Judith E.

Suyat – Chapter 5: Subjects of International Law

-Means they are those who have international personality

States are the dominant subjects of international law because they enjoy the fullest
personality in international law. Not all subjects of international law enjoy the same rights and
obligations.

How states commence its existence?

The State as a person in international law should possess the following qualifications:

 People or Population – means a community of persons sufficient in number and capable

of maintaining the permanent existence of the community and held together by a
common bond of law.
 Government – is that institution by which an independent society makes and carries out
the those rules of actions which are necessary to enable men to live in a social state.
 A definite territory which an entity exercises permanent sovereignty is another element of
a state.
 Sovereignty – means independence from outside control. Includes capacity to enter into
relations with other states.

Sovereignty, however, is dependent on recognition.

Recognition of State – means the act of acknowledging the capacity of an entity to exercise
rights belonging to a State. When State A recognizes State B, it means that both states recognize
the capacity of each other to exercise all rights belonging to a state.

How states are recognized? (Two views – Declaratory theory and Constitutive Theory)

Declaratory theory – under this theory, the existence of a state and that its being a state depends
upon its possession of the required elements and not upon recognition.

Constitutive theory – is that recognition constitutes a “state” that is, it is what makes a state a
state and confers legal personality on the entity. In effect, this merely emphasizes the point that
states are under no obligation to enter into bilateral relation. But then states may decide to
recognize an entity as a state even if it does not have all the elements of a state.

Recognition of a government
- Means the act of acknowledging the capacity of an entity to exercise powers of
government of a state.

Consequences of recognition or non-recognition

- Recognition or non-recognition of a state can have very serious consequences. A
government, once recognized:
1. Gains increased prestige and stability
2. Door of funding agencies are opened
3. Loans are facilitated
4. Access to foreign courts and immunity from suits are gained
Judith E. Suyat – Chapter 5: Subjects of International Law

5. Military and financial assistance also come within reach

The absence of formal recognition, on the other hand, bars an entity from all these benefits or at
least, access to them are suspended.

When is recognition terminated?

- Recognition of a regime is terminated when another regime is recognized
- For as long as a state continues to meet the qualifications of a sate, its status as a state
cannot be derecognized.

Succession of State (continuity)

Existing sovereignties can disappear under different circumstances. New political
sovereigns may arise as the result of
 Decolonization
 Dismemberment of an existing state
 Secession
 Annexation
 Merger

In each of these cases, an existing sovereignty disappear either in whole or in part and a new one
arises thus, giving rise to questions of succession to rights and obligations.

The issue on succession can be succession in territories, treaties, properties and contracts.

Fundamental rights of a State

 Independence – means the right to exercise within its territory the functions of a state to
the exclusion of others.
 Equality – means equality of legal rights irrespective of size or power of the state
 Peaceful co-existence includes mutual respect for each other’s territorial integrity and
sovereignty, mutual non-aggression, and mutual non-interference in each other’s affairs.

Some incomplete subjects

 Protectorates – are dependents states which have control over their internal affairs but
whose external affairs are controlled by another state.

 Federal state - is a union of previously autonomous entities

 Mandated and Trust territories – mandated territories were territories placed by the
League of Nations under one or other victorious allies in WW1. The mandate system
was replaced by trusteeship system after the WW2

 Taiwan – Taiwan seems to be a non-state territory which de jure is part of China.

 The Sovereign Order of Malta - The Sovereign Order of Malta was established during the
Crusades as a military and medical association. It ruled Rhodes from 1309 to 1522. It
Judith E. Suyat – Chapter 5: Subjects of International Law

lost its rule of Malta in 1798. In 1834 the Order established its headquarters in Rome as a
humanitarian organization.

 The Holy See and the Vatican City – the Vatican City represents an entity organized not
for political but for ecclesiastical purposes and international objects. Despite its size and
object, the Vatican City has an independent government of its own, with the Pope, who is
also head of the Roman Catholic Church, as the Holy See or Head of State, in conformity
with its traditions, and the demands of its mission in the world. Indeed, the worldwide
interests and activities of the Vatican City are such as to make it in a sense an
"international state".
Judith E. Suyat (In re: Letter of Associate Justice Puno)

Petitioner Associate Justice Reynato S. Puno, a member of the Court of Appeals, wrote a letter
dated 14 November 1990 addressed to this Court, seeking the correction of his seniority
ranking in the Court of Appeals.

On 17 January 1983, the Court of Appeals was reorganized and became the Intermediate
Appellate Court pursuant to Batas Pambansa Blg. 129 entitled "An Act Reorganizing the
Judiciary.

Petitioner was appointed Appellate Justice in the First Special Cases Division of the
Intermediate Appellate Court. On 7 November 1984, petitioner accepted an appointment to be
ceased to be a member of the Judiciary.

The aftermath of the EDSA Revolution in February 1986 brought about a reorganization of the
entire
government, including the Judiciary.

The Screening Committee recommended the return of petitioner as Associate Justice of the new
Court of Appeals and assigned him the rank of number eleven (11) in the roster of appellate
court justices. When the appointments were signed by President Aquino on 28 July 1986,
petitioner’s seniority ranking changed, however, from number eleven (11) to number
twenty six .

It is to be noted that, at the time of the issuance of Executive Order No. 33, President Aquino
was still exercising the powers of a revolutionary government, encompassing both executive and
legislative powers, such that she could, if she so desired, amend, modify or repeal any part of
B.P. Blg. 129 or her own Executive Order No. 33. It should also be remembered that the same
situation was still in force when she issued the 1986 appointments to the Court of Appeals. In
other words, President Aquino, at the time of the issuance of the 1986 appointments, modified
or disregarded the rule embodied in B.P. Blg. 129 as amended by Executive Order No. 33, on
precedence or seniority in the case of the petitioner, for reasons known only to her. Since the
appointment extended by the President to the petitioner in 1986 for membership in the new
Court of Appeals with its implicit ranking in the roster of justices, was a valid appointment
anchored on the President’s exercise of her then revolutionary powers, it is not for the
Court at this time to question or correct that exercise.

