DFA V NLRC Digest

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DFA v.

NLRC, 262 SCRA 39


FACTS:
The questions raised in this petition for certiorari are a few coincidental matters relative
to the diplomatic immunity extended to the Asian Development Bank ("ADB").
On 27 January 1993, private respondent initiated NLRC-NCR Case No. 00-01-0690-93
for his alleged illegal dismissal by ADB
Forthwith, the ADB and the DFA notified respondent Labor Arbiter that the ADB, as well
as its President and Officers, were covered by an immunity from legal process except for
borrowings, guaranties or the sale of securities pursuant to Article 50(1) and Article 55 of
the Agreement Establishing the Asian Development Bank (the "Charter") in relation to
Section 5 and Section 44 of the Agreement Between The Bank And The Government Of
The Philippines Regarding The Bank's Headquarters (the "Headquarters Agreement").
The Labor Arbiter took cognizance of the complaint and ruled in favor of the private
complainant.

The ADB did not appeal the decision. Instead, on 03 November 1993, the DFA referred
the matter to the National Labor Relations Commission ("NLRC"). However, the NLRC
instead suggested that an appropriate complaint be lodged with the Office of the
Ombudsman.

Dissatisfied, the DFA lodged the instant petition for certiorari.


ISSUE:
Whether or not ADB is entitled to diplomatic immunity.
RULING:
Yes. The above stipulations of both the Charter and Headquarters Agreement should be
able, nay well enough, to establish that, except in the specified cases of borrowing and
guarantee operations, as well as the purchase, sale and underwriting of securities, the
ADB enjoys immunity from legal process of every form. The Banks officers, on their part,
enjoy immunity in respect of all acts performed by them in their official capacity. The
Charter and the Headquarters Agreement granting these immunities and privileges are
treaty covenants and commitments voluntarily assumed by the Philippine government
which must be respected.
In the instant case, the filing of the petition by the DFA, in behalf of ADB, is itself an
affirmance of the government's own recognition of ADB's immunity. The Department of
Foreign Affairs, through the Office of Legal Affairs moved with this Court to be allowed to
intervene on the side of petitioner. The Court allowed the said Department to file its
memorandum in support of petitioner's claim of sovereign immunity. Being an
international organization that has been extended a diplomatic status, the ADB is
independent of the municipal law.
Private respondent argues that, by entering into service contracts with different private
companies, ADB has descended to the level of an ordinary party to a commercial
transaction giving rise to a waiver of its immunity from suit.
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.
The service contracts referred to by private respondent have not been intended by the
ADB for profit or gain but are official acts over which a waiver of immunity would not
attach. Therefore, ADB is entitled to such immunity and the courts should respect
diplomatic immunities of international organizations recognized by the Philippine
government.

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