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Case No. 19 Republic of Indonesia vs.

Vinzon, June 26, 2003


[G.R. No. 154705. June 26, 2003.]

FACTS:
Petitioner, Republic of Indonesia, represented by its Counsellor, entered into a Maintenance of
Agreement with respondent Vinzon, stating that the latter shall maintain specified equipment at the
former’s Embassy and the Wisma Duta, official residence of petitioner Ambassador Soeratmin. Before
the expiration of said agreement, the incoming Chief of Administration, Minister Counsellor Kasim,
found respondent’s work and services unsatisfactory. Hence, the Indonesian Embassy terminated the
agreement. Respondent claims that the termination was arbitrary and unlawful and filed a complaint
against petitioners. In turn, petitioners filed a Motion to Dismiss, alleging that the Republic of Indonesia,
as a foreign sovereign State, has sovereign immunity from suit and cannot be sued as party-defendant in
the Philippines, that Ambassador Soeratmin and Minister Counsellor Kasim are diplomatic agents and
therefore enjoy diplomatic immunity. Respondent filed an Opposition alleging that the Republic of
Indonesia has expressly waived its immunity from suit. The trial court denied herein petitioner’s Motion
and was brought up to the Court of Appeals. The petition was again denied by the CA as well as
petitioner’s following motion for reconsideration. Hence, this case was brought to the Supreme Court.

ISSUE:
1. Whether or not the Republic of Indonesia can invoke the doctrine of sovereign immunity from
suit; 2. Whether or not petitioners Ambassador Soeratmin and Minister Counsellor Kasim may be sued
herein in their private capacities.

RULING:
1. Yes. By the principle of the sovereign equality of States, as expressed in the maxim “par in
parem non habet imperium,” all states are sovereign equals and cannot assert jurisdiction over one
another, for a contrary attitude would unduly vex the peace of nations. Subject to restrictive theory, it
holds that the immunity of the sovereign is recognized only with regard to public acts or acts jure
imperii, as opposed to private acts or acts jure gestionis. There is no dispute that the establishment of a
diplomatic mission is an act jure imperii, its establishment encompasses its maintenance and upkeep
and clearly a pursuit of a sovereign activity. Further, the existence alone, of a paragraph in a contract
stating that any legal action arising out of an agreement shall be settled according to the laws of the
Philippines and by a specified court of the Philippines, is not necessarily a waiver of sovereign immunity
from suit; 2. No. The act of petitioners in terminating the Maintenance Agreement is not covered by the
exceptions provided in Article 31 of the Vienna Convention on Diplomatic Relations. The Solicitor
General believes that said act may fall under subparagraph (c) thereof, but said provision clearly applies
only to a situation where the diplomatic agent engages in any professional or commercial activity
outside official functions, which is not the case herein.