ACCORDINGLY, the Court GRANTS the Motion for Reconsideration and the seniority
rankings of members of the Court of Appeals, including that of the petitioner, at the time the
appointments were made by the President in 1986, are recognized and upheld.
Judith E. Suyat (Holy See vs. Hon. Eriberto Rosario, Jr.)

Petitioner is the Holy See who exercises sovereignty over the Vatican City in Rome, Italy, and is
represented in the Philippines by the Papal Nuncio

This petition arose from a controversy over a parcel of land located in the Municipality of
Parañaque, and registered in the name of petitioner.

The lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr., acting as agent to the
sellers.
Later, Licup assigned his rights to the sale to private respondent STARBRIGHT SALES
ENTERPRISES, INC.,.

In view of the refusal of the squatters to vacate the lots sold to private respondent, a dispute arose
as to who of
the parties has the responsibility of evicting and clearing the land of squatters. Complicating the
relations of the
parties was the sale by petitioner of Lot 5A to Tropicana Properties and Development
Corporation (Tropicana).

Private respondent filed a complaint with the Regional Trial Court, Branch 61, Makati, Metro
Manila for annulment of the sale of the three parcels of land, and specific performance and
damages against petitioner, represented by the Papal Nuncio, and three other defendants: namely,
Msgr. Domingo A. Cirilos, Jr.,
the PRC and Tropicana

Private respondent thus prayed for: (1) the annulment of the Deeds of Sale between petitioner
and the PRC on
the one hand, and Tropicana on the other; (2) the reconveyance of the lots in question; (3)
specific performance of the agreement to sell between it and the owners of the lots; and (4)
damages.

Petitioner forthwith elevated the matter to us. In its petition, petitioner invokes the privilege of
sovereign immunity only on its own behalf and on behalf of its official representative, the Papal
Nuncio.
a Motion for Intervention was filed before us by the Department of Foreign Affairs, claiming that
it has a legal interest in the outcome of the case as regards the diplomatic immunity of petitioner,
and that it "adopts by reference, the allegations contained in the petition of the Holy See insofar
as they refer to arguments relative to its claim of sovereign immunity from suit"

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 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.
Judith E. Suyat (Holy See vs. Hon. Eriberto Rosario, Jr.)

In the case at bench, 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.

In cases where the foreign states bypass the Foreign Office, the courts can inquire into the facts
and make their own determination as to the nature of the acts and transactions involved.

The burden of the petition is that respondent trial court has no jurisdiction over petitioner, being
a foreign state
enjoying sovereign immunity. On the other hand, private respondent insists that the doctrine of
nonsuability
is not anymore absolute and that petitioner has divested itself of such a cloak when, of its own
free will, it entered into a commercial transaction for the sale of a parcel of land located in the
Philippines.

The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. The
Holy See,
through its Ambassador, the Papal Nuncio, has had diplomatic representations with the
Philippine government
since 1957

There are two conflicting concepts of sovereign immunity, each widely held and firmly
established. 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

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.

Petitioner did not sell Lot 5A for profit or gain. It merely wanted to dispose off the same because
the squatters living thereon made it almost impossible for petitioner to use it

the Department of Foreign Affairs has formally intervened in this case and officially certified
that the Embassy of the Holy See is a duly accredited diplomatic mission to the Republic of the
Philippines exempt from local jurisdiction and entitled to all the rights, privileges and immunities
of a diplomatic mission or embassy in this country. The Supreme Court DISMISSED the
complaint.
Julie Diane A. Artienda (Lawyers League for a Better Philippines
vs. Pres. Corazon C. Aquino, et. al)

Doctrine: The community of nations has recognized the legitimacy of the present government.
All the eleven members of this Court, as reorganized, have sworn to uphold the fundamental law
of the Republic under her government.

Facts:

On February 25, 1986, President Corazon Aquino issued Proclamation No. 1 announcing that she
and Vice President Laurel were taking power.

On March 25, 1986, proclamation No.3 was issued providing the basis of the Aquino
government assumption of power by stating that the “new government was installed through a
direct exercise of the power of the Filipino people assisted by units of the New Armed Forces of
the Philippines.”

Petitioners alleged that the Aquino government is illegal because it was not established pursuant
to the 1973 Constitution.

Issue:

Whether or not the government of Corazon Aquino is legitimate, and therefore, should be
recognized.

Ruling: Yes.

As early as April 10, 1986, the Court had already voted to dismiss the petitions. On April 17,
1986, Atty. Lozano as counsel for the petitioners in G.R. Nos. 73748 and 73972 withdrew the
petitions and manifested that they would pursue the question by extra-judicial methods. The
withdrawal is functus officio.

The legitimacy of the Aquino government is not a justiciable matter. It belongs to the realm of
politics where only the people of the Philippines are the judge. Since the people have made the
judgment which is that they have accepted the government of President Corazon C. Aquino, such
is in effective control of the entire country so that it is not merely a de facto government but is in
fact and law a de jure government.

The community of nations has recognized the legitimacy of the present government. All the
eleven members of this Court, as reorganized, have sworn to uphold the fundamental law of the
Republic under her government.

International Law/Policy Applicable:

Recognition of government - It means the act of acknowledging the capacity of an entity to

exercise powers of government of a state.
Julie Diane A. Artienda (The Tinoco arbitration – Great Britain vs.
Costa Rica)

Doctrine: States may change between forms of government without ceasing to be that state in
the eyes of international law, or in terms of its international obligations.

