treaties !Kienna
Convention" defines a treaty as
fo$$owsF
G ,Hn internationa$ areement
conc$uded (etween States in written
form and overned (y internationa$
$aw, whether em(odied in a sin$e
instrument or in two or more re$ated
instruments and whatever its particu$ar
desination.
In "ayan Muna v. Romulo, this Court
he$d that an e:ecutive areement is
simi$ar to a treaty, e:cept that the
former !a" does not re3uire $eis$ative
concurrenceE !(" is usua$$y $ess forma$E
and !c" dea$s with a narrower rane of
su(%ect matters.
+'
Despite these differences, to (e
considered an e:ecutive areement,
the fo$$owin three re3uisites provided
under the Kienna Convention must
neverthe$ess concurF !a" the areement
must (e (etween statesE !(" it must (e
writtenE and !c" it must overned (y
internationa$ $aw. The first and the
third re3uisites do not o(tain in the
case at (ar.
. C$M%& is neither a government
nor a government agency.
The Contract ,reement was not
conc$uded (etween the Phi$ippines
and China, (ut (etween Northrai$ and
CN1E..
+/
;y the terms of the
Contract ,reement, Northrai$ is a
overnment?owned or ? contro$$ed
corporation, whi$e CN1E. is a
corporation du$y orani7ed and
created under the $aws of the Peop$e>s
Repu($ic of China.
+)
Thus, (oth
Northrai$ and CN1E. entered into
the Contract ,reement as entities
with persona$ities distinct and separate
from the Phi$ippine and Chinese
overnments, respective$y.
Neither can it (e said that CN1E.
acted as aent of the Chinese
overnment. ,s previous$y discussed,
the fact that ,m(. Aan, in his $etter
dated / Octo(er )''&,
+&
descri(ed
CN1E. as a Jstate corporationJ and
dec$ared its desination as the Primary
Contractor in the Northrai$ Pro%ect did
not mean it was to perform soverein
functions on (eha$f of China. That
$a(e$ was on$y descriptive of its nature
as a state?owned corporation, and did
not prec$ude it from enain in
pure$y commercia$ or proprietary
ventures.
". #he Contract greement is to 'e
governed 'y (hilippine la).
,rtic$e ) of the Conditions of
Contract,
+0
which under ,rtic$e /./ of
the Contract ,reement is an intera$
part of the $atter, statesF
,PP6IC,;6E 6,A ,ND
.OKERNIN. 6,N.5,.E
The contract sha$$ in a$$ respects (e
read and construed in accordance with
the $aws of the Phi$ippines.
The contract sha$$ (e written in
En$ish $anuae. ,$$ correspondence
and other documents pertainin to the
Contract which are e:chaned (y the
parties sha$$ (e written in En$ish
$anuae.
Since the Contract ,reement
e:p$icit$y provides that Phi$ippine $aw
sha$$ (e app$ica($e, the parties have
effective$y conceded that their rihts
and o($iations thereunder are not
overned (y internationa$ $aw.
It is therefore c$ear from the foreoin
reasons that the Contract ,reement
does not parta<e of the nature of an
e:ecutive areement. It is mere$y an
ordinary commercia$ contract that can
(e 3uestioned (efore the $oca$ courts.
A4ERE9ORE, the instant Petition is
&ENIE&. Petitioner China Nationa$
1achinery 2 E3uipment Corp.
!.roup" is not entit$ed to immunity
from suit, and the Contract ,reement
is not an e:ecutive areement.
CN1E.>s prayer for the issuance of a
TRO and#or Arit of Pre$iminary
In%unction is DENIED for (ein moot
and academic. This case is
RE1,NDED to the Reiona$ Tria$
Court of 1a<ati, ;ranch /0+, for
further proceedins as reards the
va$idity of the contracts su(%ect of
Civi$ Case No. 'B?)'&.
No pronouncement on costs of suit.
SO ORDERED.