Facts: In 1917, the Government of Costa Rica, under President Alfredo Gonzales, was
overthrown by Federico Tenneco. Tenneco assumed power & established new constitution.
During his tenure, he granted certain concession to search for oil to a British company and
passed legislation issuing certain new currencies. Because of such, British banks in the course of
business became holders of much of this currency. Then in 1919, when Tenneco retired, he left
the country which resulted to the fall of the government. Thereafter, the old constitution was
restored and elections were held.

In August 22, 1922, the restored government passed legislation nullifying the currency laws the
Tinoco administration had made. The consequence of such is that it invalidated all transactions
involved between Great Britain and Costa Rica. The restored government is a signatory of the
treaty of arbitration.

The claim was subsequently brought by Great Britain in behalf of the two British Corporations
which were the Royal Bank of Canada and Central Costa Rica Petroleum Company. Royal Bank
of Canada claimed that Banco Internacional of Costa Rica and the Government of Costa Rica are
indebted to it proven by holding of colones bills. The other corporation, Central Costa Rica
Petroleum Company (CCRPC) claimed that it owns the rights to explore and exploit petroleum
reserves in Costa Rica based on a grant issued by Tinoco.

The Great Britain then insisted that the restored government should recognize the concessions
given to CCRPC and the validity of Tinoco’s currency held by Royal Bank of Canada and
contended that during the period in question, the Tinoco government had been the de facto and
de jure government. This contention is supported by the fact that the government was not
opposed in any significant manner, thus giving the government legitimacy.

On the other hand, the Government of Costa Rica objected and claimed that any acts carried out
by the government were void because the Tinoco regime violated the Costa Rican constitution.
They also argued that since Great Britain did not recognize the Tinoco Government as
legitimate, it cannot then turn around and claim agreements with an illegitimate government as
binding.

Issues:

1. Whether Tinoco regime cannot be recognized as a government because it was not established
and maintained in accord with the constitution of Costa Rica of 1871.
Julie Diane A. Artienda (The Tinoco arbitration – Great Britain vs.
Costa Rica)

2. Whether or not Great Britain is estopped from pursuing its claims because it never recognized
the Tinoco government either de jure or de facto government.

Ruling:

1. No. The Court held that to hold that a government does not become a de facto government
unless it conforms to a previous constitution would be to hold that within the rules of
international law a revolution contrary to the fundamental law of the existing government cannot
establish a new government. This cannot be, and is not true.

2. No. While the failure on the part of Great Britain to recognize Tinoco government was
evidence to be taken into account in deciding on the status of that government, it was not
decisive as the status of the government had to be determined in the light of all evidence. In fact,
the Tinoco government had been a de facto government during the period of its existence. The
Court cited further that even UK always refused to recognize the Tinoco government as either de
facto or de jure government, however, they still claim at the arbitration proceedings that the
Tinoco government was in fact a de facto and de jure government.

Since those two years while in power, the Tinoco government served its role in a peaceful
environment where there is no objections, no revolution and no power dispute. The court then
holds that “the Tinoco government was an actual sovereign government.”

The Court further noted that non- recognition may have aided the succeeding government to
come into power; but subsequent presentation of claims based on the de facto existence of the
previous government does not work an injury to the succeeding government in the nature of a
fraud or breach of good faith. States may change between forms of government without ceasing
to be that state in the eyes of international law, or in terms of its international obligations.

International Law/ Policy Applicable: “The principle of the continuity of states” - the state is
bound by engagements entered into by governments that have ceased to exist; the restored
government is generally liable for the acts of the usurper.
Julie Diane A. Artienda (The People of the Philippine Islands vs.
Perfecto)

Doctrine: It is a general principle that whenever there is acquisition of new territory, the
previous political relations are totally abrogated, although some laws from the Spanish Penal
Code are still used in force, it was only done so because of convenience. However, with the new
American occupation, all laws that are inconsistent with the democratic nature of the new
government are displaced without the need of any declaration.

Facts: In 1920, the Secretary of the Philippine Senate, Fernando M. Guerrero, discovered that
certain documents which constituted the records of testimony given by witnesses in the
investigation of oil companies, had disappeared from his office. Thereafter, the Philippine
Senate, having been called into special session by the Governor-General, the Secretary for the
Senate informed that body of the loss of the documents and of the steps taken by him to discover
the guilty party.

The day following the convening of the Senate, the newspaper La Nacion, edited by Mr.
Gregorio Perfecto, published an article against the Philippine Senate. The article suggested that
the difficulty in finding the perpetrators was due to an official concealment by the Senate.
Because of the publication, an information was filed in the municipal court of the City of Manila,
in which the editorial in question was set out and in which it was alleged that the same
constituted a violation of article 256 of the Penal Code of Spain. The defendant Gregorio
Perfecto was found guilty in the municipal court and affirmed by the CFI-Manila. Mr. Perfecto
filed an appeal in the Supreme Court to dismiss the case on the ground that Article 256 was not
in force anymore.

Issue:

Whether a law is abrogated by the change of sovereignty (from Spanish to American

government) over the Philippines?

Ruling: Yes. The Judgment of the CFI Manila was reversed and set aside and the defendant-
appellant was acquitted.

It is a general principle that whenever there is acquisition of new territory, the previous political
relations are totally abrogated, although some laws from the Spanish Penal Code are still used in
force, it was only done so because of convenience. However, with the new American occupation,
all laws that are inconsistent with the democratic nature of the new government are displaced
without the need of any declaration.

The Supreme Court held that Article 256 of the Spanish Penal Code was enacted by the
Government of Spain to protect ministers of the crown and persons of authority as
representatives of the king of Spain, upholding said officials as higher from the general
Julie Diane A. Artienda (The People of the Philippine Islands vs.
Perfecto)
population and protecting them from contemptuous or dissatisfied statement from the public. It is
a law that is monarchical in nature.

With the change of sovereignty, a new government, and a new theory of government, was set up
in the Philippines. It was no sense a continuation of the old laws. No longer is there a Minister of
the Crown or a person in authority of such exalted position that the citizen must speak of him
only in bated breath. Further, it is completely against the nature and spirit of the American
System of Government which states that every man is a sovereign, a ruler and a freeman, and has
equal right with every other man.
Mary Grace C. Delos Santos (Mexico vs. USA)

FACTS:

On 9 January 2003 the United Mexican States (“Mexico”) instituted proceedings against the
United States of America (“United States”) for “violations of the Vienna Convention on
Consular Relations” of 24 April 1963 (“Vienna Convention”) allegedly committed by the
United States.

In its Application, Mexico based the jurisdiction of the Court on Article 36, paragraph 1, of the
Statute of the Court and on Article I of the Optional Protocol concerning the Compulsory
Settlement of Disputes, which accompanies the Vienna Convention (“Optional Protocol”).

On the same day, Mexico also filed a request for the indication of provisional measures.
By an Order of 5 February 2003, the Court indicated the following provisional measures:
“(a) The United States of America shall take all measures necessary to ensure that
Mr. César Roberto Fierro Reyna, Mr. Roberto Moreno Ramos and Mr. Osvaldo
Torres Aguilera are not executed pending final judgment in these proceedings;
(b) The Government of the United States of America shall inform the Court of all
measures taken in implementation of this Order.”

It further decided that, “until the Court has rendered its final judgment, it shall remain seized of
the matters” which formed the subject of that Order.

In a letter of 2 November 2003, the Agent of the United States advised the Court that the
United States had “informed the relevant state authorities of Mexico’s application”; that, since
the Order of 5 February 2003, the United States had “obtained from them information about the
status of the fifty-four cases, including the three cases identified in paragraph 59 (I) (a) of that
Order”; and that the United States could “confirm that none of the named individuals [had] been
executed”.

A Memorial by Mexico and a Counter-Memorial by the United States were filed within the time-
limits extended by the Court.

At the oral proceedings, the following final submissions were presented by the Parties:

On behalf of the Government of Mexico,

“The Government of Mexico respectfully requests the Court to adjudge and declare

(1) That the United States of America, in arresting, detaining, trying, convicting, and
sentencing the 52 Mexican nationals on death row described in Mexico’s Memorial, violated its
international legal obligations to Mexico, in its own right and in the exercise of its right to
diplomatic protection of its nationals, by failing to inform, without delay, the 52 Mexican
nationals after their arrest of their right to consular notification and access under Article 36 (1)(b)
of the Vienna Convention on Consular Relations, and by depriving Mexico of its right to provide
consular protection and the 52 nationals’ right to receive such protection as Mexico would
provide under Article 36 (1) (a) and (c) of the Convention;
Mary Grace C. Delos Santos (Mexico vs. USA)

(2) That the obligation in Article 36 (1) of the Vienna Convention requires notification of
consular rights and a reasonable opportunity for consular access before the competent authorities
of the receiving State take any action potentially detrimental to the foreign national’s rights;

(3) That the United States of America violated its obligations under Article 36 (2) of the
Vienna Convention by failing to provide meaningful and effective review and reconsideration of
convictions and sentences impaired by a violation of Article 36 (1); by substituting for such
review and reconsideration clemency proceedings; and by applying the “procedural default”
doctrine and other municipal law doctrines that fail to attach legal significance to an Article 36
(1) violation on its own terms;

(4) That pursuant to the injuries suffered by Mexico in its own right and in the exercise of
diplomatic protection of its nationals, Mexico is entitled to full reparation for those injuries in the
form of restitutio in integrum;

(5) That this restitution consists of the obligation to restore the status quo ante by
annulling or otherwise depriving of full force or effect the convictions and sentences of all 52
Mexican nationals;

(6) That this restitution also includes the obligation to take all measures necessary to
ensure that a prior violation of Article 36 shall not affect the subsequent proceedings;

(7) That to the extent that any of the 52 convictions or sentences are not annulled, the
United States shall provide, by means of its own choosing, meaningful and effective review and
reconsideration of the convictions and sentences of the 52 nationals, and that this obligation
cannot be satisfied by means of clemency proceedings or if any municipal law rule or doctrine
inconsistent with paragraph (3) above is applied; and

(8) That the United States of America shall cease its violations of Article 36 of the
Vienna Convention with regard to Mexico and its 52 nationals and shall provide appropriate
guarantees and assurances that it shall take measures sufficient to achieve increased compliance
with Article 36 (1) and to ensure compliance with Article 36 (2).”

On behalf of the Government of the United States,

“On the basis of the facts and arguments made by the United States in its Counter-
Memorial and in these proceedings, the Government of the United States of America requests
that the Court, taking into account that the United States has conformed its conduct to this
Court’s Judgment in the LaGrand Case (Germany v. United States of America), not only with
respect to German nationals but, consistent with the Declaration of the President of the Court in
that case, to all detained foreign nationals, adjudge and declare that the claims of the United
Mexican States are dismissed.”

The Court finally gives a short description of the dispute and of the facts underlying the
case, and in paragraph 16 it lists by name the 52 Mexican nationals involved.
Mary Grace C. Delos Santos (Mexico vs. USA)

ISSUES:

(1) Whether or not claim of Mexico that United States’ objection is inadmissible
(2) Whether or not US violated its international legal obligation with Mexico

RULING:

(1) The Court notes at the outset that the United States has presented a number of objections
to the jurisdiction of the Court, as well as to the admissibility of the claims advanced by Mexico;
that it is however the contention of Mexico that all the objections raised by the United States are
inadmissible as having been raised after the expiration of the time-limit laid down by Article 79,
paragraph 1, of the Rules of Court as amended in 2000.

The Court notes, however, that Article 79 of the Rules applies only to preliminary
objections. It observes that an objection that is not presented as a preliminary objection in
accordance with paragraph 1 of Article 79 does not thereby become inadmissible; that there are
of course circumstances in which the party failing to put forward an objection to jurisdiction
might be held to have acquiesced in jurisdiction; that, however, apart from such circumstances, a
party failing to avail itself of the Article 79 procedure may forfeit the right to bring about a
suspension of the proceedings on the merits, but can still argue the objection along with the
merits. The Court finds that that is indeed what the United States has done in this case; and that,
for reasons to be indicated below, many of its objections are of such a nature that they would in
any event probably have had to be heard along with the merits. The Court concludes that it
should not exclude from consideration the objections of the United States to jurisdiction and
admissibility by reason of the fact that they were not presented within three months from the date
of filing of the Memorial. The Court notes that this is a matter of merits; the first objection of the
United States to admissibility cannot therefore be upheld.

The Court then turns to the objection of the United States based on the rule of exhaustion
of local remedies. The United States contends that the Court “should find inadmissible Mexico’s
claim to exercise its right of diplomatic protection on behalf of any Mexican national who has
failed to meet the customary legal requirement of exhaustion of municipal remedies”. The Court
recalls that in its final submissions Mexico asks the Court to adjudge and declare that the United
States, in failing to comply with Article 36, paragraph 1, of the Vienna Convention, has “violated
its international legal obligations to Mexico, in its own right and in the exercise of its right of
diplomatic protection of its nationals”. The Court observes that the individual rights of Mexican
nationals under subparagraph 1 (b) of Article 36 of the Vienna Convention are rights which are
to be asserted, at any rate in the first place, within the domestic legal system of the United States.
Only when that process is completed and local remedies are exhausted would Mexico be entitled
to espouse the individual claims of its nationals through the procedure of diplomatic protection.
In the present case Mexico does not, however, claim to be acting solely on that basis. It also
asserts its own claims, basing them on the injury which it contends that it has itself suffered,
directly and through its nationals, as a result of the violation by the United States of the
Mary Grace C. Delos Santos (Mexico vs. USA)

obligations incumbent upon it under Article 36, paragraph 1 (a), (b) and (c). The Court finds that,
in these special circumstances of interdependence of the rights of the State and of individual
rights, Mexico may, in submitting a claim in its own name, request the Court to rule on the
violation of rights which it claims to have suffered both directly and through the violation of
individual rights conferred on Mexican nationals under Article 36, paragraph 1 (b). The duty to
exhaust local remedies does not apply to such a request. The Court accordingly finds that the
second objection by the United States to admissibility cannot be upheld.

The Court finally examines the objection of the United States that the claim of Mexico is
inadmissible in that Mexico should not be allowed to invoke against the United States standards
that Mexico does not follow in its own practice. The Court recalls in this respect that it is
essential to have in mind the nature of the Vienna Convention. That Convention lays down
certain standards to be observed by all States parties, with a view to the “unimpeded conduct of
consular relations”. Even if it were shown, therefore, that Mexico’s practice as regards the
application of Article 36 was not beyond reproach, this would not constitute a ground of
objection to the admissibility of Mexico’s claim; the third objection of the United States to
admissibility cannot therefore be upheld.

(2) The Court notes that in the first of its final submissions, Mexico asks the Court to
adjudge and declare that, “the United States of America, in arresting, detaining, trying,
convicting, and sentencing the 52 Mexican nationals on death row described in Mexico’s
Memorial, violated its international legal obligations to Mexico, in its own right and in the
exercise of its right to diplomatic protection of its nationals, by failing to inform, without delay,
the 52 Mexican nationals after their arrest of their right to consular notification and access under
Article 36 (1) (b) of the Vienna Convention on Consular Relations, and by depriving Mexico of
its right to provide consular protection and the 52 nationals’ right to receive such protection as
Mexico would provide under Article 36 (1) (a) and (c) of the Convention”.

It recalls that it has already in its Judgment in the LaGrand case described Article 36,
paragraph 1, as “an interrelated régime designed to facilitate the implementation of the system of
consular protection”. After citing the full text of the paragraph, the Court observes that the
United States as the receiving State does not deny its duty to perform the obligations indicated
therein. However, it claims that those obligations apply only to individuals shown to be of
Mexican nationality alone, and not to those of dual Mexican/United States nationality. The
United States further contends inter alia that it has not committed any breach of Article 36,
paragraph 1 (b), upon the proper interpretation of “without delay” as used in that subparagraph.
Article 36, paragraph 1 (b).

The Court finds that thus two major issues under Article 36, paragraph 1 (b) are in dispute
between the Parties:
1. the question of the nationality of the individuals concerned; and
2. the question of the meaning to be given to the expression “without delay”.

1. The Court accordingly concludes that the United States has not met its burden of proof in its
attempt to show that persons of Mexican nationality were also United States nationals. The Court
Mary Grace C. Delos Santos (Mexico vs. USA)

therefore finds that, as regards the 52 persons listed in paragraph 16 of the Judgment, the United
States had obligations under Article 36, paragraph 1 (b).

2. The Court continues by noting that Mexico, in its second final submission, asks the Court to
find that “the obligation in Article 36, paragraph 1, of the Vienna Convention requires
notification of consular rights and a reasonable opportunity for consular access before
the competent authorities of the receiving State take any action potentially detrimental
to the foreign national’s rights”.

Beginning with the right of an arrested individual to information, the Court finds that the
duty upon the arresting authorities to give the Article 36, paragraph 1 (b), information to the
individual arises once it is realized that the person is a foreign national, or once there are grounds
to think that the person is probably a foreign national. Precisely when this may occur will vary
with circumstances. Bearing in mind the complexities of establishing such a fact as explained by
the United States, the Court begins by examining the application of Article 36, paragraph 1 (b),
of the Vienna Convention to the 52 cases.

The Court notes that the Parties have very different views on this. According to Mexico,
the timing of the notice to the detained person “is critical to the exercise of the rights provided by
Article 36” and the phrase “without delay” in paragraph 1 (b) requires “unqualified
immediacy”. Mexico further contends that, in view of the object and purpose of Article 36,
which is to enable “meaningful consular assistance” and the safeguarding of the vulnerability of
foreign nationals in custody, “consular notification …must occur immediately upon detention
and prior to any interrogation of the foreign detainee, so that the consul may offer useful advice
about the foreign legal system and provide assistance in obtaining counsel before the foreign
national makes any ill-informed decisions or the State takes any action potentially prejudicial to
his rights”. The United States disputed this interpretation of the phrase “without delay”. In its
view it did not mean “immediately, and before interrogation” and such an understanding was
supported neither by the terminology, nor by the object and purpose of the Vienna Convention,
nor by its travaux préparatoires. According to the United States, the purpose of Article 36 was to
facilitate the exercise of consular functions by a consular officer: “The significance of giving
consular information to a national is thus limited . . . It is a procedural device that allows the
foreign national to trigger the related process of notification . . . [It] cannot possibly be
fundamental to the criminal justice process.”

The Court begins by noting that the precise meaning of “without delay”, as it is to be
understood in Article 36, paragraph 1 (b), is not defined in the Convention. This phrase therefore
requires interpretation according to the customary rules of treaty interpretation reflected in
Articles 31 and 32 of the Vienna Convention on the Law of Treaties. After examination of the
text of the Vienna Convention on Consular Relations, its object and purpose, as well as its
travaux préparatoires, the Court finds that “without delay” is not necessarily to be interpreted as
“immediately” upon arrest, nor can it be interpreted to signify that the provision of the
information must necessarily precede any interrogation, so that the commencement of
interrogation before the information is given would be a breach of Article 36. The Court
observes, however, that there is nonetheless a duty upon the arresting authorities to give the
Mary Grace C. Delos Santos (Mexico vs. USA)

information to an arrested person as soon as it is realized that the person is a foreign national, or
once there are grounds to think that the person is probably a foreign national.

Applying this interpretation of “without delay” to the facts of the four outstanding cases,
the Court finds that the United States was in breach of its obligations under Article 36, paragraph
1 (b), in respect of these individuals also. The Court accordingly concludes that, with respect to
all save one of the 52 individuals listed in paragraph 16 of the Judgment, the United States has
violated its obligation under Article 36, paragraph 1 (b), of the Vienna Convention to provide
information to the arrested person.
Mary Grace C. Delos Santos (Philippines vs. Marcos)

FACTS:

On October 21, 1988, former president Ferdinand Marcos and his wife, Imelda, were
indicted in United States district court on fraud and racketeering charges. The charges stemmed
from allegedly illegal activities engaged in while Marcos was President of the Philippines and
which continued subsequent to his arrival in the United States. The indictment charged that after
they were granted asylum in the United States in 1986, the Marcoses had violated a federal court
order which prohibited the transfer of assets. Specifically, the New York federal grand jury
charged that the Marcoses through their associates, Bienvenido Tantoco, Sr., former Philippine
ambassador to the Vatican, and his wife, backdated documents purporting to show that certain
properties in New York had been transferred to Saudi financier Adnan Khashoggi earlier than the
date of the court order. Reagan Administration officials stated that "there were no foreign policy
considerations to prevent the indictment."

Foreign policy implications, however, were raised in the federal district court that froze
the Marcoses' assets in 1986. In Republic of Philippines v. Marcos, the Second Circuit
unanimously held that the Republic was entitled to a preliminary injunction barring Marcos, his
wife, and several other defendants from transferring or encumbering the New York properties
despite the former president's act of state defense. The court ruled that the defendants had not
met their burden of proof and had failed to show that defendants' acts were public acts to which
the act of state doctrine applied. Thus, the court never reached the merits of the Marcoses'
defense, although the legal criteria used to evaluate the merits of the preliminary injunction
expressly required such an evaluation." A federal court in California had evaluated a similar
request to freeze the former president's assets and concluded that the act of state doctrine did
indeed preclude the issuance of such an order despite ostensible burden of proof problems.
The court's ruling in Marcos has not stopped Marcos from claiming that "head-of-state
immunity" still bars his prosecution in New York on the charges raised by the grand jury. Since
the court's actions in Marcos are at the center of the Marcos indictment, a review and analysis of
the court's reasoning is instructive as to the uncertainties that plague judicial action when the act
of state defense is invoked. Moreover, it provides a window to the future, indicating the potential
arguments and counter arguments that may characterize the current litigation.

ISSUE:
Whether or not the Doctrine of Act of State is applicable in the case

RULING:

The district court conceded that the act of state doctrine might eventually bar the suit, but
concluded that in this instance it could not block the issuance of an otherwise appropriate
injunction. Personal acts of a sovereign, the court noted, were not protected by the act of state
doctrine and defendants had not shown that their acts were public acts. The court further stated
that it had received no indication from the Department of State that the adjudication of the suit
would embarrass the Executive in its conduct of foreign policy." The preliminary injunction was
granted."
Mary Grace C. Delos Santos (Philippines vs. Marcos)

The Second Circuit affirmed the decision on the grounds that appellants had not met their
burden of proof and had failed to show that the acts of Marcos were public acts, which could be
protected under the act of state doctrine. The court stated that even if this burden was met at a
later date, the defense may still prove ineffectual because Marcos no longer held power and the
potential for interference in the conduct of foreign policy was appreciably less than might
otherwise have existed. The court also noted that the act of state doctrine rested on the respect for
foreign states. Because the Government of the Philippines sought to try the suit in United States
courts, respect for foreign states in this instance appeared to require the court to proceed with the
adjudication, not prohibit the action as the doctrine would require. Neither the district nor
appellate court actually reached the merits of the act of state defense, but the appellate court
suggested that these factors that leaned against applying the doctrine should be examined when
and if public acts were shown to be at issue.

DEVELOPMENT OF THE ACT OF STATE DOCTRINE

The act of state doctrine has roots in the doctrine of sovereign immunity. Both are
grounded on respect for a sovereign's right to govern and attempt to eliminate legal
confrontations between sovereigns. Yet, while the common law doctrine of sovereign immunity
could protect monarchs against suits in foreign countries, state officials that exercised sovereign
powers were not provided similar immunity. The judicially created act of state doctrine arose to
protect these individuals.
The United States Supreme Court first acknowledged the act of state doctrine as an
independent source of immunity in Underhill v. Hernandez. The suit involved a Venezuelan
general who was accused of assaulting a U.S. citizen in Venezuela. In dismissing the suit the
Court wrote "Every sovereign State is bound to respect the independence of every other
sovereign State, and the courts of one country will not sit in judgment on the acts of the
government of another done within its own territory.

***Today this statement is considered to express the essence of the act of state doctrine;
however, some commentators view it as expanding the doctrine beyond its roots in sovereign and
personal immunity. Specifically, they argue that the breadth of the statement allowed other
principles to serve as the basis for dismissing a suit under the doctrine; namely, the choice of law
principle, the principles of comity and, more recently, the separation of powers principle.

The act of state doctrine was not designed as a tool to protect heads-of-state from liability
for crimes committed in their personal lives. Officials are shielded only when they act in their
sovereign capacity for the "public interest." Moreover, the doctrine is particularly inappropriate
in cases in which the government invoking the doctrine is no longer in power. In those cases, the
major policy supporting judicial abstention, avoiding interference with foreign policy, is often
absent. Consequently, both the "official acts" and "foreign policy interference" requirements are
likely to be formidable restraints preventing use of the act of state defense by governments
(and government officials) that are no longer recognized as sovereign.
Mary Grace C. Delos Santos (SGS Societe Generale de Surveillance
SA vs. Philippines)
FACTS:

SGS is part of a large group providing, inter alia, certification services based on pre-
shipment inspections carried out on behalf of the governmental authorities of the importing
country in the country of export. Pre-shipment inspection not only covers quality, quantity and
export market price, but also seeks to verify compliance with import regulations, the declared
value of goods and their classification for customs purposes. In addition SGS provides assistance
in the modernization of customs and tax infrastructures in the country of import.

In the 1980s, the Philippines decided to appoint an inspector in its countries of supply to
provide a comprehensive import supervision service (CISS), including verification of the quality,
quantity and price of imported goods prior to shipment to the Philippines. The Philippines
entered into two successive CISS contracts with SGS in 1986 before putting the subsequent
contract out to tender. A number of companies were short-listed in a bidding process conducted
on 6 November 1990, which led to a new agreement entered into with SGS on 23 August 1991
(the CISS Agreement) for an initial period of three years. Conclusion of the CISS Agreement
was approved by the President of the Philippines.

Before the end of the three year period, the parties agreed on the extension of the CISS
Agreement, with certain modifications, for a further three year term (the First Addendum).
Subsequently, they agreed to introduce further amendments and to extend the duration of the
CISS Agreement from 15 March 1998 to 31 December 1999 (the Second Addendum). By a
document dated 22 December 1999, the Philippines asked SGS and the latter agreed to extend
the provision of services under the CISS Agreement as amended. This further extension lasted
from 31 December 1999 to 31 March 2000, at which point SGS’s services under the CISS
Agreement were discontinued. In the early years there was some opposition to the CISS system,
but this seems to have dissipated by the time of the First and Second Addendums. In any event
the Tribunal has no evidence that the discontinuance in 2000 was due to any overall
dissatisfaction on the part of the Philippines Bureau of Customs (BOC) with the service provided
by SGS. It seems that it was primarily motivated by changes to customs arrangements associated
with the implementation of the GATT-WTO Valuation System, in accordance with which
customs duty would be chargeable on transaction values rather than assessed values, reducing the
need for physical inspection of imports.

SGS submitted to the Philippines certain monetary claims which were subject to various
attempts for amicable settlement. In substance its claim was for monies unpaid under the
amended CISS Agreement, amounting to CHF202,413,047.36 (approximately US$140m), in
addition to which SGS sought interest on the amount unpaid.

In commencing the present proceedings SGS alleged that, in refusing to pay the amount
claimed (most of which was conceded by the BOC to be payable), the Philippines is in breach of
25(1) of the ICSID Convention, considering that (a) there is a dispute of legal nature; (b) arising
directly out of an Investment; (c) between a contracting State and a National of another
Contracting State; and (d) the parties have consented in writing to ICSID Arbitration.
Mary Grace C. Delos Santos (SGS Societe Generale de Surveillance
SA vs. Philippines)
The Philippines objected to the jurisdiction of the Tribunal pursuant to Rule 41(2) of the
ICSID Rules on the basis that it had not consented to submit the dispute to ICSID arbitration as
required by Article 25 of the ICSID Convention. In particular it argues that there was no
investment in the Philippines as required by the BIT, that the dispute is purely contractual in
character, and that the issues in dispute are governed by a subsisting dispute resolution provision
in the CISS Agreement requiring submission of all contractual disputes to the courts of the
Philippines.

ISSUES:
(a) whether a contract for the provision of services performed mostly (but not wholly)
outside the territory of the host State may nonetheless constitute an investment in
its territory for the purposes of Article II of the BIT, having regard to the
circumstances of the present case and the provisions of the CISS Agreement;
(b) whether the so-called “umbrella clause” (Article X(2) of the BIT) gives the Tribunal
jurisdiction over essentially contractual claims against the Respondent State;
(c) alternatively, whether the general description of a “dispute concerning an investment”
(Article VIII(1) of the BIT) encompasses claims of an essentially contractual
character; and
(d) whether the Tribunal can or should exercise jurisdiction in the present case,
notwithstanding the exclusive jurisdiction clause, Article 12 of the CISS
Agreement, requiring contractual disputes to be referred to the courts of the
Philippines;

RULING:

The ICSID Tribunal was posed with the question of whether to follow the rationale
provided by a previous decision, SGS v. Pakistan, which involved similar issues. The Tribunal
held that it was not bound to do so. The ICSID Convention provides only that awards rendered
under it are binding on the parties. (Article 53(1)), a provision which might be regarded as
directed to the res judicata effect of awards rather than their impact as precedents in later cases.
In the Tribunal view, although different tribunals constituted under the ICSID system should in
general seek to act consistently with each other, in the end it must be for each tribunal to exercise
is competence in accordance with the applicable law, which will by definition be different for
each BIT and each Respondent State.

Whether an investment has been made in the territory of a country.

For a dispute to be submitted to a Tribunal under the ICSID Convention it needs to arise
directly out of an investment. No reference is made therein as to where that investment needs to
be made. Some BITs state that a qualifying investment need be made in the territory of the
Contracting State other than that of the state from which the investor is from. However, given the
fact that investments are composed by different transactions some of which might be undertaken
in different locations, identifying the territory of the investment is not an easy task.

In SGS v. Philippines, the Tribunal, reaffirmed the ruling of SGS v. Pakistan by

concluding that an investment must be made in a territory where there had been an injection of
Mary Grace C. Delos Santos (SGS Societe Generale de Surveillance
SA vs. Philippines)
funds into the territory [of a Contracting State other the State of nationality of the investor].for
carrying out [the activities pertaining the investment]

The Tribunal also pointed out that to consider whether an investment has been made in a
territory consideration should be given to the investment as a whole; regardless of whether
individual transactions take place in different locations.

Umbrella clause in practice.

In SGS v. Philippines, the Tribunal was faced with a question similar to the one made in
SGS v. Pakistan. Specifically the Tribunal had to determine whether a breach of contract is
considered a violation of a BIT as per an umbrella clause. The Tribunal in SGS v. Philippines
had to analyze article X(2) of the Switzerland- Philippines BIT, which read: Each Contracting
Party shall observe any obligation it has assumed with regard to specific investments in its
territory by investors of the other Contracting Party. The question in place this time was whether
that provision gave the Tribunal jurisdiction over claims against the Respondent State that were
essentially contractual. The Tribunal held that, if commitments made by the State towards
specific investments do involve binding obligations or commitments under the applicable law, it
seems entirely consistent with the object and purpose of the BIT to hold that they are
incorporated and brought within the framework of the BIT by Article X(2).5. The Tribunal then
concluded, Article X(2) makes it a breach of the BIT for the host State to fail to observe binding
commitments, including contractual commitments, which it has assumed with regard to specific
investments. But it does not convert the issue of the extent or content of such obligations into an
issue of international law.

Contract claims can be investment claims.

The Tribunal had to answer the question of whether the BIT reference to a .dispute with
respect to investments could be used to attain jurisdiction over claims of contractual character. It
was held that a dispute arising out of an investment contract will be a dispute with respect to
investments in the same way an alleged expropriation would be. Accordingly, Article 25(1) of
the ICSID Convention required only that the dispute arise directly out of an investment
regardless of the contractual or treaty nature of the dispute.

Exclusive jurisdiction of local courts for contractual claims.

The Tribunal had to deal with the controversial issue of exclusive jurisdiction
of local courts for contractual claims as provided by the investment agreement between SGS and
the Philippines. The majority of the Tribunal drew a distinction between jurisdiction and
admissibility to find that it might have jurisdiction over a dispute and yet not admit it. The
Tribunal held that a party to a contract cannot claim on that contract without itself complying
with it. It then stayed the arbitration proceedings since the provision on exclusive jurisdiction
of local courts was not waived or overridden by the BIT or the ICSID Convention. One of the
arbitrators disagreed with the stay of the proceedings based, inter alia, on the argument that the
BIT arbitration provision and the contractual provision on exclusive jurisdiction of local courts
do not override or replace the other but rather coexist.
Mary Grace C. Delos Santos (SGS Societe Generale de Surveillance
SA vs. Philippines)
Retrospective applicability of BITs.

Another issue surfaced relating to jurisdiction over contractual claims that occurred
before the BIT entered into force. The Tribunal stated that it did not need to look at disputes
concerning breaches of investment contracts which occurred and were completed before the
treaty entry into force. But the Tribunal did have jurisdiction to breaches which are continuing at
that date, and the failure to pay sums due under a contract is an example of a continuing
Breach.